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KONE Corporation’s Interim Report for January-March 2008

Stock Exchange Release Published 22/04/2008

Strong growth in orders received and operating income continued

  • In January-March 2008, the growth in orders received was 24%, or 30% at comparable exchange rates. Orders received was strong in all geographical regions and totaled EUR 1,118 (1–3/2007: 902.1) million. At the end of March 2008, the order book was EUR 3,617 (Dec 31, 2007: 3,282) million.
  • Net sales increased by 12% to EUR 905.3 (811.2) million. At comparable exchange rates, the growth was 17%.
  • Operating income was EUR 86.5 (69.3) million or 9.6% (8.5%) of net sales (1–3/2007 figures exclude an expense of EUR 142.0 million related to the European Commission’s fine decision).
  • KONE reiterates its outlook for 2008
Key figures1–3/20081–3/20071–12/2007
Orders receivedMEUR1,117.5902.13,674.7
Order bookMEUR3,617.43,105.73,382.3
SalesMEUR905.3811.24,078.9
Operating incomeMEUR86.569.3 (1)473.2 (2)
Operating income%9.68.5 (1)11.6 (2)
Cash flow from operations
(before financing items and taxes)
MEUR166.6142.7380.0
Net incomeMEUR63.9-95.0180.3
Basic earnings per shareEUR0.25-0.380.72
Interest-bearing net debtMEUR137.8142.391.7
Total equity/total assets%26.420.831.7
Gearing%21.529.712.2

(1) Excluding an expense of EUR 142.0 million related to the European Commission’s fine decision
(2) Excluding an expense of EUR 142.0 million relating to the European Commission’s fine decision, a EUR 22.5 million provision for the Austrian Cartel Court’s fine decision and a EUR 12.1 million profit from the sale of the KONE Building

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

“I am very pleased with the continuing fast growth in orders received, which was 30% at comparable exchange rates. In a situation where some of the markets have weakened, this achievement is again good evidence of our improving competitiveness. Our business environment has become more challenging also because of the high raw material prices and a continuously strengthening Euro. Even in this situation our development programs have continued to bring results, the 25% growth in operating income and the good growth in orders received are a promising start for the year and we are confident of reaching our guidance in 2008.”

“As of the beginning of 2008, we have progressed into a new phase of developing KONE. Based on KONE’s new vision and redefined strategy, we are now working on five major development programs. These are Customer Focus, People Flow Solutions, Operational Excellence, Environmental Excellence and People Leadership. In this way, we are taking the next step in transforming KONE from a product and service company into a customer- and user-focused system business company.”

Analyst and media conference and conference call

A meeting for the press, conducted in Finnish, will be held on Tuesday, April 22, 2008 at 2:00 p.m. Finnish time.
A telephone conference and a meeting for analysts, conducted in English, will begin at 3:30 p.m. Finnish time. The telephone conference will also be available as webcast at www.kone.com.

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

Telephone conference numbers:

US callers: +1 334 323 6203
Non-US callers: +44 (0)20 7162 0125
Participant code: KONE
An on demand version of the telephone conference will be available at 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 2007, KONE had annual net sales of EUR 4.1 billion and over 32,500 employees. KONE class B shares are listed on the OMX Nordic Exchange 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

Minna Mars
Senior Vice President,
Corporate Communications & IR