2003-10-21 KONE Interim Report: January – September, 2003

The value of orders received rose to MEUR 3,355 (Jan.-Sept, 2002: 2,099, of which KONE Materials Handling’s orders of MEUR 500.9 consolidated for July-Sept.). KONE Elevators & Escalators accounted for MEUR 1,505 (1,598) and KONE Materials Handling for MEUR 1,851 (1,743). At comparable exchange rates order intake rose 1.5 percent in Elevators & Escalators and 14 percent in Materials Handling.
Net sales totaled MEUR 3,783 (2,681, of which Materials Handling’s sales of MEUR 621.5 consolidated for July-Sept.). Elevators & Escalators’ sales accounted for MEUR 1,939 (2,059) and Materials Handling for MEUR 1,844 (1,767). At comparable exchange rates, sales rose 1.6 percent in Elevators & Escalators and 11 percent in Materials Handling.
Operating income before goodwill amortization (EBITA) was MEUR 284.8 (224.4, of which Materials Handling’s EBITA of MEUR 29.4 consolidated for July-Sept.). In Elevators & Escalators, EBITA was MEUR 197.7 (195.0), or 10.2 (9.5) percent of net sales. Materials Handling’s EBITA was MEUR 97.8 (59.2), or 5.3 (3.3) percent of net sales. Unallocated corporate costs accounted for MEUR 10.7 (0.0).
Cash flow from operations before financial items and taxes was MEUR 358.7 (343.7, of which Materials Handling’s cash flow of MEUR 48.8 consolidated for July-Sept.). Elevators & Escalators accounted for MEUR 263.5 (294.9) and Materials Handling for MEUR 104.4 (58.7).
Interest-bearing net debt decreased to MEUR 857.8 (end of 2002: 1,252)
Net income amounted to MEUR 125.9 (111.4).
Earnings per share rose to EUR 2.00 from EUR 1.85.
KONE signed an agreement for the sale of the Tractors business and is in the process of divesting the Forest Machines businesses.

The figures for Materials Handling were consolidated into KONE’s figures as of July 1, 2002, and the comparison figures for January-September 2002 are, therefore, consolidated for the period July-September. The comparison figures in Materials Handling are calculated at the exchange rate for the comparison period and do not include Nordkalk and Paroc, which have been sold.

KONE Chairman of the Board Antti Herlin in Conjunction with the Interim Report:

“During the third quarter of 2003, KONE’s business progressed in line with the first half of the year, and the financial result is on track with our expectations for the full year.

“We reached an agreement with AGCO for the sale of Valtra, which is positive for all parties involved. The divestment of Forest Machines is progressing, and we expect to reach an agreement in the near future.

“In Elevators & Escalators there was no major change in the challenging market for new equipment. Our elevator and escalator maintenance base has now clearly exceeded the 500,000 milestone, and the number of automatic doors under service is over 200,000. Modernization operations continued to develop favorably.

“The organic sales and order growth in KONE Materials Handling continued strong in the third quarter. Profitability has improved significantly during the year and is on track to reach the EBITA margin target for the year. The improvement is partly contributable to the restructuring of the container and load handling businesses. The restructuring process is continuing.

When the planned divestments are finalized, our financial latitude to develop Elevators & Escalators, and Container and Load Handling will have improved considerably.“

Interim report, January-September 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,
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.