Download CMD 2012 Matti Alahuhta

KONE CAPITAL MARKETS DAY 2012
Accelerating the development of
KONE’s competitiveness
Matti Alahuhta, President & CEO
June 8, 2012
Agenda
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June 8, 2012
KONE’s performance
Global market in 2011 and KONE’s market
share development
Developing KONE further
Launching a new product offering
Market development in 2012
Market and business outlook
| © KONE Corporation | Capital Markets Day | Matti Alahuhta
We had a strong start to the year
Q1/2012
Q1/2011
Historical
change
Comparable
change
Orders received
MEUR
1,365.9
1,044.7
30.7%
27.1%
Order book
MEUR
4,842.8
3,737.5
29.6%
24.5%
Sales
MEUR
1,241.3
1,053.8
17.8%
15.1%
Operating income (EBIT)
MEUR
132.7
118.7
11.8%
Operating income (EBIT)
%
10.7
11.3
MEUR
141.4
122.1
%
11.4
11.6
MEUR
248.3
237.3
EBITA 1)
EBITA
Cash flow from
operations
15.8%
(before financial
items and taxes)
1)
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Operating income excluding amortization of
acquisition-related intangible assets.
Our order intake has grown to a new level
over the past 7 years
Quarterly Orders Received, 12 months rolling, Q4/2005-Q1/2012
5 000
4 500
4 000
3 500
3 000
2 500
2 000
1 500
1 000
500
0
1-12
2005
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1-12
2006
1-12
2007
| © KONE Corporation | Capital Markets Day | Matti Alahuhta
1-12
2008
1-12
2009
1-12
2010
1-12
2011
Sales has grown as a result of good progress
in both new equipment and service business
Quarterly Sales, 12 months rolling, Q4/2005-Q1/2012
5 500
5 000
4 500
4 000
3 500
3 000
2 500
2 000
1 500
1 000
500
0
1-12
2005
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1-12
2006
1-12
2007
| © KONE Corporation | Capital Markets Day | Matti Alahuhta
1-12
2008
1-12
2009
1-12
2010
1-12
2011
2011 Sales by market: Asia-Pacific’s share of
sales grew to 27% of total sales
CAGR,%
Sales by market 2005-2011, MEUR
4 603
4 744
4 987
5 225
8.3
55%
5.1
18%
5.3
23.2
4 079
3 601
3 242
62%
65%
66%
22%
65%
22%
6
65%
21%
19%
21%
27%
2010
2011
12%
13%
14%
16%
2005*
2006
2007
2008
2009
June 8, 2012
Americas
21%
21%
17%
EMEA
58%
Asia-Pacific
| © KONE Corporation | Capital Markets Day | Matti Alahuhta
*) 2005 figures are pro forma
Our operating income has grown solidly
Quarterly EBIT, 12 months rolling, Q4/2005-Q1/2012
750
700
650
600
550
500
450
400
350
300
250
200
150
100
50
0
1-12
2005
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1-12
2006
1-12
2007
| © KONE Corporation | Capital Markets Day | Matti Alahuhta
1-12
2008
1-12
2009
1-12
2010
1-12
2011
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June 8, 2012
KONE’s performance
Global market in 2011 and KONE’s market
share development
Developing KONE further
Launching a new product offering
Market development in 2012
Market and business outlook
| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Elevator and escalator market in 2011
(2010 figures in brackets)
New elevator and escalator
market 610,000 units
Elevators and escalators in
operation 2011 ~11M units
6 % (6%)
7 % (7%)
18 % (20%)
3 % (3%)
18 %
(15%)
3 % (4%)
51 % (53%)
5 % (6%)
10 %
(11%)
4%
(4%)
64 %
(60%)
EMEA
South America
China
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North America
Japan and Korea
Rest of Asia Pacific
| © KONE Corporation | Capital Markets Day | Matti Alahuhta
11 %
(11%)
EMEA
North America
South America
Japan and Korea
China
Rest of Asia Pacific
Source: Based on KONE’s estimate.
New equipment: we have been able to
significantly grow our market share
KONE’s market position
2005
2009
2011
Central and North Europe
nr. 2 nr. 2
shared nr. 1
South Europe
nr. 3 shared nr. 2
nr. 2
Middle East
nr. 4 nr. 3
nr. 2
Russia
nr. 4 nr. 4
nr. 4
China
nr. 8 nr. 4
nr. 2
India
nr. 2 shared nr. 2
nr. 1
Southeast Asia
nr. 5 nr. 3
nr. 3
Australia
nr. 2 shared nr. 1
nr. 1
nr. 4 nr. 4 with
significantly
improved
market share
nr. 4 with further
improved
market share
EMEA:
Asia-Pacific:
North America:
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Source: Based on KONE’s estimate, in new equipment units
Service: our maintenance base has grown
steadily – we continue to be an active challenger
Development of KONE’s elevator and escalator maintenance base,
2005-2011
Units
900 000
>850 000
800 000
700 000
600 000
500 000
400 000
300 000
200 000
100 000
0
2005
2006
2007
2008
2009
2010
Maintenance base growth CAGR 2005-2011: 6,7%
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
2011
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June 8, 2012
KONE’s performance
Global market in 2011 and KONE’s market
share development
Developing KONE further
Launching a new product offering
Market development in 2012
Market and business outlook
| © KONE Corporation | Capital Markets Day | Matti Alahuhta
We have accelerated the development of our
competitiveness
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Our Development Programs provide focus
areas in developing our operations
Customer Experience
Employee Engagement
Innovative Solutions for People Flow®
Service Leadership
Delivery Chain Excellence
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Customer Experience
Develop communication with customers in all touch points
Increase granularity in market understanding
Improve impact and efficiency of sales teams
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Employee Engagement
Develop leadership capabilities
Improve professional growth opportunities
Promote well-being
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Innovative Solutions for People FlowTM
New global product offering
- Ride comfort
- Visual design
- Eco-efficiency
Improve cost competitiveness in all product categories
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Service Leadership
Shorten follow-up cycles
Further develop field mobility tools
Train and coach technicians, supervisors and service
managers
Develop modernization product offering, sales and
processes
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Delivery Chain Excellence
Implement LEAN and SixSigma
Fast ramp-up of new products
Juho Malmberg
Business specific delivery chain
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Our objective is to continuously take the difficult market
situation as an opportunity in the current uncertain
environment
Stronger differentiation from competition with
our development programs
Focus on growth markets and segments
Improving quality and productivity
Development of personnel
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
We measure our performance in five key
areas to assess our development
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Customer satisfaction
Target: Continuously improved customer loyalty
Employee satisfaction
Target: Continuously improved employee
engagement
Faster than market growth
Target: Continue to grow faster than the market
Financial performance
vs. competition
Target: Better financial development than that of key
global competitors
Sustainability
Target: Good progress in the area of sustainability
June 8, 2012
| © KONE Corporation | Capital Markets Day | Matti Alahuhta
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June 8, 2012
KONE’s performance
Global market in 2011 and KONE’s market
share development
Developing KONE further
Launching a new product offering
Market development in 2012
Market and business outlook
| © KONE Corporation | Capital Markets Day | Matti Alahuhta
We have worked very actively to further
improve our product competitiveness
Developing innovative solutions for People
Flow® is a key focus area and one of our five
Development Programs
We have increased our R&D expenditure
We have now introduced a new global
product offering
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
The new offering covers our global volume
elevator range
60%
90%
of new
equipment volume
of full
replacement volume
Machine-room-less and small machine room
elevators for residential, hotel,
office and retail segments
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April 24, 2012 Confidential | © KONE Corporation |
| © KONE Corporation | Capital Markets Day | Matti Alahuhta
The new offering features significant developments in
competitiveness and added value for customers
USER EXPERIENCE
Improved ride comfort
Enhanced visual design
CUSTOMER EXPERIENCE
Better eco-efficiency
Improved space efficiency
KONE is an even closer and more dedicated
partner to our customers
IMPROVED TECHNOLOGY
Harmonized and modular global product platform:
– New machines, hoisting mechanics
– Cars, slings, signalization, visuals
Simplification across product range
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
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June 8, 2012
KONE’s performance
Global market in 2011 and KONE’s market
share development
Developing KONE further
Launching a new product offering
Market development in 2012
Market and business outlook
| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Central and North Europe:
New equipment market stable or slightly declining
NEW
EQUIPMENT
Market stable or decreasing slightly
Market at a relatively good level in Germany, Austria,
Switzerland and the Nordic countries
Market weak in the Netherlands, Ireland and parts of
eastern Europe
MODERNIZATION
Market stable or declining slightly
MAINTENANCE
Market developing well, but pricing environment
challenging
Source: Based on KONE’s estimate.
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
South Europe:
Continued weakness
NEW
EQUIPMENT
Market continues to weaken
France: market declining slightly
Italy: market continues to decline
Spain: market at a very low level
MODERNIZATION
Market declining slightly
MAINTENANCE
Intense price competition
Source: Based on KONE’s estimate.
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Middle East and Russia:
Continued growth
NEW
EQUIPMENT
Most markets in the Middle East developing
positively
Saudi Arabia: continued growth
United Arab Emirates: some signs of market recovery
Continued gradual growth in Russia
MODERNIZATION
Markets still small, but growing
MAINTENANCE
Markets developing positively
Source: Based on KONE’s estimate.
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
North America:
Gradual recovery
NEW
EQUIPMENT
United States: continued gradual recovery in the
market with regional variations
Canada: stable market at a good level
Mexico: stable market
MODERNIZATION
Market continues to grow
MAINTENANCE
Market developing well, but pricing environment
remains intense
Source: Based on KONE’s estimate.
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Asia-Pacific:
Slower growth than last year
NEW
EQUIPMENT
China: continued growth but at a lower rate than earlier; the
affordable housing segment growing the fastest
India: market growing slightly despite continued financing
constraints
Australia: market declining due to longer lead times in
decision-making
Southeast Asia: continued growth
MODERNIZATION
Market declining slightly in Australia
MAINTENANCE
Continued good development
Source: Based on KONE’s estimate.
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
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June 8, 2012
KONE’s performance
Global market in 2011 and KONE’s market
share development
Developing KONE further
Launching a new product offering
Market development in 2012
Market and business outlook
| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Market outlook 2012
The new equipment markets are expected to
continue to grow in Asia-Pacific, but at a
significantly lower rate than in 2011, and there is
uncertainty related to the development in the
second half of the year.
The markets in Central and North Europe are
expected to remain relatively stable or decline
slightly, and the markets in South Europe are
expected to decline from an already weak level.
The market in North America is expected to
continue to gradually recover from a low level.
The modernization markets are expected to be at
about the same level as in 2011 or grow slightly.
The maintenance markets are expected to
continue to develop well.
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta
Business outlook 2012
KONE’s net sales is estimated to grow by
10-15% at comparable exchange rates as
compared to 2011.
The operating income (EBIT) is expected to
be in the range of EUR 750-800 million,
assuming that translation exchange rates do
not materially deviate from the situation of
the beginning of 2012.
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| © KONE Corporation | Capital Markets Day | Matti Alahuhta