Kone Oyj Class B · OMXHEX:KNEBV
Kone Oyj Class B — Kone Oyj B — Q2 2024 Earnings Presentation
28 slides from Kone Oyj Class B's earnings presentation, Jul 19, 2024
Slide 1: KONE H1 2024
KONE H1 2024 Philippe Delorme, President & CEO Ilkka Hara, CFO
Slide 2: Q2 2024 highlights
Q2 2024 highlights • Focus on Service and Modernization delivering results: strong Service sales growth at 9% and record high Modernization orders • Sixth consecutive quarter of profitability improvement • Market outlook downgraded for China New Building Solutions and upgraded for North America Mode
Slide 3: Q2 2024 financial highlights
Q2 2024 financial highlights Double digit growth in orders in Continued strong growth in Sixth consecutive quarter of three out of four Areas Service and Modernization adjusted EBIT-% improvement sales, China New Building and solid cash flow Solutions still a headwind Orders received, EUR bn Sales,
Slide 4: Exciting customer references across the world
Exciting customer references across the world New Building Solutions New Building Solutions Modernization Modernization Grand Paris Express Metro Wasl Tower Dubai Xujiahui Garden Shanghai Large office project in Chicago
Slide 5: Q2 business highlights
Q2 business highlights Service Modernization New Building Solutions • 7% Service base growth (>5% organic) • Record high Modernization orders • Improving our residential offering to better taking us above 1.7 million units in service match customer needs in a cost competitive • New KONE Upgrade solu
Slide 6: Valuable feedback from our employees and customers
Valuable feedback from our employees and customers Employee engagement index (2024) Customer net promoter score (2024) 92% participation rate New Building Solutions: +1 vs 2023 Employee engagement +1 vs 2023 Service: -2 4 points above global average benchmark Modernization: +4
Slide 7: Appointment to the Executive Board
Appointment to the Executive Board Kaija Bridger Kaija Bridger has been appointed Executive Vice President, People & Communications as of July 1, 2024. Kaija began her career at KONE in 2015 and has held various leadership positions in People & Communications, most recently as Vice President, People
Slide 8: Market development
Market development — "A
Slide 9: Market development in Q2 2024
Market development in Q2 2024 North Europe APMEA China • In New Building Solutions America market gradual stabilization in Western markets; continued New Building Solutions in units - + ++ --- difficult environment in China Service in units + + ++ ++ • Positive market environment in Service and Mode
Slide 10: Q2 Financials
Q2 Financials JULY 18, 2024 HALF-YEAR FINANCIAL REPORT JANUARY-JUNE 2024 10
Slide 11: Orders received
Orders received Record high Modernization orders with all Areas contributing MEUR MEUR +2.3% 10,000 9,131 9,000 8,853 +3.6% at comp FX 8,400 8,578 8,185 8,000 -28 2,328 7,000 80 6,000 2,276 New Building 5,000 4,539 4,563 Solutions: - - 4,000 Service: +++ 3,000 Modernization: +++ 2,000 Margin of orde
Slide 12: Sales
Sales Continued strong growth in Service and Modernization sales across Areas MEUR MEUR 10,907 10,952 -1.2% 11,000 10,514 9,982 9,939 10,000 -0.1% at comp. FX 2,836 9,000 2,801 51 8,000 -32 -147 7,000 92 6,000 5,393 5,369 -11.1% +9.0% +11.1% 5,000 4,000 Americas +9.9% 3,000 Europe +5.8% 2,000 APMEA
Slide 13: Adjusted EBIT and profitability
Adjusted EBIT and profitability Sixth consecutive quarter of margin improvement MEUR, % MEUR, % 12.4% 12.6% 12.5% 1,600 11.7% 11.9% 11.4% 11.1% 1,400 10.6% 1,310 9.9% 1,237 1,251 1,248 1,200 -4 335 1,077 1,000 332 800 574 597 + Better margins in deliveries outside 600 China 400 + Business mix + Savi
Slide 14: Cash flow from operations and net working capital
Cash flow from operations and net working capital Solid cash flow, moderate increase in net working capital Cash flow from operations*, MEUR Net working capital**, MEUR 6/2023 12/2023 6/2024 2,000 1,908 1,829 1,600 1,550 1,485 1,200 800 755 762 711 -783 -861 -949 400 + Service invoicing cycle 0 + Ac
Slide 15: Market and business outlook
— "A Market and business outlook
Slide 16: Market outlook for 2024 (updated)
Market outlook for 2024 (updated) 11 of our 12 markets growing or stable North Europe APMEA China America New Building Solutions in units stable stable ++ --- Service in units + + ++ ++ Modernization in monetary value +++ ++ +++ +++ - - - Significant decline (>10%), - - Clear decline (5-10%), - Slig
Slide 17: Business outlook for 2024 (specified)
Business outlook for 2024 (specified) Supporting our Burdening our performance performance Sales Strong growth in Declining New • KONE expects its sales to grow 0-4% at comparable Service and Building Solutions exchange rates in 2024 Modernization market in China Improved margin Persistent cost Adju
Slide 18: Summary
Summary • Strong growth in the resilient Service and Modernization to continue • 11 of our 12 markets growing or stable • Profitability on an improving track KONE’s Capital Markets Day will be held in Helsinki on Friday, September 27
Slide 19: Slide 19
Slide 20: Appendix
Appendix JULY 19, 2024 HALF-YEAR FINANCIAL REPORT JANUARY-JUNE 2024 20
Slide 21: 4-6/2024 Sales split
4-6/2024 Sales split By business By area 18% 25% 24% (16%) (30%) (21%) 42% (48%) 14% 40% (13%) (36%) 38% (35%) New Building Solutions Americas Service Europe Modernization Asia-Pacific, Middle East and Africa 4-6/2023 figures in brackets. Figures in charts are rounded and at historical exchange rate
Slide 22: Currencies
Currencies Sales by currencies Currency impact* Main currencies 4-6/2024 Q2 2024 Q2 2023 2023 MEUR Q2 FY EUR average average average Other Sales -32 ca. -100 EUR / CNY 7.8038 7.5156 7.6589 EBIT -4 ca. -10 EUR / USD 1.0828 1.0789 1.0816 Orders received -28 ca. -100 EUR / GBP 0.8557 0.8752 0.8702 CNY
Slide 23: Q2 2024 key figures
Q2 2024 key figures Comparable Q2/2024 Q2/2023 Change change Orders received MEUR 2,327.6 2,275.5 2.3% 3.6% Order book MEUR 9,326.6 9,041.9 3.1% 2.6% Sales MEUR 2,801.0 2,835.9 -1.2% -0.1% Operating income (EBIT) MEUR 334.7 283.2 18.2% Operating income margin (EBIT %) % 11.9 10.0 Adjusted EBIT MEUR
Slide 24: 1-6/2024 key figures
1-6/2024 key figures Comparable 1-6/2024 1-6/2023 Change change Orders received MEUR 4,563.3 4,538.6 0.5% 2.6% Order book MEUR 9,326.6 9,041.9 3.1% 2.6% Sales MEUR 5,369.3 5,392.5 -0.4% 1.2% Operating income (EBIT) MEUR 597.0 521.5 14.5% Operating income margin (EBIT %) % 11.1 9.7 Adjusted EBIT MEUR
Slide 25: Balance sheet – assets employed
Balance sheet – assets employed MEUR Jun 30, 2024 Jun 30, 2023 Dec 31, 2023 Assets employed Goodwill 1,509.9 1,439.0 1,469.0 Other intangible assets 316.0 281.2 287.2 Tangible assets 823.1 718.3 779.7 Shares and other non-current financial assets 86.4 98.4 97.9 Net working capital -782.8 -948.7 -861
Slide 26: Net working capital
Net working capital* MEUR Jun 30, 2024 Jun 30, 2023 Dec 31, 2023 Net working capital Inventories 845.4 829.2 820.9 Advance payments received and deferred revenue -1,924.2 -1,953.5 -1,915.7 Accounts receivable 2,530.7 2,531.6 2,495.1 Deferred assets and income tax receivables 846.4 873.0 759.7 Accrua
Slide 27: KONE in Greater China
KONE in Greater China New Building Solutions market Greater China’s share of KONE’s orders received New Building Solutions orders received in units vs. market and sales development Monetary value (at comp. FX) 50 45 40 KONE’s New Building Solutions ~25% 27% 24% >35% orders declined clearly in units
Slide 28: Market activity in China
Market activity in China • Weak consumer sentiment and developers’ liquidity challenges continued to weigh on new construction activity, policy actions also key to recovery • New Building Solutions pricing environment characterized by intense competition • Strong growth in Service and Modernization