KONE (KNEBV) CMD 2024 summary

Strategic context, direction, and market outlook

• Strategy for 2025–2030 focuses on accelerating growth in services and modernization, shifting from reliance on new building solutions, especially in China, to a resilient, service-enabled business model, with ~90% of profits from these segments by 2024.

• Key megatrends include urban renewal, digital transformation (especially AI), and sustainability, with 70% of people expected to live in cities by 2050 and increasing regulatory focus on carbon reduction.

• The elevator market is valued at €80–85 billion, with 25 million units globally, 10 million of which are over 15 years old, presenting significant modernization opportunities.

• Service and modernization now account for 60% of sales and 90% of profits, with modernization and services growing at double-digit and near 10% rates, respectively.

• China’s new building market is in structural decline, while modernization and services are expected to become the dominant segments by 2030, with growth opportunities in urbanizing regions like India and Southeast Asia.

Strategic priorities and operational shifts

• The “Rise to Lead” strategy sets high ambitions for employee and customer satisfaction, innovation, and sustainability, aiming for superior growth and profitability.

• Four operational priorities: accelerate digital for services, drive modernization, win in residential, and cut carbon, underpinned by a culture of courage, speed, and simplicity.

• Digitalization targets full connectivity, predictive maintenance, and up to 30% productivity gains, aiming for close to 10% sales growth in services.

• Modernization focuses on activating customers, standardizing partial modernization, and expanding to non-KONE units, with ambitions to double sales and improve profitability.

• Sustainability shift aims to deliver on science-based targets by 2030, focusing on reducing Scope 3 emissions and circular economy initiatives.

Financial guidance and performance initiatives

• Midterm financial targets for 2027: mid-single-digit annual sales growth and 13–14% adjusted EBIT margin, with a long-term ambition to reach 16% EBIT.

• 2024 outlook: sales growth of 0–4% and adjusted EBIT margin of 11.5–12.2%.

• Profitability improvements expected from business mix, pricing, procurement, and operational efficiency, targeting 150 basis points uplift.

• Service growth is driven by organic expansion, digitalization, higher retention, and selective bolt-on acquisitions.

• Capital-light model supports high return on capital, strong cash flow, and flexibility for acquisitions and dividends.