Kone Oyj Class B · OMXHEX:KNEBV
Kone Oyj Class B — Q2 2023 Earnings Presentation
25 slides from Kone Oyj Class B's earnings presentation, Jul 20, 2023
Slide 1: KONE H1 2023
KONE H1 2023 Henrik Ehrnrooth, President & CEO Ilkka Hara, CFO
Slide 2: Q2 2023 Highlights
Classification: KONE Internal Q2 2023 Highlights • Broad-based sales growth and improved profitability • Excellent performance in maintenance and modernization • New equipment orders impacted by challenging market dynamics in China • New operating model implemented
Slide 3: Q2 2023 key figures
Q2 2023 key figures Continued sales growth and improved profitability in a mixed operating environment Comparable Q2/2023 Q2/2022 Change change Orders received MEUR 2,275.5 2,609.0 -12.8% -8.1% Order book MEUR 9,041.9 10,000.4 -9.6% -2.9% Sales MEUR 2,835.9 2,555.1 11.0% 16.1% Operating income (EBIT
Slide 4: 1–6/2023 key figures
1–6/2023 key figures Good development in sales and profitability, market backdrop impacted orders received Comparable 1–6/2023 1–6/2022 Change change Orders received MEUR 4,538.6 5,031.7 -9.8% -6.6% Order book MEUR 9,041.9 10,000.4 -9.6% -2.9% Sales MEUR 5,392.5 4,997.0 7.9% 11.1% Operating income (
Slide 5: Customer loyalty on a solid level
Customer loyalty on a solid level Net promoter score (indicative) • Lockdown related delivery challenges in China impacted new equipment NPS • Positive development in services, especially in modernization • Good feedback on reliability, quality and responsiveness 2013 2014 2015 2016 2017 2018 2019 2
Slide 6: Market development
Market development JULY 20,2023 HALF YEAR FINANCIAL REPORT JANUARY—JUNE 2023
Slide 7: New equipment market development in Q2 2023
New equipment market development in Q2 2023 Activity impacted by challenging markets in China and economic environment in Europe and North America North America EMEA China Rest of Asia-Pacific --- --- -- + <5% of <20% of >65% of >10% of global global global global market market market market (in uni
Slide 8: Service market development in Q2 2023
Service market development in Q2 2023 Positive development in the service markets across all regions North America EMEA China Rest of Asia-Pacific Maintenance Modernization Maintenance Modernization Maintenance Modernization Maintenance Modernization + + + + ++ ++ ++ ++ <10% of <35% of <40% of <40%
Slide 9: Market activity in China
Market activity in China • Weak consumer sentiment weighed on second quarter new equipment demand in China following a promising start to the year, pricing environment characterized by intense competition • Strong focus on completion of unfinished projects • Policy actions central to recovery in new
Slide 10: Q2 Financials
Q2 Financials JULY 20, 2023 HALF YEAR FINANCIAL REPORT JANUARY-JUNE 2023 10
Slide 11: Orders received
Orders received New equipment orders impacted by market backdrop, good growth in modernization MEUR MEUR 10,000 -12.8% 9,131 9,000 8,853 2,609 8,400 8,185 8,000 7,797 -200 7,000 -134 2,275 6,000 EMEA: + 5,032 APAC: --- 5,000 4,539 Americas: --- 4,000 -8.1% 3,000 2,000 Margin of orders received impro
Slide 12: Sales
Sales Broad-based sales growth MEUR MEUR 10,907 11.0% 11,000 10,514 9,982 9,939 10,000 +16.1% at comp. FX 9,071 9,000 92 -113 2,836 8,000 91 7,000 210 2,555 6,000 5,393 4,997 +18.5% +9.8% +24.8% 5,000 4,000 EMEA +13.0% 3,000 APAC +21.6% 2,000 Americas +12.6% 1,000 0 2018 2019 2020 2021 2022 YTD YTD
Slide 13: Adjusted EBIT and profitability
Adjusted EBIT and profitability Margin expansion driven by sales growth and profitability improvement actions MEUR, % MEUR, % 12.3% 12.4% 12.6% 12.5% 1,600 8.2% 11.7% 1,400 10.6% 1,310 9.9% 1,237 1,251 332 1,200 1,112 1,077 8.1% -4 1,000 209 800 600 574 + Pricing on deliveries 406 + Lower material c
Slide 14: Cash flow from operations and net working capital
Cash flow from operations and net working capital Cash flow improved largely due to increased operating income Cash flow from operations*, MEUR Net working capital**, MEUR 2,000 1,908 6/2022 12/2022 6/2023 1,829 1,600 1,550 1,200 1,150 800 755 762 -904 -949 385 400 -1,308 + Maintenance invoicing cyc
Slide 15: Market and business outlook
— "A Market and business outlook JULY 20,2023 HALF YEAR FINANCIAL REPORT JANUARY—JUNE 2023
Slide 16: Market outlook for 2023 (updated)
Market outlook for 2023 (updated) New equipment markets • In China, the market is expected to decline by approximately 10–15% during 2023. Policy actions are central to market recovery. • In the rest of Asia-Pacific, activity is expected to grow clearly • In EMEA, activity is expected to decline cle
Slide 17: Business outlook for 2023 (specified)
Business outlook for 2023 (specified) Sales Supporting our Burdening our performance performance • KONE expects its sales growth at comparable exchange rates for the year 2023 to be in the range of 3–6% Positive outlook for Decline in China’s new (prev. somewhat above the previous year) services equ
Slide 18: Summary
Summary • Good development in sales and profitability • New operating model drives strengthened customer focus and competitiveness • Well positioned to capture growth opportunities in services and in selected new equipment markets
Slide 19: Slide 19
Slide 20: Appendix
Appendix
Slide 21: 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 22: 4–6/2023 Sales split
4–6/2023 Sales split By business By region 16% 21% (15%) (21%) 39% 48% (38%) (47%) 36% (38%) 40% (40%) New equipment Asia-Pacific Maintenance EMEA Modernization Americas 4–6/2022 figures in brackets. Figures in charts are rounded and at historical exchange rates.
Slide 23: Currencies
Currencies Sales by currencies 4–6/2023 Currency impact* Main currencies Other Q2/2023 2022 Jun 30, MEUR Q2 Full year MEUR EUR average average 2023 spot EUR / CNY 7.5156 7.0836 7.8983 INR Sales -112.9 -384.4 AUD GBP EUR / USD 1.0789 1.0563 1.0866 EBIT -4.5 -30.0 EUR / GBP 0.8752 0.8537 0.8583 USD CN
Slide 24: Balance sheet – assets employed
Balance sheet – assets employed MEUR Jun 30, 2023 Jun 30, 2022 Dec 31, 2022 Assets employed Goodwill 1,439.0 1,437.8 1,414.7 Other intangible assets 281.2 216.7 208.2 Tangible assets 718.3 735.8 716.8 Investments 98.4 133.1 121.7 Net working capital -948.7 -1,308.1 -903.9 Assets employed total 1,588
Slide 25: Net working capital
Net working capital* MEUR Jun 30, 2023 Jun 30, 2022 Dec 31, 2022 Net working capital Inventories 829.2 873.4 843.6 Advance payments received and deferred revenue -1,953.5 -2,184.3 -1,973.8 Accounts receivable 2,531.6 2,541.1 2,668.1 Deferred assets and income tax receivables 873.0 1,040.6 826.9 Accr