Slide 1: KONE Q1 2022
KONE Q1 2022 APRIL 27, 2022 HENRIK EHRNROOTH, PRESIDENT & CEO ILKKA HARA, CFO
Slide 2: Q1 2022 Highlights
Q1 2022 Highlights ▪ Strong growth in orders received and excellent start to the year in Services ▪ Increased uncertainty due to COVID-19 restrictions in China and the war in Ukraine ▪ Supply chain disruptions intensified, offsetting actions progressing well and remain a top priority
Slide 3: Q1 2022 Key figures
Q1 2022 Key figures STRONG GROWTH IN ORDERS RECEIVED, OPERATING INCOME BURDENED BY SUPPLY CHAIN CONSTRAINTS Comparable Q1/2022 Q1/2021 Change change Orders received MEUR 2,422.6 2,075.9 16.7 % 10.6 % Order book MEUR 9,255.4 8,180.4 13.1 % 7.3 % Sales MEUR 2,441.9 2,326.4 5.0 % -0.4 % Operating incom
Slide 4: Driving differentiation through sustainability, productivity and adaptability
Driving differentiation through sustainability, productivity and adaptability Partner for smart and Accelerate construction Enhance adaptability sustainable buildings with improved productivity through connectivity ▪ Industry’s first carbon neutral elevators ▪ New KONE Construction Time Use solutio
Slide 5: Highlights of our progress in sustainability 2021
Highlights of our progress in sustainability 2021 Reduction in Share of renewable Work on science-based targets -15% absolute Scope 1 and 2 emissions* (2030: -50%) 80% electricity in our operations (2030: 100%) continued with full speed Scope 3 emissions relative +0.4% to products ordered* (2030: -4
Slide 6: Appointment to the Executive Board
Appointment to the Executive Board Karla Lindahl Karla Lindahl was appointed Executive Vice President, responsible for the South Europe and Mediterranean region and member of the Executive Board as of 1 April, 2022. 6 April 27, 2022 Interim report January–March 2022 | © KONE Corporation
Slide 7: Market development
Market development
Slide 8: Global E&E markets and KONE's positioning in 2021
Global E&E markets and KONE’s positioning in 2021 Global markets KONE’s market position and market share development ▪ New equipment market Americas China was >1 million units, New equipment Maintenance New equipment Maintenance growing ~7% #4 #4 #1 #1 ▪ Maintenance market was <20 million units, gro
Slide 9: New equipment market development in Q1 2022
New equipment market development in Q1 2022 CHINA IMPACTED BY LIQUIDITY CONSTRAINTS, FAVORABLE DEVELOPMENT IN ALL OTHER REGIONS North American market EMEA market Asia-Pacific market +++ + -- <5% of ~15% of >75% of global global global market market market (in units) (in units) (in units) ▪ Significa
Slide 10: Service market development in Q1 2022
Service market development in Q1 2022 BROAD-BASED GROWTH IN BOTH MAINTENANCE AND MODERNIZATION North American market EMEA market Asia-Pacific market Maintenance Modernization Maintenance Modernization Maintenance Modernization + ++ + +++ ++ +++ <10% of ~30% of ~40% of >40% of ~50% of ~25% of global
Slide 11: Market activity and KONE's operations in China
Market activity and KONE’s operations in China Liquidity restrictions continued ▪ New equipment market declined; pricing environment characterized by intense competition ▪ Easing measures introduced in Q1 to support housing demand COVID-19 restrictions have increased uncertainty ▪ >50 of 100 largest
Slide 12: Q1 Financials
Q1 Financials
Slide 13: Orders received
Orders received ORDERS RECEIVED GROWING STRONGLY IN ALL BUSINESSES, PRICING ACTIONS DROVE SEQUENTIAL IMPROVEMENT IN MARGIN OF ORDERS RECEIVED MEUR MEUR +16.7% 10,000 2,423 9,000 8,853 8,400 115 8,185 8,000 7,797 7,554 231 7,000 2,076 6,000 EMEA: ++ 5,000 APAC: + Americas: +++ 4,000 +10.6% 3,000 2,00
Slide 14: Sales
Sales SALES BROADLY IN LINE WITH LAST YEAR’S LEVEL, THANKS TO STRONG GROWTH IN SERVICES MEUR MEUR +5.0% 11,000 10,514 9,982 9,939 2,442 10,000 -0.4% at comp. FX 9,071 9,000 8,797 125 -9.4% +11.5% 8,000 2,326 +8.7% 7,000 121 37 6,000 74 5,000 4,000 EMEA +7.0% 3,000 APAC -7.7% 2,000 Americas +0.4% 1,0
Slide 15: Adjusted EBIT and profitability
Adjusted EBIT and profitability PROFITABILITY BURDENED BY INCREASED MATERIAL, COMPONENT AND LOGISTICS COSTS MEUR, % MEUR, % + Good development in services 13.7% - China new equipment sales 1,600 due to continued liquidity 12.3% 12.4% 12.6% 12.5% constraints 10.7% 1,400 1,310 1,237 1,251 1,206 250 1,
Slide 16: Cash flow from operations
Cash flow from operations* CASH FLOW DECLINED FROM AN EXCEPTIONALLY HIGH LEVEL DUE TO DECREASED PAYABLES MEUR MEUR + Growth in the maintenance business - Higher than average inventories 2,000 - Accounts payable 1,908 1,829 425 1,550 79 1,600 1,263 1,200 1,150 131 218 3 800 400 0 2017 2018 2019 2020
Slide 17: Market and business outlook
Market and business outlook
Slide 18: Market outlook for 2022 (updated)
Market outlook for 2022 (updated) New equipment markets ▪ The Chinese new equipment market is expected to decline significantly due to the tightened liquidity situation in the property markets and COVID-19 restrictions ▪ In the rest of the world, activity in the new equipment markets is expected to
Slide 19: Business outlook for 2022 (specified)
Business outlook for 2022 (specified) Sales Supporting our performance Burdening our result ▪ KONE estimates that in 2022, its sales growth will be in the range of 2% to 5% at comparable Positive outlook for Approx. MEUR 150-200 services and solid order headwind in 2022 from exchange rates as compar
Slide 20: Summary
Summary ▪ Growth opportunities in several areas despite clearly increased market uncertainty ▪ Visible progress in actions to address headwinds from supply chain constraints ▪ Driving differentiation through adaptability, productivity, and sustainability at the core of our strategic ambitions
Slide 21: Dedicated to People Flow
Dedicated to People Flow" KOIN|E
Slide 22: Appendix
Appendix
Slide 23: KONE's market position in 2021
KONE’s market position in 2021 New equipment market in 2021 Equipment base in 2021 >1 million units <20 million units 6% 6% 3% 3% 2% 6% China China 16% S-E Asia, S-E Asia, India and Australia India and Australia 43% EMEA EMEA North America North America South America 8% 66% South America 36% Other O
Slide 24: Chinese property market data
Chinese property market data Q1 2022, March 2022, y-o-y y-o-y Real estate investment +0.7% -2.4% Residential sales volume -18.6% -23.1% New starts -17.5% -22.2% New home prices in 70 largest -7.3% cities 24 April 27, 2022 Interim report January–March 2022 | © KONE Corporation
Slide 25: KONE in China
KONE in China New equipment market China’s share of KONE’s orders received and sales New equipment orders received in units vs. market development Monetary value 50 KONE Market ~30% <30% 40 >35% ~40% <40% KONE’s new equipment orders 30 grew slightly in units and were stable in monetary value. <20% 2
Slide 26: 1–3/2022 Sales split
1–3/2022 Sales split By business By region 15% 20% (13%) (20%) 38% 47% (40%) (51%) 38% (35%) 42% (40%) New equipment Asia-Pacific Maintenance EMEA (Europe, Middle East and Africa) Modernization Americas 1–3/2021 figures in brackets. Figures in charts are rounded and at historical exchange rates. 26
Slide 27: Currencies
Currencies Sales by currencies 1–3/2022 Currency impact* Main currencies Q1/2022 2021 Mar 31, MEUR Q1 Full year average average 2022 spot EUR Other EUR / 7.0996 7.6388 7.0403 Sales 124.8 432.4 CNY EUR / 1.1196 1.1851 1.1101 USD EBIT 15.0 51.5 EUR / 0.8383 0.8615 0.8460 GBP Orders 115.3 382.2 EUR / r
Slide 28: Balance sheet – assets employed
Balance sheet – assets employed MEUR Mar 31, 2022 Mar 31, 2021 Dec 31, 2021 Assets employed Goodwill 1,414.9 1,352.9 1,405.2 Other intangible assets 217.7 223.4 216.9 Tangible assets 734.9 724.9 736.7 Investments 139.2 139.5 144.6 Net working capital -1,657.0 -1,467.7 -1,468.2 Assets employed total
Slide 29: Net working capital
Net working capital MEUR Mar 31, 2022 Mar 31, 2021 Dec 31, 2021 Net working capital Inventories 782.0 620.9 717.8 Advance payments received and deferred revenue -2,009.3 -1,864.9 -1,957.0 Accounts receivable 2,458.0 2,164.0 2,421.4 Deferred assets and income tax receivables 911.7 746.2 898.1 Accrual