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KONE’s Pro Forma Review: January–June, 2005

Stock Exchange Release Published 21/07/2005

Strong Order and Sales Growth and Improved Profits

  • Kone Corporation demerged into two separately listed corporations, KONE Corporation and Cargotec Corporation, on 1 June, 2005. This pro forma review presents KONE’s January–June 2005 financial performance according to the business and corporate structure prevailing after the demerger.
  • Second quarter order intake continued strong. Sales and profits also improved.
  • The development and restructuring program proceeded as planned.
  • Two joint ventures were formed with the aim of strengthening KONE’s position in China and Russia.
  • KONE reiterates its outlook for unchanged operative profitability for the calendar year 2005, disregarding the EUR 89.2 million cost of the development and restructuring program.

Key Figures

4-6/20054-6/20041-6/20051-6/2004
Orders, MEUR688.3543.71 292.41,062.0
Order book, MEUR2 264.71,959.52 264.71,959.5
Sales, MEUR783.1695.11 432.41,252.2
Operating income, MEUR60.842.599.8*69.9
Cash flow from operations (before financial items and taxes), MEUR58.928.7127.797.8
Net income, MEUR39.529.8-0.549.4
Net debt, MEUR106.5167.9106.5167.9
Total equity/total assets, %27.022.027.022.0
Gearing, %18.036.418.036.4

*Excluding a MEUR 89.2 provision for the development and restructuring program. Operating income in January-June 2005 including the provision was MEUR 10.6.

President of KONE, Matti Alahuhta, in conjunction with the review:

“We are pleased with the progress in the first half of 2005. Growth in order inflow was strong in all market areas. In the second quarter it was strongest in the Asia-Pacific area, where good progress was seen especially in China and India. Our record high order book is a result of both regional actions and our strengthening product portfolio.
Our change programs for improving customer focus, product portfolio and productivity as well as increasing purchasing power are all progressing as planned. Similarly, the implementation of the restructuring and development plan of our global production network is progressing well.
The favorable performance during the first half of 2005 creates a good ground to reach the communicated targets for the full year. We are also confident that the ongoing change programs will enable us to achieve faster-than-market growth and improved profitability next year. I want to thank our personnel, who have promptly embraced this challenge.”

This review is unaudited.

KONE’s pro forma Review for the period January-September, as well as the Interim Report, for the four-month period June-September, will be published on Friday, 21 October, 2005. In 2005, KONE’s accounting period will be 1 June - 31 December.
The entire release in PDF format

Sender:

KONE Corporation

Aimo Rajahalme
Executive Vice President, Finance and Information Services

Minna Mars
Senior Vice President, Corporate Communications & IR

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

KONE is the world’s fourth largest elevator and escalator company and provides complete and innovative solutions for the installation, maintenance and modernization of elevators and escalators and the maintenance of automatic building doors. KONE provides safe and easy access to hundreds of millions of people daily in all parts of the world. KONE has annual net sales of approximately EUR three billion and about 27,000 employees. Its class B shares are listed on the Helsinki Exchanges.

www.kone.com