2009-04-23 11:30:00 CEST
2009-04-23 11:32:24 CEST
REGULATED INFORMATION
KONE Oyj - Interim report (Q1 and Q3)
KONE Corporation's Interim Report for January-March 2009
KONE Corporation, Interim Report, April 23, 2009 at 12:30 p.m.
KONE's Q1: Overall good performance
- In January-March 2009, orders received totaled EUR 898.5 (1-3/2008:
1,118) million. The year-on-year decline in orders received was 19.6%
in historical and 20.5% in comparable exchange rates. The level of
orders received was higher than both in Q3 and Q4 in 2008. At the end
of March 2009, the order book was EUR 3,753 (Dec 31, 2008: 3,577)
million.
- Net sales increased by 12.8% to EUR 1,021 (905.3) million. At
comparable exchange rates, the growth was also 12.8%.
- Operating income was EUR 91.2 (86.5) million or 8.9% (9.6%) of net
sales. The result was still burdened by high raw material costs.
- KONE reiterates its full year outlook for 2009.
Key Figures
1-3/2009 1-3/2008 1-12/2008
Orders received MEUR 898.5 1,117.5 3,947.5
Order book MEUR 3,753.1 3,617.4 3,576.7
Sales MEUR 1,021.0 905.3 4,602.8
Operating income MEUR 91.2 86.5 558.4
Operating income % 8.9 9.6 12.1
Cash flow from operations
(before financing items and taxes) MEUR 170.3 166.6 527.4
Net income MEUR 78.7 63.9 418.1
Total comprehensive income MEUR 80.2 52.7 436.7
Basic earnings per share EUR 0.31 0.25 1.66
Interest-bearing net debt MEUR -40.3 137.8 -58.3
Total equity/total assets % 34.9 26.4 39.0
Gearing % -4.2 21.5 -5.6
KONE's President & CEO, Matti Alahuhta, in conjunction with the
review:"I am pleased with our performance in the first quarter. Thanks to
continued good development in our service business and to our teams'
good performance also in new equipment project implementation and
fixed costs management, we were able to improve our EBIT compared to
the first quarter of last year. We also managed to reach in the
current difficult environment a higher orders received level than in
the second half of last year. However, in the weakening new equipment
market, the orders received continued to decline in year-on-year
comparison. Therefore, we are targeting to adjust our fixed costs
running rate by about EUR 40 million for 2010.
However, maintaining our good spirit and opportunity orientation will
be most important in our approach. I am confident that this, together
with our continuous development activities, will bring good results
for KONE even now in these challenging times."
Analyst and media conference and conference call
A meeting and conference call for the press, conducted in English,
will be held on Thursday, April 23, 2009 at 1:45 p.m. Finnish time
(EET). The telephone conference will also be available as webcast at
www.kone.com.
A telephone conference and a meeting for analysts, conducted in
English, will begin at 3:00 p.m. Finnish time (EET). The telephone
conference will also be available as webcast at www.kone.com.
Both meetings will take place in the KONE Building, located at
Keilasatama 3, in Espoo, Finland.
Telephone conference numbers:
US callers: +1 334 323 6201
Non-US callers: +44 (0)20 7162 0025
Participant 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 2008, KONE had annual net sales of EUR 4.6 billion
and over 34,800 employees. KONE class B shares are listed on the
NASDAQ OMX 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
Anne Korkiakoski
Executive Vice President,
Marketing and Communications
Accounting principles
KONE Corporation's Interim Report for January 1-March 31, 2009 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 2008. The
accounting principles for the financial statements have been
presented in the KONE 2008 Financials report published on January 23,
2009. Additionally, the changes in the presentation of statement of
comprehensive income and the statement of changes in equity according
to the revised IAS1 has been applied in the Interim Report. The
information presented in this Interim Report has not been audited.
KONE's operating environment in January-March 2009
In the first quarter of 2009, the overall market situation was
difficult in the new equipment market. In the maintenance markets,
where demand is non-cyclical by nature, steady growth continued while
the overall market environment became increasingly competitive. In
modernization, the demand was at a somewhat lower level than a year
ago.
In Europe, the Middle East and Africa (EMEA), the business
environment remained under pressure. Most new equipment markets
declined. The biggest declines were still seen in the markets of the
Middle East, Russia, the United Kingdom and Spain. However, some
segments and markets were growing, such as the hospital segment in
Southern Europe and the residential segments in some countries of the
Middle East. The demand for modernizations was at a somewhat lower
level compared to the corresponding period in 2008. However, the
modernization demand is 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, commercial building markets continued to be
challenging with owners hesitant to make investments until they see
more certainty in the market. The architectural design activity
flattened late in the quarter after several consecutive quarters of
decreasing activity.
In the Asia-Pacific region, the new equipment markets weakened to
some extent. In China, the new equipment demand continued to decline
in the coastal areas at the same time as Central and Western China
experienced some growth. In India, the new equipment demand declined
somewhat, because the difficulties in finding funding increased
decision lead times. Public transportation activity increased as the
earlier planned government-funded projects have proceeded to
tendering. In Australia, the market was weak but the residential
tender activity increased somewhat.
Orders received and order book
In January-March 2009, KONE's orders received declined by 19.6% and
totaled EUR 898.5 (1-3/2008: 1,118) million. At comparable exchange
rates, the decline was 20.5%. Only new equipment and modernization
orders are included in orders received. The growth in orders received
declined in all geographical areas, however the orders received level
in the first quarter was higher than in the third and fourth quarter
of 2008. KONE also strengthened its position in major projects. The
level of orders received in the current challenging market
environment is good evidence of KONE's improved competitiveness.
The order book increased from the end of 2008 by 4.9% and stood at
EUR 3,753 (Dec. 31/2008: 3,577) million at the end of March 2009. The
margin of the order book continued to be at the good level seen
earlier.
In the EMEA region, orders received declined in the weakening market.
Despite of the market situation, KONE succeeded in performing rather
well in Germany and Belgium. In the first quarter, KONE also showed
rather good progress in the modernization market. KONE's orders
received in modernization were particularly good in France.
In the EMEA region, one of KONE's largest orders during the first
quarter was an order to supply elevators for the high-rise Anthill
Residence project in Istanbul, Turkey. The installation of the
equipment will start in December of this year and it is estimated to
be complete in December 2010. KONE also secured a major order to
deliver all elevators and escalators for The Shard London Bridge.
Construction of the skyscraper is expected to begin this spring with
completion scheduled for May 2012. Installation of the elevators will
commence in 2010.
In addition, KONE signed a three-year elevator maintenance
partnership contract with GDF SUEZ. The contract defines KONE as one
of the preferred suppliers of elevator maintenance for GDF SUEZ's
European facilities.
In the Americas, KONE's order intake declined only modestly although
the market was very difficult. KONE has maintained its
competitiveness across different segments with particularly good
performance in the important infrastructure segment. The largest
order in North America was to supply and install escalators and
elevators for the first phase of the Dulles Corridor Metrorail
Project (DCMP). The installation of KONE solutions is expected to
start in the spring of 2010 and is estimated to be completed by the
late spring in 2013.
In the Asia-Pacific region, KONE's new equipment orders received
declined year-on-year. In China, orders received was slightly
positive. The maintenance base developed well. The good conversion
rate and strong order intake in the past were feeding the maintenance
base growth. In India and Australia, KONE had a decline in new
orders.
Sales by geographical areas MEUR
1-3/2009 % 1-3/2008 % 1-12/2008 %
EMEA 1) 638.8 63 617.7 68 3,001.5 65
Americas 234.1 23 161.7 18 888.3 19
Asia-Pacific 148.1 14 125.9 14 713.0 16
Total 1,021.0 905.3 4,602.8
1) EMEA = Europe, Middle East,
Africa
Net Sales
In January-March 2009, KONE's net sales rose by 12.8%, and totaled
EUR 1,021
(1-3/2008: 905.3) million. Growth at comparable currency rates was
also 12.8%.
New equipment sales accounted for EUR 445.1 (383.4) million of the
total and represented 16.1% growth over the comparison period. At
comparable currency rates, the growth was 15.6%.
Service sales (maintenance and modernization) increased by 10.3% and
totaled EUR 575.9 (521.9) million. At comparable currency rates, the
growth was 10.7%.
Of the sales, 63% (68%) were generated from EMEA, 23% (18%) by the
Americas and 14% (14%) by Asia-Pacific.
Financial Result
KONE's operating income was EUR 91.2 million (1-3/2008: 86.5 million)
or 8.9% (9.6) of net sales. The result was still burdened by the high
raw material costs. Net financing items were EUR 14.3 (0.1) million
and includes dividends received from Toshiba Elevator and Building
Systems Corporation (TELC).
KONE's income before taxes for January-March 2009 was EUR 105.6
(87.0) million. Taxes totaled EUR 26.9 (23.1) million, taking into
account taxes proportionate to the amount estimated for the financial
year. This repr-esents an effective tax rate of 25.5%. In
January-December 2008, the effective tax rate was 25.8%. Net income
for the period under review was EUR 78.7 (63.9) million.
Earnings per share were EUR 0.31 (0.25). Equity per share was EUR
3.77 (2.55).
Financial Position and Cash Flow
KONE's financial position stayed strong and the company had a
positive net cash position at the end of March. In January-March
2009, cash flow generated from operations (before financing items and
taxes) was EUR 170.3 (166.6) million. At the end of March, net
working capital was negative at EUR -152.0 (December 31, 2008:
-76.4) million, including financing items and taxes.
Interest-bearing assets exceeded interest-bearing net debts and the
net cash position totaled EUR 40.3 (December 31, 2008: 58.3) million.
Gearing was -4.2%, compared with -5.6% at the end of 2008. KONE's
total equity/total assets ratio was 34.9% (December 31, 2008: 39.0%)
at the end of March.
Capital expenditure, acquisitions and divestments
KONE's capital expenditure, including acquisitions, totaled EUR 31.1
(1-3/2008: 33.5) million. Capital expenditure, excluding
acquisitions, was mainly related to R&D, IT and production.
Acquisitions accounted for EUR 22.3 (23.0) million of this figure.
Acquisitions made in January-March will have no material effect on
the 2009 full-year figures.
In January-March, KONE made the acquisition of FairWay Elevator Inc,
an independent elevator service company in the Philadelphia area in
the United States. Through this acquisition, KONE establishes itself
as one of the largest elevator and escalator companies in the
Philadelphia region.
Research and development
Research and development expenses totaled EUR 15.3 (1-3/2008: 15.2)
million, representing 1.5% (1.7%) of net sales. R&D expenses include
the development of new concepts and further development of existing
solutions and services. KONE's elevators and escalators are based on
energy-efficient technology.
In January-March 2009, KONE strengthened its offering to better meet
the demands of the public infrastructure segments. KONE also added
mid-rise solutions by offering additional design features in
Asia-Pacific and improved solutions for the hospital segment.
In addition, KONE launched a new commercial escalator release to
further gain market share in the retail segment. The cost structure
has been improved and the application scope has been enlarged by
adding a full outdoor solution package to the offering as well as
several new visual design components. In addition, an optimized motor
was added for lower vertical rises to reduce unnecessary power
consumption. To further differentiate the escalator offering from
that of the competition, an innovative solution to display commercial
or safety related information on the escalator step riser was added
to the offering.
In January 2009, KONE Corporation was awarded a 2008 GOOD DESIGN
award for its innovative elevator design concept. KONE is the first
elevator and escalator company to ever receive such a prestigious
award. Founded in 1950, GOOD DESIGN is renowned as one of the most
recognized design awards program in the world. The awards are given
by The Chicago Athenaeum and The European Centre for Architecture Art
Design and Urban Studies to highlight the best new designs and design
innovations for products and graphics made between 2006 and 2008.
Personnel
The objective of KONE's personnel strategy is to help the company
meet its business targets. The main goals of the strategy are to
further secure the availability, commitment and continuous
development of its personnel. All 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 any kind of discrimination.
KONE had 34,558 (December 31, 2008: 34,831) employees at the end of
March 2009. The average number of employees was 34,565 (1-3/2008:
32,975).
The geographical distribution of KONE employees was 56% (57%) in
EMEA, 17% (17%) in the Americas and 27% (26%) in Asia-Pacific.
People Leadership is one of KONE's five development programs. KONE
invests increasingly in people development programs, personal
coaching and change management.
Environment
The development of eco-efficient solutions focused on stand-by energy
saving solutions and regenerative units for elevators. As a result of
these improvement actions, a reduction of 30 percent in the newest
release was accomplished. By next year, an additional 20 percent
reduction will be achieved.
In the service business, eco-efficiency aspects have been included in
the analysis, which provides customers with a comprehensive
recommendation on how to maintain and modernize their equipment in a
cost-effective way.
The most significant carbon dioxide (CO2) impact of KONE's own
operations relate to the company's vehicle car fleet, electricity
consumption and logistics. As a consequence, projects relating to
KONE's global car fleet and business travel are ongoing.
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. In the
present weak economic situation, having no debt is a strength.
The economic turmoil has been extremely severe since mid-2008. KONE
will focus on two major issues regarding its capital and risk
management. Firstly, the capability to adapt its cost structure in
changing volumes in order to stay competitive, and secondly, to
ensure that the Group's liquidity is guaranteed to cover both
short-term and long-term funding needs.
Overall cost control has been tightened to avoid unnecessary cost
burdens in this phase with increasing uncertainty in the market
environment. In addition, the Group's cost structure is flexible
because of outsourcing in different areas of the business.
The key area in guaranteeing good liquidity in the short run is to
keep the present good working capital position. In a difficult
economic situation, it is increasingly important to maintain a
healthy order book without deterioration in payment terms, and to
improve credit control and collection activities. Long-term funding
is guaranteed by existing committed lines.
KONE's business activities are exposed to risks, which may arise from
changes in KONE's business environment or incidents resulting from
operating activities. The most significant risks are increases in
personnel costs and raw material costs, fluctuation in currency and
changes in the development of the world economy.
A global slowdown in economic growth may bring about a decrease in
the number of new equipment orders received by KONE, cancellations of
agreed-on deliveries, or delays in the commencement of projects. A
significant part of KONE's sales consist of services which are less
susceptible to the effects of an economic recession. An economic
recession may affect the liquidity and payment schedules of KONE's
customers and lead to credit losses. Credit risks are managed by
applying advance payments and actively monitoring the liquidity of
customers.
As a global group, KONE is exposed to foreign exchange fluctuations.
The Group Treasury function manages exchange rates and other
financial risks centrally on the basis of principles approved by the
Board of Directors. The main effect of exchange rate fluctuations is
seen in the consolidated financial statements of the KONE Group
resulting from the translation of financial statements of foreign
subsidiaries into euros.
A significant part of KONE's sales consist of services which are very
labor-intensive. If the increases in labor costs cannot be
transferred to prices or the productivity targets are not met, the
profit development of the Group will be adversely affected. A failure
to efficiently reallocate personnel resources in response to reduced
business opportunities may also have a negative effect on the profit
development.
Changes in raw material prices are 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 maintenance
business deploys a significant fleet of service vehicles, and oil
price fluctuations can affect the cost of maintenance.
Appointment to the Executive Board
KONE appointed Henrik Ehrnrooth M.Sc. (Econ) Executive Vice
President, Finance (Chief Financial Officer) and a Member of the
Executive Board as of May 1, 2009. Henrik Ehrnrooth will succeed Aimo
Rajahalme, who has served as CFO since 1991.
Decisions of the Annual General Meeting
KONE Corporation's Annual General Meeting was held in Helsinki on
February 23, 2009. The meeting approved the financial statements and
discharged the responsible parties from liability for the January
1-December 31, 2008 financial period.
The number of Members of the Board of Directors was confirmed as
eight and it was decided to elect one deputy Member. Re-elected as
Members of the Board were Matti Alahuhta, Reino Hanhinen, Antti
Herlin, Sirkka Hämäläinen-Lindfors and Sirpa Pietikäinen and as
deputy Member Jussi Herlin. Anne Brunila, Juhani Kaskeala and
Shunichi Kimura were elected as new Members of the Board of
Directors.
At its meeting held after the Annual General Meeting, the Board of
Directors elected, from among its members, Antti Herlin as its Chair
and Sirkka Hämäläinen-Lindfors as Vice Chair.
Antti Herlin was elected as Chairman of the Audit Committee. Sirkka
Hämäläinen-Lindfors and Anne Brunila were elected as independent
Members of the Audit Committee.
Antti Herlin was elected as Chairman of the Nomination and
Compensation Committee. Reino Hanhinen and Juhani Kaskeala were
elected as independent Members of the Nomination and Compensation
Committee.
The Annual General Meeting confirmed an annual compensation of EUR
54,000 for the Chairman of the Board, EUR 42,000 for the Vice
Chairman, EUR 30,000 for Board Members and EUR 15,000 for the deputy
Member. In addition, a compensation of EUR 500 was approved for
attendance at Board and Committee meetings.
The Annual General Meeting approved the Board of Directors proposal
to repurchase KONE's own shares. 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, taking into
consideration the provisions of the Companies Act regarding the
maximum amount of own shares that the Company is allowed to possess.
The minimum and maximum consideration for the shares to be purchased
is determined for both class A and class B shares on the basis of the
trading price for class B shares determined on the NASDAQ OMX
Helsinki Oy on the time of purchase.
In addition, the Annual General Meeting 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.
These authorizations shall remain in effect for a period of one year
from the date
of the decision of the Annual General Meeting.
Authorized public accountants Heikki Lassila and
PricewaterhouseCoopers Oy were re-nominated as the Company's
auditors.
Dividend for 2008
The Annual General Meeting approved the Board's proposal for
dividends of EUR 0.645 for each of the 38,104,356 class A shares and
EUR 0.65 for the 214,643,060 outstanding class B shares. The date of
record for dividend distribution was February 26, 2009, and dividends
were paid on March 5, 2009.
Share Capital and Market Capitalization
The KONE 2005B options based on the KONE Corporation 2005 option
program were listed on the main list of the OMX Nordic Exchange
Helsinki on June 1, 2005. Each option entitled its holder to
subscribe for twelve (12) class B shares at a price of EUR 4.02 per
share. As the 2005B options subscription period ended on March 31,
2009, 4,660 remaining series B options held by the subsidiary
expired. The remaining 12,034 options had 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. The
2005C stock options were listed on the NASDAQ OMX 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 11.90 per
share. At the end of March 2009, the remaining 2005C options entitled
their holders to subscribe for 3,909,150 class B shares. The
subscription period for series C options will end on April 30, 2010.
In December 2007, KONE Corporation's Board of Directors decided to
grant stock option rights to approximately 350 employees of KONE's
global organization. The share subscription period for 2007 stock
option 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.
As of March 31, 2009, KONE's share capital was EUR 64,381,640.50,
comprising 219,422,206 listed class B shares and 38,104,356 unlisted
class A shares.
KONE's market capitalization was EUR 3,940 million on March 31, 2009,
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 3, 2009.
During January 1-March 31, 2009, KONE did not use its authorization
to repurchase its own shares. At the end of March, the Group had
4,905,506 class B shares in its possession. The shares in the Group's
possession represent 1.9% of the total number of class B shares. This
corresponds to 0.8% of the total voting rights.
Shares traded on the NASDAQ OMX Helsinki Ltd.
The NASDAQ OMX Helsinki traded 49.9 million of KONE Corporation's
class B shares in January-March, equivalent to a turnover of EUR
814.0 million. The daily average trading volume was 804,738
(1-3/2008: 929,603; 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, 2009 was EUR 15.60. The volume
weighted average share price during the period was EUR 16.34. The
highest quotation during the first quarter was EUR 18.74 and the
lowest 13.80.
The number of registered shareholders at the beginning of the review
period was 16,354 and 17,118 at its end. The number of private
households holding shares totaled 15,475 at the end of the period,
which corresponds to approximately 12% of the listed B-shares.
According to the nominee registers, approximately 44.3% of the listed
class B shares were owned by foreigners as of March 31, 2009. Other
foreign ownership at the end of the period totaled approximately 8%;
thus a total of 52.3% of the company's listed class B shares were
owned by international investors, corresponding to approximately 19%
of the total votes in the company.
Market outlook
In 2009, the new equipment market will continue to decline because of
the weakening global economy. Modernization will be less impacted.
The maintenance market will continue to develop well.
Outlook
In 2009, KONE's objective in net sales is to reach a growth of 5
percent or at least approximately the net sales level of 2008.
In operating income (EBIT), the objective is to reach a growth of 5
percent or at least approximately the operating income level of 2008.
Helsinki, April 23, 2009
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 income statement
MEUR 1-3/2009 % 1-3/2008 % 1-12/2008 %
Sales 1,021.0 905.3 4,602.8
Costs and expenses -914.3 -804.1 -3,979.6
Depreciation -15.5 -14.7 -64.8
Operating income 91.2 8.9 86.5 9.6 558.4 12.1
Share of associated
companies' net income 0.1 0.4 2.6
Financing income 18.7 5.6 24.4
Financing expenses -4.4 -5.5 -21.6
Income before taxes 105.6 10.3 87.0 9.6 563.8 12.2
Taxes -26.9 -23.1 -145.7
Net income 78.7 7.7 63.9 7.1 418.1 9.1
Net income attributable to:
Shareholders of
the parent company 78.6 63.6 417.3
Minority interests 0.1 0.3 0.8
Total 78.7 63.9 418.1
Earnings per share for
profit attributable to the
shareholders of the parent
company, EUR
Basic earnings per share 0.31 0.25 1.66
Diluted earnings per share 0.31 0.25 1.65
Consolidated statement of
comprehensive income
MEUR 1-3/2009 1-3/2008 1-12/2008
Net income 78.7 63.9 418.1
Other comprehensive income,
net of tax:
Translations difference 8.6 -20.9 38.0
Hedging of foreign
subsidiaries -1.9 4.1 -22.9
Cash flow hedges -5.2 5.6 3.5
Other comprehensive income,
net of tax 1.5 -11.2 18.6
Total comprehensive income 80.2 52.7 436.7
Total comprehensive income
attributable to:
Shareholders of the parent
company 80.1 52.4 435.9
Minority interests 0.1 0.3 0.8
Total 80.2 52.7 436.7
Condensed consolidated statement of financial position
Assets
MEUR 31.3.2009 31.3.2008 31.12.2008
Non-current assets
Intangible assets 695.2 625.8 670.2
Tangible assets 213.0 198.0 214.7
Loans receivable and
other interest-bearing assets 1.9 1.7 2.3
Deferred tax assets 132.7 108.8 122.1
Investments 157.9 143.4 169.1
Total non-current assets 1,200.7 1,077.7 1,178.4
Current assets
Inventories 933.1 859.1 885.5
Advance payments received -866.9 -789.0 -805.4
Accounts receivable and
other non interest-bearing assets 1,110.5 965.0 1,046.5
Current loans and receivables 180.8 110.0 204.0
Cash and cash equivalents 173.3 200.4 147.8
Total current assets 1,530.8 1,345.5 1,478.4
Total assets 2,731.5 2,423.2 2,656.8
Equity and liabilities
MEUR 31.3.2009 31.3.2008 31.12.2008
Equity 954.4 640.9 1,035.9
Non-current liabilities
Loans 172.0 220.2 172.4
Deferred tax liabilities 41.2 26.1 39.7
Employee benefits 117.2 125.3 115.8
Total non-current liabilities 330.4 371.6 327.9
Provisions 49.3 79.2 49.9
Current liabilities
Loans 143.7 229.7 123.4
Accounts payable and other liabilities 1,253.7 1,101.8 1,119.7
Total current liabilities 1,397.4 1,331.5 1,243.1
Total equity and liabilities 2,731.5 2,423.2 2,656.8
Consolidated statement of changes in equity
1) Share capital
2) Share premium account
3) Paid-up unrestricted equity reserve
4) Fair value and other reserves
5) Translation differences
6) Own shares
7) Retained earnings
8) Net income for the period
9) Minority interests
10) Total equity
MEUR 1) 2) 3) 4) 5) 6) 7) 8) 9) 10)
1 Jan, 2009 64.4 100.4 3.3 9.0 -16.2 -83.1 957.2 0.9 1,035.9
Total
comprehensive
income for
the period -5.2 6.7 78.6 0.1 80.2
Transactions
with
shareholders
and minority
shareholders:
Dividends
paid -164.1 -164.1
Issue of
shares
(option
rights) 0.0 0.3 0.3
Purchase of
Own shares -
Sale of
own shares -
Change in
minority
interests -
Option and
share-based
compensation 2.1 2.1
31 Mar, 2009 64.4 100.4 3.6 3.8 -9.5 -83.1 795.2 78.6 1.0 954.4
MEUR 1) 2) 3) 4) 5) 6) 7) 8) 9) 10)
1 Jan, 2008 64.2 100.2 - 5.5 -31.3 -87.8 698.1 0.3 749.2
Total
comprehensive
income for
the period 5.6 -16.8 63.6 0.3 52.7
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
Option and
share-based
compensation 2.5 2.5
31 Mar, 2008 64.2 100.4 - 11.1 -48.1 -87.8 537.0 63.6 0.5 640.9
MEUR 1) 2) 3) 4) 5) 6) 7) 8) 9) 10)
1 Jan, 2008 64.2 100.2 - 5.5 -31.3 -87.8 698.1 0.3 749.2
Total
comprehensive
income for
the period 3.5 15.1 417.3 0.8 436.7
Transactions
with
shareholders
and minority
shareholders:
Dividends
paid -163.6 -163.6
Issue of
shares
(option
rights) 0.2 0.2 3.3 3.7
Purchase of
own shares -
Sale of
own shares -
Change in
Minority
interests -0.2 -0.2
Option and
share-based
compensation 4.7 5.4 10.1
31 Dec, 2008 64.4 100.4 3.3 9.0 -16.2 -83.1 539.9 417.3 0.9 1,035.9
Condensed consolidated statement of cash flow
MEUR 1-3/2009 1-3/2008 1-12/2008
Operating income 91.2 86.5 558.4
Change in working capital 63.6 65.4 -95.8
Depreciation 15.5 14.7 64.8
Cash flow from operations 170.3 166.6 527.4
Cash flow from financing items and taxes -15.7 -15.4 -99.5
Cash flow from operating activities 154.6 151.2 427.9
Cash flow from investing activities -22.3 -35.8 -128.6
Cash flow after investing activities 132.3 115.4 299.3
Purchase and sale of own shares - - -
Issue of shares 0.3 0.2 3.7
Dividends paid -151.9 -151.1 -163.3
Change in loans receivable 27.7 4.8 -82.7
Change in loans payable 18.9 77.1 -62.7
Cash flow from financing activities -105.0 -69.0 -305.0
Change in cash and cash equivalents 27.3 46.4 -5.7
Cash and cash equivalents at end of
period 173.3 200.4 147.8
Translation difference 1.8 0.9 1.4
Cash and cash equivalents at beginning of
period 147.8 154.9 154.9
Change in cash and cash equivalents 27.3 46.4 -5.7
Change in interest-bearing net debt
1-3/ 1-3/ 1-12/
MEUR 2009 2008 2008
Interest-bearing net debt at beginning of
period -58.3 91.7 91.7
Interest-bearing net debt at end of
period -40.3 137.8 -58.3
Change in interest-bearing net debt 18.0 46.1 -150.0
Key figures
1-3/2009 1-3/2008 1-12/2008
Basic earnings per share EUR 0.31 0.25 1.66
Diluted earnings per share EUR 0.31 0.25 1.65
Equity per share EUR 3.77 2.55 4.10
Interest-bearing net debt MEUR -40.3 137.8 -58.3
Total equity/total assets % 34.9 26.4 39.0
Gearing % -4.2 21.5 -5.6
Return on equity % 31.6 36.8 46.8
Return on capital employed % 25.6 25.2 35.9
Total assets MEUR 2,731.5 2,423.2 2,656.8
Assets employed MEUR 914.1 778.7 977.6
Working capital
(including financing and tax items) MEUR -152.0 -188.5 -76.4
Sales by geographical areas
MEUR 1-3/2009 % 1-3/2008 % 1-12/2008 %
EMEA1) 638.8 63 617.7 68 3,001.5 65
Americas 234.1 23 161.7 18 888.3 19
Asia-Pacific 148.1 14 125.9 14 713.0 16
Total 1,021.0 905.3 4,602.8
1) EMEA = Europe, Middle East, Africa
Quarterly Key Figures
Q1/ Q4/ Q3/ Q2/ Q1/
2009 2008 2008 2008 2008
Orders received MEUR 898.5 845.2 892.4 1,092.4 1,117.5
Order book MEUR 3,753.1 3,576.7 4,002.8 3,838.7 3,617.4
Sales MEUR 1,021.0 1,431.6 1,123.8 1,142.1 905.3
Operating income MEUR 91.2 189.2 146.0 136.7 86.5
Operating income % 8.9 13.2 13.0 12.0 9.6
Q4/ Q3/ Q2/ Q1/
2007 2007 2007 2007
Orders received MEUR 901.9 926.3 944.4 902.1
Order book MEUR 3,282.3 3,473.6 3,318.0 3,105.7
Sales MEUR 1,294.2 971.6 1,001.9 811.2
Operating income MEUR 160.8 1) 126.7 116.4 69.3 2)
Operating income % 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 sales profit from the sale of KONE
Building
2) Excluding a MEUR 142.0 fine for the European Commission's decision
Orders received
MEUR 1-3/2009 1-3/2008 1-12/2008
898.5 1,117.5 3,947.5
Order book
MEUR 31.3.2009 31.3.2008 31.12.2008
3,753.1 3,617.4 3,576.7
Capital expenditure
MEUR 1-3/2009 1-3/2008 1-12/2008
In fixed assets 7.7 9.2 65.1
In leasing agreements 1.1 1.3 9.3
In acquisitions 22.3 23.0 60.0
Total 31.1 33.5 134.4
R&D expenditure
MEUR 1-3/2009 1-3/2008 1-12/2008
15.3 15.2 58.3
R&D Expenditure as percentage of sales 1.5 1.7 1.3
Number of employees
1-3/2009 1-3/2008 1-12/2008
Average 34,565 32,975 33,935
At the end of the period 34,558 33,155 34,831
Commitments
MEUR 31.3.2009 31.3.2008 31.12.2008
Mortgages
Group and parent company 0.7 0.7 0.7
Pledged assets
Group and parent company 2.0 4.7 2.0
Guarantees
Associated companies 3.8 4.3 4.1
Others 6.8 6.4 7.2
Operating leases 171.3 149.9 171.7
Total 184.6 166.0 185.7
The future minimum lease payments
under non-
cancellable operating leases
MEUR 31.3.2009 31.3.2008 31.12.2008
Less than 1 year 42.9 39.8 43.3
1-5 years 95.4 89.4 96.9
Over 5 years 33.0 20.7 31.5
Total 171.3 149.9 171.7
Derivatives
Fair values of derivative financial instruments
Positive Negative
Fair Fair net fair net fair net fair
Value Value value value value
MEUR 31.3.2009 31.3.2009 31.3.2009 31.3.2008 31.12.2008
FX Forward
contracts 12.4 11.1 1.3 16.0 10.9
Currency options 1.6 2.0 -0.4 0.3 0.4
Cross-currency
swaps,
due under one year 1.0 17.0 -16.0 3.4 1.8
Cross-currency
swaps,
due in 1-3 years - - - 5.9 -22.7
Electricity
derivatives 0.0 1.3 -1.3 0.5 -1.0
Total 15.0 31.4 -16.4 26.1 -10.6
Nominal values of derivative financial instruments
MEUR 31.3.2009 31.3.2008 31.12.2008
FX Forward contracts 506.4 632.5 615.7
Currency options 213.6 43.0 90.4
Cross-currency swaps, due under one
year 136.7 20.0 23.6
Cross-currency swaps, due in 1-3 years - 136.7 113.1
Electricity derivatives 4.3 3.1 4.7
Total 861.0 835.3 847.5
Share and shareholders on March 31, 2009
Class A Class B
shares shares Total
Number of shares 38,104,356 219,422,206 257,526,562
Own shares in
possession 1) 4,905,506
Share capital, EUR 64,381,641
Market capitalization, MEUR 3,940
Number of shares traded,
million, Jan-Mar 2009 49.9
Value of shares traded MEUR,
Jan-Mar 2009 814.0
Number of shareholders 3 17,118 17,118
Close High Low
Class B share price,
EUR, Jan-March, 2009 15.60 18.74 13.80
1) During Jan-Mar 2009, the authorization to repurchase shares was
not used. During 2008, the authorization to repurchase shares was not
used. In April 2008, 326,000 class B shares assigned to the
share-based incentive plan for the company's senior management were
transferred from KNEBV Incentive Ky to the participants due to
achieved targets for the financial year 2007. 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.
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