2010-01-26 11:30:00 CET
2010-01-26 11:32:01 CET
REGULATED INFORMATION
KONE Oyj - Financial Statement Release
KONE Corporation's financial statement bulletin 2009
KONE Corporation, stock exchange release, January 26, 2010 at 12:30 p.m. EET
KONE 2009
October-December 2009: Strong year-end
- In October-December 2009, orders received totaled EUR 813.5 (10-12/2008:
845.2) million. Orders received declined by 3.8% at historical exchange rates,
but increased by 0.3% at comparable exchange rates.
- Net sales decreased by 0.3% to EUR 1,427 (1,432) million. At comparable
exchange rates it grew by 2.3%.
- Operating income was EUR 202.7 (189.2) million or 14.2% (13.2%) of net sales.
- Cash flow was exceptionally strong at EUR 198.2 (88.5) million.
January-December 2009: Overall good performance
- In January-December 2009, orders received totaled EUR 3,432 (2008: 3,948)
million. Orders received declined by 13.0%, or 12.7% at comparable exchange
rates. At the end of December 2009, the order book was EUR 3,309 (3,577)
million.
- Net sales increased by 3.1% to EUR 4,744 (4,603) million. At comparable
exchange rates, the growth was 3.7%.
- Operating income, excluding a one-time restructuring cost, was EUR 600.3
(558.4) million or 12.7% (12.1%) of net sales. The operating income, including
the one-time restructuring cost of EUR 33.6 million related to the fixed cost
adjustment program, was EUR 566.7 million. Earnings per share were 1.84 (1.66).
- Cash flow was exceptionally strong at EUR 825.1 (527.4) million.
- In 2010, KONE's net sales is estimated to decline approximately 5% at
comparable exchange rates. The operating income (EBIT) is expected to be in the
range of EUR 560-610 million.
- The Board proposes a dividend of EUR 0.65 per class B share from the year
2009. Further the Board proposes an extra dividend of EUR 0.65 per class B share
due to the centennial year 2010 of KONE and therefore the total proposed
dividend is 1.30 per class B share.
Key Figures
10-12/ 10-12/ Change 1-12/ 1-12/ Change
2009 2008 % 2009 2008 %
--------------------------------------------------------------------------------
Orders
received MEUR 813.5 845.2 -3.8 3,432.4 3,947.5 -13.0
Order
book MEUR 3,309.1 3,576.7 -7.5 3,309.1 3,576.7 -7.5
Sales MEUR 1,426.8 1,431.6 -0.3 4,743.7 4,602.8 3.1
Operating
income MEUR 202.7 189.2 7.1 600.3 1) 558.4 7.5
Operating
income % 14.2 13.2 12.7 1) 12.1
Cash flow
from
Operations
(before
financing
items and
taxes) MEUR 198.2 88.5 825.1 527.4
Net
income MEUR 166.6 147.9 466.4 418.1
Total comprehensive income MEUR 165.9 156.6 449.5 436.7
Basic
earnings
per share EUR 0.66 0.59 1.84 1.66
Interest-
bearing
net debt MEUR -504.7 -58.3 -504.7 -58.3
Total equity/
total assets % 47.0 39.0 47.0 39.0
Gearing % -37.7 -5.6 -37.7 -5.6
( )
1) Excluding a MEUR 33.6 one-time restructuring cost related to the fixed costs
adjustment program, which was booked in the second quarter.
KONE President & CEO, Matti Alahuhta, in conjunction with the review:"I am very pleased with our 2009 results. Our personnel has done an excellent
job in a very demanding environment. I therefore want to thank every KONE
employee for a work well done.
EBIT continued to grow. We made good progress in the service business. The
quality and efficiency of the new equipment deliveries developed very positively
as well. I am particularly delighted with the exceptionally strong cash flow
during the year. The orders received development in the fourth quarter was also
pleasing. This was the case particularly in China, where our market position
continued to strengthen.
From this strong position, we have now started in a good spirit our efforts to
continue to develop our business in order to reach a good performance again in
2010."
Analyst and media meeting and conference call
A meeting for the press, conducted in Finnish, will be held on Tuesday, January
26, 2010 at 2:15 p.m. Eastern European Time.
A telephone conference and a meeting for analysts, conducted in English, will
begin at 3:45 p.m. Eastern European Time. The meeting can also be followed as a
webcast on www.kone.com.
Both meetings will take place in the KONE Building, located at Keilasatama 3,
Espoo, Finland.
Telephone conference numbers:
US callers: +1 866 458 4087
Non-US callers: +44 203 043 2436
Participant code: KONE
An on demand version of the telephone conference will be available on
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 2009, KONE had annual net sales of EUR 4.7 billion
and almost 34,000 employees. KONE class B shares are listed on the NASDAQ OMX
Helsinki in Finland.
www.kone.com
For further information please contact:
Henrik Ehrnrooth, CFO, tel. +358 (0) 204 75 4260
Sender:
KONE Corporation
Henrik Ehrnrooth
CFO
Anne Korkiakoski
Executive Vice President,
Marketing and Communications
Financial statement bulletin 2009
Accounting Principles
The information presented in this report is based on the audited KONE 2009
Financial Statements, that has been released together with this report. KONE
Corporation's financial statement bulletin 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 2009.
October-December 2009 review
Operating environment in October-December
In the fourth quarter of 2009, demand for new equipment continued to weaken in
most geographical regions. Good growth was however seen in some markets in
Asia-Pacific. In addition, residential segment in Northern Europe started to
develop favorably. The modernization markets were competitive but continued to
be stable and provided growth opportunities. Global maintenance markets, which
are less cyclical by nature, continued to grow, but became increasingly
competitive.
In the Europe, Middle East and Africa (EMEA) region, the business environment in
new equipment markets continued to weaken, but varied from country to country.
In new equipment, the residential activity improved in Sweden, Finland and
Austria. The weakest markets were Russia, Italy, United Kingdom and especially
Spain. The demand for modernization was stable overall with France, Sweden,
Finland and Austria showing good development. The maintenance markets continued
to develop well in EMEA.
In the Americas region, the new equipment markets continued to decline. In the
United States, aggressive pricing was frequently noticed in major projects.
Modernization activity remained relatively stable, and some strength was seen in
the public works segment as a result of federal stimulus money which is
available for public housing, schools, hospitals and government facilities. The
new equipment market in Canada showed signs of bottoming. In Mexico, the new
equipment market also continued to be weak, but was bottoming. Maintenance
markets in North America developed well, but were increasingly competitive.
In the Asia-Pacific region, the new equipment market development in China was
positive during the fourth quarter and the market in India started also to pick
up. Other markets in the region remained weak. In China, real estate investments
increased due to the improved lending environment for home buyers and land
developers. The Indian new equipment market grew in the fourth quarter from a
low level. In Australia, the new equipment market was weak, but the tendering
activity improved somewhat. In Southeast Asia, construction markets remained
weak. However, signs of a recovery were seen, but decision making remained slow.
Maintenance markets in Asia-Pacific developed favorably.
Financial performance in October-December
KONE's orders received in the fourth quarter of 2009 declined by 3.8% and
totaled EUR 813.5 (10-12/2008: 845.2) million. At comparable exchange rates,
orders received increased by 0.3%. The Asia-Pacific region showed growth in
orders received. This was achieved especially because of continued very strong
development in orders received in China. Orders received grew also in India and
Australia in the fourth quarter. In the EMEA region, the level of orders
received in new equipment was also at the 2008 level. This is good evidence of
KONE's continuously improved competitiveness and that development actions taken
have been effective. In modernization, KONE's progress in orders received was
good especially in France, Sweden, Finland, the Netherlands and Italy.
Maintenance contracts are not included in orders received.
KONE's largest orders in October-December 2009 were an order to supply new
elevators and escalators for the Erasmus Medical Centre expansion in Rotterdam,
The Netherlands. KONE also received two orders in the United Arab Emirates: to
supply elevators for the Elite Residence Tower in Dubai and for the Gate Towers
development in Abu Dhabi. In China, KONE won an order to supply escalators and
elevators for Beijing's rapidly expanding subway system and an order to supply
all elevators and escalators for the Leatop Plaza building in Guangzhou, China.
In addition, KONE won a six-year contract from Storstockholms Lokaltrafik AB,
Sweden, to maintain all elevator and escalator units installed in Stockholm's
metro stations.
KONE's net sales declined by 0.3% as compared to October-December 2008 and
totaled EUR 1,427 (1,432) million. At comparable exchange rates sales grew by
2.3%.
New equipment sales accounted for EUR 686.5 (705.5) million of the total which
represented a decline of 2.7% over the comparison period. At comparable exchange
rates, it grew by 0.9%.
Service sales (maintenance and modernization) increased by 2.0% and totaled EUR
740.3 (726.1) million. At comparable exchange rates, the growth was 3.6%.
Maintenance continued to grow well. However, modernization deliveries were lower
as compared to the strong level of the fourth quarter in 2008.
The operating income for the October-December period totaled EUR 202.7 (189.2)
or 14.2% (13.2%) of net sales. The good operating income was primarily a result
of the development programs that have led to favorable progress in the
maintenance business as well as in installation productivity and better quality.
In addition, reduced sourcing costs and tight cost control contributed to the
positive result. Cash flow was exceptionally strong EUR 198.2 (88.5) million,
which was a result of the improved operating income and a reduced net working
capital. The progress in net working capital was largely due to a constant
strong focus on payment terms and a reduced level of inventories.
Sales by geographical areas, MEUR
10-12/ 10-12/ 1-12/ 1-12/
2009 % 2008 % 2009 % 2008 %
----------------------------------------------------------
EMEA 1) 904.0 64 934.1 65 2,953.4 62 3,001.5 65
Americas 275.4 19 278.6 20 970.2 21 888.3 19
Asia-Pacific 247.4 17 218.9 15 820.1 17 713.0 16
---------------------------------------------------------- Total 1,426.8 1,431.6 4,743.7 4,602.8
----------------------------------------------------------
1) EMEA = Europe, Middle East, Africa
Review January - December 2009
KONE's operating environment
Due to the global economic and financial crisis, new equipment markets weakened
during 2009. As the year progressed the market situation became increasingly
mixed, with most markets continuing to weaken but with some markets already
showing positive development. The modernization markets remained quite stable
despite the weak environment, and the size of the market was approximately the
same in monetary value as the year before. Maintenance markets, which are less
cyclical by nature, continued to grow. The growth was supported by high
conversions of installed equipment into the maintenance base which was due to
strong new equipment deliveries in prior years. The lag between the installation
of new equipment to the conversion into maintenance is typically 12 months but
can be up to 30 months. The maintenance market became increasingly competitive
throughout the year.
In the European, Middle East and African region (EMEA), the markets were very
challenging and continued to decline throughout the year. At the end of the year
however, signs of recovery were seen in certain residential markets, especially
in Sweden, Finland and Austria. The market in Germany was quite resilient
throughout the year. The new equipment market in the United Kingdom continued to
weaken towards the end of the year when it seemed to have bottomed out in some
residential segments at a low level, but the commercial segment continued to
weaken. The new equipment markets in the southern parts of Europe continued to
become weaker and the markets in the Middle East and Russia were very weak. The
modernization market was stable mainly due to the European Safety Norms for
existing Lifts (SNEL) and the need for upgrades of an aging equipment base. The
maintenance market continued to grow, but was increasingly competitive in EMEA.
In the Americas region, the new equipment markets weakened significantly
compared to the previous year. The new equipment market in the United States has
been demanding since the beginning of 2007. The infrastructure market increased
partly due to stimulus activity during the second half of the year, but was very
competitive because of the increasing aggressive pricing behavior. The
modernization market was relatively stable as a result of federal stimulus money
which was available for public housing, schools, hospitals and government
facilities. The market in Canada was challenging, but stabilized towards the end
of the year. In Mexico, the market was, up to the fourth quarter for the most
parts consistent with those of the United States, but in the fourth quarter it
showed signs of bottoming. The maintenance markets continued to grow, but was
highly competitive.
In the Asia-Pacific region, the positive market development continued in China,
but most other markets declined. Positive signs could however be seen in several
markets towards the end of the year. Urbanization continued to drive growth in
China, where the new equipment market was also weaker in the beginning of 2009
but strengthened throughout the year to show some growth compared to 2008. Real
estate investments, construction areas, completed areas and sale of completed
dwellings all showed growth compared to the previous year. The government eased
reserve requirements for banks to increase lending activity to stimulate real
estate developments and housing sale, but tightened it at the end of the year to
moderate the growth in these sectors. Especially the infrastructure and
affordable housing markets grew, driven by stimulus packages. The new equipment
market in India declined during the first half of the year but the residential
construction activity started to grow from its low level in the second half of
the year. In Australia, the construction activity weakened due to high vacancy
rates, but some improvements in tender activity were seen towards the end of the
year. In Southeast-Asia, the construction market remained weak during 2009.
However, the tendering activity also improved towards the end of the year, but
decision making remained slow. The maintenance market, in Asia-Pacific developed
favorably.
Orders received and Order book
KONE's orders received decreased by approximately 13% as compared to 2008, and
totaled EUR 3,432 (2008: 3,948) million. At comparable exchange rates, orders
received also decreased about 13%. KONE was successful in many markets that are
important for the company. The performance in orders received was strongest in
Asia-Pacific, with China developing very positively throughout the year.
Maintenance contracts are not included in orders received.
The order book decreased from the end of 2008 by approximately 7% and stood at
EUR 3,309 (3,577) million at the end of December 2009. At comparable exchange
rates, the decrease was approximately 8%. As earlier, the margin of the order
book remained at a good level.
In the EMEA region, orders received declined in the continuously weakening
market during the first nine months. In the fourth quarter orders received grew.
In new equipment, KONE's development in orders received varied from country to
country. KONE performed particularly well in Germany, where the orders received
development was positive compared to the year before. The most negative
development during 2009 was seen in the Middle East, Russia, Spain, the United
Kingdom and Ireland. In the modernization market KONE's orders received grew.
The development was best in France, Sweden and Finland.
In the Americas, KONE experienced a good order intake during the first half of
the year despite the weak market environment as KONE's advanced elevator and
escalator solutions in new equipment and modernization increased customer
awareness. During the second half of the year competition increased, and
aggressive pricing behavior became apparent especially in major projects. KONE
increased its market share in 2009 as compared to 2008. Despite the decline in
orders received, KONE continued to improve its customer satisfaction and quality
as well as maintaining its healthy margin in the order book.
In the Asia-Pacific region, new equipment orders declined slightly. In China,
however, KONE's new equipment order intake continued to develop positively and
the company succeeded to further strengthen its position in the highly competed
new equipment market. In 2009, KONE was again one of the fastest growing
elevator companies in China. KONE is the fourth largest company in its industry
in the Chinese market. In Southeast-Asia, India and Australia orders received
declined compared to 2008.
Net sales
KONE's net sales grew by approximately 3% as compared to the prior year, and
totaled EUR 4,744 (4,603) million. Growth at comparable exchange rates was
approximately 4%. Net sales growth was almost entirely organic. The amount of
sales consolidated from the companies acquired in 2009 did not have a material
impact on the Group sales for the financial period.
New equipment sales accounted for EUR 2,211 (2,190) million of the total and
represented approximately 1% growth over the comparison period. At comparable
exchange rates, the growth was approximately 2%. New equipment sales accounted
for 47% (48) of total sales.
Service (maintenance and modernization) sales increased by 5% and totaled EUR
2,533 (2,413) million. At comparable exchange rates, the growth was
approximately 6%. In 2009, maintenance accounted for 34% (33) and modernization
for 19% (19) of total sales. KONE's maintenance base grew during 2009, fed by
the company's strong order book and a high conversion rate.
The distribution of net sales was, 62% (65) EMEA, 21% (19), Americas and 17%
(16) Asia-Pacific. The largest individual countries in terms of net sales in
2009 were the United States, France and China.
Financial result
KONE's operating income excluding a one-time restructuring cost was EUR 600.3
(558.4) million or 12.7% (12.1) of net sales. The operating income including the
one-time restructuring cost of EUR 33.6 million related to the fixed cost
adjustment program, was EUR 566.7 million or 11.9% of net sales. The growth in
operating income was the result of improved competitiveness in the new equipment
business, favorable progress in the maintenance business, installation
productivity and better quality. In addition, reduced sourcing costs and tight
cost control contributed to the positive result development already during the
second quarter but especially during the latter part of the year. Net financing
items were EUR 19.8 (2.8) million and included dividends received from Toshiba
Elevator and Building Systems Corporation (TELC).
KONE's income before taxes was EUR 594.6 (563.8) million. Taxes totaled EUR
128.2 (145.7) million. In 2009, the effective tax rate resulting from the
operations for the financial year was 25.5% (25.8).However, taking into account
prior year taxes and reassessment of deferred tax assets, the effective tax rate
was 21.6% for the financial year. The reassessment of deferred tax assets is
based on the realized and expected profit estimate of the business operations.
Net income for the financial period was EUR 466.4 (418.1) million.
The profit attributable to shareholders was EUR 465.6 (417.3) million,
corresponding to earnings per share of EUR 1.84 (1.66). Equity per share was EUR
5.28 (4.10).
Consolidated statement of financial position and Cash flow
In 2009 KONE's financial position strengthened further and the company had a
positive net cash position at the end of the year.
Cash flow generated from operations (before financing items and taxes) was EUR
825.1 (527.4) million.
The cash flow was exceptionally strong in 2009. The primary drivers of the
strong cash flow were the growth in the operating income and a substantial
improvement in net working capital. The progress in net working capital was
largely due to a constant strong focus on payment terms and a reduced level of
inventories.
Net working capital was EUR -228.7 ( -76.4) million, including financing items
and taxes.
At the end of 2009, interest-bearing assets exceeded interest-bearing debts and
the net cash position totaled EUR 504.7 (58.3) million. Gearing was -37.7%
(-5.6). KONE's total equity/total assets ratio was 47.0% (39.0).
Capital expenditure and acquisitions
KONE's capital expenditure, including acquisitions, totaled EUR 92.5 (134.4)
million. Capital expenditure, excluding acquisitions, was mainly related to
facilities and equipment in R&D, IT and production. Acquisitions accounted for
EUR 46.0 (60.0) million of this figure. Acquisitions made during the accounting
period had no material effect on the 2009 figures.
In 2009, KONE completed the acquisition of FairWay Elevator Inc, an independent
elevator service company in the Philadelphia area of the United States. Through
this acquisition, KONE established itself as one of the largest elevator and
escalator companies in the Philadelphia region. In addition, KONE acquired Excel
Elevator Inc, an independent elevator service company based in Los Angeles.
Excel has a great reputation in the Southern California market for its quality
work in modernizing vertical transportation systems as well as its significant
maintenance base. In addition, KONE made several smaller acquisition during
2009.
Research and development
Research and development expenses totaled EUR 62.0 (58.3) million, representing
1.3% (1.3) of net sales. R&D expenses include development of new product
concepts and further developments of existing products and services. KONE's
elevators and escalators are based on energy-efficient technology.
With focus on key customer segments and emerging people flow requirements, KONE
introduced in the elevator and escalator business many new product and service
enhancements that fulfill its customers´ needs better and make it easier to do
business with KONE.
KONE released new solutions for the infrastructure, modernization and affordable
housing segments. In addition, new solutions for the 2-3 landing
machine-room-less segment in the United States were introduced. The focus has
mainly been on solutions that deliver improved performance, fresh visual options
and improved energy-efficiency. The KONE JumpLift solution is an example of the
expanded elevator offering. This innovative offering puts the elevator into
operation already as the building is under construction, enabling more efficient
flow of workers, delivering improved safety and productivity to the job site.
With priority on energy efficiency and industry-leading standard design, KONE
launched both in North America and Asia-Pacific award-winning car and
signalization designs, along with energy-efficient lighting and improved
operating functionality.
In Europe, KONE introduced an innovative control system solution providing
seamless integration between building door access, elevator performance, and
lighting control. This innovation has been recognized by building owners and
their tenants as an attractive People Flow solution that creates real
differentiation in the residential segment.
In addition, KONE launched new escalator releases to further gain market share
in the retail and infrastructure segments. 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 taken into use to reduce power consumtion. 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 was added to the offering.
KONE Corporation was awarded GOOD DESIGN awards in 2008 and 2009 for its
innovative designs for new elevator design concepts and for its new design
signalization series. 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.
Other important events during the financial period
In connection with the first quarter result, KONE announced that it intends to
reduce the 2010 run-rate of fixed costs by EUR 40 million due to the weak new
equipment market. The plans for the program were communicated in connection with
the second quarter result. The annual impact of this fixed cost reduction plan
is expected to be at least EUR 40 million starting in 2010. The total one-time
restructuring cost relating to this program is EUR 33.6 million, which was
booked in the second quarter of 2009. The fixed cost adjustment program has
progressed according to plan during 2009.
The majority of the fixed cost savings are being achieved through organizational
development. The organizational structures are, as a result of this development
flatter, and bring management closer to customers, broaden the span of control
for managers to ensure better hands-on management and ensure uniforms structures
globally to improve internal collaboration. The program improves the efficiency
and speed of KONE. Selective actions are also taken in the supply chain and
outsourcing. In addition to these actions, an overall tighter cost control
continues throughout the company.
The program is estimated to decrease approximately 500 jobs globally. A majority
of this decrease has already been completed. Simultaneously, KONE continues to
recruit in certain markets that are providing growth opportunities, such as
China.
A fine for the European Commission's decision of EUR 142 million, was recognized
as a provision in the first quarter of 2007 and booked into interest-bearing
debts in the consolidated statement of financial position during the second
quarter of 2007. In June 2009, KONE re-paid the long term loan to the European
commision. As KONE has appealed the decision, the size of the fine might however
still change.
Personnel
The objective of KONE's personnel strategy is to help the company meet its
business targets. The main goals of this strategy are to further secure the
availability, engagement, motivation and continuous development of its
personnel. All of KONE's activities are 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.
In 2009, personnel development activities continued in line with the "People
Leadership" program that was created in early 2008. The purpose of the program
is to improve leadership capabilities in order to inspire, engage and develop
people for outstanding performance. Two new leadership programs were rolled out:
the Supervisor Development Program for first level line managers and Leadership
Lift for top management. Over 2500 supervisors globally were trained in people
leadership and the roll-out for further modules in operational excellence and
process capabilities were started. Five leadership programs, with more than 200
top management participants, were completed at International Institute for
Management Development (IMD). A new leadership program for middle management was
created and piloted for roll-out in 2010. Many other training and development
actions continued both on local and global levels.
The work to further harmonize the key people processes continued. A global
resourcing system and a harmonized recruitment policy were taken into use across
KONE while development work for a common tool for performance and compensation
management was finalized. A global employee master data system was rolled out in
pilot countries and the plan for 2010 roll-outs was completed. Harmonized role
descriptions along with a global grading system were launched and implemented
across KONE.The Agile KONE program, which intends to increase speed and take
management closer to the customer through flatter organizations and wider spans
of control, was implemented in Europe.
A global employee survey was carried out with all-time high responses and
engagement rates. Actions to address the identified development areas were taken
in various countries. Planning for the new survey in 2010 was started.
The efforts to improve workplace safety continued with an improvement target of
15% in IIFR (industrial injury frequency rate). Close cooperation with the
employees to promote safety continued. The improved safety awareness was
confirmed by "KONE's commitment to employee safety" being the highest single
score in the employee survey. Regular virtual safety meetings worldwide were
held to share information on best practices and new developments concerning
safety.
KONE had 33,988 (34,831) employees at the end of 2009. The average number of
employees was 34,276 (33,935).
The geographical distribution of KONE employees was 55% (56) in EMEA, 17% (17)
in the Americas and 28% (27) in Asia-Pacific.
Environment
KONE's aim is to be the eco-efficiency leader in its industry. The early
credentials of the company's eco-efficiency relate to the KONE EcoDisc hoisting
machine, a permanent magnet gearless motor innovation. 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. EcoDisc hoisting does not need any oil. It regenerates energy back to the
buildings power network and has eco-lighting and a compact design based on
recyclable materials.
In order to enhance eco-efficiency leadership, "Environmental Excellence" was
selected as one of KONE's five development programs. Environmental Excellence
embraces actions aiming to develop KONE's innovation leadership in the area of
eco-efficiency. It also intends to minimize KONE's carbon footprint and to
ensure the compliance of KONE's suppliers with the corresponding requirements
and environmental targets.
KONE set an ambitious target for 2010, which aimed to continue reducing the
electricity consumption of its volume elevators by 50% by the end of 2010,
compared to the 2008 base value. During 2009, KONE's new volume elevators'
energy consumption was reduced about 30% compared to the base level of 2008.
KONE has also set an annual 5% carbon footprint reduction target for its own
operations. KONE had its carbon footprint assessed in 2008 by a third party in
accordance with the Greenhouse Gas Protocol guidelines (GHG Protocol). The
largest part of KONE's entire global impact relates to the amount of electricity
used by KONE equipment in their lifetime, underlining the importance of
energy-efficient innovations for elevators and escalators. 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 to renew KONE's global car fleet and to reduce needs for air travel are
ongoing. Electricity consumption and logistics related eco-efficiency
initiatives have also been implemented in 2009.
Capital and risk management
KONE's business activities are exposed to risks, which may arise from its
operations or changes in the business environment. The risk factors listed below
can potentially have an adverse affect on KONE's business operations and
financial position and hence the shareholder value of the company. Other risks,
which are currently either unknown or considered immaterial to KONE, may however
become material in the future.
A continuing global economic slowdown or a renewed weakening of the global
economy may bring about a further decrease in the number of new equipment and
modernization orders received, cancellation of agreed deliveries, or delays in
the commencement of projects. A significant part of KONE's sales consists of
services which are less susceptible to the effects of economic cycles, but which
are very labor-intensive. The profit development of the Group could be adversely
affected if the productivity targets in the service business are not met or if
it is not possible to efficiently reallocate personnel resources in response to
reduced business opportunities.
A big proportion of KONE's new equipment sales take place in the form of major
construction projects in which KONE is a subcontractor. In these projects,
KONE's project management organization cooperates with the main contractors'
project organization. Supply chains, the high technology featured in components
and technologically demanding installation processes may make it more difficult
to achieve the quality, cost or schedule objectives set for the project. Common
project management methodology and tools together with related global training
programs are used for managing project risks.
KONE's business activities are dependent on the uninterrupted operation and
reliability of sourcing channels, production plants, logistics processes and the
IT systems used. These risks are controlled by analyzing and improving the fault
tolerance of processes and by increasing the readiness for transferring the
manufacturing of critical components from one production line to another. KONE
actively monitors the operations and financial strength of its key suppliers.
The aim is also to secure the availability of alternative sourcing channels for
critical components and services. Additionally, KONE has a global property
damage and business interruption insurance program in place.
A renewed economic downturn may affect the liquidity and payment schedules of
KONE's customers and lead to credit losses. KONE's `tender to cash´ process
defines the rules for tendering, authorizations and credit control. Advance
payments, documentary credits and guarantees are used in the payment terms to
minimize the risks related to accounts receivable. KONE proactively manages its
account receivable in order to minimize the risk of customer defaults. The
customer base of KONE consists of a large number of customers in several market
areas.
KONE operates internationally and is, thus, exposed to currency risks arising
from exchange rate fluctuations related to currency flows from sales and
purchases and from translation of statement of financial position items of
foreign subsidiaries into euros. The KONE Treasury function manages exchange
rates and other financial risks centrally on the basis of principles approved by
the Board of Directors.
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. In order to reduce the fluctuation of raw material prices
and their impact on the price of components, KONE has for 2010 entered into
fixed price contracts for a substantial part of the most significant materials.
The maintenance business deploys a significant fleet of service vehicles, which
explains why oil price fluctuations have an effect on the cost of maintenance.
For further information regarding financial risks, please refer note 2 in the
consolidated financial statements.
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 succeeded Aimo Rajahalme, who 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 Ltd. 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.
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 NASDAQ OMX Helsinki Ltd. 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 19,504 options had been used and the shares were entered in the
Finnish Trade Register in March and April 2009.
In 2005, KONE also granted a conditional option program, 2005C. The 2005C stock
options were listed on the NASDAQ OMX Helsinki Ltd. 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 December 2009, the remaining 2005C options entitled
their holders to subscribe for 3,153,250 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 granted stock option
rights to approximately 350 employees of KONE's global organization. The
decision was based on the authorization received from the Annual General Meeting
meeting at February 26, 2007. The maximum number of options is 2,000,000. Each
option right will entitle its owner to subscribe for two (2) new class B shares.
The share subscription period for 2007 stock option will be April
1, 2010-April 30, 2012. The share subscription period begins April 1, 2010, as
the average turnover growth of the KONE Group for financial years 2008 and 2009
exceeded market growth and as the earnings before interest and taxes (EBIT) of
the KONE Group for the financial year 2008 exceeded the EBIT for the financial
year 2007, and the EBIT for the financial year 2009 exceeded the EBIT for the
financial year 2008 as required in the terms of the stock options. For further
information regarding stock options, please refer to note 21 in the consolidated
financial statements.
As of December 31, 2009, KONE's share capital was EUR 64,606,717.50, comprising
220,322,514 listed class B shares and 38,104,356 unlisted class A shares.
KONE´s market capitalization was EUR 7,601 million on December 31, 2009,
disregarding own shares in the Group's possession. Market capitalization is
calculated on the basis of both the listed B shares and the unlisted A shares
excluding treasury shares. Class A shares are valued at the closing price of the
class B shares.
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 the financial year, KONE did not use its authorization to repurchase its
own shares.
In April 2009, 195,264 KONE class B shares assigned to the share-based incentive
plan for the company's senior management were transferred from KNEBV Incentive
Oy to the participants due to achieved targets for the financial year 2008. At
the end of December, the Group had 4,710,242 class B shares in its possession.
The shares in the Group's possession represent 2.1% 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 Ltd. traded 160.9 million KONE Corporation's class B
shares in 2009, equivalent to a turnover of EUR 3,399 million. The share price
on December 30, 2009 was EUR 29.96. The highest quotation was EUR 30.40 and the
lowest 13.80.
Market outlook 2010
The good development is expected to expand in the new equipment market in the
Asia-Pacific region. In EMEA and North America, the market will continue to
decline in most countries, however stabilization is expected towards the end of
the year. The modernization market will be at about last year's level.The
maintenance market will continue to develop well, but remain very competitive.
Outlook 2010
KONE's net sales is estimated to decline approximately 5% at comparable exchange
rates.
The operating income (EBIT)is expected to be in the range of EUR 560-610
million.
The Board's proposal for the distribution of profit
The parent company's non-restricted equity on December 31, 2009 is EUR
1,561,214,658.74 of which net profit from the financial year is EUR
181,888,247.92.
The Board of Directors proposes to the Annual General Meeting that a dividend of
EUR 0.6475 be paid on the outstanding 38,104,356 class A shares and EUR 0.65 on
the outstanding 215,633,008 class B shares. Further the Board proposes an extra
dividend of EUR 0.6475 to be paid on the outstanding 38,104,356 class A shares
and EUR 0.65 on the outstanding 215,633,008 class B shares due to the centennial
year 2010 of KONE, resulting in a total proposed dividend of 1.295 per class A
share and 1.30 per class B share. The total amount of proposed dividends will be
EUR 329,668,051.42.
The dividend is proposed to be paid on March 11, 2010. All the shares existing
on the dividend record date are entitled to dividend for the year 2009, except
for the own shares held by the parent company.
Further the Board of Directors proposes to the General Meeting that Board is
authorized to grant during year 2010 no more than EUR 3,500,000 to support
activities of universities and colleges and that 100,000 treasury class B shares
of KONE Corporation is distributed without compensation to the KONE Corporation
Centennial Foundation to be established and that Board is authorized to grant
later no more than EUR 100,000 to the KONE Corporation Centennial Foundation.
Annual General Meeting 2010
KONE Corporation's Annual General Meeting will be held at 11:00 a.m. on Monday,
March 1, 2010 at Finlandia Hall, Mannerheimintie 13, in Helsinki, Finland.
Helsinki, January 26, 2010
KONE Corporation's Board of Directors
This bulletin 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
10-12/ 10-12/ 1-12/ 1-12/
MEUR 2009 % 2008 % 2009 % 2008 %
-------------------------------------------------------------------------
Sales 1,426.8 1,431.6 4,743.7 4,602.8
Costs and
expenses -1,208.2 -1,227.1 -4,081.2 -3,979.6
Depreciation 15.9 -15.3 -62.2 -64.8
One-time
restructuring
cost - -33.6
-------------------------------------------------------------------------
Operating
income 202.7 14.2 189.2 13.2 566.7 11.9 558.4 12.1
Share of
associated
companies'
net income 3.5 0.9 8.1 2.6
Financing
income 3.0 11.6 28.8 24.4
Financing
expenses -1.5 -2.0 -9.0 -21.6
-------------------------------------------------------------------------
Income
before
taxes 207.7 14.6 199.7 13.9 594.6 12.5 563.8 12.2
Taxes -41.1 -51.8 -128.2 -145.7
-------------------------------------------------------------------------
Net income 166.6 11.7 147.9 10.3 466.4 9.8 418.1 9.1
-------------------------------------------------------------------------
Net income
attributable
to:
Shareholders
of the
parent
company 166.5 147.5 465.6 417.3
Non-controlling
interests 0.1 0.4 0.8 0.8
-------------------------------------------------------------------------
Total 166.6 147.9 466.4 418.1
-------------------------------------------------------------------------
Earnings per share for profit attributable to the shareholders of the parent
company, EUR
10-12/ 10-12/ 1-12/ 1-12/
2009 2008 2009 2008
Basic
earnings
per
share, EUR 0.66 0.59 1.84 1.66
Diluted
earnings
per
share, EUR 0.65 0.59 1.83 1.65
Consolidated statement of comprehensive income
10-12/ 10-12/ 1-12/ 1-12/
MEUR 2009 2008 2009 2008
----------------------------------------------------------------------
Net income 166.6 147.9 466.4 418.1
Other
comprehensive
income,
net
of tax:
Translation
Differences 4.7 17.6 -7.3 38.0
Hedging of
foreign
subsidiaries 0.0 -15.5 -1.0 -22.9
Cash flow
Hedges -5.4 6.6 -8.6 3.5
----------------------------------------------------------------------
Other
comprehensive
income,
net
of tax -0.7 8.7 -16.9 18.6
----------------------------------------------------------------------
Total
comprehensive
income 165.9 156.6 449.5 436.7
----------------------------------------------------------------------
Total
comprehensive
income
attributable
to:
Shareholders of the parent company 165.8 156.2 448.7 435.9
Non-controlling interests 0.1 0.4 0.8 0.8
----------------------------------------------------------------------
Total 165.9 156.6 449.5 436.7
Condensed consolidated statement of financial position
Assets
Dec 31, Dec 31,
MEUR 2009 2009
--------------------------------------------------------
Non-current assets
Intangible assets 706.7 670.2
Tangible assets 200.5 214.7
Loans receivable and
other interest-bearing assets 1.6 2.3
Deferred tax assets 152.8 122.1
Investments 156.0 169.1
--------------------------------------------------------
Total non-current assets 1,217.6 1,178.4
Current assets
Inventories 784.6 885.5
Advance payments received -832.4 -805.4
Accounts receivable and
other non interest-bearing assets 1,056.1 1,046.5
Current deposits and loan receivables 421.2 204.0
Cash and cash equivalents 204.9 147.8
--------------------------------------------------------
Total current assets 1,634.4 1,478.4
--------------------------------------------------------
Total assets 2,852.0 2,656.8
--------------------------------------------------------
Equity and liabilities
Dec 31, Dec 31,
MEUR 2009 2009
--------------------------------------------------------
Equity 1,339.2 1,035.9
Non-current liabilities
Loans 27.2 172.4
Deferred tax liabilities 42.4 39.7
Employee benefits 110.6 115.8
--------------------------------------------------------
Total non-current liabilities 180.2 327.9
Provisions 100.3 49.9
Current liabilities
Loans 95.8 123.4
Accounts payable and other liabilities 1,136.5 1,119.7
--------------------------------------------------------
Total current liabilities 1,232.3 1,243.1
--------------------------------------------------------
Total equity and liabilities 2,852.0 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) Non-controlling interests
10) Total equity
--------------------------------------------------------------------------
MEUR 1) 2) 3) 4) 5) 6) 7) 8) 9) 10)
--------------------------------------------------------------------------
Jan 1, 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 -8.6 -8.3 465.6 0.8 449.5
Transactions
with
shareholders
and non-
controlling
interests:
Dividends
paid -164.1 -164.1
Issue of
shares
(option
rights) 0.2 9.7 9.9
Purchase
of own
shares -
Sale of
own
shares -
Change in
non-
controlling
interests -0.9 -0.9
Option and
share-based
compensation 3.0 5.9 8.9
--------------------------------------------------------------------------
Dec 31, 2009 64.6 100.4 13.0 0.4 -24.5 -80.1 799.0 465.6 0.8 1,339.2
--------------------------------------------------------------------------
------------------------------------------------------------------------
MEUR 1) 2) 3) 4) 5) 6) 7) 8) 9) 10)
------------------------------------------------------------------------
Jan 1, 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 non-
controlling
interests:
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
non-
controlling
interests -0.2 -0.2
Option and
share-based
compensation 4.7 5.4 10.1
------------------------------------------------------------------------
Dec 31, 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 flows
10-12/ 10-12/ 1-12/ 1-12/
MEUR 2009 2008 2009 2008
----------------------------------------------
Operating income 202.7 189.2 566.7 558.4
Change in
working capital
before financial
items and taxes -22.4 -116.0 194.2 -95.8
Depreciation
and impairment 17.9 15.3 64.2 64.8
----------------------------------------------
Cash flow
from operations 198.2 88.5 825.1 527.4
Cash flow
from financing
items and taxes -24.0 -12.8 -123.7 -99.5
----------------------------------------------
Cash flow
from operating
activities 174.2 75.7 701.4 427.9
----------------------------------------------
Cash flow
from
investing
activities -42.0 -31.7 -90.6 -128.6
----------------------------------------------
Cash flow
after
investing
activities 132.2 44.0 610.8 299.3
----------------------------------------------
Purchase and
sale of
own shares - - - -
Issue of
shares 9.0 2.5 9.9 3.7
Dividends
paid - - -164.0 -163.3
Change in
deposits
and
loans
receivable,
net -141.5 -55.0 -220.9 -82.7
Change in
loans
payable 10.4 -22.7 -181.4 -62.7
----------------------------------------------
Cash flow
from
financing
activities -122.1 -75.2 -556.4 -305.0
----------------------------------------------
----------------------------------------------
Change in
cash and
cash
equivalents 10.1 -31.2 54.4 -5.7
----------------------------------------------
Cash and
cash
equivalents
at end of
period 204.9 147.8 204.9 147.8
Translation
difference -2.3 4.5 -2.7 1.4
Cash and
cash equivalents
at beginning
of period 192.5 183.5 147.8 154.9
----------------------------------------------
Change in
cash and
cash
equivalents 10.1 -31.2 54.4 -5.7
----------------------------------------------
Change in interest-bearing net debt
10-12/ 10-12/ 1-12/ 1-12/
MEUR 2009 2008 2009 2008
----------------------------------------------
Interest-bearing
net debt
at beginning
of period -358.8 -9.3 -58.3 91.7
Interest-bearing
net debt
at end
of period -504.7 -58.3 -504.7 -58.3
----------------------------------------------
Change in
interest-bearing
net debt -145.9 -49.0 -446.4 -150.0
----------------------------------------------
Key figures
1-12/ 1-12/
2009 2008
---------------------------------------
Basic
earnings
per share EUR 1.84 1.66
Diluted
earnings
per share EUR 1.83 1.65
Equity
per share EUR 5.28 4.10
Interest-bearing
net debt MEUR -504.7 -58.3
Total equity/
total assets % 47.0 39.0
Gearing % -37.7 -5.6
Return on equity % 39.3 46.8
Return on
capital employed % 34.0 35.9
Total assets MEUR 2,852.0 2,656.8
Assets employed MEUR 834.5 977.6
Working capital
including
financing and
tax items) MEUR -228.7 -76.4
Sales by geographical regions
1-12/ 1-12/
MEUR 2009 % 2008 %
------------------------------------
EMEA 2,953.4 62 3,001.5 65
Americas 970.2 21 888.3 19
Asia-Pacific 820.1 17 713.0 16
------------------------------------
Total 4,743.7 4,602.8
------------------------------------
1) EMEA = Europe, Middle East, Africa
Quarterly Key Figures
Q4/ Q3/ Q2/ Q1/
2009 2009 2009 2009
--------------------------------------------------
Orders
received MEUR 813.5 766.5 953.9 898.5
Order
book MEUR 3 309.1 3,603.4 3754.1 3,753.1
Sales MEUR 1 426.8 1,127.3 1168.6 1,021.0
Operating
income MEUR 202.7 160.1 146.3 1) 91.2
Operating %
income 14,2 14.2 12.5 1) 8.9
Q4/ Q3/ Q2/ Q1/
2008 2008 2008 2008
------------------------------------------------
Orders
received MEUR 845.2 892.4 1,092.4 1,117.5
Order
book MEUR 3,576.7 4,002.8 3,838.7 3,617.4
Sales MEUR 1,431.6 1,123.8 1,142.1 905.3
Operating
income MEUR 189.2 146.0 136.7 86.5
Operating %
income 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 2) 126.7 116.4 69.3 3)
Operating %
income 12.4 2) 13.0 11.6 8.5 3)
Q4/2006 Q3/2006 Q2/2006 Q1/2006
------------------------------------------------
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 33.6 one-time restructuring cost related to the fixed cost
adjustment program.
2) 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.
3) Excluding a MEUR 142.0 fine for the European Commission´s decision.
Orders received
1-12/ 1-12/
MEUR 2009 2008
--------------------------
3,432.4 3,947.5
--------------------------
Order book
Dec 31, Dec 31,
MEUR 2009 2008
--------------------------
3,309.1 3,576.7
--------------------------
Capital expenditure
1-12/ 1-12/
MEUR 2009 2008
---------------------------------------
In fixed assets 40.9 65.1
In leasing agreements 5.6 9.3
In acquisitions 46.0 60.0
---------------------------------------
Total 92.5 134.4
---------------------------------------
R&D expenditure
1-12/ 1-12/
MEUR 2009 2008
--------------------------------------------------------
62.0 58.3
--------------------------------------------------------
R&D Expenditure as percentage of sales 1.3 1.3
Number of employees
1-12/ 1-12/
Number of employees 2009 2008
--------------------------------------------
Average 34,276 33,935
At the end of the period 33,988 34,831
Notes on the consolidated financial statements
Commitments
Dec 31, Dec 31,
MEUR 2009 2008
----------------------------------------------
Mortgages
Group and parent company - 0.7
Pledged assets
Group and parent company 1.9 2.0
Guarantees
Associated companies 3.5 4.1
Others 6.4 7.2
Operating leases 162.0 171.7
----------------------------------------------
Total 173.8 185.7
----------------------------------------------
The future minimum lease payments under non-cancellable operating leases
Dec 31, Dec 31,
MEUR 2009 2008
--------------------------------------
Less than 1 year 41.0 43.3
1-5 years 91.6 96.9
Over 5 years 29.4 31.5
--------------------------------------
Total 162.0 171.7
--------------------------------------
Derivatives
Fair values of derivative financial instruments
Positive Negative Net Net
fair fair fair fair value value value value
Dec 31, Dec 31, Dec 31, Dec 31,
MEUR 2009 2009 2009 2008
-----------------------------------------------------------
FX Forward contracts 4.2 6.8 -2.6 10.9
Currency options - - - 0.4
Cross-currency swaps,
due under one year - 17.0 -17.0 1.8
Cross-currency swaps,
due in 1-3 years - - - -22.7
Electricity derivatives 0.4 0.8 -0.4 -1.0
-----------------------------------------------------------
Total 4.6 24.6 -20.0 -10.6
-----------------------------------------------------------
Nominal values of derivative financial instruments
Dec 31, Dec 31,
MEUR 2009 2008
-----------------------------------------
FX Forward contracts 488.4 615.7
Currency options - 90.4
Cross-currency swaps,
due under one year 113.1 23.6
Cross-currency swaps,
due in 1-3 years - 113.1
Electricity derivatives 5.3 4.7
-----------------------------------------
Total 606.8 847.5
-----------------------------------------
Shares and shareholders
Class A Class B
shares shares Total
--------------------------------------------------------------------------------
Number of shares 38,104,356 220,322,514 258,426,870
Own shares in
possession 1) 4,710,242
Share capital, EUR 64,606,718
Market capitalization, MEUR 7,601
Number of shares traded,
million, 1-12/2009 160.9
Value of shares traded MEUR, Jan-Dec,
1-12/2009 3,399
Number of shareholders 3 22,304 22,304
Close High Low
--------------------------------------------------------------------------------
Class B share price,
Jan-Dec, 2009, EUR 29.96 30.40 13.80
1) During 2009, the authorization to repurchase shares was not used. In April
2009, 195,264 KONE class B shares assigned to the share-based incentive plan for
the company's senior management were transferred from KNEBV Incentive Oy to the
participants due to achieved targets for the financial year 2008. 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.
[HUG#1377135]
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