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KONE'S BUSINESS MODEL

KONE has a strong life-cycle business model.

KONE provides value for the customers during the entire lifespan of the building. In the new equipment business, we offer innovative and sustainable elevators, escalators, automatic building doors and integrated access control solutions to deliver the best people flow experience. In maintenance, we ensure the safety and availability of the equipment in operation, and in modernization we offer solutions for aging equipment ranging from the replacement of components to full replacements.

KONE’s business model is capital light as the working capital is negative in all businesses and we work extensively with component suppliers to complement our own manufacturing capacity. The maintenance business is very stable due to high requirements for safety and reliability. The customer relationships are also typically long and stable (around 95% annual retention rate). New equipment and modernization are more cyclical in nature and follow the construction cycles.

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New equipment:

  • Growth drivers: urbanization and changing demographics
  • Follows regional construction cycles
  • Customers: developers, builders, architects, consultants, building owners

Maintenance:

  • Growth drivers: growing installed base, high requirements on safety and reliability
  • Stable business due high requirements on safety and reliability
  • Customers: building owners, facility managers, housing corporations

Modernization:

  • Growth driver: aging installed base, higher requirements for efficient people flow, safety and sustainability, strong maintenance base
  • Customers: building owners, housing corporations, facility managers

In addition to the core growth drivers, changing customer needs as well as new technologies offer new opportunities to create value for customers.