KONE Oyj

KONE reported orders growth of 10.9% at comparable FX, sales growth of 3.4% in comparable currencies, adjusted EBIT of EUR 370 million, and year-to-date cash flow of EUR 937 million. Adjusted EBIT margin expanded by 40 basis points year over year. Items affecting comparability were roughly EUR 50 million in the quarter, including around EUR 25 million related to the planned TKE transaction, and management expects an additional about EUR 40 million one-time cost in the second half, mainly transaction-related. For the full year, KONE left guidance unchanged for comparable sales growth of 3%-6% and adjusted EBIT margin of 12.3%-13%.

Philippe Delorme emphasized that the quarter reflected progress across the business and execution of the Rise strategy, especially modernization, digital connectivity, affordability in residential new buildings, and decarbonization. He highlighted maintenance portfolio connectivity at 44%, 75% of deliveries with regenerative drives, and continued customer and employee engagement strength. On TKE, he said shareholder support was nearly 100% at the EGM, regulatory filings are underway, and collaboration with TKE teams is constructive and productive.

Ilkka Hara said market demand remains led by service and modernization, while China remains the clear exception in new building markets. He cited 10.9% order growth, 3.4% sales growth, EUR 370 million adjusted EBIT, and EUR 937 million year-to-date cash flow, with margin improvement aided by favorable mix and fixed-cost leverage but partly offset by China and inflation. He also said pricing actions have been implemented across all businesses and regions, raw materials remain a headwind of a few tens of millions, and there will be about EUR 40 million of additional one-time transaction-related cost in H2.

Analysts pressed on modernization growth, service growth, order margin pressure, pricing in China and the U.S., and whether inflation could affect the full-year margin range. Management said modernization revenue should continue to grow at a strong rate, service growth was held back by a high China comparison, reduced bolt-on M&A, and some repair execution issues, and order margins should be flat to positive as pricing actions and cost controls work through. On TKE, management repeated that the process is moving as planned, U.S. regulatory timing cannot be speculated on, and the EUR 700 million synergy target remains intact. They also said IFRS 18 should have only a very minor P&L impact.