1515
Annons
KONE Oyj: Financial Statement Bulletin January-December 2021

KONE Corporation, stock exchange release, February 2, 2022 at 12.30 p.m. EET

Financial Statement Bulletin of KONE Corporation for January-December 2021

Strong year in orders and sales; supply chain environment remains challenging

October-December 2021
  • Orders received grew by 4.2% to EUR 2,155.1 (10-12/2020: 2,068.7) million. At comparable exchange rates, orders grew by 0.4%.
  • Sales grew by 5.6% to EUR 2,766.8 (2,621.2) million. At comparable exchange rates, sales grew by 1.8%.
  • Operating income (EBIT) was EUR 351.9 (367.1) million or 12.7% (14.0%) of sales. The adjusted EBIT was EUR 359.4 (380.6) million or 13.0% (14.5%) of sales.*
  • Cash flow from operations (before financing items and taxes) was EUR 525.0 (368.1) million.
January-December 2021
  • Orders received grew by 8.2% to EUR 8,852.8 (1-12/2020: 8,185.1) million. At comparable exchange rates, orders grew by 7.4%.
  • Sales grew by 5.8% to EUR 10,514.1 (9,938.5) million. At comparable exchange rates, sales grew by 5.3%.
  • Operating income (EBIT) was EUR 1,295.3 (1,212.9) million or 12.3% (12.2%) of sales. The adjusted EBIT was EUR 1,309.8 (1,250.5) million or 12.5% (12.6%) of sales.*
  • Cash flow from operations (before financing items and taxes) was EUR 1,828.7 (1,907.5) million.
  • The Board proposes a dividend of EUR 1.75 per class B share for the year 2021. Further the Board proposes an extraordinary dividend of EUR 0.35 per class B share and therefore the total proposed dividend is EUR 2.10 per class B share.

Business outlook for 2022

KONE estimates that in 2022, its sales growth will be in the range of 2% to 7% at comparable exchange rates as compared to 2021. The adjusted EBIT is expected to be in the range EUR 1,180-1,330 million, assuming that foreign exchange rates would remain at the January 2022 level. Foreign exchange rates are estimated to impact EBIT positively by around EUR 50 million.

KEY FIGURES 10-12/20 10-12/20 Change 1-12/2021 1-12/202 Change
21 20 0
Orders received MEUR 2,155.1 2,068.7 4.2% 8,852.8 8,185.1 8.2%
Order book MEUR 8,564.0 7,728.8 10.8%
Sales MEUR 2,766.8 2,621.2 5.6% 10,514.1 9,938.5 5.8%
Operating MEUR 351.9 367.1 -4.1% 1,295.3 1,212.9 6.8%
income
Operating % 12.7 14.0 12.3 12.2
income margin
Adjusted EBIT* MEUR 359.4 380.6 -5.6% 1,309.8 1,250.5 4.7%
Adjusted EBIT % 13.0 14.5 12.5 12.6
margin*
Income before MEUR 360.1 372.5 -3.3% 1,320.8 1,224.2 7.9%
tax
Net income MEUR 278.1 287.2 -3.2% 1,022.7 947.3 7.9%
Basic earnings EUR 0.53 0.55 -2.6% 1.96 1.81 7.9%
per share
Cash flow from MEUR 525.0 368.1 1,828.7 1,907.5
operations
(before
financing items
and
taxes)
Interest MEUR -2,164.1 -1,953.8
-bearing net
debt
Equity ratio % 41.2 45.5
Return on % 32.0 29.7
equity
Net working MEUR -1,468.2 -1,160.1
capital
(including
financing items
and taxes)
Gearing % -67.6 -61.1

* KONE presents adjusted EBIT as an alternative performance measure to enhance comparability of the business performance between reporting periods. Restructuring costs related to significant restructuring programs are excluded from the calculation of the adjusted EBIT. In January-December 2021, the adjusted EBIT excluded costs of EUR 14.5 million related to restructuring measures in KONE's global business lines and functions. During 2017-2020, all restructuring costs excluded from adjusted EBIT related to the Accelerate program.

Henrik Ehrnrooth, President and CEO:

" The year 2021 ended on a positive note in many areas. Overall, it was an unusual year because of the significant disruptions in the global supply chain and the sharp increases in material and component costs. We managed the challenging situation strongly and were constantly able to deliver on customer promises. Our result for the year was good considering the significant headwinds that we faced. The actions that we have taken to offset these headwinds are progressing well, resulting in the sequential improvement in our margin of orders received during the fourth quarter. Improving pricing, securing productivity gains and lowering product costs remains high on our agenda.

Orders received in the quarter reached the previous year's high level, thanks to growth in the new equipment business. This was a good achievement considering the impact of liquidity constraints on the Chinese property markets. Our service business delivered strong performance yet again across several fronts. In the maintenance business, the service base continued to grow and both pricing and value-added services contributed to the strong growth in sales. I would like to thank everyone in our organization for their dedication and outstanding work during what has once again proved to be an exceptional year.

We have executed well on our `Sustainable success with customers' strategy during its initial year. Driving differentiation through adaptability, user experience and sustainability has been at the core of our strategic ambitions. With this strategic phase, we are further accelerating this development. Our DX Class elevators have raised the bar for delivering value-added services through digital solutions. This provides improved user experiences and a new level of adaptability for building owners when they need to adjust their building to evolving needs. The KONE Care service offering, which, since its launch over five years ago, has taken the concept of customer driven offering to a new level by tailoring maintenance agreements to individual customer needs. It is another excellent example of the benefits of adaptability. It also has proven to be a fundamental driver of pricing, growth, and improved customer experience. During the fourth quarter we took the next step in the development of the KONE Care offering, with the launch of KONE Care DX. This new offering again sets a new standard in the market. It is the industry's first carbon neutral maintenance service and uses AI and digital connectivity to provide seamless, predictive elevator care for our DX class elevators. The positive initial feedback that it has received from our customers is encouraging.

We have long seen that sustainability contributes to superior business outcomes. The renewal of EcoVadis platinum as well as our placing on CDP's `A' list are further acknowledgements of our sustainability performance. Environmental performance is of utmost importance; however, being a true leader in sustainability means embedding sustainability in all aspects of our business and customer offering. Diversity, inclusion and equity has been a particular area of focus during 2021. The progress we have made in increasing the share of women in director level positions, one of the specific targets in our diversity pledge, demonstrates that the entire KONE organization has taken our commitment to heart.

Looking at 2022, our demand outlook is positive with expectations for growth in the service markets and in the new equipment markets outside China. The Chinese new equipment market is expected to remain solid although below that of 2021 due to the tightened liquidity situation. In terms of financial performance, we expect our solid order book and continued positive momentum in the services business to drive growth in sales. The adjusted EBIT margin, on the other hand, is expected to decline due to lower margins on orders received in 2021 and continued challenges in the cost environment. We anticipate this pressure to ease towards the latter part of the year as the actions we are taking to restore margins start to deliver results. I am confident that the strong engagement of our people, and the strength of our offering, positions us well to capture the growth opportunities we see in our markets."

Operating environment in October-December 2021

Recovery continued in the global elevator and escalator market during October-December. That said, market activity was somewhat impacted by global supply chain constraints and increasing cases of COVID-19 infections, which resulted in a slowdown in decision-making.

Activity in the new equipment market was broadly in line with that of the previous year, albeit with varied trends in regional demand. In Asia-Pacific, the new equipment market was stable. In China, the market was stable with tightened liquidity impacting activity in the property sector. In the rest of Asia-Pacific, the market continued to recover strongly. Across the EMEA region, the new equipment market grew slightly. In North America, the market grew clearly.

The service market developed positively with broad based growth in both maintenance and modernization.

The pricing environment remained adversely affected by intense competition. That said, market prices continued to improve in several areas as a response to the increased component and logistics costs.

Operating environment in January-December 2021

Activity in the global elevator and escalator markets was somewhat affected by the COVID-19 pandemic in the early part of the year, but recovered thereafter. However, global supply chain constraints affected the pace of the recovery in the second half. Throughout the year, activity was the strongest in the residential segment across all regions. The sentiment in the infrastructure segment was somewhat boosted by stimulus, whereas activity in the commercial segment remained limited.

Demand in the new equipment market increased clearly from 2020, when markets in most regions were heavily impacted by the pandemic. In Asia-Pacific, new equipment volumes grew clearly. In China, volumes grew clearly with strong growth in the first half and softer development in the second half due to tightened liquidity situation in the property sector. In the rest of Asia-Pacific the market grew significantly. In the EMEA region, the new equipment market grew slightly. The new equipment markets grew slightly in Central and North Europe and in the Middle East, whereas in South Europe the market was stable. In North America, the new equipment market grew clearly.

In the service market, maintenance activity picked up as of the second quarter and was largely at pre-COVID levels at the end of the year. Similarly, demand rebounded in modernization after a slow start to the year.

The pricing environment continued to be adversely affected by intense competition. That said, market prices started to improve in several areas in the second half of the year as a response to the increased component and logistics costs.

Market outlook 2022

The Chinese new equipment market is expected to remain solid although below that of 2021 due to the tightened liquidity situation in the property markets. In the rest of the world, the new equipment markets are expected to continue recovering. In North America and in the EMEA region, the new equipment markets are expected to grow slightly. The new equipment market in Asia-Pacific, excluding China, is expected to grow significantly.

Modernization markets are expected to grow across regions supported by pent-up demand and stimulus measures.

Continuing global supply chain constraints and potential labor shortages may limit growth in construction activity, which could impact demand in the new equipment and modernization markets.

Maintenance activity is expected to return to pre-pandemic growth trajectory with slight growth in the more mature markets and clear growth in Asia-Pacific.

Business outlook 2022

KONE estimates that in 2022, its sales growth will be in the range of 2% to 7% at comparable exchange rates as compared to 2021. The adjusted EBIT is expected to be in the range EUR 1,180-1,330 million, assuming that foreign exchange rates would remain at the January 2022 level. Foreign exchange rates are estimated to impact EBIT positively by around EUR 50 million.

KONE has a solid order book and a positive outlook for services. Furthermore, the effect of product cost, productivity and pricing actions are expected to support the results towards the latter part of the year.

The key headwinds for the 2022 results are increased material, component and logistics costs, as well as the competitive dynamics and liquidity constraints in China.

The Board's proposal for the distribution of profit

The parent company's non-restricted equity on December 31, 2021 is EUR 1,357,142,216.84 of which the net income for the financial year is EUR 501,757,193.86. The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 1.7475 be paid on the outstanding 76,208,712 class A shares and EUR 1.7500 on the outstanding 441,753,623 class B shares. Further, the Board proposes an extra dividend of EUR 0.3475 to be paid on the outstanding 76,208,712 class A shares and EUR 0.3500 on the outstanding 441,753,623 class B shares, resulting in a total amount of proposed dividend of EUR 1,087,339,859.94. The Board of Directors further proposes that the remaining non-restricted equity, EUR 269,802,356.90 be retained and carried forward. The Board proposes that the dividends be payable from March 10, 2022. All the shares existing on the dividend record date are entitled to dividend for the year 2021 except for the own shares held by the parent company.

Press and analyst meetings

A Microsoft Teams call for the press, conducted in English, will be held on Wednesday, February 2, 2022 at 2:15 p.m. EET. Journalists are kindly asked to sign up to media@kone.com,and they will receive a link to the call upon registration.

A webcast for analysts, conducted in English, will begin at 3:45 p.m. EET and will be available on www.kone.com/investors. An on-demand version of the webcast will be available on www.kone.com later the same day. The event can also be joined via a telephone conference.

U.S.: +1 323-701-0160
UK: +44 (0)330 336 9601
Finland: +358 (0)9 7479 0574
Participant code: 2714403

For further information, please contact:

Natalia Valtasaari, Head of Investor Relations, KONE Corporation, tel. +358 204 75 4705 

Sender:

KONE Corporation

Henrik Ehrnrooth
President and CEO

Ilkka Hara
CFO

About KONE

At KONE, our mission is to improve the flow of urban life. As a global leader in the elevator and escalator industry, KONE provides elevators, escalators and automatic building doors, as well as solutions for maintenance and modernization to add value to buildings throughout their life cycle. Through more effective People Flow®, we make people's journeys safe, convenient and reliable, in taller, smarter buildings. In 2021, KONE had annual sales of EUR 10.5 billion, and at the end of the year over 60,000 employees. KONE class B shares are listed on the Nasdaq Helsinki Ltd. in Finland.

www.kone.com

Source: Cision
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