Slide 1: KONE Q3 2021
KONE Q3 2021 OCTOBER 28, 2021 HENRIK EHRNROOTH, PRESIDENT & CEO ILKKA HARA, CFO
Slide 2: Q3 2021 Highlights
Q3 2021 Highlights ▪ Strong growth in orders received, sales broadly stable ▪ Supply chain environment remains challenging, customer deliveries prioritized ▪ Improved momentum for 24/7 Connected Services
Slide 3: Q3 2021 Key figures
Q3 2021 Key figures STRONG GROWTH IN ORDERS RECEIVED, EBIT IMPACTED BY RISING COSTS IN SUPPLY CHAIN Comparable Q3/2021 Q3/2020 Change change Orders received MEUR 2,211.1 1,931.7 14.5% 10.9% Order book MEUR 8,436.9 7,914.4 6.6% 3.1% Sales MEUR 2,610.0 2,587.0 0.9% -1.3% Operating income (EBIT) MEUR 3
Slide 4: 1–9/2021 Key figures
1–9/2021 Key figures ROBUST PERFORMANCE ACROSS THE BOARD Comparable 1–9/2021 1–9/2020 Change change Orders received MEUR 6,697.7 6,116.4 9.5% 9.8% Order book MEUR 8,436.9 7,914.4 6.6% 3.1% Sales MEUR 7,747.3 7,317.3 5.9% 6.6% Operating income (EBIT) MEUR 943.4 845.8 11.5% Operating income margin (EB
Slide 5: 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 KONE actions Reducing product costs and improving productivity Pricing actions across all businesses Focusing on differe
Slide 6: Improved momentum for 24/7 Connected Services
Improved momentum for 24/7 Connected Services ▪ Penetration in maintenance base increased to 10% ▪ Value proposition resonating well with customers – Increased transparency – Reduced breakdowns and improved accessibility through ▪ >40% fewer callouts ▪ 70% of all potential faults identified proactiv
Slide 7: Market development
Market development
Slide 8: Elevator usage continued to recover in most markets
Elevator usage continued to recover in most markets 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 Sep 21 Sep 21 vs. Dec 0.6 vs. Dec 20 20 0.4 Germany +30% Hotel +138% 0.4 UK +64%
Slide 9: New equipment market development in Q3 2021
New equipment market development in Q3 2021 RECOVERY CONTINUED AT A VARIED PACE IN DIFFERENT REGIONS 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) ▪ Significant growth ▪ Slight
Slide 10: Service market development in Q3 2021
Service market development in Q3 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 m
Slide 11: Chinese property market in Q3 2021
Chinese property market in Q3 2021 ▪ In units ordered, the new equipment market was stable y-o-y with signs of tempering activity ▪ The pricing environment continues to be characterized by intense competition ▪ Macro momentum slowing ▪ Financing environment for developers remains tight ▪ Liquidity r
Slide 12: Q3 Financials
Q3 Financials
Slide 13: Orders received
Orders received STRONG GROWTH IN BOTH NEW EQUIPMENT AND MODERNIZATION ▪ In Q3, the margin of MEUR orders received declined 10,000 9,000 8,400 7,959 8,185 8,000 7,621 7,554 7,797 7,000 6,813 6,698 6,151 10.9% 2,211 6,000 5,496 2,007 2,211 62 5,000 1,932 218 4,465 1,932 4,000 3,000 +14.5% 2,000 +10.2%
Slide 14: Sales
Sales BROADLY STABLE DEVELOPMENT, WITH STRONG MOMENTUM IN MAINTENANCE Growth at comp. FX MEUR -1.3% 11,000 9,982 9,939 -6.5% 1.0% 10,000 9,071 7.5% 2,610 9,000 8,647 8,784 8,797 2,587 8,000 7,747 57 7,334 3 6,933 7,000 6,277 97 2,610 6,000 2,558 2,587 60 5,225 5,000 4,000 +0.9% 3,000 EMEA -1.2% +2.0
Slide 15: Adjusted EBIT
Adjusted EBIT MARGINS BURDENED BY INCREASED COMPONENT AND LOGISTICS COSTS + Favorable mix Adjusted EBIT* and adjusted EBIT margin Q3 adj. + Good development in services MEUR; % EBIT margin - Decline in volumes 13.1% - Approx. MEUR 75 impact from 1,600 12.6% 12.5% increased component and logistics co
Slide 16: Cash flow
Cash flow YEAR-TO-DATE CASH FLOW STRONG Cash flow from operations* ▪ Q3 cash flow solid, MEUR comparison period 2,000 1,908 exceptionally high 1,509 1,550 1,500 1,474 1,346 1,304 1,213 1,263 1,150 600 1,071 365 1,000 820 463 500 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 1-9/2021 * Before f
Slide 17: Market and business outlook
Market and business outlook
Slide 18: Market outlook for 2021 (updated)
Market outlook for 2021 (updated) New equipment markets ▪ In China, the new equipment market is expected to grow clearly from a high level thanks to strong activity in the first half of the year ▪ In the rest of the world, the new equipment markets are expected to recover from a low comparison perio
Slide 19: Business outlook for 2021 (specified)
Business outlook for 2021 (specified) Sales Supporting our performance Burdening our result ▪ KONE estimates that in 2021, its sales growth will be in the range of 4% to 6% at comparable Solid order book and Approx. MEUR 200 maintenance base headwind in 2021 from exchange rates as compared to 2020 i
Slide 20: Headwinds and tailwinds going into 2022
Headwinds and tailwinds going into 2022 BOOSTING OUR PERFORMANCE Solid order book Service growth momentum Effects of product cost & pricing actions towards the latter part of the year BURDENING OUR RESULT Elevated raw material prices Increased costs for logistics and for securing component availabil
Slide 21: Summary
Summary ▪ Market recovery continues despite challenges in global supply chains ▪ Addressing rising costs from a position of strength ▪ Driving differentiation with our value-added solutions and services
Slide 22: Dedicated to People Flow
Dedicated to People Flow" KOIN|E
Slide 23: Appendix
Appendix
Slide 24: Q3/2021 Sales split
Q3/2021 Sales split By business By region 14% 18% (14%) (18%) 45% 53% (44%) 33% (56%) (31%) 37% (38%) New equipment Asia-Pacific Maintenance EMEA (Europe, Middle East and Africa) Modernization Americas 7–9/2020 figures in brackets. Figures in charts are rounded and at historical exchange rates. 24 O
Slide 25: 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 grew clearly in units and slightly Market 40 in monetary value. >30% ~35% >35% >40% >40% 35 30 25 <
Slide 26: Currencies
Currencies Sales by currencies 1–9/2021 Currency impact* Main currencies EUR Q3/2021 2020 Sep 30, Other MEUR Q3 Full year average average 2021 spot EUR / 7.7422 7.8916 7.4847 Sales 56.8 -23.2 CNY EUR / 1.1972 1.1452 1.1579 USD EBIT 8.3 2.8 EUR / 0.8663 0.8864 0.8605 GBP USD Orders 61.7 -3.9 EUR / re
Slide 27: Balance sheet – assets employed
Balance sheet – assets employed MEUR Sep 30, 2021 Sep 30, 2020 Dec 31, 2020 Assets employed Goodwill 1,384.3 1,343.5 1,327.0 Other intangible assets 216.7 218.4 223.2 Tangible assets 720.9 690.6 710.0 Investments 142.0 132.6 143.2 Net working capital -1,356.9 -1,200.3 -1,160.1 Assets employed total
Slide 28: Net working capital
Net working capital MEUR Sep 30, 2021 Sep 30, 2020 Dec 31, 2020 Net working capital Inventories 673.7 640.9 597.0 Advance payments received and deferred revenue -1,893.7 -1,817.7 -1,766.8 Accounts receivable 2,317.9 2,133.9 2,178.6 Deferred assets and income tax receivables 854.0 802.7 720.9 Accrual