2003-06-26 KONE Aims to Divest Its Tractors And Forest Machines Businesses

After acquiring Partek Corporation in 2002, KONE has developed the KONE Materials Handling division for the Container Handling, Load Handling, Tractors and Forest Machines businesses according to the outlined strategy while divesting other Partek businesses and holdings. The acquisition has lived up to KONE’s expectations. However, within the Materials Handling division, KONE has now decided to concentrate on Container Handling and Load Handling. New owners are being sought for Tractors and Forest Machines.

Tractors And Forest Machines Are Strong Businesses

The Tractor business area develops, manufactures, markets and services tractors under the name Valtra. Valtra is the market leader in the Nordic countries and ranked third in Latin America. Net sales in 2002 were EUR 762 million. Valtra has 2,508 employees, including 1,541 in Finland and 710 in Brazil. Sisu Diesel, which is part of Tractors, produces over 27,000 off-road diesel engines annually.

Forest Machines is one of the world’s leading manufacturers of forest machines and cranes and a pioneer in mechanized timber harvesting. Forest machine brands are Valmet and Timbco. The business area offers a broad range of machines and cranes for harvesting by both the cut-to-length method and the full-tree method. Net sales in 2002 amounted to EUR 292 million, of which the forest cranes accounted for EUR 57 million. Forest Machines has 1,034 employees, including 613 in Sweden, 186 in Brazil and 55 in Finland. Personnel figures exclude forest cranes personnel. The forest cranes business will be retained by KONE and transferred to Load Handling.

Increased Focus on Elevators & Escalators, Container And Load Handling

The divestment of Tractors and Forest Machines gives KONE a clearer business structure that is focused on the elevator and escalator, container handling and load handling businesses. It will also substantially decrease gearing and net debt. At present, net debt is approximately EUR 1 billion. Reduced net debt improves the possibilities to develop and grow KONE Elevators & Escalators and KONE Materials Handling through complementary acquisitions and investments.

KONE will continue to consist of two divisions: KONE Elevators & Escalators and KONE Materials Handling. Manfred Eiden will continue as president of KONE Corporation and KONE Elevators & Escalators and Carl-Gustaf Bergström will continue as president of KONE Materials Handling. Both report to CEO Antti Herlin.

Press Conference

A meeting for analysts and media will be held on 26 June 2003 at 2:00 p.m. Finnish time at KONE Building, Keilasatama 3, Espoo.

Presentation material

Sender:

KONE Corporation

Tapio Hakakari
Secretary to the Board of Directors

Outi-Maria Liedes
Senior Vice President,
Corporate Communications & IR

For further information, please contact:
Carl-Gustaf Bergström, President, KONE Materials Handling, tel. +358 (0)400 530 887
Tapio Hakakari, Secretary to the Board of Directors, KONE, tel. +358 (0)400 408 316
Kari Heinistö, Senior Executive Vice President, KONE Materials Handling,
tel. + 358 (0)204 55 4542

KONE is a global service and engineering company that specializes in moving people and goods. Annual net sales total EUR 5,500 million, and we employ nearly 35,000 people. KONE's B shares are listed on the Helsinki Exchanges.