KONE Corporation, Stock Exchange Release, April 22, 2008 at 12:30
p.m.
KONE's Q1: Strong growth in orders received and operating income
continued
- In January-March 2008, the growth in orders received was 24%, or
30% at comparable exchange rates. Orders received was strong in all
geographical regions and totaled EUR 1,118 (1-3/2007: 902.1) million.
At the end of March 2008, the order book was EUR 3,617 (Dec 31, 2007:
3,282) million.
- Net sales increased by 12% to EUR 905.3 (811.2) million. At
comparable exchange rates, the growth was 17%.
- Operating income was EUR 86.5 (69.3) million or 9.6% (8.5%) of net
sales (1-3/2007 figures exclude an expense of EUR 142.0 million
related to the European Commission's fine decision).
- KONE reiterates its outlook for 2008.
Key Figures
1-3/ 1-3/ 1-12/
2008 2007 2007
Orders received MEUR 1,117.5 902.1 3,674.7
Order book MEUR 3,617.4 3,105.7 3,282.3
Sales MEUR 905.3 811.2 4,078.9
Operating income MEUR 86.5 69.3 1) 473.2 2)
Operating income % 9.6 8.5 1) 11.6 2)
Cash flow from
operations
(before financing
items and taxes) MEUR 166.6 142.7 380.0
Net income MEUR 63.9 -95.0 180.3
Basic earnings
per share EUR 0.25 -0.38 0.72
Interest-bearing
net debt MEUR 137.8 142.3 91.7
Total equity/
total assets % 26.4 20.8 31.7
Gearing % 21.5 29.7 12.2
1) Excluding an expense of EUR 142.0 million related to the European
Commission's fine decision
2) Excluding an expense of EUR 142.0 million related to the European
Commission's fine decision, a EUR 22.5 million provision for the
Austrian Cartel Court's fine decision and a EUR 12.1 million profit
from the sale of the KONE Building
KONE's President & CEO, Matti Alahuhta, in conjunction with the
review:
"I am very pleased with the continuing fast growth in orders
received, which was 30% at comparable exchange rates. In a situation
where some of the markets have weakened, this achievement is again
good evidence of our improving competitiveness. Our business
environment has become more challenging also because of the high raw
material prices and a continuously strengthening Euro. Even in this
situation our development programs have continued to bring results,
the 25% growth in operating income and the good growth in orders
received are a promising start for the year and we are confident of
reaching our guidance in 2008."
"As of the beginning of 2008, we have progressed into a new phase of
developing KONE. Based on KONE's new vision and redefined strategy,
we are now working on five major development programs. These are
Customer Focus, People Flow Solutions, Operational Excellence,
Environmental Excellence and People Leadership. In this way, we are
taking the next step in transforming KONE from a product and service
company into a customer- and user-focused system business company."
Analyst and media conference and conference call
A meeting for the press, conducted in Finnish, will be held on
Tuesday, April 22, 2008 at 2:00 p.m. Finnish time.
A telephone conference and a meeting for analysts, conducted in
English, will begin at 3:30 p.m. Finnish time. The telephone
conference will also be available as webcast at www.kone.com.
Both meetings will take place in the KONE Building, located in
Keilasatama 3, Espoo, Finland.
Telephone conference numbers:
US callers: +1 334 323 6203
Non-US callers: +44 (0)20 7162 0125Participant code: KONE
An on demand version of the telephone conference will be available at
www.kone.com later the same day.
About KONE
KONE's objective is to offer the best people flow experience by
developing and delivering solutions that enable people to move
smoothly, safely, comfortably and without waiting in buildings in an
increasingly urbanizing environment. KONE provides its customers with
industry-leading elevators, escalators and innovative solutions for
modernization and maintenance, and is one of the global leaders in
its industry. In 2007, KONE had annual net sales of EUR 4.1 billion
and over 32,500 employees. KONE class B shares are listed on the OMX
Nordic Exchange Helsinki in Finland.
www.kone.com
For further information please contact:
Aimo Rajahalme, Executive Vice President, Finance, tel. +358 (0) 204
75 4484
Sender:
KONE Corporation
Aimo Rajahalme
Executive Vice President,
Finance
Minna Mars
Senior Vice President,
Corporate Communications & IR
KONE's first quarter 2008 review
Accounting principles
KONE Corporation's Interim Report for January 1-March 31, 2008 has
been prepared in line with IAS 34, 'Interim Financial Reporting'.
KONE has applied the same accounting principles in the preparation of
the interim report as in its financial statements for 2007. The
accounting principles for the financial statements have been
presented in the Annual Report 2007 published on January 25, 2008.
The information presented in this Interim Report has not been
audited.
KONE's operating environment in January-March 2008
In the first quarter of 2008, the overall market situation was
favorable for new equipment and modernization with some markets
showing signs of softening. In the maintenance markets, where the
demand is by nature non-cyclical, steady growth continued while the
overall market environment became increasingly competitive.
In Europe, the Middle East and Africa (EMEA), the business
environment remained favorable. The new equipment market was good in
most markets in Central, Northern and Eastern Europe as well as in
the Middle East. The highest growth was seen in the Middle East and
Russia. In the United Kingdom, the residential market weakened, but
the commercial market activity continued at a good level. In Southern
Europe, the new equipment market remained fairly stable due to the
activity in the commercial segments, although the residential market
continued to slow down in Italy and especially in Spain. Demand for
modernizations continued to grow, mainly driven by the European
Safety Norms (SNEL) and the need for upgrades resulting from the
aging of the equipment base.
In the United States, the economic environment continued to weaken
and to impact the residential market. Investments in the commercial
markets continued to be good in coastal regions but showed some
weakness in central markets. The other North American markets
continued to be good.
In the Asia-Pacific region, market growth was strong in most markets.
The new equipment market continued to grow fast, driven by strong
urbanization and economic growth. Especially the Chinese and Indian
markets sustained very high growth levels. Market development in
Southeast Asia was also encouraging. On the other hand, the
Australian market flattened after a long growth phase.
Orders Received and Order Book
In January-March 2008, KONE's orders received increased by
approximately 24% and totaled EUR 1,118 (1-3/2007: 902.1) million. At
comparable exchange rates, the growth was approximately 30%. Only new
equipment and modernization orders are included in orders received.
The growth in orders received was strongest in the Asia-Pacific
region, but growth was also good in EMEA and the Americas. High
growth in orders received is strong evidence of KONE's improving
competitiveness.
The order book increased from the end of 2007 by 10% and stood at EUR
3,617 (Dec. 31/2007: 3,282) million at the end of March 2008. The
margin of the order book continued to be at the earlier good level.
In the EMEA region, most markets continued to contribute positively
to KONE's orders received in January-March 2008. KONE succeeded in
performing particularly well in the United Kingdom, Russia and the
Middle-East. In the first quarter, KONE also showed good progress in
the modernization market. KONE's orders received in modernization
were particularly good in France and Scandinavia.
In the EMEA region, one of KONE's largest orders during the first
quarter was an order to supply and install all elevators and
escalators for the Point Village project in Dublin, Ireland. In
Portugal, KONE was awarded a contract to supply all elevators and
escalators for the new Dolce Vita Tejo shopping center near Lisbon.
Installation of the equipment is scheduled to begin in August 2008
and is estimated to be completed in April 2009. KONE also received a
major order to supply all elevators and escalators for the Watermark
Place project in the City of London. The installation of the
equipment will start in June 2008 and is scheduled to be completed in
April 2009.
In addition, KONE received a major order to supply all elevators and
escalators for the CB31 Tower in Paris's La Défense district in
France. The tower, originally built in 1974 and previously known as
the AXA Tower, will be completely renewed.
In the Americas, KONE experienced a good order intake. KONE's
advanced elevator and escalator solutions and improved
competitiveness continued to gain increased customer awareness. In
particular, major project business progressed well. The largest order
in North America was a major order from Revel Entertainment to supply
and install all high-rise elevators for Hotel Tower II at Revel, a
new beachfront entertainment destination in Atlantic City.
Installation of the equipment is scheduled to begin in August 2008
and completion is due in early 2010.
In the Asia-Pacific region, KONE's new equipment order intake was
exceptionally strong and continued to progress especially well in
China and India. The company further strengthened its position in
major projects. The largest order in the Asia-Pacific region was a
major order from the Las Vegas Sands Corporation for the Marina Bay
Sands development in Singapore. This is one of the most significant
high-rise deals KONE has received in this region. The value of the
order is approximately EUR 30 million.
Sales by geographical areas
1-3/ 1-3/ 1-12/
MEUR 2008 % 2007 % 2007 %
EMEA 1) 617.7 68 535.5 66 2,675.3 65
Americas 161.7 18 177.6 22 840.8 21
Asia-Pacific 125.9 14 98.1 12 562.8 14
Total 905.3 811.2 4,078.9
1) EMEA = Europe, Middle East, Africa
Net Sales
In January-March 2008, KONE's net sales rose by approximately 12%,
compared to last year, and totaled EUR 905.3 (1-3/2007: 811.2)
million. Growth at comparable currency rates was approximately 17%.
New equipment sales accounted for EUR 383.4 (307.0) million of the
total and represented an approximate of 25% growth over the
comparison period. At comparable currency rates, the growth was
approximately 31%.
Service sales (maintenance and modernization) increased by 4% and
totaled EUR 521.9 (504.2) million. At comparable currency rates, the
growth was approximately 8%.
Of the sales, 68% (66%) were generated from EMEA, 18% (22%) by the
Americas and 14% (12%) by Asia-Pacific. The weakened US dollar had an
impact on the geographical sales mix. At comparable exchange rates,
the Americas also had a clearly positive sales growth.
Financial Result
KONE's operating income was EUR 86.5 million (1-3/2007: 69.3 million,
excluding an expense of EUR 142.0 million related to the European
Commission's fine decision) or 9.6% (8.5% excluding an expense of EUR
142.0 million related to the European Commission's fine decision) of
net sales. The strong growth was the result of sales growth, healthy
sales margins and improved productivity. Net financing items were EUR
0.1 (-1.8) million.
KONE's income before taxes for January-March 2008 was EUR 87.0
(-74.7) million. Taxes totaled EUR 23.1 (20.3) million, taking into
account taxes proportionate to the amount estimated for the financial
year. This represents an effective tax rate of 26.6%. In
January-December 2007, the effective tax rate was 27.9% excluding the
result impact of EUR 164.5 million relating to the fine decisions of
the European Commission and the Austrian Cartel Court. Net income for
the period under review was EUR 63.9 (-95.0) million.
Earnings per share were EUR 0.25 (-0.38). Equity per share was EUR
2.55 (1.90).
Balance Sheet and Cash Flow
In January-March 2008, cash flow generated from operations (before
financing items and taxes) was EUR 166.6 (142.7) million. At the end
of March, net working capital was negative at EUR -188.5 (December
31, 2007: -121.8) million, including financing items and taxes.
Interest-bearing net debt totaled EUR 137.8 (December 31, 2007: 91.7)
million. Gearing was 21.5%, compared with 12.2% at the end of 2007.
KONE's total equity/total assets ratio was 26.4% (December 31, 2007:
31.7%) at the end of March.
Capital expenditure, acquisitions and divestments
KONE's capital expenditure, including acquisitions, totaled EUR 33.5
(1-3/2007: 17.1) million. Capital expenditure, excluding
acquisitions, was mainly related to R&D, IT and production.
Acquisitions accounted for EUR 23.0 (9.1) million of this figure.
Acquisitions made in January-March will have no material effect on
the 2008 full year figures.
In January-March, KONE acquired the French elevator company ARA Lyon.
ARA Lyon maintains and modernizes elevators in the area of Lyon. KONE
also acquired the Arundel Elevator Company, a full service elevator
company based in Baltimore, Maryland, USA. This acquisition
significantly increased KONE's customer base in Maryland and the
neighboring Mid-Atlantic states. In addition, KONE acquired RPG
Mantenimiento S.L., an elevator company based in Murcia, Spain. RPG
maintains and modernizes elevators in the Murcia province and in the
South West of Spain.
Research and development
Research and development expenses totaled EUR 14.7 (1-3/2007: 13.1)
million, representing 1.6% (1.6%) of net sales. R&D expenses include
development of new concepts and further development of existing
solutions and services.
KONE's elevators and escalators are based on energy-efficient
technology. During the period under review, new energy-saving
solutions were launched especially in the Asian market. KONE also
increased the load and travel extension of its machine-room-less
(MRL) product family.
In the escalator offering, KONE has been focusing on extending the
coverage of the standard offering. KONE is now able to offer higher
flexibility and shorter installation and delivery times to its
customers. In modernization, visual and technical offerings have been
extended.
In addition, KONE launched a next generation equipment monitoring
system, which is able with an almost unlimited capacity to monitor
and manage large building complexes and geographically remote
buildings from a single location. The system is easily integrated
with other facility management systems in the building.
Personnel
The main goals of KONE's personnel strategy are to further increase
the interest in KONE as an employer and to secure the availability,
commitment and continuous development of its personnel. KONE's
activities are also guided by ethical principles. The personnel's
rights and responsibilities include the right to a safe and healthy
working environment, personal wellbeing as well as the prohibition of
discrimination.
KONE had 33,155 (December 31, 2007: 32,544) employees at the end of
March 2008. The average number of employees was 32,975 (1-3/2007:
29,622). Also in the period under review, most of the personnel
growth was in the fastest growing markets such as Asia-Pacific and
the Middle East. Additional recruitment in other markets was carried
out mainly in installation and modernization operations due to
growing volumes.
The geographical distribution of KONE employees was 57% (57%) inEMEA, 17% (18%) in the Americas and 26% (25%) in Asia-Pacific.
People Leadership is one of KONE's five development programs. We
invest increasingly in people development programs, personal coaching
and change management.
Environment
The most significant environmental impact of an elevator is generated
by its use. Consequently, reducing the environmental impact of
equipment is most effective when the product is being developed and
the optimal solution for each building is being planned. Therefore,
KONE continuously strives to improve the eco-efficiency of its
solutions through effective research and development.
Part of KONE's one-platform elevator solutions' eco-efficient
credentials lie in the KONE EcoDisc® hoisting machine, which is a
permanent magnet gearless motor. It consumes 70% less energy than a
hydraulic drive and 40% less than a geared traction elevator drive,
thus making it one of the most eco-efficient solutions on the market
today. Some of EcoDisc®'s other features, besides the
energy-efficiency advantages, include the oil-free operation and the
compact design based on recyclable materials.
ISO 14000 is a series of international standards on environmental
management. ISO 14001 then provides a framework for the development
of an environmental management system that helps the company deal
efficiently with environmentally related topics. In the end of March
2008, 90% of KONE's production operations were certified according to
the ISO 14001 standard. In addition, a number of country
organizations also hold the environmental certificate. KONE is
actively continuing the ISO 14001-expansion.
Environmental Excellence is one of KONE'e five development programs.
We have lifted the eco-efficiency targets of our solutions and
operations to an even higher level.
Capital and Risk Management
The ultimate goal of capital and risk management in the KONE Group is
to contribute to the creation of shareholder value.
Capital is managed in order to maintain a strong financial position
and to ensure that the Group's funding needs can be optimized in a
cost-efficient way even in a critical funding environment. KONE's
philosophy is to take an aggregated view of share price development,
dividends and the possible purchase of own shares as components of
the total shareholder return.
KONE's business activities are exposed to risks, of which the most
significant are increases in personnel costs and raw material costs,
fluctuations in currency and changes in the development of the world
economy.
A rise in raw material prices is reflected directly in the production
costs of components made by KONE, such as doors and cars, and
indirectly in the prices of purchased components. The price of oil
also affects maintenance costs.
As a global group, KONE is exposed to foreign currency fluctuations
and currencies. The Group Treasury function manages currency and
other financial risks centrally based on principles approved by the
Board of Directors. As the expenses and income of the elevator and
escalator business occur mainly in the same currency, exchange rate
movements are reflected mostly in the translation of the achieved
result into euros.
Decisions of the Annual General Meeting
KONE Corporation's Annual General Meeting in Helsinki on February 25,
2008 confirmed the number of members of the Board of Directors to be
seven and the number of deputy members to be one. Re-elected as full
members of the Board were Matti Alahuhta, Reino Hanhinen, Antti
Herlin, Sirkka Hämäläinen-Lindfors, Sirpa Pietikäinen, Masayuki
Shimono and Iiro Viinanen, and as a deputy member Jussi Herlin. The
term of the Board ends at the next Annual General Meeting.
At its meeting held after the Annual General Meeting, the Board of
Directors elected Antti Herlin as its Chairman and Sirkka
Hämäläinen-Lindfors as the Vice Chairman of the Board.
The Annual General Meeting decided to amend the Articles of
Association due to the new Companies Act, which entered into force on
September 1, 2006. The new Articles of Association can be found at
www.kone.com.
In addition, the Annual General Meeting decided to increase the
number of shares in the company by issuing new shares to the
shareholders without payment in proportion to their holdings so that
one class A share was be given for each class A share and one class B
share was given for each class B share. The new shares were admitted
to public trading and entered into the book-entry system on February
29, 2008.
The Annual General Meeting decided that the share subscription period
for the 2005C option rights will begin on April 1, 2008. In addition,
it was decided that EUR 0.25 of the subscription price to be paid for
the new shares issued based on the 2005A, 2005B, 2005C, and 2007
option rights will be credited to the share capital, and that the
remaining part will be credited to the paid-up unrestricted equity
reserve. Due to the increase in the number of shares, the Annual
General Meeting decided that the number of shares to be subscribed
for based on the 2005A, 2005B, 2005C and 2007 option rights will
increase, and the share subscription price will decrease in the same
proportion.
In addition, the Annual General Meeting authorized the Board of
Directors to repurchase KONE's own shares with assets distributable
as profit. The shares may be repurchased in order to develop the
capital structure of the Company, finance or carry out possible
acquisitions, implement the Company's share-based incentive plans, or
to be transferred for other purposes or to be cancelled. Altogether
no more than 25,570,000 shares may be repurchased, of which no more
than 3,810,000 may be class A shares and 21,760,000 class B shares.
The Annual General Meeting also authorized the Board of Directors to
decide on the distribution of any shares repurchased by the company.
The authorization is limited to a maximum of 3,810,000 class A shares
and 21,760,000 class B shares. The Board shall have the right to
decide to whom to issue the shares, i.e. to issue shares in deviation
from the pre-emptive rights of shareholders. The repurchased shares
may be used as compensation in acquisitions and in other arrangements
as well as to implement the Company's share-based incentive plans in
the manner and to the extent decided by the Board of Directors. The
Board of Directors also has the right to decide on the distribution
of the shares in public trading in the OMX Nordic Exchange Helsinki
for the purpose of financing possible acquisitions. The shares shall
be distributed at least at the market price at the moment of their
transfer determined on the basis of the trading price for class B
shares determined in public trading in the OMX Nordic Exchange
Helsinki.
These authorizations shall remain in effect for a period of one year
from the date of the decision of the Annual General Meeting.
PricewaterhouseCoopers Oy, Authorized Public Accountants and Heikki
Lassila, APA, were re-elected as the Company's auditors.
Dividend
The Annual General Meeting approved the Board's proposal for a
dividend of EUR 1.29 for each class A share and EUR 1.30 for each
outstanding class B share before the increase in the number of shares
due to the share issue without payment. This amounted to EUR
163,619,671.52 for the financial year, which ended December 31, 2007.
The date of the dividend payment was March 6, 2008.
Share Capital and Market Capitalization
The KONE 2005A and 2005B options based on the KONE Corporation option
program 2005 were listed on the main list of the OMX Nordic Exchange
Helsinki on June 1, 2005. Each option entitles its holder to
subscribe for twelve (12) class B shares at a price of EUR 4.02 per
share.
As of March 31, 2008, 1,727,112 shares have been subscribed for with
the options, raising KONE's share capital to EUR 64,186,533.00,
comprising 218,641,776 listed class B shares and 38,104,356 unlisted
class A shares.
At the end of March 2008, the remaining number of shares that can be
subscribed for was 889,908. The remaining 2005A options entitle their
holders to subscribe for 138,480 class B shares, while the remaining
2005B options entitle their holders to subscribe for 751,428 class B
shares. The share subscription period for series A options ended on
March 31, 2008 and the subscription period for series B options will
end on March 31, 2009. As the 2005A options subscription period ended
on March 31, 2008, all remaining series A options have been used and
the shares will be entered in the Finnish Trade Register in April.
In 2005, KONE also granted a conditional option program, 2005C. It
was decided that the share subscription period of the 2005C option
program would begin on April 1, 2008. The 2005C stock options were
listed on the OMX Nordic Exchange Helsinki in Finland as of April 1,
2008. The total number of 2005C stock options is 2,000,000 of which
522,000 are owned by a subsidiary of KONE Corporation. Each option
right entitles its owner to subscribe for two (2) KONE Corporation
class B shares at a price of EUR 12.55 per share.
In December 2007, KONE Corporation's Board of Directors decided to
grant stock option rights to approximately 350 employees of the
global organization of KONE. A maximum of 2,000,000 options in total
can be granted. The share subscription period for stock option 2007
will be April 1, 2010-April 30, 2012. The share subscription period
begins only if the average turnover growth of the KONE Group for the
2008 and 2009 financial years exceeds the market growth and if the
earnings before interest and taxes (EBIT) of the KONE Group for the
financial year 2008 exceeds the EBIT for the 2007 financial year, and
the EBIT for the 2009 financial year exceeds the EBIT for the 2008
financial year.
The share issue without payment approved by KONE Corporation's Annual
General Meeting on February 25, 2008 was entered in the Trade
Register on February 28, 2008. The share issue without payment has
the same effect as a share split. The number of shares in the company
was increased by issuing new shares to the shareholders without
payment in proportion to their holdings so that one class A share was
given for each class A share and one class B share for each class B
share.
KONE's market capitalization was EUR 6,537 million on March 31, 2008,
disregarding own shares in the Group's possession.
Repurchase of KONE Shares
On the basis of the Annual General Meeting's authorization, KONE
Corporation's Board of Directors decided to commence repurchasing
shares at the earliest on
March 7, 2008.
During January 1-March 31, 2008 KONE did not use its authorization to
repurchase its own shares. At the end of March, the group had
5,231,506 class B shares in its possession. The shares in the group's
possession represent 2.4% of the total number of class B shares. This
corresponds to 0.9% of the total voting rights.
Shares traded on the OMX Nordic Exchange Helsinki
The OMX Nordic Exchange Helsinki traded 57.7 million (the number of
shares has been adjusted to the increase in the number of shares due
to the share issue without payment) KONE Corporation's class B shares
in January-March, equivalent to a turnover of EUR 1,239 million. The
daily average trading volume was 929,603 (1-3/2007: 840,096) (the
numbers of shares have been adjusted to the increase in the number of
shares due to the share issue without payment). The share price on
March 31, 2008 was EUR 25.99. The volume weighted average share price
during the period was EUR 22.72. The highest quotation during the
first quarter was EUR 26.08 and the lowest 18.77.
The number of registered shareholders at the beginning of the review
period was 13,650 and 13,787 at its end. The number of private
households holding shares totaled 12,393 at the end of the period.
According to the nominee registers, approximately 44.6% of the listed
class B shares were owned by foreigners at March 31, 2008. Other
foreign ownership at the end of the period totaled approximately 7%;
thus a total of approximately 51.6% of the company's listed class B
shares were owned by international investors, corresponding to
approximately 19% of the total votes in the company.
Outlook
We estimate that the market will continue to create favorable
opportunities for KONE to grow in 2008 although market growth will
not be equally strong in all markets this year as in 2007, due to the
weakened economic outlook.
KONE's target for 2008 is to achieve, at comparable exchange rates, a
growth of about 10% in net sales, compared to 2007. The operating
income (EBIT) target is to achieve a growth close to 20% compared to
the 2007 figure of EUR 473 million. This corresponds to an operating
income (EBIT) margin of at least 12.0%.
Helsinki, April 22, 2008
KONE Corporation
Board of Directors
This Interim Report contains forward-looking statements that are
based on the current expectations, known factors, decisions and plans
of the management of KONE. Although management believes that the
expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will
prove to be correct. Accordingly, results could differ materially
from those implied in the forward-looking statements as a result of,
among other factors, changes in economic, market and competitive
conditions, changes in the regulatory environment and other
government actions and fluctuations in exchange rates.
Consolidated statement of income
1-3/ 1-3/ 1-12/
MEUR 2008 % 2007 % 2007 %
Sales 905.3 811.2 4,078.9
Costs and expenses -804.1 -869.7 -3,699.8
Depreciation -14.7 -14.2 -58.3
Operating income 86.5 9.6 -72.7 -9.0 320.8 7.9
Share of associated
companies' net income 0.4 -0.2 1.7
Financing income 5.6 3.4 16.6
Financing expenses -5.5 -5.2 -25.1
Income before taxes 87.0 9.6 -74.7 -9.2 314.0 7.7
Taxes -23.1 -20.3 -133.7
Net income 63.9 7.1 -95.0 -11.7 180.3 4.4
Net income
attributable to:
Shareholders of
the parent company 63.6 -94.9 180.1
Minority interests 0.3 -0.1 0.2
Total 63.9 -95.0 180.3
Earnings per share for profit attributable to the shareholders of the
parent company, EUR
1-3/ 1-3/ 1-12/
2008 2007 2007
Basic earnings per share 0.25 -0.38 0.72
Diluted earnings per share 0.25 -0.38 0.71
The result for the comparison period of 1-3/2007 includes an expense
of MEUR 142.0 related to the European Commission's fine decision. In
addition to this, the result for the comparison period of 1-12/2007
includes a MEUR 22.5 provision for the Austrian Cartel Court's fine
decision and a MEUR 12.1 profit from the sale of the KONE Building.
Condensed consolidated balance sheet
Assets
MEUR 31.3.2008 31.3.2007 31.12.2007
Non-current assets
Intangible assets 625.8 624.2 630.4
Tangible assets 198.0 217.2 201.0
Loans receivable and
other interest-bearing assets 1.7 3.0 1.7
Deferred tax assets 108.8 135.0 118.6
Investments 143.4 130.1 131.3
Total non-current assets 1,077.7 1,109.5 1,083.0
Current assets
Inventories 859.1 774.8 773.2
Advance payments received -789.0 -665.8 -694.6
Accounts receivable and
other non interest-bearing assets 965.0 833.3 924.5
Current loans and receivables 110.0 147.7 118.9
Cash and cash equivalents 200.4 106.0 154.9
Total current assets 1,345.5 1,196.0 1,276.9
Total assets 2,423.2 2,305.5 2,359.9
Equity and liabilities
MEUR 31.3.2008 31.3.2007 31.12.2007
Equity 640.9 479.9 749.2
Non-current liabilities
Loans 220.2 76.8 175.8
Deferred tax liabilities 26.1 30.5 25.9
Employee benefits 125.3 144.6 131.9
Total non-current liabilities 371.6 251.9 333.6
Provisions 79.2 210.0 86.6
Current liabilities
Loans 229.7 322.2 191.4
Accounts payable and
other liabilities 1,101.8 1,041.5 999.1
Total current liabilities 1,331.5 1,363.7 1,190.5
Total equity and liabilities 2,423.2 2,305.5 2,359.9
Consolidated statement of changes in equity
1) Share capital
2) Share premium account
3) Fair value and other reserves
4) Translation differences
5) Own shares
6) Retained earnings
7) Minority interests
8) Total equity
MEUR 1) 2) 3) 4) 5) 6) 7) 8)
1 Jan, 2008 64.2 100.2 5.5 -31.3 -87.8 698.1 0.3 749.2
Net income
for the
period 63.6 0.3 63.9
Items booked
directly
into equity:
Transactions
with shareholders
and minority
shareholders:
Dividends paid -163.6 -163.6
Issue of shares
(option rights) 0.0 0.2 0.2
Purchase of
own shares -
Sale of
own shares -
Change
in minority
interests -0.1 -0.1
Cash flow
hedge 5.6 5.6
Translation
differences -20.9 -20.9
Hedging of
foreign
subsidiaries 5.5 5.5
Tax impact
of hedging -1.4 -1.4
Option and
share based
compensation 2.5 2.5
31 Mar, 2008 64.2 100.4 11.1 -48.1 -87.8 600.6 0.5 640.9
MEUR 1) 2) 3) 4) 5) 6) 7) 8)
1 Jan, 2007 64.0 98.0 -0.5 -14.0 -91.2 638.8 3.5 698.6
Net income
for the period -94.9 -0.1 -95.0
Items booked
directly
into equity:
Transactions
with shareholders
and minority
shareholders:
Dividends paid -125.1 -125.1
Issue of shares
(option rights) 0.0 0.4 0.4
Purchase of
own shares -0.3 -0.3
Sale of
own shares -
Change in
minority
interests -0.4 -0.4
Cash flow hedge 0.9 0.9
Translation
differences 0.8 0.8
Hedging of
foreign
subsidiaries -2.8 -2.8
Tax impact
of hedging 0.7 0.7
Option and
share based
compensation 2.1 2.1
31 Mar, 2007 64.0 98.4 0.4 -15.3 -91.5 420.9 3.0 479.9
MEUR 1) 2) 3) 4) 5) 6) 7) 8)
1 Jan, 2007 64.0 98.0 -0.5 -14.0 -91.2 638.8 3.5 698.6
Net income
for the period 180.1 0.2 180.3
Items booked
directly into
equity:
Transactions
with shareholders
and minority
shareholders:
Dividends paid -125.1 -125.1
Issue of shares
(option rights) 0.2 2.2 2.4
Purchase
of own
shares -0.3 -0.3
Sale of
own shares -
Change in
minority
interests -3.4 -3.4
Cash flow hedge 6.0 6.0
Translation
differences -18.4 -18.4
Hedging of
foreign
subsidiaries 1.5 1.5
Tax impact
of hedging -0.4 -0.4
Option and
share based
compensation 3.7 4.3 8.0
31 Dec, 2007 64.2 100.2 5.5 -31.3 -87.8 698.1 0.3 749.2
Condensed consolidated statement of cash flow
1-3/ 1-3/ 1-12/
MEUR 2008 2007 2007
Operating income 86.5 -72.7 320.8
Change in working capital 65.4 201.2 0.9
Depreciation 14.7 14.2 58.3
Cash flow from operations 166.6 142.7 380.0
Cash flow from financing items and taxes -15.4 -2.4 -134.0
Cash flow from operating activities 151.2 140.3 246.0
Cash flow from investing activities -35.8 -43.9 -94.6
Cash flow after investing activities 115.4 96.4 151.4
Purchase and sale of own shares - -0.3 -0.3
Issue of shares 0.2 0.4 2.4
Dividends paid -151.1 -116.0 -125.1
Change in loans receivable 4.8 13.4 42.0
Change in loans payable 77.1 2.7 -24.0
Cash flow from financing activities -69.0 -99.8 -105.0
Change in cash and cash equivalents 46.4 -3.4 46.4
Cash and cash equivalents at end of period 200.4 106.0 154.9
Translation difference 0.9 0.1 1.0
Cash and cash equivalents at beginning of period 154.9 109.5 109.5
Change in cash and cash equivalents 46.4 -3.4 46.4
Change in interest-bearing net debt
1-3/ 1-3/ 1-12/
MEUR 2008 2007 2007
Interest-bearing net debt
at beginning of period 91.7 124.9 124.9
Interest-bearing net debt
at end of period 137.8 142.3 91.7
Change in interest-bearing
net debt 46.1 17,4 -33.2
Key figures
1-3/ 1-3/ 1-12/
2008 2007 2007
Basic earnings per share EUR 0.25 -0.38 0.72
Diluted earnings per share EUR 0.25 -0.38 0.71
Equity per share EUR 2.55 1.90 2.98
Interest-bearing net debt MEUR 137.8 142.3 91.7
Total equity/total assets % 26.4 20.8 31.7
Gearing % 21.5 29.7 12.2
Return on equity % 36.8 neg. 24.9
Return on capital employed % 33.8 neg. 30.4
Total assets MEUR 2,423.2 2,305.5 2,359.9
Assets employed MEUR 778.7 622.2 840.9
Working capital
(including financing
and tax items) MEUR -188.5 -349.3 -121.8
Sales by geographical areas
1-3/ 1-3/ 1-12/
MEUR 2008 % 2007 % 2007 %
EMEA 617.7 68 535.5 66 2,675.3 65
Americas 161.7 18 177.6 22 840.8 21
Asia-Pacific 125.9 14 98.1 12 562.8 14
Total 905.3 811.2 4,078.9
1) EMEA = Europe, Middle East, Africa
Quarterly Key Figures
Q1/ Q4/ Q3/ Q2/ Q1/
2008 2007 2007 2007 2007
Orders received MEUR 1,117.5 901.9 926.3 944.4 902.1
Order book MEUR 3,617.4 3,282.3 3,473.6 3,318.0 3,105.7
Sales MEUR 905.3 1,294.2 971.6 1,001.9 811.2
Operating income MEUR 86.5 160.8 1) 126.7 116.4 69.3 2)
Operating income % 9.6 12.4 1) 13.0 11.6 8.5 2)
Q4/ Q3/ Q2/ Q1/
2006 2006 2006 2006
Orders received MEUR 712.1 742.0 821.9 840.3
Order book MEUR 2,762.1 2,951.0 2,818.0 2,654.0
Sales MEUR 1,145.6 879.8 840.4 735.0
Operating income MEUR 123.4 101.1 83.9 51.7
Operating income % 10.8 11.5 10.0 7.0
1) Excluding a MEUR 22.5 provision for the Austrian Cartel Court's
fine decision and a MEUR 12.1 profit from the sale of the KONE
Building.
2) Excluding an expense of MEUR 142.0 related to the European
Commission's fine decision.
Orders received
MEUR 1-3/2008 1-3/2007 1-12/2007
1,117.5 902.1 3,674.7
Order book
MEUR 31.3.2008 31.3.2007 31.12.2007
3,617.4 3,105.7 3,282.3
Capital expenditure
MEUR 1-3/2008 1-3/2007 1-12/2007
In fixed assets 9.2 6.6 58.1
In leasing agreements 1.3 1.4 9.2
In acquisitions 23.0 9.1 49.6
Total 33.5 17.1 116.9
R&D expenditure
MEUR 1-3/2008 1-3/2007 1-12/2007
14.7 13.1 50.7
R&D Expenditure as
percentage of sales 1.6 1.6 1.2
Number of employees
1-3/2008 1-3/2007 1-12/2007
Average 32,975 29,622 30,796
At the end of the period 33,155 29,868 32,544
Notes to the Interim Report
Commitments
MEUR 31.3.2008 31.3.2007 31.12.2007
Mortgages
Group and parent company 0.7 30.7 0.7
Pledged assets
Group and parent company 4.7 5.4 4.8
Guarantees
Associated companies 4.3 1.8 5.3
Others 6.4 3.6 6.3
Operating leases 149.9 116.8 148.9
Total 166.0 158.3 166.0
The future minimum lease payments under non-cancellable operating
leases
MEUR 31.3.2008 31.3.2007 31.12.2007
Less than 1 year 39.8 34.0 39.0
1-5 years 89.4 72.5 91.2
Over 5 years 20.7 10.3 18.7
Total 149.9 116.8 148.9
Derivatives
Fair values of derivative financial instruments
positive negative
fair fair net fair net fair net fair
value value value value value
MEUR 31.3.2008 31.3.2008 31.3.2008 31.3.2007 31.12.2007
FX Forward
contracts 25.4 9.4 16.0 -0.2 6.0
Currency options 0.4 0.1 0.3 0.0 0.0
Cross-currency
swaps,
due under one year 3.4 0.0 3.4 - 2.9
Cross-currency
swaps,
due in 1-3 years 5.9 0.0 5.9 5.4 8.9
Electricity
derivatives 0.5 0.0 0.5 0.1 0.9
Total 35.6 9.5 26.1 5.3 18.7
Nominal values of derivative financial instruments
MEUR 31.3.2008 31.3.2007 31.12.2007
FX Forward contracts 632.5 478.5 527.3
Currency options 43.0 11.4 15.6
Cross-currency swaps,
due under one year 20.0 - 20.0
Cross-currency swaps,
due in 1-3 years 136.7 156.7 136.7
Electricity derivatives 3.1 3.3 2.5
Total 835.3 649.9 702.1
Share and shareholders March 31,
2008
Class A Class B
shares shares Total
Number of shares 38,104,356 218,641,776 256,746,132
Own shares in
possession 1) 5,231,506
Share capital, EUR 64,186,533
Market capitalization, MEUR 6,537
Number of shares traded,
million, 1-3/2008 57.7
Value of shares traded MEUR,
1-3/2008 1,239
Number of shareholders 3 13,787 13,787
Close High Low
Class B share price,
EUR, 1-3/2008 25.99 26.08 18.77
1) During the first quarter of 2008, the authorization to repurchase
shares was not used. Due to the share issue without payment
(registered on February 28, 2008) the number of shares in the company
was increased by issuing new shares to the shareholders without
payment in proportion to their holdings so that one class A share was
given for each class A share and one class B share for each class B
share.
