2010-10-19 11:30:00 CEST
2010-10-19 11:30:25 CEST
REGULATED INFORMATION
KONE Oyj - Interim report (Q1 and Q3)
KONE Corporation's Interim Report for January-September 2010
KONE Corporation, stock exchange release, October 19, 2010 at 12:30 p.m. EET
KONE's Q3: Good progress resulted in strong operating income
July-September 2010
- In July-September 2010, orders received totaled EUR 865.2 (7-9/2009: 766.5)
million. Orders received increased by 12.9% at historical exchange rates and by
5.7% at comparable exchange rates.
- Net sales increased by 9.6% to EUR 1,236 (1,127) million. At comparable
exchange rates the increase was 3.9%.
- Operating income was EUR 184.8 (160.1) million or 15.0% (14.2%) of net sales.
- Cash flow from operations reached EUR 242.8 (255.5) million.
- KONE upgrades its outlook for 2010 due to strong sales growth in particular in
the Asia-Pacific region as well as improved overall productivity. KONE's net
sales is estimated to grow 2-6% compared to 2009. The operating income (EBIT) is
expected to be in the range of EUR 660-690 million. KONE previously estimated
its net sales to be at approximately the same level as in 2009. The previous
operating income (EBIT) outlook was EUR 630-660 million.
January-September 2010
- In January-September 2010, orders received totaled EUR 2,803 (1-
9/2009: 2,619) million. Orders received increased by 7.0% at historical exchange
rates and by 2.8% at comparable exchange rates. The order book stood at EUR
3,658 (Dec 31, 2009: 3,309) million at the end of September 2010.
- Net sales increased by 5.5% to EUR 3,498 (3,317) million. At comparable
exchange rates it increased by 1.5%.
- Operating income was EUR 469.1 (397.6) million or 13.4% (12.0%) of net sales
(1-9/2009 figures exclude a one-time cost of EUR 33.6 million related to the
fixed cost adjustment program).
Key Figures
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2010 2009 2010 2009 2009
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Orders received MEUR 865.2 766.5 2,802.7 2,618.9 3,432.4
Order book MEUR 3,657.9 3,603.4 3,657.9 3,603.4 3,309.1
Sales MEUR 1,235.9 1,127.3 3,497.8 3,316.9 4,743.7
Operating income MEUR 184.8 160.1 469.1 397.6 1) 600.3 1)
Operating income % 15.0 14.2 13.4 12.0 1) 12.7 1)
Cash flow 242.8 255.5 662.1 626.9
from operations
(before financing
items and taxes) MEUR 825.1
Net income MEUR 144.9 134.6 362.1 299.8 466.4
Total 102.6 124.0 387.5 283.6
comprehensive
income MEUR 449.5
Basic earnings 0.57 0.53 1.42 1.18
per share EUR 1.84
Interest-bearing -610.7 -358.8 -610.7 -358.8
net debt MEUR -504.7
Total equity/ 45.3 42.6 45.3 42.6
total assets % 47.0
Gearing % -43.3 -30.9 -43.3 -30.9 -37.7
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1) Excluding a EUR 33.6 million one-time restructuring cost related to the fixed
costs adjustment program, which was booked in the second quarter in 2009.
KONE President & CEO, Matti Alahuhta, in conjunction with the review:"The development of our result in the third quarter was delightful. Our
operating income was strong and our orders received developed well, in
particular in Asia-Pacific.
No substantial changes were seen in our operating environment during the third
quarter. The markets in the Asia-Pacific region continued to develop well, the
new equipment market situation in Europe differed from country to country and
the North American markets have stabilized at a low level.
Our operating income grew by approximately 15 percent. The strong development
was enabled by rapid sales growth in Asia-Pacific, improved quality and
productivity as well as lower fixed costs. In addition to these factors,
external factors such as more favorable translation exchange rates compared to
2009 and favorable sourcing prices contributed clearly to the development of our
operating income. The current trends of these external factors are unfavorable
from KONE's perspective. Should the current trends continue, it will be more
challenging to improve the result.
As a result of the continued strong development and favorable external factors
during the first three quarters of the year, we have upgraded our full-year
outlook for both sales and operating income."
Analyst and media meeting and conference call
A meeting for the press, conducted in Finnish, will be held on Tuesday, October
19, 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:
Finnish callers: +358 923 101 527
US callers: +1 866 458 40 87
Other callers: +44 203 043 2436
Participant code: KONE
An on-demand version of the webcast will be available on www.kone.com later
during the same day.
About KONE
KONE is one of the global leaders in the elevator and escalator industry. The
company has been committed to understanding the needs of its customers for the
past century, providing industry-leading elevators, escalators and automatic
building doors as well as innovative solutions for modernization and
maintenance. The company'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. In 2009, KONE had annual net sales of EUR 4.7 billion
and approximately 34,000 employees. KONE class B shares are listed on the NASDAQ
OMX Helsinki Ltd in Finland. Founded in 1910, KONE celebrates its centennial
anniversary in 2010.
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
Interim Report for January-September 2010
Accounting Principles
KONE Corporation's Interim Report for January-September 2010 has been prepared
in line with IAS 34, `Interim Financial Reporting´. KONE has applied the same
accounting principles in the preparation of this interim report as in its
financial statements for 2009, published on January 26, 2010. Additionally the
changes according to revised IAS/IFRS standards have been adopted. Out of these
relevant changes are IFRS 3 (revised) Business combinations and IAS 27 (revised)
Consolidated and separate financial statements. The information presented in
this Interim Report has not been audited.
July-September 2010 review
Operating environment in July-September
In the third quarter of 2010 no substantial changes in the development of the
overall markets were seen. The overall market development in Europe, Middle East
and Africa (EMEA) and the Americas remained uncertain, while the good growth in
the Asia-Pacific region continued. The activity level in major projects
continued to develop favorably. Modernization markets were overall quite stable.
Maintenance markets continued to develop favorably. The overall pricing
environment remained intense in all businesses.
In the EMEA region, the business environment in the new equipment markets
continued to be mixed with the residential market developing positively in North
and Central Europe, but with most South European markets remaining weak. Growth
was seen in the residential markets in the United Kingdom, Sweden, Norway and
Poland. The residential markets in Germany and Finland were stable at a good
level. The residential markets in France and Italy were stabilizing at a low
level. The market continued to decline in Spain. The commercial segment was
still burdened by high vacancy rates in South Europe with the infrastructure and
medical segments showing signs of slow recovery. Markets in the Middle East
continued to develop positively, particularly in Abu Dhabi and Saudi Arabia. The
modernization markets were at about last year's level. The maintenance markets
continued to develop well in the EMEA region, but price competition remained
strong.
In the Americas region, the new equipment market has stabilized at a low level.
The new equipment market in the United States remained challenging and uncertain
and price competition continued to be very intense. The tendering activity in
infrastructure and publicly funded projects declined. Modernization activity
increased slightly. In Canada, the new equipment market remained rather active
and the modernization market was stable. The markets in Mexico continued to
recover, albeit slowly. Maintenance markets in the Americas developed rather
well, but were very competitive.
In the Asia-Pacific region, the good growth in the new equipment markets
continued during the third quarter, but the pricing environment was intense. The
most favorable development was seen in China, where all segments grew. The
residential segment, particularly affordable housing, and the public
transportation segment were the fastest growing segments. Tendering activity
continued to grow in India with the residential segment, particularly affordable
housing, being the main growth segment, while activity in the commercial segment
remained stable at a low level. In Australia, funding constraints continued to
negatively influence the new equipment market with housing construction activity
being at a low level. Tendering activity, however, increased slightly. Tendering
activity in the modernization market continued to improve. In Southeast Asia,
market growth strengthened. Maintenance markets in Asia-Pacific continued to
develop favorably.
Financial performance in July-September
KONE's orders received increased by 12.9% as compared to July-September 2009,
and totaled EUR 865.2 (7-9/2009: 766.5) million. At comparable exchange rates,
orders received increased by 5.7%. The growth was primarily driven by the volume
business. The performance in orders received was strongest in Asia-Pacific, with
Southeast Asia and China developing the most positively. Orders received grew
moderately in EMEA and declined in the Americas. Maintenance contracts are not
included in orders received.
The largest order received in July-September 2010 was an order to supply
elevators and escalators for DC Tower 1 in Vienna, Austria. At 220 meters, DC
Tower 1 will be the tallest building in Austria.
KONE's net sales increased by 9.6% as compared to July-September 2009, and
totaled EUR 1,236 (1,127) million. At comparable exchange rates, the increase
was 3.9%.
New equipment sales was EUR 585.3 (531.0) million which represented an increase
of 10.2% over the comparison period. At comparable currency rates, the increase
was 3.5%.
Service sales (maintenance and modernization) increased by 9.1% and totaled EUR
650.6 (596.3) million. At comparable currency rates, the increase was 4.4%.
Maintenance sales continued to grow at the prior good rate, whereas
modernization sales declined slightly.
The operating income for the July-September 2010 period totaled EUR 184.8
(160.1) million or 15.0% (14.2%) of net sales. The good operating income was
primarily a result of strong sales growth in the Asia-Pacific region, improved
operational quality and productivity, lower fixed costs as well as favorable
sourcing costs and translation exchange rates compared to the comparison period.
Sales by geographical regions, MEUR
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2010 % 2009 % 2010 % 2009 % 2009 %
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EMEA 1) 674.9 55 674.5 60 1,999.3 57 2,049.4 62 2,953.4 62
Americas 259.1 21 238.4 21 746.5 21 694.8 21 970.2 21
Asia-Pacific 301.9 24 214.4 19 752.0 22 572.7 17 820.1 17
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Total 1,235.9 1,127.3 3,497.8 3,316.9 4,743.7
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1) EMEA = Europe, Middle East, Africa
January-September 2010 review
KONE's Orders received and Order book in January-September
The overall market situation was demanding in new equipment throughout the
reporting period except in the Asia-Pacific region where all major markets grew.
Modernization markets were stable. The global maintenance market continued to
grow.
In January-September 2010, KONE's orders received increased by 7.0% and totaled
EUR 2,803 (1-9/2009: 2,619) million. At comparable exchange rates, the increase
was 2.8%. Maintenance contracts are not included in orders received.
The order book increased from the end of 2009 by 10.5% and stood at the end of
September 2010 at EUR 3,658 (Dec 31, 2009: 3,309) million. At comparable
exchange rates, the order book increased by 4.5%. The margin of the order book
remained stable. Cancellations of orders have remained at a very low level.
In the EMEA region, total orders received were at the same level as during
January-September 2009. KONE's orders received grew in the northern parts of
Europe and in the Middle East but declined in South Europe. In the Americas
region, orders received declined clearly. In the Asia-Pacific region, orders
received grew in all of KONE's major countries and the growth was very strong in
China, Southeast Asia and India.
Net sales
In January-September 2010, KONE's net sales increased by 5.5% as compared to
last year, and totaled EUR 3,498 (1-9/2009: 3,317) million. At comparable
exchange rates the increase was 1.5%.
New equipment sales was EUR 1,608 (1,525) million and represented an increase of
5.5% over the comparison period in 2009. At comparable exchange rates the
increase was 0.9%.
Service (maintenance and modernization) sales increased by 5.4% and totaled EUR
1,889 (1,792) million. At comparable exchange rates, the increase was 2.0%.
Maintenance sales continued to grow at its prior good rate, whereas
modernization sales declined.
The geographical distribution of net sales was 57% (62%) EMEA, 21% (21%)
Americas and 22% (17%) Asia-Pacific.
Financial result
In January-September 2010, KONE's operating income was very strong at EUR 469.1
(1-9/2009: 364.0) million or 13.4% (11.0%) of net sales (the operating income in
January-September 2009 excluding the one-time cost of EUR 33.6 million related
to the fixed cost adjustment program was EUR 397.6 million or 12.0% of net
sales). The growth in operating income was the result of good business progress
in Asia-Pacific, improved overall quality and productivity due to good progress
in KONE's development programs, reduced fixed costs as well as favorable
sourcing costs and favorable movements in translation exchange rates. Net
financing items were EUR 4.7 (18.3) million.
KONE's income before taxes for January-September 2010 was EUR 482.8 (386.9)
million. Taxes totaled EUR 120.7 (87.1) million, taking into account taxes
proportionate to the amount estimated for the financial year. This represents an
effective tax rate of 25.0%. Net income for the period under review was EUR
362.1 (299.8) million.
Earnings per share was EUR 1.42 (1.18). Equity per share was EUR 5.51 (4.59).
Consolidated statement of financial position and Cash flow
KONE's financial position was strong and the company had a positive net cash
position at the end of September. Cash flow generated from operations (before
financing items and taxes) in January-September 2010 was EUR 662.1 (1-
9/2009: 626.9) million.
Cash flow remained at a healthy level and it increased compared to January-
September 2009. Net working capital improved although the improvement was not as
significant as in January-September 2009. The improvement in net working capital
was largely due to good payment terms and an improvement in the ratio of advance
payments received relative to inventories. At the end of September 2010, net
working capital was EUR -407.7 (December 31, 2009: -228.7) million, including
financing items and taxes.
Interest-bearing assets exceeded interest-bearing debts and the net cash
position totaled EUR 610.7 (December 31, 2009: 504.7) million. Gearing was
-43.3%, compared with -37.7% at the end of 2009. KONE's total equity/total
assets ratio was 45.3% (December 31, 2009: 47.0%) at the end of September.
Capital expenditure and acquisitions
KONE's capital expenditure, including acquisitions, totaled EUR 181.8 (1-
9/2009: 66.0) million, of which acquisitions accounted for EUR 149.5 (39.3)
million. Capital expenditure, excluding acquisitions, was mainly related to
facilities and equipment in R&D, IT and production. The acquisitions completed
during the reporting period do not individually or as a whole have a material
impact on the result or financial position of the Group. The most important
acquisitions completed during the reporting period included two acquisitions in
Spain, one in the United States and one in France. These acquisitions are
detailed below.
During January-September 2010, KONE completed the acquisition of ASBA
Mantenimientos S.L., a Spanish elevator company based in Barcelona, to
strengthen KONE's maintenance and modernization operations in the Catalonia
region.
KONE also acquired Reliant Elevator Company, the largest independent elevator
service company in Oregon, USA. Through this acquisition KONE strengthened its
position as one of the leading elevator and escalator companies in the Portland
metropolitan area and throughout Oregon.
In addition, KONE acquired ATPE-AMIB S.A., a French automatic door company. The
Paris-based company provides and maintains gates, garage doors, access control
and intercom installations in residential buildings.
In Spain, KONE also acquired Marvi Elevator group, which installs, maintains and
modernizes elevators in the eastern regions of Spain and has an assembly and
logistics center in Catalonia, where it is one of the leading players in the
industry.
Research and development
Research and development expenses totaled EUR 46.6 (1-9/2009: 44.1) million,
representing 1.3% (1.3%) of net sales. R&D expenses include the development of
new concepts and further development of existing products and services. KONE's
elevators and escalators are based on energy-efficient technology.
In January-September 2010, KONE released new offerings in all regions. The new
elevator offering for the Asia-Pacific markets included a wide range of updated
products such as machines and drives, a further improvement in the eco-
efficiency offering and option extensions as well as a new design collection. In
Europe, KONE introduced an enhanced offering for the medical segment. In
addition, extended solutions for the residential and office segments were
offered with a focus on energy efficiency. KONE also released an updated
offering for modular elevator modernization, full replacement and solutions for
existing buildings without elevators. The maintenance offering and energy
efficient solutions for automatic building doors were updated as well. In the
Americas, KONE launched updated car and signalization design solutions for its
mid- and high-rise elevators, along with energy efficient lighting and improved
functionality offerings. In January 2010, KONE released a new escalator
dedicated especially for the Chinese retail and commercial building segments. In
January-September 2010, KONE also initiated the introduction of a new
regenerative drive family to expand the coverage of its already wide offering of
energy efficient solutions.
Other important events during the financial period
KONE announced in 2009 a program to reduce fixed costs due to the weak new
equipment markets. The plans for the program were communicated in connection
with the second quarter result in 2009. The annual impact of the fixed cost
reduction plan was expected to be at least EUR 40 million starting in 2010. The
total one-time restructuring cost relating to this program was EUR 33.6 million,
which was booked in the second quarter of 2009. The fixed cost adjustment
program continued to progress according to plan and has been largely finalized
with the exception of certain costs related to real estate and other fixed
assets as well as to individual reductions of personnel.
KONE announced in March 2010 that certain municipalities, public authorities and
companies in Austria had filed civil damage claims against leading elevator and
escalator companies. The claims have been served on KONE's Austrian subsidiary
KONE AG, and they relate to the 2007 decision of the Austrian Cartel Court
concerning practices prior to mid-2004. Some further claims have been served
since the announcement in March and the total capital amount claimed jointly and
severally from all of the defendants together amounted to EUR 146 million at the
end of the reporting period. KONE's position is that the claims are without
merit. No provision has been made.
KONE announced in July 2010 that it will relocate and expand its manufacturing
and R&D unit within Kunshan, China. The Kunshan New & Hi-tech Industrial
Development Zone (KSND) industrial park is located close to the Suzhou-Shanghai
Expressway thus enabling better connections to suppliers and customers. The new
site will open in 2012. The current R&D center will be expanded and a new high-
rise test tower will be built to support the development of People Flow(TM)
products and solutions.
KONE announced in September 2010 changes in the KONE Executive Board and
organization. All appointments related to these changes will be effective as of
November 1, 2010. KONE will establish a new Customer Experience unit to support
its development into an even more customer focused company. Juho Malmberg,
currently responsible for the Development unit at KONE, was appointed Executive
Vice President for the new Customer Experience unit. Kati Hagros was appointed
Senior Vice President, Development and CIO. Peter de Neef, Executive Vice
President, Service Business, will leave KONE on October 31, 2010 to become the
CEO of a Dutch company. Pekka Kemppainen, currently responsible for KONE's
business in Asia-Pacific, was appointed Executive Vice President, Service
Business. Noud Veeger, currently responsible for KONE's business in Central and
North Europe, was appointed Executive Vice President, Asia-Pacific. Ari
Lehtoranta, currently responsible for the Major Project Business, was appointed
Executive Vice President, Central and North Europe. Tarek Elnaggar, currently
responsible for KONE's business in the Middle East, was appointed Senior Vice
President, Major Projects Business. Juho Malmberg, Pekka Kemppainen, Noud Veeger
and Ari Lehtoranta will continue as members of the Executive Board and report to
Matti Alahuhta, President and CEO. Kati Hagros will report to Henrik Ehrnrooth,
CFO, and Tarek Elnaggar will report to Heikki Leppänen, Executive Vice
President, New Equipment Business.
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.
During January-September 2010, KONE continued to invest in and run leadership
training programs with a special focus on middle management and supervisors.
KONE's annual employee survey was conducted and the results were published with
actions being implemented during the second half of the year. The planning of
the next survey was initiated. Work on human resources systems and tools
continued.
KONE had 33,626 (December 31, 2009: 33,988) employees at the end of September.
The average number of employees was 33,594 (1-9/2009: 34,365).
The geographical distribution of KONE employees was 55% (December
31, 2009: 55%) in EMEA, 16% (17%) in the Americas and 29% (28%) in Asia-Pacific.
Environment
KONE published its second Corporate Responsibility Report during the reporting
period.
KONE's aim is to be the eco-efficiency leader in its industry. The development
of eco-efficient solutions focuses on stand-by energy saving solutions and
regenerative units for elevators. KONE set an ambitious target for 2010 with the
aim of reducing the electricity consumption of its volume elevators by 50% by
the end of 2010, compared to the 2008 base value. This target has been achieved.
KONE intends to minimize its carbon footprint and to ensure the compliance of
KONE's suppliers with the corresponding requirements and environmental targets.
KONE has set an annual 5% carbon footprint reduction target for its own
operations. 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.
During January-September 2010, KONE elevators received energy efficiency ratings
in measurements performed by independent third parties. In Europe KONE's
MonoSpace® and MiniSpace(TM) elevators and in Asia the 3000S MonoSpace®, 3000S
MiniSpace(TM) and MiniSpace(TM) elevators received an 'A label' as defined by
VDI 4707, a guideline published by the Association of German Engineers, which
aims at classifying elevators based on their energy consumption (the
classification ranges from A to G, from the most to the least energy efficient
system).
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 effect on KONE's business operations and
financial position and hence the value of the company. Other risks, which are
currently either unknown or considered immaterial to KONE, may, however, become
material in the future.
A renewed weakening of the economies in the EMEA and Americas regions after a
short period of growth or a disruption in the growth in the Asia-Pacific region
may bring about a decrease in the 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 are not met or if it is not possible to efficiently
reallocate personnel resources in response to changing business opportunities
and environments.
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. As a result of the recovery of trade in many countries
especially in Asia-Pacific, certain electronic components have been in short
supply, which could have an impact on KONE's deliveries. These risks are
controlled by accurate forecasting and close cooperation with KONE's suppliers.
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.
The uncertain economic climate, a continued high level of bankruptcies in the
EMEA and Americas regions and the challenging lending environment 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 accounts 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 translation exchange rates developed favorably
during January-September 2010 from KONE's perspective. The current trends in
translation exchange rates are unfavorable from KONE's perspective, which could
have an impact on KONE's result and financial position. KONE operates in certain
countries with currency controls, as a result of which KONE may be unable to
repatriate funds from these countries, which can result in inefficient capital
allocation. KONE's 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.
Material costs have increased during 2010, which may have an impact on KONE's
sourcing costs going forward. The maintenance business deploys a significant
fleet of service vehicles, and oil price fluctuations therefore have an effect
on the cost of maintenance.
Decisions of the Annual General Meeting
KONE Corporation's Annual General Meeting was held in Helsinki on March
1, 2010. The meeting approved the financial statements and discharged the
responsible parties from liability for the January 1-December 31, 2009 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, Anne Brunila, Reino Hanhinen, Antti Herlin, Sirkka Hämäläinen-
Lindfors, Juhani Kaskeala, Shunichi Kimura and Sirpa Pietikäinen and as deputy
Member Jussi Herlin.
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 authorized the Board of Directors 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. The authorization shall remain in effect for a period of
one year from the date of the decision of the General Meeting.
In addition, the Annual General Meeting authorized the Board of Directors to
decide on the issuance of options and other special rights entitling to shares
referred to in chapter 10 section 1 of the Companies Act. The authorization is
limited to a maximum of 3,810,000 class A shares and 21,760,000 class B shares.
The Board of Directors decides on all the conditions of the issuance of shares
and of special rights entitling to shares. The authorization concerns both the
issuance of new shares as well as the transfer of treasury shares, and the
issuance of shares and of special rights entitling to shares may be carried out
in deviation from the shareholders' pre-emptive rights. The authorization shall
remain in effect for a period of five years from the date of the decision of the
General Meeting.
The General Meeting decided to establish the KONE Corporation Centennial
Foundation. The purpose of the foundation is to advance and support
developmental, educational and cultural activities for children and youth around
the world. The General Meeting decided to distribute 100,000 treasury class B
shares of KONE Corporation without compensation to the KONE Corporation
Centennial Foundation to be established, and authorized the Board to later grant
no more than EUR 100,000 to the foundation. The General Meeting also decided to
authorize the Board to grant during 2010 no more than EUR 3,500,000 to support
the activities of universities and colleges.
Authorized public accountants Heikki Lassila and PricewaterhouseCoopers Oy were
re-nominated as the Company´s auditors.
Dividend for 2009
The Annual General Meeting approved the Board's proposal for dividends of EUR
1.295 for each of the 38,104,356 class A shares and EUR 1.30 for the
215,633,008 outstanding class B shares. Half of the dividend is an extra
dividend due to KONE's centennial year 2010. The date of record for dividend
distribution was March 4, 2010, and dividends were paid on March 11, 2010.
Share capital and Market capitalization
In 2005, KONE granted a conditional option program, 2005C. The 2005C stock
options were listed on the NASDAQ OMX Helsinki Ltd. as of April 1, 2008. Each
option right entitled its owner to subscribe for two (2) KONE Corporation class
B shares at a price of EUR 10.60 per share. As the 2005C options subscription
period ended on April 30, 2010, the remaining 522,000 series of C options held
by the subsidiary expired. The rest of the remaining 1,054,625 options had been
used and the shares were entered in the Finnish Trade Register in May 2010.
In 2007, KONE granted a conditional option program, 2007. The 2007 stock options
were listed on the NASDAQ OMX Helsinki Ltd. as of April 1, 2010. The total
number of 2007 stock options is 2,000,000 of which 888,000 are owned by a
subsidiary of KONE Corporation. Each option right entitles its owner to
subscribe for two (2) class B shares at a price of EUR 22.845 per share. At the
end of September 2010, the outstanding 2007 options entitled their holders to
subscribe 2,224,000 class B shares as no shares have been subscribed by the end
of September 2010. The subscription period for 2007 options will end on April
30, 2012.
In July 2010, KONE Corporation's Board of Directors decided to grant stock
option rights to approximately 430 employees of KONE's global organization based
on the authorization by the Annual General Meeting on March 1, 2010. The total
number of 2010 stock options is 3,000,000 of which 858,500 are owned by a
subsidiary of KONE Corporation. Each option right entitles its owner to
subscribe for one (1) class B share at a price of EUR 35.00 per share. The
subscription price is further reduced in situations mentioned in the terms, for
example with dividends distributed before the subscription of the shares. The
share subscription period for the 2010 stock options will be from April 1, 2013
to April 30, 2015. The share subscription period begins only if the financial
performance of the KONE Group for the financial years 2010-2012 based on the
total consideration of the Board of Directors is equal to or better than the
average performance of KONE's key competitors.
On September 30, 2010, KONE's share capital was EUR 65,134,030.00, comprising
222,431,764 listed class B shares and 38,104,356 unlisted class A shares.
KONE´s market capitalization was EUR 9,691 million on September 30, 2010,
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 at the end of the reporting period.
Shares in KONE's possession
On the basis of the Annual General Meeting's authorization, KONE Corporation's
Board of Directors decided to commence the possible repurchasing of shares at
the earliest on March 9, 2010.
In March 2010, 100,000 treasury class B shares of KONE Corporation were
distributed without compensation to the KONE Corporation Centennial Foundation.
In April 2010, 311,375 KONE class B shares assigned to the share-based incentive
plan for the company's senior management were transferred due to achieved
targets for the financial year 2009. 290,639 of the shares were transferred by
KONE Corporation and 20,736 were transferred by KNEBV Incentive Oy, subsidiary
of KONE Corporation. In May 2010, KONE used its authorization to repurchase own
shares and bought back 550,000 of its own class B shares.
At the end of September 2010, the Group had 4,848,867 class B shares in its
possession. The shares in the Group's possession represent 2.2% 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 108.8 million KONE Corporation's class B
shares in January-September 2010, equivalent to a turnover of EUR 3,512 million.
The daily average trading volume was 575,628 (1-9/2009: 690,028). The share
price on September 30, 2010 was EUR 37.90. The volume weighted average share
price during the period was EUR 32.32. The highest quotation during the period
under review was EUR 38.49 and the lowest EUR 27.72.
The number of registered shareholders was 22,304 at the beginning of the review
period and 28,797 at its end. The number of private households holding shares
totaled 26,194 at the end of the period, which corresponds to approximately 13%
of the listed B shares.
According to the nominee registers, 43.0% of the listed class B shares were
owned by foreigners as per September 30, 2010. Other foreign ownership at the
end of the period totaled 6.6%. Thus a total of 49.6% of KONE's listed class B
shares were owned by international investors, corresponding to approximately
18% of the total votes in the company.
Market outlook 2010
KONE specifies its market outlook for 2010. The new equipment markets in Asia-
Pacific are expected to continue to grow, albeit at a lower rate than during the
first half of the year. In Central and North Europe, the positive development in
residential construction is expected to continue in most countries, while the
markets in South Europe are stabilizing at a low level. The new equipment market
in North America has stabilized at a low level. The development of the markets
in South Europe and North America remains uncertain and their recovery is
expected to be slow. The modernization markets are expected to be at about last
year's level. The maintenance markets are expected to continue to develop well,
but remain very competitive.
Outlook 2010
KONE upgrades its outlook for 2010 due to strong sales growth in particular in
the Asia-Pacific region as well as improved overall productivity.
KONE's net sales is estimated to grow 2-6% compared to 2009.
The operating income (EBIT) is expected to be in the range of EUR 660-690
million.
Previous outlook
KONE's net sales is estimated to be at approximately the same level as in 2009.
The operating income (EBIT) is estimated to be in the range of EUR 630-660
million.
Helsinki, October 19, 2010
KONE Corporation's Board of Directors
This Interim Report contains forward-looking statements that are based on the
current expectations, known factors, decisions and plans of the management of
KONE. Although management believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that such
expectations will prove to be correct. Accordingly, results could differ
materially from those implied in the forward-looking statements as a result of,
among other factors, changes in economic, market and competitive conditions,
changes in the regulatory environment and other government actions and
fluctuations in exchange rates.
Consolidated statement of income
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
MEUR 2010 % 2009 % 2010 % 2009 % 2009 %
--------------------------------------------------------------------------------
Sa-
les 1,235.9 1,127.3 3,497.8 3,316.9 4,743.7
Costs
and
expen- -1, -2,
ses 035.3 -951.9 981.3 -2,873.0 -4,081.2
Deprecia-
tion -15.8 -15.3 -47.4 -46.3 -62.2
One-time
restructuring
cost - - - -33.6 -33.6
--------------------------------------------------------------------------------
Operating
income 184.8 15.0 160.1 14.2 469.1 13.4 364.0 11.0 566.7 11.9
Share
of
associated
companies'
net
income 4.5 3.0 9.0 4.6 8.1
Financing
income 4.3 4.1 11.5 25.8 28.8
Financing
expenses -1.2 -1.4 -6.8 -7.5 -9.0
--------------------------------------------------------------------------------
Income
before
taxes 192.4 15.6 165.8 14.7 482.8 13.8 386.9 11.7 594.6 12.5
Taxes -47.5 -31.2 -120.7 -87.1 -128.2
--------------------------------------------------------------------------------
Net
income 144.9 11.7 134.6 11.9 362.1 10.4 299.8 9.0 466.4 9.8
--------------------------------------------------------------------------------
Net
income
attributable
to:
Shareholders
of the
parent
company 144.8 134.4 361.4 299.1 465.6
Non-
controlling
interests 0.1 0.2 0.7 0.7 0.8
--------------------------------------------------------------------------------
Total 144.9 134.6 362.1 299.8 466.4
--------------------------------------------------------------------------------
Earnings per share for profit attributable to the shareholders of the parent
company, EUR
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2010 2009 2010 2009 2009
--------------------------------------------------
Basic earnings
per share, EUR 0.57 0.53 1.42 1.18 1.84
Diluted earnings
per share, EUR 0.56 0.53 1.41 1.18 1.83
--------------------------------------------------
Consolidated statement of comprehensive income
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
MEUR 2010 % 2009 % 2010 % 2009 % 2009
-----------------------------------------------------
Net income 144.9 134.6 362.1 299.8 466.4
Other
comprehensive
income,
net of
tax:
Translation
differences -48.0 -13.5 29.4 -12.0 -7.3
Hedging of
foreign
subsidiaries -1.2 0.0 -1.2 -1.0 -1.0
Cash flow
hedges 6.9 2.9 -2.8 -3.2 -8.6
-----------------------------------------------------
Other
comprehensive
income,
net of
tax -42.3 10.6 25.4 -16.2 -16.9
-----------------------------------------------------
Total
comprehensive
income 102.6 124.0 387.5 283.6 449.5
-----------------------------------------------------
Total
comprehensive
income
attributable
to:
Shareholders
of the parent
company 102.5 123.8 386.8 282.9 448.7
Non-controlling
interests 0.1 0.2 0.7 0.7 0.8
-----------------------------------------------------
Total 102.6 124.0 387.5 283.6 449.5
-----------------------------------------------------
Condensed consolidated statement of financial position
Assets
Sep 30, Sep 30, Dec 31,
MEUR 2010 2009 2009
----------------------------------------------------------
Non-current assets
Intangible assets 838.7 697.0 706.7
Tangible assets 203.8 199.1 200.5
Loans receivable and other
interest-bearing assets 1.7 1.6 1.6
Deferred tax assets 177.9 135.0 152.8
Investments 163.5 150.1 156.0
----------------------------------------------------------
Total non-current assets 1,385.6 1,182.8 1,217.6
Current assets
Inventories 889.2 931.8 784.6
Advance payments received -1,012.0 -945.8 -832.4
Accounts receivable and other
non interest-bearing assets 1,160.4 1,087.3 1,056.1
Current deposits and
loan receivables 481.8 279.1 421.2
Cash and cash equivalents 208.2 192.5 204.9
----------------------------------------------------------
Total current assets 1,727.6 1,544.9 1,634.4
----------------------------------------------------------
Total assets 3,113.2 2,727.7 2,852.0
----------------------------------------------------------
Equity and liabilities
Sep 30, Sep 30, Dec 31,
MEUR 2010 2010 2009
----------------------------------------------------------
Equity 1,409.0 1,162.3 1,339.2
Non-current liabilities
Loans 30.0 28.5 27.2
Deferred tax liabilities 51.3 35.6 42.4
Employee benefits 113.3 108.2 110.6
----------------------------------------------------------
Total non-current liabilities 194.6 172.3 180.2
Provisions 94.0 69.5 100.3
Current liabilities
Loans 51.0 85.9 95.8
Accounts payable and
other liabilities 1,364.6 1,237.7 1,136.5
----------------------------------------------------------
Total current liabilities 1,415.6 1,323.6 1,232.3
----------------------------------------------------------
Total equity and liabilities 3,113.2 2,727.7 2,852.0
----------------------------------------------------------
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, 2010 64.6 100.4 13.0 0.4 -24.5 -80.1 1,264.6 0.8 1,339.2
---------------------------------------------------------------------------
Net income
for the
period 361.4 0.7 362.1
Other
comprehensive
income:
Translation
differences 29.4 29.4
Hedging of
foreign
subsidiaries -1.2 -1.2
Cash flow
hedges -2.8 -2.8
Transactions
with
shareholders
and non-
controlling
interests:
Profit
distribution 1.3 -334.0 -332.7
Issue
of shares
(option rights) 0.5 21.8 22.3
Purchase
of own
shares -16.9 -16.9
Sale
of own
shares -
Change in
non-
controlling
interests -0.1 -0.1
Option and
share-based
compensation 4.3 5.4 9.7
---------------------------------------------------------------------------
Sep 30, 2010 65.1 100.4 34.8 -2.4 3.7 -91.4 936.0 361.4 1.4 1,409.0
---------------------------------------------------------------------------
-------------------------------------------------------------------------
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
-------------------------------------------------------------------------
Net income
for the
period 299.1 0.7 299.8
Other
comprehensive
income:
Translation
differences 12.0 12.0
Hedging
of foreign
subsidiaries -1.0 -1.0
Cash flow
hedges -3.2 -3.2
Transactions
with
shareholders
and non-
controlling
interests:
Profit
distribution -164.1 -164.1
Issue
of shares
(option rights) 0.0 0.9 0.9
Purchase
of
own shares -
Sale
of
own shares -
Change in
non-
controlling
interests -0.5 -0.5
Option and
share-based
compensation 3.0 3.5 6.5
-------------------------------------------------------------------------
Sep 30, 2009 64.4 100.4 4.2 5.8 -29.2 -80.1 796.6 299.1 1.1 1,162.3
-------------------------------------------------------------------------
--------------------------------------------------------------------------
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
--------------------------------------------------------------------------
Net income
for the
period 465.6 0.8 466.4
Other
comprehensive
income:
Translation
differences -7.3 -7.3
Hedging of
foreign
subsidiaries -1.0 -1.0
Cash flow
hedges -8.6 -8.6
Transactions
with
shareholders
and non-
controlling
interests:
Profit
distribution -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
--------------------------------------------------------------------------
Condensed consolidated statement of cash flows
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
MEUR 2010 2009 2010 2009 2009
----------------------------------------------------------------------
Operating income 184.8 160.1 469.1 364.0 566.7
Change in
working capital
before financial
items and
taxes 42.2 80.1 145.6 216.6 194.2
Depreciation and impairment 15.8 15.3 47.4 46.3 64.2
----------------------------------------------------------------------
Cash flow
from
operations 242.8 255.5 662.1 626.9 825.1
Cash flow
from financing
items and
taxes -11.4 -34.1 -124.7 -99.7 -123.7
----------------------------------------------------------------------
Cash flow
from
operating
activities 231.4 221.4 537.4 527.2 701.4
----------------------------------------------------------------------
Cash flow
from investing
activities -80.9 -16.1 -131.1 -48.6 -90.6
----------------------------------------------------------------------
Cash flow
after investing
activities 150.5 205.3 406.3 478.6 610.8
----------------------------------------------------------------------
Purchase
and sale of
own shares - - -16.9 - -
Issue of
shares - - 22.3 0.9 9.9
Profit
distribution - - -332.7 -164.0 -164.0
Change in
deposits and
loans receivable,
net -94.1 -105.6 -45.7 -79.4 -220.9
Change in
loans payable -9.7 -77.6 -38.3 -191.8 -181.4
----------------------------------------------------------------------
Cash flow
from financing
activities -103.8 -183.2 -411.3 -434.3 -556.4
----------------------------------------------------------------------
----------------------------------------------------------------------
Change in
cash and
cash
equivalents 46.7 22.1 -5.0 44.3 54.4
----------------------------------------------------------------------
Cash and
cash
equivalents
at end of
period 208.2 192.5 208.2 192.5 204.9
Translation
difference 5.3 -0.1 -8.3 -0.4 -2.7
Cash and
cash
equivalents
at beginning of
period 166.8 170.3 204.9 147.8 147.8
----------------------------------------------------------------------
Change in
cash and
cash
equivalents 46.7 22.1 -5.0 44.3 54.4
----------------------------------------------------------------------
Change in interest-bearing net debt
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
MEUR 2010 2009 2010 2009 2009
---------------------------------------------------------------------
Interest-bearing net debt
at beginning of period -487.6 -167.1 -504.7 -58.3 -58.3
Interest-bearing net debt
at end of period -610.7 -358.8 -610.7 -358.8 -504.7
---------------------------------------------------------------------
Change in interest-bearing
net debt -123.1 -191.7 -106.0 -300.5 -446.4
---------------------------------------------------------------------
Notes for the interim report
Key figures
1-9/ 1-9/ 1-12/
2010 2009 2009
----------------------------------------------------------
Basic earnings
per share EUR 1.42 1.18 1.84
Diluted earnings
per share EUR 1.41 1.18 1.83
Equity per share EUR 5.51 4.59 5.28
Interest-bearing
net debt MEUR -610.7 -358.8 -504.7
Total equity/total assets % 45.3 42.6 47.0
Gearing % -43.3 -30.9 -37.7
Return on equity % 35.1 36.4 39.3
Return on
capital employed % 33.3 31.4 34.0
Total assets MEUR 3,113.2 2,727.7 2,852.0
Assets employed MEUR 798.3 803.5 834.5
Working capital
(including financing and
tax items) MEUR -407.7 -242.7 -228.7
----------------------------------------------------------
Sales by geographical regions
1-9/ 1-9/ 1-12/
MEUR 2010 % 2009 % 2009 %
---------------------------------------------
EMEA 1) 1,999.3 57 2,049.4 62 2,953.4 62
Americas 746.5 21 694.8 21 970.2 21
Asia-Pacific 752.0 22 572.7 17 820.1 17
---------------------------------------------
Total 3,497.8 3,316.9 4,743.7
---------------------------------------------
1) EMEA = Europe, Middle East, Africa
Quarterly figures Q3/ Q2/ Q1/
2010 2010 2010
---------------------------------------------
Orders received MEUR 865.2 1,042.8 894.7
Order book MEUR 3,657.9 3,933.7 3,638.5
Sales MEUR 1,235.9 1,258.9 1,003.0
Operating income MEUR 184.8 175.7 108.6
Operating income % 15.0 14.0 10.8
---------------------------------------------
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 3,754.1 3,753.1
Sales MEUR 1,426.8 1,127.3 1,168.6 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/ 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 EUR 33.6 million one-time restructuring cost related to the fixed
cost adjustment program.
2) Excluding a EUR 22.5 million 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 EUR 142.0 million fine for the European Commission's decision.
Orders received
1-9/ 1-9/ 1-12/
MEUR 2010 2009 2009
----------------------------------
2,802.7 2,618.9 3,432.4
----------------------------------
Order book
Sep 30, Sep 30, Dec 31,
MEUR 2010 2009 2009
----------------------------------
3,657.9 3,603.4 3,309.1
----------------------------------
Capital expenditure
1-9/ 1-9/ 1-12/
MEUR 2010 2009 2009
---------------------------------------------
In fixed assets 22.4 22.1 40.9
In leasing agreements 9.9 4.6 5.6
In acquisitions 149.5 39.3 46.0
---------------------------------------------
Total 181.8 66.0 92.5
---------------------------------------------
R&D expenditure
1-9/ 1-9/ 1-12/
MEUR 2010 2009 2009
------------------------------------------------------------
46.6 44.1 62.0
------------------------------------------------------------
R&D Expenditure as percentage of sales 1.3 1.3 1.3
------------------------------------------------------------
Number of employees 1-9/ 1-9/ 1-12/
2010 2009 2009
---------------------------------------------------
Average 33,594 34,365 34,276
At the end of the period 33,626 34,136 33,988
---------------------------------------------------
Commitments
Sep 30, Sep 30, Dec 31,
MEUR 2010 2009 2009
----------------------------------------------------
Mortgages
Group and parent company - 0.7 -
Pledged assets
Group and parent company 2.0 1.9 1.9
Guarantees
Associated companies 3.8 3.4 3.5
Others 10.1 6.6 6.4
Operating leases 175.6 162.3 162.0
----------------------------------------------------
Total 191.5 174.9 173.8
----------------------------------------------------
The future minimum lease payments under non-cancellable operating leases
Sep 30, Sep 30, Dec 31,
MEUR 2010 2009 2009
--------------------------------------------
Less than 1 year 45.4 40.7 41.0
1-5 years 101.3 92.8 91.6
Over 5 years 28.9 28.8 29.4
--------------------------------------------
Total 175.6 162.3 162.0
--------------------------------------------
Derivatives
Fair values of derivative financial instruments
Positive Negative Net Net Net
fair fair fair fair fair
value value value value value
Sep Sep Sep Sep Dec
30, 30, 30, 30, 31,
MEUR 2010 2010 2010 2009 2009
-------------------------------------------------------------------
FX Forward contracts 5.8 11.6 -5.8 2.9 -2.6
Cross-currency swaps,
due under one year - - - -15.2 -17.0
Cross-currency swaps,
due in 1-3 years - 13.4 -13.4 - -
Electricity derivatives 0.5 0.6 -0.1 -1.1 -0.4
-------------------------------------------------------------------
Total 6.3 25.6 -19.3 -13.4 -20.0
-------------------------------------------------------------------
Nominal values of derivative financial instruments
Sep 30, Sep 30, Dec 31,
MEUR 2010 2009 2009
---------------------------------------------------
FX Forward contracts 583.8 472.6 488.4
Cross-currency swaps,
due under one year - 136.7 113.1
Cross-currency swaps,
due in 1-3 years 139.3 - -
Electricity derivatives 4.5 4.7 5.3
---------------------------------------------------
Total 727.6 614.0 606.8
---------------------------------------------------
Shares and shareholders
Class A Class B
Sep 30, 2010 shares shares Total
-------------------------------------------------------
Number of
shares 38,104,356 222,431,764 260,536,120
Own shares
in
possession 1) 4,848,867
Share
capital, EUR 65,134,030
Market
capitalization, MEUR 9,691
Number of
shares traded,
million,
1-9/2010 108.8
Value of
shares traded
MEUR,
1-9/2010 3,512
Number of
shareholders 3 28,797 28,797
Close High Low
-------------------------------------------------------
Class B
share price,
1-9/2010, EUR 37.90 38.49 27.72
-------------------------------------------------------
1) During January-September 2010, KONE used its authorization and bought back
550,000 of its own class B shares in May. In April 2010, 311,375 KONE class B
shares assigned to the share-based incentive plan for the company's senior
management were transferred due to achieved targets for the financial year
2009. 290,639 of the shares were transferred by KONE Corporation and 20,736 were
transferred by KNEBV Incentive Oy, subsidiary of KONE Corporation. In March
2010, 100,000 treasury class B shares of KONE Corporation were distributed
without compensation to the KONE Corporation Centennial Foundation.
[HUG#1452940]
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