KONE Oyj — Earnings Release 2024

Jan 30, 2025

Financial Statement Bulletin of KONE Corporation for January-December 2024

Financial Statement Bulletin of KONE Corporation for January-December 2024

KONE Corporation, stock exchange release, January 30, 2025 at 8:30 a.m. EET

Financial Statement Bulletin of KONE Corporation for January-December 2024

Strong growth in Service and Modernization, consistent profitability improvement

October-December 2024

· Orders received grew by 3.4% to EUR 2,119.0 (10-12/2023: 2,049.2) million.
At comparable exchange rates, orders grew by 2.6%.
· Sales grew by 5.9% to EUR 2,975.6 (2,809.9) million. At comparable exchange
rates, sales grew by 5.1%.
· Operating income (EBIT) was EUR 332.5 (362.1) million or 11.2% (12.9%) of
sales. Adjusted EBIT was EUR 386.5 (358.6) million or 13.0% (12.8%) of sales.*
· Cash flow from operations (before financing items and taxes) was EUR 533.7
(381.1) million.

January-December 2024

· Orders received grew by 2.1% to EUR 8,758.9 (1-12/2023: 8,577.7) million. At
comparable exchange rates, orders grew by 3.3%.
· Sales grew by 1.3% to EUR 11,098.4 (10,952.3) million. At comparable
exchange rates, sales grew by 2.2%.
· Operating income (EBIT) was EUR 1,249.0 (1,200.1) million or 11.3% (11.0%)
of sales. Adjusted EBIT was EUR 1,303.0 (1,248.4) million or 11.7% (11.4%) of
sales.*
· Cash flow from operations (before financing items and taxes) was EUR 1,589.3
(1,485.2) million.

Business outlook for 2025

KONE expects its sales to grow slightly at comparable exchange rates in 2025.
Adjusted EBIT margin is expected to continue to improve.

Key figures 10-12/20 10-12/20 Change 1-12/2024 1-12/2023 Change
23
24
Orders received MEUR 2,119.0 2,049.2 3.4% 8,758.9 8,577.7 2.1%
Order book MEUR 9,058.6 8,715.7 3.9%
Sales MEUR 2,975.6 2,809.9 5.9% 11,098.4 10,952.3 1.3%
Operating MEUR 332.5 362.1 -8.2% 1,249.0 1,200.1 4.1%
income
Operating % 11.2 12.9 11.3 11.0
income margin
Adjusted EBIT* MEUR 386.5 358.6 7.8% 1,303.0 1,248.4 4.4%
Adjusted EBIT % 13.0 12.8 11.7 11.4
margin*
Income before MEUR 329.5 360.6 -8.6% 1,254.1 1,206.1 4.0%
tax
Net income MEUR 244.5 276.3 -11.5% 961.0 931.6 3.2%
Basic earnings EUR 0.47 0.53 -11.2% 1.84 1.79 2.7%
per share
Cash flow from MEUR 533.7 381.1 1,589.3 1,485.2
operations
(before
financing items
and
taxes)
Interest MEUR -831.2 -1,013.4
-bearing net
debt
Equity ratio % 39.8 40.9
Return on % 33.8 33.0
equity
Net working MEUR -827.2 -861.2
capital
(including
financing items
and taxes)
Gearing % -28.7 -36.4

* KONE presents adjusted EBIT as an alternative performance measure to enhance
comparability of business performance between reporting periods. In
January-December 2024, items affecting comparability amounted to EUR 54 million
including EUR 36 million restructuring costs and EUR 18 million expensed
development costs as a result of redirecting development activities in alignment
with KONE's new strategy. Majority of the items affecting comparability pertain
to the restructuring of China operations. In the comparison period, items
affecting comparability included restructuring costs and a positive effect
recognized on completion of the sale of operations in Russia.

Philippe Delorme, President and CEO:

”Our financial performance in the last quarter of the year once again
demonstrated the resilience of our business. We continued to grow at a healthy
rate, with both orders and sales increasing over 10% outside China. Service and
Modernization had yet another excellent quarter, both delivering double-digit
sales growth. Importantly, the fourth quarter marked the eighth consecutive
quarter of profitability improvement. Service and Modernization were the key
drivers of earnings growth, while our margin and delivery volumes in China
continued to be the main headwinds. I was pleased to see that our focus on cash
flow is paying off, with strong development in the quarter. I would like to take
this opportunity to extend my thanks to the KONE team for their dedication to
driving performance across our businesses.

The execution of our new strategy Rise is in full swing, and we have excellent
progress to report in all of our strategic shifts. In the Service business our
connectivity rate has reached close to 35%. During the year we expanded our
digital service offering with the introduction of Remote Services and rolled out
solutions for smarter service operation to new countries. Other exciting
achievements included improving the cost competitiveness of our offering in the
low-rise residential market as well as accelerating the sales of regenerative
drives to significantly reduce carbon emissions. We also continued to develop
our modular partial modernization offering to strengthen our ability to capture
the significant growth opportunities in this market.

We enter 2025 with a solid order book and good momentum in the Service and
Modernization business. As a result, we expect sales to grow slightly during the
year. Profitability improvement is expected to continue, driven primarily by
growth in Service and Modernization. The initiatives launched in specific areas
where we have identified scope for performance improvement, such as sales and
operations excellence and procurement efficiency, are also expected to
contribute gradually.

Looking ahead, we see exciting opportunities for profitable growth and are
committed to delivering on our mid-term financial targets. I am confident that
our strong team, good momentum in strategy execution, and disciplined approach
to improving profitability position us well to deliver on our ambition of being
the leader of our industry.”

October-December 2024

The global New Building Solutions market declined slightly during the fourth
quarter with regional differences in demand. In North America, the market grew
slightly. In Europe, the market was stable with growth in the 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. The market
continued to weaken in China.

Service and Modernization markets continued to offer the best growth
opportunities. Both markets developed positively with growth across all regions.

Intense competition continued to impact the New Building Solutions pricing
environment in China, while elsewhere pricing was more stable. In the Service
and Modernization markets, the pricing environment was more favorable.

January-December 2024

Regional differences in demand trends were apparent in the global New Building
Solutions market during January-December 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 declined
due to the property market downturn. In Asia-Pacific, Middle East and Africa,
activity grew significantly. In Europe, the market was stable with mixed
regional activity levels. In North America, the market grew 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 more favorable.

Market outlook 2025

KONE has a positive or stable market outlook for eleven of its twelve end
-markets.

Activity in the New Building Solutions market is expected to vary regionally.
The market is expected to grow slightly in North America. In Europe, the market
is expected to be stable. In Asia-Pacific, Middle East and Africa activity is
expected to grow clearly. In China, the market is expected to decline
significantly.

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 clearly in Asia-Pacific, Middle
East and Africa and grow slightly in other regions.

Business outlook 2025

KONE expects its sales to grow slightly at comparable exchange rates in 2025.
Adjusted EBIT margin is expected to continue to improve.

Key drivers for sales growth are the positive outlook for Service and
Modernization and the strong order book. The declining New Building Solutions
market in China is a headwind.

The key profitability drivers are sales growth in Service and Modernization and
the ramp up of performance initiatives. The challenging New Building Solutions
market in China and slight overall decline in margin of orders booked in 2024
are expected to impact profitability negatively.

Press and analyst meetings

A Microsoft Teams call for the press, conducted in English, will be held on
January 30, 2025 at 9:00 a.m. EET. Journalists are kindly asked to sign up to
media@kone.com, and they will receive a link to the call upon registration.

A webcast for analysts, conducted in English, will begin at 10:30 a.m. EET and
will be available on www.kone.com/en/investors. An on-demand version of the
webcast will be available on www.kone.com later the same day. The event can also
be joined via telephone conference.

U.S.: +1 786 697 3501
UK: +44 (0) 33 0551 0200
Finland: +358 (0)9 2319 5437
Participant code: 300124

For further information, please contact:

Natalia Valtasaari, Vice President, Investor Relations, tel. +358 204 75 4705

Sender:

KONE Corporation

Philippe Delorme
President and CEO

Ilkka Hara
CFO

About KONE

At KONE, our purpose is to shape the future of cities. As a global leader in the
elevator and escalator industry, we move two billion people every day, making
their journeys safe, convenient, and reliable with smart and sustainable People
Flow®. In 2024, KONE had annual sales of EUR 11.0 billion, and at the end of the
year over 60,000 employees in close to 70 countries. KONE class B shares are
listed on the Nasdaq Helsinki Ltd. in Finland.

www.kone.com

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