1. || Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou 08.08.2015Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou1 The Economist: The lift business: Top floor, please

2. ||  People live and work more “vertically” than ever before  Trend towards urbanization  Every year 70m. people move to cities worldwide  By 2050 2/3 of world population will reside in cities  Increase of 2.5 billion people  90% of the increase in Asia and Africa 08.08.2015Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou2 Lift: A continuous need Source: 2014 Revision of the World Urbanization Prospects Source: wikipedia

3. ||  New installations: From 300’000 10 years ago to 700’000 today, 67% of them in China  Market is moving east  China, India, Turkey, Middle East  Europe  50% of lifts worldwide  Maintenance  Refurbishment  Double revenues by 2015 08.08.2015Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou3 Global Demand Source: 2013 KONE estimations

4. ||  New installations  10% margin  Not stable revenues - affected by economy’s fluctuations  Maintenance  25–35% margin ($2,000–5,000 a year)  More stable revenues  Contracts at the time of installation act as barriers for newcomers  Antitrust authoriries  fine for fixing German & Benelux prices  Refurbishment … promising profits 08.08.2015Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou4 The Business – What drives profits? Source: BBC news magazine Source: avenuestosuccess.com

5. ||  4 firms control the lion’s share  67% globally  In China growing competition from:  Mitsubishi, Hitachi  More than 500 Chinese local companies  Maintenance:  Captive business in Europe and America: big companies  China: local companies or not at all  Service business with lag for big companies 08.08.2015Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou5 Industry Competition Logos’ source: companies’ websites

6. ||  Main Challenge: cost leadership  cheaper production, larger margins  Manufacture & R&D massively outsourced to Asia  Global standardization  Economies of scale  Sales of pricier offerings are on demand  Double-decker elevators  Keycard elevators  Sustainability  Speed & Comfort  Space Saving 08.08.2015Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou6 Business Challenges – Trends Source: http://sourceable.net/elevator-trends-technologies-transforming-tall-buildings/ Source: http://bestdesignews.com

7. ||  Customer’s perspective  Little evolution  Dominant design  Producer’s perspective:  Significant additions that add value and differentiate from competitors but not great breakthrough  Patent war  Slows down evolution  New inventions must be cheap(-er)  cost leadership 08.08.2015Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou7 Lift Evolution

8. ||  Main Advantages: 80% less energy, no machine room, no danger of being trapped, 100% environmentally friendly  A small manufacturer (Mezolift) first introduced the solar lift for small houses (2011)  Bigfirms followed (e.g. Schindler in 2013)  Rigid production process  Cost issues 08.08.2015Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou8 Case Study: Solar Lift Source: http://elevatortoday.com/2012/10/13/mezolift-first-solar-elevator/, Schindlerhttp://elevatortoday.com/2012/10/13/mezolift-first-solar-elevator/

9. Thank you!