KONE as an investment
A life-cycle business with a high share of resilient Service and Modernization revenue
KONE’s business model is to provide solutions for the full life cycle of equipment.
The growth of the elevator and escalator industry is driven by three key megatrends: Urbanization, sustainability and technology. These strong megatrends support the New Building Solutions market growth, which feeds into the growth of our Service base. Digital transformation driving efficiency and superior customer value is significant for the growth of our Service business. The installed base of elevators and escalators is aging, providing a growing need for equipment modernization.
Driving competitiveness through customer centricity and productivity
We retain our challenger attitude and develop our competitiveness by continuously looking for new ways to add value for our customers with our services and solutions. We also systematically strive to improve productivity and quality.
With constant development of competitiveness, KONE has grown faster than the market.
Our innovations have shaped the industry
Sustainability
One of our strategic targets is to be a leader in sustainability – not only in our own industry, but also beyond. We want to be the most trusted partner for our customers throughout their building life cycle and help them achieve their sustainability objectives, creating better urban environments. In addition to the environmental aspects of our offering and operations, our sustainability focus areas include safety, quality, diversity and inclusion, as well as ethics and compliance. At KONE, sustainability is a source of innovation and a competitive advantage for us. Conducting business in a responsible way with good corporate governance supports us in creating long-term value for shareholders.
Growth and profitability
We target mid-single digit annual sales growth and 13-14% adjusted EBIT-% by the full year 2027.
Our roadmap towards scalable and resilient growth
Our roadmap to 13-14% Adjusted EBIT by 2027
Capital-light and cash-generative business model
KONE’s business is capital-light. We have manufacturing units in all the key regions, and we cooperate with many local and global component suppliers. As a result, the level of tangible and intangible assets is relatively low in the business.
We have strong cash generation and negative working capital thanks to advance and progress payments from our customers across businesses and geographies.
The cash generative business model has enabled steadily developing dividends for shareholders.
Good profitability combined with our capital light business model enables high return on capital.
Calculation of return on capital employed = [(net income + financing expenses) / (equity + Interest-bearing-debt (average of the figures for the accounting period))] x 100
