Slide 1: KONE Q1 2023
KONE Q1 2023 Henrik Ehrnrooth, President & CEO Ilkka Hara, CFO
Slide 2: Q1 2023 Highlights
Q1 2023 Highlights • Positive momentum in orders and sales • Excellent start to the year in services • China E&E market remained weak; first signs of policy- driven improvement visible in construction activity • Good results from profitability actions
Slide 3: Q1 2023 key figures
Q1 2023 key figures Good start to the year with sales growth and improved profitability Comparable Q1/2023 Q1/2022 Change change Orders received MEUR 2,263.1 2,422.6 -6.6% -5.1% Order book MEUR 9,176.2 9,255.4 -0.9% 2.1% To be updated Sales MEUR 2,556.6 2,441.9 4.7% 5.9% Operating income (EBIT) MEUR
Slide 4: Securing our position as a leader in sustainability
Securing our position as a leader in sustainability Our ambitious work to meet our science-based targets continued Moving towards our diversity, equity and inclusion targets Scope 1 & 2 emissions* Scope 3 emissions relative to products ordered** Share of women at director level -11.8% +0.7% -4.3% in
Slide 5: Market development
— "A Market development INTERIM REPORT JANUARY-MARCH 2023
Slide 6: Global E&E markets and KONE's positioning in 2022
Global E&E markets and KONE’s positioning in 2022 Global markets KONE’s market position and market share development • New equipment market North America China was ~1 million units, New equipment Maintenance New equipment Maintenance declining >10% #3 #4 #2 #2 • Maintenance market was >20 million un
Slide 7: New equipment market development in Q1 2023
New equipment market development in Q1 2023 Global market declined, but demand trends differed regionally North America EMEA China Rest of Asia-Pacific --- stable --- +++ <5% of <20% of >65% of >10% of global global global global market market market market (in units) (in units) (in units) (in units
Slide 8: Service market development in Q1 2023
Service market development in Q1 2023 Positive overall development in the service markets North America EMEA China Rest of Asia-Pacific Maintenance Modernization Maintenance Modernization Maintenance Modernization Maintenance Modernization + + + + ++ -- ++ +++ <10% of <35% of <40% of <40% of <50% of
Slide 9: Market activity in China
Market activity in China • New equipment demand declined significantly as financing for developers remained constrained • Pricing environment characterized by intense competition • Post-pandemic reopening drove recovery in China’s economy • First signs of policy impacts visible in construction activ
Slide 10: Q1 Financials
Q1 Financials ‘APRIL 26, 2023 INTERIM REPORT JANUARY-MARCH 2023 10
Slide 11: Orders received
Orders received Solid order development considering market backdrop MEUR MEUR 10,000 -6.6% 9,131 9,000 8,853 2,423 8,400 8,185 8,000 7,797 -121 7,000 -38 2,263 6,000 EMEA: +++ APAC: - - - 5,000 Americas: + 4,000 -5.1% 3,000 2,000 Orders received margin improved 1,000 both y/y and sequentially 0 2018
Slide 12: Sales
Sales Strong growth in services compensated for a slight decline in new equipment sales MEUR MEUR 10,907 11,000 10,514 9,982 9,939 +4.7% 10,000 9,071 -29 9,000 2,557 82 8,000 7,000 2,442 -23 85 6,000 -2.0% +9.2% +22.8% 5,000 4,000 EMEA +9.9% 3,000 APAC -4.2% 2,000 Americas +16.1% 1,000 +5.9% at comp
Slide 13: Adjusted EBIT and profitability
Adjusted EBIT and profitability Margin expansion driven by growth in services sales and profitability improvement actions MEUR, % MEUR, % 12.3% 12.4% 12.6% 12.5% 1,600 8.0% 9.5% 1,400 1,310 1,237 1,251 9.9% 242 1,200 1,112 -1 1,077 1,000 196 800 600 + Lower material costs in China, pricing on delive
Slide 14: Cash flow from operations and net working capital
Cash flow from operations and net working capital Cash flow improved as a result of increased operating income and improved working capital Cash flow from operations*, MEUR Net working capital**, MEUR 2,000 1,908 3/2022 12/2022 3/2023 1,829 1,600 1,550 1,200 1,150 800 755 -904 -1,032 400 -1,453 456
Slide 15: Market and business outlook
— "A Market and business outlook INTERIM REPORT JANUARY-MARCH 2023
Slide 16: Market outlook for 2023 (updated)
Market outlook for 2023 (updated) New equipment markets • In China, the new equipment market is expected to decline by close to 10% during 2023. Activity is expected to start to recover towards the end of the first half as a result of the broad stimulus measures that have already been announced • Ac
Slide 17: Business outlook for 2023 (specified)
Business outlook for 2023 (specified) Sales Supporting our Burdening our performance performance • KONE expects its sales at comparable exchange rates for the year 2023 to be somewhat above the previous year (prev. Positive outlook for Decline in China’s new similar level to 2022) services equipment
Slide 18: Summary
Summary • Strong start to the year across the board • Further strengthening customer focus and competitiveness a key priority • Well positioned to capture growth opportunities in services and in the new equipment business in Asia
Slide 19: Slide 19
Slide 20: Appendix
Appendix APRIL 26, 2023,
Slide 21: KONE's market position in 2022
KONE’s market position in 2022 New equipment market in 2022 Equipment base in 2022 ~1 million units >20 million units 6% 6% 3% 4% 2% China China 6% S-E Asia, India and Australia S-E Asia, India and Australia 17% EMEA EMEA 43% North America North America South America South America 62% 10% Other 36%
Slide 22: 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’s new equipment 40 orders declined significantly <30% <25% >35% ~30% in units and in monetary <40% 30 value. <20% 20 >10% 10 >5% <
Slide 23: 1–3/2023 Sales split
1–3/2023 Sales split By business By region 17% 23% (15%) (20%) 34% 43% (38%) (47%) 39% (38%) 43% (42%) New equipment Asia-Pacific Maintenance EMEA Modernization Americas 1–3/2022 figures in brackets. Figures in charts are rounded and at historical exchange rates.
Slide 24: Currencies
Currencies Sales by currencies 1–3/2023 Currency impact* Main currencies Q1/2023 2022 Mar 31, Other MEUR Q1 Full year MEUR EUR average average 2023 spot EUR / CNY 7.3802 7.0836 7.4763 Sales -28.7 -294.6 INR AUD EUR / USD 1.0748 1.0563 1.0875 GBP EBIT -1.4 -22.5 EUR / GBP 0.8810 0.8537 0.8792 CNY USD
Slide 25: Balance sheet – assets employed
Balance sheet – assets employed MEUR Mar 31, 2023 Mar 31, 2022 Dec 31, 2022 Assets employed Goodwill 1,434.6 1,414.9 1,414.7 Other intangible assets 244.6 217.7 208.2 Tangible assets 713.6 734.9 716.8 Investments 106.8 139.2 121.7 Net working capital -1,032.3 -1,452.6 -903.9 Dividend withholding tax
Slide 26: Net working capital
Net working capital* MEUR Mar 31, 2023 Mar 31, 2022 Dec 31, 2022 Net working capital Inventories 837.0 782.0 843.6 Advance payments received and deferred revenue -1,972.2 -2,009.3 -1,973.8 Accounts receivable 2,494.1 2,458.0 2,668.1 Deferred assets and income tax receivables 839.3 911.7 826.9 Accrua