KONE Corporation Pro Forma Review: January–December 2005

Stock Exchange Release Published 27/01/2006

Strong Order Intake Continued

  • Kone Corporation demerged into two separately listed corporations, KONE Corporation and Cargotec Corporation, on 1 June 2005. This pro forma review presents KONE’s January–December 2005 financial performance according to the business and corporate structure prevailing after the demerger.
  • The official Report for the period June-December, 2005 is released in conjunction with this report. The Board of Directors proposes a dividend of EUR 1.00 per class B share
  • Fourth quarter order intake continued strong both in new equipment and modernizations in all market areas.
  • Fourth quarter net sales exceeded our expectations because of the completion of a high number of projects at the end of the year. This also boosted operating income slightly over last year’s level. As a result, cash flow was strong.
  • In 2006, KONE’s target is to achieve, at comparable exchange rates, an approximately 10 percent increase in net sales, compared to the 2005 pro forma figure. This is supported by the strong order intake in 2005. Order intake growth, however, is not expected to achieve the 2005 level. The operating income (EBIT) target is to achieve growth of approximately 20 percent from the comparable 2005 pro forma figure of EUR 272 million.

Key Figures

Orders received, MEUR700.4568.52,639.22,135.8
Order book, MEUR2,326.81,796.12,326.81,796.1
Sales, MEUR879.8896.03,242.22,894.5
Operating income, MEUR94.192.3272.0*234.6
Cash flow from operations (before financial items and taxes), MEUR111.4123.2329.4289.0
Net income, MEUR54.763.5108.8164.0
Net debt, MEUR99.3-61.499.3-61.4
Total equity/total assets, %
Gearing, %14.8-8.414.8-8.4

* Excluding a MEUR 89.2 provision for the development and restructuring program. Operating income in 2005 including the provision was MEUR 182.8.
** Disregarding MEUR 15.3 non-recurring income due to a provision reversal regarding disability pensions.

President of KONE, Matti Alahuhta, in conjunction with the review:

“We are very satisfied with the progress of our change programs and the numerous small wins that we already achieved in 2005. KONE’s business developed positively, and our order intake rose in all geographical markets. We are particularly pleased with the strong order intake in Asia. “

“We are gradually becoming more customer focused. Simultaneously our product and service portfolios are improving, and we have also started several productivity development projects.”

“KONE achieved faster than market growth already in 2005. As a result of strong sales growth and a slight improvement in operating margin, our operating profit development was also better than we had expected at the beginning of the year. I want to thank KONE’s committed personnel for the good work done in 2005.”

Analyst and Media Conference and Conference Call

A meeting for the media and analysts will be held on Friday 27 January, 2006 at 2:00 p.m. Finnish time at KONE Building, address Keilasatama 3, Espoo.

A telephone conference for analysts and investors, conducted in English, will begin at 4:00 p.m. Finnish time and will also be available as live audio web cast on the company website. Callers may access the conference directly at the following telephone numbers: +1-617-213-8845 (US callers) or +44-20-7365-8426 (Non-US callers), password: KONE Corporation. On demand copy of the conference will be available on the company website later the same day.

This pro forma review is unaudited.


KONE Corporation

Aimo Rajahalme
Executive Vice President, Finance and Information Services

Minna Mars
Senior Vice President, Corporate Communications & IR

For further information please contact:
Aimo Rajahalme, Executive Vice President, Finance, tel. +358 (0)204 75 4484

KONE is one of the world’s leading elevator and escalator companies. It provides its customers with industry-leading elevators and escalators and innovative solutions for their maintenance and modernization. KONE also provides maintenance of automatic building doors. KONE has annual net sales of approximately EUR three billion and about 27,000 employees. Its class B shares are listed on the Helsinki Exchanges.



The entire release in PDF format

2006-01-27 KONE Corporation Pro Forma Review: January–December 2005

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