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1. Company Snapshot

1.a. Company Description

KONE Oyj, together with its subsidiaries, engages in the elevator and escalator business worldwide.It offers elevators, escalators, and automatic building doors.The company also provides maintenance services; modernization solutions; and various residential solutions.


In addition, it offers KONE Office Flow, a connected solution that allows for personalized user experiences and touch-free access; health and well-being solutions for elevators, escalators, and doors; KONE Residential Flow, a smarter building solution for the movement of people, goods, and information; KONE Access, an access control system, which is integrated with elevator system and building doors; KONE Destination, a destination control system that reduce waiting and travel times; KONE infotainment, a communication channel for building tenants and visitors; and monitoring solutions that enable real-time inspection of elevators and escalators.Further, the company provides people flow planning and consulting services; and solutions for special buildings and large projects.KONE Oyj was founded in 1908 and is based in Espoo, Finland.

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1.b. Last Insights on KNEBV

KONE Oyj's recent performance has been positively driven by robust growth in orders and modernization, with significant advancements in digital connectivity and sustainability. The company's long-term growth drivers, including services and modernization, have instilled confidence among investors. Additionally, KONE Oyj's strong position in the industrial sectional door market, driven by automation and sustainability demands, is expected to fuel growth. Stifel Canada has raised its price target on a related entity, indicating potential for KONE Oyj's peers. Despite challenges in China, the company's Q4 2025 earnings call highlights a finely balanced view of risk and reward.

1.c. Company Highlights

2. KONE's 2025 Earnings Report: A Strong Performance with Growth in Services

KONE's fourth quarter results for 2025 showed a strong performance, with order growth of 12.2% and sales growth of 4.3%. The company's service business continued to grow, making up over 40% of sales. The adjusted EBIT margin expanded by 60 basis points to EUR 402 million. The earnings per share (EPS) came out at EUR 0.611, slightly below estimates of EUR 0.72. The Board proposed a dividend of EUR 1.80 per Class B share, representing a nearly 3% dividend yield.

Publication Date: Feb -08

📋 Highlights
  • Service Business Dominance:: Services accounted for over 40% of sales, driving 6% growth in Q4 2025, with a target of near 10% growth in 2026.
  • Margin Expansion:: Adjusted EBIT margin rose 60 bps to EUR 402 million in 2025, with 2026 guidance at 12.3–13% despite raw material headwinds.
  • Sustainability Progress:: Achieved a 13% reduction in Scope 3 emissions, exceeding targets amid digital transformation and modernization efforts.
  • China Market Shifts:: NBS in China declined to mid-single-digit margins, while services/modernization (40% of revenue) showed higher profitability and a goal to reach 50–50 revenue split.
  • Connectivity Growth:: 40% of the installed base is now connected, with ambitions for full connectivity to enable predictive maintenance and remote rescue capabilities by 2026.

Segment Performance

KONE's markets were resilient in the fourth quarter, with growth in services and modernization, but a decline in New Building Solutions in China. The service growth was 6% in the quarter, a solid number but slower than previous dynamics. In China, the service business saw a slight decline in the fourth quarter due to actions taken to prioritize cash flow profitability. However, the company targets close to 10% growth in services, and 2026 guidance implies an acceleration versus 7.6% growth last year.

Guidance and Outlook

For 2026, KONE expects sales growth of 2-6% and an adjusted EBIT margin of 12.3-13%. The company anticipates a slight headwind from raw materials but expects tailwinds from its performance initiatives. The outlook for 2026 is positive but slower than Q4. The company's guidance implies an acceleration in service growth, and the role of modernization is expected to become a stronger contributor to service growth.

Valuation

With a P/E Ratio of 31.71 and a Dividend Yield of 3.0%, KONE's valuation seems to be pricing in a stable growth trajectory. The company's ROE of 40.64% and ROIC of 24.55% indicate a strong profitability profile. The EV/EBITDA ratio of 18.58x suggests that the company's enterprise value is reasonable relative to its earnings before interest, taxes, depreciation, and amortization.

Operational Highlights

The company's focus on digital transformation, modernization, and sustainability is expected to drive growth and improve profitability. The connectivity of the installed base has grown to 40%, and the company sees a significant opportunity for further improvement. The modernization margin is not far from the group margin and is expected to continue improving, driven by partial modernization and conversions from NBS.

3. NewsRoom

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KONE Oyj (KNYJF) Q4 2025 Earnings Call Highlights: Strong Order Growth and Digital ...

Feb -06

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Montage Gold Kept at Buy at Stifel Canada as Kone is Ahead of Schedule; Price Target Raised to C$12.75

Jan -20

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What The Evolving Narrative Means For KONE Oyj's Valuation

Dec -07

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VWDRY vs. KNYJY: Which Stock Should Value Investors Buy Now?

Dec -03

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Industrial Sectional Door Industry Report 2025: Market to Reach $2.75 Billion by 2030, Driven by Hormann, ASSA ABLOY, KONE, Griffon, Sanwa, and StellaGroup Leading

Nov -24

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European Dividend Stocks To Consider For Your Portfolio

Sep -02

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Otis Worldwide Stock Is Set to Get a Lift

Aug -14

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Europe Elevator & Escalator Market Growth Forecast Report 2025-2030 | AI Integration to Fuel Opportunities, Infrastructure and Tourism Developments Boosting Demand

Jul -08

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.80%)

6. Segments

Building Products

Expected Growth: 4.8%

KONE Oyj's building products segment is expected to grow driven by increasing urbanization and demand for energy-efficient solutions. The company's focus on innovation, digitalization, and sustainability will also support growth.

7. Detailed Products

Elevators

KONE Oyj provides a wide range of elevator solutions for various building types, including residential, commercial, and industrial buildings.

Escalators

KONE Oyj offers a variety of escalator solutions for shopping centers, airports, and other high-traffic areas.

Moving Walks

KONE Oyj provides moving walk solutions for airports, shopping centers, and other high-traffic areas.

Autowalks

KONE Oyj offers autowalk solutions for airports and other high-traffic areas.

Modernization Solutions

KONE Oyj provides modernization solutions to upgrade and improve the performance of existing elevators and escalators.

Maintenance and Repairs

KONE Oyj offers maintenance and repair services to ensure the smooth operation of elevators and escalators.

KONE Care

KONE Oyj provides KONE Care, a comprehensive maintenance and repair service that ensures the optimal performance of elevators and escalators.

8. KONE Oyj's Porter Forces

Forces Ranking

Threat Of Substitutes

KONE Oyj operates in the elevator and escalator industry, where substitutes are limited. However, the company faces competition from other manufacturers, which can be considered as substitutes.

Bargaining Power Of Customers

KONE Oyj has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often customized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

KONE Oyj relies on a network of suppliers for components and materials. While the company has some bargaining power due to its size, suppliers may still have some negotiating power, particularly for specialized components.

Threat Of New Entrants

The elevator and escalator industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to join the market.

Intensity Of Rivalry

The elevator and escalator industry is highly competitive, with several established players competing for market share. KONE Oyj faces intense competition from companies like Otis, Schindler, and ThyssenKrupp.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 16.72%
Debt Cost 5.93%
Equity Weight 83.28%
Equity Cost 6.90%
WACC 6.74%
Leverage 20.08%

11. Quality Control: KONE Oyj passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Sandvik

A-Score: 5.7/10

Value: 2.6

Growth: 4.8

Quality: 6.9

Yield: 3.8

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

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Alfa Laval

A-Score: 5.3/10

Value: 2.4

Growth: 6.8

Quality: 6.6

Yield: 3.8

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Siemens

A-Score: 5.2/10

Value: 3.5

Growth: 5.0

Quality: 5.6

Yield: 5.0

Momentum: 6.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Schindler

A-Score: 5.2/10

Value: 0.8

Growth: 3.9

Quality: 7.4

Yield: 3.1

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
KONE

A-Score: 4.4/10

Value: 1.3

Growth: 3.3

Quality: 6.7

Yield: 5.6

Momentum: 6.5

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
Eaton

A-Score: 4.2/10

Value: 1.3

Growth: 5.9

Quality: 7.3

Yield: 3.1

Momentum: 3.0

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

63.5$

Current Price

63.5$

Potential

-0.00%

Expected Cash-Flows