2016-10-26 11:30:54 CEST
2016-10-26 11:30:54 CEST
REGLAMENTUOJAMA INFORMACIJA
KONE Oyj - Interim report (Q1 and Q3)
Interim Report of KONE Corporation for January-September 2016
KONE Corporation, stock exchange release, October 26, 2016 at 12.30 p.m. EEST
Interim Report of KONE Corporation for January-September 2016
July-September 2016: Solid development on a broad basis
* In July-September 2016, orders received totaled EUR 1,772 (7-9/2015: 1,764)
million. Orders received grew by 0.4% at historical exchange rates and by
3.3% at comparable exchange rates.
* Net sales declined by 0.6% to EUR 2,170 (2,184) million. At comparable
exchange rates, net sales grew by 1.9%.
* Operating income (EBIT) was EUR 331.1 (325.9) million or 15.3% (14.9%) of
net sales.
* Cash flow from operations (before financing items and taxes) was EUR 400.6
(432.0) million.
* KONE specifies its business outlook for 2016. In 2016, KONE's net sales is
estimated to grow by 3-5% at comparable exchange rates as compared to 2015.
The operating income (EBIT) is expected to be in the range of EUR
1,260-1,320 million, assuming that translation exchange rates would remain
at approximately the average level of January-September 2016. KONE
previously estimated its net sales to grow by 2-6% at comparable exchange
rates as compared to 2015. KONE's previous outlook for its operating income
(EBIT) was EUR 1,250-1,330 million, assuming that translation exchange rates
would have remained at approximately the average level of January-June 2016.
January-September 2016: Continued good operating performance
* In January-September 2016, orders received totaled EUR 5,782 (1-
9/2015: 6,012) million. Orders received declined by 3.8% at historical
exchange rates and by 1.2% at comparable exchange rates. The order book
stood at EUR 8,699 (September 30, 2015: 8,351) at the end of September 2016.
* Net sales grew by 1.7% to EUR 6,191 (6,085) million. At comparable exchange
rates the growth was 4.0%.
* Operating income was EUR 901.1 (863.0) million or 14.6% (14.2%) of net
sales.
* Cash flow from operations (before financing items and taxes) was EUR 1,100
(1,070) million.
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
Key figures 2016 2015 2016 2015 2015
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Orders received MEUR 1,771.7 1,764.5 5,781.8 6,011.8 7,958.9
Order book MEUR 8,699.0 8,350.7 8,699.0 8,350.7 8,209.5
Sales MEUR 2,170.2 2,184.2 6,191.1 6,085.5 8,647.3
Operating income (EBIT) MEUR 331.1 325.9 901.1 863.0 1,241.5
Operating income (EBIT) % 15.3 14.9 14.6 14.2 14.4
Cash flow from operations
(before financing items
and taxes) MEUR 400.6 432.0 1,099.6 1,070.2 1,473.7
Net income MEUR 259.9 263.3 724.6 680.4 1,053.1
Basic earnings per share EUR 0.52 0.50 1.42 1.30 2.01
Interest-bearing net debt MEUR -1,368.7 -1,137.6 -1,368.7 -1,137.6 -1,512.6
Total equity/total assets % 44.0 42.4 44.0 42.4 45.4
Gearing % -56.2 -52.1 -56.2 -52.1 -58.7
Henrik Ehrnrooth, President and CEO, in conjunction with the review:
"I am pleased with our continued solid performance in the third quarter. Orders
received grew by 0.4% at historical and 3.3% at comparable rates to EUR 1,772
million thanks to strong development in many countries. Sales was EUR 2,170
million, declining by 0.6% at historical rates but growing by 1.9% at comparable
rates. I am particularly satisfied with the continued positive development in
profitability despite the new equipment market having remained challenging
already for some time. The relative operating income increased to 15.3% of net
sales, and operating income grew to EUR 331 million driven by the good
development in the service business. Also our cash flow remained strong at EUR
401 million.
During the third quarter, global market trends continued to be mixed. Overall,
new equipment market volumes were rather stable following a stabilization in
China. We have updated our market outlook, and now expect the Chinese market to
decline by around 5% in units this year. However, price pressure and the shift
in customer preferences towards lower specification products continue to put
pressure on the monetary value of the Chinese market. During the quarter, the
global service market continued to offer growth opportunities in all regions.
Our third quarter performance demonstrates our ability to find opportunities
also in challenging markets. The clear growth in our orders received in both
EMEA and the Americas is a good example of this. In China, our third quarter
orders received developed slightly better than the Chinese market overall. In
the service business, we have been successful in accelerating the growth and are
excited about the additional potential going forward.
Over the past years, we have focused on understanding the needs of our customers
even better. Based on the findings, we have piloted and introduced new service
concepts to our customers with very encouraging results. We aim to accelerate
the development of new services and solutions, and have therefore decided to
increase our investment into R&D and IT. I would like to thank everyone at KONE
for their commitment to develop our business further in order to serve our
customers even better.
With three quarters of the year now behind us, we have further specified our
business outlook for 2016. We now expect sales growth of 3-5% at comparable
exchange rates and an operating income in the range of EUR 1,260-1,320 million,
assuming that translation exchange rates would remain at the average level of
January-September 2016."
Operating environment in July-September 2016
In the third quarter of 2016, the global new equipment market volumes were
rather stable compared to the previous year's corresponding period. The new
equipment market in China declined slightly in units. The market in the Europe,
Middle East and Africa (EMEA) region was rather stable, while the market
continued to grow in North America. Modernization demand continued to see growth
across all regions. Also the maintenance market continued to grow globally, with
the strongest rate of growth seen in the Asia-Pacific region and more moderate
development in Europe and North America.
Operating environment in January-September 2016
During January-September 2016, the new equipment market volumes in the Asia-
Pacific region weakened compared to the previous year's corresponding period due
to a decline in the significant China market. In the EMEA region, market
volumes saw slight growth in Central and North Europe. In South Europe, the new
equipment market was rather stable and continued to show positive signs in
demand. The market in the Middle East was stable. In North America, the new
equipment market continued to grow slightly from a high level. The large
European modernization market grew clearly in Central and North Europe and
showed early signs of recovery in South Europe. In North America, the
modernization market continued to grow slightly, and also the markets in the
Asia-Pacific region continued to offer increasing modernization opportunities.
The maintenance markets continued to grow globally, with the fastest rate of
growth seen in the Asia-Pacific region. The pricing environment remained
challenging in many markets, with the new equipment market in China seeing the
most intense pricing competition.
Market outlook 2016
In new equipment, the market in China is expected to decline by approximately
5% in units ordered. Competition is expected 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 slight growth in Europe and a more stable development in 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, but to develop rather well also in other regions.
Business outlook 2016
KONE slightly specifies its business outlook for 2016.
KONE's net sales is estimated to grow by 3-5% at comparable exchange rates as
compared to 2015.
The operating income (EBIT) is expected to be in the range of EUR 1,260-1,320
million, assuming that translation exchange rates would remain at approximately
the average level of January-September 2016.
Previous business outlook
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 1,250-1,330
million, assuming that translation exchange rates would remain at approximately
the average level of January-June 2016.
Press and analyst meetings
A meeting for the press, conducted in Finnish, will be held on Wednesday,
October 26, 2016 at 2:15 p.m. EEST.
A meeting for analysts, conducted in English, will begin at 3:45 p.m. EEST. 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: +1 719 325 4756
UK callers: +44 (0)203 043 2003
Finnish callers: +358 (0)9 7479 0361
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:
Sanna Kaje, Vice President, Investor Relations, tel. +358 204 75 4705
Sender:
KONE Corporation
Henrik Ehrnrooth
President and CEO
Ilkka Hara
CFO
About KONE
At KONE, our mission is to improve the flow of urban life. As a global leader in
the elevator and escalator industry, KONE provides elevators, escalators and
automatic building doors, as well as solutions for maintenance and modernization
to add value to buildings throughout their life cycle. Through more effective
People Flow®, we make people's journeys safe, convenient and reliable, in
taller, smarter buildings. 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
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