Inside information: KONE lowers its full year sales and adjusted EBIT outlook and provides preliminary key figures for the third quarter

KONE Corporation, inside information, October 14, 2022 at 8.30 am EEST

Inside information: KONE lowers its full year sales and adjusted EBIT outlook and provides preliminary key figures for the third quarter

KONE's services business continued its strong development in the third quarter and new equipment demand and pricing outside China developed in line with expectations. However, the market environment in China has deteriorated further due to liquidity constraints significantly impacting construction activity. COVID-19 restrictions are also increasing uncertainty. At comparable currencies, orders received during the third quarter decreased significantly in China, while sales increased slightly due to recovery following the lockdowns in the second quarter.

The effect of liquidity constraints in China, together with slower progress at construction sites in Europe and North America, is expected to result in lower than anticipated new equipment deliveries in the fourth quarter. Cost inflation remains a headwind, and third quarter deliveries were impacted by component shortages. The availability of components is, nevertheless, expected to improve in the fourth quarter. KONE lowers its full year sales and adjusted EBIT guidance to reflect the change in business outlook.

Revised business outlook for 2022:

KONE expects its sales in 2022 to decline by -1 to -4% at comparable exchange rates as compared to 2021. The adjusted EBIT is expected to be in the range of EUR 1,010-1,090 million, assuming that foreign exchange rates would remain at the October 2022 level. Foreign exchange rates are estimated to impact EBIT positively by around EUR 80 million.

This guidance assumes that KONE's delivery capability is not impeded by extended or more severe COVID-19 restrictions in China during the fourth quarter.

Previous business outlook for 2022:

KONE expects its sales growth in 2022 to be in the range of -1 to +3% at comparable exchange rates as compared to 2021. The adjusted EBIT is expected to be in the range of EUR 1,130-1,210 million, assuming that foreign exchange rates would remain at the July 2022 level. Foreign exchange rates are estimated to impact EBIT positively by around EUR 80 million.

Preliminary key figures

EUR million	7-9/2022	Change	Comparable change	1-9/2022	Change	Comparable change
Orders received	2,155.5	-2.5 %	-10.0 %	7,187.1	7.3 %	0.1 %
Sales	2,998.2	14.9 %	6.5 %	7,995.2	3.2 %	-3.4 %
New equipment	1,594.5	14.5 %	5.0 %	3,967.6	-5.3 %	-12.5 %
Maintenance	986.9	14.7 %	8.0 %	2,872.5	13.5 %	8.1 %
Modernization	416.8	16.9 %	8.6 %	1,155.1	12.5 %	6.2 %
Operating income	303.9	-6.9 %		664.0	-29.6%
Operating income margin, %	10.1			8.3
Adjusted EBIT	305.8	-6,3 %		711.6	-25.1%
Adjusted EBIT margin, %	10.2			8.9

KONE will publish its Interim Report for January-September 2022, on Thursday, October 27, 2022, at 12:30 p.m. EEST. There will be a webcast and teleconference on the same day with the opportunity to ask questions. The webcast and teleconference details will be published on KONE's website at http://www.kone.com/en/investors/.

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.