Q1 2026 Kone Corp Earnings Call Transcript
Key Points
- Sales grew by nearly 7% in the first quarter, indicating strong market performance.
- Service and Modernization increased to 67% of sales, supporting margin expansion and business resilience.
- The company announced a strategic combination with TKE, expected to create a world-class player in the industry.
- KONE Oyj (KNYJF) achieved a cash flow improvement to EUR500 million in the quarter.
- The company maintained a healthy cash conversion rate and specified sales growth guidance to 3% to 6%.
- Foreign exchange posed a headwind, impacting the margin by approximately 15 basis points.
- Increased geopolitical risks, particularly related to the Middle East conflict, could lead to higher transport and fuel costs.
- The transaction with TKE involves a complex regulatory approval process expected to take 12 to 18 months.
- There are concerns about maintaining investment-grade status with the anticipated leverage post-transaction.
- Potential antitrust hurdles could require remedies that might affect the strategic rationale of the TKE combination.
Good morning, everyone. My name is Natalia Valtasaari. I'm Head of Investor Relations here at KONE. And I want to start by apologizing for the delay to start of this webcast. We had some network issues here on our end. I would suggest that everyone who is only following on the webcast also dial in, the number should be visible to you, just in case this is not smooth sailing going forward, which I very much hope it will be.
So that said, let's get started. Very pleased to be joined today by our CEO, Philippe Delorme, and our CFO, Ilkka Hara. As you know, we published our Q1 results today, but clearly, today's big news is our announcement that we plan to combine with TKE, very exciting, and this will, of course, be the main focus of the webcast. Once you have heard from our key speakers, we'll be opening the lines for Q&A. I expect an active session. (Event Instructions)
So with that, Philippe, please.
Thank
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