KONE Corporation, stock exchange release, April 30, 2025 at 8.30 a.m. EEST

Interim Report of KONE Corporation for January-March 2025

Solid start to the year with growth and improved profitability

January-March 2025

• Orders received grew by 6.4% to EUR 2,378.4 (1-3/2024: 2,235.7) million. At comparable exchange rates, orders grew by 5.1%.
• Sales grew by 4.1% to EUR 2,672.3 (2,568.2) million. At comparable exchange rates, sales grew by 2.8%.
• Operating income (EBIT) was EUR 276.7 (262.4) million or 10.4 % (10.2 %) of sales. The adjusted EBIT was EUR 279.6 (262.4) million or 10.5 % (10.2 %) of sales.*
• Cash flow from operations (before financing items and taxes) was EUR 486.7 (398.2) million.

Business outlook for 2025 (specified)

KONE expects its sales to grow 1-6% 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 April 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 slightly at comparable exchange rates in 2025. The improvement in adjusted EBIT margin was expected to continue in 2025.

* KONE presents adjusted EBIT as an alternative performance measure to enhance comparability of business performance between reporting periods. In January-March 2025, items affecting comparability amounted to EUR 2.8 million consisting of costs related to the separation of KONE Door Business under its own legal structure. There were no items affecting comparability in the comparison period.

Philippe Delorme, President and CEO:

"The first quarter marked a solid start to the year. Growth momentum outside China was good, resulting in orders received increasing by 5% and sales by nearly 3%. In China, our performance was, as anticipated, impacted by continued pressure in the property markets. Although we still expect the demand for New Building Solutions in China to decline significantly this year, we have begun to see a pathway towards stabilization. From a business perspective, Modernization really stood out in the quarter. We grew both orders and sales by nearly 20%, with excellent development in all areas. Service growth was also healthy, which contributed to a favorable sales mix and allowed us to deliver continued improvement in profitability.

Strategy execution progressed well during the quarter. For me, a clear highlight was the continued development of our remote service offering, as well as the accelerated deployment of digital solutions to drive more efficient field operations. We also saw a significant step up in the sales of regenerative drives, which is central to our objective of supporting customers in improving energy efficiency and reducing their carbon footprint. Last but not least, I was pleased to see our performance initiatives in sales and operations excellence and procurement efficiency moving forward. I see great potential for us to work in a more systematic and efficient way across the organization and expect this to be a key contributor to achieving our mid-term financial targets.

Looking ahead, I see exciting opportunities and am confident in the resilience of our model. Although the New Building Solutions business is likely to face some market uncertainty, our order book and positive outlook for Service and Modernization provide a solid foundation for growth. With this in mind, we have specified our guidance for the year. We expect sales to grow by 1-6% at comparable exchange rates, and the adjusted EBIT margin to be in the range of 11.8%-12.4% in 2025. With clarity of direction and dedicated focus on strategy execution, we are well equipped to deliver on our ambition to lead the industry."

Operating environment in January-March 2025

The global New Building Solutions market declined clearly during the first quarter with regional differences in demand. In North America, the market declined clearly due to slowdown in customer decision making towards the end of the quarter. In Europe, the market grew slightly with decline in the Nordics and growth elsewhere. In Asia-Pacific, Middle East and Africa, activity grew clearly. The market continued to weaken in China.

Service and Modernization 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 Modernization markets, the pricing environment was more favorable.

Market outlook 2025 (updated)

Activity in the New Building Solutions market is expected to vary regionally. The market is expected to decline slightly in North America as a result of increased uncertainty in the business environment. In Europe, activity is expected to grow slightly. 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 (specified)

KONE expects its sales to grow 1-6% 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 April 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 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, slight overall decline in margin of orders booked in 2024, and a limited impact from tariffs are expected to impact profitability negatively.

Press and analyst events

A Microsoft Teams call for the press, conducted in English, will be held on Wednesday, April 30, 2025 at 09:00 a.m. EEST. Those registered have received a link to the call.​

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

U.S.: +1 786 697 3501
UK: +44 (0) 33 0551 0200
Finland: +358 9 2319 5437
Participant code: 300425

For further information, please contact:

Natalia Valtasaari, Vice President, Investor Relations, KONE Corporation, 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 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