#1KONE KONE Capital Markets Day 2008 Significant growth potential for KONE in Russia Klaus Cawen Executive Vice President M&A and Strategic Alliances, Russia, Legal Affairs#2Significant growth potential for KONE in Russia Capital City, Moscow Rapidly growing economy ■ One of the top ten elevator markets ■ KONE uniquely positioned to drive growth 2 May 7, 2008 OKONE Corporation | Capital Markets Day I Klaus Cawén KONE#3Rapidly growing economy Третья очередь комплекса "Антей" Antey-III, Yekaterinburg KONE Strong GDP growth ▪ 140 million population – mostly urban ■ High disposable income - high consumption 3 May 7, 2008 O KONE Corporation | Capital Markets Day | Klaus Cawén#4Strong GDP growth KONE 12 10 8 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 4 May 7, 2008 O KONE Corporation | Capital Markets Day | Klaus Cawén Note: Real GDP Growth Source: Bank of Finland#5In addition to Moscow and St. Petersburg there are 11 cities with a population exceeding one million KONE St Petersburg Moscow Moscow St Petersburg Novosibirsk Nizhny Novgorod Yekaterinburg Samara Cities by Number of Inhabitants (Millions) Rural 26% Omsk Nizhniy Novgorod Perm Perm Rostov-na-Donu Kazan Kazan Samara ◆Yekaterinburg Ufa Ufa Chelyabinsk Rostov-on-Don Volgograd Omsk Chelyabinsk Volgograd Urban 74% 0 1 2 3 4 5 6 7 8 9 Novosibirsk Source: United Nations Population density and urbanization statistics 5 May 7, 2008 O KONE Corporation I Capital Markets Day I Klaus Cawén Source: United Nations Population Division estimates and projections#6High disposable income ■ Unleashed hungry urban consumers ■ 13% flat income tax Growing middle class ■ Demand for quality and brand value MIBC, Moscow 6 May 7, 2008 O KONE Corporation I Capital Markets Day I Klaus Cawén KONE#7One of the top ten elevator markets KONE Naberezhnaya Tower, Moscow Huge construction growth 450,000 elevators in operation Significant residential market 7 May 7, 2008 OKONE Corporation | Capital Markets Day I Klaus Cawén#8KONE Strong construction growth in Russia is forecasted to continue Office, commercial and residential construction activity, real EUR bn 20 206 • 2007 Nominal construction output (Office, commercial, residential): EUR bn 35 18 16 14 12 10 8 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008f 2009f 2010f 2011f 2012f Office Commercial Residential Source: Global Insight, Nov 2007 NOTE: The figures presented in the graph are real bn EUR figures, converted from USD 2000 real figures using recent conversion rates 8 May 7, 2008 O KONE Corporation I Capital Markets Day I Klaus Cawén#9Import elevators are gaining share in the growing Russian elevator market Russian elevator and escalator market, units KONE 35,000 30,000 38% 26,000 22,000 35% 33% 19,000 32% 15,000 31% 12,000 28% 26% 62% 65% 67% 68% 69% 72% 74% 2004 2005 2006 2007 2008F 2009F 2010F Local equipment Import 9 May 7, 2008 OKONE Corporation | Capital Markets Day | Klaus Cawén Source: KONE#10KONE is one of the two leading elevator companies on the Russian import market KONE Russian total new equipment market approx. 22,000 units in 2007 Comp1 KONE Local market 68% Import market 32% Comp2 10 May 7, 2008 O KONE Corporation | Capital Markets Day | Klaus Cawén Comp3 Source: KONE#11Residential segment clearly the biggest in KONE units 11 May 7, 2008 60 % (≈ 14,000 units) OKONE Corporation | Capital Markets Day | Klaus Cawén Residential ■ Office Retail Hotels Public Transportation ☐ Others#12Maintenance Split of KONE revenues in Russia 2007 Maintenance New equipment 12 May 7, 2008 OKONE Corporation | Capital Markets Day | Klaus Cawén KONE ☐ ■ Small share but growing every year through new installations ■ Moscow & St. Petersburg ■ Future base for modernization business as market develops#13KONE uniquely positioned to drive growth Imperia Tower, Moscow ■ Distribution network ■ Correct product portfolio for Russian market ■ Brand value linked to high quality and class 13 May 7, 2008 OKONE Corporation | Capital Markets Day | Klaus Cawén KONE#14KONE history in Russia goes back to the 1930's KONE ◉ 1935 1971 ▪ 1994 ■ 1995 2000 2007 ▪ 2008 First elevator deliveries to Russia KONE representative office in Moscow KONE subsidiary in Moscow KONE subsidiary in St. Petersburg Creation of distributor network started Acquisition of JSC Lift RSU-5 in St. Petersburg One of the two leading elevator companies in import segment with over 560 employees, subsidiaries in Moscow and St. Petersburg and 20 distributors covering all major cities 14 May 7, 2008 OKONE Corporation | Capital Markets Day | Klaus Cawén#15KONE coverage extends to all major cities. through 20 distributors KONE St KONE Petersburg Kaliningrad KONE • Moscow Lipetsk Voronezh Belgorodo N. Novgorod Krasnodar Izhevsk Tyumen Kazan Samara Yekaterinburg Ufa ●Chelyabinsk Omsk Sochi Volgograd 15 Tomsk Novosibirsk May 7, 2008 OKONE Corporation | Capital Markets Day | Klaus Cawén Habarovsk Vladivostok#16KONE elevator offering covers segments from KONE budget residential to high-rise Price KONE Alta ™ • High rise elevators • • Over 30 floors and 4 m/s and • KONE MiniSpaceⓇ Machine room elevators • Sold to High-class office segment and High rise residential segment KONE MonoSpace® and KONE MonoSpace® Special • Machineroomless elevators ⚫ KONE MonoSpaceⓇ sold primarily to mid-price office and • improved residential segment ⚫ KONE MonoSpace® Special sold to High-class residential segment and Office segment KONE EcoDomⓇ 5000 • Machine room elevators • Sold primarily to Mid-price residential segment KONE EcoDom® 3000 • Machine room elevators Sold primarily to Mid-low-price residential segment 16 May 7, 2008 OKONE Corporation | Capital Markets Day | Klaus Cawén Value#17KONE has a number of landmark projects in Russia Capital City Moscow ▪ This 274-meter high complex will be the tallest residential building in Europe ■73 floors ■48 elevators with speeds up to 7 m/s ■4 dual-purpose high-rise double deck elevators ▪6 escalators ▪KONE destination control system Antey-III Yekaterinburg Третья очередь комплекса "Антей" KONE ■ A first high-rise building in the Ural region ■ 50 floors ■ 19 elevators with speeds up to 6 m/s ■ KONE destination control system 17 May 7, 2008 KONE Corporation I Capital Markets Day I Klaus Cawén#18KONE has demonstrated continuous success in winning orders e.g. in the Moscow City project 19 Northern Tower KONE 11 City Terminal 12 MIBC 10 Naberezhnaya Tower 17-18 Twin Towers 18 16 17 12 13 10 B 7 Moscow-river 13 Federation Tower -st Krasnogvardeysky proyezd 20 EXPOCENTER 9 Capital City 4 Imperia Tower 18 May 7, 2008 O KONE Corporation | Capital Markets Day | Klaus Cawén 14 Rossija Tower 6-8 Central Core 2-3 City Palace 15 City Hall#19Future opportunities - construction outlook promises continued growth in Russia • . KONE Residential construction volumes to double, from 40 million m² to 80 million m² in 2007-2012 Significant replacement plans; 5-storey housing to 25-storey buildings Local municipalities plan to move industrial facilities away from city centers and build office, commercial and residential buildings Significant number of major projects planned in all major cities Olympics in Sochi 2014 bringing further growth 19 May 7, 2008 OKONE Corporation | Capital Markets Day | Klaus Cawén#20KONE is uniquely positioned to capture the growth opportunities in Russia Competitive product portfolio covering most segments Positive brand image linked to quality and high class Strong local presence 20 May 7, 2008 O KONE Corporation | Capital Markets Day | Klaus Cawén KONE#21www.kone.com KONE