March 23, 2020 / 9:43 AM / 15 days ago

BRIEF-Kone Downgrades Its Business Outlook For 2020 Due To COVID-19

March 23 (Reuters) - Kone Oyj:

* KONE DOWNGRADES ITS BUSINESS OUTLOOK FOR 2020 DUE TO THE ESTIMATED IMPACTS RELATED TO THE COVID-19 OUTBREAK

* IN Q1, RESTRICTIONS HAVE BEEN MOST SEVERE IN CHINA

* ON CORONAVIRUS: KONE DOWNGRADES ITS BUSINESS OUTLOOK FOR 2020 DUE TO ESTIMATED IMPACTS RELATED TO COVID-19 OUTBREAK

* IN REST OF WORLD, MEASURES ARE CURRENTLY INCREASING SIGNIFICANTLY

* NOW ESTIMATES THAT IN 2020, ITS SALES WILL DECLINE OR BE STABLE AT BEST AT COMPARABLE EXCHANGE RATES AS COMPARED TO 2019

* ADJUSTED EBIT MARGIN IS EXPECTED TO DECLINE SOMEWHAT OR TO BE STABLE AT BEST

* RATE OF DECLINE IN SALES WILL DEPEND ON DURATION AND SEVERITY OF GOVERNMENT MEASURES AND PACE OF RECOVERY.

* STABLE SALES WOULD REQUIRE A RELATIVELY BRISK RECOVERY IN SECOND HALF OF 2020

* SALES ARE EXPECTED TO DECLINE BY LESS THAN 5% IN CASE RESTRICTIVE MEASURES WOULD IMPACT KONE’S BUSINESS MAINLY IN FIRST HALF OF 2020

* SHOULD BROAD AND STRICT GOVERNMENT MEASURES CONTINUE TO IMPACT OPERATIONS WELL INTO H2 2020, KONE’S SALES ARE EXPECTED TO DECLINE BY 5-10%

* OVERALL OUTLOOK FOR SERVICE BUSINESS IS POSITIVE

* PROFITABILITY IS EXPECTED TO BE BURDENED BY WEAKER FIXED COST ABSORPTION DUE TO LOWER SALES, COSTS RELATED TO MEASURES

* EXCLUDING COVID-19 RELATED FACTORS, KONE’S PROFITABILITY OUTLOOK HAS BEEN POSITIVE

* PREVIOUSLY ESTIMATED ITS SALES TO GROW BY 0-6% IN 2020 AT COMPARABLE EXCHANGE RATES AS COMPARED TO 2019.

* PREVIOUSLY ADJUSTED EBIT WAS EXPECTED TO BE IN RANGE OF EUR 1,250-1,400 MILLION Source text for Eikon: Further company coverage: (Gdansk Newsroom)

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