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KONE Corporation’s Interim Report for January-September 2008

Stock Exchange Release Published 21/10/2008

KONE Q3: KONE’s good EBIT growth continued

July-September

- In July-September 2008, orders received decreased by 3.7%. At comparable exchange rates, the growth was 0.5%. Orders received totaled EUR 892.4 (7–9/2007: 926.3) million.

- Net sales increased by 16% to EUR 1,124 (971.6) million. At comparable exchange rates, the growth was 20%.

- Operating income was EUR 146.0 (126.7) million or 13.0% (13.0%) of net sales.

January-September

- In January-September 2008, orders received growth was 12%, or 17% at comparable exchange rates. Orders received totaled EUR 3,102 (1–9/2007: 2,773) million. At the end of September 2008, the order book stood at a record high of EUR 4,003 (Dec 31, 2007: 3,282) million.

- Net sales increased by 14% to EUR 3,171 (2,785) million. At comparable exchange rates, the growth was 19%.

- Operating income was EUR 369.2 (312.4) million or 11.6% (11.2%) of net sales (1–9/2007 figures exclude an expense of EUR 142.0 million related to the European Commission’s fine decision)

- KONE reiterates its outlook for 2008

Key Figures
7-9/
2008
7-9/
2007
1-9/
2008
1-9/
2007
1-12/
2007
Orders receivedMEUR892.4926.33,102.32,772.83,674.7
Order bookMEUR4,002.83,473.64,002.83,473.63,282.3
SalesMEUR1,123.8971.63,171.22,784.74,078.9
Operating incomeMEUR146.0126.7369.2312.4 (1473.2 (2
Operating income%13.013.011.611.2 (111.6 (2
Cash flow from operations
(before financing items and taxes)
MEUR153.4158.7438.9264.0380.0
Net incomeMEUR107.591.8270.279.7180.3
Basic earnings per shareEUR0.420.371.070.320.72
Interest-bearing net debtMEUR-9.3168.5-9.3168.591.7
Total equity/total assets%34.027.934.027.931.7
Gearing%-1.125.9-1.125.912.2


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

“Our people have continued to do a good job. Even with the negative impact of raw material prices, KONE succeeded to grow its operating income (EBIT) by 15%. In the current demanding market environment, our service business is a major asset to us. The new equipment market faced increasing uncertainty especially in Western Europe and North America. We continue to be very determined in working with our five development programs; our attitude is to take also this demanding market phase as an opportunity to continue to gain market share as well as further improve KONE’s quality and productivity.”

Analyst and media meeting and telephone conference

A meeting for the press, conducted in Finnish, will be held on Tuesday, October 21, 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 a webcast on www.kone.com.

Both meetings will take place in the KONE Building, located at Keilasatama 3, 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 at www.kone.com later the same day.

Read the report

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 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