2003-04-23 KONE Interim Report: January – March, 2003

Improved Profitability and Higher Order Intake in Both Divisions

Orders received rose to MEUR 1,155 (Q1 2002: 500). KONE Elevators & Escalators accounted for MEUR 503 (500) (at comparable exchange rates, growth was nine percent) and KONE Materials Handling for MEUR 653 (Q1 2002, not consolidated: 615, reflecting growth of 16 percent at comparable exchange rates).
Net sales totaled MEUR 1,147 (631). Elevators & Escalators’ net sales decreased to MEUR 563 (631). (At comparable exchange rates, sales decreased two percent). Materials Handling’s sales were MEUR 584 (568, reflecting growth of 11 percent at comparable exchange rates).
Operating income before goodwill amortization (EBITA) was MEUR 69.3 (45.0). In Elevators & Escalators EBITA was MEUR 47.6 (45.0), representing 8.5 (7.1) percent of net sales. Materials Handling’s EBITA was MEUR 22.2 (14.6), or 3.8 (2.6) percent of net sales. Unallocated corporate costs accounted for MEUR 0.5 (0.0).
Cash flow from operations before financial items and taxes decreased to MEUR 68.9 (92.9). Elevators & Escalators accounted for MEUR 60.3 (92.9) and Materials Handling for MEUR 8.6 (-18.9).
Net income amounted to MEUR 25.6 (21.3).
Earnings per share rose to EUR 0.41 from EUR 0.36.
KONE finalized the sale of the entire share capital in Nordkalk Corporation to NK-Holding Oy Ab and the sale of its holding in Paroc Group Oy Ab, which significantly reduced KONE’s net debt.

The figures for Materials Handling were consolidated into KONE’s figures as of July 1, 2002. The comparison figures for 2002 are, therefore, not consolidated figures, nor do the comparison figures for the first quarter of 2002 include the sold businesses, Nordkalk and Paroc.

CEO Antti Herlin in conjunction with the interim report:

“We achieved a first quarter result that lives up to our expectations.

“The profitability of Elevators & Escalators rose despite the tougher market situation.

“The Materials Handling business developed according to our disclosed plans, and profitability improved. Reorganization of the businesses has progressed rapidly. The effect of these changes already shows to some extent, but the main contribution to improved profitability will come later this year and in 2004.

“The outlook for at least the same level of full-year order intake and sales in new elevators and escalators, and in Materials Handling as a year earlier still holds at comparable exchange rates.”

KONE interim report, January-March 2003

Sender:

KONE Corporation

Aimo Rajahalme
Executive Vice President,
Finance and Information Services

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

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

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.