2006-07-19 KONE Corporation's Interim Report for January-June 2006

KONE’s Q2 Strong - Upgrades 2006 Operating Income Outlook

At comparable exchange rates, KONE’s target for 2006 is to achieve an approximate 10 percent increase in net sales compared to the 2005 pro forma figure. KONE upgrades its operating income (EBIT) target to be between EUR 335 and 355 million.
Order intake growth remained strong at approximately 29 percent during January-June.
Net sales grew by 10 percent and totaled EUR 1,575 (1,432) million during January-June.
Operating income improved by 36 percent to EUR 135.6 (99.8 *) million during January-June.

Key Figures

	4-6/2006	Pro forma 4-6/2005	1-6/2006	Pro forma 1-6/2005	Pro forma 1-12/2005	Previous accounting period 6-12/2005
Orders received, MEUR		821.9		688.3		1,662.2	1,292.4	2,639.2	1,622.1
Order book, MEUR		2,818.0		2,264.7		2,818.0	2,264.7	2,326.8	2,326.8
Sales, MEUR		840.4		783.1		1,575.4	1,432.4	3,242.2	2,101.4
Operating income, MEUR		83.9		60.8		135.6	99.8 x)	272.0 x)	194.7
Cash flow from operations (before financial items and taxes), MEUR		29.3		58.9		146.6	127.7	329.4	215.4
Net income, MEUR		52.1		39.5		83.9	-0.5	108.8	124.0
Net debt, MEUR		201.9		106.5		201.9	106.5	99.3	99.3
Total equity/total assets, %		27.1		27.0		27.1	27.0	31.2	31.2
Gearing, %		34.0		18.0		34.0	18.0	14.8	14.8

*) Excluding a EUR 89.2 million provision for the development and restructuring program. Operating income, including the provision, was EUR 182.8 million in 2005 and EUR 10.6 million for the period 1-6/2005.

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

“I am pleased with KONE’s progress during the first half of 2006. Our development programs, our rigorous measures in cost control and actions to increase productivity start to show concrete results. The brisk order intake was clearly boosted by our product and service offering developments and increased focus on sales and customer management skills, which helped us to benefit from the favorable market developments. I am especially pleased with our good progress in Asia. All this proves that we are on the right track. I thank our personnel for their commitment and a job well done.”

Analyst and Media Conference and Conference Call

A meeting for the press and analysts will be held on 19 July, 2006 at 3:00 p.m. Finnish time at KONE Building, address Keilasatama 3, Espoo.

A telephone conference for analysts and investors, conducted in English, will begin at 5:00 p.m. Finnish time and will also be available as live audio web cast on the company website. Callers may access the conference directly at the following telephone numbers: +1 334 323 6201 (US callers) or +44 (0)20 7162 0025 (Non-US callers), password: KONE. On demand copy of the conference will be available on the company website later the same day.

Sender:

KONE Corporation

Aimo Rajahalme
Executive Vice President,
Finance

Minna Mars
Senior Vice President,
Corporate Communications & IR

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

KONE is one of the world's leading elevator and escalator companies. It provides its customers with industry-leading elevators and escalators and innovative solutions for their maintenance and modernization. KONE also provides maintenance of automatic building doors. In 2005, KONE had annual net sales of EUR 3.2 billion and about 27,000 employees. Its class B shares are listed on the Helsinki Stock Exchange.