KONE Q2 2026 Earnings Call: Complete Transcript

KONE (OTC: KNYJY ) reported second-quarter financial results on Wednesday. The transcript from the company's second-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

The full earnings call is available at Summary Kone Corp reported an 11% increase in orders for Q2, with significant growth in modernization, which rose by over 15%, reflecting strong execution of strategic priorities. 4% in comparable currencies, contributing to a year-to-date sales growth of 5%, and adjusted EBIT margin expanded by 40 basis points. The company advanced its RISE strategy, increasing connectivity in maintenance and achieving a 75% rate of equipment deliveries with regenerative drives, supporting sustainability goals.

Kone Corp's planned combination with TKE is progressing well, with strong shareholder support and regulatory reviews underway, aiming for $700 million in cost synergies. 3% to 13%, despite challenges from inflation and geopolitical risks. Full Transcript Natalia Valtasaari, Head of Investor Relations Good morning and welcome to Kone Corp's second quarter results call. My name is Natalia Valtasaari, I'm Head of Investor Relations here at Kone Corp, and I'm very pleased to be joined here today by Philippe Delorme, our President and CEO, and by Ilkka Hara, our EVP, CFO.

As usual, Philippe will start by talking through the highlights of the quarter in terms of financials, but especially our strategy execution. Ilkka will then follow up with some more details on markets and financials, and then Philippe will wrap up before we head into the Q and A session. And just as a reminder already at this point, please in the Q and A try to limit yourselves to one question, one follow-up, and of course you can rejoin the queue if you have anything further to ask. But with that, Philippe, please.

Philippe Delorme, President and CEO Thank you, Natalia, and good morning everyone. I'm very pleased to be here today to discuss our second quarter results, which reflect continued progress across our business and good momentum in our strategic priorities. Looking at the numbers, order growth stands out. I was especially encouraged by the acceleration in modernization, which grew by well over 15%.

This shows our success in capturing the opportunities created by aging building stock around the world. We also delivered further margin expansion and strong cash generation, highlighting the core quality of our business mix and the benefits of disciplined execution. Beyond the financials, we continue to advance our strategy. An excellent example is the increasing connectivity of our maintenance portfolio, now at 44%, strengthening both customer value and our service capabilities.

And finally, there is a good momentum in the planned combination with TKE. I'll provide a more detailed update on this later in the presentation, but first let's take a closer look at our financial performance. Let's start with orders. Orders grew by almost 11% in the quarter.

What I find particularly encouraging is both the breadth and the quality of that growth. Three of our four regions delivered double-digit growth, while modernization grew strongly across all regions. 4% in comparable currencies, putting year-to-date sales growth at a respectable 5%. Our adjusted EBIT margin expanded by 40 basis points thanks to a richer sales mix and improved operating leverage.

Cash generation was also very robust, resulting in healthy cash conversion and further strengthening our financial position. So overall, this was a good quarter for Kone Corp, with growth across all our key financial metrics and performance very much in line with our expectation. Let me share a few practical examples of the progress we are making in executing our RISE strategy in digital. First, we continue to make good progress both in connecting more maintenance equipment and rolling out productivity tools for our field technicians.

Together, we make an even more reliable, responsive, and efficient service partner for our customers. In modernization, our modular approach significantly reduces downtime, one of the biggest concerns for customers undertaking upgrade projects. I'm confident that this is a key factor behind the consistently strong modernization growth we've delivered since the launch of RISE. I also believe it is behind the improvement in our modernization customer satisfaction scores we've seen during the year.

In residential new buildings, our focus on affordability without compromising quality has strengthened our competitiveness in this important segment. Our offering developments are supporting growth in new equipment today while also creating a valuable install base for future service business. Turning to Cut carbon, 75% of our equipment deliveries are now equipped with regenerative drives, helping customers reduce energy consumption and meet increasingly demanding sustainability requirements. And finally, our core processes and culture.

Our ambition is to be the number one choice for both customers and employees. We track our progress through annual customer loyalty and employee engagement surveys. Customer loyalty has developed positively in three of our four areas, but feedback also highlights opportunities for further improvement, and at the same time employee engagement remained above the global benchmark, reflecting the strength of our culture and the commitment of our people. I'm proud of what the Kone Corp team has accomplished, and I'm also happy to see our strategy translating into tangible value for our customers.

Let me share a few examples from the quarter. Starting in China, we have a great example from the