KONE Equity Story

KONE Equity Story INVESTORS@KONE.COM

KONE in a nutshell

KONE is one of the global leaders in the elevator and escalator industry KONE provides industry-leading elevators, escalators, automatic building doors and integrated solutions for People Flow services covering the entire lifetime of equipment, from the design phase to maintenance, repairs and modernization solutions Founded in Finland in 1910, significant family ownership in the 4 th generation Net sales EUR 8.8 billion in 2016 Over 52,000 employees Our vision is to Provide the best People Flow experience Our mission is to improve the flow of urban life

OUR MISSION OUR VISION At KONE, our mission is to improve the flow of urban life KONE delivers the best People Flow experience We understand People Flow in and between buildings, making people s journeys safe, convenient and reliable We provide Ease, Effectiveness and Experiences to users and customers, over the full life cycle of buildings We make cities better places to live 4

Key propositions of KONE as an investment LONG-TERM GROWTH INDUSTRY Growth supported by global megatrends GLOBAL LEADER Wide geographic coverage with a strong position in the growing Asian markets LIFE-CYCLE BUSINESS Services account for around 45% of our sales CAPITAL-LIGHT BUSINESS MODEL Low amount of fixed assets required, negative working capital and high return on invested capital CHALLENGER ATTITUDE We retain our challenger attitude and continuously develop our competitiveness 5

We have a strong life-cycle business model MAINTENANCE NEW EQUIPMENT BUSINESS 55% of sales Enables us to capitalize on the prevailing market situation; more cyclical in nature Fuels the future growth of our service business Customers include builders, general contractors and developers 2016 sales EUR 8.8 billion 31% of sales Stable part of the business; steady and recurring cash flow High customer retention Customers include facility managers and building owners MODERNIZATION 14% of sales More cyclical in nature; impacted by economic development Significant potential in Europe and North America Customers include facility managers and building owners 6

We have a wide geographic reach Hyvinkää Helsinki North America 19% of sales Torreón Allen Coal Valley Essen Pero Ùsti nad Labem Cadrezzate Kunshan Asia-Pacific 41% of sales Nanxun (GiantKONE) Chennai KONE is present Head office Global R&D site Production site KONE collaborates with authorized distributors and agents in close to 80 countries EMEA 40% of sales 2016 sales figures 7

We have grown profitably by capitalizing on the opportunities in new equipment and Asia-Pacific SALES BY BUSINESS 12 000 8 000 4 000 0 3 238 3 601 2005 2006 4 079 4 603 4 744 2007 2008 2009 4 987 2010 5 225 2011 6 277 2012 6 933 2013 7 334 2014 8 647 2015 8 785 55% 15 10 5 32% 14% 0 2016 EBIT margin New equipment sales Maintenance Sales Modernization sales CAGR, % 9.5% 12.6% 6.8% 6.7% SALES BY AREA CAGR, % 12 000 8 000 4 000 0 3 242 2005 3 601 4 079 2006 2007 4 603 2008 4 744 2009 4 987 2010 5 225 2011 6 277 2012 6 933 2013 7 335 2014 15 8 647 8 785 10 40% 19% 5 42% 0 2015 2016 EBIT margin EMEA sales Americas sales Asia-Pacific sales 9.5% 4.5% 8.2% 22.4% 8

We operate in an industry driven by urbanization megatrends

Long-term growth industry WE ADDRESS THESE NEEDS TO CREATE MORE VALUE FOR OUR CUSTOMERS Affordable vertical housing Safe, reliable, efficient infrastructure Improving living standards and convenience Ecoefficiency and sustainability Growing building intelligence Well-being and happiness 10

Urbanization and urban development continue globally, progressing through different stages THREE STAGES OF URBANIZATION 1 2 3 MOVE FROM RURAL TO URBAN AREAS Urbanization is the essential driver in economic growth and development Scarcity of land in urban centers increasing height of buildings Growing need for affordable housing GROWTH OF MIDDLE INCOME CONSUMERS Shrinking household sizes, increasing floor space per capita Upgrading and rebuilding of former fringe areas in cities Congested and inefficient cities are a major risk to economic growth significant investment into urban infrastructure required CHANGING PATTERNS OF URBAN LIVING Later family formation, increase in one-person households Challenges in mature cities: shortage of affordable apartments, aging of the buildings and infrastructure Increasing building intelligence is generating new demands EMERGING MARKETS MATURE MARKETS 11

In recent years, market growth has been driven by new equipment NEW EQUIPMENT MARKET (new orders received, units) Units ( 000) 1000 MAINTENANCE MARKET (total equipment in operation, units) Units ( 000 000) 15 >14.0 800 600 400 200 0 495 33% 7% 4% 20% 36% 2007 825 20% 3% 3% 12% 62% 2016 10 5 0 ~9.0 55% 12% 5% 17% 11% 2007 42% 8% 4% 16% 31% 2016 EMEA North America South America Rest of APAC China 12 Source: based on KONE s estimates

Going forward, industry dynamics are changing with the importance of the maintenance business increasing MAINTENANCE NEW EQUIPMENT BUSINESS Good growth opportunities, despite a moderation in the growth in Asia-Pacific Increasing opportunities from smarter buildings Relative importance of maintenance out of the total business will increase in the emerging markets In all markets, new technology will start shaping the business MODERNIZATION Growing opportunity in all regions as the installed base ages and requirements increase 13

Different market dynamics provide diverse growth opportunities New equipment Maintenance Services Modernization Growth drivers Urbanization, GDP growth, construction market growth Growth of the installed base; legislation and safety requirements Aging of installed base; legislation and safety requirements Competitive landscape Consolidated, handful of global OEMs Some more locally operating OEMs Fragmented; OEMs have significant market shares Many small to mid-sized local players Fragmented market Both OEMs and smaller companies have good market shares 14

Digitalization shapes the industry Everything becomes mobile and connected Cloud Customers have full real-time transparency Users demand increased convenience, efficiency and enjoyment in People Flow New ecosystems emerging around smart buildings and cities Connectivity Data storage and integration Analytics Mobility Sensors

We have a wide geographic coverage

We have focused on increasing market share in growth markets NEW EQUIPMENT MAINTENANCE BUSINESS KONE s position 2009 2016 KONE s position 2009 2016 North America #4 #4 North America #4 #4 EMEA #3 #2 China China market share #4 10% #1 20% Rest of APAC* #1 #1 EMEA #4 #3 China #4 #1 Rest of APAC* #3 #2 Global new equipment market share 12% 19% Market position #4 Shared #3 *Rest of APAC excluding Japan and Korea. 17

EMEA has the largest installed base globally, Europe being a key service market E&E MARKET IN EUROPE, MIDDLE EAST AND AFRICA (2016, units) A mix of more mature markets and developing regions; Europe the largest market in the area 42% Residential is the largest market segment Rapidly aging elevator base in Europe provides structural growth potential in modernization % 20% of all E&E equipment in operation globally * KONE in EMEA KONE s sales in 2016 EUR 3,477 million (40%) Revenue mix is more weighted towards services (maintenance and modernization) Largest sales contributors include France, Germany, UK, Italy, Finland and Sweden 18 % of all new equipment orders globally * * Figures based on KONE s estimate.

North America, another key service market, is seeing good growth also in new equipment E&E MARKET IN THE AMERICAS REGION (2016, units) 8% In North America, non-residential segments comprise the majority of market volumes Rapidly aging elevator base provides structural growth potential in modernization % 3% 4% 3% of all E&E equipment in operation globally* KONE in Americas KONE s sales in 2016 EUR 1,659 million (19%) Revenue mix is more weighted towards services (maintenance and modernization) United States is the largest sales contributor in the region (around 15% of KONE s total global sales) KONE has operations in United States, Canada and Mexico No own operations in South America 19 % of all new equipment orders globally* * Figures based on KONE s estimate.

The majority of new equipment volumes globally are in Asia-Pacific E&E MARKET IN ASIA-PACIFIC (2016, units) China A mix of developing and more mature markets China is the largest new equipment market globally and India the second largest 31% 62% 8% 4% Residential is the largest segment KONE in Asia-Pacific 7% 8% Rest of Asia Pacific Japan and South Korea KONE s sales in 2016 EUR 3,649 million (41%) Largest sales contributors China (around 30% of KONE s total global sales), Australia and India Sales weighted towards new equipment in most markets and particularly in China 20 % % of all E&E equipment in operation globally* of all new equipment orders globally* KONE is market leader in the new equipment market in China and India No own operations in Japan and South Korea * Figures based on KONE s estimate.

KONE is the market leader in China with ~20% market share in new equipment in 2016 New equipment orders received (units) vs. market growth KONE maintenance base vs. total installed base growth 40 30 20 ~44% ~20% KONE Market 36% 21% 27% 21% KONE Market 10 <5% 15% 15% 0 2006-2014 CAGR ~-5% ~-5% ~-5% 2015 2016 Note: The KONE figure 2006 2016 includes GiantKONE from December 2011 onwards. Market growth based on KONE s estimate. 2006-2014 CAGR 2015 Note: CAGR 2006 2016 including KONE and GiantKONE 2016 New equipment business accounts for about 90% of our China sales 2016: China share of total sales was ~30%, share of total orders received <35% We continue to target faster than market growth in the long term in our new equipment business Maintenance accounts for about 10% of our China sales today We see clear growth potential in the service business in China and focus on growing this business further Conversion rate of 50%, providing a good basis for growth 21

We provide life-cycle solutions

New equipment: elevators and escalators are at the core of our strong product offering Elevators Escalators Our People Flow solutions Automatic doors People Flow Intelligence* solutions *KONE People Flow Intelligence comprises solutions for access and destination control, as well as information communication and equipment monitoring 23

Maintenance is legally required provides stability and resilience to market cyclicality >1,100,000 Brands Equipment acquired by Equipment KONE manufactured manufactured by by KONE KONE ~800,000 Equipment GEOGRAPHICAL SPLIT OF MAINTENANCE BASE (units) manufactured by other companies +6.2% Equipment manufactured by other companies EMEA North America APAC CAGR, 2010 2016 ~4% ~3% ~20% Maintenance is legally required in most countries Growth of maintenance base driven by Conversions from new equipment sales after firstmaintenance period Acquisitions Wins from competition KONE offers modular-based, preventive maintenance, which can be tailored according to customer requirements We maintain both equipment manufactured by us as well as other brands 2010 2016 24

Modernization encompasses a variety of activities from component upgrades to full replacement of equipment Activity Component upgrades Upgrades of single components to ensure reliability and improve performance Modernization packages Modernization of key systems such as electrification, control system and door operator unit Full replacement / major modernization Full replacement or major modernization of the complete elevator system Frequency As needed Multiple packages during the lifetime of equipment One-time occurrence Modernization improves the safety, accesibility, user experience, reliability, energy efficiency and transportation capacity of the equipment 25

A large part of the E&E equipment in operation in the mature service markets are over 20 years old, providing significant modernization potential ~5.3M ~1.0M Over 50% >3.0M Over 50% Total US installed base Of which at least 20 years old Total European installed base Of which at least 20 years old Total China installed base ~0.15M Of which at least 20 years old Based on KONE 2014 estimate 26

We differentiate with competitive products and strong execution COMPETITIVE PRODUCTS COMPETITIVE PRODUCTS Ride comfort Ride comfort Visual design Visual design Space efficiency Space efficiency Eco-efficiency Eco-efficiency STRONG EXECUTION STRONG EXECUTION Reliability Reliability High-quality service and delivery High-quality service and delivery

Our strategy provides a clear direction

We have a new phase in our strategy to even better serve our customers Capitalize on new technologies to add value for customers in new ways Cater to changing customer expectations Drive smart and sustainable urbanization Increased differentiation Higher speed of bringing new services and solutions to market

30 IR KIT KONE Corporation

We have had clear progress towards our strategic targets Most loyal customers Great place to work Faster than market growth Best financial development Leader in sustainability Increase in customer loyalty Higher employee engagement Continued new equipment market share growth Continued margin expansion Decrease in relative carbon footprint* business 31 2011 2013 2016 2011 2013 2015 2011 2013 2015 2011 2013 2015 2011 2013 2015 * tco2 / MEUR sales IR KIT KONE Corporation

Our employees are our key asset and the majority is in the field every day EMPLOYEES BY REGION EMPLOYEES BY FUNCTION 14% (13%) 9 % (8 %) 26 % (26 %) 41% (42%) 45% (45%) 56 % (56 %) 9 % (10 %) Asia-Pacific EMEA Americas New equipment sales and installations Production Maintenance and modernization Administration, IT, R&D Employees at the end of 2016. 32

Examples of KONE s industry leading innovations 1996 2001 2002 KONE MonoSpace machine-room-less elevator KONE JumpLift construction time elevator KONE EcoMod escalator modernization solution 2005 2012 2013 KONE InnoTrack autowalk 2013 Next generation KONE MonoSpace and MiniSpace elevators 2014 KONE UltraRope high-rise hoisting technology KONE People Flow Intelligence solutions KONE NanoSpace elevator modernization solution KONE Polaris destination control system 33

Digitalization enables the delivery of new services and improved quality and productivity of our operations Productivity Growth Field operations productivity Sales management efficiency New services and solutions New business models Systems and platforms Technology enablers Customer experience and user engagement Digital way of working and culture 34

Our capital-light business model enables a high return

KONE s business model is flexible and capital-light, yielding a high return on capital Global position in a lifecycle business Enables us to catch growth opportunities in all regions and businesses as they arise High cash flow generation Negative working capital, low capital intensity Flexible cost structure Low amount of fixed costs, subcontracting used for example in installation High return on capital Absolute EBIT growth combined with low investment requirements generate a high return 36

We have a cash-generative business model HIGH OPERATIVE CASH FLOW GENERATION NEGATIVE WORKING CAPITAL MEUR 1,750 MEUR 0 1,500-100 -200 1,250-300 -400 1,000-500 -600 750-700 -800 500-900 -1 000 250-1 100-1 055 0 2010 2011 2012 2013 2014 2015 2016-1 200 2010 2011 2012 2013 2014 2015 2016 12m rolling quarterly cash flow from operations (before financing items and taxes) Inventories advance payments Other WC items 37

Our absolute EBIT has grown faster than sales 12 months quarterly rolling absolute EBIT and EBIT margin progression, 2009 2016 MEUR 1,400 16% 1,200 1,000 800 600 400 200 12.1 14.7 14% 12% 10% EBIT EBIT-% We have seen improvement both in absolute and relative EBIT 0 Q1/2010 Q1/2011 Q1/2012 Q1/2013 Q1/2014 Q1/2015 Q1/2016 0% 38

We benefit from operational and financial flexibility Flexibility built into our new equipment business model Service Manufacturing Installation High share of outsourcing to component suppliers Low investment requirements in manufacturing /assembly Subcontracting used in installation Service less prone to cyclicality Own technicians used in service Admin Further centralization opportunities in back-office activities 39

We have a streamlined and capital-light network of production and distribution centers, focusing on assembly Hyvinkää Ùsti nad Labem Coal Valley Pero Torreón Allen Kunshan Nanxun (GK) Chennai Suppliers KONE s assembly units KONE s distribution centers Customers installation sites Suppliers include component manufacturers, raw material providers and contract manufacturers. Production consists largely of the assembly of sourced components. Only selected components are produced in-house. The final assembly of equipment is carried out on-site in the course of installation. 40

Our balance sheet is strong and our business model enables a high return on capital TOTAL EQUITY AND NET DEBT MEUR RETURN ON CAPITAL EMPLOYED % Total equity Net debt 50 41.7 1,339 1,601 2,034 1,834 1,725 2,062 2,575 2,796 40 30 34.0 34.8 34.3 29.4 36.4 37.7 34.1 20-505 -750-829 -574-622 -912-1,513-1,688 10 2009 2010 2011 2012 2013 2014 2015 2016 0 2009 2010 2011 2012 2013 2014 2015 2016 41

We have continued to be active in acquisitions, while capex has remained relatively low CAPITAL EXPENDITURE AND DEPRECIATION MEUR 140 128 119 120 106 100 100 93 86 88 84 79 80 74 64 66 72 77 60 52 53 44 58 62 40 50 50 20 33 16 20 22 28 30 13 0 2010 2011 2012 2013 2014 2015 2016 ACQUISITIONS MEUR 200 185 180 167 160 140 120 100 80 60 40 20 0 2010 2011 169 2012 83 2013 67 2014 65 2015 99 2016 Capital expenditure excluding acquisitions Amortization of acquisition-related intangible assets Depreciation 21 23 21 38 17 23 19 (Number of acquisitions) Most acquisitions are small or medium-sized maintenance companies 42

Good financial development has resulted in an increasing dividend 1.60 1.40 1.20 Split-adjusted dividend per class B share, EUR,1980 2016 1.20 1.40 1.55 1.00 0.80 CAGR +15% 0.70 0.88 1.00 0.60 0.40 0.20 0 0.45 0.33 0.25 0.19 0.02 0.06 0.09 0.01 0.01 0.02 0.04 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 Note: Includes the basic dividend. Adjusted for share splits in 1999 (1:3), 2002 (1:3), 2005 (1:2), 2008 (1:2) and 2013 (1:2). 1 EUR= 5.9 FIM; not adjusted to constant exchange rate. Additional extraordinary dividends: for 2009, a double dividend was paid; for 2011, an extraordinary dividend of EUR 0.75 was paid and for 2012, an extraordinary dividend of EUR 0.65 was paid 43

We have reached two of our three long-term financial targets Growth Faster than market Profitability EBIT margin of 16% Cash flow Improved working capital rotation

KONE s key figures 2009 2016 2016 2015 2014 2013 2012 2011 2010 Orders received MEUR 7,621 7,959 6,813 6,151 5,496 4,465 3,809 Sales MEUR 8,784 8,647 7,334 6,933 6,277 5,225 4,987 EBIT excl. one-time items MEUR 1,293 1,241 1,036 953 829 725 696 Cash flow from operations 1) MEUR 1,509 1,474 1,345 1,213 1,071 820 857 Net working capital 2) 3) MEUR -1055-983 -750-612 -439-361 -394 Fixed assets 2) MEUR 368 345 317 270 262 232 205 Total equity 2) MEUR 2,796 2,576 2,062 1,725 1,834 2,034 1,601 Net debt 2) MEUR -1,688-1,513-912 -622-574 -829-750 ROCE % 34.1 41.7 37.7 36.3 29.4 34.3 34.8 Basic EPS EUR 2.00 2.01 (4 1.47 1.37 1.23 (5 1.15 (5 1.05 Basic dividend per B share 6) EUR 1.55 1.40 1.20 1.00 0.88 0.70 0.45 Figures for 2012 have been restated according to the revised IAS 19 Employee Benefits. 1) Cash flow from operations before financing items and taxes. 2) At the end of the period. 3) Including tax receivables and liabilities, accrued interest and derivative items 4) Basic earnings per share excluding extraordinary dividend received from TELC was EUR 1.79 in 2015. 5) Excluding one-time items. Including one-time items, basic earnings per share was EUR 1.17 in 2012 and EUR 1.26 in 2011. 6) In addition, KONE has distributed extraordinary dividends, EUR 0.33 for 2009, EUR 0.75 for 2011 and EUR 0.65 for 2012. 45

INVESTOR RELATIONS CONTACTS Sanna Kaje Vice President, Investor Relations Tel. +358 (0)204 75 4705 sanna.kaje@kone.com MORE INFORMATION FROM FOLLOWING SOURCES Mikko Pohjala Investor Relations Manager Tel. +358 (0)204 75 4560 mikko.pohjala@kone.com Nelli Hämäläinen Investor Relations Specialist Tel. +358 (0)204 75 4925 nelli.hamalainen@kone.com KONE Annual Review KONE Interim Reports KONE Sustainability Reports KONE Capital Markets Day Presentations Heidi Nurmi Investor Relations Coordinator Tel. +358 (0)204 75 4240 heidi.nurmi@kone.com More information on our IR website www.kone.com/investors Download the KONE IR App from the Apple App Store 46