| Imagery Source: KONE Corporation |
| Information Source: KONE Corporation |
| Half-year Financial Report of KONE Corporation for January-June 2025 |
| Sales growth and continued margin improvement |
| April-June 2025 |
- Orders received declined by 0.5% to EUR 2,316.2 (4-6/2024: 2,327.6) million. At comparable exchange rates, orders grew by 3.0%.
|
- Sales grew by 1.8% to EUR 2,850.1 (2,801.0) million. At comparable exchange rates, sales grew by 4.9%.
|
- Operating income (EBIT) was EUR 338.0 (334.7) million or 11.9 % (11.9 %) of sales. The adjusted EBIT was EUR 347.2 (334.7) million or 12.2 % (11.9 %) of sales.*
|
- Cash flow from operations (before financing items and taxes) was EUR 364.4 (312.6) million.
|
| January-June 2025 |
- Orders received grew by 2.9% to EUR 4,694.6 (1-6/2024: 4,563.3) million. At comparable exchange rates, orders grew by 4.0%.
|
- Sales grew by 2.9% to EUR 5,522.4 (5,369.3) million. At comparable exchange rates, sales grew by 3.9%.
|
- Operating income (EBIT) was EUR 614.7 (597.0) million or 11.1 % (11.1 %) of sales. The adjusted EBIT was EUR 626.7 (597.0) million or 11.3 % (11.1 %) of sales.*
|
- Cash flow from operations (before financing items and taxes) was EUR 851.1 (710.8) million.
|
| Business outlook for 2025 (specified) |
| KONE expects its sales to grow 2-5% at comparable exchange rates in 2025. Adjusted EBIT margin is expected to be in the range of 11.8%-12.4%. Assuming that foreign exchange rates remain at the July 2025 level, the negative impact of foreign exchange rates on the adjusted EBIT is expected to be approximately EUR 50 million. |
| KONE previously expected its sales to grow 1-6% at comparable exchange rates in 2025. The improvement in adjusted EBIT margin was expected to be in the range of 11.8%-12.4%. Assuming that foreign exchange rates remain at the April 2025 level, the negative impact of foreign exchange rates on the adjusted EBIT was expected to be approximately EUR 50 million. |
| Philippe Delorme, President and CEO: |
| "The second quarter demonstrated strength across both the Service and Modernisation businesses, as we continue to execute and deliver on our strategy. This is a testament to the resilience of our business model. Service sales grew again by nearly 10% and are now our largest business. Modernisation sales saw an impressive increase of almost 20%. This positive development reflects our continued focus on delivering customer value and strong field execution. Order momentum was solid, and I was particularly pleased to see our partial modernisation offering gaining further traction in the market. I am proud of the KONE team's accomplishments this quarter, especially considering the complex global environment, and I would like to extend my sincere thanks for their dedication and hard work. |
| Importantly, we achieved continued profitability improvement, with our adjusted EBIT margin rising to 12.2% for the quarter. An unfavourable business mix was the main driver, which helped to mitigate ongoing margin pressure in the Chinese new equipment market. We also made progress in initiatives related to sales and operations excellence, as well as procurement efficiency. I expect these efforts to contribute more meaningfully to our financial performance starting next year. |
| One of our strategic ambitions is to be the number one choice for both employees and customers. Our annual surveys provide valuable insights into how we are progressing. I was very pleased to see this year's results showing sustained high levels of employee engagement and strong alignment with our strategic direction. Customer feedback, meanwhile, reinforces my belief in the importance of leveraging data to increase transparency and improve customer experience. In this context, reaching nearly 38% connectivity in our maintenance base and accelerating the deployment of digital tools in field service operations mark important progress. Enhancing the competitiveness of our offering through sustainable innovation is another key driver of customer satisfaction. We are committed to scaling our energy-efficient solutions, and I am pleased to share that we have reached an important milestone in this journey, with close to 60% of deliveries equipped with regenerative drives. |
| As we move through the year, continuing to execute our strategy with courage and speed remains critical. While acknowledging trade policy-related uncertainty, we see exciting pockets of growth in all of our markets. With our strong team and unwavering focus on delivering superior customer value, we are well-positioned to seize the opportunities ahead." |
| Operating environment in April-June 2025 |
| The global New Building Solutions market declined clearly during the second quarter. This was mainly due to the continued weak market conditions in China. In North America, the market grew significantly. In Europe, the market declined slightly. In Asia-Pacific, the Middle East and Africa, activity grew significantly. |
| Service and Modernisation markets offered 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 Modernisation markets, the pricing environment was more favourable. |
| Operating environment in January-June 20255 |
| Regional differences in demand trends were visible in the global New Building Solutions market during the first half of 2025. In North America, the market grew slightly. In Europe, the market was stable with a decline in the Nordics and growth elsewhere. In Asia-Pacific, the Middle East and Africa, activity grew significantly. In China, activity continued to decline due to the property market downturn. |
| The Service and Modernisation 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 Modernisation markets, the pricing environment was more favourable. |
|
Market outlook 2025 (updated) |
| Activity in the New Building Solutions market is expected to vary regionally in 2025. The market is expected to be stable in North America. In Europe, activity is expected to grow slightly. In Asia-Pacific, the Middle East and Africa, activity is expected to grow clearly. In China, the market is expected to decline significantly. |
| Modernisation markets are expected to grow in all regions, supported by an ageing equipment base as well as the focus on sustainability and adaptability of buildings. |
| Service markets are expected to grow clearly in Asia-Pacific, the Middle East and Africa and grow slightly in other regions. |
| Business outlook 2025 (specified) |
| KONE expects its sales to grow 2-5% at comparable exchange rates in 2025. Adjusted EBIT margin is expected to be in the range of 11.8%-12.4%. Assuming that foreign exchange rates remain at the July 2025 level, the negative impact of foreign exchange rates on the adjusted EBIT is expected to be approximately EUR 50 million. |
| Key drivers for sales growth are the positive outlook for Service and Modernisation, and the solid order book. The declining New Building Solutions market in China is a headwind. |
| The key profitability drivers are sales growth in Service and Modernisation, and the ramp-up of performance initiatives. The challenging New Building Solutions market in China, a slight overall decline in the margin of orders booked in 2024, and a limited impact from tariffs are expected to negatively impact profitability. |
| For the full document, click the link below |
| KONE Corporation |
| Stay ahead of the curve! Subscribe to InsidEntity for daily updates on all your favourite companies. |
