(AGENPARL) – ven 19 luglio 2024 7.30 AM CEST / 19-Jul-2024 / KONE Oyj (HEX:KNEBV)
KONE Corporation, stock exchange release, July 19, 2024 at 8.30 a.m. EEST
Half-year Financial Report of KONE Corporation for January-June 2024
Solid order growth in three of the four geographical Areas, margin improvement
continued
April-June 2024
· Orders received grew by 2.3% to EUR 2,327.6 (4-6/2023: 2,275.5) million. At
comparable exchange rates, orders grew by 3.6%.
· Sales declined by 1.2% to EUR 2,801.0 (2,835.9) million. At comparable
exchange rates, sales declined by 0.1%.
· Operating income (EBIT) was EUR 334.7 (283.2) million or 11.9% (10.0%) of
sales. The adjusted EBIT was EUR 334.7 (332.0) million or 11.9% (11.7%) of
sales.*
· Cash flow from operations (before financing items and taxes) was EUR 312.6
(306.1) million.
January-June 2024
· Orders received grew by 0.5% to EUR 4,563.3 (1-6/2023: 4,538.6) million. At
comparable exchange rates, orders grew by 2.6%.
· Sales declined by 0.4% to EUR 5,369.3 (5,392.5) million. At comparable
exchange rates, sales grew by 1.2%.
· Operating income (EBIT) was EUR 597.0 (521.5) million or 11.1% (9.7%) of
sales. The adjusted EBIT was EUR 597.0 (573.9) million or 11.1% (10.6%) of
sales.*
· Cash flow from operations (before financing items and taxes) was EUR 710.8
(762.0) million.
Business outlook for 2024 (specified)
KONE expects its sales to grow 0-4% at comparable exchange rates in 2024.
Adjusted EBIT margin is expected to be in the range of 11.5%-12.2%. Assuming
that foreign exchange rates remain at the July 2024 level, the negative impact
of foreign exchange rates on the adjusted EBIT would be approximately EUR 10
million.
KONE previously expected its sales to grow 0-5% at comparable exchange rates in
2024. Adjusted EBIT margin was expected to be in the range of 11.5%-12.3%.
Assuming that foreign exchange rates remain at the April 2024 level, the impact
of foreign exchange rates on the adjusted EBIT was expected to be limited.
Key 4-6/2024 4-6/2023 Change 1-6/2024 1-6/2023 Change
1-12/2023
figures
8,577.7
received
8,715.7
Sales MEUR 2,801.0 2,835.9 -1.2% 5,369.3 5,392.5 -0.4%
10,952.3
1,200.1
income
11.0
income
margin
1,248.4
EBIT*
11.4
EBIT
margin*
1,206.1
before
931.6
1.79
earnings
per share
Cash flow MEUR 312.6 306.1 710.8 762.0
1,485.2
from
operations
(before
financing
items
taxes)
Interest MEUR -417.7 -640.9
-1,013.4
-bearing
debt
40.9
ratio
33.0
equity
Net MEUR -782.8 -948.7
-861.2
working
capital
(including
financing
items
and taxes)
Gearing % -17.6 -28.8
-36.4
* KONE presents adjusted EBIT as an alternative performance measure to enhance
comparability of business performance between reporting periods. In January-June
2024, there were no items affecting comparability. In the comparison period,
items affecting comparability included restructuring costs and a positive effect
arising from the revaluation of operations in Russia classified as held for
sale.
Philippe Delorme, President and CEO:
“I am very pleased that our focus on accelerating Service and Modernization paid
off again in Q2. For me, the standout of the quarter was the double-digit growth
in orders in three of our four Areas at comparable exchange rates. This was
driven by all-time high Modernization orders, a result of our relentless focus
on making modernizing elevators easier for our customers in the aging installed
base. Another highlight was the strong 9% growth in Service sales at comparable
exchange rates. We will continue to drive a higher share of the resilient
Service and Modernization businesses also going forward.
Also in China, we are driving a more balanced business mix in the tough
operating environment. The property market in China remained very challenging in
Q2. This led to a significant decline in both our orders and sales in China New
Building Solutions. Our priority is to ensure solid cash flow and to achieve a
more balanced business mix in the Area. Service and Modernization now account
for around a third of our sales in China and these businesses grew well also in
Importantly, we improved our profitability for the sixth quarter in a row. Our
adjusted EBIT margin improved by 20 basis points year-over-year. This was driven
by improved margin in our New Building Solutions and Modernization deliveries
outside China as well as better business mix. On the negative side, we saw a
decline in our margin in China and cost increases driven by inflation. We
specify our guidance for the year, and now expect sales to grow by 0 to 4% at
comparable exchange rates and the adjusted EBIT margin to be between 11.5% and
12.2%.
We also got valuable feedback from both our employees and customers in our
annual surveys. I am very happy that our employee engagement improved during a
period of many changes and continued to be well above the global benchmark. We
saw strong results in wellbeing, inclusion and intent to stay with KONE. In the
customer loyalty survey, we improved on many aspects, and our Modernization net
promoter score, for example, continued to improve. We also learned that there
are areas where we need to work hard to improve customer experience. I would
like to extend a huge thank you to both our employees and customers for taking
the time to provide this feedback, which will enable us to improve further.”
Operating environment in April-June 2024
The global New Building Solutions market declined clearly during the second
quarter with regional differences in demand. In North America, the market
declined slightly. In Europe, the market grew slightly with growth in Southern
and Eastern parts of Europe, and weaker activity in the Western parts and
Nordics. In Asia-Pacific, Middle East and Africa, activity grew clearly,
supported by strong development especially in the Middle East. Market remained
weak in China.
Both Service and Modernization markets developed positively with continued
growth across all regions.
Intense competition impacted the New Building Solutions pricing environment in
China, while elsewhere pricing was more stable. In the Service and Modernization
markets, the pricing environment was favorable.
Operating environment in January-June 2024
Regional differences in demand trends were apparent in the global New Building
Solutions market during the first half of 2024. In the more mature markets,
activity was impacted by high interest rates and slow economic growth, while in
many emerging markets activity was more favorable. In China, activity continued
to decline due to property market downturn. In Asia-Pacific, Middle East and
Africa, activity grew significantly, supported by strong development especially
in India and the Middle East. In Europe, market was stable with continued mixed
regional activity levels. In North America, the market declined slightly.
Both the Service and Modernization markets developed positively with growth
across all regions.
Intense competition impacted the New Building Solutions pricing environment in
China, while elsewhere pricing was more stable. In the Service and Modernization
markets, the pricing environment was favorable.
Market outlook 2024 (updated)
In the New Building Solutions market, activity is expected to be stable both in
North America and in Europe. In Asia-Pacific, Middle East and Africa activity is
expected to grow clearly. In China, market is expected to decline over 10% in
units and price pressure to continue.
Modernization markets are expected to grow in all regions supported by an aging
equipment base as well as the focus on sustainability and adaptability of
buildings.
Service markets are expected to grow slightly in the more mature markets and
grow clearly in Asia-Pacific, Middle East and Africa and in China.
Business outlook 2024 (specified)
KONE expects its sales to grow 0-4% at comparable exchange rates in 2024.
Adjusted EBIT margin is expected to be in the range of 11.5%-12.2%. Assuming
that foreign exchange rates remain at the July 2024 level, the negative impact
of foreign exchange rates on the adjusted EBIT would be approximately EUR 10
million.
Key drivers for sales growth are positive outlook for Service and Modernization
and the strong order book. Declining New Building Solutions market in China is a
headwind.
The key profitability drivers are sales growth in Service and Modernization,
improved margin coming through in deliveries outside China and savings from the
operating model renewal. Persistent cost inflation and decision to slightly
increase investments in R&D and IT are expected to impact profitability
negatively.
Press and analyst meetings
A Microsoft Teams call for the press, conducted in English, will be held on
Friday, July 19, 2024 at 9:00 a.m. EEST. Journalists are kindly asked to sign up
A webcast for analysts, conducted in English, will begin at 10:30 a.m. EEST and
will be available on https://join.rajucast.tv/KONE-2024-0719-Q2. An on-demand
version of the webcast will be available on http://www.kone.com later the same day. The
event can also be joined via a telephone conference.
Participant code: 190724
For further information, please contact: