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KONE Corporation’s Interim Report for January-September 2009

Press Release Published 20/10/2009

KONE’s Q2: Continued good performance

TO DELETE

July-September

- In July-September 2009, orders received totaled EUR 766.5 (7–9/2008: 892.4) million. Orders received declined by 14.1%, or 13.4% at comparable exchange rates. Orders received was negatively affected by delays in customers’ decision making in a few major projects.
- Net sales increased by 0.3% to EUR 1,127 (1,124) million. At comparable exchange rates, the growth was 0.5%.
- Operating income was EUR 160.1 (146.0) million or 14.2% (13.0%) of net sales.
- Cash flow was exceptionally strong and totaled EUR 255.5 (153.4) million.
- KONE further specifies its operating income outlook for 2009. In operating income (EBIT), the objective is EUR 580–595 million, excluding the one-time cost of EUR 33.6 million, which was booked in the second quarter. The previous operating income (EBIT) outlook was EUR 570–595 million excluding the one-time cost of EUR 33.6 million.

January-September

- In January-September 2009, orders received totaled EUR 2,619 (1–9/2008: 3,102) million. Orders received declined by 15.6%, or 16.1% at comparable exchange rates. At the end of September 2009, the order book was EUR 3,603 (Dec 31, 2008: 3,577) million.
- Net sales increased by 4.6% to EUR 3,317 (3,171) million. At comparable exchange rates, the growth was 4.3%.
- Operating income, excluding one-time costs, was EUR 397.6 (369.2) million or 12.0% (11.6%) of net sales. The operating income, including the one-time cost of EUR 33.6 million related to the fixed cost adjustment program, was EUR 364.0 million.

Key Figures
7-9/ 20097-9/ 20081-9/ 20091-9/ 20081-12/ 2008
Orders receivedMEUR766.5892.42,618.93,102.33,947.5
Order bookMEUR3,603.44,002.83,603.44,002.83,576.7
SalesMEUR1,127.31,123.83,316.93,171.24,602.8
Operating incomeMEUR160.1146.0397.6 (1)369.2558.4
Operating income%14.212.012.0 (1)11.612.1
Cash flow from operations
(before financing items and taxes)
MEUR255.5153.4626.9438.9527.4
Net incomeMEUR134.6107.5299.8270.2418.1
Total comprehensive incomeMEUR124.0127.5283.6280.1436.7
Basic earnings per shareEUR0.530.421.181.071.66
Interest-bearing net debtMEUR-358.8-9.3-358.8-9.3-58.3
Total equity/total assets%42.634.042.634.039.0
Gearing%-30.9-1.1-30.9-1.1-5.6

1) Excluding a MEUR 33.6 one-time costs related to the fixed costs adjustment program, which was booked in the second quarter.

1) Excluding a MEUR 33.6 one-time costs related to the fixed costs adjustment program, which was booked in the second quarter.

Matti Alahuhta, President and CEO, in conjunction with the review:

“The service business and operational excellence are key priorities for us in the current weak economic environment. I am pleased with our good development in these areas. These have contributed positively to our profitability and cash flow.

The orders received in the third quarter was a small disappointment. Customers’ decisions in respect of a few major projects were delayed towards the end of the year. We estimate that orders received in the fourth quarter will be at a higher level than in the third quarter.

Our teams have again done a good job and I want to thank them for their efforts. Although the new equipment markets are weak, we are with our own actions able to influence our business performance even in this situation, and we therefore look forward with confidence.”

Analyst and media conference and conference call

A meeting for the press, conducted in Finnish, will be held on Tuesday, October 20, 2009 at 1:45 p.m. Eastern European Time.

A telephone conference and a meeting for analysts, conducted in English, will begin at 3:00 p.m. Eastern European 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 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:

Henrik Ehrnrooth, Executive Vice President, Finance, tel. +358 (0) 204 75 4260

Sender:

KONE Corporation

Henrik Ehrnrooth
Executive Vice President,
Finance

Anne Korkiakoski
Executive Vice President,
Marketing and Communications