Kone Oyj Class B · OMXHEX:KNEBV
Kone Oyj Class B — Kone Oyj B — Q3 2024 Earnings Presentation
29 slides from Kone Oyj Class B's earnings presentation, Oct 24, 2024
Slide 1: KONE Q3 2024
KONE Q3 2024 Philippe Delorme, President & CEO Ilkka Hara, CFO
Slide 2: Q3 2024 highlights
Q3 2024 highlights • Strong support and excitement around new strategy – executing at full speed • Continued strong growth in Service and Growth in Decline in Modernization Modernization orders* Greater China sales* • Strong growth in Americas, Europe and APMEA. Intensified headwinds in China • Busi
Slide 3: Q3 2024 financial highlights
Q3 2024 financial highlights Double digit growth in orders in Strong growth in Service and Positive development in three out of four Areas Modernization sales. Greater adjusted EBIT-% continued. China sales declined by 20%* Performance improvement initiatives launched Orders received, EUR bn Sales,
Slide 4: Rise to lead
Rise to lead #1 for Employees & Customers • Innovation & Sustainability • Growth & Profitability We shape the future of cities
Slide 5: Bringing new innovations to market
Bringing new innovations to market • KONE High-Rise MiniSpace DX with UltraRope • ~35% of Service base connected – moving towards launched tiered connected services • Significantly lower carbon footprint and more • Dynamic maintenance live in eight countries – key floor space for developers enabler
Slide 6: Exciting customer references across the world
Exciting customer references across the world New Building Solutions New Building Solutions Modernization Modernization Photo to be identified Wooden modular Melbourne Square BLVD, Harry Reid International Oasis City Garden, residential project, Australia Airport, Las Vegas Shanghai The Netherlands
Slide 7: Recognition for innovation and sustainability
Recognition for innovation and sustainability • KONE SiteFlow wins the CTBUH • KONE has been recognized as one 2024 Innovation Award, KONE also of the best employers in the world awarded for diversity, equity and for several years by Forbes inclusion business magazine
Slide 8: Market development
Market development
Slide 9: Market development in Q3 2024
Market development in Q3 2024 North Europe APMEA China • In New Building Solutions America market stabilization in Western markets; further weakening in China New Building Solutions in units ++ stable +++ --- • Positive market environment in Service Service in units + + ++ ++ and Modernization acros
Slide 10: Q3 Financials
Q3 Financials OCTOBER 24, 2024 INTERIM REPORT JANUARY-SEPTEMBER 2024 10
Slide 11: Orders received
Orders received Double digit growth in three out of four Areas MEUR MEUR +4.4% 10,000 9,131 9,000 8,853 +5.5% at comp FX 8,400 8,578 8,185 2,077 8,000 -21 7,000 6,529 6,640 108 1,990 6,000 New Building 5,000 Solutions: - 4,000 Service: +++ 3,000 Modernization: +++ 2,000 Margin of orders received sli
Slide 12: Sales
Sales Continued strong growth in Service and Modernization sales across Areas MEUR MEUR 10,907 10,952 +0.1% 11,000 10,514 9,982 9,939 10,000 +1.1% at comp. FX 9,000 2,750 2,754 8,142 8,123 49 8,000 -27 7,000 -115 98 6,000 -9.3% +9.6% +10.5% 5,000 4,000 Americas +11.6% 3,000 Europe +6.3% 2,000 APMEA
Slide 13: Adjusted EBIT and profitability
Adjusted EBIT and profitability Continued positive margin development MEUR, % MEUR, % 12.4% 12.6% 12.5% 1,600 11.5% 11.6% 11.4% 11.3% 10.9% 1,400 1,310 1,237 1,251 9.9% 1,248 1,200 -3 319 1,077 1,000 890 916 316 800 600 + Better margins in deliveries outside China 400 + Business mix - Decline in mar
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 9/2023 12/2023 9/2024 2,000 1,908 1,829 1,600 1,550 1,485 1,200 1,104 1,056 800 755 -720 -873 -861 400 + Accounts payable 0 - Inven
Slide 15: Market and business outlook
— "A Market and business outlook
Slide 16: Market outlook for 2024 (unchanged)
Market outlook for 2024 (unchanged) 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%). - Sl
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 0-3% at comparable Service and Building Solutions exchange rates in 2024 Modernization market in China Improved margin Persistent cost Adju
Slide 18: New mid-term targets set for 2027
New mid-term targets set for 2027 Sales BEUR CAGR: MSD% ~11 Close to 10% Double digit Service Modernization RoW Low single digit New Building Solutions Market expected to China decline further in 2025 2024 2027 2030 Margin expansion to Adj. EBIT 11.5-11.9% 13-14% → Towards 16% accelerate towards 202
Slide 19: Summary
Summary • New strategy in motion • Strong growth in the resilient Service and Modernization to continue • 11 of our 12 markets growing or stable. Stronger headwinds in China • Performance initiatives ramping up • Targeting mid single-digit annual sales growth and 13-14% adjusted EBIT margin by 2027
Slide 20: Slide 20
Slide 21: Appendix
Appendix OCTOBER 24, 2024 INTERIM REPORT JANUARY-SEPTEMBER 2024 2
Slide 22: 7-9/2024 Sales split
7-9/2024 Sales split By business By area 19% 23% 25% (17%) (29%) (22%) 41% (46%) 15% (13%) 41% 37% (37%) (35%) New Building Solutions Americas Service Europe Modernization Asia-Pacific, Middle East and Africa 7-9/2023 figures in brackets. Figures in charts are rounded and at historical exchange rate
Slide 23: Currencies
Currencies Sales by currencies Currency impact* Main currencies 7-9/2024 Q3/2024 Q3/2023 2023 MEUR Q3 FY MEUR EUR average average average Other Sales -27 ca. -120 EUR / CNY 7.8155 7.6145 7.6589 EBIT -3 ca. -10 EUR / USD 1.0891 1.0801 1.0816 Orders received -21 ca. -120 EUR / GBP 0.8510 0.8706 0.8702
Slide 24: Q3 2024 key figures
Q3 2024 key figures Comparable Q3/2024 Q3/2023 Change change Orders received MEUR 2,076.6 1,989.9 4.4% 5.5% Order book MEUR 9,001.2 8,839.5 1.8% 4.6% Sales MEUR 2,753.6 2,749.9 0.1% 1.1% Operating income (EBIT) MEUR 319.4 316.5 0.9% Operating income margin (EBIT margin) % 11.6 11.5 Adjusted EBIT MEU
Slide 25: 1-9/2024 key figures
1-9/2024 key figures Comparable 1–9/2024 1–9/2023 Change change Orders received MEUR 6,640.0 6,528.5 1.7% 3.5% Order book MEUR 9,001.2 8,839.5 1.8% 4.6% Sales MEUR 8,122.8 8,142.4 -0.2% 1.2% Operating income (EBIT) MEUR 916.5 837.9 9.4% Operating income margin (EBIT margin) % 11.3 10.3 Adjusted EBIT
Slide 26: Balance sheet – assets employed
Balance sheet – assets employed MEUR Sep 30, 2024 Sep 30, 2023 Dec 31, 2023 Assets employed Goodwill 1,504.0 1,479.3 1,469.0 Other intangible assets 341.6 302.5 287.2 Tangible assets 821.7 743.9 779.7 Shares and other non-current financial assets 96.7 95.2 97.9 Net working capital -720.4 -872.6 -861
Slide 27: Net working capital
Net working capital* MEUR Sep 30, 2024 Sep 30, 2023 Dec 31, 2023 Net working capital Inventories 872.0 852.2 820.9 Advance payments received and deferred revenue -1,953.7 -1,964.2 -1,915.7 Accounts receivable 2,469.0 2,508.0 2,495.1 Deferred assets and income tax receivables 879.8 916.3 759.7 Accrua
Slide 28: 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% 28% 23% >35% orders declined clearly in units
Slide 29: 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