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KONE 2013 | CORPOR ATE RESPONSIBILIT Y REPORT
ECONOMIC RESPONSIBILIT Y
18
2013 Orders received:
Strong growth in Asia-Pacific and the
Americas
0
500 1,000 1,500 2,000
Q1
2011
1,045
2012
1,366
2013
1,712
Q2
2011
1,226
2012
1,513
2013
1,638
Q3
2011
1,095
2012
1,269
2013
1,327
Q4
2011
1,099
2012
1,321
2013
1,473
2013 Sales:
Strong sales growth in new equipment
and good growth also in maintenance
0 500 1,000 1,500 2,000 2,500
Q1
2011
1,054
2012
1,241
2013
1,399
Q2
2011
1,286
2012
1,544
2013
1,762
Q3
2011
1,296
2012
1,634
2013
1,739
2011
1,589
2012
1,858
2013
2,033
Q4
A global company
KONE’s main geographic regions include the
Europe, Middle East and Africa (EMEA) region,
North America, and Asia-Pacific. In 2013,
markets in Asia-Pacific, North America and the
Middle East developed positively. In Europe,
markets remained uncertain, but uncertainty in
the market decreased towards the end of the
year. In the EMEA region as a whole, the new
equipment market declined slightly in 2013.
In North America, the recovery of the market
progressed throughout the year. The market
in Asia-Pacific grew at a somewhat higher
rate than in the previous year driven by rapid
growth in China. Globally, the major projects
segment grew somewhat, driven by strong
activity in Asia-Pacific, the Middle East and
North America. The modernization market was
relatively stable, with positive development in
North America and Asia-Pacific, but a decline in
the EMEA region. Maintenance market growth
was the fastest in Asia-Pacific, driven by growth
in new equipment installations. In the more
mature maintenance markets, the growth rate
was lower, with many countries seeing a very
competitive market environment.
Over the past years, KONE’s geographic
presence and sales split has shifted significantly.
The share of the Asia-Pacific region out of
KONE’s total sales has increased from 12%
in 2005 to 38% in 2013. In the same period,
the share of EMEA has declined from 66% to
46% and that of North America from 22% to
16%. This is a result of rapid market growth
and KONE’s market share gains in Asia-Pacific,
at a time when European and North American
markets have been weak. At the same time
however, good sales growth has been achieved
also in more challenging markets in the EMEA
region and North America. While the major
volumes of new equipment globally have
shifted today to the Asia-Pacific region, Europe
and North America are important markets in
maintenance and modernization.
Financial performance
In 2013, KONE’s orders received increased by
11.9% and totaled EUR 6,151 (1–12/2012:
5,496) million. Maintenance contracts are not
included in orders received. The margin of
the order book was at a healthy level, and the
orders received margins improved slightly from
the previous year’s good level. Cancellations
of orders remained very low. KONE’s new
equipment orders received in elevator and
escalator units amounted to approximately
137,000 units (2012: approximately 118,000).
KONE’s net sales grew by 10.4% as compared to
the prior year, and totaled EUR 6,933 (1–12/2012:
6,277) million. KONE delivered approximately
120,000 new elevator and escalator units in
2013 (2012: approximately 103,000). In 2013,
KONE’s largest individual countries in terms of
contribution to sales were China, accounting
approximately 30% of total sales, and the United
States, exceeding 10% of total sales. KONE’s
customer base is large and diverse, with no single
customer representing a substantial share of sales.
KONE’s operating income (EBIT) grew and
reached EUR 953.4 (1–12/2012: 828.7) million
or 13.8% (13.2%) of net sales (1–12/2012
figures exclude a one-time cost of EUR
37.3 million related to the support function
development and cost adjustment programs).
The growth in operating income was a result
of continued strong new equipment sales
growth in Asia-Pacific, China in particular, and
positive development in the service business
globally. The relative operating income was
burdened by the significant growth of the
share of new equipment sales of total sales,
a high level of deliveries of projects that
were booked as orders received with lower
margins in 2010 and 2011, particularly in
North America, and intense price competition.
However, in the second half of the year, the
relative operating income developed positively
due to a strong operational performance on
a broad basis as well as a favorable impact of
pricing actions taken during the past two years.
KONE continued to increase fixed costs in
areas that support the growth of the business,
in particular in Asia-Pacific as well as process
development and IT. KONE’s income before
taxes was EUR 960.5 (804.3) million.
Taxes totaled EUR 247.3 (193.3) million. This
represents an effective tax rate of 25.8%
(24.0%) for the financial year. The effective
tax rate resulting from the operations for the
financial year was 23.6% (23.5%). KONE
maintains transparency in its relationship with
all tax authorities. We are committed to paying
all taxes that are legally due and to meeting all
disclosure requirements in the countries where
we operate. Every transaction must have a
solid business rationale without compromising
tax compliance principles. Our objective is to
ensure predictability in tax matters.
100 150 200 250 300
2013 Operating income*:
Strong new equipment sales growth in
Asia-Pacific and positive development in
global service business key contributors
to EBIT growth
0 50
Q1
2011
119
2012
135
2013
160
Q2
2011
185
2012
210
2013
243
Q3
2011
189
2012
226
2013
258
Q4
2011
233
2012
257
2013
293
* excluding one-time items