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KONE Corporation’s financial statement bulletin 2008

Stock Exchange Release Published 23/01/2009

KONE 2008: Continued market share gains and growing profitability

October-December 2008

  • In October-December 2008, orders received totaled EUR 845.2 (10–12/2007: 901.9) million, a decrease of 6.3%. At comparable exchange rates, the decrease was 5.5%.
  • Net sales was EUR 1,432 (1,294) million and increased by 11%. At comparable exchange rates, the growth was 13%.
  • Operating income was EUR 189.2 (160.8: Excluding the Austrian Cartel Court’s fine and the profit from the sale of the KONE Building) million or 13.2% (12.4%) of net sales.

January-December 2008

  • In January-December 2008, orders received totaled EUR 3,948 (2007: 3,675) million. The growth was 7%, or 12% at comparable exchange rates. At the end of December 2008, the order book stood at EUR 3,577(Dec 31, 2007: 3,282) million.
  • Net sales was EUR 4,603 (4,079) million or an increase of 13%. At comparable exchange rates, the growth was 17%.
  • Operating income was EUR 558.4 (473.2) million or 12.1% (11.6%) of net sales (1–12/2007 figures exclude an expense of EUR 152.4 million related to the European Commission’s fine and the Austrian Cartel Court fine decisions and the profit from the sale of the KONE building). Earnings per share were 1.66 (0.72).
  • In 2009, KONE's objective in net sales is to reach a growth of 5 percent or at least approximately the net sales level of 2008. In operating income (EBIT), the objective is to reach a growth of 5 percent or at least approximately the operating income level of 2008.
  • The Board proposes a dividend of EUR 0.65 per class B share.

Key Figures

10-12/ 200810-12/ 2007Change %1-12/ 20081-12/ 2007Change %
Orders receivedMEUR845.2901.9-6.33,947.53,674.77.4
Order bookMEUR3,576.73,282.39.03,576,73,282.39.0
SalesMEUR1,431.61,294.210.64,602.84,078.912.8
Operating incomeMEUR189.2160.8 (x)17.7558.4473.2(xx)18.0
Operating income%13.212.4(x)12.111.6 (xx)
Cash flow From operations (before Financing items and taxes)
MEUR88.5116.0527.4380.0
Net incomeMEUR147.9100.6418.1180.3
Interest -bearing net debtMEUR-58.391.7-58.391.7
Total equity/ total assets%39.031.739.031.7
Gearing%-5.612.2-5.612.2
Basic earnings per shareEUR0.590.401.660.72

x) Excluding a EUR 22.5 million provision for the Austrian Cartel Court's fine decision and a EUR 12.1 million sales profit from the sale of KONE Building

xx) Excluding a EUR 142.0 million fine for the European Commission´s decision, a EUR 22.5 million provision for the Austrian Cartel Court's fine decision and a EUR 12.1 million sales profit from the sale of KONE Building

KONE President & CEO, Matti Alahuhta, in conjunction with the review:

“I am pleased with our performance development during 2008. It was a difficult year with higher than expected raw material costs, high increases in salaries and wages and declining new equipment markets. However, KONE made good progress on many fronts. I am especially pleased with good development in maintenance and modernization. We see good additional potential in these activities during 2009. I am also very pleased with our overall progress in the United States and in China. In both of these important markets we were able to increase our market share.

We are very committed to take the current challenging market situation as an opportunity. Our objective is to continue to increase our market share and simultaneously put our company to a great shape in quality, maintenance and installation productivity as well as in working capital management.”

Analyst and media meeting and telephone conference

A meeting and conference call for the press, conducted in English, will be held on Friday, January 23, 2009 at 1:45 p.m. Finnish time.

A telephone conference and a meeting for analysts, conducted in English, will begin at 3:00 p.m. Finnish time. The telephone conference will also be available as a webcast on www.kone.com.

Both meetings will take place in the KONE Building, located at Keilasatama 3, in Espoo, Finland.

Telephone conference numbers:

US callers: +1 334 323 6201
Non-US callers: +44 (0)20 7162 0025
Participant code: KONE

An on demand version of the telephone conference will be available on www.kone.com later the same day.

About KONE

KONE’s objective is to offer the best people flow experience by developing and delivering solutions that enable people to move smoothly, safely, comfortably and without waiting in buildings in an increasingly urbanizing environment. KONE provides its customers with industry-leading elevators, escalators and innovative solutions for modernization and maintenance, and is one of the global leaders in its industry. In 2008, KONE had annual net sales of EUR 4.6 billion and over 34,800 employees. KONE class B shares are listed on the NASDAQ OMX Helsinki in Finland.

www.kone.com

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

Sender:

KONE Corporation

Aimo Rajahalme
Executive Vice President,
Finance

Anne Korkiakoski
Executive Vice President,
Marketing and Communications

Financial statements bulletin 2008 (pdf)