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KONE Capital Markets Day 2008
KONE Central and North EuropeNoud VeegerExecutive Vice President, Area Director Central & North Europe
2 May 7, 2008 © KONE Corporation l Capital Markets Day l Noud Veeger
Long-term profitable growth opportunities in Central & North Europe through
Urbanization
Modernization
New equipment leadership driving service market share
3 May 7, 2008 © KONE Corporation l Capital Markets Day l Noud Veeger
Agenda
Central and North Europe markets and KONE´s position
Key development actions
Long-term profitable growth opportunities
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The Central and North Europe markets
HyvinkääHelsinki
Essen
Keighley
Global R&D centersProduction siteHead office
Usti nad Labem
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Europe – growing dynamics between cities
0
100
200
300
400
500
600
1950 1970 1990 2010 2030
Rural Urban
Source: U.N. World Urbanisation Prospects 2007
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Construction market development 2000-2012 in Central and North Europe
Source: Global Insight, Feb 2008
• 2007 Nominal construction output (Office, Commercial, Residential): EUR bn 374
NOTE: The figures presented in the graph are real bn EUR figures, converted from USD 2000 real figures using recent conversion rates
Office, commercial and residential construction activity, real EUR bn
0
50
100
150
200
250
300
350
400
2000 2001 2002 2003 2004 2005 2006 2007f 2008f 2009f 2010f 2011f 2012f
Office Commercial Residential
7 May 7, 2008 © KONE Corporation l Capital Markets Day l Noud Veeger
Markets in Central and North Europe Total new equipment market size in 2007, elevators + escalators
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Source: KONE
8 May 7, 2008 © KONE Corporation l Capital Markets Day l Noud Veeger
Markets in Central and North Europe Total elevators in service in units (LIS) in 2007
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Source: KONE
9 May 7, 2008 © KONE Corporation l Capital Markets Day l Noud Veeger
Ger
man
y
UK
Switz
erla
nd
Net
herla
nds
Finl
and
Sw
eden
Aust
ria
Nor
way
Cze
ch
Pol
and
Irela
nd
Slov
ak R
epub
lic
Den
mar
k
Hun
gary
Slov
enia
Est
onia
Markets in Central and North Europe Total Modernization market size 2007, elevators & escalators
Source: KONE
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KONE development actions - Customer Focus
CRM process implementation
Sales force training
E-business
Increasing equipment in service
Care-for-Life process
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KONE development actions - Operational Excellence
Modular based maintenance
Installation productivity
Supply chain control
Reduction of callouts
Continuous fixed cost discipline
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Products
Strong position in new equipment since the introduction of KONE MonoSpace®, the world’s first machine-room-less elevatorDesign– KONE DecoTM
– KONE FourSeasonsTM conceptModernization– KONE MaxiSpaceTM
– KONE ReGenerateTM
Double-deck elevators KONE PolarisTM
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Central London offices under construction
Source: CB Richard Ellis, Central London Offices, Q1 2008
0
2
4
6
8
10
12
14
16
2000
Q1
2000
Q3
2001
Q1
2001
Q3
2002
Q1
2002
Q3
2003
Q1
2003
Q3
2004
Q1
2004
Q3
2005
Q1
2005
Q3
2006
Q1
2006
Q3
2007
Q1
2007
Q3
2008
Q1
Under Construction Available Committed
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London - KONE is at the Heart of Change
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Modernization market
Population getting older
Buildings getting older
Legislation for safety of existing lifts
18 May 7, 2008 © KONE Corporation l Capital Markets Day l Noud Veeger Source: United Nations World Population Prospects: The 2006 Revision
Percentage of population aged 65 or older in Western Europe
15 %
16 %
19 %
23 %
26 %
28 %
10 %
12 %
14 %
16 %
18 %
20 %
22 %
24 %
26 %
28 %
30 %
2000 2010 2020 2030 2040 2050
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Age distribution of the construction base in Central and North Europe
0 % 20 % 40 % 60 % 80 % 100 %
Austria
Czech Republic
Denmark
Estonia
Finland
Germany
Hungary
Ireland
Latvia
Lithuania
Netherlands
Poland
Slovak Republic
Slovenia
Sweden
United Kingdom
Over 6262-3837-28Less than 27
Source: Housing Statistics in the European Union 2005/2006© Ministry of Infrastructure of the Italian Republic, Federcasa
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SNEL overview of National Legislations in Central and North Europe
Existing national laws (specifically UWED) cover part or all of SNEL points
Preparation for national laws to be started
National laws in preparation
National laws have been introduced
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Eastern Europe
Urbanization
Increasing standard of living
Safety legislation
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Warsaw
Krakow
Gdansk
Lodz
Wroclaw
Poznan
Szczecin
Eastern Europe – Case Poland
Poland
2005 2006 2007
New Elevator Business Market Size in Units
Source: KONE
23 May 7, 2008 © KONE Corporation l Capital Markets Day l Noud Veeger
Long-term profitable growth opportunities in Central & North Europe through
Urbanization
Modernization
New equipment leadership driving service market share