Slide 1: KONE H1 2019
KONE H1 2019 JULY 18, 2019 HENRIK EHRNROOTH, PRESIDENT & CEO ILKKA HARA, CFO
Slide 2: Q2 2019 Highlights
Q2 2019 Highlights ▪ Solid growth in orders received with improving margin ▪ Strong momentum in modernization ▪ Adjusted EBIT growing in line with full-year target
Slide 3: Q2 2019 Key figures
Q2 2019 Key figures STRONG QUARTER IN ORDERS RECEIVED, ADJUSTED EBIT GREW Comparable Q2/2019 Q2/2018 Change change Orders received MEUR 2,310.1 2,118.6 9.0 % 8.1 % Order book MEUR 8,407.1 7,915.3 6.2 % 5.9 % Sales MEUR 2,540.8 2,330.6 9.0 % 7.9 % Operating income (EBIT) MEUR 306.5 280.5 9.3 % Operat
Slide 4: January-June 2019 Key figures
January-June 2019 Key figures CONTINUED SOLID GROWTH ACROSS THE BOARD Comparable 1-6/2019 1-6/2018 Change change Orders received MEUR 4,404.1 4,027.2 9.4 % 8.0 % Order book MEUR 8,407.1 7,915.3 6.2 % 5.9 % Sales MEUR 4,739.6 4,338.6 9.2 % 7.7 % Operating income (EBIT) MEUR 521.8 492.0 6.1 % Operatin
Slide 5: Q2 2019 Business highlights
Q2 2019 Business highlights ▪ Broad-based competitiveness driving orders received – Differentiating with our services and solutions – Strong project execution and reliable field operations ▪ Improving margin of orders received - Further improvements in the field operations - installation resource an
Slide 6: Changes in the Executive Board
Changes in the Executive Board Maciej Kranz Tomio Pihkala Maciej Kranz has been Tomio Pihkala has been appointed Chief appointed Executive Vice Technology Officer and President, New Executive Vice President, Equipment Business KONE Technology and Innovations 6 July 18, 2019 Half-year Financial Repor
Slide 7: Market development
Market development
Slide 8: New equipment market development in Q2 2019
New equipment market development in Q2 2019 NEW EQUIPMENT MARKET GREW SLIGHTLY North American market EMEA market Asia-Pacific market Stable Stable + <5% of ~20% of >2/3 of global global global market market market (in units) (in units) (in units) ▪ Market was stable on a high ▪ Market stable with mi
Slide 9: Service market development in Q2 2019
Service market development in Q2 2019 CONTINUED POSITIVE DEVELOPMENT North American market EMEA market Asia-Pacific market Maintenance Modernization Maintenance Modernization Maintenance Modernization + + + + ++ +++ <10% of >25% of ~40% of >1/3 of >40% of >15% of global market global market global m
Slide 10: Chinese property market in Q2 2019
Chinese property market in Q2 2019 GOVERNMENT BALANCING BETWEEN STIMULUS AND RESTRICTIONS IN THE RESIDENTIAL MARKET ▪ In units ordered, the new equipment market grew slightly y-o-y ▪ Pricing was fairly stable ▪ Government balancing between supporting the economic activity and curbing speculation in
Slide 11: Q2 Financials
Q2 Financials
Slide 12: Orders received
Orders received GROWTH IN ORDERS RECEIVED DRIVEN BY CHINA AND THE AMERICAS ▪ In Q2, the margin of MEUR orders received improved slightly 8,000 7,000 8.1% 2,310 19 6,000 Q2 growth 5,000 9.0% 173 4,000 2,119 2,310 3,000 2,119 2,000 1,000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 1-6/2019 Q2 2018
Slide 13: Sales
Sales CLEAR GROWTH IN ALL BUSINESSES, CONTINUED STRONG NEW EQUIPMENT DELIVERIES IN CHINA Growth at comp. FX MEUR 7.9% 10,000 9,000 13.7% 2,541 8,000 25 5.0% 7,000 8.1% Q2 growth 6,000 9.0% 5,000 2,331 4,000 2,541 3,000 2,331 EMEA 6.8% 2,000 APAC 9.6% Americas 6.6% 1,000 0 Modernization Maintenance N
Slide 14: Adjusted EBIT
Adjusted EBIT ADJUSTED EBIT GREW Adjusted EBIT* and adjusted EBIT margin ▪ Restructuring costs MEUR; % Q2 adjusted related to the EBIT margin Accelerate program: 1,400 14 12.9% 12.6% EUR 13 million 1,200 12 1,000 10 320 2 800 Q2 growth 8 3 6.4% 600 6 400 320 4 300 300 200 2 0 0 Profitability FX IFRS
Slide 15: Cash flow
Cash flow STRONG CASH FLOW IN THE FIRST HALF OF 2019 Cash flow from operations* ▪ Net working capital MEUR contributed positively in the first half of the 1,600 year driven by strong 1,400 development in advances received and 1,200 progress payments 1,000 ▪ Adoption of IFRS 16 800 had a positive imp
Slide 16: Market and business outlook for 2019
Market and business outlook for 2019
Slide 17: Market outlook for 2019
Market outlook for 2019 New equipment markets ▪ The new equipment market is expected to be relatively stable or to grow slightly ▪ In China, the market is expected to be relatively stable or to grow slightly in units ordered, while in the rest of the Asia-Pacific, the market is expected to grow slig
Slide 18: Business outlook for 2019 (specified)
Business outlook for 2019 (specified) Sales Boosting our performance Burdening our result ▪ In 2019, KONE’s sales is estimated to grow by 4–7% (3–7%) at comparable exchange rates as Solid order book Raw material prices and compared to 2018 trade tariffs Services business (MEUR <50) growth Adjusted E
Slide 19: Summary
Summary ▪ Broad-based competitiveness driving orders received ▪ Well on track towards full-year targets
Slide 20: Dedicated to People Flow
Dedicated to People Flow" KOIN|E
Slide 21: Appendix
Appendix
Slide 22: Q2 2019 Sales split
Q2 2019 Sales split By business By area 14% 20% (14%) (19%) 41% (40%) 55% 31% (55%) (32%) 40% (41%) New equipment Asia-Pacific Maintenance EMEA (Europe, Middle East and Africa) Modernization Americas 4-6/2018 figures in brackets. Figures in charts are rounded and at historical exchange rates. 22 Jul
Slide 23: IFRS 16
IFRS 16 IMPACT IN Q2 Balance sheet Income statement Cash flow statement ▪ EUR 358 million increase in the ▪ EUR 2 million positive impact on ▪ EUR 29 million positive impact on 2019 opening interest-bearing EBIT cash flow from operations (before debt financing items and taxes) ▪ EUR 3 million increa
Slide 24: 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 45 Market >25% >25% 40 <35% >35% >35% 35 The market grew slightly in units 30 New equipment orders grew 25 significantly in units
Slide 25: Currencies
Currencies Sales by currencies 1-12/2018 Currency impact Main currencies USD 1-6/19 2018 Jun 30, MEUR Q2 2019 1-12/2018 average average 2019 spot Others EUR / Sales 25 -260 7.6891 7.8148 7.8185 RMB EUR / 1.1334 1.1809 1.1380 USD EBIT 3 -41 EUR / RMB 0.8761 0.8861 0.8966 GBP Orders 19 -239 received E
Slide 26: Balance sheet – assets employed
Balance sheet – assets employed MEUR Jun 30, 2019 Jun 30, 2018 Dec 31, 2018 Assets employed Goodwill 1,343.5 1,324.1 1,333.4 Other intangible assets 251.2 266.7 260.2 Tangible assets 747.6 378.0 397.4 Investments 151.3 134.7 143.3 Net working capital -805.4 -725.7 -757.8 Assets employed total 1,688.
Slide 27: Net working capital
Net working capital Jun 30, 2019 Jun 30, 2018 Dec 31, 2018 MEUR Net working capital Inventories 643.3 634.5 624.1 Advance payments received and deferred revenue -1,699.4 -1,465.1 -1,562.2 Accounts receivable 2,126.1 1,953.3 1,988.3 Other non-interest-bearing assets 759.8 690.6 660.5 Other non-intere
Slide 28: Consolidated statement of cash flows
Consolidated statement of cash flows MEUR 1-6/2019 1-6/2018 1-12/2018 Operating income 521.8 492.0 1,042.4 Change in working capital before financing items and taxes 62.9 -5.2 -11.2 Depreciation and amortization 116.3 58.5 118.9 Cash flow from operations before financing items and taxes 701.1 545.2