KONE Oyj - Financial Statement Release

Financial Statements Bulletin of KONE Corporation for January-December 2013

KONE Corporation, stock exchange release, January 28, 2014 at 12:30 p.m. EET


October-December 2013: Strong development on a broad basis
  * In October-December 2013, orders received totaled EUR 1,473 (10-
    12/2012: 1,321) million. Orders received grew by 11.5% at historical
    exchange rates and by 16.0% at comparable exchange rates.
  * Net sales grew by 9.4% to EUR 2,033 (1,858) million. At comparable exchange
    rates the growth was 13.1%.
  * Operating income was EUR 292.8 (257.4) million or 14.4% (13.9%) of net
    sales.
  * Cash flow from operations was EUR 240.8 (266.6) million.
January-December 2013: Strong overall progress

  * In January-December 2013, orders received totaled EUR 6,151 (1-
    12/2012: 5,496) million. Orders received grew by 11.9% at historical
    exchange rates and by 14.1% at comparable exchange rates. The order book
    stood at EUR 5,587 (Dec 31, 2012: 5,050) million at the end of December
    2013.
  * Net sales grew by 10.4% to EUR 6,933 (6,277) million. At comparable exchange
    rates the growth was 12.6%.
  * Operating income was EUR 953.4 (828.7) million or 13.8% (13.2%) of net sales
    (1-12/2012 figures exclude a one-time cost of EUR 37.3 million related to
    the support function development and cost adjustment programs).
  * Basic earnings per share was EUR 1.37 (1.17). The comparable basic earnings
    per share excluding one-time items was EUR 1.37 (1.23).
  * Cash flow from operations was EUR 1,213 (1,071) million.
  * In 2014, KONE's net sales is estimated to grow by 6-9% at comparable
    exchange rates as compared to 2013. The operating income (EBIT) is expected
    to be in the range of EUR 980-1,050 million, assuming that translation
    exchange rates do not materially deviate from the situation of the beginning
    of 2014.
  * The Board proposes a dividend of EUR 1.00 per class B share for the year
    2013.

Key Figures
                            10-12/  10-12/ Change %   1-12/      1-12/ Change %
                              2013    2012             2013       2012
-------------------------------------------------------------------------------
 Orders received      MEUR 1,473.2 1,321.3     11.5 6,151.0    5,496.2     11.9

 Order book           MEUR 5,587.5 5,050.1     10.6 5,587.5    5,050.1     10.6

 Sales                MEUR 2,033.0 1,857.7      9.4 6,932.6    6,276.8     10.4

 Operating income     MEUR   292.8   257.4     13.7   953.4 828.7 (1))     15.1
 (EBIT)

 Operating income        %    14.4    13.9             13.8  13.2 (1))
 (EBIT)

 EBITA                MEUR   297.9   264.3            973.6 861.5 (1))

 EBITA                   %    14.7    14.2             14.0  13.7 (1))

 Cash flow from
 operations           MEUR   240.8   266.6          1,213.1    1,070.8
 (before financing
 items and taxes)

 Net income           MEUR   185.8   183.0            713.1      611.0

 Basic earnings per    EUR    0.36    0.35             1.37       1.17
 share

 Interest-bearing net MEUR  -622.0  -574.0           -622.0     -574.0
 debt

 Total equity/total      %    43.7    47.1             43.7       47.1
 assets

 Gearing                 %   -36.1   -31.3            -36.1      -31.3



Comparative figures for 2012 have been restated according to the revised IAS 19
'Employee Benefits'.

(1)) Excluding a MEUR 37.3 one-time cost related to the support function
development and cost adjustment programs.

Matti Alahuhta, President & CEO, in conjunction with the review:"Our business development was very strong in the last quarter of the year.
Orders received grew by 11.5% at historical and by 16.0% at comparable exchange
rates to EUR 1,473 million. Orders received growth was driven by a positive
development in all geographical regions. Sales grew by 9.4% at historical and by
13.1% at comparable exchange rates to EUR 2,033 million. Sales grew in all
regions. Operating income grew by 13.7% to EUR 293 million, or 14.4% of sales,
driven primarily by continued strong sales growth in Asia-Pacific and a good
business development in North America. Cash flow was at a good level of EUR 241
million.

Our performance was strong also for the full year 2013. Orders received grew by
11.9% at historical and by 14.1% at comparable exchange rates to EUR 6,151
million, and sales by 10.4% and 12.6%, respectively, to EUR 6,933 million.
Operating income grew by 15.1% and reached EUR 953 million,13.8% of sales. Cash
flow was at a record-high level of EUR 1,213 million.

I am very pleased with our progress in 2013. We again achieved faster than
market growth in key growth markets, and were also able to sustain a solid
performance in the most difficult regions. With focused efforts, we have been
able to improve our operational performance and quality across the company. I
want to express my thanks to all KONE employees for their effort!

In 2013, new equipment market growth was driven by Asia-Pacific, China in
particular. The growth of the Chinese market picked up again in the last quarter
of the year, resulting in a full-year market growth rate of slightly above 15%.
KONE's growth in China was clearly higher, leading again to increased market
share. In North America, the recovery of the market continued. In Europe, the
uncertainty of the market environment decreased towards the end of the year, but
development in both the new equipment and modernization markets was still
weakening. The
persisting low new equipment volumes continued to impact the market also through
intensified price competition in maintenance and modernization.

In 2014, in new equipment, we expect to see clear growth in Asia-Pacific, with
an expected market growth of approximately 10% in China. The market in the EMEA
region is expected to grow slightly, although demand in Europe is likely to
still decline slightly. The market in North America is expected to continue to
grow. In modernization, we expect the market to grow slightly, and most
maintenance markets are expected to continue to develop rather well.

Our three-year development programs have proved to be a very effective way to
develop competitive assets. We completed our previous set of three-year
development programs at the end of the year. During these years, the
satisfaction of our customers and employees improved, the competitiveness of our
solutions advanced further, the development of our service business made
significant progress, and the quality of our delivery chain clearly improved. We
are now starting work with already the fourth set of development programs. The
start of new programs has become a symbol of a beginning of a new phase to us.

Uncertainty in the weak markets diminished towards the end of the year. This,
coupled with the outlook on growth markets remaining positive, make us look to
the new year with confidence."

Operating environment in October-December (Q4 2013)

In the last quarter of 2013, the new equipment market growth accelerated in
Asia-Pacific, while market development in other regions was largely unchanged.
New equipment demand in the Europe, Middle East and Africa (EMEA) region was
overall rather stable. In North America, market growth continued. The major
projects segment remained active globally. The modernization market grew
slightly. Maintenance markets grew in most countries, although at low rates in
such countries, where new equipment activity has been weak for the past years.

Operating environment in January-December 2013

In 2013, markets in Asia-Pacific, North America and the Middle East developed
positively. In Europe, uncertainty on the market decreased towards the end of
the year. In the Europe, Middle East and Africa (EMEA) region, the new equipment
market declined slightly. In North America, the recovery of the market
progressed throughout the year. The market in Asia-Pacific grew at a somewhat
higher rate than in the previous year driven by rapid growth in China. The major
projects segment grew somewhat, driven by strong activity in Asia-Pacific, the
Middle East and North America. The modernization market was relatively stable,
with positive development in North America and Asia-Pacific, but a decline in
the EMEA region. Maintenance market growth was the fastest in Asia-Pacific,
driven by growth in new equipment installations. In the more mature maintenance
markets, the growth rate was lower, with many countries seeing a very
competitive market environment.

Market outlook 2014

In new equipment, the market in Asia-Pacific is expected to grow clearly in
2014. The market in China is expected to grow by approximately 10%. The market
in the EMEA region is expected to grow slightly, with a relatively stable demand
in Central and North Europe, a further slight decline in South Europe, and a
growing demand in the Middle East. The market in North America is expected to
continue to grow.

The modernization market is expected to grow slightly.

The maintenance markets are expected to develop rather well in most countries.

Business outlook 2014

KONE's net sales is estimated to grow by 6-9% at comparable exchange rates as
compared to 2013.

The operating income (EBIT) is expected to be in the range of EUR 980-1,050
million, assuming that translation exchange rates do not materially deviate from
the situation of the beginning of 2014.

The Board's proposal for the distribution of profit

The parent company's non-restricted equity on December 31, 2013 is EUR
1,357,635,587.39 of which the net profit for the financial year is EUR
429,462,500.68.

The Board of Directors proposes to the Annual General Meeting that a dividend of
EUR 0.9975 be paid on the outstanding 76,208,712 class A shares and EUR 1.00 on
the outstanding 436,474,010 class B shares, resulting in a total amount of
proposed dividends of EUR 512,492,200.22. The Board of Directors further
proposes that the remaining non-restricted equity, EUR 845,143,387.17 be
retained and carried forward.

The Board proposes that the dividends be payable from March 6, 2014. All the
shares existing on the dividend record date are entitled to dividend for the
year 2013 except for the own shares held by the parent company.

Press and analyst meetings

A meeting for the press, conducted in Finnish, will be held on Tuesday, January
28, 2014 at 2:15 p.m. EET.

A meeting for analysts, conducted in English, will begin at 3:45 p.m. EET. The
meeting will be available as a live webcast on www.kone.com. The meeting
participants can also join a telephone conference that will be arranged in
conjunction with the meeting. The telephone conference details are set out
below.

Both meetings will take place in the KONE Building, located at Keilasatama 3,
Espoo, Finland.

Telephone conference numbers:

Finnish callers: +358 9 2313 9201
US callers: +1 334 323 6201
UK callers: +44 20 7162 0077
Participant code: KONE

An on-demand version of the webcast will be available on www.kone.com later
during the same day.
For further information, please contact:

Karla Lindahl, Director, Investor Relations, tel. +358 (0) 204 75 4441
Sender:


KONE Corporation

Henrik Ehrnrooth
CFO

Anne Korkiakoski
Executive Vice President
Marketing & Communications
About KONE

KONE is one of the global leaders in the elevator and escalator industry.
 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 industry-leading elevators, escalators, automatic building doors and
integrated solutions to enhance the People Flow in and between buildings.
 KONE's services cover the entire lifetime of a building, from the design phase
to maintenance, repairs and modernization solutions. In 2013, KONE had annual
net sales of EUR 6.9 billion, and at the end of the year over 43,000 employees.
KONE class B shares are listed on the NASDAQ OMX Helsinki Ltd in Finland.

www.kone.com


[HUG#1757491]

Attachments:

KONE Financial Statement Bulletin 2013.pdf