KONE’s Annual General Meeting 2016 · KONE’s Annual General Meeting 2016 March 7, 2016 Henrik...

KONE’s Annual General Meeting 2016

March 7, 2016

Henrik Ehrnrooth, President & CEO

KONE’s 2015

Market development

in 2015

Long-term drivers

Our outlook for 2016

March 7, 2016 Annual General Meeting 2016 | © KONE Corporation 2

2015: Profitable growth in a

changing market environment

2015 2014 Historical

change Comparable

change

Orders received MEUR 7,958.9 6,812.6 16.8% 5.6%

Order book MEUR 8,209.5 6,952.5 18.1% 11.9%

Sales MEUR 8,647.3 7,334.5 17.9% 8.3%

Operating income (EBIT) MEUR 1,241.5 1,035.7 19.9%

Operating income (EBIT) % 14.4 14.1

Cash flow from operations

(before financing

items and taxes)

MEUR 1,473.7 1,345.4

Basic earnings per share EUR 2.01 1.47

Basic earnings per share

excluding one-time item* EUR 1.79 -

Dividend per share EUR 1.401) 1.20

March 7, 2016 Annual General Meeting 2016 | © KONE Corporation 3 1) Board’s proposal to the AGM

*Excluding extraordinary dividend from TELC

2015 Orders received: Growth in both the volume

business and major projects

MEUR

2,200

2,400

1,600

2,000

1,800

1,400

1,200

1,000

800

600

400

200

0

21.7%

18.7%

Q4

1,947

Q3

1,764

Q2

2,193

Q1

14.3%

11.9% 2,054

2009 2015

March 7, 2016 Annual General Meeting 2016 | © KONE Corporation 4 Growth in historical exchange rates.

2015 Sales: Growth in all regions,

in North America in particular

MEUR

400

200

0

1,000

800

600

2,600

2,400

2,200

1,600

2,000

1,800

1,400

1,200

18.3%

16.3% 19.5%

17.3%

Q3

2,184

Q2 Q4

2,210

Q1

1,691

2,562

2009 2015

March 7, 2016 Annual General Meeting 2016 | © KONE Corporation 5 Growth in historical exchange rates.

2015 Operating income: Positive development

driven by both the new equipment and service

businesses

Operating income excluding one-time items.

MEUR

379

326325

212

0

50

100

150

200

250

300

350

400

20.0%

17.4% 23.5%

18.0%

Q4 Q3 Q2 Q1 2009 2015


Growth in historical exchange rates.

2015: We further strengthened our

offering and capabilities in new equipment


~ 161,000 units

(~ 154,000 units)

New equipment orders

received

New elevator solutions were launched in

2015:

- I MonoSpace® and I MiniSpace™ for

the Indian market

- Z MiniSpace™ for the Chinese

market

Updated version of the TransitMaster 140

escalator was released for the

infrastructure segment in China.

KONE’s new elevator test tower, one of

the world’s tallest at 236 meters, was

opened in Kunshan in the autumn.

New equipment units

delivered

~ 137,000 units

(~ 130,000 units)

2015: We delivered on our target to accelerate

growth in services


A strong level of conversions of installed

equipment was driving the growth of the

maintenance base.

Our approach to sales and customer

interactions was sharpened.

We improved the response times of

technicians and speed of problem

resolution with a next generation Field

Mobility device.

Equipment in KONE’s

maintenance base

< 1.1 million units

(> 1 million units)

KONE’s 2015

Long-term drivers



Market development

in 2015

Market development in 2015

China

Rest of Asia-Pacific

Europe, Middle East

and Africa

North America

New equipment: the global market declined slightly

due to a decline in the large Chinese market

In Asia-Pacific, the new

equipment market declined slightly

in 2015, but remained at a high

level

In the EMEA region, Central and

North Europe saw the strongest

development. South Europe

stabilized and the Middle East saw

some growth.

In North America, the market

developed strongly

EMEA: Euroope, Middle East and Africa March 7, 2016 Annual General Meeting 2016 | © KONE Corporation 10


Europe, Middle East

and Africa

North America

China


Maintenance: growth continued globally, with Europe

and North America remaining the most significat

markets

11

In the EMEA region, the market

grew, but the environment

remained varied. South Europe in

particular continued to see intense

price competition

In North America, the market saw

some growth, but competition

remained intense

In Asia-Pacific, maintenance

markets grew with at fastest rate

globally



Europe, Middle East

and Africa

North America

China


Modernization: slight increase in global modernization

demand with a positive develpoment in North America

in particular

In the EMEA region, the large

European market developed

favorably in Central and North

Europe, but South Europe remained

weak

In North America, modernization

demand continued to grow

In Asia-Pacific, increasing

modernization opportunities were

seen from a smaller starting level


KONE’s 2015

Long-term drivers



Market development

in 2015

2015

8,647

44%

17%

39%

2014

7,334

41%

15%

44%

2013

6,933

38%

16%

46%

2012

6,277

35%

16%

49%

2011

5,225

27%

18%

55%

2010

4,987

21%

21%

58%

2009

4,744

17%

21%

62%

2008

4,603

16%

19%

65%

2007

4,079

14%

21%

65%

2006

3,601

13%

22%

65%

2005*

3,242

12% 22%

66%

EMEA Americas Asia-Pacific

CAGR,%

10.3%

4.6%

7.7%

25.4%

March 7, 2016 14

13.8% 14.1% 13.2% 13.9% 14.0% 12.7% 12.1% 11.6% 10.0% 8.4% EBIT margin

(%)¹

EMEA= Europe, Middle East and Africa

*) 2005 figures are pro forma

¹ Excluding one-time items Annual General Meeting 2016 | © KONE Corporation

14.4%

Sales by area 2005–2015 (MEUR)

Over the past decade, KONE’s sales

has grown in all regions

8,647

31%

12%

57%

2014

7,334

2008

4,603

33%

19%

48%

2007

4,079

36%

19%

45%

2006

3,601

40%

19%

41%

2005*

3,242

41%

19%

40%

32%

13%

55%

2013

6,933

32%

14%

54%

2012

6,277

34%

16%

50%

2011 2015

37%

17%

46%

2010

4,987

37%

5,225

46%

2009

4,744

34%

19%

47%

17%

Maintenance New equipment Modernization

CAGR,%

10.3%

6.0%

7.0%

14.3%

*) 2005 figures are pro forma


13.8% 14.1% 13.2% 13.9% 14.0% 12.7% 12.1% 11.6% 10.0% 8.4% EBIT margin

(%)¹

¹ Excluding one-time items

14.4%

Sales by business 2005–2015 (MEUR)

We have grown both the new equipment and the

service business

Powerful global megatrends will continue to drive the

E&E industry growth

Annual General Meeting 2016 | © KONE Corporation 16

Urbanization

Safety Environment

March 7, 2016

Changing demographics

Connectivity Quality

Urbanization and urban development continue

globally, progressing through different stages

Strong growth in middle

income consumers

Changing living

preferences

Mature markets Emerging markets

Move from rural to

urban areas

1

Growth of middle

income consumers

2

Changing patterns of

urban living

3

17 March 7, 2016 Annual General Meeting 2016 | © KONE Corporation

Continued growth in urban

population


1. Move from rural to urban areas

Source: UN World Urbanization prospects, 2014 revision.

85% of the billion new urban residents by

2030 to be in Asia-Pacific and Africa

Urbanization continues to be a strong driver

in Asia-Pacific and Africa

6,000

5,000

4,000

3,000

2,000

1,000

0

Urban population

(Millions)

Latin America

Africa and the

Middle East

China

Asia-Pacific

ex China

North America

Europe

2030

5,058

2015

3,957

+1,101

China, India and Southeast Asia will continue to see a

growing middle class accelerating urban development


90 % of the 2.5 billion new middle income

consumers to be in Asia-Pacific

2. Growth of middle income

consumers

1,000

2,000

0

4,000

5,000

3,000

+2,460

Latin America

Middle East

and Africa

Asia-Pacific

North America

Europe

2030

4,884

2015

2,424

Source: UNDP Human Development Report, data from Brookings

Institution. The middle income consumer group includes people earning

or spending $10–$100 a day (2005 PPP).

(Millions)

Europe and North America will see changing

requirements in city planning and infrastructure


3 3. Changing patterns of urban living

75

60

3529

17

Germany Australia United

States

France UK

Projected % increase in one-person households,

early-mid-2000s to 2025-2030

Source: OECD: The Future of Families to 2030.

Living preferences continue to change

alongside changing demographics

The industry and KONE will be shaped

by two significant trends going forward

Digitalization and increasing speed

of technological change

Changing growth dynamics

21 March 7, 2016 Annual General Meeting 2016 | © KONE Corporation

1 NEW EQUIPMENT

Opportunities in many

markets despite the

decline in global

market volumes.

Increasing

opportunities from

smarter buildings

The importance of the service business is increasing

as the new equipment market slows

3 MODERNIZATION

Growing opportunity in

all regions as the

installed equipment

base ages and

customer requirements

increase

2 MAINTENANCE Importance of

maintenance relative to

the total business will

increase in the

emerging markets

New technology to start

shaping the business

everywhere

1

2

3


Mobility

Connectivity

Cloud

Analytics

Sensors

Data storage

and integration

Everything becomes mobile and connected

Customers have full real-time transparency

Users demand increased convenience,

efficiency and enjoyment in People Flow

New ”ecosystems” emerging around

smart buildings and cities

Development of technological enablers

continues to accelerate


Annual General Meeting 2016 | © KONE Corporation 24

Our strategy focuses on making KONE an

even more competitive company

March 7, 2016

Work with our development programs

continues in 2016

Annual General Meeting 2016 | © KONE Corporation 25 March 7, 2016

Further improve customer

service and communication

Help all employees perform

at their best

Develop innovative

solutions in new equipment

Strengthen our differentiation in

the maintenance business

Accelerate the growth of

the modernization business

First in Customer Loyalty

A Winning Team of

True Professionals

The Most Competitive

People Flow® Solutions

Preferred Maintenance Partner

Top Modernization Provider

KONE’s 2015

Long-term drivers



Market development

in 2015

The modernization market is expected to grow slightly in Europe, to

continue to grow in North America, and to develop strongly in Asia-

Pacific.

Modernization markets

Market outlook 2016

Asia-Pacific: The market in China is expected to decline by 5–10%

in units ordered and also the price competition to continue intense.

In the rest of Asia-Pacific, the market is expected to see some

growth.

Europe, Middle East and Africa: the market is expected to grow

slightly with growth in Central and North Europe and a more stable

development in South Europe and the Middle East.

North America: the market is expected to see some growth.

The maintenance markets are expected to see the strongest growth

rate in Asia-Pacific, and to develop rather well also in other regions.

Maintenance markets

New equipment markets


Business outlook 2016

KONE’s net sales is estimated to grow by 2–6%

at comparable exchange rates as compared to

2015.

The operating income (EBIT) is expected to be in

the range of EUR 1,220–1,320 million, assuming

that translation exchange rates would remain at

approximately the average level of January 2016.

Sales

Operating income


KONE’s Annual General Meeting 2016 · KONE’s Annual General Meeting 2016 March 7, 2016 Henrik...

Documents

Transcript of KONE’s Annual General Meeting 2016 · KONE’s Annual General Meeting 2016 March 7, 2016 Henrik...