Interim Report of KONE Corporation for January-March 2013
KONE Corporation, stock exchange release, April 23, 2013 at 12:30 p.m. EET
January-March 2013: Very strong start to the year
-
In January-March 2013, orders received totaled EUR 1,712 (1-3/2012: 1,366) million. Orders received increased by 25.4% at historical exchange rates and by 24.7% at comparable exchange rates. The order book stood at EUR 5,823 million at the end of March 2013 (Dec 31, 2012: 5,050 million).
-
Net sales grew by 12.7% to EUR 1,399 (1,241) million. At comparable exchange rates the growth was 12.2%.
-
Operating income was EUR 160.4 (134.6) million or 11.5% (10.8%) of net sales.
-
Cash flow from operations was EUR 297.8 (252.2) million.
-
KONE specifies its outlook due to the strong order intake in the first quarter. KONE's net sales is estimated to grow by 7-10% at comparable exchange rates as compared to 2012. The operating income (EBIT) is expected to be in the range of EUR 870-920 million, assuming that translation exchange rates do not materially deviate from the situation of the beginning of 2013. Previously KONE estimated net sales to grow by 5-9% at comparable exchange rates as compared to 2012. The operating income (EBIT) was expected to be in the range of EUR 840-920 million, assuming that translation exchange rates do not materially deviate from the situation of the beginning of 2013.
Key Figures
Comparative figures for 2012 have been restated according to the revised IAS 19 Employee benefits.
| 1-3/ 2013 | 1-3/ 2012 | 1-12/ 2012 | ||
| Orders received | MEUR | 1,712.4 | 1,365.9 | 5,496.2 |
| Order book | MEUR | 5,823.1 | 4,842.8 | 5,050.1 |
| Sales | MEUR | 1,398.7 | 1,241.3 | 6,276.8 |
| Operating income (EBIT) | MEUR | 160.4 | 134.6 | 828.7 1) |
| Operating income (EBIT) | % | 11.5 | 10.8 | 13.2 1) |
| EBITA | MEUR | 165.2 | 143.3 | 861.5 1) |
| EBITA | % | 11.8 | 11.5 | 13.7 1) |
| Cash flow from operations (before financing items and taxes) | MEUR | 297.8 | 252.2 | 1,070.8 |
| Net income | MEUR | 125.8 | 109.5 | 611.0 |
| Total comprehensive income | MEUR | 143.0 | 94.6 | 591.7 |
| Basic earnings per share | EUR | 0.49 | 0.43 | 2.35 |
| Interest-bearing net debt | MEUR | -406.5 | -489.8 | -574.0 |
| Total equity/total assets | % | 37.7 | 46.3 | 47.1 |
| Gearing | % | -26.6 | -29.2 | -31.3 |
1) Excluding a MEUR 37.3 one-time cost related to the support function development and cost adjustment programs.
Matti Alahuhta, President & CEO, in conjunction with the review:
"Our start to the year was very strong. Orders received grew by 25% to EUR 1,712 million as a result of exceptionally strong growth in both Asia-Pacific and North America. Sales grew by over 12% to 1,399 million and operating income by 19% to EUR 160 million. Cash flow was at a very good level at EUR 298 million. I want to express my thanks to all KONE employees for their excellent work!
The markets developed largely in line with our expectations in the first quarter. The growth of the Chinese new equipment market was, however, clearly faster than we expected. We estimate the growth rate in China to decrease clearly already in the second quarter of the year, and our market growth expectation for the full year in China is approximately 10%. Also elsewhere in Asia-Pacific the new equipment market grew. Market growth continued in North America, but price competition remained intense especially in the maintenance market. The European new equipment and modernization markets continued to decline, and the maintenance pricing environment remained challenging particularly in South Europe.
As a result of the strong order intake during the first quarter, we have specified our guidance for the full year. We now expect our sales to grow by 7-10% at comparable exchange rates and the operating income to be in the range of EUR 870-920 million, assuming there is no significant change in the translation exchange rates."
Operating environment in January-March 2013
In the first quarter of 2013, the new equipment market in Asia-Pacific grew faster than at the end of 2012, whereas the development trends of other regions were largely unchanged from the latter part of 2012. New equipment demand in the EMEA region declined slightly but remained at a relatively good level in Central and North Europe, and declined further from an already weak level in South Europe. Market growth continued in North America. The major projects segment grew driven by high activity levels in China and the Middle East. The global modernization market was relatively stable, although with regional variations. Maintenance markets grew in most countries, although at low rates in countries where new equipment activity has been weak over the past years. Price competition remained very intense, particularly in regions where the overall market activity was at a low level.
Market outlook 2013
In new equipment, the market in Asia-Pacific is expected to grow clearly in 2013. The new equipment market in China is expected to grow by approximately 10% in 2013. The market in Central and North Europe is expected to decline slightly, and the market in South Europe to further decline from an already weak level. The market in North America is expected to continue to grow.
The modernization market is expected to be at about the same level as in 2012 or decline slightly.
The maintenance market is expected to continue to develop rather well in most countries.
Business outlook 2013
KONE specifies its outlook due to the strong order intake in the first quarter.
KONE's net sales is estimated to grow by 7-10% at comparable exchange rates as compared to 2012.
The operating income (EBIT) is expected to be in the range of EUR 870-920 million, assuming that translation exchange rates do not materially deviate from the situation of the beginning of 2013.
Previous business outlook
KONE's net sales is estimated to grow by 5-9% at comparable exchange rates as compared to 2012.
The operating income (EBIT) is expected to be in the range of EUR 840-920 million, assuming that translation exchange rates do not materially deviate from the situation of the beginning of 2013.
Press and analyst meetings
A meeting for the press, conducted in Finnish, will be held on Tuesday, April 23, 2013 at 2:15 p.m. EET.
A meeting for analysts, conducted in English, will begin at 3:45 p.m. EET. The meeting will be available as a live webcast on www.kone.com. The meeting participants can also join a telephone conference that will be arranged in conjunction with the meeting. The telephone conference details are set out below.
Both meetings will take place in the KONE Building, located at Keilasatama 3, Espoo, Finland.
Telephone conference numbers:
US callers: +1 334 323 6203
UK callers: +44 207 1620 177
Finnish callers: +358 9 2313 9202
Participant code: KONE
An on-demand version of the webcast will be available on www.kone.com later during the same day.
For further information, please contact:
Karla Lindahl, Director, Investor Relations, tel. +358 (0) 204 75 4441
Sender:
KONE Corporation
Henrik Ehrnrooth
CFO
Anne Korkiakoski
Executive Vice President
Marketing & Communications
About KONE:
KONE is one of the global leaders in the elevator and escalator industry. 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 2012, KONE had annual net sales of EUR 6.3 billion and approximately 40,000 employees. KONE class B shares are listed on the NASDAQ OMX Helsinki Ltd in Finland.
www.kone.com