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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 impacted by headwinds in China, which has affected its overall performance despite strong service and modernization growth. The company's Q3 2024 earnings were likely impacted by these challenges. Additionally, the company's recent announcement to provide elevator solutions for an emergency hospital in Sweden may not have a significant short-term impact on its performance. However, the planning phase for the elevator installations is currently underway, which may provide some near-term visibility.

1.c. Company Highlights

2. KONE's Q3 Results: Strong Order Growth and Margin Expansion

KONE reported a robust third quarter, with 7.8% order growth driven by broad-based growth, and a 3.9% sales increase at comparable currencies. The company's adjusted EBIT margin expanded by 75 basis points year-over-year to EUR 341 million, demonstrating its ability to maintain profitability. However, EPS came in at €0.4341, below analyst estimates of €0.514. The company's cash generation was strong, with operating cash flow increasing by roughly EUR 100 million year-over-year to EUR 364 million.

Publication Date: Oct -24

📋 Highlights
  • Q3 Performance:: 7.8% order growth and 3.9% sales increase at comparable currencies, with Modernization driving 15.5% sales growth.
  • EBIT Margin Expansion:: Adjusted EBIT margin rose 75 bps to EUR 341 million YoY, supported by service and operational efficiency.
  • Cash Generation:: Operating cash flow surged by EUR 100 million YoY to EUR 364 million, reflecting strong liquidity.
  • Strategic Focus:: 40% of maintenance base now connected digitally, with productivity tools active in 41 countries to boost service margins.
  • Modernization Momentum:: 10% organic order growth in Modernization, driven by 10 million elevators over 15 years globally, creating a structural growth engine.

Business Highlights

The company secured a notable contract to equip the Jeddah Tower in Saudi Arabia with its next-generation high-rise solutions, showcasing its innovation and capacity to deliver complex projects reliably. KONE's strategy focuses on making the company more resilient, with service and modernization as key growth drivers. The company has made progress in accelerating this shift, with 40% of its maintenance base now connected, and field service technicians leveraging productivity tools in 41 countries.

Growth Prospects

For the full year 2025, KONE expects sales growth of 3% to 5% at comparable exchange rates and an adjusted EBIT margin of 11.9% to 12.3%. The company expects China to be a challenge, but service and modernization growth will contribute positively to earnings. In 2026, KONE expects continued growth in service and modernization, with meaningful contributions from performance improvement measures. Analysts estimate next year's revenue growth at 4.4%.

Valuation

With a P/E Ratio of 30.92 and an EV/EBITDA of 18.24, KONE's valuation suggests that the market is pricing in a certain level of growth. The company's ROE of 39.95% and ROIC of 30.58% indicate strong profitability. The Dividend Yield is 3.08%, providing a relatively stable return for investors. The Free Cash Flow Yield is 3.58%, indicating a decent cash generation capability.

Challenges and Opportunities

KONE faces challenges in China, where the NBS market is declining, but the company is adapting its business to focus on service and modernization. The company sees a structural growth opportunity in modernization, driven by aging elevators, and believes it is gaining market share. The parcel modernization business is a significant contributor to modernization orders and sales, and is more profitable than traditional modernization.

3. NewsRoom

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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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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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Is Kone Oyj (KNYJY) Stock Outpacing Its Industrial Products Peers This Year?

Jul -03

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UK Elevators & Escalators Market Forecast Report 2025: Market Set to Reach 9,874 Units by 2030, with 3.11% CAGR During 2024-2030

Jun -26

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Are Industrial Products Stocks Lagging ABB (ABBNY) This Year?

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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: 5.6/10

Value: 3.1

Growth: 4.9

Quality: 7.1

Yield: 3.8

Momentum: 6.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Siemens

A-Score: 5.5/10

Value: 3.6

Growth: 5.0

Quality: 5.6

Yield: 5.0

Momentum: 7.5

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
Alfa Laval

A-Score: 5.4/10

Value: 2.7

Growth: 6.9

Quality: 6.8

Yield: 3.8

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

View Full Report
Stock-Card
Schindler

A-Score: 5.3/10

Value: 1.1

Growth: 3.9

Quality: 7.2

Yield: 3.1

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
Eaton

A-Score: 4.5/10

Value: 0.7

Growth: 5.9

Quality: 6.9

Yield: 2.5

Momentum: 6.0

Volatility: 5.0

1-Year Total Return ->

View Full Report
Stock-Card
KONE

A-Score: 4.3/10

Value: 1.8

Growth: 3.3

Quality: 6.4

Yield: 5.6

Momentum: 6.0

Volatility: 2.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

59.62$

Current Price

59.62$

Potential

-0.00%

Expected Cash-Flows