KONE Oyj - Financial Statement Release

Financial Statement Bulletin of KONE Corporation for January-December 2015

KONE Corporation, stock exchange release, January 28, 2016 at 12.30 p.m. EET

Financial Statement Bulletin of KONE Corporation for January-December 2015

October-December 2015: Strong finish to the year

·         In  October-December  2015, orders  received  totaled  EUR  1,947 (10-
12/2014: 1,704) million.  Orders received  grew by  14.3% at historical exchange
rates and 7.0% at comparable exchange rates.
·         Net  sales grew by  18.3% to EUR 2,562 (2,166)  million. At comparable
exchange rates the growth was 10.8%.
·         Operating income was EUR 378.5 (315.3) million or 14.8% (14.6%) of net
sales.
·         Cash  flow from operations (before financing  items and taxes) was EUR
403.5 (367.8) million.

January-December 2015: Profitable growth in a changing market environment

·         In   January-December  2015, orders  received  totaled  EUR  7,959 (1-
12/2014: 6,813) million.  Orders received  grew by  16.8% at historical exchange
rates  and by  5.6% at comparable  exchange rates.  The order  book stood at EUR
8,210 (December 31, 2014: 6,952) million at the end of December 2015.
·         Net  sales grew by  17.9% to EUR 8,647 (7,334)  million. At comparable
exchange rates the growth was 8.3%.
·         Operating income was EUR 1,241 (1,036) million or 14.4% (14.1%) of net
sales.
·         Basic   earnings   per   share  was  EUR  2.01 (1.47).  Excluding  the
extraordinary  dividend received during  the financial year,  earnings per share
was EUR 1.79.
·         Cash  flow from operations (before financing  items and taxes) was EUR
1,474 (1,345) million.
·         In  2016, KONE's net sales is estimated  to grow by 2-6% at comparable
exchange  rates as compared to  2015. The operating income is  expected to be in
the range of 1,220-1,320 million, assuming that translation exchange rates would
remain at approximately the average level of January 2016.
·         The  Board proposes a dividend  of EUR 1.40 per class  B share for the
year 2015.

Key figures

                                  10-12/  10-12/ Change    1-12/   1-12/ Change
                                    2015    2014            2015    2014
-------------------------------------------------------------------------------
 Orders received           MEUR  1,947.2 1,703.8  14.3%  7,958.9 6,812.6  16.8%

 Order book                MEUR  8,209.5 6,952.5  18.1%  8,209.5 6,952.5  18.1%

 Sales                     MEUR  2,561.8 2,165.8  18.3%  8,647.3 7,334.5  17.9%

 Operating income (EBIT)   MEUR    378.5   315.3  20.0%  1,241.5 1,035.7  19.9%

 Operating income (EBIT)      %     14.8    14.6            14.4    14.1

 Cash flow from operations
 (before financing items
 and taxes)                MEUR    403.5   367.8         1,473.7 1,345.4

 Net income                MEUR    372.7   210.7         1,053.1   773.9

 Basic earnings per share   EUR     0.71    0.40            2.01    1.47

 Interest-bearing net debt MEUR -1,512.6  -911.8        -1,512.6  -911.8

 Total equity/total assets    %     45.4    43.6            45.4    43.6

 Gearing                      %    -58.7   -44.2           -58.7   -44.2





Henrik Ehrnrooth, President and CEO, in conjunction with the review:

"We ended the year with a strong fourth quarter. Sales was EUR 2,562 million,
with growth accelerating to 18.3% at historical and 10.8% at comparable exchange
rates. Orders also developed strongly, totaling EUR 1,947 million, which
corresponded to a growth of 14.3% at historical and 7.0% at comparable rates.

Operating income was EUR 379 million, and the relative operating income improved
to 14.8% of net sales. Cash flow exceeded the previous year's level at EUR 404
million. Translation exchange rates again positively impacted our reported
figures.

For 2015 as a whole, I am very happy with our broad-based strong performance in
a market environment that saw significant changes in growth dynamics. We managed
our business successfully in a slowing market in China and were able to
accelerate our growth in many other areas. Overall, we again strengthened our
competitiveness and achieved profitable growth, which shows in the good
development in orders received, our solid result, and the very strong cash flow.
The record-high cash flow reflects a continued healthy management of the
fundamentals in our business.

I am very satisfied with the progress we made during the year both in our new
equipment and service business. In service, our objective has been to accelerate
growth. We developed in line with this target, with higher sales growth in
maintenance and clear growth in modernization orders. In our new equipment
business, we made significant improvements in our product and cost
competitiveness. In addition, for the business as a whole, important steps were
taken to speed up our innovation activities and the use of new technologies in
order to provide a better customer and user experience. Our achievements this
year would not have been possible without the commitment of our personnel, for
which I would like to thank everyone in the KONE team.

Looking ahead into 2016, the global market environment is expected to continue
to be varied. The market development remains divided in Europe, with Central and
North Europe expected to see some growth in new equipment and modernization
demand, but South Europe to remain stable at a low level. For North America, our
market outlook continues positive for both new equipment and modernization. In
China, we expect the market to be challenging. The new equipment market in
China, when measured in units, is expected to decline by 5-10% and to continue
to see intense price pressure. In the global maintenance market, we continue to
see good opportunities for growth.

In 2016, our sales is expected to grow by 2-6% at comparable rates. Operating
income is expected to be in the range of EUR 1,220-1,320 million, assuming that
the translation rates would remain at the average level of January 2016. Despite
the mixed market conditions, I am convinced that we can continue our strong
performance in the year ahead thanks to our further strengthened competitive
positioning and committed team."

Operating environment in October-December 2015

In the last quarter of 2015, the global new equipment market volumes weakened
slightly following a somewhat declining market in China. In the Europe, Middle
East and Africa (EMEA) region, new equipment demand grew slightly, and in North
America, the market continued to grow. The major projects segment grew in the
quarter. The modernization market grew in North America, and was on a slightly
positive trend in Europe driven by Central and North Europe. Also the
maintenance market continued to grow globally, although at low rates in such
countries, where new equipment activity has been weak for the past years.

Operating environment in January-December 2015

In 2015, the global new equipment market volumes decreased slightly due to a
decline in the large Chinese new equipment market. Of the other markets, new
equipment demand in North America grew clearly, and markets in Europe and the
Middle East also saw some growth. Globally the demand in modernization increased
slightly, with positive development in North America and Asia-Pacific, and a
slightly better trend overall also in Europe. The major projects segment saw
some growth in the year, but the development varied from quarter to quarter. The
maintenance market continued to grow globally. The fastest growth was seen in
Asia-Pacific. In the more mature maintenance markets, the rate of growth was
lower.

Market outlook 2016

In new equipment, the market in China is expected to decline by 5-10% in units
ordered and also the price competition to continue intense. In the rest of Asia-
Pacific and in North America, the market is expected to see some growth. Also
the market in Europe, Middle East and Africa region is expected to grow slightly
with growth in Central and North Europe and a more stable development in South
Europe and the Middle East.

The modernization market is expected to grow slightly in Europe, to continue to
grow in North America, and to develop strongly in Asia-Pacific.

Maintenance markets are expected to see the strongest growth rate in Asia-
Pacific, and to develop rather well also in other regions.

Business outlook 2016

KONE's net sales is estimated to grow by 2-6% at comparable exchange rates as
compared to 2015.

The operating income (EBIT) is expected to be in the range of EUR 1,220-1,320
million, assuming that translation exchange rates would remain at approximately
the average level of January 2016.

The Board's proposal for the distribution of profit

The parent company's non-restricted equity on December 31, 2015 is EUR
1,765,223,548.43 of which the net profit for the financial year is EUR
1,200,968,239.16.

The Board of Directors proposes to the Annual General Meeting that a dividend of
EUR 1.3975 be paid on the outstanding 76,208,712 class A shares and EUR 1.40 on
the outstanding 436,957,058 class B shares, resulting in a total amount of
proposed dividends of EUR 718,241,556.22.

The Board of Directors further proposes that the remaining non-restricted
equity, EUR 1,046,981,992.21 be retained and carried forward.

The Board proposes that the dividends be payable from March 16, 2016. All the
shares existing on the dividend record date are entitled to dividend for the
year 2015 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 Thursday, January
28, 2016 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 can be found
below.

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

Telephone conference numbers:

US callers: +1 646 254 3365
UK callers: +44 (0)20 3427 1910
Finnish callers: +358 (0)9 6937 9590

Participant code: KONE

An on-demand version of the webcast will be available on www.kone.com later the
same day.

For further information, please contact:
Katri Saarenheimo, Director, Investor Relations, tel. +358 204 75 4705

Sender:

KONE Corporation

Henrik Ehrnrooth
President and CEO

Eriikka Söderström
CFO

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 2015, KONE had annual
net sales of EUR 8.6 billion, and at the end of the year close to 50,000
employees. KONE class B shares are listed on the Nasdaq Helsinki Ltd. in
Finland.

www.kone.com


[HUG#1981918]

Attachments:

KONE_Financial_Statement_Bulletin_2015.pdf