Slide 1: KONE Result presentation 2021
KONE Result presentation 2021 FEBRUARY 2, 2022 HENRIK EHRNROOTH, PRESIDENT & CEO ILKKA HARA, CFO
Slide 2: Q4 2021 Highlights
Q4 2021 Highlights ▪ Orders received at last year’s high level ▪ Excellent development in the Services business ▪ Supply chain environment remains challenging. Good progress in offsetting actions ▪ Dividend proposal: EUR 1.75 dividend and EUR 0.35 extraordinary dividend per B class share
Slide 3: Q4 2021 Key figures
Q4 2021 Key figures SOLID DEVELOPMENT IN THE QUARTER, COST HEADWINDS BURDENED PROFITABILITY Comparable Q4/2021 Q4/2020 Change change Orders received MEUR 2,155.1 2,068.7 4.2% 0.4% Order book MEUR 8,564.0 7,728.8 10.8% 3.8% Sales MEUR 2,766.8 2,621.2 5.6% 1.8% Operating income (EBIT) MEUR 351.9 367.1
Slide 4: 1–12/2021 Key figures
1–12/2021 Key figures STRONG YEAR IN ORDERS AND SALES, SUPPLY CHAIN ENVIRONMENT REMAINS CHALLENGING Comparable 1–12/2021 1–12/2020 Change change Orders received MEUR 8,852.8 8,185.1 8.2% 7.4% Order book MEUR 8,564.0 7,728.8 10.8% 3.8% Sales MEUR 10,514.1 9,938.5 5.8% 5.3% Operating income (EBIT) MEU
Slide 5: Dividend proposal: EUR 2.10 per class B share including extraordinary dividend
Dividend proposal: EUR 2.10 per class B share including extraordinary dividend Split-adjusted dividend per class B share ▪ Dividend payout EUR, 2006-2021 in 2021: 89% of earnings per share excluding the 0.50 extraordinary dividend 0.35 ▪ Effective dividend yield* in 2021: CAGR: 14% ▪ 2.8% excluding
Slide 6: Good development towards our strategic targets
Good development towards our strategic targets STRATEGIC TARGETS Great place to Employee engagement work above high-performance benchmark Most loyal Positive development in customers Net Promoter Score Faster than Strong development in both market growth new equipment and services Best financial EBI
Slide 7: Excellent year in Services business
Excellent year in Services business Continued growth in maintenance base +4.9% millions of units ▪ Strong growth in maintenance sales with 1.5 >1.4 <1.5 improved pricing 1.0 ▪ Good development in modernization orders 0.5 ▪ Faster than market growth in China services ▪ 24/7 Connected Services penetra
Slide 8: Market development
Market development
Slide 9: Broad-based year-on-year recovery in elevator usage
Broad-based year-on-year recovery in elevator usage MONTHLY AVERAGE NUMBER OF STARTS PER ELEVATOR, DATA FROM CONNECTED UNITS By country By segment Indexed, indicative Indexed, indicative 1.2 1.4 1.2 1.0 1.0 0.8 0.8 0.6 Dec 21 Dec 21 vs. Dec 0.6 vs. Dec 20 20 0.4 Germany +13% Hotel +97% 0.4 UK +44% M
Slide 10: New equipment market development in Q4 2021
New equipment market development in Q4 2021 RECOVERY CONTINUED AT A VARIED PACE IN DIFFERENT REGIONS North American market EMEA market Asia-Pacific market ++ + Stable <5% of ~20% of >2/3 of global global global market market market (in units) (in units) (in units) ▪ Clear growth ▪ Slight growth thro
Slide 11: Service market development in Q4 2021
Service market development in Q4 2021 BROAD-BASED GROWTH IN BOTH MAINTENANCE AND MODERNIZATION 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
Slide 12: Chinese property market in Q4 2021
Chinese property market in Q4 2021 ▪ In units ordered, the new equipment market was stable y-o-y ▪ The pricing environment continues to be characterized by intense competition ▪ Macro momentum slowing ▪ Financing environment for developers remains tight ▪ Liquidity restrictions impacted property sec
Slide 13: Q4 Financials
Q4 Financials
Slide 14: Orders received
Orders received MARKET RECOVERY PROVIDED GOOD BACKDROP FOR FULL YEAR ORDER GROWTH, Q4 ORDERS AT LAST YEAR’S HIGH LEVELS ▪ Q4 orders received MEUR margin declined slightly y/y, but 10,000 improved sequentially 9,000 8,853 8,400 8,185 7,959 7,797 8,000 7,621 7,554 2,155 6,813 1,988 2,069 7,000 +0.4% 6
Slide 15: Sales
Sales Q4 SALES GROWTH DRIVEN BY CONTINUED STRONG MOMENTUM IN THE MAINTENANCE BUSINESS Growth at comp. FX MEUR +1.8% 11,000 10,514 9,982 9,939 -1.1% -0.1% 10,000 8,797 9,071 +7.7% 2,767 9,000 8,647 8,784 2,767 2,685 2,621 8,000 7,334 96 6,933 7,000 0 6,277 +5.6% 6,000 5,225 +3.1% 2,621 16 66 5,000 4,
Slide 16: Profitability
Adjusted EBIT PROFITABILITY BURDENED BY INCREASED COMPONENT AND LOGISTICS COSTS + Improved productivity Adjusted EBIT* and adjusted EBIT margin + Good development in services MEUR; % Q4 Adj. EBIT margin 14.5% - Approx. MEUR 75 impact from 1,600 13.7% increased component and 13.0% logistics costs 1,4
Slide 17: Responding to cost and availability headwinds in the supply chain
Responding to cost and availability headwinds in the supply chain Increased costs for Elevated Increased securing electronic material prices logistics costs component availability Good progress in KONE’s actions to offset cost headwinds Reducing product costs and improving productivity Pricing actio
Slide 18: Cash flow
Cash flow FULL YEAR CASH FLOW EXCEPTIONALLY STRONG Cash flow from operations* ▪ Q4 cash flow growth MEUR driven by positive working capital 2,000 1,908 1,829 development 368 1,509 1,550 1,474 525 1,500 1,346 1,263 386 1,213 1,150 1,071 1,000 820 500 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 202
Slide 19: Market and business outlook
Market and business outlook
Slide 20: Market outlook for 2022
Market outlook for 2022 New equipment markets ▪ In China, the new equipment market is expected to remain solid although below that of 2021 due to the tightened liquidity situation in the property markets ▪ In the rest of the world, the new equipment markets are expected to continue recovering Modern
Slide 21: Business outlook for 2022
Business outlook for 2022 Sales Supporting our performance Burdening our result ▪ KONE estimates that in 2022, its sales growth will be in the range of 2% to 7% at comparable Solid order book and Approx. MEUR 100-150 positive outlook for headwind in 2022 from exchange rates as compared to 2021 servi
Slide 22: Summary
Summary ▪ Continued positive outlook in services. Growth expected in new equipment markets outside China. ▪ Good progress in actions to address impact of supply chain constraints ▪ Driving long-term growth and differentiation with our value- added solutions and services
Slide 23: Dedicated to People Flow
Dedicated to People Flow" KOIN|E
Slide 24: Appendix
Appendix
Slide 25: 1–12/2021 Sales split
1–12/2021 Sales split By business By region 14% 18% (14%) (21%) 44% (41%) 54% 33% (54%) (32%) 38% (39%) New equipment Asia-Pacific Maintenance EMEA (Europe, Middle East and Africa) Modernization Americas 1–12/2020 figures in brackets. Figures in charts are rounded and at historical exchange rates. 2
Slide 26: 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 orders KONE 45 declined slightly in units and in Market ~30% ~35% 40 monetary value. <40% ~40% >35% 35 30 25 <20%
Slide 27: Currencies
Currencies Sales by currencies 1–12/2021 Currency impact* Main currencies EUR Q4/2021 2020 Dec 31, Other MEUR Q4 Full year average average 2021 spot EUR / 7.6388 7.8916 7.1947 Sales 96.1 49.6 CNY EUR / 1.1851 1.1452 1.1326 USD EBIT 10.9 12.4 EUR / 0.8615 0.8864 0.8403 GBP USD Orders 78.2 61.5 EUR /
Slide 28: Balance sheet – assets employed
Balance sheet – assets employed MEUR Dec 31, 2021 Dec 31, 2020 Assets employed Goodwill 1,405.2 1,327.0 Other intangible assets 216.9 223.2 Tangible assets 736.7 710.0 Investments 144.6 143.2 Net working capital -1,468.2 -1,160.1 Assets employed total 1,035.1 1,243.4 Financed by Equity 3,199.2 3,197
Slide 29: Net working capital
Net working capital MEUR Dec 31, 2021 Dec 31, 2020 Net working capital Inventories 717.8 597.0 Advance payments received and deferred revenue -1,957.0 -1,766.8 Accounts receivable 2,421.4 2,178.6 Deferred assets and income tax receivables 898.1 720.9 Accruals and income tax payables -2,268.2 -1,996.