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KONE Interim Report: January – March, 2004, IFRS

Stock Exchange Release Published 21/04/2004

Elevators & Escalators Posts Order Growth but Lower Profits, Kone Cargotec Increases Volumes and Profits

  • Orders received amounted to MEUR 965.4 (Q1 2003: 1,155*). KONE Elevators & Escalators accounted for MEUR 513.6 (502.8) of the total, representing seven percent growth at comparable exchange rates. The value of Kone Cargotec’s order intake was MEUR 451.8 (390.3), reflecting growth of 22 percent at comparable exchange rates
  • Net sales totaled MEUR 893.4 (1,185*). Elevators & Escalators’ net sales decreased to MEUR 551.0 (591.5). At comparable exchange rates, however, sales were unchanged. Kone Cargotec’s sales were MEUR 342.4 (328.0), reflecting growth of nine percent at comparable exchange rates.
  • Operating income was MEUR 219.0 (72.2*). In Elevators & Escalators operating income was MEUR 30.4 (47.6), representing 5.5 (8.0) percent of net sales. Kone Cargotec’s operating income was MEUR 21.8 (17.2) or 6.4 (5.2) percent of net sales. Unallocated costs totaled MEUR 2.8 (0.5). The capital gain from the sale of the Tractors business accounted for most of the remainder of 2004 consolidated operating income.
  • Cash flow from operating activities before financial items and taxes increased to MEUR 92.2 (79.5*). Elevators & Escalators accounted for MEUR 69.3 (61.0) and Kone Cargotec for MEUR 25.6 (14.7).
  • Net income amounted to MEUR 131.9 (47.9).
  • Diluted earnings per share were EUR 2.09 (0.76)


KONE has changed over to International Financial Reporting Standards (IFRS) as of 1 January, 2004 so the comparison figures for year 2003 have also been adjusted to reflect IFRS practices. For further information regarding the impact of the transition from Finnish Accounting Standards (FAS) to IFRS, please refer to KONE’s 8 April, 2004 announcement.
* The consolidated comparison figures include the Forest Machines and Tractors businesses, as well as other minor holdings, which have been divested.
Sisu Auto has been divested, and its figures have not been consolidated in 2004 totals.

CEO Antti Herlin in Conjunction with the Interim Report:

“The first quarter with KONE’s new structure in place showed both positive and negative development. We are now focusing all our efforts on developing our strong divisions, which are in different stages of the economic cycle.”
“Elevators & Escalators’ order book continues at a high level, almost EUR 2 billion. Strong demand in China and a significant pick-up of orders in Europe have contributed to this build-up but so have delays in the completion of construction projects, which had a negative impact on sales and profitability.
“During 2004 we are focusing on development. Our main initiatives involve increasing efficiency throughout our operations, harmonizing IT, and launching our new, ground-breaking KONE MaxiSpaceä technology. These efforts will strengthen our competitiveness and support our endeavor for continued growth and improving profitability.
“In Kone Cargotec we are seeing the results of the structural measures taken last year. We have a stronger market position in a business that is showing solid growth. As the restructuring of production in Kone Cargotec has progressed at least as well as planned, we are now focusing on improving profitability, strengthening the sales network and increasing our presence in Asia.
“We have continued our aggressive acquisition of elevator, escalator and door service companies. Thanks to our strong financial position, we are in good shape to act on opportunities to grow both divisions.”

Interim report, January-March 2004

Interim figures in Excel format (stored in zip file)

Sender:
KONE Corporation
Aimo Rajahalme
Executive Vice President, Finance and Information Services
Tapio Hakakari
Secretary to the Board of Directors
For further information please contact:
Aimo Rajahalme, Executive Vice President, Finance and Information Services,
tel. +358 (0)204 75 4484
KONE Corporation is a global service and engineering company that specializes in moving people and goods. It comprises two divisions: KONE Elevators & Escalators and Kone Cargotec. KONE Elevators & Escalators sells, manufactures, installs, maintains and modernizes elevators and escalators, and services automatic building doors. Kone Cargotec supplies products and services to facilitate moving and loading cargo. KONE's B shares are listed on the Helsinki Exchanges.
www.konecorp.com