UPDATE 2-Kone's CEO gets off at the top after reporting strong order book

Tue Jan 28, 2014 9:27am EST

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By Ritsuko Ando and Jussi Rosendahl

HELSINKI, Jan 28 (Reuters) - Finnish lifts and escalators firm Kone's chief executive Matti Alahuhta is to step down at the end of March, the company announced on Tuesday, after reporting a rise in profits and higher orders due to strong demand in China.

Alahuhta, 61, a well-known figure in Finland who has also served on the executive board of Nokia, said nine years as CEO was a long time and that he wanted to do something new. He will be replaced by chief financial officer Henrik Ehrnrooth.

Alahuhta told reporters that he did not intend to take on another role as a CEO and denied he was angling for the top job at Nokia, which is in the process of finding a new leader following the sale of its mobile phones business to Microsoft.

Under Alahuhta Kone's business has expanded globally, benefiting from growth in construction and high-rise developments in markets such as China and the Middle East, and analysts said he was leaving at a time when the company was on a steady growth track.

The share price was up 2 percent at 32.94 euros by 1340 GMT.

"He is respected and has accomplished a lot at Kone. But I think the organisation today is very strong, so his departure should not be a major issue for the company's future in that respect," said Pareto Securities analyst Jari Harjunpaa.

In the fourth quarter Kone's operating income rose 14 percent to 293 million euros ($401 million). While that was in line with expectations orders received in the quarter rose to 1.47 billion euros, beating the average market forecast of 1.37 billion euros according to a Reuters poll.

"The growth of the Chinese market picked up again in the last quarter of the year, resulting in a full-year market growth rate of slightly above 15 percent," Alahuhta said in a statement.

The company forecast the Chinese market would grow by approximately 10 percent in 2014.

The mid-point of its forecast range for operating profits in 2014 was 980 milllion euros to 1.05 billion euros, weaker than the market's forecast for 1.05 billion, but analysts said the outlook for China was encouraging.

"Their outlook for China is brighter than I expected. Also, this company has traditionally been a bit conservative with its guidances, so it looks like the Chinese market remains pretty strong for them," said Harjunpaa. ($1=0.7313 euros) (Editing by Greg Mahlich)

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