Kyro Corporation    STOCK EXCHANGE RELEASE   4 February 2004, 8:30


- Growth strategy proceeded through acquisitions of Z. Bavelloni and
  Suomen Lämpölasi
- Net sales EUR 226.7 (144.3) million, growth 57 %
- Ebita EUR 22.9 (18.9) million, up 21%, 10.1 (13.1) % of net sales
- Earnings per share 0.31 (0.31) EUR, equity per share EUR 3.41 (3.36)
- Financial position good, equity ratio 58.6% (77.1%)
- Board’s proposal for dividend 0.15 euro per share plus
  supplementary dividend 0.15 euro per share
- Glaston Technologies´ new orders in December EUR 23.5 million
- Group order book EUR 81.4 (67.4) million


- The key strategy target for Kyro is profitable growth in Glaston
Technologies, both organically and through acquisitions. As the world
economy has provided limited possibilities for organic growth in 2002
and 2003, we have implemented Kyro’s growth strategy through
acquisitions. The glass processing machinery group in Glaston
Technologies is now the strong number one in the world of glass
processing machines, and the glass processing group as a comprehensive
supplier has the widest coverage of architectural glass products in
Finland, says President and CEO Pentti Yliheljo.

- Managing the growth brought by acquisitions while continuing to grow
organically presents the most significant challenges for Kyro.
Difficulty of change has been increased by the weak economic situation
in Europe and the major strengthening of the euro against all other
currencies important to us. We can be satisfied with the level of
results achieved in this situation. This success has been supported by
improved profits in Tamglass and Kyro Power, the location of Tamglass
manufacturing within different currency areas, and synergy and market
benefits provided by acquired companies.

- Glaston Technologies aims at improving profits through several
development and improvement projects. The most lucrative profit
improvements from synergies and cooperation in the new group structure
are also still to be realised. The trust received from our customers
and a good order book are now important as we face additional
challenges from exchange rates in 2004, Yliheljo continues.


Kyro’s main business area, Glaston Technologies, consists of the glass
processing machinery group, which is the leading global player in its
field, and the glass processing group, which focuses on markets in
Finland and neighbouring countries. Kyro’s second business area is
Energy, which consists of Kyro Power Oy.

Glaston Technologies grew strongly through acquisitions in 2002 and
2003. The comparison figures for Glaston Technologies in 2002 include
only companies acquired by the end of the year 2002. Z. Bavelloni,
Glasto and Suomen Lämpölasi Oy have been consolidated as of 1 January


Kyro Group net sales in 2003 grew by 57% through acquisitions and
amounted to EUR 226.7 (144.3) million. The strengthening of the euro
against other billing currencies slowed the growth of net sales as
well as sales. The relative effect of currency exchange rates on
profitability was larger. However, Group operating profit before
amortisation of goodwill grew by 21% to EUR 22.9 (18.9) million. Its
share of net sales was 10.1% (13.1%). Amortisation of goodwill was EUR
3.1 (0.2) million and operating profit after amortisation amounted to
EUR 19.8 (18.7) million.

Net financal items amounted to EUR 0.58 (-0.60) million. This includes
interest, dividend and other financial income of EUR 2.47 (3.06)
million, and interest and other financial expenses of EUR 1.89 (3.66)
million. Profit before extraordinary items grew by 13% to EUR 20.4
(18.1) million. Its share of net sales was 9.0% (12.5%).

Profit for the financial year was EUR 12.2 (11.7) million. Return on
invested capital stood at 14.1% (13.6)%. Earnings per share totalled
EUR 0.31 (0.31) and equity per share EUR 3.41 (3.36). Key figures are
influenced by the fact, that the number of shares outstanding has
grown by 1,318,878 (3.3 %) since the end of the comparison year,
because treasury shares have been used as partial consideration in

Business activities of the Group’s parent company consist of financing
and investing activities, as well as group administration services.
The parent company’s net sales totalled EUR 0.7 (0.7) million and its
profit for the financial period was EUR 41.2 (10.3) million. In the
profit has been entered EUR 43.7 million as dividends from
subsidiaries under financial income and EUR 17.8 million as group
contributions under extraordinary items.

Kyro’s order book increased to EUR 81.4 (67.4) million despite
unfavourable currency rate developments,. The order book was boosted
by a good commercial success in the last quarter and the order books
of newly acquired Group companies.

Figure 1.  Net sales, operating profit and order book, EUR million.

                        Net Sales   Operating profit**  Order Book
                       2003    2002    2003    2002    2003    2002

Glaston Technologies* 198.4   117.8    19.7    15.5    58.8    45.2
Energy                 28.3    26.3     5.6     5.5    22.6    22.2
Parent company, other operations
  and eliminations      0.0     0.2    -2.4    -2.1
Group total           226.7   144.3    22.9    18.7    81.4    67.4

*  Glaston Technologies’ comparison figures for 2002 do not include
companies consolidated only after 31 December 2002.

** Operating income before amortisation of consolidation goodwill.


The Group´s financial standing is good. Acquisitions and higher than
normal dividends decreased the equity ratio to 58.6 (77.1) %. A total
of EUR 11.8 million was paid as dividends, of which EUR 5.9 million as
dividends decided by the Annual General Meeting and EUR 5.9 million as
supplementary dividends decided by an Extraordinary Shareholders’
Meeting in December.

Cash flow from business operations was EUR 19.6 (14.7) million. The
Group's liquid funds totalled EUR 29.1 (55.7) million. Interest-
bearing net liabilities amounted to EUR 4.4 (-52.2) million. Gearing
stood at 3.2% (–40.5%).


Kyro Group investments amounted to EUR 62.7 (6.8) million, the bulk of
which consisted of the purchase cost of Z. Bavelloni, Glasto and
Suomen Lämpölasi Oy shares.


Research and development expenses entered in the income statement for
the financial period totalled EUR 9.8 (6.6) million, all relating to
Glaston Technologies.


At the end of the financial period Kyro Group had 1,127 (531)
employees, of whom 706 (161) worked abroad. The average number of
employees was 1,015 (536).

The number of employees has increased due acquisitions as well as
recruitment at Tamglass plants in China and Brazil. The acquired
companies employed 704 persons on 31 December 2003.

Figure 2. Number of personnel on 31 December

                             2003              2002

Glaston Technologies        1,093               497
Energy                         24               24
Kyro Corporation               10                10
Kyro Group                  1,127               531


A total of 3,116,471 Kyro Corporation shares were traded on the
Helsinki Exchanges in 2003, which equals 7.9 (7.8) % of the total
number of shares. The lowest price paid for a Kyro Corporation share
on the Helsinki Exchanges was EUR 5.40 and the highest price EUR 8.20.
The average price during the year was EUR 7.16.


Based on the authorisation given by the Annual General Meeting on 19
March 2003, the Board of Directors decided on 21 March 2003 to
purchase a maximum of 1,983,750 treasury shares through public trading
on the Helsinki Stock Exchanges at the market value at the time of
purchase. The period for share acquisition ends on 19 March 2004. The
company had not exercised the authorisation by 4 February 2004.

Figure 3. The conveyance of treasury shares as partial consideration

Date        Acquisition           Amount of shares      Price/share

20.01.2003  Z. Bavelloni          3.0 % of share capital  EUR 5.97
07.01.2003  Suomen Lämpölasi      0.2 % of share capital  EUR 6.35
04.09.2003  Uniglass              0.2 % of share capital  EUR 7.20

On 31 December 2003 Kyro Corporation held 164,952 treasury shares,
representing 0.4 % of its total share capital.


An extraordinary general meeting of Tamglass Ltd. Oy on 20.12.2002
approved a new option programme which may be applied to Tamglass key
personnel and Kyro management. The option programme consists of 35,000
A options with an exercise period of 1.5.2005-31.5.2009 and 35,000 B
options with an exercise period of 1.5.2007-31.5.2009. The options
entitle the subscription of at most 70,000 Tamglass Ltd. Oy shares,
which correspond to 8.0% of shares in the company.

In accordance with restrictions in the incentive programme, share
subscription using options is possible only by permission from Kyro
Corporation, but the options may be sold to Kyro Corporation during
their exercise period at a price which is defined as the difference
between the calculational value of the share and the subscription
price. Two thirds of the calculational value of the share is based on
the results of the Tamglass Group and one third on the development of
the Kyro share price.


The term of office of Kyro Corporation’s Board of Directors is 2001-
2004. Board members at the beginning of the year were Lauri Fontell,
Lars Hammarén, Carl-Olaf Homén, Barbro Koljonen, Carl-Johan Numelin,
Carl-Johan Rosenbröijer, Christer Sumelius and Gerhardt Wendt.

On 10 March 2003 Lauri Fontell notified the company that he wished to
leave Kyro Corporation’s Board of Directors before the end of his
term. He was replaced by Heikki Mairinoja for the remainder of the
board’s term by an unanimous vote. KPMG Wideri Oy were appointed as
the company’s auditors with Sixten Nyman as the responsible auditor.

The board elected C-J Numelin to continue as the chairman and C
Sumelius as the deputy chairman.


The Kyro Corporation Board proposes that a dividend of EUR 0.15 per
share plus a supplementary dividend of EUR 0.15 per share totalling
EUR 11.8 million, will be paid for the financial period 2003. Dividend-
entitling shares totalled 39,510,048 on 4 February 2004.

The dividend is paid to shareholders listed on the ownership list of
the Finnish Securities Depository Ltd by the date of record 22 March
2004. The Board proposes that the dividend be paid on 29 March 2004.


On 20 January 2003 Kyro Corporation purchased all shares of Z.
Bavelloni Immobiliare S.p.A. and Glasto Holding B.V. Merging the
parent company Z. Bavelloni Immobiliare S.p.A with its operational
subsidiary, Z. Bavelloni S.p.A and Kyro Italy S.p.A to form a single
company Z. Bavelloni S.p.A. was completed in December. On 7 January
2003 Tamglass Ltd. Oy also purchased a 70% share in Suomen Lämpölasi
Oy, a manufacturer of insulating glass elements.


Kyro Group will adopt accounting policies compliant with the
international IFRS standard during 2005. Financial statements and
interim reports for 2004 will be based on Finnish accounting
principles but the company will simultaneously collect comparison data
for the transition period. The most significant changes to accounting
principles relate to net sales recognition, the discontinuation of
goodwill amortisation, and its replacement with annual impairment


Glaston Technologies net sales grew by 68% through acquisitions and
amounted to EUR 198.4 (117.8) million. The impact of the strengthening
of the euro is evident in that net sales would have been 10% higher if
exchange rates had remained at their 2002 levels.

Operating profit before amortisation of goodwill increased by 27% to
EUR 19.7 (15.5) million, despite a larger relative effect from
exchange rates on profitability than on net sales. Operating profit
before amortisation of goodwill amounted to 9.9% (13.2%) of net sales.

Net sales and operating profit before amortisation of goodwill reached
again their highest level for the year in the last quarter.

The sales volume of the Tamglass Group grew clearly, but the increase
in the net sales was less due to the currency impact mentioned before.
Regional machine manufacturing in Tamglass has been set up to partly
cover against strong exchange rate fluctuations and it compensated
partly for the impact of the strong euro on profits. Profitability was
further improved by new successful products and efficient logistics.

The strenthening of the euro and current economic cycle reduced the
net sales and profitability of the Bavelloni Group. The company’s new
orders have been increasing again since the third quarter.

The order book of Glaston Technologies grew to EUR 58.8 (45.2) million
thanks to a record amount of machine orders in December worth EUR 23.5
million. The order book of Bavelloni is clearly smaller than that of
Tamglass relative to business volumes because the company’s products
are mainly supplied from stock, except for some of the biggest CNC


The glass processing machinery group of Glaston Technologies consists
of Tamglass - the market and technology leader in safety glass
machinery, Z. Bavelloni - a leading supplier of glass pre-processing
machines and tools, Glasto - a group of distribution companies and
Uniglass Engineering - a supplier of flat tempering machines.
Bavelloni also manufactures machines and tools for stone processing.

Synergies between Tamglass and Bavelloni

Bavelloni and Tamglass launched close co-operation in sales,
maintenance and logistics. Synergy benefits were achieved already
during the period under review in the form of increased market share
as well as cost savings from cooperation in purchasing and logistics.
The companies introduced a One-Stop-Partner concept, which offers
comprehensive deliveries of glass processing machines and was
enthusiastically received.

Markets and sales

The popularity of glass in architecture, the increasingly general
application of value-added glass products, the growing size and new
forms of glass surfaces in vehicles, and safety glass regulations all
contribute to an increased demand for glass. This establishes a basis
for long-term growth by the glass processing machinery group, wherein
the the largest growth is seen for safety glass machines.

The current economic cycle slowed the sales of glass processing
machines, particularly at the beginning of the year in the U.S. and
Central Europe. The investment climate took a clear positive turn in
the U.S. in the last quarter.

The demand in the Far-East turned good for the whole year, despite the
effects of SARS. The situation for Kyro in South America is set by
Brazil, where reasonable demand continued. The Iraq war and uncertain
situation affected demand in the Middle East.

Production and new products

The capacity utilisation rate of machine production in Glaston
Technologies was at a good level in the latter part of the year. The
production at all machinery companies is based on assembly and
subcontracting, which enables flexible use of capacity.

Bavelloni strengthend its position in Brazil by starting regional
production and acquiring a sales network.

The leading position of Tamglass ProBend and ProConvection success
products in the most demanding product categories continues to
strengthen. Tamglass introduced a new HTF Super version of the world’s
most popular HTF flat tempering machine. Bavelloni launched, e.g., CNC
lines for large glass sheets and a cost-effective grinding machine.

All operations of Uniglass Engineering were centralised at the
company’s machinery plant, which creates cost savings and improves
operational efficiency. To complement its flat tempering machine
range, Uniglass Engineering launched a new UGT UniTop model in late

Maintenance services

The current economic cycle and the situation in Middle East lowered
the capacity utilisation rate of the glass processing industry, which
affected sales of maintenance services. Still, the number of
maintenance contracts continued to grow. Purchase decisions for second-
hand machines have also largely been postponed to the beginning of

Tamglass launched several renovation and change packages, which may be
used to enhance machine operations to meet new processing needs.

The global maintenance network of Tamglass and Bavelloni was  expanded
in Eastern Europe and other locations.


The glass processing group of Glaston Technologies consists of
Tamglass Glass Processing, which includes Tamglass Safety Glass - a
safety glass processor,  Tamglass Finton - a balcony systems
manufacturer and Tamglass Insulating Glass - an insulating glass
element manufacturer.

Markets and sales

The use of glass in Finnish construction is at a good level. The
economic situation reduces new office construction, which is a very
important application area for glass. Building renovations, on the
other hand, have a strong emphasis on glass construction.

The business concept of Tamglass Glass Processing, which provides
comprehensive deliveries, has been well received by customers.
Tamglass Finton and Tamglass Insulated Glass increased their volumes
significantly after becoming part of Tamglass Glass Processing.

Tamglass Glass Processing launched a business concept for
comprehensive deliveries of glass processing products, which was well
received by customers. In addition, glass processing units
strengthened their sales organisations.

Tamglass Glass Processing delivered glass to several demanding
construction projects, such as the main post office in Stockholm, the
ferry terminal in the southern port of Helsinki, the Ikea headquarters
in Helsingborg, and the new annex at the University of Tampere among

Essential overall glass processing expertise

Tamglass Glass Processing enhanced its operations to meet the demands
of its new business concept.  The glass processing plants have
achieved cost savings from internal deliveries and centralised
purchasing. Based on its own efficient operations, Tamglass Glass
Processing provides the product development of the glass processing
machinery group with market information concerning trends in glass
processing requirements and acts as a testing and demonstration plant
for new machines.


Net sales, operating profit and order book

The net sales of the energy business area was EUR 28.3 (26.3).
Operating profit amounted to EUR 5.6 (5.5) million. Its share of net
sales was 19.6% (20.9%). Kyro Power’s order book (12 months) totalled
EUR 22.6 (22.2).

Development of energy markets

The market price of electricity fluctuated greatly. The volumne of
Nordic hydropower production decreased during the cold winter and dry
summer, which lead to an increase in the electricity prices. Rains and
a mild early Winter, however, reduced the price of electricity in the
latter part of the year. On average, the market price of electricity
exceeded that of the previous year by one-third.

Energy production

The turbine of the gas power plant underwent corrective maintenance in
the Autumn. Low water levels in Kyrösjärvi restricted the utilisation
rate of the hydropower plant.

Acquisition of the Hämeenkyrö district heating network

Kyro Power acquired the district heating network of the Hämeenkyrö
municipality, which strengthens the company´s district heating
operations. The district heating operations of Hämeenkyrö were
transferred to Kyro Power’s subsidiary, Hämeenkyrön Lämpö Oy, in


The basic set-ups for the business areas within the Kyro Group are
good. Glaston Technologies is the world market leader in a growing
business segment, and it has a good order book. The business of Kyro
Power is stable and profitable.

The major unknowns in 2004 concerning Kyro relate to the exchange rate
of the euro and changes in it, as well as the general economic
develepment, particularly in the large EU countries.

Glaston Technologies aims at improving its profitability by developing
its operations and making use of synergy benefits.

If the exchange rate of the euro remains at its current level or
strengthens further, year 2004 will be more challenging to Kyro than
the previous one.


The company will publish three interim reports in 2004.

Interim report 1/2004 (1.1-31.3.2004) on 05 May 2004
Interim report 2/2004 (1.1-30.6.2004) on 12 August 2004
Interim report 3/2004 (1.1-30.9.2004) on 03 November 2004

The printed version of the annual report will be sent to shareholders
during week 11. The electronic version will also be published in the
Internet, at, the same week.

The Annual General Meeting of Kyro will be held on 17 March 2004 at
16:00 in Hilton Helsinki Kalastajatorppa.

Helsinki 4 February 2004

Kyro Corporation

Board of Directors

Additional information on Kyro’s financial reports is available from
Kyro’s President, Pentti Yliheljo, and its Chief Financial Officer,
Veli Kronqvist. Phone:  +358 3 72 3111.

Investor            Kyro Corporation, Mr. Mika Nevalainen, VP,
relations           Corporate Communications, Phone +358 400
                    882 024,
IR pages at the internet address

Distribution:       Helsinki Exchanges
                    Key media


Consolidated Income Statement, EUR million

                                  1-12/03                1-12/02*

Net sales                           226.7                  144.3
Other operating income                1.6                    0.9
Expenses                            198.6                  121.1
Depreciation and amortisation
of goodwill                           6.8                    5.2
Operating profit before amortisation
of goodwill                          22.9                   19.3
% of net sales                       10.1                   13.1
Amortisation of
consolidation goodwill                3.1                    0.2
Operating profit                     19.8                   18.7
  % of net sales                      8.7                   13.0
Net financial items                   0.6                   -0.6
Profit before extraordinary
items                                20.4                   18.1
Income tax                           -5.4                  - 5.7
Minority interest                    -1.5                   -0.6
Profit for the financial period      12.2                   11.7

*  Glaston Technologies comparison figures for 2002 do not include
companies acquired only after 31 December 2002.

Consolidated Balance Sheet, EUR million
                                     2003                   2002

Fixed assets                        118.6                   73.6
 Inventories                         32.2                   15.7
 Deferred tax receivable              8.3                    6.1
 Other current assets                86.9                   91.7
Assets                              246.1                  187.1

Shareholders’ equity                135.9                  137.1

Minority interest                     2.2                    0.7
Non-discretionary reserves            5.6

  Interest bearing liabilities       33.4                    3.7
  Non-interest bearing liabilities   60.6                   38.7
Equity and liabilities              246.1                  187.1

Key figures                       1-12/03                1-12/02

Return on invested capital, %        14.1                   13.6
Return on equity, %                  10.3                    9.4
Equity ratio, %                      58.6                   77.1
Gearing, %                            3.2                  -40.5
Investments, EUR million             62.7                    6.8
 % of net sales                      27.7                    4.7
Research and development
EUR million                           9.8                    6.6
Personnel, average                  1,015                    536
Personnel at year-end               1,127                    531
in Finland                            421                    370
Order book, EUR million              81.4                   67.4

Key figures                        1-12/03                1-12/02

Earnings per share, EUR               0.31                  0.31
Equity per share, EUR                 3.41                  3.36
Number of shares, 1,000             39,675                39,675
- outstanding on 31 Dec.            39,510                38,191
Number of shares on average         39,388                38,160
Share price
 average price                        7.16                  6.25
 Lowest                               5.40                  5.00
 Highest                              8.20                  7.35
Share price at year-end               7.90                  6.34
Market capitalisation of share capital
at year-end,
EUR million                          313.4                 251.5
Turnover, no. of shares          3 116 471             3 084 189
Turnover, % of total                   7.9                   7.8
Turnover, EUR million                 22.3                  19.3
Dividend per share, EUR               0.15                  0.15
Supplementary dividend per share, EUR 0.15                  0.15
Dividend per earnings, %              96.8                  96.8
Effective dividend yield,%             3.8                   4.7
P/E ratio                             25.5                  20.5

                                      2003                  2002
Contingent liabilities, EUR million

Mortgage on company assets            0.4                   0.5
Other liabilities                    18.6                   7.8
Derivatives contracts
Value of underlying assets
  Forward currency contracts         24.1                  18.4
  Electricity contracts               2.7                   3.2
Market value
  Forward currency contracts         22.7                  17.5
  Electricity contracts               2.5                   5.4

Cash Flow, EUR million
                              31.12.2003          31.12.2002
Cash flow from operations
before financial items and taxes     25.6                20.5
Financial items                      -0.5                -0.5
Taxes paid                           -5.5                -5.3
Cash flow from business operations   19.6                14.7

Cash flow from investments           -5.3                -1.1
Acquisition of subsidiaries         -69.3                -2.3
Cash flow from investments          -74.7                -3.4

Dividends paid                      -11.7                -13.3
Disposal of treasury shares           8.0                  0.7
Change in net debt                   30.3                 -2.2
Cash flow from financing             26.6                -14.7

Change in liquid assets             -28.5                 -3.4

                             Net sales
                       2002                 2003
              1-3   4-6   7-9   10-12   1-3   4-6   7-9   10-12
                                 EUR million                   ‘
Technologies 25.0  34.3  23.0    35.4  46.4  48.2   40.2   63.6
Energy        6.5   5.7   6.0     8.2   8.0   6.8    6.5    7.0
Parent company,
other operations
& eliminations
              0.1   0.0   0.0     0.0   0.0   0.0   -0.1    0.0
Group total  31.6  40.0  29.0    43.6  54.4  55.1   46.6   70.6

Operating income before amortisation of consolidation goodwill, EUR
millions / EBITA%
                       2002                 2003
              1-3   4-6   7-9   10-12   1-3   4-6   7-9   10-12 ‘
Technologies  2.5   3.9   2.4     6.7   4.3   4.5    3.3    7.6
EBITA%       10.0  11.5  10.3    18.9   9.3   9.3    8.3   12.0
Energy        1.3   1.1   1.1     2.0   1.7   1.5    1.1    1.3
EBITA%       20.6  18.5  19.1    24.3  20.8  22.1   16.9   18.4
 Parent company,
other operations
& eliminations
             -0.5  -0.7  -0.6    -0.4  -0.8  -0.6   -0.4   -0.7
Group total   3.4   4.3   2.9     8.3   5.2   5.4    4.0    8.2
EBITA%       10.6  10.8  10.1    19.1   9.6   9.9    8.6   11.7

                        Order book, EUR millions

             3/02   6/02   9/02  12/02   03/03   06/03  09/03  12/03
Technologies 49.5  49.7    42.1   45.2    63.6    54.0   60.3   58.8
Energy       23.6  23.0    23.0   22.2    22.0    22.2   22.6   22.6
Group total  73.1  72.7    65.1   67.4    85.6    76.2   82.9   81.4