1 KONE Annual Review 2024

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Annual Review 2024

2 KONE Annual Review 2024

Contents

KONE as a company

Board of Directors’ Report

Key figures and financial development

Shares and shareholders

Sustainability Statement

Consolidated financial statements

Consolidated statement of income

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Notes to the consolidated financial statements

1. Basis of preparation

2. Financial performance

3. Net working capital

4. Acquisitions and capital expenditure

106

5. Capital structure

114

6. Other notes

127

Parent company financial statements

132

Board of Directors’ dividend proposal and

signatures

150

Auditor’s reports

151

Corporate Governance Statement

160

Investor information

170

KONE as a company | KONE in brief

3 KONE Annual Review 2024

KONE in brief

At KONE, our purpose is to shape the future of cities. As a global leader

in the elevator and escalator industry, we move two billion people every

day, making their journeys safe, convenient, and reliable with smart and

sustainable People Flow®.

Sales approximately

EUR 11 billion in 2024

We move 2 billion

people every day

More than 1,700,000

equipment in KONE’s service base

More than 60,000

employees

Close to 600,000 customers

Operations in close to 70 countries,

and authorized distributors and

agents in close to 100 countries

KONE as a company | Key figures

4 KONE Annual Review 2024

Key figures

Orders received

(MEUR)

Sales (MEUR)

Adjusted EBIT (MEUR) and

adjusted EBIT margin (%)

Cash flow

(MEUR)

Earnings per share (EUR)

Dividend per class B share

(EUR)

Orders received do not include Service

contracts

Cash flow from operations before

financing items and taxes

Board’s proposal

9,131

8,578

8,759

2022 2023 2024

10,907

10,952

11,098

2022 2023 2024

1,077

1,248

1,303

9.9%

11.4%

11.7%

2022 2023 2024

755

1,485

1,589

2022 2023 2024

1.50

1.79

1.84

2022 2023 2024

1.75

1.80

2022 2023

2024 ⁴

Sales by Area

25 %

(23 %)

38 %

(37 %)

14 %

(13 %)

23 %

(27 %)

Americas Europe APMEA Greater China

1-12/2024 (1-12/2023)

Sales by business

41 %

(45 %)

41 %

(38%)

19 %

(17 %)

New Building Solutions Service Modernization

1-12/2024 (1-12/2023)

1–12/2024

1–12/2023

Change

Change at

comparable

exchange rates

Orders received

MEUR

8,758.9

8,577.7

2.1%

3.3%

Order book

MEUR

9,058.6

8,715.7

3.9%

1.4%

Sales

MEUR

11,098.4

10,952.3

1.3%

2.2%

Operating income

MEUR

1,249.0

1,200.1

4.1%

Operating income margin

11.3

11.0

Adjusted EBIT ¹

MEUR

1,303.0

1,248.4

4.4%

Adjusted EBIT margin ¹

11.7

11.4

Income before tax

MEUR

1,254.1

1,206.1

4.0%

Net income

MEUR

961.0

931.6

3.2%

Basic earnings per share

EUR

1.84

1.79

2.7%

Cash flow from operations (before financing items and taxes)

MEUR

1,589.3

1,485.2

Interest-bearing net debt

MEUR

-831.2

-1,013.4

Equity ratio

39.8

40.9

Return on equity

33.8

33.0

Net working capital (including financing items and taxes)

MEUR

-827.2

-861.2

Gearing

-28.7

-36.4

KONE presents adjusted EBIT as an alternative performance measure to enhance comparability of business performance between reporting periods. In 2024, items

affecting comparability amounted to EUR 54 million including EUR 36 million restructuring costs and EUR 18 million expensed development costs as a result of redirecting

development activities in alignment with KONE's new strategy. Majority of the items affecting comparability pertain to the restructuring of China operations. In the

comparison period, items affecting comparability included restructuring costs and a positive effect recognized on completion of the sale of operations in Russia.

Adjusted EBIT

Adjusted EBIT margin

KONE as a company | KONE’s strategy

5 KONE Annual Review 2024

KONE’s strategy

At KONE, our purpose is to shape the future of

cities. We make urban life more vibrant and

livable. And we do it by enabling safe,

sustainable, and effortless people flow for all.

We help cities leave a positive mark on the

planet – for the next century and beyond. We

shape the future of cities.

KONE’s strategy 2021–2024

KONE’s strategy for 2021–2024 ‘Sustainable success with

customers’ focused on increasing the value KONE creates for

its customers with new intelligent solutions and on embedding

sustainability even deeper across all of its operations.

KONE had defined four Where to Win areas representing

the biggest opportunities for profitable growth: Core products

and services; New solutions for customer value; Smart and

sustainable cities, as well as Service and Modernization

business in China.

In addition, KONE had defined four Ways to Win:

Empowered people; Marketing and sales renewal; Lean

KONE and Digital + physical enterprise.

KONE made good progress on several fronts during the

strategy period. Highlights included successfully leveraging

our connected core products and services in offering

development, introducing new solutions to support customers

in achieving their eco-efficiency goals and reaching carbon

neutrality in our manufacturing units.

KONE’s new strategy for 2025–2030:

‘Rise’

KONE’s ambition is to lead the industry. This means we want

to be the #1 choice for our employees and customers, lead in

innovation and sustainability, and lead in growth and

profitability.

To reach this ambition, KONE will focus on four strategic

shifts:

Accelerate Digital

We will fundamentally transform how we do service. With this,

we will provide our customers the best experience with real-

time information, immediate responses, and full transparency

leading to less call-outs, less entrapments and better uptime.

Drive Modernization

With close to 10 million aging elevators and escalators

globally, we will drive modernization to help customers update

and upgrade their equipment for better sustainability, user

experience, safety and accessibility.

Win Residential

We will win in residential, the industry’s largest segment, by

developing affordable, fit-for-purpose offering with the right

service capability to meet the specific needs of residential

customers, and by selling and delivering efficiently.

Cut Carbon

We will radically cut carbon to make a difference in the world

and help our customers decarbonize with our sustainable

solutions.

In addition to these four strategic shifts, we are

strengthening our core - how we work and how we serve and

deliver to our customers. With improved processes and further

simplicity, we want to be the easiest company to work with.

KONE continues to be guided by its values of courage, care,

customer and collaboration.

Financial targets

KONE has set the following mid-term financial targets to be

achieved by the end of 2027:

• Growth: Mid-single-digit annual sales growth

• Profitability: Adjusted EBIT margin of 13–14%

KONE’s long-term financial targets are:

• Growth: Faster than the market

• Profitability: To reach an EBIT margin of 16%

• Cash flow: Improved working capital rotation

KONE as a company | KONE’s strategy

6 KONE Annual Review 2024

KONE as a company | KONE’S business model

7 KONE Annual Review 2024

KONE’s business model

KONE provides value for customers during the whole life

cycle of the building. In New Building Solutions, KONE offers

innovative, intelligent and sustainable elevators, escalators,

automatic building doors and integrated access control

solutions to deliver the best people flow experience. In

Service, we ensure the safety and availability of the

equipment in operation. In Modernization we offer solutions

for aging equipment ranging from the replacement of

components to full replacements.

The key growth drivers of New Building Solutions are

urbanization and changing demographics. New Building

Solutions deliveries are the main growth driver of Service

business as the majority of units delivered will end up in

KONE’s service base. Digitalization also contributes to

Service by increasing customer stickiness. In addition, KONE

also maintains other manufacturers’ equipment.

The main growth drivers for Modernization are the aging

installed base and increased requirements for efficient people

flow, safety and sustainability. Having a strong service base is

crucial for the growth in Modernization, and modernizations

outside the service base also contributes to the growth in

Service.

KONE’s business model is capital light in nature. Our

working capital is negative and we operate with advance

payments in all of our businesses and across all areas. We

work extensively with component suppliers to complement our

own manufacturing capacity. Service business is very stable

due to high requirements for safety and reliability. Customer

relationships are also typically long and stable (>90% annual

retention rate). New Building Solutions follows construction

cycles, while Modernization needs are stable by nature but

decision-making can be influenced by sentiment.

People and leadership

 >60,000 employees

representing 154 different

nationalities, ca. half of

employees in the field

 Management systems and

certificates (e.g. ISO 14001, ISO

9001, ISO 45001)

Innovations, processes

and systems

 R&D spend 1.8% of sales

 ~1,600 technology professionals

in R&D, Innovation and Codes

and Standards, almost half in

software development

 Global KONE Way processes

and systems

 Safe and efficient maintenance

and installation methods

Brand and reputation

 One of the leading brands in the

elevator and escalator industry

Natural resources

 Materials used 1,595,051

tonnes

 Heating and vehicle fleet fuels

427,357 MWh

 Electricity and district heat

110,670 MWh

 Water consumption 298,500

Partnering

 Co-creation with customers

 Partnering to co-develop new

technologies and solutions

 Collaboration with educational

institutes

 Distributors and agents

Manufacturing and

delivery chain

 10 manufacturing units in seven

countries

 ~2,000 material and component

suppliers and ~8,000 installation

suppliers

 Optimized logistics network

Financial

 Equity EUR 2.9 billion

 Interest-bearing net debt

EUR -831.2 million

 Net working capital EUR -827.2

million

 Capital expenditure 3.6 % of

sales

Moving around 2 billion people

every day

 ~159,000 new elevators and escalators

ordered in 2024

 Maintenance and modernization services,

well over 1.7 million units in service base

The most sustainable offering

 Best in class energy efficiency, ISO 25745

A-class energy rating as the first elevator

company

 Up to 70% energy savings through

modernization of elevators

 Offering includes carbon neutral elevators

and escalators and carbon neutral

maintenance

Emissions and waste

 Carbon footprint from own operations

109,943 tCO2e

 Waste 35,277 tonnes

 Wastewater effluents 0.3 tonnes

 Carbon footprint from our products and

value chain 11.6 MtCO2

Shareholders

 Operating income EUR 1,249.0 million

 Total amount of proposed dividends MEUR

931.4

 Return on equity 33.8%

Society

 Several external recognitions in

sustainability ratings

 Wages, salaries, other employment

expenses and pensions EUR 3.9 billion

 27.4% of director level positions held by

women

 Direct purchases EUR 3.9 billion

 Income taxes EUR 293.1 million with

effective tax rate 23.4%

Environment

 29% reduction in absolute GHG emissions

from our own operations (Scope 1 and 2)

compared to 2018

 12.8% decrease in product-related GHG

emissions (Scope 3) relative to ordered

products compared to 2018

 Corporate units as well as all manufacturing

and R&D units are ISO 9001 and ISO 14001

certified

 100% of targeted strategic suppliers with

ISO 14001 certification at the end of 2024

 Carbon neutral manufacturing units

Inputs

Business model ¹

Outputs

Impact

¹ Sales split by business (%)

Board of Directors’ Report | Operating environment

Terminology: slight <5%, clear 5–10%, significant >10%

8 KONE Annual Review 2024

Board of Directors’ Report

KONE’s operating environment

Regional differences in demand trends were apparent in the

global New Building Solutions market during January–

December 2024. In the more mature markets, activity was

impacted by high interest rates and slow economic growth,

while in many emerging markets activity was more favorable.

In China, activity declined due to the property market

downturn. In Asia-Pacific, Middle East and Africa, activity

grew significantly. In Europe, the market was stable with

mixed regional activity levels. In North America, the market

grew slightly.

Both the Service and Modernization markets developed

positively with growth across all regions.

Intense competition impacted the New Building Solutions

pricing environment in China, while elsewhere pricing was

more stable. In the Service and Modernization markets, the

pricing environment was more favorable.

New Building Solutions

market in units

1–12/2024

Service market

in units

1–12/2024

Modernization market

in monetary value

1–12/2024

Total market - + +++

North America + + +++

Europe stable + ++

Asia-Pacific, Middle East and

Africa

+++ ++ +++

Greater China --- ++ +++

The table represents the development of the operating environment compared to the corresponding period last year.

--- Significant decline (>10%), -- Clear decline (5–10%), - Slight decline (<5%), Stable,

+ Slight growth (<5%), ++ Clear growth (5–10%), +++ Significant growth (>10%)

Board of Directors’ Report | Financial development

Terminology: slight <5%, clear 5–10%, significant >10%

9 KONE Annual Review 2024

Orders received and order book

Orders received grew by 2.1% as compared to January–

December 2023 and totaled EUR 8,758.9 million. At

comparable exchange rates, KONE’s orders received grew by

3.3%.

At comparable rates, orders received in New Building

Solutions declined slightly with clear decline in the volume

business and significant growth in major projects. In

Modernization, orders received grew significantly. Orders

grew significantly in the volume business and grew

significantly in major projects.

Overall, the margin of orders received was slightly down

year-on-year driven by China. Elsewhere the development

was more stable. In China, like for-like new equipment prices

declined significantly and mix was negative.

KONE’s orders received in New Building Solutions in

elevator and escalator units amounted to approximately

159,000 units (2023: approximately 164,000).

Orders received in the Americas Area grew significantly

at comparable rates as compared to January–December

2023. New Building Solutions orders grew clearly and

Modernization orders grew significantly in the Area.

Orders received in the Europe Area grew clearly at

comparable exchange rates as compared to January–

December 2023. New Building Solutions orders grew slightly

and Modernization orders grew significantly in the Area.

Orders received in the Asia-Pacific, Middle East and

Africa (APMEA) Area grew significantly at comparable rates

as compared to January–December 2023. New Building

Solutions orders grew significantly and Modernization orders

grew significantly in the Area.

Orders received in Greater China Area declined

significantly at comparable rates as compared to January–

December 2023. New Building Solutions orders declined

clearly in units and declined significantly in monetary value.

Modernization orders grew significantly in the Area.

The order book grew by 3.9% compared to the end of

December 2023 and stood at a strong level of EUR 9,058.6

million at the end of the reporting period. At comparable rates,

the order book grew by 1.4%.

The order book margin continued to be at a healthy level.

Customer cancellations were at a low level.

MEUR

1–12/2024

1–12/2023

Change

Change at

comparable exchange

rates

Orders received

8,758.9

8,577.7

2.1%

3.3%

Order book

9,058.6

8,715.7

3.9%

1.4%

– – – Significant decline (>10%), – – Clear decline (5–10%), – Slight decline (<5%), Stable,

+ Slight growth (<5%) , ++ Clear growth (5–10%), +++ Significant growth (>10%)

New Building Solutions

orders

Modernization orders

Total orders

Americas

+++

Europe

+++

Asia-Pacific, Middle East and Africa

+++

Greater China

---

+++

---

In monetary value at comparable exchange rates

Orders received consist predominantly of New Building Solutions and Modernization orders. Service contracts are not included in orders received, but the figure

includes orders related to the Service business, such as repairs.

Board of Directors’ Report | Financial development

Terminology: slight <5%, clear 5–10%, significant >10%

10 KONE Annual Review 2024

Sales

KONE’s sales grew by 1.3% as compared to January–

December 2023, and totaled EUR 11,098.4 million. At

comparable exchange rates, KONE’s sales grew by 2.2%. At

comparable exchange rates, the Service and Modernization

businesses grew in all Areas. This more than offset the

decline in New Building Solutions sales.

New Building Solutions sales declined by 7.1% at

comparable exchange rates. Service sales grew by 9.5% at

comparable exchange rates, thanks to 6.5% service base

growth (including some inorganic growth), improved pricing

and continued momentum in value-added services.

Modernization sales grew by 10.1% at comparable exchange

rates.

KONE’s elevator and escalator service base continued to

grow and was well over 1.7 million units at the end of 2024

(well over 1.6 million units at the end of 2023).

The growth of the service base was driven, in particular,

by a continued good level of conversions of new equipment

deliveries to the service base. Bolt-on acquisitions had a

positive contribution to the growth. In 2024, the balance of

service contracts that were won from or lost to competition

was slightly negative.

The largest individual countries in terms of sales were

China (21%), the United States (21%), Germany (7%) and

France (6%).

In the Americas Area, sales grew by 10.4% and totaled

EUR 2,727.1 million. At comparable exchange rates, sales

grew by 10.9%. New Building Solutions sales grew

significantly, Service sales grew clearly and Modernization

sales grew significantly in the Area.

Sales in the Europe Area grew by 5.8% and totaled EUR

4,233.8 million. At comparable exchange rates, sales grew by

5.5%. New Building Solutions sales declined clearly, Service

sales grew clearly and Modernization sales grew clearly in the

Area.

In Asia-Pacific, Middle East and Africa (APMEA) Area,

sales grew by 9.4% and totaled EUR 1,609.3 million. At

comparable exchange rates, sales grew by 13.5%. New

Building Solutions sales grew significantly. Service sales grew

significantly and Modernization sales grew significantly in the

Area.

Sales in the Greater China Area declined by 16.0% and

totaled EUR 2,528.2 million. At comparable exchange rates,

sales declined by 14.8%. New Building Solutions sales

Sales by business,

MEUR

1–12/2024

1–12/2023

Change

Change at

comparable exchange

rates

New Building Solutions

4,506.9

4,921.5

-8.4%

-7.1%

Service

4,503.6

4,127.0

9.1%

9.5%

Modernization

2,088.0

1,903.8

9.7%

10.1%

Total

11,098.4

10,952.3

1.3%

2.2%

– – – Significant decline (>10%), – – Clear decline (5–10%), – Slight decline (<5%), Stable,

Slight growth (<5%), ++ Clear growth (5–10%), +++ Significant growth (>10%)

New Building Solutions sales

Service sales

Modernization sales

Americas

+++

Europe

Asia-Pacific, Middle East

and Africa

+++

Greater China

---

In monetary value at comparable exchange rates.

Sales by Area,

MEUR

1–12/2024

1–12/2023

Change

Change at

comparable exchange

rates

Americas

2,727.1

2,469.4

10.4%

10.9%

Europe

4,233.8

4,000.7

5.8%

5.5%

APMEA

1,609.3

1,470.9

9.4%

13.5%

Greater China

2,528.2

3,011.3

-16.0%

-14.8%

Total

11,098.4

10,952.3

1.3%

2.2%

Board of Directors’ Report | Financial development

Terminology: slight <5%, clear 5–10%, significant >10%

11 KONE Annual Review 2024

declined significantly, Service sales grew clearly and

Modernization sales grew clearly in the Area.

Board of Directors’ Report | Financial development

12 KONE Annual Review 2024

Financial result

KONE’s operating income (EBIT) was EUR 1,249.0 million or

11.3% of sales. Adjusted EBIT was EUR 1,303.0 million or

11.7% of sales. Profitability improved thanks to favorable

business mix and better margin in New Building Solutions and

Modernization deliveries outside China. The decline in margin

in China and broad-based inflation were the main headwinds.

In January–December 2024, items affecting comparability

amounted to EUR 54 million including EUR 36 million

restructuring costs and EUR 18 million expensed

development costs as a result of redirecting development

activities in alignment with KONE's new strategy. Majority of

the items affecting comparability pertain to the restructuring of

China operations. In the comparison period, items affecting

comparability included restructuring costs and a positive effect

recognized on the completion of the sale of operations in

Russia.

With comparable exchange rates, the translation impact

on operating income for the comparison period was EUR -8.9

million.

KONE’s income before taxes was EUR 1,254.1 million.

Taxes totaled EUR 293.1 (274.6) million. This represents an

effective tax rate of 23.4% for the full financial year. Net

income for the period was EUR 961.0 million.

Basic earnings per share was EUR 1.84.

Cash flow and financial position

KONE’s financial position was strong at the end of December

2024.

In January–December 2024 cash flow from operations

(before financing items and taxes) increased to EUR 1,589.3

million.

Net working capital (including financing items and taxes)

was EUR -827.2 million at the end of December 2024.

Compared to the beginning of the year net working capital

increased moderately.

Interest-bearing net debt was EUR -831.2 million at the

end of December 2024. KONE’s cash and cash equivalents

together with current deposits and loan receivables were EUR

1,799.0 (Dec 31, 2023: 1,688.4) million at the end of the

reporting period. Interest-bearing liabilities were EUR 987.1

(Dec 31, 2023: 687.8) million, including a pension liability of

EUR 141.4 (Dec 31, 2023: 132.9) million and lease liabilities

of EUR 432.6 (Dec 31, 2023: 349.1) million. Additionally,

KONE had an asset on employee benefits, EUR 15.0 (Dec 31,

2023: 9.2) million. Gearing was -28.7% and the equity ratio

was 39.8% at the end of December 2024.

Equity per share was EUR 5.54.

1–12/2024

1–12/2023

Operating income

MEUR

1,249.0

1,200.1

Operating income margin

11.3

11.0

Adjusted EBIT

MEUR

1,303.0

1,248.4

Adjusted EBIT margin

11.7

11.4

Income before taxes

MEUR

1,254.1

1,206.1

Net income

MEUR

961.0

931.6

Basic earnings per share

EUR

1.84

1.79

1–12/2024

1–12/2023

Cash flow from operations (before financing items

and taxes)

MEUR

1,589.3

1,485.2

Net working capital (including financing items and

taxes)

MEUR

-827.2

-861.2

Interest-bearing net debt

MEUR

-831.2

-1,013.4

Gearing

-28.7

-36.4

Equity ratio

39.8

40.9

Equity per share

EUR

5.54

5.32

Board of Directors’ Report | Financial development

13 KONE Annual Review 2024

Capital expenditure and acquisitions

KONE’s capital expenditure and acquisitions totaled EUR

522.5 million in January–December 2024. Capital expenditure

excluding acquisitions was mainly related to manufacturing

and R&D facilities, IT licenses and software development as

well as tools and equipment in R&D. Capital expenditure on

leases consists mainly of maintenance vehicles and office

facilities.

Acquisitions totaled EUR 125.6 million in January–

December 2024. KONE completed several service-related

acquisitions predominantly in Europe.

Research and development

KONE’s R&D activities focus on developing smart and

sustainable solutions that adapt to future needs. Built-in

connectivity in our newest elevator models makes them a

digital platform for various services and new business models.

Additionally, KONE supports its customers in achieving their

eco-efficiency goals throughout the building lifecycle and

develops a variety of partnerships to further enhance

customer focused solutions. Research and development

expenditure totaled EUR 203.6 million, representing 1.8% of

sales in January–December 2024. R&D expenditure includes

the development of new products and service concepts as

well as further development of existing solutions and services.

Recognitions for achievements in the field of innovation

included the Red Dot Award for Product Design 2024 for the

KONE 4G Gateway elevator connectivity as well as ‘Awards

of Excellence’ in the Council on Tall Buildings and Urban

Habitat (CTBUH) Awards Program for KONE SiteFlow, a

cutting-edge digital solution that oversees construction

elevators and tracks logistics in real time, and for Diversity,

Equity and Inclusion (DEI) initiatives.

KONE brought several new products and enhancements

to the market in 2024. KONE introduced a range of updates to

its Modernization offering and portfolio to speed up

installations in smaller machine rooms and to provide quieter

operation and improved ride comfort. KONE also broadened

the availability and improved the usability of ReSolve MRL DX

for modernizing other brands’ equipment. In September, the

KONE High-Rise MiniSpace DX product family was launched

as was a combination of a new elevator control system and

KONE UltraRope to create more rentable space, and to

significantly reduce energy consumption and carbon

emissions. The cost-competitiveness of KONE’s offering in

the low-rise residential market was improved with KONE

MonoSpace 100 DX in five European countries, and the roll

out to other areas continues in 2025.

During 2024, our connected lifts in service base increased

to close to 35%, enabling more opportunities to fundamentally

transform how we do service through digitalization.

KONE received many sustainable product certifications in

the Asian market during 2024. These included Singapore

Green Building Product (SGBP) certifications for seven

products in total: two escalators (KONE TravelMaster™ 110

and KONE TransitMaster™ 140), three DX platforms (KONE

TranSys™ DX, KONE MiniSpace™ DX and KONE N

MiniSpace™ DX) and two elevators (KONE N MiniSpace™

and KONE N MonoSpace®). Furthermore, KONE received

Green Label Gold rating Certificates from Green Product

Council Indonesia (GPCI) for seven of its solutions. KONE

also received Malaysia’s Green Recognition Scheme

MyHIJAU Mark for four of its solutions and the LOTUS

certification from the Vietnam Green Building Council (VGBC)

for six solutions in total.

MEUR

1–12/2024

1–12/2023

On fixed assets

164.3

161.2

On leasing agreements

232.7

161.1

On acquisitions

125.6

190.3

Total

522.5

512.7

1–12/2024

1–12/2023

R&D expenditure

MEUR

203.6

185.0

As percentage of sales

1.8

1.7

Board of Directors’ Report | Financial development

14 KONE Annual Review 2024

Sustainability recognitions

KONE has received external recognition for its efforts to

conduct business in a sustainable way.

Sustainability recognitions in 2024

KONE’s score

Industry performance

CDP Climate Change List

Place on the list

CDP Supplier Engagement

Leaderboard

Place on the list

Clean200 list (by Corporate Knights

and California-based shareholder

advocates As You Sow)

place

Only elevator and escalator

company on the list

TIMEs and Statista’s ‘World’s Most

Sustainable Companies of 2024’

Top 25% of 500

recognized companies

Financial Times and Statista Climate

Leaders 2024

Recognition

EcoVadis 2024 sustainability

assessment (labor and human rights,

ethics, and sustainable procurement)

Gold, top 5% of over

130,000 companies

evaluated worldwide

Top 1%

Forbes World’s Best Employers

One of the best

employers in the world

Board of Directors’ Report | Personnel

15 KONE Annual Review 2024

Personnel

Personnel total turnover rate was 11.5% (13.1%). Employee

costs for the reporting period totaled EUR 3,907 (3,656)

million. The geographical distribution of KONE employees

was 12% (12%) in the Americas, 33% (32%) in Europe, 19%

(19%) in Asia-Pacific, Middle East and Africa, and 36% (37%)

in Greater China. The number of employees is presented as

full-time equivalents.

1–12/2024

1–12/2023

Average number of employees

64,072

63,164

Number of employees at the end of period

64,663

63,536

Americas

7,970

7,625

Europe

21,346

20,542

APMEA

12,383

12,116

Greater China

22,964

23,253

Board of Directors’ Report | Most significant risks

16 KONE Annual Review 2024

Most significant risks

KONE is exposed to risks that may arise from its operations or

changes in the operating environment. The most significant

risk factors described below can potentially have an adverse

effect on KONE’s business operations and financial position

and, as a result, on the value of the company. Other risks,

which are currently either unknown or considered immaterial

to KONE may, however, become material in the future.

Strategic risks

The demand for KONE’s products and services and the

competitive environment are impacted by the general

economic cycles and especially the level of activity within the

construction industry. The uncertain economic outlook, and its

impacts on construction markets, represents a risk to KONE’s

business and profitability. This applies especially to China,

where market activity remains under pressure. In 2024,

KONE’s New Building Solutions sales in China declined

significantly.

Intensifying geopolitical risks and tensions, business

environment unpredictability and disruptions in global supply

chains may impact KONE’s main markets and expose KONE

to business disruptions and profitability risks. In addition to the

level of market demand, the competitiveness of KONE’s

offering is a key driver for growth and profitability. A failure to

anticipate or address changes in customer requirements and

in competitors’ offerings, ecosystems and business models or

in the regulatory environment could result in a deterioration of

the competitiveness of KONE’s offering. Furthermore,

structural changes in the competitive landscape of the

elevator and escalator industry, such as increased

competition and customer consolidation, could affect market

dynamics and KONE’s market share.

Operational risks

With business models and ways of working changing in the

elevator and escalator industry, KONE needs new

organizational capabilities, as well as new competencies and

talent on the individual employee level in different fields, such

as in digitalization. At the same time, labor scarcity and

competition over talent, such as skilled field workforce, is

increasing, especially in Europe. Securing the needed

resources and their competence management is critical. A

failure to develop, retain and attract the required capabilities

could have an adverse impact on KONE’s growth and

profitability.

The majority of components used in KONE’s supply chain

are sourced from external suppliers, a significant number of

which are located in China. KONE also subcontracts a

significant amount of installation activity, outsources certain

business support processes and works with partners in e.g.

digital services and logistics. This exposes KONE to supply

chain and logistics constraints, risks related to component and

subcontracted labor availability and cost as well as to

continuity risk in partnerships. During 2024, the ongoing

military conflicts also continued to impact global ocean freight.

A failure to secure the needed materials, components or

resources, or quality issues within these, could cause

business disruptions, rescheduling of orders and cost

increases. Labor availability constraints may also impact

progress at construction sites and performance of

maintenance and repair services.

As one of the leading companies in the industry, KONE

has a strong brand and reputation. Issues that impact the

company’s reputation or brand could affect KONE’s business

and financial performance. Such reputational risks could

materialize in the case of e.g. safety, cybersecurity or non-

compliance incidents, major delivery issues or product or

service quality issues.

Hazard, security and incidental risks

The operations of KONE, its suppliers and customers utilize

information technology extensively and KONE’s business is

dependent on the quality, integrity, availability and

confidentiality of information. Thus, KONE is exposed to IT

disruption and cybersecurity risks, as operational information

systems and products may be vulnerable to interruption, loss

or manipulation of data, or malfunctions which can result in

disruptions in processes and equipment availability.

Geopolitical tensions, for instance those related to the

wars in Ukraine and the Middle East, may lead to cyber,

hybrid and even conventional attacks causing local and global

disturbances that may impact KONE, our customers and our

suppliers.

A breach of sensitive employee or customer data may

result in significant penalties as well as reputational damage.

Such incidents could be caused by, including but not limited

to, cyber-crime, cyber-attacks, ransomware, information theft,

fraud, or inadvertent actions from our employees and vendors.

Physical damage caused by fire, extreme weather

conditions, natural catastrophes or terrorism, among other

things, could also cause business interruption for KONE or its

suppliers.

Financial risks

The majority of KONE’s sales and financial result are

denominated in currencies other than the euro, which exposes

KONE to risks arising from foreign exchange rate fluctuations.

KONE is also exposed to counterparty risks related to

financial institutions, through the significant amounts of liquid

funds deposited with financial institutions, in the form of

financial investments and in derivatives. Additionally, KONE is

exposed to risks related to liquidity and payment discipline of

its customers, which may impact cash flow or lead to credit

losses, especially in China. Significant changes in local

financial or taxation regulation could also have an impact on

KONE’s financial performance, liquidity, and cash flow. For

further information on financial risks, please refer to the notes

to the consolidated Financial Statements.

Board of Directors’ Report | Most significant risks

17 KONE Annual Review 2024

Risks

Mitigation actions

Weakening of the global economic environment

KONE strives to continuously develop its competitiveness in all regions and businesses. KONE has a wide geographic presence, global manufacturing

capabilities and supply network, as well as a balanced business mix with a high share of Service and Modernization business.

Geopolitical tensions impacting the competitiveness of

KONE’s supply chain, leading to increased costs or

causing potential disruptions

KONE is continuously working on mitigating any potential delays of its products and critical components. KONE actively monitors the development of the

applicable and relevant regulations, policies and trade rules, prepares for alternative scenarios and evaluates the competitiveness and viability of KONE’s

supply chain and sourcing channels. KONE is taking actions to mitigate the impact of tariffs, for example by applying for tariff exemptions when applicable.

KONE also applies increased scrutiny over business operations that may be affected by international trade restrictions or other geopolitical actions.

Changes in the competitive or customer landscape,

customer requirements or competitors’ offerings

impacting KONE’s competitiveness

KONE aims to be the industry leader with its competitive offering by investing in research and development and by taking an open innovation approach.

KONE also closely follows emerging industry and market trends and actively monitors opportunities for industry consolidation.

Increasing material, fuel and/or logistics costs

weakening KONE’s profitability

KONE aims to offset cost increases by improving the margin of orders received and adopting dynamic pricing and contract models which allow KONE to

pass on increased supply costs. Improving pricing, securing productivity gains and lowering product costs remain high on KONE’s agenda.

A failure to secure and develop the needed

organizational capabilities and competencies

KONE continuously evaluates the skills and competences required for the execution of the selected strategy and develops and/or acquires these from

internal talent pools or externally. KONE also has extensive training programs in place to develop and retain critical talents.

Risks related to component and subcontracted labor

availability

KONE’s sourcing processes aim to identify critical suppliers and supply categories and implement alternative sources, long-term agreements, last-buy

options and other measures to ensure the availability of the supply. KONE has also developed multinational subcontractor pools to ensure subcontractor

capacity on a regional level. Subcontractors’ competences and capabilities are monitored and developed continuously, similarly as with own employees.

The semiconductor market is closely monitored, and the situation managed with detailed planning of delivery execution and active involvement of supply

chain partners among other actions.

Product integrity, safety or quality issues as well as

issues with reputation

To mitigate product risks, KONE has strict quality control processes for product design, supply, manufacturing, installation and maintenance. In addition,

KONE aims for transparent and reliable communication, to prevent reputational risks and to manage potential incidents. KONE also has stringent corporate

governance principles in place.

Interruptions to KONE’s or its suppliers’ operations

KONE actively develops business continuity management capabilities to reduce the impact and likelihood of disruptions within its supply chain. Furthermore,

KONE monitors the operations, business continuity management capabilities, financial strength and cybersecurity of its key suppliers. In addition, KONE

aims to secure the availability of alternative sourcing channels for critical components and services. KONE also has a global property damage and business

interruption insurance program in place.

KONE’s global supply chain helps mitigate the risk of interruptions. KONE has 10 manufacturing facilities in seven countries, multiple distribution centers

and a large supplier network across the globe, which helps to mitigate the impacts from potential disruptions in individual locations or countries.

IT system interruptions and cybersecurity risks

KONE’s security policies define controls to safeguard premises, information and information systems which are both in development and in operation, in

order to detect cybersecurity incidents and to respond and recover in a timely manner. KONE works with third-party security service providers and trusted,

well-known technology partners to manage the risks through the control framework. KONE conducts tests, reviews and exercises to identify areas of risk

and to ensure the appropriate preparedness. The company continues to invest in its cybersecurity capabilities based on these findings. KONE also has a

global cyber insurance program in place.

Financial risks

KONE applies centralized risk management in accordance with the KONE Treasury Policy. More information on financial risk management can be found in

notes 2.4, 3.2 and 5.3 of KONE’s Financial Statements 2024.

Risk management

Board of Directors’ Report | Outlook 2025

18 KONE Annual Review 2024

Market outlook 2025

KONE has a positive or stable market outlook for eleven of its

twelve end-markets.

Activity in the New Building Solutions market is expected

to vary regionally. The market is expected to grow slightly in

North America. In Europe, the market is expected to be

stable. In Asia-Pacific, Middle East and Africa activity is

expected to grow clearly. In China, the market is expected to

decline significantly.

Modernization markets are expected to grow in all regions

supported by an aging equipment base as well as the focus

on sustainability and adaptability of buildings. Service markets

are expected to grow clearly in Asia-Pacific, Middle East and

Africa and grow slightly in other regions.

Business outlook 2025

KONE expects its sales to grow slightly at comparable

exchange rates in 2025. Adjusted EBIT margin is expected to

continue to improve.

Key drivers for sales growth are the positive outlook for

Service and Modernization and the strong order book. The

declining New Building Solutions market in China is a

headwind.

The key profitability drivers are sales growth in Service

and Modernization and the ramp up of performance initiatives.

The challenging New Building Solutions market in China and

slight overall decline in margin of orders booked in 2024 are

expected to impact profitability negatively.

The Board’s proposal for the distribution of profit

The parent company’s distributable profits on December 31,

2024 is EUR 3,215,181,251.13 of which the net income for

the financial year is EUR 1,111,782,600.04.

The Board of Directors proposes to the Annual General

Meeting that a dividend of EUR 1.7975 be paid on the

outstanding 76,208,712 class A shares and EUR 1.80 on the

outstanding 441,319,396 class B shares, resulting in a total

amount of proposed dividend of EUR 931,360,072.62. The

Board of Directors further proposes that the distributable

profits, EUR 2,283,821,178.51, be retained and carried

forward.

The Board proposes that the dividends be payable from

March 14, 2025. All the shares existing on the dividend record

date are entitled to dividend for the year 2024 except for the

treasury shares held by the parent company.

Annual General Meeting 2025

KONE Corporation’s Annual General Meeting will be held on

Wednesday March 5, 2025 at 11.00 a.m. at Finlandia Hall,

Mannerheimintie 13 E, in Helsinki, Finland.

Market outlook 2025

North America

Europe

Asia-Pacific, Middle

East and Africa

China

New Building Solutions

in units

stable

---

Service

in units

Modernization

in monetary value

+++

--- Significant decline (>10%), -- Clear decline (5–10%), - Slight decline (<5%), Stable,

+ Slight growth (<5%), ++ Clear growth (5–10%), +++ Significant growth (>10%)

Board of Directors’ Report | Key figures and financial development

19 KONE Annual Review 2024

Key figures and financial development

Consolidated statement of income

2024

2023

2022

2021

2020

Sales

MEUR

11,098

10,952

10,907

10,514

9,939

Sales outside Finland

MEUR

10,889

10,736

10,698

10,342

9,745

Operating income

MEUR

1,249

1,200

1,031

1,295

1,213

As percentage of sales

11.3

11.0

9.5

12.3

12.2

Adjusted EBIT ¹

MEUR

1,303

1,248

1,077

1,310

1,251

As percentage of sales ¹

11.7

11.4

9.9

12.5

12.6

Income before taxes

MEUR

1,254

1,206

1,028

1,321

1,224

As percentage of sales

11.3

11.0

9.4

12.6

12.3

Net income

MEUR

961

932

784

1,023

947

Consolidated statement of financial position, MEUR

Dec 31, 2024

Dec 31, 2023

Dec 31, 2022

Dec 31, 2021

Dec 31, 2020

Non-current assets

3,321

2,967

2,781

2,798

2,666

Current assets

5,963

5,764

6,309

6,922

6,126

Total equity

2,893

2,786

2,867

3,199

3,197

Non-current liabilities

929

658

643

717

522

Provisions

186

197

177

152

155

Current liabilities

5,276

5,090

5,404

5,652

4,918

Total assets

9,284

8,731

9,090

9,720

8,792

Interest-bearing net debt

-831

-1,013

-1,309

-2,164

-1,954

Assets employed ²

2,062

1,773

1,557

1,035

1,243

Net working capital ²

-827

-861

-904

-1,468

-1,160

¹ KONE presents adjusted EBIT as an alternative performance measure to enhance comparability of business performance between reporting periods. In 2024,

items affecting comparability amounted to EUR 54 million including EUR 36 million restructuring costs and EUR 18 million expensed development costs as a

result of redirecting development activities in alignment with KONE's new strategy. Majority of the items affecting comparability pertain to the restructuring of

China operations. In 2023, items affecting comparability included restructuring costs and a positive effect recognized on completion of the sale of operations in

Russia.

² Items included are presented on section Definitions and calculation of key figures.

Board of Directors’ Report | Key figures and financial development

20 KONE Annual Review 2024

Alternative performance measure

KONE reports an alternative performance measure, adjusted

EBIT, to enhance the comparability of business performance

between reporting periods. Adjusted EBIT is calculated by

excluding from EBIT items affecting comparability such as

significant restructuring costs and income and expenses

incurred outside the ordinary course of business of KONE.

In 2024, items affecting comparability amounted to EUR

54 million including EUR 36 million restructuring costs and

EUR 18 million expensed development costs as a result of

redirecting development activities in alignment with KONE's

new strategy. Majority of the items affecting comparability

pertain to the restructuring of China operations.

In 2023, items affecting comparability included

restructuring costs and a positive effect recognized on

completion of the sale of operations in Russia.

In 2022, the comparison period, items affecting

comparability included a charge for the impairment of assets

and recognition of provisions for commitments in Russia and

Ukraine as well as restructuring costs. In 2021 and earlier

periods, items affecting comparability related to restructuring

measures.

Other information

2024

2023

2022

2021

2020

Orders received

MEUR

8,759

8,578

9,131

8,853

8,185

Order book

MEUR

9,059

8,716

9,026

8,564

7,729

Cash flow from operations before financing items

and taxes

MEUR

1,589

1,485

755

1,829

1,908

Capital expenditure excl. acquisitions

MEUR

397

322

209

217

201

As percentage of sales

3.6

2.9

1.9

2.1

2.0

Expenditure on research and development

MEUR

204

185

188

189

180

As percentage of sales

1.8

1.7

1.8

Average number of employees

64,072

63,164

63,186

61,698

60,376

Number of employees at end of reporting period

64,663

63,536

63,277

62,720

61,380

Employee costs

MEUR

3,907

3,656

3,533

3,222

3,043

Key ratios, %

2024

2023

2022

2021

2020

Return on equity

33.8

33.0

25.9

32.0

29.7

Return on capital employed

27.2

27.8

22.4

26.8

25.0

Equity ratio

39.8

40.9

40.3

41.2

45.5

Gearing

-28.7

-36.4

-45.7

-67.6

-61.1

Alternative performance measure

2024

2023

2022

2021

2020

Operating income (EBIT)

MEUR

1,249

1,200

1,031

1,295

1,213

Operating income margin (EBIT margin)

11.3

11.0

9.5

12.3

12.2

Items impacting comparability

MEUR

Adjusted EBIT

MEUR

1,303

1,248

1,077

1,310

1,251

Adjusted EBIT margin

11.7

11.4

9.9

12.5

12.6

Board of Directors’ Report | Definitions and calculation of key figures

21 KONE Annual Review 2024

Definitions and calculation of key figures

Basic earnings/share

Net income attributable to the shareholders of the

parent company

Share issue and conversion-adjusted weighted

average number of outstanding shares

Equity/share

Total shareholders’ equity

Number of outstanding shares (issue adjusted)

Dividend/share

Dividend payable for the reporting period

Share issue and conversion-adjusted weighted

average number of outstanding shares

Dividend/earnings (%)

100 x

Dividend/share

Earnings/share

Effective dividend yield

(%)

100 x

Dividend/share

Price of class B shares at end of reporting period

Price/earnings

Price of class B shares at end of reporting period

Earnings/share

Average price

Total EUR value of all class B shares traded

Average number of class B shares traded during the

reporting period

Market value of all

outstanding shares

The number of outstanding shares (A + B)

¹ at end of

reporting period x the price of class B share at end of

reporting period

¹ Class A shares are valued at the closing price of the class B shares.

Shares traded

Number of class B shares traded during the

reporting period

Shares traded (%)

100 x

Number of class B shares traded

Weighted average number of class B shares

Average number of

employees

The average employee count at the end of each

calendar month during the reporting period

Return on equity (%)

100 x

Net income

Total equity (average during the reporting period)

Return on capital

employed (%)

100 x

Net income + financing expenses

Equity + interest-bearing-debt (average during the

reporting period)

Equity ratio (%)

100 x

Total equity

Total assets – advance payments received and

deferred revenue

Gearing (%)

100 x

Interest-bearing net debt

Total equity

Assets employed

Net working capital + goodwill + intangible assets +

tangible assets + investments in associated

companies + shares and other non-current financial

assets

Board of Directors’ Report | Changes in the Executive Board

22 KONE Annual Review 2024

Changes in the Executive Board

Philippe Delorme started as President and CEO of KONE on

January 1, 2024. Henrik Ehrnrooth continued as Executive

Advisor until the end of March 2024, supporting the transition

and induction of the new CEO.

Kaori Uehigashi started as an interim Executive Vice

President for Strategy & Transformation on January 4, 2024.

Nicolas Alchal was appointed Executive Vice President,

Strategy & Transformation as of Jan 1, 2025. Before starting

in this role, Nicolas acts as an interim Executive Vice

President for Europe Area, as of March 1, 2024, when Karla

Lindahl started her parental leave.

The initial duration of these interim roles was planned to

be until early 2025. On December 9, 2024, KONE announced

that these interim EVP roles for Europe and Strategy &

Transformation organizations will continue until the end of

March 2025. Karla Lindahl, Executive Vice President, Europe,

will return from parental leave in late March 2025.

On May 6, 2024, KONE announced the appointment of

Kaija Bridger as Executive Vice President, People &

Communications, and a member of the Executive Board at

KONE as of July 1, 2024, succeeding Susanne Skippari, who

decided to leave KONE for a position outside the company.

Other events

In 2007, a decision was issued by the European Commission

concerning alleged local anticompetitive practices before early

2004 in Germany, Luxembourg, Belgium and the Netherlands

by leading elevator and escalator companies, including

KONE’s local subsidiaries. Also, the Austrian Cartel Court

issued in 2007 a decision concerning anti-competitive

practices that had taken place before mid-2004 in local

Austrian markets by leading elevator and escalator

companies, including KONE’s local subsidiary. As previously

announced by KONE, a number of civil damage claims by

certain companies and public entities relating to the two 2007

decisions are pending in related countries. The claims have

been made against various companies concerned by the

decisions, including certain KONE companies. All claims are

independent and are progressing procedurally at different

stages. The total capital amount claimed jointly and severally

from all of the defendants together was EUR 55 million at the

end of December 2024 (December 31,2023: EUR 64 million).

KONE’s position is that the claims are without merit. No

provision has been made.

In September, KONE announced plans to initiate a review

of its Door Business to assess its optimal structure and

synergies, including a potential sale of the business. The

KONE Door Business provides maintenance, repair,

modernization, and new equipment solutions for pedestrian

and industrial doors. In 2023, KONE Door Business

accounted for approximately 2% of KONE Group revenue.

The contemplated review and actions are subject to local legal

requirements and consultation of employee representatives.

Board of Directors’ Report | Decisions of the Annual General Meeting

23 KONE Annual Review 2024

Decisions of the Annual General

Meeting

KONE Corporation's Annual General Meeting was held in

Helsinki on February 29, 2024.

The meeting approved the financial statements,

considered the Remuneration Report for governing bodies

and discharged the responsible parties from liability for the

financial period January 1–December 31, 2023.

The General Meeting approved dividends in line with the

Board of Directors’ proposal of EUR 1.7475 for each of the

class A shares and EUR 1.75 for each of the outstanding

class B shares. The date of record for dividend distribution

was March 4, 2024 and dividend was paid on March 11, 2024.

The number of Members of the Board of Directors was

confirmed as nine. Re-elected as Members of the Board were

Matti Alahuhta, Susan Duinhoven, Marika Fredriksson, Antti

Herlin, Iiris Herlin, Jussi Herlin, Ravi Kant and Krishna

Mikkilineni. Timo Ihamuotila was elected as new Member to

the Board of Directors.

At its meeting held after the General Meeting on February

29, 2024, the Board of Directors of KONE Corporation elected

from among its members Antti Herlin as its Chairman and

Jussi Herlin as Vice Chair.

Marika Fredriksson was elected as Chair and Susan

Duinhoven, Jussi Herlin and Timo Ihamuotila as members of

the Audit Committee. Marika Fredriksson, Susan Duinhoven

and Timo Ihamuotila are independent of both the company

and of significant shareholders.

Jussi Herlin was elected as Chair and Matti Alahuhta, Antti

Herlin and Susan Duinhoven as members of the Nomination

and Compensation Committee. Matti Alahuhta and Susan

Duinhoven are independent of both the company and of

significant shareholders.

The General Meeting confirmed an annual compensation

of EUR 220,000 for the Chairman of the Board, EUR 125,000

for the Vice Chairman and EUR 110,000 for Board Members.

Of the annual compensation, 40 percent will be paid in class B

shares of KONE Corporation and the rest in cash. In addition,

the General Meeting confirmed a separate annual

compensation to the members of the board committees:

Chairman of the Audit Committee: EUR 20,000 and members

of the Audit Committee: EUR 10,000, and Chairman of the

Nomination and Compensation Committee: EUR 20,000 and

members of the Nomination and Compensation Committee:

EUR 10,000. The annual compensation of the members of the

board committees is paid in cash. In addition, it was resolved

that compensation is not paid to a Board Member who is

employed by the company.

The General Meeting approved the authorization for the

Board of Directors to repurchase KONE's own shares.

Altogether no more than 52,930,000 shares may be

repurchased, of which no more than 7,620,000 may be class

A shares and 45,310,000 class B shares. The authorization

will be valid until the conclusion of the following annual

general meeting, however, at the latest until 30 June 2025.

Furthermore, the General Meeting authorized the Board of

Directors to decide on the issuance of shares as well as the

issuance of options and other special rights entitling to shares

referred to in Chapter 10, Section 1 of the Limited Liability

Companies Act. The number of shares to be issued based on

this authorization shall not exceed 7,620,000 class A shares

and 45,310,000 class B shares. The Board of Directors

decides on all the conditions of the issuance of shares and of

special rights entitling to shares. The authorization concerns

both the issuance of new shares as well as the transfer of

treasury shares. The issuance of shares and of special rights

entitling to shares may be carried out in deviation from the

shareholders' pre-emptive rights (directed issue). The

authorization will be valid until the conclusion of the following

annual general meeting, however, at the latest until 30 June

2025.

The audit firm Ernst & Young Oy was nominated as the

auditor for the term 2024 and it will also carry out the

assurance of the company's sustainability reporting for the

financial year 2024.

Board of Directors’ Report | Share-based incentive plans

24 KONE Annual Review 2024

Share-based incentive plans

KONE has two share-based incentive plan structures, a

performance-based long-term incentive plan structure (LTI)

and a restricted share plan structure (RSP).

The performance based long-term incentive plan (LTI)

emphasizes profitable growth and sustainability. It consists of

annually commencing individual share plans, each with a

three-year rolling performance period. The performance

criteria for each commencing performance year are

determined on an annual basis. The plans vest and are

delivered in one portion after the three-year performance

period, based on accumulated outcomes of each performance

year. If the participant's employment or service relationship

with KONE Group terminates before the end of the

performance period, the participant, as a rule, forfeits the

share award without compensation. The target group and

targets for each annually commencing long-term incentive

plan as well as possible rewards are decided upon annually

by the Board. As part of the plan for the top management, a

long-term share ownership target has been set. For the

Executive Board members, the ownership target of KONE

shares corresponds to a minimum of five years’ annual base

salary. For other selected top management positions, the

ownership target corresponds a minimum of two years’ base

salary.

The performance based long-term incentive plan is

targeted to approximately 570 top leaders annually, including

the President and CEO, members of the Executive Board and

selected key employees of KONE Group. The performance

criteria applied to the 2021, 2022, 2023 and 2024

performance years are based on annual growth in sales,

adjusted EBIT margin (jointly 80%) and improvements in

sustainability. The sustainability performance condition is a

combination of reductions in carbon footprint, diversity and

inclusion as well as safety related targets.

The restricted share plan structure serves as a

complementary incentive structure used as a commitment

instrument for retention and recruitment purposes for top

management (excluding the President and CEO) and other

selected key employees. The restricted share plan structure

does not have a performance condition. Each annually

commencing plan has a commitment period up to three years,

after which the potentially granted share awards will be paid to

the participant, provided that their employment or service

relationship with KONE Group is in force at the time of

payment.

Pursuant to the plan rules, the potential rewards are

settled as a combination of KONE class B shares and/or cash

when the criteria set in the terms and conditions for the plan

are met. The number of shares earned by participants under

the share-based incentive plan structures are determined on

gross basis with deduction for taxes made when applicable

before delivery of the shares to the participants. Share-based

incentive plans are classified as equity-settled transactions.

Board of Directors’ Report | Shares

25 KONE Annual Review 2024

At the end of December 2024, the Group had 11,867,752

class B treasury shares. The treasury shares represent 2.6 %

of the total number of class B shares. This corresponds to 1.0

% of the total voting rights.

In addition to the Nasdaq Helsinki Ltd., KONE’s class B share

is traded also on various alternative trading platforms.

The number of registered shareholders was 110,750 at the

beginning of the review period and 106,659 at its end. The

number of private households holding shares totaled 101,852

at the end of the period, which corresponds to approximately

12.0 % of the listed B shares. At the end of December 2024, a

total of 51.9 % of the B shares were owned by nominee-

registered and non-Finnish investors.

Shares and share capital

Share capital and market capitalization

Dec 31, 2024

Dec 31, 2023

Number of class B shares

453,187,148

Number of class A shares

76,208,712

Total shares

529,395,860

Treasury shares

11,867,752

12,159,159

Share capital, EUR

66,174,483

Market capitalization, MEUR ¹

24,324

23,358

Market capitalization is calculated on the basis of both the listed B shares and the unlisted A shares excluding treasury shares. Class A shares are valued at the

closing price of the class B shares at the end of the reporting period.

Treasury shares

1–12/2024

Treasury shares at the beginning of the period

12,159,159

Changes in treasury shares during the period

-291,407

Treasury shares at the end of the period

11,867,752

Shares traded on Nasdaq Helsinki

1–12/2024

1–12/2023

Shares traded on the Nasdaq Helsinki Ltd., millions

139.4

145.3

Average daily trading volume

555,351

579,003

Volume-weighted average share price

EUR

47.16

45.79

Highest share notation

EUR

54.78

53.34

Lowest share notation

EUR

41.33

37.20

Share notation at the end of the period

EUR

47.00

45.16

Board of Directors’ Report | Shares

26 KONE Annual Review 2024

Flagging notifications

During January–December 2024, BlackRock, Inc. announced

three notices in accordance with the Finnish Securities Market

Act Chapter 9, Section 5. The notices were announced on

November 4, November 12 and November 13. The notices

have been released as stock exchange releases and are

available on KONE Corporation’s website at www.kone.com.

According to the latest notification, the total number of KONE

Corporation shares owned by BlackRock, Inc. and its funds

increased to above five (5) per cent of the share capital of

KONE Corporation on November 13, 2024.

Board of Directors’ Report | Shares and shareholders

27 KONE Annual Review 2024

KONE share

KONE has two classes of shares: A and B. Only B-class

shares are listed on the Nasdaq Helsinki Ltd. Trading of the

KONE class B shares started on January 2, 1967.

Voting rights

Each KONE class A share is assigned one vote, as is each

block of 10 class B shares, with the provision that each

shareholder is entitled to at least one vote.

Dividend policy

KONE has not adopted a specific dividend policy. In the case

of a dividend distribution, the dividend paid on the class B

share is higher than that on the class A share.

The difference between the dividends is at minimum one (1)

percent and at maximum two-and-a-half (2.5) percent,

calculated from the accounting par value of the share. The

accounting par value of the share is EUR 0.125.

Closing price (EUR)

December 31, 2024

47.00

December 31, 2023

45.16

Change

4.1%

Market capitalization

on December 31, 2024

EUR 24,324 million

Share notations (EUR)

High

54.78

Low

41.33

Volume-weighted

average price

47.16

KONE Corporation’s share capital consists of

the following:

Number of

Par value,

EUR

Class A

76,208,712

9,526,089

Class B

453,187,148

56,648,394

Total

529,395,860

66,174,483

Dividend proposal

EUR 1.80

per class B share

KONE class B dividend per share, EUR

◼ Dividend ◼ Extraordinary dividend *

Board’s proposal for the 2024 dividend

0.00

0.50

1.00

1.50

2.00

2.50

Shares and shareholders

KONE class B

Trading code, Nasdaq Helsinki

Ltd.

KNEBV

ISIN code

FI0009013403

Accounting par value

EUR 0.125

Board of Directors’ Report | Shares and shareholders

28 KONE Annual Review 2024

KONE class B share price development, EUR

KONE class B share OMX Helsinki Cap Index

Shareholders

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Class A shares, %

⚫ 92.6% Companies

⚫ 7.4% Non-profit organizations

Class B shares, %

⚫ 51.4% Foreign / nominee registered shareholders

⚫ 14.5% Companies

⚫ 13.3% Financial institutions and insurance companies

⚫ 12.4% Individuals

⚫ 4.4% Public institutions

⚫ 4.0% Non-profit organizations

* Includes foreign-owned shares registered by Finnish nominees

Number of shares

Number of

owners

Percentage of

owners

Number of

Percentage of

1–10

23,617

22.1 %

126,822

0.0 %

11–100

47,433

44.5 %

2,111,098

0.4 %

101–1,000

28,688

26.9 %

9,734,911

1.8 %

1,001–10,000

6,206

5.8 %

16,642,137

3.1 %

10,001–100,000

625

0.6 %

15,573,008

2.9 %

100,001–

0.1 %

485,165,620

91.7 %

Total

106,659

100.0 %

529,353,596

100.0 %

Shares which have not been transferred to the paperless

book entry system

42,264

0.0 %

Total

529,395,860

100.0 %

Board of Directors’ Report | Shares and shareholders

29 KONE Annual Review 2024

Major shareholders on December 31, 2024

More information on the shareholdings of

KONE’s Board of Directors and Executive

Board on Dec 31, 2024 and changes in

shareholding during January 1–December 31,

2024 are available in the Corporate

Governance Statement.

A-series

B-series

Total

% of shares

% of votes

Herlin Antti

70,561,608

53,062,160

123,623,768

23.4 %

62.4 %

Holding Manutas Oy

54,284,592

42,805,254

97,089,846

18.3 %

48.2 %

Security Trading Oy

16,277,016

8,560,303

24,837,319

4.7 %

14.1 %

Herlin Antti

1,696,603

0.3 %

0.1 %

Polttina Oy

17,271,928

3.3 %

1.4 %

Wipunen Varainhallinta Oy

16,350,000

3.1 %

1.3 %

KONE Foundation

5,647,104

9,859,632

15,506,736

2.9 %

5.5 %

Heikintorppa Oy

10,000,000

1.9 %

0.8 %

Varma Mutual Pension Insurance Company

7,215,394

1.4 %

0.6 %

Ilmarinen Mutual Pension Insurance Company

6,839,091

1.3 %

0.6 %

Blåberg Olli Edvard

5,400,000

1.0 %

0.4 %

Riikantorppa Oy

4,900,000

0.9 %

0.4 %

Elo Mutual Pension Insurance Company

3,252,000

0.6 %

0.3 %

10 largest shareholders total

76,208,712

134,150,205

210,358,917

39.7 %

73.7 %

Foreign / nominee registered shareholders

235,228,602

44.4 %

19.4 %

Repurchased own shares

11,867,752

2.2 %

1.0 %

Others

71,940,589

13.6 %

5.9 %

Total

76,208,712

453,187,148

529,395,860

100.0 %

The list of ten major shareholders includes the major shareholders with a Finnish book-entry account.

Antti Herlin’s ownership of Holding Manutas represents 1.1% of the shares and 12.8% of the voting rights. Together with the ownership of Security Trading Oy in

which he exercises controlling power, his ownership represents 51.0% of the shares and 62.7% of the voting rights.

Antti Herlin’s ownership of Security Trading Oy represents 56.4% of the shares and 57.5% of the voting rights. Together with the ownership of his children,

Antti Herlin’s ownership in Security Trading Oy represents 99.9% of the shares and 99.8% of the voting rights.

Foreign ownership including foreign-owned shares registered by Finnish nominees.

Board of Directors’ Report | Shares and shareholders

30 KONE Annual Review 2024

Share-related key figures

2024

2023

2022

2021

2020

Basic earnings per share

EUR

1.84

1.79

1.50

1.96

1.81

Diluted earnings per share

EUR

1.84

1.79

1.49

1.96

1.81

Equity per share

EUR

5.54

5.32

5.49

6.13

6.12

Dividend per class B share ¹

EUR

1.80

1.75

2.10

2.25

Dividend per class A share ¹

EUR

1.7975

1.7475

2.0950

2.2450

Dividend per earnings, class B share

97.9

97.8

117.0

107.3

124.0

Dividend per earnings, class A share

97.8

97.6

116.8

107.0

123.7

Effective dividend yield, class B share

3.83

3.9

3.6

3.3

3.4

Price per earnings, class B share

EUR

25.57

25.23

32.29

32.20

36.63

Market value of class B share, average

EUR

47.16

45.79

46.56

65.44

62.07

Market value of class B share at end of period

EUR

47.00

45.16

48.30

63.04

66.46

Market capitalization at the end of period ²

MEUR

24,324

23,358

24,975

32,652

34,452

Number of class A shares at the end of period, (1,000s)

76,209

Weighted average number of class A shares, (1,000s)

76,209

Number of class B shares at the end of period, (1,000s) ²

441,319

441,028

440,881

441,754

442,181

Weighted average number of class B shares, (1,000s) ³

441,292

441,008

441,632

441,847

442,055

Weighted average number of shares, (1,000s) ³

518,014

517,595

517,841

518,055

518,264

¹ Board's proposal.

² Reduced by the number of repurchased own shares. Class A shares are valued at the closing price of the class B shares.

³ Adjusted for share issue and share option and share-based incentive plan dilution, and reduced by the number of repurchased own shares

Key figures per share

Board of Directors’ Report | Sustainability Statement

31 KONE Annual Review 2024

Sustainability Statement

General information

Sustainability reporting principles

Basis of preparation

This Sustainability Statement forms the core of KONE’s

annual sustainability reporting. The Statement has been

prepared pursuant to the Corporate Sustainability Reporting

Directive (CSRD) and structured around European

Sustainability Reporting Standards (ESRS) with the objective

of providing transparent and harmonized information on the

material sustainability topics relevant for KONE. The reporting

scope is aligned with KONE’s consolidated financial

statements unless otherwise indicated in connection with the

disclosed information. In addition to this Sustainability

Statement, KONE publishes a separate Sustainability

Supplement that includes complementary information about

specific sustainability matters.

The sustainability information included in this Statement is

based on the double materiality assessment (DMA),

conducted under the CSRD framework. KONE has identified

sustainability-related risks and opportunities most relevant to

KONE’s business and stakeholders, and KONE’s broader

societal impacts on people and environment. In this

Sustainability Statement, KONE’s value chain is defined to

cover upstream activities related to component and raw

material production, and downstream activities related to the

use of KONE’s products and to the disposal and recycling of

equipment at the end of the building's life cycle. KONE has

also mapped its activities according to Sustainability

Accounting Standard Board’s (SASB) sustainability

accounting standards for Electrical and Electronic Equipment.

Read more about the SASB disclosure and information

regarding KONE’s climate-related risks and opportunities in

accordance with the Task Force on Climate Related Financial

Disclosures (TCFD) requirements on kone.com.

This is KONE’s first year of reporting under CSRD, and

consequently certain sustainability information is not

presented for the comparison period. For those parts of the

report where comparative information has been included, the

reporting framework has remained the same. There have

been no material restatements to the previously disclosed

sustainability information. The environmental data includes

both net and gross emissions for Scope 1 data. KONE reports

net emissions for renewable natural gas, to show the total

emissions reductions achieved during the reporting year. This

approach aligns with the evolving reporting guidelines,

concerning the purchase of biomethane certificates, which

currently cannot be calculated into gross Scope 1 emissions.

Sustainability data, management judgment and

uncertainty

The sustainability data used as the basis for the Sustainability

Statement is sourced from various KONE’s internal

information systems. All financial data has been collected

through KONE’s enterprise resource planning and financial

reporting systems. All financial information presented in this

report are based on KONE Corporation’s consolidated and

audited financial statements, unless otherwise indicated.

Sustainability data is collected from KONE’s subsidiaries

and operative units, and controls are in place to ensure that

the information is complete and accurate. In the absence of

accurate datapoints, sustainability reporting requires the use

of assumptions, estimates, projections, and management

judgment which inherently include uncertainties. Further

information on these uncertainties is presented in connection

with the disclosed information.

Sustainability governance

Sustainability governance structure and roles

KONE’s governance model for sustainability and corporate

responsibility within the organization is designed to ensure

that sustainability is embedded into all levels of decision-

making, from strategic oversight to operational execution. The

key governance bodies for sustainability at KONE include the

Board of Directors, the President and CEO and the Executive

Board, Sustainability Disclosure Board, Safety, Quality and

Sustainability Board, and Global Sustainability Forum.

The Board of Directors holds the overall responsibility for

overseeing the company’s sustainability strategy. The Board

regularly reviews sustainability performance, addresses

potential risks, impacts and opportunities, and ensures that

the company complies with all relevant regulations and

standards. The Board members' strong conviction in the

strategic importance of sustainability for KONE's business

places significant weight on it in KONE's overall strategy. The

board is well-versed in key sustainability matters relevant to

the industry and products, such as carbon neutrality. The

Board of Directors consists of non-executive members with a

gender ratio of 67% male and 33% female. The Vice Chair of

the Board, Jussi Herlin has a separate employment contract

for his role as Executive Vice Chair of the Board at KONE.

There are no other separate employment contracts for the

members of the Board of Directors. Of the Board members,

78% are independent of the Corporation and 67% are

independent from significant shareholders.

The President and CEO is responsible for integrating the

sustainability strategy approved by the Board of Directors into

the company’s daily operations.The Executive Board

implements the sustainability strategy across all business

units. Each executive member is responsible for embedding

sustainability within their respective areas, ensuring that

initiatives are effectively executed and aligned with the

company’s overall objectives.

Specific sustainability-related executive boards have been

established to focus on critical areas such as environment,

safety, quality, global compliance and sustainability

governance. Various sustainability related forums act as

platforms that bring together representatives from various

areas, business lines and global funcions to share best

practices, discuss challenges, and align on global

sustainability priorities.

KONE’s Global Compliance Committee, which comprises

four Executive Board members, the Corporate Controller and

VP, Global Compliance, assists the Executive Board in

ensuring that KONE has an effective program to conduct

business in an ethical and compliant manner. The Global

Compliance Committee has expertise in topics critical to

compliance, and provides advice to the Executive Board,

management and audit committee in meetings and through

reports. The Audit Committee monitors compliance matters

Board of Directors’ Report | Sustainability Statement

32 KONE Annual Review 2024

which are reviewed by the Board of Directors at least

annually.

The Board members are experienced in addressing

sustainability-related impacts, risks, and opportunities, for

instance related to carbon neutrality and health and safety

topics, within the company’s industry, products and operating

environment. The Board’s annual review cycle and

governance structure are established to ensure continuous

monitoring of progress towards sustainability targets,

associated risks and opportunities as well as development of

relevant skills. These reviews are conducted by KONE’s or

external subject matter experts.

Risk management and internal controls

KONE’s sustainability reporting is based on the group-level

principles of risk management and internal control. The aim of

risk management is to identify risks and opportunities in

relation to the achievement of sustainability objectives and

assess the likelihood and magnitude of the impacts these may

have, as well as to identify actions to manage the impacts.

The identified risks and opportunities are managed through

KONE’s sustainability, risk management and internal control

governance models.

KONE’s internal control framework is built and based on

corporate values, the KONE Code of Conduct, a culture of

honesty and high ethical standards. The framework is

supported by a dedicated leadership, training programs, a

positive and diligent corporate culture and working

environment as well as by attracting and promoting dedicated

and competent employees. Global and local policies and

principles are a key part of the internal control framework.

KONE’s internal controls are designed to manage relevant

sustainability reporting risks, as part of KONE’s processes

and employee job roles. Internal controls over sustainability

reporting are supported by global and local policies and

principles that are continuously maintained by incorporating

changes and developments from the business operations and

information systems.

KONE’s Global Risk Management function facilitates risk

assessments which includes the assessment of risks and

opportunities in relation to sustainability reporting. Dedicated

sustainability risk and impact or materiality assessments are

conducted to ensure systematical identification, assessment,

and treatment of risks, impacts and opportunities. Risks and

opportunities are prioritized according to KONE’s Risk

Management Policy which applies to sustainability reporting.

The Executive Board reviews and evaluates the risk

assessment results minimum twice a year and agrees on risk

management priorities. The Executive Board members for

Areas and global functions are owners of the key risks and

opportunities relevant to the objectives of their organization.

They are ultimately accountable that the risks are managed

appropriately and shall allocate resources and delegate

responsibility to efficiently manage the risks. The Board of

Directors and the President and CEO are jointly responsible

for overseeing impacts, risks, and opportunities, with this

responsibility further delegated to committees focused on

safety, quality, sustainability, and global compliance, along

with their respective members.

KONE’s Global Risk Management function facilitates

sustainability risk assessments, including double materiality

analysis (DMA) and the assessment of impacts, risks and

opportunities (IROs), which are reviewed and managed jointly

with relevant functions. The Executive Board and the

President and CEO receive updates on material IROs or other

relevant risk assessments bi-annually by the global risk

management function. The Board of Directors are informed on

the material risks and opportunities on an annual basis by the

General Counsel.

KONE integrates the findings of its risk assessment and

internal controls to business practices and processes through

management systems and considers those in the

sustainability related processes and reporting. This is done by

appointing identified risks, opportunities, actions and controls

with relevant risk owners and responsible stakeholders. These

actions and controls vary from corporate business risks and

climate change related mitigation strategies to operational and

location specific environmental mitigation actions. Internal

control activities to manage the identified material risks related

to the accuracy and timeliness of sustainability reporting are

adopted as part of KONE’s processes that produce

sustainability information.

The Board of Directors monitors and evaluates the

effectiveness of KONE’s risk management systems according

to their role defined in KONE Risk Management Policy, in

addition to the review of key risks and action plans. The

Board’s Audit Committee monitors the efficiency and

functioning of the internal control environment, including

internal controls over sustainability reporting. The

management is responsible for establishing and maintaining

adequate internal controls and for monitoring their

effectiveness as part of operative management. The Board’s

Audit Committee is informed on internal control findings on an

annual basis.

Sustainability-related performance in incentive

plans

KONE drives sustainability performance also through

compensation. KONE’s long-term incentive plan, approved

and updated by the Board of Directors, emphasizes

sustainability alongside profitable growth to ensure a strong

focus in driving transformation towards the achievement of

KONE’s sustainability ambitions. KONE’s Sustainability KPIs

have a total 20% weight in the long-term incentive plan and

are related to KONE’s targets to reduce its Scope 1, 2 and 3

carbon emissions (10% weight), as well as diversity and

safety related targets (10% weight).

Sustainability due diligence

KONE integrates due diligence into its governance and

strategy by adhering to the Finnish Corporate Governance

Code and embedding sustainability into its operations. The

company's due diligence and its integration to key processes

are supported by KONE Global Management System, Health

and Safety Policy Statement, Environmental Policy Statement,

Human Rights Policy, Code of Conduct, and Supplier and

Distributor Codes of Conduct, which are detailed in the policy

sections of the material sustainability topics. KONE

emphasizes engagement with stakeholders, including

employees, suppliers, and communities. Refer to ESRS 2,

Interests and views of stakeholders for more information on

engaging with the affected stakeholders.

Supporting KONE's sustainability due diligence, the

continuous assessment and identification of impacts, risks,

and opportunities is embedded into its processes and policies.

More information is presented in the corresponding material

topics throughout this Sustainability Statement in the following

sections: Material impacts, risks and opportunities, Policies,

Engaging with the affected stakeholders, Remediating

negative impacts, Actions, and Metrics. In addition to

complying with applicable laws, rules, and regulations, KONE

has established internal requirements to uphold high

environmental and social standards in global activities, as well

as for its suppliers and partners. Refer to S2, Respect for

Board of Directors’ Report | Sustainability Statement

33 KONE Annual Review 2024

Human Rights, and Supplier Due Diligence for detailed

descriptions of KONE’s human rights and supplier due

diligence processes.

Sustainability in operations

Strategy

In 2024, KONE launched a new strategy ‘Rise’ for years

2025–2030 where leading in sustainability is part of the

strategic ambition and ’Cut Carbon’ is one of the four strategic

shifts. In this strategic shift, the focus is both on reducing

KONE’s own emissions as well as on helping KONE’s

customers to decarbonize with sustainable solutions.

Sustainability continues to also be one of KONE’s core

principles together with safety and quality.

Progress toward the sustainability-related strategic

ambition is measured using an internal sustainability index.

Under the ‘Cut Carbon’ strategic shift, KONE measures

emission reductions in the value chain, revenue from

sustainable solutions, and market share in sustainable

opportunities. More concretely, KONE aims to radically cut

down emissions from its products and solutions by adopting

and developing energy efficient technologies, exploring new

low-carbon materials and innovating together with its suppliers

and partners. In services, sustainability advancements are

achieved through leveraging digitalization to reduce

unnecessary callouts and for smart planning of the service

operations.

With the new strategy, KONE remains committed to

provide the most sustainable solutions to its customers and

help them decarbonize throughout the buildings’ life cycle with

the following key objectives:

• Overall reduction of product related Scope 3 emissions:

Reducing emissions related to the materials used and

lifetime energy consumption per product ordered

• Smart use of materials and circularity: Optimizing material

use and reducing the materials, energy, and other

resources used in KONE’s solutions and operations

• Extending product lifetime: Extending lifetime of

equipment through service and modernization including

intelligent KONE 24/7 Connected Services and predictive

maintenance

• End-user safety: Having safety as KONE’s top priority in

all operations

• Accessibility: Providing accessible, safe, and convenient

solutions for all groups of End-users

Business model and value chain

KONE has a lifecycle business model where it provides

elevators, escalators, building doors and related smart

solutions for buildings and urban mobility. KONE maintains

and modernizes the equipment to ensure the longevity, safety,

and efficient operation of equipment, thereby contributing to

sustainability by extending the product life cycle. By offering

energy-efficient and sustainable products, KONE aims to

reduce environmental impact throughout the entire product life

cycle, from raw material sourcing to end-of-life. Furthermore,

KONE requires that its supply chain partners adhere to

sustainability requirements, including ethical sourcing and

minimizing environmental impact.

A significant part of the value KONE creates is the result of

collaboration with the large network of customers, partners,

and suppliers, as well as through the use of elevators and

escalators manufactured and/or maintained by KONE. Key

customer groups include construction companies, building

owners, facility managers, developers, and housing

associations. Architects, authorities, and consultants are also

key influencers in the decision-making process regarding

elevators and escalators. Refer to Notes to the consolidated

financial statements - Sales for a description of KONE’s key

products and most significant markets. No new bans on

products or services were implemented during 2024.

KONE creates value to its customers by providing

innovative, safe, and energy-efficient solutions that enhance

the flow of people in urban environments. The company’s

digital solutions, such as predictive maintenance and smart

elevators, offer improved user experience, safety and uptime.

KONE strives to ensure health and safety for employees

through high safety standards and practices. For its

employees, KONE promotes diversity, inclusion, and

continuous learning within its workforce. For its shareholders,

KONE creates value through its resilient, sustainable and

capital light business model, which creates strong and stable

cash flow.

KONE has identified the following strategic inputs that are

crucial in creating value for customers, shareholders and

society:

• Competent and engaged people and strong leadership

• Innovative sustainable offering and global processes and

systems

• Best partners

• Efficient manufacturing and delivery chain

• A solid financial position

• Environmentally sustainable operations

• High safety record, strong brand, solid reputation and

commitment to safety

• Life cycle business model and the existing maintenance

base

KONE ensures the availability of key inputs in its value

chain through a combination of strategic sourcing, supplier

management, and risk mitigation. To secure key talent, KONE

invests in continuous employee development, diversity and

inclusion, and retention through a supportive and innovative

culture.

Interests and views of stakeholders

Sustainability is embedded into KONE’s strategy and

business model. The table Stakeholder engagement

summarizes KONE’s key stakeholders, their interests, and

KONE’s engagement with them. KONE collaborates and

maintains an active dialogue with its stakeholders to

understand their needs and expectations, also related to

human rights matters, and to provide input for KONE’s

planning processes as well as to the continuous improvement

of KONE management system, thus creating a predictable

business environment for everyone. Applicable administrative,

management and supervisory bodies are informed about the

outcomes by the responsible topic owners and subject matter

experts through various channels, and appropriate actions are

taken to address the material impacts.

Stakeholder views have been considered as part of the

strategy setting process. To enable employee’s participation

and to ensure employee consultation in health and safety

matters, KONE runs and participates in local safety forums

and councils with employees and their representatives. To

represent the interests of employees and actively involve

them in shaping the company, an employee engagement

survey ‘Pulse’ is conducted annually. Refer to S1, Metrics for

KONE’s headcount of employees per geographical area. The

learnings from the various stakeholder engagement activities

including the employee engagement and customer surveys

Board of Directors’ Report | Sustainability Statement

34 KONE Annual Review 2024

were taken into account in strategy development by lifting the

key findings to the relevant Executive Board discussions.

The views of employees, value chain workers and

equipment users are also collected through KONE

management system which harmonizes safety management

practices across KONE and sets minimum requirements to

protect the health and address the safety of KONE equipment

users, employees and anyone else KONE works with. KONE

considers the interests, views, and rights of its value chain

workers in KONE’s strategy and business model as feasible,

mainly through management level discussions.

Board of Directors’ Report | Sustainability Statement

35 KONE Annual Review 2024

Stakeholder engagement

Stakeholder

Interest

Channels of dialogue

Assessment method

Customers,

consumers and

end-users 

• Reliable and safe solutions,

as well as service and

modernization

• Competitive pricing, value

• Meetings, events, seminars and conferences

• Dialogue through solution support

• Information shared through company reports, marketing materials, website, and social media channels

• Continuous dialogue through daily interactions, digital solutions, user feedback, social media channels

• Net promoter score

• Customer surveys

• KONE Compliance Line

• Monitoring feedback

Own workforce

(Employees and

non-employees)

• Safe working environment

• Well-being

• Career development

• Fair compensation 

• Daily interactions

• Regular employee performance discussions

• Internal channels and forums for company-wide discussions

• Training opportunities and innovation tools

• Pulse employee engagement survey

• Annual employee performance discussions

• Idea management system, innovation tool

• KONE Compliance Line

Investors and

analysts

• Sustainable financial

performance and growth

• Transparency

• Financial and other company reports, stock exchange releases, company website

• Events, such as annual general meetings and capital markets days

• Investor and analyst meetings

• Direct feedback from financial market

representatives

• Feedback from the financial community also

through surveys

Suppliers and

subcontractors

(Workers in the

value chain)

• Long-term partnerships

• Fair business practices

• Safe working environment

• Continuous one-to-one dialogue with suppliers

• Trade fairs, steering group meetings, supplier workshops and an annual supplier day for selected

strategic suppliers

• Supplier assessments including audit and an annual supplier excellence certification program

• Annual supplier survey

• Supplier quality audit and performance

assessment with the Supplier Maturity

Certification Program

• Monitoring of high-risk suppliers

• KONE Compliance Line

Distributors and

agents

(Workers in the

value chain)

• Market reach

• Efficiency

• Logistical expertise

• Risk mitigation 

• Daily interactions, account planning, regular country visits and distributors’ meetings

• KONE tools

• Reward programs and business development initiatives

• Monitoring of sales-related activities and direct

feedback from distributors

• KONE Compliance Line

Partners

• Collaboration

• Resource sharing

• Innovation 

• Continuous one-to-one dialogue

• Developer portal for application programming and interface building

• Engaging in co-innovation programs

• Industry and innovation events and competitions, such as hackathons

• Bi-annual partner information review

• Annual partner feedback survey

• Feedback from 1-to-1 partner discussions

Media

• Content

• Engagement

• Transparency 

• Press releases and events, interviews, background briefings and visits

• Publications, as well as the company website and social media channels

• Monitoring and analyzing media coverage about KONE

• Surveys and media analysis

Educational and

research

institutions

• Research opportunities

• Internships

• Knowledge sharing

• Partnerships 

• KONE’s apprentice programs and summer traineeships

• KONE is a member of the CEMS global alliance of academic and corporate institutions

• Collaborations to provide information about KONE in schools, universities, and other relevant institutions

• Thesis opportunities, recruitment fairs, projects, guest lectures, and research programs

• Most attractive workplace surveys, online

tracking

• School collaboration and social media visibility

in order to enhance KONE's brand as an

employer and to attract talent

Countries KONE

operates in

• Environmental impact

• Contribution to local

development 

• Company website and social media channels

• Sustainability surveys and reputation studies

• Volunteer work through the KONE Centennial Foundation

• Sustainability surveys and reputation studies

• KONE Compliance Line

Board of Directors’ Report | Sustainability Statement

36 KONE Annual Review 2024

Sustainability-related impacts, risks and

opportunities

Identification and assessment

KONE’s double materiality assessment (DMA) approach

consisted of four phases to determine material topics and

provide input for the strategy development. These phases

included value chain mapping, impact assessment, financial

assessment, and final materiality determination. The DMA

was completed in 2024. The DMA results will be reviewed

annually and updated when necessary. KONE’s earlier

materiality assessment, human rights impact assessment and

third-party due diligence process, non-financial risk

assessment, and climate change scenario analysis, which

have been integrated into KONE’s risk management

processes, were used as a starting point for the DMA. Refer

to E1, Scenario analysis for a description of the scenario

analysis and related assumptions.

The results of the DMA including the material impacts,

risks and opportunities (IROs) were reviewed by a

management steering group consisting of KONE Executive

Board members and other management members. These

members were selected based on their ownership, roles and

responsibilities in the area of sustainability and reporting. The

results of the DMA were reported to the Audit Committee of

the KONE Board of Directors. Internal control over the DMA

process was ensured through the reviews of the results and

the adopted systematic assessment methodology.

In the initial phase of the DMA, KONE mapped its value

chain and listed the main business activities across upstream,

own operations, downstream, and cross-cutting activities

through interviews with key internal stakeholders. The

geographical locations and key external stakeholders affected

by these activities were identified for each, in line with the

reporting principles. Specific geographies, high-risk areas,

and at-risk functions were taken into account.

The impacts, risks, and opportunities were evaluated by

KONE’s subject matter expert teams on a scale from 1 to 5,

aligning with the ESRS criteria. These results can be easily

compared with KONE's risk management process and tool,

allowing for the consideration of sustainability risks alongside

other business risks in terms of relative position and priorities.

The views of KONE’s stakeholders were provided through

summarized input by the involved subject matter experts

ESRS Topics

Sub-topic

Material to KONE

E-Environment

E1 Climate change

E1 Climate change adaption

Yes

E1 Climate change mitigation

Yes

E1 Energy

Yes

E2 Pollution

E2 Pollution of air

E2 Pollution of water

E2 Pollution of soil

E2 Pollution of living organisms and food resources

E2 Substances of concern

E2 Substances of very high concern

E2 Microplastics

E3 Water and marine

resources

E3 Water

E3 Marine resources

E4 Bio-diversity and eco-

systems

E4 Direct impact drivers of biodiversity loss

E4 Impacts on the state of species

E4 Impacts on the extent and condition of

ecosystems

E4 Impacts and dependencies on eco-system

services

E5 Resource use and

circular economy

E5 Resources inflows, including resource use

E5 Resource outflows related to products and

services

E5 Waste

S-Social

S1 Own workforce

S1 Working conditions

Yes

S1 Equal treatment and opportunities for all

S1 Other work-related rights

S2 Workers in the value

chain

S2 Working conditions

Yes

S2 Equal treatment and opportunities for all

S2 Other work-related rights

S3 Affected communities

S3 Communities’ economic, social and cultural rights

S3 Communities’ civil and political rights

S3 Rights of indigenous peoples

S4 Consumers and end-

users

S4 Information-related impacts for consumers and/or

end-users

S4 Personal safety of consumers and/or end-users

Yes

S4 Social inclusion of consumers and/or end-users

G-Governance

G1 Business conduct

G1 Corporate culture

Yes

G1 Protection of whistle-blowers

Yes

G1 Animal welfare

G1 Political engagement and lobbying activities

G1 Management of relationships with suppliers

including payment practices

G1 Corruption and bribery

Yes

Board of Directors’ Report | Sustainability Statement

37 KONE Annual Review 2024

through their interaction with affected stakeholders and

engagement with the users of KONE’s Sustainability

Statement.

During the impact assessment phase, KONE evaluated,

scored, and prioritized the various impacts (positive or

negative) and activities within its value chain that could affect

people or the environment based on their scale, scope,

likelihood, and irremediability, which was considered for

negative impacts. In case of a potential negative human rights

impact, the severity of the impact was prioritized over its

likelihood.

The financial assessment phase included identification of

key risks and opportunities posing financial implications,

together with an assessment of their magnitude and

likelihood, as well as the timeframe. The following scales were

applied:

Likelihood of occurrence:

1. Highly unlikely to occur: >0–1%

2. Unlikely to occur: >1–10%

3. Possible to occur: >10–30%

4. Likely to occur: >30–60%

5. Highly likely to occur: >60–100%

Magnitude of financial impacts:

1. Nominal financial impact

2. Moderate financial impact

3. High financial impact

4. Significant financial impact

5. Critical financial impact

Timeframe:

Short <1 year

Medium 1–5 years

Long >5 years

The connections between impacts, and dependencies with

the risks and opportunities, were considered as part of the

identification of IROs, mainly in relation to geographical

locations and IRO contents in the subtopics, however not

systematically cross-referencing all connections and

dependencies. Each prioritized risk, opportunity or impact is

assigned to a risk owner. The risk owner appoints a person in

a relevant role to be responsible for the specific IRO. The

responsible person implements the necessary IRO treatment

actions, and reports regarding progress to the risk owner.

As a result of the DMA, a comprehensive overview of

KONE’s IROs relating to each sustainability topic was formed.

When an impact and/or risk or opportunity score of any topic

exceeded a certain threshold, the topic was identified as

material to KONE. The treatment of such IROs were

prioritized to meet KONE's strategic sustainability objectives

and ensure alignment with stakeholder expectations. In

principle, all mandatory data points have been included and

disclosed following the materiality principle of the ESRS

standard. No material entity specific IROs were identified.

Material ESRS topics

KONE's material ESRS topics based on the DMA process are

presented in the table on the previous page.

KONE has identified material risks and negative and

positive impacts related to climate change and energy,

negative health and safety impacts related to own employees,

value chain workers and end-users, and positive impacts

related to corporate culture, protection of whistle-blowers and

corruption and bribery. IROs, relevant for each ESRS topic,

are described in summary tables in the beginning of topical

sustainability sections accompanied by the relevant

information on time-horizon, value chain information and the

management actions taken to address the IROs.

Current financial effects of KONE’s material risks and

opportunities do not expose KONE’s financial position,

financial performance or cash flows to significant risks for

material adjustments to the carrying amounts of assets and

liabilities. During 2024, KONE’s strategy and business models

showed resilience in harnessing the material opportunities

and addressing material impacts and risks stated in this

report, mainly driven by healthy geographic and business line

mix, supported by robust supply chain. The conclusion was

supported by a qualitative assessment based on KONE

reaching the set strategic targets and KPIs during the

reporting period. Refer to E1, Scenario analysis for a

description of KONE’s resilience regarding material climate

change topics.

Refer to ESRS 2, Sustainability in operations for a

description of KONE’s new strategy ‘Rise’. Progress in

strategy execution and performance in strategic sustainability

KPI’s is monitored and as part of quarterly reporting in line

with KONE’s governance structure. KONE Risk Management

Policy defines the roles and responsibilities for The Executive

Board and the Board of Directors. These roles and

responsibilities apply when they oversee and monitor the

material impacts, risks and opportunities related to KONE's

strategy implementation and targets. KONE’s material

impacts, risks and opportunities have been considered

thoroughly in the planning of the new strategy and during

strategy implementation in 2024.

Standard-specific considerations

Climate change

KONE has assessed and screened its major greenhouse gas

(GHG) emission sources in its own operations, products, and

value chain for all relevant business activities. The majority of

the emissions stem from KONE’s value chain due to the long

lifetime of KONE’s products with the expectation of the future

emission profile remaining similar. To deepen the

understanding of climate-related physical and transition risks

and opportunities, KONE has conducted a climate change

scenario analysis based on TCFD recommendations. Refer to

E1, Scenario analysis for definitions of the climate scenarios.

Climate-related physical hazards were screened under the

high emission scenario considering the geospatial mapping of

KONE’s own and key suppliers’ manufacturing locations and

logistics hubs and the projected climate change related

physical exposures on these locations. The hazards were

assessed taking into account their likelihood, magnitude and

duration.

The climate-related risks and opportunities were identified

and assessed in the short (<1 year), medium (2-5 years) and

long terms (>5 years). The short-term horizon is aligned with

KONE’s short term target setting and budgeting, whereas the

medium-term links to mid-term financial planning, and the

long-term horizon to the strategic planning period and beyond.

Based on the assessment, KONE recognizes that severe

weather events may expose the operations of KONE’s own or

suppliers’ manufacturing sites and logistics routes to physical

damage and consequent business interruption. However, the

likelihood and magnitude of the events are relatively low and

non-material in the short-term, increase over the medium

term, and divert in the long term, when the frequency and

severity of disruptive events continue to increase in the high

emission scenario.

Climate-related transition risks and opportunities and their

drivers were identified and assessed in KONE’s subject

matter expert interviews considering likelihood, impacts and

duration of the transition events in a range of scenarios

Board of Directors’ Report | Sustainability Statement

38 KONE Annual Review 2024

including a Paris-aligned scenario of limiting climate change to

1.5°C.

KONE supports its customers by offering them sustainable

solutions that are energy efficient, durable, and easy to

disassemble and recycle. Customer demand is driven by

policy and regulatory changes as well as technological

advancements in renewable energy, energy efficiency and

materials. KONE’s reputation and brand image as a

sustainability leader in the industry is at risk if KONE is not

able to offer customers solutions that meet their needs to

mitigate climate change.

Environmental risk assessments

Based on the DMA, pollution, water and marine resources,

biodiversity and ecosystems, resource use and circular

economy are not among the most material sustainability

topics for KONE.

KONE continuously screens and manages environmental-

related impacts through the ISO14001 certified management

system, which sets common requirements for KONE units to

assess and mitigate any material environmental risks

identified considering their activities, products, and services in

their control and the associated life-time impacts. Risk

identification and management are further ensured through

regular audits. In addition, KONE constantly monitors risks

arising from the supply and value chain for environmental

matters. These risks are tracked in real time through

automation with geolocation information provided.

KONE has not organized separate consultations with

affected communities, but regularly co-operates with the

relevant parties, such as local authorities to identify any

material impacts, risks, and opportunities arising from the

environmental topics. In addition, consultations are conducted

as part of the environmental risks assessments.

KONE’s management system is complemented with more

detailed environmental assessments that are described in the

following sections.

Pollution

Due to KONE’s automated manufacturing systems and

assembly lines, the amount of NOx, SOx and VOC emissions

KONE produces is minuscule. These emissions are monitored

as required by the local environmental permits and applicable

regulatory frameworks.

Water and marine resources

Based on conducted water risk assessments, only a few of

KONE’s manufacturing units are located in areas recognized

with high levels of water stress. Manufacturing units’ water

stress impact is rated minor because KONE’s processes do

not require significant water usage.

Biodiversity and ecosystems

Based on conducted assessments, KONE’s manufacturing

units are not located in or near United Nations Educational,

Scientific and Cultural Organization (UNESCO) World

Heritage sites, Nature 2000 sites or other conservation parks,

or biodiversity-sensitive areas. Biodiversity mitigation

measures have not been concluded to be necessary.

However, KONE continues to assess and monitor its impacts

on biodiversity to better plan for future actions by conducting a

more detailed assessment of the impacts and dependencies

of the value chain on biodiversity in the future.

Resource use and circular economy

KONE constantly tracks all waste consumption in its

manufacturing units as part of regular facility monitoring. The

waste generated by the manufacturing processes are

negligible, and most of the waste is recycled or incinerated.

The key material flows and raw materials are systematically

monitored on a component or module basis through

automated warehousing systems. Still, KONE’s most

significant environmental impacts emerge from the energy use

and the associated emissions of the products over their long

lifetime.

Business conduct

KONE’s third-party due diligence process, supplier screenings

and audits, internal assessments and surveys, and local

compliance risk assessments, as well as the Compliance Line

reports support the identification of impacts, risks and

opportunities related to corporate culture and governance. In

addition, specific functions and areas, particularly Asia-Pacific,

the Middle East and Africa, and Greater China, have been

considered in terms of bribery and corruption risk in the global

anti-bribery and corruption risk assessments.

Board of Directors’ Report | Sustainability Statement

39 KONE Annual Review 2024

Appendices

Data points that derive from other EU legislation

The following table illustrates the data points in ESRS 2 and topical ESRS that derive from other European Union (EU) legislation as listed in ESRS 2 Appendix B. The table indicates where the data

points can be found within the Sustainability Statement, which data points are not material, and whether a phase-in has been used.

Disclosure

requirement

Data

point

Description

SFDR

reference

Pillar 3

reference

Benchmark

Regulation reference

EU Climate Law

reference

Section

ESRS 2 GOV-1

21 (d)

Board's gender diversity

Sustainability governance

ESRS 2 GOV-1

21 (e)

Percentage of board members who are independent

Sustainability governance

ESRS 2 GOV-4

Statement on due diligence

Sustainability governance

ESRS 2 SBM-1

40 (d) i

Involvement in activities related to fossil fuel activities

Not material

ESRS 2 SBM-1

40 (d) ii

Involvement in activities related to chemical production

Not material

ESRS 2 SBM-1

40 (d) iii

Involvement in activities related to controversial weapons

Not material

ESRS 2 SBM-1

40 (d) iv

Involvement in activities related to cultivation and production of

tobacco

Not material

ESRS E1-1

Transition plan to reach climate neutrality by 2050

Scenario analysis, Actions and

targets, Reporting principles

ESRS E1-1

16 (g)

Undertakings excluded from Paris-aligned Benchmarks

Reporting principles

ESRS E1-4

GHG emission reduction targets

Scenario analysis, Actions and

Targets

ESRS E1-5

Energy consumption and mix

Metrics

ESRS E1-5

Energy consumption from fossil sources disaggregated by sources

(only high climate impact sectors)

Metrics

ESRS E1-5

40-43

Energy intensity associated with activities in high climate impact

sectors

Metrics

ESRS E1-6

Gross Scope 1, 2, 3 and Total GHG emissions

Metrics

ESRS E1-6

53-55

Gross GHG emissions intensity

Metrics

ESRS E1-7

GHG removals and carbon credits

Metrics

ESRS E1-9

Exposure of the benchmark portfolio to climate-related physical risks

Phase-in used

ESRS E1-9

66 (a);

66 (c)

Disaggregation of monetary amounts by acute and chronic physical

risk; Location of significant assets at material physical risk

Phase-in used

ESRS E1-9

67 (c)

Breakdown of the carrying value of its real estate assets by energy-

efficiency classes

Phase-in used

ESRS E1-9

Degree of exposure of the portfolio to climate-related opportunities

Phase-in used

Board of Directors’ Report | Sustainability Statement

40 KONE Annual Review 2024

Disclosure

requirement

Data

point

Description

SFDR

reference

Pillar 3

reference

Benchmark

Regulation reference

EU Climate Law

reference

Section

ESRS E2-4

Amount of each pollutant listed in Annex II of the E-PRTR Regulation

emitted to air, water and soil

Not material

ESRS E3-1

Water and marine resources

Not material

ESRS E3-1

Dedicated policy

Not material

ESRS E3-1

Sustainable oceans and seas

Not material

ESRS E3-4

28 (c)

Total water recycled and reused

Not material

ESRS E3-4

Total water consumption in m

per net revenue on own operations

Not material

ESRS 2- SBM 3 -

16 (a) i

Activities negatively affecting biodiversity sensitive areas

Not material

ESRS 2- SBM 3 -

16 (b)

Material negative impacts with regards to land degradation,

desertification or soil

sealing

Not material

ESRS 2- SBM 3 -

16 (c)

Operations that affect threatened species

Not material

ESRS E4-2

24 (b)

Sustainable land / agriculture practices or policies

Not material

ESRS E4-2

24 (c)

Sustainable oceans / seas practices or policies

Not material

ESRS E4-2

24 (d)

Policies to address deforestation

Not material

ESRS E5-5

37 (d)

Non-recycled waste

Not material

ESRS E5-5

Hazardous waste and radioactive waste

Not material

ESRS 2- SBM3 -

14 (f)

Risk of incidents of forced labour

Not material

ESRS 2- SBM3 -

14 (g)

Risk of incidents of child labour

Not material

ESRS S1-1

Human rights policy commitments

Policies

ESRS S1-1

Due diligence policies on issues addressed by the fundamental

International Labor Organisation Conventions 1 to 8

Policies

ESRS S1-1

Processes and measures for preventing trafficking in human beings

Policies

ESRS S1-1

Workplace accident prevention policy or management system

Policies

ESRS S1-3

32 (c)

Grievance/complaints handling mechanisms

Remediating negative impacts

on own workforce

ESRS S1-14

88 (b)

and (c)

Number of fatalities and number and rate of work-related accidents

Metrics

ESRS S1-14

88 (e)

Number of days lost to injuries, accidents, fatalities or illness

Phase-in used

ESRS S1-16

97 (a)

Unadjusted gender pay gap

Not material

ESRS S1-16

97 (b)

Excessive CEO pay ratio

Not material

ESRS S1-17

103 (a)

Incidents of discrimination

Remediating negative impacts

on own workforce

ESRS S1-17

104 (a)

Non-respect of UNGPs on Business and Human Rights and OECD

Remediating negative impacts

on own workforce

Board of Directors’ Report | Sustainability Statement

41 KONE Annual Review 2024

Disclosure

requirement

Data

point

Description

SFDR

reference

Pillar 3

reference

Benchmark

Regulation reference

EU Climate Law

reference

Section

ESRS 2- SBM3 –

11 (b)

Significant risk of child labour or forced labour in the value chain

Material impacts, risks and

opportunities

ESRS S2-1

Human rights policy commitments

Policies

ESRS S2-1

Policies related to value chain workers

Policies

ESRS S2-1

Non-respect of UNGPs on Business and Human Rights principles

and OECD guidelines

Policies

ESRS S2-1

Due diligence policies on issues addressed by the fundamental

International Labor Organisation Conventions 1 to 8

Policies

ESRS S2-4

Human rights issues and incidents connected to its upstream and

downstream value chain

Actions

ESRS S3-1

Human rights policy commitments

Not material

ESRS S3-1

Non-respect of UNGPs on Business and Human Rights, ILO

principles or and OECD guidelines

Not material

ESRS S3-4

Human rights issues and incidents

Not material

ESRS S4-1

Policies related to consumers and end-users

Policies

ESRS S4-1

Non-respect of UNGPs on Business and Human Rights and

OECD guidelines

Policies

ESRS S4-4

Human rights issues and incidents

Actions

ESRS G1-1

10 (b)

United Nations Convention against Corruption

Policies, Prevention and detection of

corruption and bribery

ESRS G1-1

10 (d)

Protection of whistle-blowers

Not material

ESRS G1-4

24 (a)

Fines for violation of anti-corruption and anti-bribery laws

Not material

ESRS G1-4

24 (b)

Standards of anti- corruption and anti-bribery

Not material

Disclosure requirements incorporated by reference

Disclosure requirement

Description

Reference

DP 40 a ii

Information on KONE’s significant markets and customer groups

Annual Review: Financial Statements: Sales

DP 40 f

Information on the significant products and services

Annual Review: Financial Statements: Sales

DP 29 c i

Information on KONE’s total research and development costs

Annual Review: Financial Statements: Costs and Expenses

Board of Directors’ Report | Sustainability Statement

42 KONE Annual Review 2024

Content index

ESRS 2 General disclosures

Section name

BP-1

General basis for preparation of sustainability statements

Sustainability reporting principles

BP-2

Disclosures in relation to specific circumstances

Sustainability reporting principles, Sustainability-related impacts, risks and opportunities,

Appendices

GOV-1

The role of the administrative, management and supervisory bodies

Sustainability governance, Sustainability-related impacts, risks and opportunities

GOV-2

Information provided to and sustainability matters addressed by the undertaking’s administrative, management

and supervisory bodies

Sustainability governance, Sustainability-related impacts, risks and opportunities

GOV-3

Integration of sustainability-related performance in incentive schemes

Sustainability governance

GOV-4

Statement on due diligence

Sustainability governance

GOV-5

Risk management and internal controls over sustainability reporting

Sustainability governance

SBM-1

Strategy, business model and value chain

Sustainability in operations

SBM-2

Interests and views of stakeholders

Sustainability in operations

SBM-3

Material impacts, risks and opportunities and their interaction with strategy and business model

Sustainability reporting principles, Sustainability-related impacts, risks and opportunities

IRO-1

Description of the processes to identify and assess material impacts, risks and opportunities

Sustainability reporting principles, Sustainability-related impacts, risks and opportunities

IRO-2

Disclosure requirements in ESRS covered by the undertaking’s sustainability statement

Sustainability-related impacts, risks and opportunities, Appendices

E1 Climate change

Section name

E1-1

Transition plan for climate change mitigation

Material impacts, risks and opportunities, Scenario analysis, Actions and Targets,

Reporting principles

E1-2

Policies related to climate change mitigation and adaptation

Policies

E1-3

Actions and resources in relation to climate change policies

Actions and Targets

E1-4

Targets related to climate change mitigation and adaptation

Scenario analysis, Actions and Targets, Metrics

E1-5

Energy consumption and mix

Metrics

E1-6

Gross Scope 1, 2, 3 and Total GHG emissions

Metrics

E1-7

GHG removals and GHG mitigation projects financed through carbon credits

Metrics

E1-8

Internal carbon pricing

Metrics

GOV-3

Integration of sustainability-related performance in incentive schemes

ESRS 2, Sustainability governance

IRO-1

Description of the processes to identify and address material IROs

ESRS 2, Sustainability-related impacts, risks and opportunities

SBM-3

Material IRO and their interaction with strategy and business model(s)

Scenario analysis

S1 Own Workforce

Section name

S1-1

Policies related to own workforce

Policies

S1-2

Processes for engaging with own workers and workers’ representatives about impacts

Engaging with own workforce

S1-3

Processes to remediate negative impacts and channels for own workers to raise concerns

Remediating negative impacts on own workforce

S1-4

Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing

material opportunities related to own workforce, and effectiveness of those actions

Actions

S1-5

Targets related to managing material negative impacts, advancing positive impacts, and managing material

risks and opportunities

Targets

S1-6

Characteristics of the undertaking’s employees

Metrics

S1-14

Health and safety metrics

Metrics

S1-17

Incidents, complaints and severe human rights impacts

Remediating negative impacts on own workforce

SBM-2

Interests and views of stakeholders

ESRS 2, Sustainability in operations

SBM-3

Material impacts, risks and opportunities and their interaction of with strategy and business model

Material impacts, risks and opportunities

Board of Directors’ Report | Sustainability Statement

43 KONE Annual Review 2024

S2 Workers in the value chain

Section name

S2-1

Policies related to value chain workers

Policies, Respect for human rights

S2-2

Processes for engaging with value chain workers about impacts

Engaging with value chain workers

S2-3

Processes to remediate negative impacts and channels for value chain workers to raise concerns

Remediating negative impacts on value chain workers

S2-4

Taking action on material impacts on value chain workers, and approaches to managing material risks and

pursuing material opportunities related to value chain workers, and effectiveness of those action

Actions, Respect for human rights

S2-5

Targets related to managing material negative impacts, advancing positive impacts, and managing material

risks and opportunities

Targets

SBM-2

Interests and views of stakeholders

ESRS 2, Sustainability in operations

SBM-3

Material impacts, risks and opportunities and their interaction with strategy and business model

Material impacts, risks and opportunities

S4 Consumers and end-users

Section name

S4-1

Policies related to consumers and end-users

Policies

S4-2

Processes for engaging with consumers and end-users about impacts

Engaging with consumers and end-users

S4-3

Processes to remediate negative impacts and channels for consumers and end-users to raise concerns

Remediating negative impacts on consumers and end-users

S4-4

Taking action on material impacts on consumers and end-users, and approaches to managing material risks

and pursuing material opportunities related to consumers and end- users, and effectiveness of those actions

Actions

S4-5

Targets related to managing material negative impacts, advancing positive impacts, and managing material

risks and opportunities

Targets

SBM-2

Interests and views of stakeholders

ESRS 2, Sustainability in operations

SBM-3

Material impacts, risks and opportunities and their interaction with strategy and business model

Material impacts, risks and opportunities

G1 Business conduct

Section name

G1-1

Business conduct policies and corporate culture

KONE culture, Policies, Mechanisms for identifying, reporting and investigating concerns,

Prevention and detection of corruption and bribery

G1-3

Prevention and detection of corruption and bribery

Mechanisms for identifying, reporting and investigating concerns, Prevention and detection

of corruption and bribery

GOV-1

The role of the administrative, supervisory and management bodies

ESRS 2, Sustainability governance

IRO-1

Description of the processes to identify and assess material impacts, risks and opportunities

ESRS 2, Sustainability-related impacts, risks and opportunities

Board of Directors’ Report | Sustainability Statement

44 KONE Annual Review 2024

Environmental information

EU Taxonomy disclosure

EU Taxonomy is a classification system for environmentally

sustainable activities that was established to translate the

EU’s climate and environmental objectives into criteria for

specific economic activities. It recognizes environmentally

sustainable economic activities that make a substantial

contribution to at least one of the EU’s climate and

environmental objectives, while at the same time not

significantly harming any of the other objectives and meeting

minimum social safeguards. The purpose is to help investors

to make environmentally sustainable investments by

identifying businesses that contribute to the transformation to

an economy that supports the EU’s environmental objectives

and to steer investments for the realization of the Paris

Agreement.

The elevator and escalator industry is currently not directly

in the scope of the Taxonomy because it is not among the

most high-emitting industries. Nonetheless, KONE has

identified certain taxonomy-eligible and aligned activities

within its business. As the Taxonomy Regulation continues to

be developed over time and is subject to interpretation, KONE

continuously re-assesses its activities’ contribution to the

environmental objectives of the Taxonomy.

Assessment of taxonomy-eligible activities

An eligible activity is an economic activity that is described

and has technical screening criteria set out in Annex I of the

Climate Delegated Act of the Taxonomy Regulation. In 2024,

KONE identified the following taxonomy-eligible activities

under climate change mitigation and circular economy.

Activity 5.2 ‘Sale of spare parts’ relates to products and

spare parts that are used in products manufactured by

economic activities classified under the NACE code C28.22

‘Manufacture of lifting and handling equipment’ and is

therefore applicable to KONE’s business. As part of KONE’s

Service business, KONE sells spare parts to maintenance

companies that are maintaining products manufactured by

KONE. This activity fits into the description of activity 5.2.

KONE’s DX Class elevators are manufactured with built-in

24/7 Connected Services connectivity, and maintenance of

these elevators fits into the description of the activity 4.1

‘Provision of IT/OT data-driven solutions’.

In addition to elevators and escalators, KONE’s offering

includes automatic building doors. The description of the

economic activity 3.5 ‘Manufacture of energy efficiency

equipment for buildings’ includes NACE code C25.12,

comprising manufacture of metal doors, windows and their

frames, shutters and gates as well as metal room partitions for

floor attachment. KONE’s revenue related to manufacture of

different types of doors and gates falls within this scope. The

installation, service, and repair of these door and gate

solutions is also considered Taxonomy-eligible based on the

description of activity 7.3 ‘Installation, maintenance and repair

of energy efficiency equipment’.

KONE’s vehicle fleet consists of about 19,000 vehicles.

Based on the description of activity 6.5 ‘Transport by

motorbikes, passenger cars and commercial vehicles‘, KONE

has concluded that the capital expenditure on leasing costs of

KONE’s entire vehicle fleet are Taxonomy-eligible as related

to category C ‘Purchase of output from other companies’

Taxonomy-eligible economic activities’. KONE did not identify

any capital expenditure related to categories A or B.

Taxonomy-alignment has not been pursued at this stage

for the above-mentioned activities.

Assessment of taxonomy-aligned activities

An eligible activity is considered to be aligned if it is making a

substantial contribution to at least one of the six

environmental objectives, while also doing no significant harm

to the other environmental objectives as well as meeting the

minimum standards on human rights and labor standards. In

2024, KONE identified taxonomy-aligned activities under

climate change mitigation and circular economy and is

reporting alignment for the following activities.

One of KONE’s pioneering eco-efficient solutions is the

regenerative drive. When descending with a heavily loaded

car or ascending with a lightly loaded car, elevators equipped

with a regenerative drive can recover energy by converting

the stored mechanical energy into electrical energy in the

motor, which acts as a generator. Energy is pushed back into

the electrical grid of the building, where it can be used by

other building appliances, such as HVAC. From EU

Taxonomy, the economic activity 3.6 ‘Manufacture of other

low carbon technologies’ was found to be best suited for

manufacturing elevators with regenerative drive.

KONE 24/7 Connected Services offers intelligent

predictive maintenance through a cloud connection, enabling

the connected equipment to provide a constant stream of data

that helps to make intelligent, predictive decisions on how to

solve potential problems before they cause disruption.

Advanced analytics determines if an issue is critical and

needs to be addressed immediately or if it can be solved

during the next scheduled maintenance visit, resulting in more

efficient maintenance. Any elevator or escalator can be

connected to 24/7 Connected Services by installing a

connectivity device. KONE’s DX Class elevators are

manufactured with built-in 24/7 connectivity. These activities

fit into the description of economic activity 4.1 ‘Provision of

IT/OT data-driven solutions’.

The lifetime of elevators and escalators is typically long

and can be further extended with regular maintenance and

modernization of the equipment. KONE’s Modernization

business offers solutions for prolonging the product life cycle

with upgrades in terms of energy efficiency, safety, and visual

appearance. The description of the economic activity 5.1

‘Repair, refurbishment and remanufacturing’ entails repair and

refurbishment of goods that have been used for their intended

purpose before by a customer, and KONE’s partial

modernization business for elevators and escalators fits into

the activity description. As well as activity 5.2, activity 5.1

relates to products that are manufactured by economic

activities classified under the NACE code C28.22

‘Manufacture of lifting and handling equipment’ and is thus

applicable to KONE’s business.

Activity 4.1 includes revenue from manufacturing DX Class

elevators without regenerative drive; other elevators and DX

Class elevators equipped with a regenerative drive are

included in activity 3.6.

Substantial contribution criteria

KONE has reviewed the substantial contribution criteria for

economic activities 3.6, 4.1 and 5.1 and assessed its activities

to be aligned.

Per the substantial contribution criteria set out in Annex I

to regulation 2020/852 for activity 3.6, elevators equipped with

regenerative drive demonstrate substantial life cycle GHG

emission savings compared to the best performing alternative

solutions available on the market, such as a modern elevator

drive technology without the ability to feed electricity back to

the building network. The amount of regenerated energy of

Board of Directors’ Report | Sustainability Statement

45 KONE Annual Review 2024

the regenerative drive varies according to the building type;

the saving can potentially amount up to 20-40% of the

elevator consumption in mid-rise buildings and up to 35-45%

in high-rise buildings. By meeting the criteria, elevators

manufactured with regenerative drive make a substantial

contribution to climate change mitigation.

With regards to substantial contribution to circular

economy, remote monitoring and predictive maintenance

through KONE 24/7 Connected Services meets the criteria of

activity 4.1. The service provides information on upcoming

maintenance needs and identifies any potential issues before

they cause problems. Round-the-clock monitoring increases

safety and improves accessibility of the equipment, and fact-

based maintenance recommendations help prolong the

equipment lifetime. As for the activity 5.1, partial

Modernization extends the products’ lifetime by repairing and

refurbishing them, thereby also substantially contributing to

the transition to circular economy.

Do No Significant Harm assessment

A Do No Significant Harm (DNSH) assessment was

conducted for the activities for which KONE meets the

substantial contribution criteria, as listed above. KONE has a

total of seven global R&D units and 10 manufacturing units in

the US, Mexico, EU, China, and India, with 200 most strategic

material suppliers located near KONE's supply units.

Elevators with regenerative drive, DX Class elevators, the

connectivity devices for 24/7 Connected Services as well as

partial modernization components are manufactured or

assembled at KONE’s factories, thus the same manufacturing

operations-related DNSH assessments apply for all the

taxonomy-aligned activities.

Climate change adaptation

KONE has performed physical climate risk and vulnerability

assessment as part of KONE’s annual risk assessment

process. KONE’s risk and opportunity assessment includes a

Climate Change Scenario Analysis based on International

Panel for Climate Change RCP scenarios to help to ensure

that KONE’s strategy is resilient to climate change in a range

of possible future states. The risk assessment focused on the

qualitative implications of climate-related risks and

opportunities in key strategic performance areas of KONE’s

operations: direct material purchases, manufacturing

operations, logistics and product and service design.

Based on the assessment, physical climate risks are not

considered material. KONE has taken mitigating actions to

ensure continued operations globally and actively develops

business continuity management capabilities to reduce the

impact and likelihood of disruptions within its supply chain.

Sustainable use and protection of water resources

Throughout KONE’s global manufacturing operations, water is

mainly used for sanitary purposes. Water consumption in

KONE’s Service and Modernization activities is minimal.

KONE sources water mainly from municipal water supplies,

and wastewater is released into municipal wastewater

treatment systems that abide by local regulations. Some of

KONE’s manufacturing units use minor quantities of water in

their industrial processes, for example, in painting and coating

processes with closed loop water circulation, and for cooling

purposes. Those manufacturing units monitor their water

consumption and wastewater discharge parameters, perform

the necessary sampling, and report to the local authorities

according to the local regulation. Two out of KONE’s ten

manufacturing units have their own wastewater treatment

systems, with regular third-party monitoring and permits in

place.

Based on water risk assessment, some of KONE’s

manufacturing units are located in areas recognized with high

levels of water stress. However, manufacturing units’ water

stress impact is rated minor in the 2023 environmental

assessment.

Environmental impact assessments as part of ISO 14001

certification including water impact assessment have been

performed for all of KONE’s manufacturing units.

Pollution prevention and control

Pollution prevention and control criteria require that the

activity does not lead to the manufacture, placing on the

market or use of substances listed in a number of EU’s

regulations addressing the production and use of chemical

substances. KONE has assessed its aligned activities against

the criteria for the DNSH to pollution prevention and control

and found to meet the criteria.

KONE has systematic practices and code of conducts with

environmental annex requiring that the substances, materials,

components, parts, sub-assemblies, assemblies, products,

labels affixed to products or used in the manufacturing of the

products and their components comply with the regulation laid

out by the EU. KONE is constantly striving to limit the amount

of restricted substances in its products and aims to use only

articles which are sustainable from environmental, technical

and economical perspective.

Certain components used in KONE’s products contain

substances addressed in the DSNH pollution prevention and

control criteria. As lead is the most significant substance,

KONE has done an assessment by analyzing if the

components containing lead have suitable alternatives on the

market and whether using these alternatives is technically and

economically feasible. The assessment was conducted by

KONE’s subject matter experts from product design and R&D

Sustainability teams. Based on the analysis, KONE is not

aware of suitable alternative technologies on the market that

would be technically and/or economically feasible.

Transition to a circular economy

KONE’s contribution to circular economy focuses on reducing

the materials, energy and other resources used in solutions

and operations. KONE strives to optimize material use, for

example, through robotics and automation, product design,

recycling waste wherever possible, and reusing packaging

materials. KONE aims to maximize the positive environmental

impacts and minimize the adverse ones throughout the life

cycle of our solutions. This extends from raw material

extraction to end-of-life treatment such as recycling the

materials. Up to 90% of the materials in KONE’s solutions can

be recovered. Modernization solutions contribute to the

renovation and repurposing of buildings. KONE’s products are

fit for disassembly and can be reused and recycled.

The current share of recycled content in KONE’s products

is relatively low, and KONE works closely with its suppliers to

increase the recycled content in metals, without compromising

the safety or quality of the equipment.

Protection and restoration of biodiversity

Environmental impact assessments as part of ISO 14001

certification have been performed for all of KONE’s

manufacturing units. All required mitigation and compensation

measures for protecting the environment are implemented

based on the local regulatory requirements and included in

KONE’s ISO 14001 certification and auditing processes.

KONE conducted a screening in 2024 and found that none

of its manufacturing units are in or near biodiversity-sensitive

areas. KONE has a long-term (2030) and annual biodiversity

target, which states that KONE’s manufacturing units must not

be located in or near UNESCO World Heritage sites, Nature

Board of Directors’ Report | Sustainability Statement

46 KONE Annual Review 2024

2000 sites or other conservation parks, or biodiversity-

sensitive areas.

Minimum social safeguards

Based on the assessment of the Minimum safeguards

criteria on human rights, bribery and corruption, taxation

and fair competition, which are laid out by the EU

Platform on Sustainable Finance, KONE has found its

activities to be aligned.

KONE’s Code of Conduct, Human Rights Policy,

Anti-Bribery and Corruption Policy, Competition

Compliance Policy and other related policies set out the

principles and standards expected from KONE

employees, KONE companies, suppliers, distributors

and other business partners. KONE is committed to

respecting and endorsing internationally recognized

labor and human rights standards in its operations and

across the value chain. KONE has a human rights due

diligence process, consisting of impact assessments,

third party due diligence, supplier screenings and

internal assessments and surveys. To prevent bribery

and corruption, KONE has developed a comprehensive

anti-bribery and corruption program which includes thorough

risk assessments, clear policies, mandatory training, and

proactive measures.

OpEx

For OpEx, KONE has defined the total operational

expenditure (denominator), EUR 282 million, based on the

methodology specified in the Taxonomy Regulation. It

includes research and development costs of KONE, in

addition to cost related to maintenance and repair of the

facilities and buildings, as well as short-term lease expenses.

KONE did not identify any turnover-related or standalone

Taxonomy-eligible or aligned operational expenditure.

Changes in KONE’s Taxonomy reporting after

2023

KONE has re-categorized the revenue from sales of DX Class

elevators equipped with regenerative drive from economic

activity 4.1 to 3.6. This has resulted in a slightly higher

taxonomy-alignment for the activity 3.6 and vice versa a

slightly lower alignment for 4.1 compared to the 2023

disclosure.

As for activity 4.1, the 2024 reported revenue includes the

total value of the service contracts which include 24/7

Connected Services. The 2023 disclosure included only the

extra value of 24/7 Connected Services, which was charged

on top of a regular service contract. Since 2023, KONE has

significantly developed its service strategy to fully leverage

benefits from connectivity. Today, 24/7 Connected Services is

integrated into KONE’s overall way of doing service and is no

longer considered a separate value-add service.

Nuclear and fossil gas related activities

Nuclear energy related activities

The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative

electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.

The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce

electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as

well as their safety upgrades, using best available technologies.

The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or

process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear

energy, as well as their safety upgrades.

Fossil gas related activities

The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce

electricity using fossil gaseous fuels.

The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and

power generation facilities using fossil gaseous fuels.

The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities

that produce heat/cool using fossil gaseous fuels.

Board of Directors’ Report | Sustainability Statement

47 KONE Annual Review 2024

Proportion of turnover from products or services associated with Taxonomy-aligned economic activities

2024

Substantial contribution criteria

DNSH criteria

Economic activities

Code

Turnover

Proportion of turnover, year

Climate change mitigation

Climate change

adaptation

Water

Pollution

Circular economy

Biodiversity

Climate change mitigation

Climate change adaptation

Water

Pollution

Circular economy

Biodiversity

Minimum safeguards

Proportion of taxonomy

aligned (A.1) or eligible

(A.2) turnover, year N

-1

Category enabling activity

Category transitional

activity

MEUR

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y/N

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1 Environmentally sustainable activities (Taxonomy-

aligned)

Manufacture of other low carbon technologies

3.6

1,850

16.7 %

N/EL

16.8 %

Provision of IT/OT data-driven solutions

4.1

1,976

17.8 %

N/EL

18.3 %

Repair, refurbishment and remanufacturing

5.1

1,101

9.9 %

N/EL

8.6 %

Turnover of environmentally sustainable activities

(Taxonomy-aligned) (A.1)

4,927

44.4 %

37.6 %

0.0 %

62.4 %

0.0 %

43.7 %

Of which Enabling

3,827

34.5 %

16.7 %

0.0 %

17.8 %

0.0 %

35.1 %

Of which Transitional

A.2 Taxonomy-eligible but not environmentally sustainable

activities (not Taxonomy-aligned activities)

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

Manufacture of energy efficiency equipment for buildings

3.5

0.1 %

N/EL

0.2 %

Provision of IT/OT data-driven solutions

4.1

0.5 %

N/EL

0.4 %

Sale of spare parts

5.2

0.1 %

N/EL

0.1 %

Installation, maintenance and repair of energy efficiency

equipment

7.3

0.7 %

N/EL

0.6 %

Turnover of Taxonomy-eligible but not environmentally

sustainable activities (not Taxonomy-aligned activities)

(A.2)

155

1.4 %

60.2 %

0.0 %

39.8 %

0.0 %

1.2 %

A. Turnover of Taxonomy eligible activities (A.1 + A.2)

5,082

45.8 %

38.2 %

0.0 %

61.8 %

0.0 %

44.9 %

B. TAXONOMY-NON ELIGIBLE ACTIVITIES

Turnover of Taxonomy-non-eligible activities

6,016

54.2 %

TOTAL

11,098

100.0 %

EL = Eligible; N/EL = Non-eligible

Total turnover as per KONE group reported figures. KONE’s principles for defining turnover and capital expenditure can be found in notes 2.1. and 4 in the financial statements.

Board of Directors’ Report | Sustainability Statement

48 KONE Annual Review 2024

Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities

2024

Substantial contribution criteria

DNSH criteria

Economic activities

Code

CapEx

Proportion of CapEx, year

Climate change mitigation

Climate change adaptation

Water

Circular economy

Pollution

Biodiversity

Climate change mitigation

Climate change adaptation

Water

Circular economy

Pollution

Biodiversity

Minimum safeguards

Proportion of Taxonomy

aligned (A.1.) or eligible

(A.2.) CapEx, year N

-1

Category enabling activity

Category transitional

activity

MEUR

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y/N

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1 Environmentally sustainable activities (Taxonomy-

aligned)

CapEx of environmentally sustainable activities

(Taxonomy-aligned) (A.1)

Of which Enabling

Of which Transitional

A.2 Taxonomy-eligible but not environmentally sustainable

activities (not Taxonomy-aligned activities)

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

Transport by motorbikes, passenger cars and commercial

vehicles

6.5

160

30.6 %

N/EL

17.4 %

CapEx of Taxonomy-eligible but not environmentally

sustainable activities (not Taxonomy-aligned activities)

(A.2)

160

30.6 %

100.0 %

0.0 %

17.4 %

A. CapEx of Taxonomy eligible activities (A.1 + A.2)

160

30.6 %

100.0 %

0.0 %

17.4 %

B. TAXONOMY-NON ELIGIBLE ACTIVITIES

CapEx of Taxonomy-non-eligible activities

363

69.4 %

TOTAL

523

100.0 %

EL = Eligible; N/EL = Non-eligible

Total CapEx as per KONE group reported figures. KONE’s principles for defining turnover and capital expenditure can be found in sections 2.1., 4.3 and 4.4. in the financial statements.

Board of Directors’ Report | Sustainability Statement

49 KONE Annual Review 2024

2024

Substantial contribution criteria

DNSH

Economic activities

Code

OpEx

Proportion of OpEx, year N

Climate change mitigation

Climate change adaptation

Water

Pollution

Circular economy

Biodiversity

Climate change

mitigation

Climate change adaptation

Water

Pollution

Circular economy

Biodiversity

Minimum safeguards

Proportion of Taxonomy

aligned (A.1) or eligible

(A.2) OpEx, year N

-1

Category enabling activity

Category transitional

activity

MEUR

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y/N

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1 Environmentally sustainable activities (Taxonomy-

aligned)

OpEx of environmentally sustainable activities

(Taxonomy-aligned) (A.1)

Of which Enabling

Of which Transitional

A.2 Taxonomy-eligible but not environmentally sustainable

activities (not Taxonomy-aligned activities)

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

OpEx of Taxonomy-eligible but not environmentally

sustainable activities (not Taxonomy-aligned activities)

(A.2)

0.0 %

A. OpEx of Taxonomy eligible activities (A.1+ A.2)

0.0 %

B. TAXONOMY-NON ELIGIBLE ACTIVITIES

OpEx of Taxonomy-non-eligible activities

282

100.0 %

TOTAL

282

100.0 %

EL = Eligible; N/EL = Non-eligible

Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities

Board of Directors’ Report | Sustainability Statement

50 KONE Annual Review 2024

E1 Climate Change

Material impacts, risks and opportunities

Environmental and climate change related risks and

opportunities were identified as part of the DMA process,

building on previous climate-related assessments and

understanding of KONE’s main climate impacts. Climate

change adaptation and mitigation and energy were identified

as material topics for KONE. Refer to ESRS 2, Sustainability-

related impacts, risks and opportunities for a description of the

materiality assessment methodology. Material IROs are

described in the table Material impacts, risks and

opportunities related to climate change.

KONE has screened all its major emission sources. The

emissions arising from the use of KONE’s products, i.e.

locked-in emissions, are relevant where non-renewable

energy sources are used in KONE’s solutions over their

lifetime. Product and value chain (Scope 3) emissions involve

activities outside of KONE’s direct control and decarbonization

speed in related industries might affect the ability to reduce

Scope 3 emissions. Therefore, KONE engages systematically

with its main suppliers and customers to reduce material-

related emissions and find new innovative energy solutions in

countries where its solutions are used. Refer to the table

Greenhouse gas emissions for more information on the direct

use-phase GHG emissions calculations (Scope 3 category 11)

and E1, Reporting principles for the calculation methodology.

Scenario analysis

The identification and assessment of climate-

related risks and opportunities

KONE’s first climate change scenario analysis was kicked off

in 2022 and finalized in early 2023. Resilience assessment of

KONE’s critical-to-continuity activities with respect to climate-

related risks was part of the analysis. The analysis continues

to be reviewed annually as part of KONE’s overall risk

assessment process and assessed and updated regularly.

Refer to ESRS 2, Standard specific considerations for a

description of the applied time horizons. Critical assumptions,

inputs and key drivers to the scenarios, including those driving

the transition to a lower-carbon economy, are presented in the

table Scenario comparison.

In the first phase of the scenario analysis, KONE focused

on the qualitative implications of climate-related risks and

opportunities in key strategic performance areas of its

operations considering the inherent and residual risk after

existing treatment actions. KONE aims to quantify the

anticipated financial impacts of material physical and

transition climate risks upon a future analysis update.

Climate-related risks and opportunities were considered in

terms of key strategic performance areas, which covered

direct material purchases (representing KONE’s upstream

value chain), logistics (value chain cross-cutting activity),

manufacturing operations and product and service design

(representing KONE’s own operations). Although KONE’s

downstream value chain was not directly in the scope, product

and service design is closely linked to the downstream value

chain. KONE’s analysis included how KONE can advise and

help customers in preventing damage when their facilities,

together with KONE equipment, are exposed to severe

weather events, such as hurricanes and floods.

Climate scenarios

The climate scenario assessment utilized several information

sources, including the 6

Assessment Report of The

Intergovernmental Panel on Climate Change (IPCC) Working

Group I, Swiss Re CatNet, and combined SSP-RCP

scenarios, i.e. Shared Socioeconomic Pathways (SSPs)

informed by the Representative Concentration Pathways

(RCPs).

Real world political and societal dynamics may deviate

from the assumptions of the SSP-RCP scenarios, such as the

Material impacts, risks and opportunities related to climate change

Material topic

(time horizon)

Material impacts, risks and opportunities

Management response

Climate change

adaptation in own

operations and up-

and downstream

value chain (long-

term)

↓ Physical risk

Severe weather events may interrupt operations and

increase the cost of doing business in KONE’s

factories or in the upstream supply chain or

downstream delivery chain, including logistics routes.

• KONE develops business continuity management

capabilities and harmonizes its products to increase

resilience in case of disruptive events

• KONE develops services helping customers with prior

weather event loss prevention, stand-by maintenance

during events and post-event status check and repairs

Climate change

mitigation in up-

and downstream

value chain (long-

term/

continuous)

↑ Positive impact

KONE's solutions are designed for life cycle use with a

long lifetime aiming for circularity, with professional

maintenance and modernization, enabling lower

lifetime energy consumption and GHG emissions.

↓ Negative impact

Product-related emissions – lifetime energy

consumption and materials – account for the majority

of KONE’s emissions

↓ Transition risk

Reputational damage if KONE fails to meet its

promised sustainability/climate-related targets in time

• KONE continues to develop low carbon offering to

meet customer expectations and support them to

meet their climate targets

• KONE actively engages with its suppliers on climate

topics

Energy in

downstream value

chain

(long-term/

continuous)

↓ Negative impact

KONE solutions are designed to last long (25 years for

the elevators and 15 years for escalators). During their

lifetime KONE solutions consume electricity.

• KONE continues to develop its energy efficient low

carbon offering

Please note that the table includes impacts, risks and opportunities with the further division of climate-related risks into physical or transition.

Board of Directors’ Report | Sustainability Statement

51 KONE Annual Review 2024

level of global cooperation, affecting the feasibility of

mitigation and adaptation measures. Other constraints relate

to assumptions on the availability and use of natural

resources, the feasibility of technological advancements and

their implementation and the effectiveness and

implementation of policies.

The selected scenarios are considered representative of

KONE’s risks and uncertainties, as they combine a range of

plausible warming pathways and related socio-economic

developments, which may influence the global megatrends

that support KONE’s strategy, and which will have a direct

impact in KONE’s day-to-day operating environment.

KONE’s resilience under the scenarios

KONE has a climate pledge with science-based targets for

significant GHG emissions reductions in line with limiting

global warming to 1.5°C, which is currently the most ambitious

criteria for setting science-based targets. Refer to E1, Actions

and targets to read more about KONE’s targets.

In the ‘1.5°C low carbon’ scenario, KONE’s business

strategy is resilient, as demand for energy efficient,

sustainable and climate resilient solutions increases already in

the short term, and in the medium term there is full

transformation to renewable energy and electrification that

creates opportunities for KONE. Physical changes may cause

occasional disruptions to KONE factories and supply chain.

However, KONE’s efforts to enhance its ability to anticipate,

prepare for, respond to, and adapt to disruptions will keep

business interruptions limited and mainly recoverable without

material losses.

In the ‘2.7°C, middle of the road’ scenario, in the short to

medium term, tighter policies promote demand for KONE’s

energy efficient product offering, but only in selected markets

and countries committed to the Paris Agreement. KONE’s

business strategy faces some resilience challenges, as with

less policy incentive to innovate, the advancement in material

efficiency, recycling infrastructure and new materials is slower

in the short to medium term, but may accelerate in the long

term, when regulators recognize the need to take actions.

Global supply chains and logistic routes may face notable

disruptions, affecting KONE’s business.

In the ‘4°C high carbon’ scenario, emissions continue to

rise, the transition to a low-carbon economy is disorganized,

economic growth is preferred over climate action and

overconsumption of resources continues over the medium to

long term. In this scenario, KONE’s business strategy faces

the most resilience challenges, as the demand for sustainable

and climate resilient solutions grows only in advanced

economies or among select customer groups. Even so, most

of KONE’s strategic choices will still be relevant. Particularly in

the long term, extreme weather conditions increase

disruptions in supply chains and logistic routes, which may

lead to significant logistic cost increases. In the medium term,

changes may be required in KONE’s product design for the

equipment to bear extreme heat and humidity in order to

operate under such conditions.

KONE considers the current and future projected

exposures to acute and chronic physical climate change

impacts when investing into and selecting new manufacturing

or distribution center locations or expanding existing ones.

However, KONE’s ability to influence suppliers or customers

in the selection of their operating locations is limited. Due to

KONE’s global footprint, KONE is able to diversify its supply

and delivery chain, making KONE less dependent on

particularly exposed locations from time to time. Furthermore,

KONE utilizes special, location-based software tools to

regularly monitor its supply chain locations, including supplier

manufacturing locations and physical risks relevant to climate

change. This increases KONE ‘s speed to switch to

predefined alternative supply chains, if needed.

KONE’s new strategy, ‘Rise’, emphasizes actions to cut

carbon emissions in alignment with the Paris Agreement and

the '1.5°C low carbon’ scenario. Sustainability is integrated

into the strategy as a key driver of profitable growth and

differentiation. Refer to ESRS 2, Sustainability in operations

Scenario comparison

SSP1

SSP2

SSP4

Reference

temperature

scenario

from IPCC

1.5°C warming pathway

2.7°C warming pathway

4°C warming pathway

Key inputs

Tightening regulation

Tightening regulation, supply chain

interruptions, extreme weather

events

Projected temperature and precipitation

changes, expected severity of climate related

weather events

Key drivers

Policies/regulations,

technological change

Policies/regulations, technological

change, resource use, extreme

weather events

Extreme weather events, demographic

changes, social and economic development,

resource use

Scenario

description

• Ambitious, globally

consistent regulations

aiming at low-carbon

economy

• Increased demand for

sustainable and climate

resilient solutions creating

opportunities for KONE

• Full transformation to

renewable energy and

electrification and focus on

energy efficiency

• GHG emissions significantly

reduced by 2050

• Current socio-economic

development patterns continue

• Disruptions in the availability of

certain raw materials and

increased price volatility in the

long term

• Global supply chains and

logistic routes may face notable

changes, affecting KONE’s

business

• GHG emissions moderately

increase until stabilizing around

2035 and turning to decrease

around 2050

• Disorganized transition to low-carbon

economy, economic growth preferred over

climate action

• Non-integrated carbon markets, and

increased carbon leakage due to

differences in carbon regulations between

countries

• The demand for sustainable and climate

resilient solutions grows in advanced

economies, whereas in developing

markets customers are not willing to pay

for such solutions

• Disruptions in supply chains and logistic

routes due to extreme weather leading to

significant logistic cost increase for KONE

• GHG emissions continue to rise but at a

slightly reduced rate

Board of Directors’ Report | Sustainability Statement

52 KONE Annual Review 2024

for a description of driving down GHG emissions, one of

KONE’s strategic shifts.

When conducting the scenario assessment, KONE has not

identified any assets or business activities that are

incompatible with or need significant efforts to be compatible

with a transition to a climate-neutral economy. There are no

critical climate-related assumptions in KONE’s financial

statements.

Policies

Climate change adaptation

Key policies related to climate change adaptation and

mitigation are introduced in the table Key policies related to

climate change. KONE Business Continuity Management

Standard sets company-wide minimum requirements on crisis

and disruption preparedness and business recovery and

supports KONE’s resilience and adaptation to climate change.

It guides to identify critical activities, impacts, risks, and

mitigation actions to prevent the disruptions or recover within

the set time objectives.

The impactful business disruption scenarios including

physical climate change are documented in business

continuity plans, which include roles and responsibilities

relevant to the prevention and preparedness, emergency and

crisis response and business recovery of each scenario. The

plans and the sufficiency and effectiveness of risk mitigations

are reviewed annually at minimum, in connection with crisis

and business continuity management exercises and audits.

Climate change mitigation and energy

KONE’s commitment to the ten principles of the United

Nations (UN) Global Compact initiative are embedded in its

strategy, policies, and procedures, including KONE

Environmental Policy Statement which emphasizes KONE’s

pledge to reduce GHG emissions and minimizing the

environmental impacts of its solutions through durable,

energy-efficient products and maintenance offerings. KONE

Executive Board reviews quarterly and Board of Directors

reviews annually the progression against the environmental

targets.

KONE’s business processes are set under the ISO

standards. Of these standards, ISO 14001 Environmental

management system and ISO 50001 Energy management

system specifically relate to enhancing KONE’s sustainability

performance in climate change mitigation in its own and

partners’ daily operations and culture in alignment with the UN

sustainable development agenda, Paris Pledge for Action

climate initiative and KONE’s science-based targets.

Although KONE’s material topics focus on the impacts of

GHG emissions and energy in the value chain, KONE is also

committed to reduce emissions and energy consumption in its

own operations. KONE Global Facilities Policy demonstrates

KONE’s dedication to increasing the usage of renewable

electricity at its facilities worldwide to 100% by 2030. All

KONE units report renewable electricity as part of their

quarterly reporting. Refer to E1, Reporting principles to read

more about KONE’s data collection and monitoring process.

KONE’s everyday work is guided by KONE Code of

Conduct alongside other company policies and guidelines.

KONE’s Code of Conduct requires compliance with applicable

laws and regulations to maintain high environmental

standards across KONE’s operations, suppliers, and

customers. KONE Supplier and Distributor Codes of Conduct

mandate KONE’s suppliers to comply with all relevant

environmental laws and KONE requirements, secure

necessary permits, and manage materials, energy, and

emissions effectively. Refer to G1, Policies and S2, Policies to

read more about KONE’s Codes of Conduct and their

implementation.

All policies are available on KONE’s internal systems,

such as intranet, or publicly.

Actions and targets

Climate change adaptation

KONE aims to adapt to the physical impacts of climate

change by harmonizing the engineering, delivery and

manufacturing structures of its existing and new products.

This helps KONE to maintain and improve its resilience when

the delivery chain or logistics routes may be disrupted and

material or component suppliers, KONE factories, distribution

centers or logistics routes for shipments need to be quickly

replaced with feasible alternatives. In 2024, KONE conducted

the first phase release of product harmonization which will be

followed with selected component harmonization

implementations in Europe and Americas in 2025.

In 2024, KONE conducted simulated crisis and business

continuity management exercises at some of its

manufacturing facilities to ensure business continuity and to

reduce the impact and likelihood of disruptions within its full

delivery chain. While KONE’s 10 manufacturing facilities in

seven countries, multiple distribution centers and a large

supplier network across the globe help to mitigate the impacts

from potential disruptions in individual locations or countries,

KONE aims to secure the availability of supply by

implementing alternative sourcing channels, long-term

agreements, and last-buy options for critical components and

services. KONE also has a global property damage and

business interruption insurance program in place.

Key policies related to climate change

Management system

Material topics addressed

Scope

Management bodies

Business Continuity

Management Standard

Climate change adaptation

All KONE units

Supply Chain leadership team

Business continuity plans

Climate change adaptation

All KONE units

Head of unit/function

Environmental Policy

Statement

Climate change mitigation,

energy efficiency

All KONE units and

global operations

President and CEO

ISO 14001 integrated in

KONE Management

System

Climate change mitigation,

energy efficiency

All KONE units and

key suppliers

EVP Supply Chain

ISO 50001 Energy

Management System

Climate change mitigation,

energy efficiency

4 (2023: 3) local

units

Local leadership teams and assigned function

Global Facilities Policy

Renewable energy

All KONE units

Executive Board, CFO

Board of Directors’ Report | Sustainability Statement

53 KONE Annual Review 2024

In terms of downstream adaptation, KONE continuously

develops services, which help its customers with weather

event loss prevention, stand-by maintenance during events

and post-event status check and repairs.

Climate change mitigation and energy

KONE is committed to a 50% cut in the Scope 1 and 2

emissions from its own operations by 2030, compared to a

2018 baseline, and has pledged to have carbon neutral

operations by 2030. This target is in line with limiting global

warming to 1.5°C, which is currently the most ambitious

criteria for setting science-based targets. Additionally, KONE

targets a 40% reduction in the emissions related to its

products’ materials and lifetime energy use (Scope 3

emissions) over the same period, relative to orders received.

In addition, KONE is committed to reduce electricity

consumption in its own operations and has set a target to

increase the share of renewable electricity to more than 90%

by the end of 2023 and to 100% by 2030. KONE has also

increased the share of renewable electricity faster than

originally planned by reaching 97% already in 2023. Due to

this progress and systematic work in 2024, KONE set the

target to increase the share of renewable electricity to 98%

during 2024. In 2024, KONE reached a 99% share of

renewable electricity.

KONE’s new strategy has a strong emphasis on emission

reduction targets as one of the core strategic shifts. Refer to

ESRS 2, Strategy for details about KONE’s new strategy. To

support the ongoing green transformation, KONE has a

Climate and Environmental Excellence Program which is

centered around four focus areas: partner with customer,

offering, operations, and mindset and behavior.

Internally, KONE promotes environmental and climate

actions, for example, during dedicated theme days. During

2024, KONE continued to grow awareness and ownership of

its environmental targets and progress. The company

organized for example sustainability and climate-related

information sharing and training sessions for various

employee groups. KONE also responds to customers’

increasing demand for sustainable products and services.

During the reporting year 2024, KONE has successfully

implemented emission reduction activities by investing into the

energy efficiency of KONE’s solutions, increasing, and

expanding the low carbon offering and engaging with

suppliers to improve material efficiency in its solutions. The

emissions reduction activities will be continued in 2025 and

beyond to ensure KONE meets its 2030 targets. All of KONE’s

emissions reduction activities in 2024 are aligned with its

climate change scenario analysis work to ensure long-term

success in line with the 1.5°C pathway of the Paris

Agreement. Refer to E1, Scenario analysis for further

information. KONE’s constant focus is on actual emission

reductions both in its own operations and in products and

value chain. However, to reach carbon neutral operations by

2030, KONE is planning to compensate the remaining

emissions.

KONE has identified the following key decarbonization

levers to reach its science-based targets by 2030 in its own

operations (Scope 1 and 2) and value chain (Scope 3):

• Scope 1: fleet transformation to electrical vehicles (EVs)

and increasing use of renewable energy

• Scope 2: increase use of renewable electricity and other

renewable energy sources

• Scope 3: increase share of energy-efficient electrification

systems and regenerative drives, increase material

efficiency, systematically engaging with suppliers, product

innovations and partnerships

Scope 1 and 2 emissions

During the reporting year 2024, KONE reached net Scope 1

and 2 emission reduction of 29% (2023: 25%) compared to its

2018 emissions of 154,700 tCO2e, exceeding the emission

reduction target of -25% (2023: -21%). As described in the

general information section, the environmental data includes

both net and gross emissions for Scope 1 data. KONE reports

net emissions for renewable natural gas, to show the total

emissions reductions achieved during the reporting year.

Levers to reach Scope 1 & 2 emission reduction target by 2030

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

Baseline 2018 Fleet transformation Renewable electricity Renewable energy Target year 2030

tCO2e

Board of Directors’ Report | Sustainability Statement

54 KONE Annual Review 2024

Gross emissions are visible in the table ‘GHG Emissions’,

footnote

KONE focuses on decreasing Scope 1 emissions by

primarily transitioning to zero and low emission vehicle fleet or

no fleet. KONE’s vehicle fleet accounts for approximately 95%

(2023: 92%) of its Scope 1 and 2 GHG emissions. The total

carbon footprint of KONE’s vehicle fleet decreased by 2%

compared to 2023 and decreased by 4% compared to its

2018 emissions (109,000 tCO2e).

During 2024, KONE developed a comprehensive plan to

reduce vehicle emissions in collaboration with its partners by

for example identifying the technicians who could utilize

electrical vehicles (EVs), incorporating EVs in subsidiaries

local car policies, encouraging KONE employees to select

low-emission vehicles and providing EV charging points.

Accelerating the transition to electric vehicles is imperative to

achieve KONE’s 2030 reduction targets.

Renewable energy and energy efficiency

KONE’s ten global manufacturing units have reduced their net

Scope 1 and 2 emissions by 83% (2023: 81%) at the end of

2024 compared to the 2018 baseline. In 2024, solar panels

were used in six out of ten manufacturing units and green

district heating in one manufacturing unit. All units have been

purchasing 100% renewable electricity since the beginning of

2023. In 2024, KONE also increased the use of biofuels in its

facilities in North America and continued to optimize energy

usage in heating, ventilation, air conditioning and lighting

systems in KONE’s manufacturing units. KONE has also

invested in manufacturing line robotics and automation to

further improve both the material and energy efficiency of its

manufacturing process.

In addition, KONE has taken significant actions to reduce

market-based Scope 2 emissions by systematically improving

energy efficiency and increasing the use of renewable

electricity across its facilities. KONE’s total energy

consumption remained stable in 2024 compared to 2023 and

increased by 6% compared to 2018.

Product and value chain (Scope 3) emissions:

energy and material efficiency

In 2024, KONE’s Scope 3 (product and value chain)

emissions per product ordered (62.2 tCO2e/order) decreased

by 8.7% compared to 2023 (68.2 tCO2e/order) and by 12.8%

compared to 2018 (71.4 tCO2e/order). KONE’s absolute

product and value chain emissions decreased by 8.8%

compared to 2023 and 9.8% compared to 2018. KONE’s

Scope 3 GHG absolute emissions from its products’ annual

energy consumption decreased by 9.8% compared to 2023

(364,000 tCO2e) and by 15.3% compared to 2018 (387,600

tCO2e).

During 2024 and onward, one of the major contributing

emissions reduction factors is further improved energy

efficiency of KONE’s products. This was achieved, for

instance, through an increased share of energy-efficient

electrification systems and regenerative drives in ordered

elevators and systematically engaging with suppliers to

increase the material efficiency of KONE’s solutions. KONE

also collaborates with its suppliers to increase the recycled

content in the materials used for KONE’s products. KONE

actively looks for new partners and ways of working to find

alternative materials with lower embodied carbon emissions

and to develop processes to reuse and recycle materials more

effectively.

In 2024, KONE launched KONE Energy Management

feature which optimizes energy consumption of elevator

groups over passenger waiting time and time to destination in

off-peak hours while minimizing the waiting time and time to

destination during peak hours. This results in annual energy

savings in elevator groups due to optimized energy use during

low-traffic periods. Additionally, KONE Service Business

introduced KONE Remote Services which enables resolving

issues remotely. This lowers the need for service site visits

and KONE technicians driving between the sites, resulting in

GHG emission reductions.

KONE’s offering also holds the widest range of externally

assured product information in the industry, such as

Environmental Product Declarations (EPD) in compliance with

the EN 15804 standard, and energy efficiency documentation

according to ISO 25745. In 2024, KONE published six (2023:

four) EPDs and had in total 27 (2023: 21) third-party verified

EPDs. Through Health Product Declarations (HPDs), KONE

Levers to reach Scope 3 emission reduction target by 2030

Baseline 2018 Energy efficiency Material efficiency Innovations and

partnerships

Target year 2030

tCO2e/OR

Board of Directors’ Report | Sustainability Statement

55 KONE Annual Review 2024

also provides information about the material content and

associated health effects of its products, responding to a

growing need for healthier living environments. By 2024,

KONE holds a total of six HPDs.

KONE was the first in the industry to launch a carbon

neutral service offering, the KONE Care DX, in 2021. By

2024, KONE has introduced a carbon-neutral elevator and

escalator and continued to expand its carbon neutral offering

to further markets. In the future, KONE aims to increase the

number of elevators with regenerative drive-in line with the

company's ambitious emission reduction targets, thus also

increasing the Taxonomy-aligned share of revenue. Refer to

E1, EU Taxonomy to read more.

Product and value chain (Scope 3) emissions:

supplier engagement, innovations and partnerships

In 2024, KONE identified its suppliers accounting for the

majority of KONE’s Scope 3 emissions from purchased

goods, and actively collaborates with them to reduce these

emissions. This collaboration entails actions such as

continuous dialogue with suppliers, emissions reporting

development, emission reduction targets setting and supplier

trainings. From 2025 onwards, KONE will start to measure the

commitment of its suppliers in reducing their CO2 emissions.

Requirements for smart and sustainable materials,

solutions and buildings are increasing, presenting KONE with

sustainable growth opportunities. To understand the emerging

needs and technologies in sustainable, resilient urban

environments and people’s behavior in them, KONE actively

participates in large-scale research projects and consortiums,

such as Veturi, which is a four-year innovation program, co-

funded with Business Finland. In this program, KONE

collaborates with customers and partners to tackle climate

change and urbanization challenges to create smart and

sustainable cities.

KONE's R&D expenditure includes the development of

new sustainable solutions as well as the further development

of existing solutions and services. In 2024, sustainability-

linked R&D expenditure was EUR 43.1 million, including the

development of KONE’s new generation regenerative drives.

In addition, KONE constantly invests in systems and tools

driving operational efficiency, improving the sustainability of its

operations and manufacturing. Refer to KONE Annual

Review, Costs and Expenses for further information on the

R&D costs.

Target setting

KONE’s science-based targets for Scope 1 and 2 as well as

Scope 3 were set in 2020, validated by the Executive Board

and approved by the Board of Directors. The aim was to align

KONE’s emission reduction activities with the overall business

strategy and financial planning.

The science-based targets cover 100% of KONE’s Scope

1 and market-based Scope 2 emissions and almost 99% of

KONE’s Scope 3 emissions (category 1: purchased goods

and services and category 11: use of sold products).

The science-based targets coupled with annual renewable

electricity and carbon neutral operation targets form KONE’s

emission reduction plan and its global Climate Pledge to drive

the needed emission reduction activities in both KONE’s own

operations and related to its products and value chain.

KONE’s strategy and business model are compatible with the

transition to a sustainable economy, and with the limiting of

global warming to 1.5 °C in line with the Paris Agreement.

The science-based targets were set in collaboration with

relevant internal stakeholders and global business units

including R&D, Innovation and procurement. In addition,

Science Based Target initiative (SBTi) standards and criteria

were followed at the time in line with a cross-sector emission

pathway compatible with limiting global warming to 1.5°C

accounting for business growth in different geographical areas

and business lines. The 2018 baseline was chosen in line with

SBTi guidelines and criteria for a representative year which

covered the most recent period for which the data was

available at the time. SBTi has assessed and approved the

targets, and the progress against the targets is externally

assured annually. The emission reduction roadmap and

business growth estimations are also reviewed annually to

align with KONE’s overall business outlook.

All of KONE’s emission reduction targets (Scope 1,2 and

3), renewable energy target, and action plans are in line with

its global environmental policies and standards. As part of

KONE’s annual budgeting process, all emission reduction

targets are reviewed by the global sustainability team and

validated by top management. Through this process KONE

ensures that both annual progress and long-term 2030 goals

are met.

KONE’s annual and long-term (2030) emission reduction

targets and base year information are further detailed in the

table Greenhouse gas emissions. KONE’s GHG intensity per

net revenue is introduced in the table Greenhouse gas

emissions intensity. Please also see KONE’s energy

consumption and mix in the tables Energy consumption by

energy sources and Energy consumption. The energy

intensity of KONE’s own operations is introduced in table

Energy intensity.

Carbon credits

KONE compensates for direct and indirect CO2 emissions of

service activities related to KONE Care DX service contracts.

KONE also offers its customers the option to compensate the

embodied CO2 emissions until handover of selected KONE

DX elevators. In addition, after active emission reduction at all

manufacturing units, KONE compensates the remaining CO2

emissions to achieve carbon neutral manufacturing units

globally.

KONE compensates for its emissions through a third-party

partner via carbon credits. KONE has chosen projects from

different continents and representing different climate

benefits: reforestation in Colombia, solar power in Thailand,

hydro power in China and Laos, clean cookstoves that avoid

deforestation in Mali. All projects are conducted outside of the

EU and are Gold Standard® certified. In addition to having a

positive climate effect, the projects support other United

Nations Sustainable Development Goals (UNSDG) providing

social and environmental benefits to local communities.

A total of 28 tCO2 equivalent outside of KONE’s value

chain was cancelled in the reporting period covering

emissions in 2024 and 2025. KONE does not consider

compensation in its science-based GHG emission reduction

targets. Compensation is used only as a last measure to

support KONE’s customers to reach carbon neutrality.

Internal carbon pricing

KONE rolled out a pilot program for an internal carbon cost

over the period 2021-2024 to facilitate the change and to

encourage all units to reduce their carbon footprint. The

internal carbon cost is a shadow cost in KONE’s operative

profit and loss statement, i.e. it is used in KONE’s internal

reporting and does not trigger actual cash flows inside or

outside the company. The internal carbon cost covers KONE’s

total Scope 1 (108,600 tCO2e in 2024) and market-based

Scope 2 emissions (1,400 tCO2e in 2024), which contribute

approximately 1% and 0.01% to KONE’s total GHG

emissions, respectively. The actual price used is EUR 100 per

metric ton CO2e, which is reviewed annually. It is based on

Board of Directors’ Report | Sustainability Statement

56 KONE Annual Review 2024

the price of emissions allowances (EUA) traded on the EU

Emissions Trading Scheme (ETS) which is widely used in the

industry as a shadow price. KONE’s carbon pricing scheme is

not aligned with the screening criteria in EU Taxonomy.

Board of Directors’ Report | Sustainability Statement

57 KONE Annual Review 2024

Metrics

Energy consumption and mix

Energy consumption

MWh

2024

2023

Fuel from coal and coal products

Fuel from crude oil and petroleum products (of which 99% from vehicle fuels)

419,900

421,700

Fuel from natural gas

11,900

28,700

Fuel from other fossil sources

Purchased or acquired electricity, heat, steam, and cooling from fossil sources

8,600

14,700

Total fossil energy consumption

440,400

465,100

Consumption from nuclear sources

Fuel consumption from renewable sources, including biomass

500

700

Renewable natural gas

19,600

Purchased or acquired electricity, heat, steam, and cooling from renewable sources

70,600

65,100

The consumption of self-generated non-fuel renewable energy

8,900

6,200

Total renewable energy consumption

99,600

72,000

Total energy consumption

540,000

537,100

Majority

of crude oil and petroleum products comprise of vehicle fuels (414,000 MWh)

Natural gas RECs/GOs

Energy consumption by energy sources

2024

2023

Fossil

82%

87%

Nuclear

Renewable

18%

13%

Energy intensity

2024

2023

Energy intensity in KONE’s own operations (MWh/MEUR)

Energy intensity in our own operations is not an operation target for KONE, but an ESRS reporting requirement. However, KONE constantly improves the energy efficiency of its products. Pursuant to EU regulation (EC) No 1893/2006, all KONE’s

revenue stems from operations in high climate impact sector including the manufacture of elevators, escalators and doors (NACE code C28.22 ‘Manufacture of lifting and handling equipment’). However, a substantial share (59%) of the total revenue can

be attributed to the non-high climate impact sectors, such as our Service and Modernization business. The energy intensity is calculated based on total energy consumption per the net sales from the consolidated activities. Refer to Section 2.1 of the

consolidated financial statement for information on the net sales.

Board of Directors’ Report | Sustainability Statement

58 KONE Annual Review 2024

GHG emissions

Greenhouse gas emissions

Retrospective

Milestones and targets

3,4,5

Base year 2018

2023

2024

% change between

2023 and 2024

2025, %

2030, %

Annual %

target/base year

Scope 1 GHG emissions

Net Scope 1 GHG emissions (tCO2eq)

119,600

114,000

108,600

-5%

-32%

-50%

-9%

Percentage of Scope 1 GHG emissions from regulated emission

trading schemes (%)

Scope 2 GHG emissions

Gross location-based Scope 2 GHG emissions (tCO2eq)

36,900

32,000

32,600

Gross market-based Scope 2 GHG emissions (tCO2eq)

35,100

2,500

1,400

-44%

-32%

-50%

-96%

Significant Scope 3 emissions

Total Gross indirect (Scope 3) GHG emissions (tCO2eq)

12,652,900

11,555,700

1. Purchased goods and services

4,285,300

4,410,400

4,125,400

-40% (per product order)

4. Upstream transportation and distribution

108,600

107,400

5. Waste generated in operations

2,600

1,900

-27%

6. Business traveling

18,000

20,200

12%

11. Use of sold products

Lifetime (included in total Scope 3)

8,308,800

8,113,300

7,300,800

-40% (per product order)

Annual (excluded from total Scope 3)

387,600

364,000

328,500

Total GHG emissions

Total GHG emissions (location-based) (tCO2eq)

12,798,400

11,696,900

Total GHG emissions (market-based) (tCO2eq)

12,769,400

11,665,700

KONE is not regulated under emission trading schemes.

Biogenic emissions, not accounted for in the table, totaled 2,800 tons of CO2e.

KONE has a combined target for Scope 1 and 2 emissions and an intensity target for the significant Scope 3 categories (1 & 11).

KONE’s Scope 3 intensity target (set in 2020) results in absolute emission reductions by 2030 based on Science-Based Target initiative’s guidelines.

In addition to KONE’s official science-based targets, KONE measures its comparable operational carbon footprint (Scope 1&2) annually. KONE set to reduce its comparable operational carbon footprint by 28% in 2024 and achieved 30% reduction

compared to baseline 2019 (144,400 metric tons CO2).

Net Scope 1 emissions 108,600 tCO2 includes natural gas RECs/GOs certificates, gross emissions without certificates 112,500 tCO2. Total gross GHG emissions (location-based) were 11,700,800 tCO2eq and total gross GHG emissions (market-

based) were 11,669,600 tCO2eq.

Greenhouse gas emissions intensity

GHG intensity per net revenue

2024

2023

Total GHG emissions (location-based) per net sales (tCO2eq/MEUR)

1,054.3

1,168.6

Total GHG emissions (market-based) per net sales (tCO2eq/MEUR)

1,051.5

1,165.9

The GHG emission intensity is calculated based on gross total location-based or market-based GHG emissions divided by the net sales from the consolidated activities. Refer to Section 2.1 of the consolidated financial statements for information on net

sales.

Board of Directors’ Report | Sustainability Statement

59 KONE Annual Review 2024

Reporting principles

KONE applies an operational control approach for

consolidating the energy and GHG emission metrics. Data is

first consolidated at the subsidiary or manufacturing unit level

and entered into the environmental performance system. The

data is further consolidated globally. Manual data collection

and the use of estimations and emission factors introduces a

level of uncertainty into the environmental data. To reduce

uncertainty, KONE has established consistent emission

reporting practices over the years including reporting

guidelines, training and internal reviews and validations.

KONE follows the three standards provided by the

Greenhouse Gas Protocol of the World Resource Institute and

the World Business Council for Sustainable Development in

its GHG accounting: the GHG Corporate Accounting and

Reporting Standard, the GHG Protocol Scope 2 Guidance,

and the Corporate Value Chain (Scope 3) Accounting and

Reporting Standard.

The collected energy data covers 99% of KONE’s Scope 1

and 2 emissions. Reporting principles and scope cover

countries globally, including all KONE manufacturing sites.

Calculation principles for Scope 1 and 2 emissions

Energy consumption covers indirect and direct energy usage

of non-renewable and renewable electricity, liquefied

petroleum gas (LPG), natural gas, district heating and self-

generated electricity (e.g. solar). The data sources include

invoices and third-party service provider reports. Activity data

is collected on a quarterly basis from the manufacturing units.

Scope 1 emissions have been calculated using the energy

consumption data and national emission factors from the UK

Department for Environment, Food and Rural Affairs (DEFRA)

and some supplier-specific emission factors, such as biofuels

in Finland. Scope 1 net emissions presented in this document

include renewable natural gas RECs/GOs. Gross emissions

(in the table ‘GHG emissions’, footnote

) are calculated

without them. This approach aligns with the evolving reporting

guidelines, concerning the purchase of biomethane

certificates, which currently cannot be calculated into gross

Scope 1 emissions. KONE purchases renewable natural gas

in USA and Canada through biomethane RECs and in France

through Biomethane Guarantees of Origin.

Scope 2 emissions have been calculated following market-

and location-based methods. Renewable energy guarantees

of origin subject to European Energy Certificate System

(EECS) and Energy Attribute certificates (e.g. Renewable

Energy Certificates (RECs), International Renewable Energy

Certificates (I-RECs), Tradable Instruments for Global

Renewables (TiGRs)) have been acquired for the purchased

renewable electricity. In 2024, KONE’s purchased renewable

electricity consumption consisted close to 100% of contractual

instruments, approximately 30% of contractual instruments

used for sale and purchase of energy bundled with attributes

about energy generation, and about 70% of contractual

instruments used for sale and purchase of unbundled energy

attribute claims. Over 99% of KONE's Scope 2 energy comes

from renewable electricity. In 2024, market-based Scope 2

emissions were 1,400 tCO2, with half from non-renewable

electricity and half from district heating.

For the market-based method, supplier-specific emission

factors are used for Finland and the Czech Republic

supplemented with the Association of Issuing Bodies (AIB)

European Residual Mix Report and Reporting principles and

scope International Energy Agency (IEA) Emission Factors for

untracked purchased electricity. For the location-based

method, emissions factors from AIB and IEA are used.

The direct biogenic carbon emissions are calculated by

multiplying the energy in TJ (2024: 51TJ) of used biofuels with

emission factors from Statistics Finland.

Calculation principles for Scope 3 emissions

KONE has reported all significant and relevant Scope 3

categories based on GHG Protocol Scope 3 Inventory

guidelines. Annually, KONE assesses the relevance and

magnitude of all Scope 3 categories and updates the

inventory when needed.

Emissions from purchased goods and services are

calculated for KONE’s two main product types, elevators and

escalators, for new construction, and for those modernization

projects where new elevator units are delivered to the

customer. The total emissions are based on the most sold

products in each region multiplied by the number of all

products ordered during the reporting year. The emission

factors are from the Ecoinvent V3.4 database or EPDs from

the material manufacturers.

Logistics data covers the transportation of products from

KONE’s manufacturing units to distribution centers.

Transportation to local warehouses or installation sites is

included for cases where KONE’s manufacturing units are

responsible for transportation. Spare part deliveries are also

within the reporting scope, while inbound logistics of materials

to KONE’s manufacturing sites is excluded. Product and

spare parts logistics data has been calculated using an in-

house logistics emission calculation tool and emission factors

from DEFRA.

Emissions for waste in own operations is calculated by

multiplying the collected waste data with the emission factors

retrieved from DEFRA for each waste type and treatment

method. The calculation does not cover waste from KONE’s

installation sites, which is normally treated according to KONE

customers' waste management processes and applicable

laws and requirements.

Business air travel data has been collected from KONE’s

biggest travel agency and few local travel agencies. The

emission calculations are aligned with DEFRA’s methodology.

The operational carbon emissions of sold equipment are

calculated based on lifetime energy consumptions and

emission factors from the latest publication of the IEA. The

average annual energy consumption is calculated from

KONE’s delivered products according to the ISO 25745

standards for the most sold configurations and expected

usage profiles in each geographical region. The average

annual energy consumption of the products is multiplied by

the expected lifetimes of 25 and 15 years for elevators and

escalators, respectively, to obtain the lifetime energy

consumption values. The emission factors represent the order

quantity-weighted average emission factor for each region.

The total global operational carbon emissions are calculated

by multiplying the average operational carbon emissions of

each region with the region-specific order quantities and then

aggregating the results. KONE’s product-related Scope 3

emissions calculations are in line with its third-party verified

EPDs, and KONE is constantly improving them by working

with suppliers and partners for more transparent and efficient

data collection.

Data estimation methods

Energy consumption and waste data may not in all cases be

available in real time or immediately after quarter close. For

this reason, energy and waste consumption and Scope 1 and

2 and Scope 3 (category 6) data are projected for the fourth

quarter, extrapolated from the previously known data in the

third quarter in the reporting year. For consistency, Scope 3

(categories 4 and 5) are extrapolated in a similar manner.

Similarly, KONE estimates the yearly order quantities

required for Scope 3 category 1 and 11 calculations for the

fourth quarter based on previously known data.

Board of Directors’ Report | Sustainability Statement

60 KONE Annual Review 2024

EU Paris-aligned Benchmarks

Considering the exclusion criteria stated in the Article 12 of

the Commission Delegated Regulation (EU) 2020/1818,

KONE is not excluded from the EU Paris-aligned

Benchmarks.

Board of Directors’ Report | Sustainability Statement

61 KONE Annual Review 2024

Social information

S1 Own Workforce – Health and Safety

KONE’s own workforce consists of three groups: KONE

employees, agency workers and self-employed contractors.

The KONE employee group includes permanent employees,

fixed-term employees and trainees. The majority of KONE’s

own workforce are KONE employees. KONE’s own workforce

spreads across close to 70 countries globally, working in

KONE offices, factories and client sites.

Material impacts, risks and opportunities

Working conditions in own operations, particularly health and

safety, was identified as a material topic for KONE in

connection with the 2024 DMA. Refer to ESRS 2,

Sustainability-related impacts, risks and opportunities for a

description of the materiality assessment methodology.

Material IROs are described in the table Material impacts,

risks and opportunities related to own workforce.

Given that KONE undertakes installation and service

activities globally, KONE has recognized various potential

health and safety impacts and risks for its own workforce and

acknowledged that inadequate safety precautions can lead to

higher incident rates, severe accidents, and even fatalities.

By embedding the core principles – safety, quality and

sustainability – into KONE’s operations and strategy, KONE

ensures that it addresses material impacts on its workforce

effectively. KONE’s integrated management system, and the

establishment of specialized boards and committees support

this by providing comprehensive oversight and development

of integrated management practices.

KONE Risk Management Policy, aligned with its strategy

and business model, states that all KONE processes,

procedures, facilities and premises shall be safe without

compromising the health of employees, and are designed and

maintained in accordance with established safety standards.

Due to the nature of the work at construction sites, certain

groups of workers may be exposed to hazards especially in

the installation and maintenance sites. Findings in KONE

Safety Solution (KSS) confirm that workers on New Building

Solution projects and maintenance sites face the greatest

safety risks at KONE.

KONE has defined core safety principles to guide in

controlling the most significant health and safety risks and

avert serious incidents in its operations. The main scenarios

causing serious injuries at KONE are contact with moving

objects and falling from heights, whilst the identified main

types of work-related injuries are cuts, strains, bruises, and

contusions.

Policies

Managing workplace safety

KONE Global Management System integrates Quality,

Environmental, Health and Safety management to drive

strategic initiatives, and to improve and standardize practices.

It includes all activities, offerings, and services globally to add

value to customers and ensure business success in a safe

and sustainable way. KONE Global Management System also

provides directives for occupational health and safety in

addition to local laws. Safety management adheres to the ISO

45001 standard, covering KONE’s entire own workforce

(100%), including contractors. The key health and safety

indicators are detailed in the table S1, Global key

performance indicators for health and safety – Own workforce.

KONE also certifies its units to reinforce its safety

commitment. Refer to S4, Policies for more information on

ISO certifications.

Possible tensions between the prevention or mitigation of

material negative health and safety impacts and other

business pressures are tackled with KONE’s cross-functional

safety governance model. The Safety Core Team, KONE’s

global safety leadership body, collaborates to ensure

community support through open dialogue, and the

effectiveness and alignment of safety initiatives with KONE's

strategic direction. The team reviews the monthly safety

performance, achievements, and plans for the next month,

focusing on opportunities and risks, and agreeing on short-

and long-term actions and cross-functional support needs

within the team.

Policies are introduced in the table Key policies related to

own workforce. Adherence to KONE policies, rules, and

established working methods are evaluated with KONE

management system audit scheme covering 100% of its units.

KONE uses the results from the audit scheme to improve

safety systematically through corrective action planning and

implementation follow-up meetings.

KONE Health and Safety Policy Statement demonstrates

KONE’s commitment to the applicable safety requirements

and provides a framework for safety objectives and

responsibilities.

KONE Risk Management Policy, an integral part of KONE

Global Management System, sets KONE’s risk management

objectives and defines roles, responsibilities, and risk

tolerance. It is guided by the principles, framework and risk

management process outlined in ISO 31000 Risk

Management.

KONE Global Facilities Policy creates a harmonized

selection and management for KONE facilities. One of the key

objectives is to provide a safe and secure workplace for every

user of the facility.

KONE Premises Security Policy outlines physical security

measures for KONE-operated premises, whether owned or

leased. Each facility must have documented, executed, and

Material impacts, risks and opportunities related to own workforce

Material topic

(time horizon)

Material impacts, risks and opportunities

Management response

Health and

safety in own

operations

(medium-long-

term)

↓ Negative impact

KONE operates in an industry that poses multiple safety

risks. With installation and service operations conducted

worldwide, we have identified several potential health and

safety impacts on our workforce, particularly those involved

in tasks on the mentioned sectors. A failure in safety

measures can result in increased incident rates, serious

accidents, and even fatalities.

• Integrated management system, including health and

safety, as well as risk management framework,

applicable to the full scope of own workforce

• Inclusive approach to health and safety practices,

involving non-employees into company safety

initiatives such as safety campaigns, and setting

requirements for their competency, methods and tools

Board of Directors’ Report | Sustainability Statement

62 KONE Annual Review 2024

tested emergency procedures, including annual evacuation

and rescue drills with recorded outcomes.

KONE Installation Policy explains the requirements

applicable to KONE’s installation works and sets the

expectations to ensure correct and safe installation.

Adherence to the policy is verified with regular frontline audits.

KONE products must be installed using methods and tools

that are KONE approved. If KONE method does not exist, site

or delivery specific risk assessment needs to be conducted.

KONE Travel Policy gives guidance on how to plan and

execute work-related travel. In addition, the country or region-

specific risk assessment and security advice must be

reviewed to ensure that the trip is safe. To maintain a healthy

work-life balance and employee well-being, there are strict

recovery periods that are also emphasized during travel.

Respect for human rights

Health and safety is a salient human right and as such, one of

KONE’s core principles. KONE is committed to respecting and

endorsing human rights including those set out in the:

• International Bill of Human Rights

• United Nations Guiding Principles on Business and

Human Rights

• Basic labor rights as defined by the International Labour

Organization (ILO) including the ILO Declaration on

Fundamental Principles and Rights at Work

• The Organisation for Economic Co-operation and

Development (OECD) Guidelines for Multinational

Enterprises

The KONE Human Rights Policy details KONE’s role,

objectives, and responsibilities with respect to its human rights

commitment. Read more about the KONE Human Rights

Policy, which is reviewed annually and is publicly available, on

kone.com.

KONE recognizes that it operates in countries where child

and forced labor exist. Regarding KONE's own operations,

facility service companies (e.g., cleaning, catering, security)

have been assessed to pose an elevated risk of forced labor.

In South-East Asia, the risk concerning child labor is also

heightened. KONE’s highest risks lie in its supply and delivery

chains, especially in Africa, Asia, South-East Asia and Greater

China. In the Human Rights Policy, KONE strictly prohibits

any form of child labor and, in line with ILO standards, does

not hire workers under the age of 15 or under local mandatory

schooling age, whichever is higher. KONE’s policy mandates

that the minimum age for hazardous work is always 18 years.

The Human Rights policy outlines prohibition of any form of

modern slavery, in KONE’s operations and supply chains.

KONE ensures timely compensation for employees, including

contractors, temporary, and part-time staff, with no unlawful

deductions or withdrawals.

KONE adheres to all applicable local laws, relevant ILO

conventions and industry standards with respect to working

hours, wages, benefits, and overtime. Situations in which local

laws conflict with ILO or other relevant standards are

addressed by the Global Compliance Committee, which is

accountable for human rights at KONE. As a committed

participant in the UN Global Compact, KONE has embedded

its principles, including those related to human rights, into the

company’s policies and procedures.

The human rights working group, consisting of members

from all areas of KONE, monitors national and international

policy developments to ensure compliance with regulatory

requirements and The United Nations Guiding Principles on

Business and Human Rights (UNGPs) standards. Health and

safety, along with other human rights matters, are regularly

discussed. In 2024, KONE diligently followed up on safety

outcomes from the 2023 human rights impact assessment,

aligning with the action plan to mitigate identified risks. KONE

identifies, assesses, and prioritizes human rights impacts

throughout its business, aiming to prevent and mitigate these

impacts continuously. For its own workforce, KONE conducts

regular human rights impact assessments and internal

surveys to ensure compliance within its operations.

Anonymous surveys are also used to identify issues of

discrimination, bullying, and harassment within KONE units.

Refer to S2, Respect for human rights for more information on

KONE’s human rights due diligence process.

In cases where a compliance incident investigation

establishes that a Code of Conduct violation has occurred,

relevant functions and stakeholders agree on remedial steps

based on the facts of the case and local law, following a

standardized process.

Engaging with own workforce

KONE is committed to positioning itself as a great place to

work, empowering its people and involving them in shaping

their employee experience. KONE’s annual global employee

engagement survey, Pulse, is a key tool in enhancing

Key policies related to own workforce

Management

system

Material topics

addressed

Scope

Management bodies

Global

Management

System

Health and

safety

All activities, offerings, and services; own workforce

as well as contractors and partners

Executive Board

Health and Safety

Policy Statement

Health and

safety

Own workforce, partners and users of KONE

equipment

President and CEO

Risk Management

Policy

Health and

safety

All KONE entities

Executive Board

Global Facilities

Policy

Health and

safety

All KONE units, covering offices and warehouse

spaces for KONE operations; own workforce and

value chain workers

EVP Supply Chain, The Global Category

Manager Facilities, Local Owners

Premises Security

Policy

Health and

safety

All new or significantly renovated KONE facilities

Executive Board

Installation Policy

Health and

safety

All KONE entities and units; own workforce

Head of Delivery Operations Development

Travel Policy

Health and

safety

Own workforce

Executive Board

Human Rights

Policy

Health and

safety

All KONE entities; own workforce and value chain

workers

Executive Board

Board of Directors’ Report | Sustainability Statement

63 KONE Annual Review 2024

transparency and understanding its employees' journey at

KONE. The results are shared yearly through an online

dashboard with people leaders and Unit people partners.

Clear responsibilities and roles are established to ensure

the collection and effective utilization of relevant data. Leaders

are held accountable for creating action plans as part of their

role and communicating results to their teams, with a focus on

translating the survey outcomes into tangible actions to

enhance the working environment and drive lasting

improvements.

The 2024 results show a positive development in the

Engagement index and a high survey response rate. The

responsibility of enabling and delivering the survey sits with

the global Talent and Culture Center of Expertise, reporting to

the Senior Vice President (SVP) Talent and Culture.

Considering the perspectives of employees who may be

particularly vulnerable, KONE incorporates inclusion and well-

being indexes in the Pulse survey. Another engagement

mechanism for involving particularly vulnerable employees in

dialogue are KONE’s three Employee resource groups

(ERGs), independently led by voluntary employees. Each of

these ERGs has a sponsor from the organization at the

executive board level and receives corresponding

organizational support and budget.

KONE’s people leaders are in continuous dialogue with

their respective team members and host performance

discussions with them regularly. KONE’s internal

communication channels offer everyone, also non-employees

who have access to KONE systems, the opportunity to

participate in company-wide discussions, like the quarterly live

CEO Q&A event.

To enable worker participation and ensure employee

consultation in health and safety matters, KONE conducts

local safety forums involving mainly employees and their

representatives. Management teams actively contribute to

these safety committees' activities, with agendas,

agreements, and action plans currently managed at a local

level. KONE collaborates with Workers' Councils, tailored to

local setups in accordance with country-specific regulations.

The annual European Employee Forum, overseen by the

People and Communications Executive Vice President (EVP),

brings together employee representatives and top

management to discuss various issues, including safety,

business development, and strategy. The primary objective is

to foster dialogue between council representatives and KONE,

contributing to the company's goal of becoming an exemplary

workplace.

Remediating negative impacts on own workforce

Safety incident management process and reporting

KONE Safety Solution (KSS) is used globally for reporting and

managing all own workforce, subcontractor, third-party, and

user-related (including consumers and end-users) near-

misses and incidents. Access to KSS is provided to all KONE

employees and to non-employees within KONE’s workforce

with a few exceptions. Independent contractors and agency

workers without a KONE account are required to report to

KONE supervisors. For units with restrictions on providing

direct access due to regulations, KONE offers an option to

report through local channels. Furthermore, with some

exceptions due to local laws, the KSS app was installed in

2024 on all KONE phones globally, ensuring straightforward

access to KSS.

KONE’s incident management process follows a standard

workflow. For every accident, root causes are identified and

resolved with corrective actions. High or moderate risk

incidents and near misses are investigated and analyzed by

local safety personnel with the support from global. Remedial

actions address root causes with plans specifying timeframes

and responsibilities. Actions might encompass, for instance,

tool redesign or the implementation of training programs. In

case of injuries, KONE offers health services to its own

workforce to facilitate speedy and complete recovery.

The success of corrective measures is regularly evaluated

within the context of safety performance review processes

and routine meetings, where safety managers address issues

and share best practices. Should any corrective action prove

ineffective, it will undergo reassessment for additional

measures until the risk level is proved acceptable. Lessons

learned are disseminated worldwide, and incidents are

reported monthly to global functions.

KONE’s own workforce can report any concerns through

internal reporting channels, which include reporting to

management, Human Resources, Legal, or Compliance.

Refer to G1, Mechanisms for identifying, reporting and

investigating concerns for details on KONE’s confidential

reporting channel, the KONE Compliance Line.

Voice of the employee

There are multiple forums and channels in place to address

employee concerns. Qualitative inputs are collected in the

Pulse survey and passed on to managers. Refer to S1,

Engaging with own workforce for further information on the

Pulse process and forums for employee engagement. Refer to

G1, Mechanisms for identifying, reporting and investigating

concerns for methods by which KONE assesses that its own

workforce is aware of and trusts these channels. Pulse survey

results also help to identify trust issues or needs related to

KONE’s reporting channels.

KONE encourages employees to report near-misses and

incidents to improve safety, using various communication

methods like global campaigns, internal articles, and safety

network meetings. KONE provides 'Incident and Near Miss

Reporting' training that is translated into most languages. To

gain an understanding of the awareness level related to KSS,

KONE monitors the number of reports and completed

eLearning on incident reporting, and tracks safety passport

training completions locally.

KONE’s Supplier and Distributor Codes of Conduct,

complementing the KONE Code of Conduct, highlight KONE’s

non-retaliation policy against anyone who reports a concern in

good faith. Refer to G1, Policies to read more.

Incidents and complaints

In 2024, KONE received a total of 261 compliance reports, of

which 33% were received through the Compliance Line. Of

the total number of reports, 84 were cases related to

harassment and discrimination. 63 were fraud or corruption-

related, 31 related to conflicts of interest, and the remaining

83 fell under various other categories. 239 cases were closed

in 2024. Some of these were reported in previous years. Of

the cases closed in 2024, 98 were either substantiated or

partially substantiated, and disciplinary actions in those cases

ranged from coaching discussions to termination of

employment. 92 employees were dismissed or resigned as a

result of the investigations.

In 2024, there were two unfortunate work-related fatalities

within KONE's own employees. KONE was not subject to any

material fines, penalties or compensation associated with

these accidents.

Board of Directors’ Report | Sustainability Statement

64 KONE Annual Review 2024

In 2024, KONE encountered one report that was human

rights related. Similarly to 2023, KONE had zero incidents of

child or forced labor reported through its compliance reporting

channels in 2024. KONE’s target is to maintain zero incidents

going forward. KONE also had zero incidents that resulted in

court proceedings or fines or concerned the use of child or

forced labor or other severe human rights incidents.

Actions

Actions to mitigate negative impacts

Annually, KONE establishes a detailed health and safety

priority action plan with global objectives, while allowing some

flexibility for areas and business units to specify their

particular needs. Based on 2023 safety performance and

lessons learned, as well as its ambitions, KONE’s 2024 Safety

Budget Instructions for units addressed the following priorities:

• Fundamentals – Actions related to monthly progress

review, subcontractor safety engagement, near miss

incident reporting, and fall prevention plan

• Data and Innovation – Actions related to KSS, including

full use of the solution for injury and near miss reporting,

improving data quality, and focusing on minor injury

reporting

• People and Communications – Actions related to

practicing and improving open culture, utilizing pre-work

risk assessment tools, sharing end-user incidents,

organizing campaigns, and participation in global safety

team meetings

Determining the actions involves a collaborative, cross-

functional effort, following KONE’s health and safety

governance model. Refer to S1, Policies for an outline of the

governance model. KONE’s global safety development

function initiates and coordinates company level actions to

address actual and potential impacts. A summary of key

company level actions to mitigate negative health and safety

impacts on KONE’s own workforce are introduced in the table

KONE’s global actions, outcomes and contributions.

KONE is dedicated to addressing and remedying

situations where its actions have negatively impacted its

workforce by refining KONE's processes, services, and

products, and boosting safety awareness. Despite KONE’s

efforts, its workforce still occasionally faces negative work-

related health and safety impacts. If an accident occurs,

KONE’s priority is to offer immediate crisis support and ensure

the safety of everyone involved, followed by an internal

investigation to determine root causes and implement

remedial actions to prevent similar accidents. Refer to S1,

Remediating negative impacts on own workforce to learn how

KONE’s incident management process addresses actual

impacts with remedial actions.

Refer to S1, Targets and S1, Metrics for information on

how KONE evaluates its health and safety related actions and

initiatives by setting targets and monitoring the progression

against them.

Tracking the progress of KONE’s own workforce’s safety

performance takes place in several ways and forums. KONE

carries out, for example, monthly safety performance follow-

ups in every area, in global safety meetings, and by the

Executive Board.

KONE’s internal audit program also ensures the

effectiveness of preventive and remedial actions with a robust

follow-up process for remedial actions in case of any non-

conformity.

KONE’s global actions, outcomes and contributions

Summary of global actions

in 2024 to improve H&S

Expected global outcomes

Contribution to the achievement

of policy objectives and targets

Subcontractor safety

development program 2024–

2025

• Improved subcontractor safety performance in the 13

countries currently participating

• Global standardized approach on subcontractor

management

Improvement in partner safety

performance – objective 1

Incident investigation

development program

2024–2026

• Improved incident investigation methods to better

understand root causes and how incidents can be

prevented, aimed at all employees involved in incident

investigations

• Investigation competency development program

Improvement in employee and partner

safety performance – objective 1

Two global safety awareness

campaigns – Safety Week and

Year-end safety campaign

• Enhanced safety awareness and competencies – own

workforce and workers in the value chain, customers

and partners

• Local and global activities covering all KONE

businesses and areas

Continually improve our health and

safety performance – objective 2

Global training implementation

in local languages

• Raised employee risk awareness, safety reporting

competency and electrical safety method awareness e-

learnings

Continually improve our health and

safety performance – objective 2

Data and innovation

development

• KSS improvements and piloting AI to enhance data

analysis internally

• Intelex app pushed to all KONE mobiles

Be the benchmark for health and

safety in our industry – objective 3

Reforming global Health and

Safety management practices

• Alignment with the new strategy

• To pursue identified opportunities emerging from the

ESRS requirements, work to continue in 2025

Be the benchmark for health and

safety in our industry – objective 3

Global KONE Installation Safety

and Method Passport update

• Improved installer competency in applying KONE

methods and safety requirements, own workforce (S1)

and installer workers in the value chain (S2)

• 2024 pilot phase to be followed by planning of global

expansion

Be the benchmark for health and

safety in our industry – objective 3

Board of Directors’ Report | Sustainability Statement

65 KONE Annual Review 2024

Well-being

KONE has a global benefits and well-being plan which gives

central guidance on developing local practices, services, and

benefits offerings. KONE has a global framework and program

for well-being, Elevate Your Health, which is accessible to all

our employees and non-employees who have access to

KONE intranet. As one example of financial well-being, KONE

wants to provide life insurance to all KONE employees to

protect them and their families against the risk of financial

loss. KONE helps its leaders support their teams’ well-being

through various e-learning programs, toolkits, and short

guides.

KONE has set up a well-being champions program

consisting of volunteers from its workforce in selected

countries. The purpose of the program is to raise awareness

and promote well-being activities, programs, and services

throughout the organization, and to inspire colleagues to take

care of their well-being.

KONE units organize healthcare for KONE employees

according to local practices and regulations. In 2024, KONE

established an occupational health principle, integrated as

part of its global management system, which stands as the

global guidance and describes the minimum requirements on

occupational health. KONE also reviews medical insurance

data annually to provide recommendations and enable

preventive actions.

In 2024, KONE continued to expand the possibilities for

flexible working, such as remote and hybrid work, flexible

working time, job sharing, compressed work week and part-

time work. To further support the work-life balance of its

diverse workforce, KONE provides family support, for

example, via childcare and elderly care services and family

leave in many of its local units.

Targets

KONE monitors and analyzes various leading and lagging

indicators to evaluate material occupational safety impacts,

risks, and opportunities for its workforce, and the

effectiveness of health and safety measures. Continual

improvement of safety performance is pursued through target

setting. Targets are presented in the table Global key

performance indicators for health and safety – Own workforce.

Industrial Injury Frequency Rate (IIFR) has been used for

target setting at KONE for years. KONE aims to reach a long-

term IIFR target of 0.6 by 2030, with a target of 7% reduction

in 2024 compared to 2023 performance. Yearly targets are set

at the beginning of each year based on the previous year’s

progress. Total Recordable Incident Rate (TRIR) has been

monitored since 2023. Since IIFR is still KONE’s main health

and safety management indicator, a specific short or long

term TRIR target has not been set yet.

KONE’s objective is to eliminate all work-related fatalities

and severe injuries, and reach zero in both.

Establishing health and safety targets is a collaborative

process that relies on various factors, including safety

performance, external requirements, identified opportunities,

and the strategic direction of KONE as a company. KONE

collects feedback from its own workforce through global safety

and quality networks and communities encompassing all

KONE operations. Additionally, results from the Pulse survey

and supply chain safety maturity assessment provide valuable

input from the workforce.

Global health and safety performance is tracked by the

global safety development function. KONE also has monthly

reviews at local and global level in cross-functional meeting

practices. A performance report highlighting safety activities

and incidents from the past month is distributed to the

Executive Board every month. Progress is also reviewed in

quarterly Global Safety Team meetings together with all safety

Global key performance indicators for health and safety – Own workforce

Key Performance Indicator - H&S

2022

2023

2024

Target

The coverage of KONE’s integrated

health and safety management

system

100%

• 2024 target: 100%

• 2025 target: 100%

• 2030 target: 100%

The number of employee fatalities as

a result of work-related injuries

• 2024 target: 0

• 2025 target: 0

• 2030 target: 0

The number of employee recordable

work-related accidents

351

Total Recordable Incident Rate

(TRIR), employees

2.8

3.0

• 2024 target: N/A

• 2025 target: -11% from 2024

• 2030 target: N/A

Industrial Injury Frequency Rate

(IIFR), employees

(KONE’s main H&S KPI)

1.4

1.1

1.3

• 2024 target: -7% from 2023

• 2025 target: -11% from 2024

• 2030 target: 0.6

The number of days lost to work-

related injuries, employees

3,909

The percentage of people in own workforce covered by KONE’s integrated health and safety management system, based on legal requirements and ISO 45001

Occupational Health and Safety Management standard. The system is audited both internally and by an external party.

Does not include fatalities as a result of work-related ill health.

The number of work-related accidents (injuries) that result in any of the following: death, days away from work, restricted work or job transfer to another job,

medical treatment beyond first aid, loss of consciousness; or significant injury diagnosed by a physician or other licensed healthcare professional. Does not include

cases of work-related ill health due to restrictions on collecting the data.

Total number of recordable work-related employee accidents (injuries) divided by the number of total employee theoretical hours worked, multiplied by 1,000,000.

Voluntary KPI: Number of severe and moderate work-related employee incidents divided by the number of total employee theoretical hours worked, multiplied by 1

000 000.

IIFR increased slightly in 2024 due to a rise in moderate and serious injuries. Although long-term trends remain positive, progress has plateaued at these low

levels. Proactive safety initiatives are anticipated to drive future improvement in IIFR.

Lost days are counted as total calendar days lost from work due to a work-related injury, including injuries that occurred in the previous year but contributed lost

days in the reporting year, counted up to maximum of 180 days per injury. Does not include cases of work-related ill health due to restrictions on collecting the data.

Board of Directors’ Report | Sustainability Statement

66 KONE Annual Review 2024

professionals, as well as in collaborative discussions in global

Safety and Quality Network meetings. Furthermore, the global

Safety Core Team, comprising leadership representatives

from each area and major business lines and global functions,

evaluates performance on a monthly basis. Refer to S1,

Engaging with own workforce to learn how workers are

engaged to identify any lessons or improvements as a result

of KONE’s performance.

Metrics

Safety performance

The progress of KONE’s health and safety performance over

the years has been positive. Nonetheless, KONE understands

that innovative strategies are needed to further improve the

current relatively low figures. Key metrics are presented in the

table Global key performance indicators for health and safety

– Own workforce. Due to the current configuration of KSS,

only own employees are included in these figures.

As stated in S1; ‘Actions’, the management of

occupational health within KONE is structured at the unit level

in adherence with national regulations. There are often legal

restrictions on the collection of data, which sets challenges to

consolidate meaningful data on a company level. Therefore,

the figures exclude cases of work-related ill health.

KONE’s workforce characteristics and numbers

The number of employees is reported as a headcount. All

demographic information is collected through the HR system

at the end of the reporting period. This information excludes

certain KONE units for which detailed personnel information is

not available e.g. due to their recent acquisition. The

employee number disclosed elsewhere in the Board of

Directors’ Report is based on full-time equivalents (FTEs) and

it includes also the employees of recent acquisitions. As a

result, the disclosed number of employees may differ within

the report. The differences are not material. Employee

headcount and turnover are disclosed in the tables in the

following pages.

Board of Directors’ Report | Sustainability Statement

67 KONE Annual Review 2024

Employee headcount by gender

Gender

Number of employees (headcount)

Male

56,269

Female

7,631

Other

Not reported

489

Total employees

64,402

In some countries it is possible for persons to legally register themselves as having a third, often neutral, gender, which

is categorized as ‘other’ in the table above.

Employees migrated from other system without recorded gender or recent hires who have not yet recorded their gender

data in KONE HR system.

Employee headcount in top 10 countries

Country

Number of employees (headcount)

China

21,783

India

5,731

United States of America

5,721

France

3,287

Germany

2,922

Finland

2,643

Italy

2,097

United Kingdom

1,800

Australia

1,169

Mexico

1,147

China is the only country that falls under the ESRS disclosure requirement, all other countries are voluntarily disclosed.

Number of employees who have left KONE during the reporting period

Number of employees (headcount)

Number of employees who have left

KONE during the reporting period

7,793

Total rolling 12-month turnover rate

11.5%

Total turnover (11.5%) = Permanent employee + Expatriate leavers (7,315) divided by average headcount in last 12

months (63,873). Fixed term and Trainee employees (478 leavers) are not counted in the turnover.

Board of Directors’ Report | Sustainability Statement

68 KONE Annual Review 2024

Employee headcount by contract type and gender

Headcount

Female

Male

Other

Not reported

Total

Number of employees

7,631

56,269

489

64,402

Number of permanent employees

7,435

55,353

388

63,188

Number of temporary employees

196

916

101

1,214

Number of non-guaranteed hours

employees

n/a

Number of full-time employees

7,263

55,855

479

63,610

Number of part-time employees

368

414

792

Gender as specified by the employees themselves

Includes students and trainees

Currently, non-guaranteed hours for employees cannot be reported because the data is currently not collected in HR systems. Reporting capability is being set

up to report the number next year.

Voluntary disclosure

Employee headcount by contract type and region

Headcount

Americas

APMEA

Europe

Greater China

Total

Number of employees

7,961

12,407

21,070

22,964

64,402

Number of permanent employees

7,955

12,146

20,266

22,821

63,188

Number of temporary employees

261

804

143

1,214

Number of non-guaranteed hours

employees

n/a

Number of full-time employees

7,959

12,376

20,311

22,964

63,610

Number of part-time employees

759

792

Includes students and trainees

Currently, non-guaranteed hours for employees cannot be reported because this data isn't collected in HR systems. Reporting capability is being set up to report

the number next year

Voluntary disclosure

Board of Directors’ Report | Sustainability Statement

69 KONE Annual Review 2024

S2 Workers in the Value Chain – Health

and Safety

In addition to KONE’s own workforce, many workers perform

work within KONE’s value chain. Workers who are likely to be

materially impacted can be divided into four categories:

1. Workers of KONE’s upstream first tier component

suppliers who are engaged in manufacturing

activities

2. Workers of KONE’s downstream subcontractor

suppliers engaged in dismantling, installation or

maintenance activities (e.g. subcontractors installing

KONE elevators)

3. Workers of KONE’s service provider suppliers

performing services at a KONE site (e.g. consulting

and IT services on site, facility and cleaning services)

4. Workers of KONE’s distributors engaged in

installation activities for KONE products

Material impacts, risks and opportunities

Working conditions among value chain workers, particularly

health and safety, were identified as material topic for KONE

in connection with the 2024 DMA. Refer to ESRS 2,

Sustainability-related impacts, risks and opportunities for a

description of the materiality assessment methodology.

Material IROs are described in the table Material impacts,

risks and opportunities related to workers in the value chain.

KONE addresses negative impacts on value chain workers

and incorporates their mitigation or elimination into its

processes by pre-planning works, enhancing worker

competencies, and robust risk management.

Negative impacts to subcontractors are individual incidents

related to hazards in the working environment when installing

or dismantling KONE equipment. The most severe injuries

among subcontractors are related to falls from heights,

electrical work, energy isolation, and manual handling. KONE

directly contracts downstream subcontractors for installation

and modernization work.

KONE also uses distributors to sell and install its products.

These value chain workers are not under KONE supervision

or at KONE sites. While KONE monitors and collaborates with

distributors to promote ethical practices, ensuring compliance

with labor laws and ethical standards is the responsibility of

the distributors.

Certain categories of workers in the value chain are more

susceptible to potential dangers while engaging in KONE-

related tasks. Based on health and safety data, value chain

workers working on New Building Solutions and

Modernization projects are at an increased risk of injury. A

considerable portion of these downstream labor suppliers are

located in Greater China. To avoid possible negative health

and safety impacts, and to support subcontractors and

distributors to have the required skills, equipment, safeguards

and guidance to remain safe, KONE sets standards for

minimum health and safety measures.

Furthermore, the locations of KONE’s highest risks

regarding child and forced labor can be found in S1, Policies.

The supplier sustainability team is working closely with the

global compliance team to address any serious issues flagged

in the on-site or online Human Rights Assessments, with a

particular focus given to suppliers in China, India and Mexico.

Policies

KONE's safety management is integrated into its Global

Management System, guiding continual improvement of

safety practices. Refer to S1, Policies for more detail on the

KONE management system.

Refer to G1, Policies for KONE’s expectations for

employees and business partners, which are set out in KONE

Code of Conduct. Policies are introduced in the table Key

policies related to workers in the value chain. Read more

about all of these policies, which are reviewed yearly in line

with KONE’s policy review process, on kone.com.

KONE Supplier Code of Conduct is available in over 30

languages. It sets out the ethical business practice

requirements that KONE expects from suppliers, including

health and safety, zero tolerance to bribery and corruption,

and the standards KONE requires from suppliers in terms of

internationally recognized labor and human rights, and

environmental issues.

KONE Distributor Code of Conduct covers topics similar to

the Supplier Code of Conduct and is currently available in

seven languages. KONE requires all of its suppliers and

distributors to sign the Codes and tracks and monitors the

signatures of the policies. KONE may terminate contracts for

failure to adhere to the Codes.

KONE’s safety management framework follows the ISO

45001 standard on occupational health and safety

management systems and is extended to the workers of

Material impacts, risks and opportunities related to workers in the value chain

Material topic

(time horizon)

Material impacts, risks and opportunities

Management response

Health and safety

in own

operations and

downstream

value chain

(short-long-term)

↓ Negative impact

KONE is conducting installation and service operations

globally. There are risks related to value chain workers’

health and safety especially in the installation and

service/maintenance operations. Safety hazards related

to installation operations might cause accidents leading

to short-term absences due to injuries, long-term

permanent disabilities or even fatalities, if neglecting

appropriate health and safety measures.

↓ Negative impact

Distributors’ employees and outsourced labor may not

work in a safe or clean environment and/or may not

respect KONE’s quality and safety requirements or

equivalent. Serious injuries or deaths may occur.

• Inclusive approach to health and safety practices

such as involving value chain workers into

company safety initiatives, setting requirements

for their competency, and applying methods and

tools

• Identifying gaps, development areas and best

practices, for example through the Subcontractor

Safety Development Program, to further develop

KONE processes and collaboration with its value

chain workers for improved health & safety in the

work environment

Board of Directors’ Report | Sustainability Statement

70 KONE Annual Review 2024

KONE’s value chain. Refer to S4, Policies for more detail on

ISO certification.

KONE Human Rights Policy details KONE’s role,

objectives and responsibilities with respect to its human rights

commitment also for value chain workers. Refer to S1,

Policies for more information on the Human Rights Policy and

human rights working group.

Engaging with value chain workers

KONE supports its suppliers with their commitment to

responsible and sustainable business conduct, including

human rights, through safety, quality, and environmental

practices. In addition to continuous one-to-one dialogue with

suppliers, KONE meets them at trade fairs, steering group

meetings, and supplier workshops. Supplier collaboration

includes audits and assessments on the environment, ethics,

compliance, human rights, and quality. In addition, KONE has

an annual supplier excellence certification program for direct

material suppliers.

KONE supports distributors’ business growth by providing

commercial, technical, and training support, fostering

collaboration and synergy. KONE engages with

subcontractors, distributors, and partners through regular

forums to improve working methods, operational collaboration,

and safety performance.

All companies providing external workforce for KONE in

specified categories are included in its Global Supplier

Relationship Management. Health and safety topics are

regularly discussed, and possible actions taken within this

level. Operational engagement in health and safety is done

regularly in several levels of the organization based on local

practices. Engagement frequency and depth of the

cooperation varies based on the work requirements.

KONE also actively engages with representatives from its

distributors to gain insights into the performance of health and

safety measures. Together with the distributors, periodic

operational assessments are conducted to evaluate and

enhance performance across various distributor countries.

KONE identifies opportunities and shares best practices

related to health, safety, and quality with the distributor

representatives, who communicate the requirements to their

employees and subcontractors.

In general, there are monthly, quarterly, and annual

meeting practices with the subcontractor companies in

different organizational levels to discuss and develop working

conditions and health and safety practices of KONE’s value

chain workers. Leaders in all levels conduct Gemba walks at

KONE sites, with own employees and subcontractors

discussing and collaborating on developing safety in the daily

work. KONE also has annual initiatives and campaigns in

which all of KONE’s subcontractor workers are welcome to

participate.

KONE holds monthly meetings with various tiers of

distributors. These meetings facilitate ongoing engagement

and collaboration. In addition to these regular interactions,

KONE conducts an annual Field Operations assessment,

tailored to the performance, maturity, and growth opportunities

of each distributor. Furthermore, once a year, KONE hosts a

distributor meeting with top management representatives.

This meeting focuses on critical areas such as safety and

quality, operations, and business, ensuring alignment and

continuous improvement across all levels of the organization.

KONE Global Installation, Safety and Procurement are

responsible for creating and developing processes to engage

with value chain labor suppliers and the value chain workers.

Managing Directors of KONE’s frontlines are responsible for

ensuring that these processes are followed and for monitoring

that KONE requirements are met.

KONE monitors the health and safety performance of

subcontractors daily as allowed by local law and the contract

with the subcontractors. Internal and external meetings review

safety data to identify trends and improve subcontractor

safety. The effectiveness of these actions is reviewed with

subcontractors and internally at KONE. The certified health

and safety management system ensures external evaluation

of risk mitigation processes.

KONE gathers safety related data into KSS from internal

and external operations conducted by its own workforce and

value chain workers. This data is used systematically improve

safety at KONE. Refer to S1, Remediating negative impacts

on own workforce for more information on this process.

Remediating negative impacts on value chain

workers

KONE provides several channels for collaboration,

development, and raising concerns about health and safety

topics for value chain workers. These include the KSS

system, safety initiatives and campaigns, local meeting

practices, and day-to-day operational processes with KONE

representatives at the worker level. Additionally, KONE

participates in global industry forums, such as the Global

Elevator Safety Forum, to improve health and safety in the

elevator and escalator industries. KONE does not have direct

responsibility for distributor installation worker health and

safety, but closely monitors and works with distributors to

encourage and support ethical practices.

KONE engages with its workforce and value chain to

improve health and safety, using data from the KSS reporting

system, audits, site visits, and worker feedback to develop

products and procedures. Incidents and non-conformities are

managed locally, with root causes identified and corrective

actions taken. Trends are analyzed to develop strategies and

actions.

Subcontractor workers report incidents to their

supervisors, who then manage these within KSS. Health and

safety incidents are documented internally as lessons learned.

Safety representatives from distributors gather and submit

reports which are reviewed monthly with KONE to uphold

safety standards. Subcontractors do not have direct access to

KSS; they communicate issues through local channels. This

information is collected via real-time digital platforms before

being forwarded to KSS for analysis.

Key policies related to workers in the value chain

Management

system

Material topics addressed

Scope

Management bodies

Supplier Code of

Conduct

Health and safety, corruption

and bribery

All suppliers, including suppliers’ own workforce,

suppliers, and third parties

VP Global Compliance

Distributor Code

of Conduct

Health and safety, corruption

and bribery

All distributors, including distributors’ own workforce,

customers, suppliers, and third parties

VP Global Compliance

Board of Directors’ Report | Sustainability Statement

71 KONE Annual Review 2024

KONE management and supervisors closely collaborate

with subcontractors to share safety information. Subcontractor

workers are encouraged to engage in health and safety

discussions via toolbox talks, regular meetings, and KONE

events. The success of these initiatives is tracked through

safety KPIs, audits, and ongoing dialogue with value chain

companies and workers. Following KONE's continual

improvement principles, all employees and subcontractors are

responsible for suggesting and identifying ways to improve

workplace safety. The KONE Compliance Line is available to

the public including value chain workers to report concerns,

including human rights grievances. Refer to G1, Mechanisms

for identifying, reporting and investigating concerns for more

information on KONE Compliance Line.

KONE’s non-retaliation policy is also highlighted in KONE

Supplier and Distributor Codes of Conduct emphasizing that

both suppliers and distributors should provide their employees

with the means to raise concerns about any topics in the

Codes. Any person making such a report in good faith should

be protected from retaliation. In its supplier human rights

assessment questionnaire, KONE has included questions

assessing whether the suppliers have effective grievance

mechanisms in place. Additionally, KONE assesses whether

its suppliers are aware of KONE’s Compliance Line dedicated

to suppliers, and the procedures for raising concerns or

grievances during onsite assessments. KONE has included

similar questions in its annual distributor due diligence

questionnaire to assess the accessibility and trust of the

reporting channel.

Actions

KONE initiated the Global Subcontractor Safety Development

Program in 2024 to address potential negative impacts on

workers within its value chain, as well as to enhance positive

outcomes by establishing a framework for effective

collaboration with the subcontractor companies and

standardizing their safety management practices. The

program focuses on worker groups and areas most affected

by potential negative impacts related to KONE operations.

In the Global Subcontractor Safety Development Program,

a guiding framework addresses specific topics for mitigating

health and safety risks. Topics such as risk awareness and

site supervision improvements were selected based on

analyzed safety data consolidated from incidents, near

misses, and root causes.

During the year, the program assessed ongoing

subcontractor management practices in prioritized

geographies and businesses to identify development actions

for better safety performance. The effectiveness of these

actions is constantly reviewed to achieve maximum impact.

The program is expected to continue until the end of 2025.

KONE's incident management process and integrated

safety management system extend to value chain workers.

The data gathered from incidents helps identify development

areas within KONE's internal processes and supports value

chain companies in improving their safety performance and

culture. Refer to S1, Remediating negative impacts on own

workforce for more information about KONE’s incident

management process.

In addition to mitigating negative impacts, KONE also aims

to deliver positive impacts for value chain workers proactively.

For example, KONE invites value chain partners to participate

in health and safety initiatives and campaigns. These

campaigns are designed to raise risk and safety awareness,

thereby positively impacting workers’ health and safety. Refer

to S1, Actions for more information about KONE’s initiatives

and campaigns.

KONE has processes to assess the effectiveness of

actions in mitigating negative impacts for value chain workers.

Regular meetings and forums evaluate health and safety data

points to understand progress. If progress is insufficient,

adjustments are made for continual improvement.

Value chain worker related health and safety data in KSS,

internal and external management system audit findings and

actions arising from KONE’s close collaboration with value

chain companies help KONE to identify and prioritize

remedies needed to mitigate potential negative impacts in its

value chain.

KONE sets minimum requirements for subcontractor

training, tools, and personal protective equipment (PPE).

Mandatory health and safety training requirements are related

to the safe working methods needed to install and maintain

KONE products. Based on the local practices and legislation

KONE is providing e-learning, hands-on and project or

product specific trainings for subcontractors. In addition,

KONE Supplier and Distributor Codes of Conduct require that

suppliers provide a safe and healthy working environment in

compliance with all relevant laws and regulations. Suppliers

must ensure their employees receive proper health and safety

training, information, and equipment.

KONE constantly monitors and identifies broader health

and safety impacts on its value chain workers by analyzing

trends and channels in place for value chain workers to raise

issues. These processes and their effectiveness are validated

and reviewed in internal and external audits to identify

development needs and prioritize actions for continual

improvement. In 2024, KONE had no severe human rights

issues or incidents connected to its upstream and

downstream value chain reported.

KONE provides detailed method instructions for its

products to promote safety in installation and maintenance.

KONE also seeks feedback from its value chain workers and

companies to further develop KONE products and installation

methods. Close collaboration with subcontractors and

distributors enables effective mitigation actions if any negative

impacts caused by KONE emerge. The collaboration is done

in several levels including KONE procurement, sales, delivery

operations, global functions, and local KONE entities.

The line organization is accountable for health and safety

of own employees at KONE as well as those workers in the

value chain under KONE supervision at KONE sites. The local

KONE line organization has the required competencies and

resources to enable, support and ensure compliance of safe

working methods of its value chain workers, mainly in New

Building Solution and Modernization projects.

KONE has dedicated health and safety experts working for

local KONE entities and areas. KONE also has a global

Safety and Quality function dedicated to area and business

safety development. Within this function the global safety

development team is supporting and guiding health and safety

development throughout KONE operations including the

workers in the value chain. KONE global health and safety

related initiatives, programs, tools and campaigns are led and

resourced by the global safety development team.

Respect for human rights

Human rights policy commitment

KONE is a committed participant of the UN Global Compact

and continuously improves its understanding of human rights

impacts and take steps to remediate such impacts. The

Supplier and Distributor Codes of Conduct set out the

expectation for KONE’s business partners to respect the

same internationally recognized human rights that KONE is

committed to respecting.

Board of Directors’ Report | Sustainability Statement

72 KONE Annual Review 2024

In 2024, KONE revised both its distributor annual due

diligence questionnaire and supplier online human rights

assessment questionnaire and included questions on how

these ethical guidelines are communicated to their

employees. KONE has not become aware, through any of its

reporting channels, of any cases involving the non-respect of

the UN Guiding Principles on Business and Human Rights,

the ILOs Declaration on Fundamental Principles and Rights at

Work, or the OECD Guidelines for Multinational Enterprises,

related to workers in the upstream or downstream value

chain.

KONE’s Supplier and Distributor Codes of Conduct

explicitly prohibit use of forced labor under any circumstances

(including trafficked, indentured, or bonded labor) or

contracting with subcontractors or suppliers using child labor

or forced labor, mental and physical coercion, slavery and

human trafficking.

KONE is committed to taking appropriate action to

remediate situations where its activities have caused or

contributed to an adverse human rights impact. Any human

rights issues can be escalated to the human rights working

group, reporting to the Global Compliance Committee. If Code

of Conduct violations are uncovered through compliance

investigations, the relevant functions and stakeholders, such

as management, Compliance, Legal, and Human Resources,

collaborate to agree on corrective measures based on the

facts of the case and applicable local laws. When necessary,

specific individuals are designated to oversee the

implementation of the corrective actions to ensure they are

carried out.

Human rights due diligence

KONE continuously develops and monitors its human rights

due diligence program to identify and address potential risks

in KONE’s own operations and supply chain, ensuring that the

program aligns with international human rights standards. The

processes within the program are discussed in KONE’s

human rights working group regularly. KONE’s human rights

due diligence program consists of impact assessments,

internal assessments and surveys, and third-party due

diligence and screening.

KONE carries out regular human rights impact

assessments to identify risks within its organization and

across its supply chain. The scope of these assessments

considers risks in the value chain, both in upstream and

downstream, also covering end-users, customers and local

communities. KONE prioritizes potential impacts based on the

severity of the impact on potentially affected individuals and

groups, the associated risks to the business and the likelihood

of such impacts occurring. Based on findings from the human

rights impact assessments as well as KONE’s annual risk

assessments, KONE creates action plans to mitigate the risks.

The latest global human rights impact assessment

conducted in 2023 found that KONE’s salient human rights

issues remain the same as in 2019: the health and safety of

employees and workers throughout the supply and delivery

chains and respect for individuals’ labor rights.

KONE uses internal surveys to assess human rights

compliance in its own operations, as well as anonymous

surveys to identify discrimination, bullying and / or harassment

issues within a unit. Additionally, KONE carries out periodic

on-site assessments of KONE-provided accommodation to

identify and address any impacts on human rights and on

employee safety.

Supplier due diligence

In 2024, KONE continued to extend the volume of third parties

in its compliance screening solution. The solution currently

covers suppliers representing 78.3% (2023: 78.2%) of

KONE’s total spend, as well as customers and other third

parties included on the basis of selected risk criteria.

The tool manages third parties through five key stages:

onboarding, risk assessment, due diligence, risk mitigation

and monitoring. Adverse findings on human rights are flagged

to the relevant KONE contract owner or category manager for

follow-up.

In 2024, a dedicated supplier sustainability team was

established to develop and implement KONE's human rights

due diligence. Online and on-site supplier human rights

assessments were conducted to identify potential and actual

human rights risks in KONE’s supply chain. Based on the

assessment results, the team collaborates with suppliers and

other key stakeholders to prevent potential adverse effects

and mitigate adverse human rights impacts. An action plan

with measurable targets is agreed upon with the suppliers

along with a timeline. The tracking and follow-up process and

designated resources has also been established and adopted

into supplier human rights practices.

Targets

KONE wants to ensure that its business partners follow the

same standards that KONE follows on health and safety, zero

tolerance to bribery and corruption, internationally recognized

labor and human rights, and environmental issues. Therefore,

KONE has set targets for signatories of KONE Distributor and

Supplier Codes of Conduct, measuring against base years of

2020 and 2021, respectively. These targets were set

according to a strategic and systematic process. Though

stakeholders are not directly involved in the target setting

process, KONE considers how they may be affected. KONE

requires all its distributors to sign KONE’s Distributor Code of

Conduct. By the end of 2024, 97% (2023: 92%) of KONE’s

Distributors had done so due to the gradual phase-out of

certain distributors. KONE aims at achieving the target of

100% compliance during 2025.

According to KONE purchasing policy, all KONE suppliers

are required to agree to and sign the Supplier Code of

Conduct and demonstrate compliance with the behaviors

expected by KONE. Deviations from this requirement may be

permitted if the supplier's own Code of Conduct is verified and

deemed to align with KONE’s standards, subject to approval

by the legal department. The target for Supplier Code of

Conduct compliance is set annually through a thorough

analysis of supplier performance and their adherence to this

critical policy. By the end of 2024, 87% (2023: 86%) of

KONE’s total spend with regular trade suppliers and

installation subcontractors was with parties who had signed

KONE’s Supplier Code of Conduct or equivalent. KONE’s

2024 target was 87%.

KONE aims to decrease both the number and severity of

injuries among subcontractors involved in dismantling and

installation activities for New Building Solutions and

Modernization projects by 2030. KONE has not set a specific

quantitative target for reducing injuries among value chain

workers due to challenges in collecting and verifying data.

Working hours and other key information are generally

confidential, making it difficult to compare them with the level

of health and safety of your own employees. Despite these

limitations, KONE closely monitors injury numbers and trends

to improve worker safety in the value chain.

For occupational health and safety, the process for target

setting is a collaborative effort, based on legal aspects,

subcontractor health and safety performance, and interactions

with subcontractors. All subcontractor related incidents are

communicated and discussed with subcontractors in regular

Board of Directors’ Report | Sustainability Statement

73 KONE Annual Review 2024

meetings to ensure collaboration on corrective and preventive

measures for continual improvement. KONE is currently

working on setting a long-term target for the number of

subcontractor injuries, including the subcontractors in the

value chain worker category 2, in alignment with KONE’s own

employee health and safety target setting for 2030.

Workers’ feedback for health and safety target setting

purposes is gathered through global safety and quality

networks and communities covering all KONE operations.

Additionally, the Compliance Line and KSS give KONE

valuable feedback for its target setting from both own

workforce and value chain workers. In the target setting

process, KONE is also utilizing information from industrial

forums like the European Lift Association, along with other

public data, to place targets in a broader context.

KONE monitors the safety performance of its

subcontractors, particularly those engaged in elevator

installations, through KSS. Refer to S1, Remediating negative

impacts on own workforce for details on KSS. Subcontractor

near misses, moderate and serious injuries, and the rare

cases of fatalities, are part of monthly global reporting to

Executive Board and routine health and safety performance

reviews in global and local management meetings.

Considering the human rights impact assessment, DMA

results, Subcontractor Safety Development Program findings,

and KSS reports, KONE has identified a need to further

support its partners in improving their health and safety

management practices. KONE is confident that enhancing

Code of Conduct compliance monitoring and KONE’s ongoing

Subcontractor Safety Development Program will effectively

reduce material negative health and safety impacts for

workers within the value chain while fostering positive

outcomes.

KONE has prioritized supporting and monitoring the health

and safety management of downstream subcontractor

suppliers with workers involved in dismantling and installation,

upstream first-tier component suppliers in manufacturing, and

service providers working at a KONE site. Going forward,

KONE aims to establish more effective processes for

overseeing the health and safety of all worker groups in its

value chain, including workers of distributors involved in

installation activities.

Board of Directors’ Report | Sustainability Statement

74 KONE Annual Review 2024

S4 Consumers and End-Users – Health

and Safety

Material impacts, risks and opportunities

Personal health and safety of consumers and end-users was

identified as material topic for KONE in connection with the

2024 DMA. Refer to ESRS 2, Sustainability-related impacts,

risks and opportunities for a description of the materiality

assessment methodology.

KONE is dedicated to ensuring that all consumers and

end-users who are likely to be materially impacted by its

operations, value chain, products, and services are thoroughly

included within the scope of KONE’s disclosures. Material

IROs are described in the table Material impacts, risks and

opportunities related to consumers and end-users.

KONE recognizes that its products are used by a broad

and diverse range of consumers and end-users. These

include individuals with varying levels of mobility, such as the

elderly, people with disabilities, children, and those

transporting heavy or large objects. Additionally, KONE’s

products are frequently used in high-traffic environments such

as hospitals, shopping centers, and public transportation

hubs, where safety and reliability are of utmost importance.

When it comes to consumer and end-user safety, the

majority of incidents are related to misuse or inappropriate

personal behavior on or with the equipment. Naturally,

children and young adults are more prone to incidents caused

by mis- or unintended use of the equipment.

Incidents involving KONE products are often influenced by

factors like property maintenance, building conditions,

improper use and supervision, and other variables impacting

end-users beyond KONE’s manufacturing and marketing.

Safety is embedded in the product development process,

where potential hazards affecting the full product life cycle are

systematically identified. While some hazards cannot be

completely eliminated, they are minimized to acceptable

levels or addressed through maintenance requirements to

replace parts before they become safety risks, ensuring

product safety before market introduction. Existing products

are continuously developed to further improve their safety and

functionality.

Through continuous engagement with customers over the

whole life cycle of their building and KONE’s equipment,

KONE is able to address potential safety risks or actual

material impacts and provide solutions that may go beyond

the locally required safety standards.

Policies

KONE’s Quality, Health and Safety statements provide

ambition and objectives applicable to all KONE units. Read

more about the policy statements, which are publicly

available, on kone.com.

Codes, standards and regulations set technical and

operational requirements for KONE’s solutions and services

throughout their entire life cycle from design, manufacturing

and installation to service, modernization and dismantling.

Codes and regulations are legally enforceable by an authority

when adopted by a city, state or country, and compliance with

them is set mandatory at KONE.

KONE Codes and Standards Policy sets out KONE’s

expectations for compliance by its units and employees with

applicable codes, standards and regulations concerning

KONE solutions and services. KONE Customer Solutions

Engineering Policy outlines key principles to ensure that the

engineering work for customer deliveries is safe, high-quality,

and complies with applicable laws, codes, and standards.

Policies are introduced in the table Key policies related to

consumers and end-users.

Risk management is an integral part of KONE’s business

processes associated with the safety of solutions and services

throughout their life cycle. Refer to S1, Policies for a

description of the KONE Risk Management Policy.

KONE Human Rights Policy details KONE’s role,

objectives and responsibilities with respect to its human rights

commitment and in relation to KONE’s employees and

workers across the supply and delivery chain. In relation to

end-users, the policy acknowledges that safety is a shared

responsibility that extends to all stakeholders, including end-

users. Refer to S1, Policies for more information on KONE

Human Rights Policy and alignment with internationally

recognized instruments. Refer to S2, Respect for human

rights for additional information about the engagement of

consumers and end-users regarding human rights, and G1,

Mechanisms for identifying, reporting and investigating

concerns for details about the remedy process.

ISO certification coverage

KONE operates a global integrated management system

comprising Quality management (ISO 9001), Environmental

management (ISO 14001) and Occupational Health and

Safety management (ISO 45001). Refer to S1, Policies for

further information on KONE’s management system.

To ensure continual improvement, KONE is certifying its

units in line with ISO standards. Many KONE units are either

covered as part of the KONE group certificates (OneISO) or

maintain their own certificate, certified by a local accredited

body. KONE aims to broaden its group ISO certificate scope

and incorporate the local certificates within it.

Although KONE is expanding the coverage of group

certificates year by year, not every KONE unit is certified

against each of those international standards. The table Share

Material impacts, risks and opportunities related to consumers and end-users

Material topic

(time horizon)

Material impacts, risks and opportunities

Management response

Health and

safety in

downstream

value chain

(medium-term)

↓ Negative impact

Misuse of KONE equipment, neglecting

maintenance instructions or other unforeseen

events may lead to equipment failures and cause

severe incidents or fatalities to end-users.

↓ Risk

Equipment malfunctions related injuries due to error

in design or maintenance. Inadequate maintenance

level, including by subcontractors. Postponement of

modernization by the building owner.

• Safety is embedded in the product development process

• Retrofit of identified safety hazards in KONE products.

• Modular Based Maintenance (MBM) using preventive

maintenance methods

• Regular training of KONE’s maintenance technicians

• Safety promotion campaigns for customers and end-users

• Develop modernization solutions for upgrading or replacing

existing equipment with new solutions that meet or exceed

the latest safety standard

Board of Directors’ Report | Sustainability Statement

75 KONE Annual Review 2024

of KONE employees working in an ISO certified unit

demonstrates the coverage of KONE’s employees by the

three main ISO management system certification (either local

or OneISO) and their respective unit headcount compared to

KONE global headcount.

In addition to the mentioned standards, some units are

certified according to further international, local or area

specific standards, such as Information Security management

(ISO 27001), Energy Efficiency Management (ISO 50001)

and/or the Lifts Directive 2014/33/EU.

All these certifications enhance the health and safety of

both consumers and workers by verifying KONE’s standard

management approach.

Engaging with consumers and end-users

KONE units engage with trade associations, standardization

forums and organizations that aim to shape and influence the

development of industry standards, practices and objectives.

To capture even wider safety improvement opportunities

KONE is, for example, an active member in the European Lift

Association (ELA) where actual incident data from a number

of original equipment manufacturers (OEMs) in the industry

and industry associations is collected and analyzed. In

Americas, KONE also supports the Elevator and Escalator

Safety Foundation through its industry trade association.

At KONE, consumer and end-user perspectives are

integrated into decision-making through structured feedback

mechanisms, including surveys, incident management, and

direct customer engagement. Insights gathered influence

product design, safety enhancements, and service

improvements. KONE’s Global Quality and Safety Function

oversees these efforts, with the Senior Vice President of

Quality and Safety holding operational responsibility. This role

ensures consumer feedback informs key strategies, reporting

directly to the Executive Board.

Safety communications

Safety is a collaborative effort, also involving the owners,

passengers and users of elevators, escalators, and automatic

building doors. KONE equipment is designed for safe use

when instructions for operation, daily inspections and

maintenance are followed. KONE educates its customers to

help prevent or lessen impacts from situations that could lead

to safety risks and provide product safety training and

materials to support the safety of customers’ workers. KONE

also organizes safety awareness campaigns for its equipment

users in cooperation with customers to support safe behavior

and closely monitor safety occurrences related to KONE

products. Building owners and maintenance service providers

are responsible for ensuring the equipment is professionally

maintained and kept in good condition. Consequently, building

owners need to inform the service provider if they identify any

hazards, such as unusual noises or debris on any part of the

equipment.

KONE works closely with its customers to help them

operate KONE equipment safely, identify potential safety

hazards, and to deal with situations that could lead to safety

risks. KONE communicates actively about safety, organizes

safety-related activities, and provides training and educational

resources to its customers and the public to help them use the

equipment in a safe way.

Special attention is paid to children as one of the most

vulnerable groups of users. KONE’s safety mascots, Bob and

Max, have visited many shopping centers, kindergartens, and

customer premises around the world to promote safety in a

fun and engaging way. On its website, KONE provides

specific informative materials also for children.

Further insights are gathered through KONE’s annual

customer loyalty survey. It comprises more than 19,000

(2023: more than 15,000) customer interviews, and more than

65,000 (2023: more than 60,000) customers take part in

KONE’s transactional surveys each year. KONE’s local teams

review the results and work to embed actions into their plans.

KONE’s human rights impact assessment, renewed in

2023, considered end-users and customers from health and

safety perspective to identify any related human rights risks.

KONE updates its impact assessments regularly and creates

action plans to cease and mitigate identified risks. No specific

groups of end-users or customers were identified as high risk

for human rights impacts in KONE’s assessment. Refer to S2,

Human rights due diligence for more information.

Remediating negative impacts on consumers

and end-users

When incidents involving users of KONE equipment occur,

KONE’s incident management process is applied. Refer to S1,

Remediating negative impacts on own workforce for details on

the process. The incident management process is applicable

for all KONE units globally with the exception of its operations

in the United States. Due to legal requirements, incidents

involving users in the United States are not recorded in

KONE’s central data base in KSS, but each is investigated for

potential corrective and preventative actions with the same

diligence on a local platform.

KONE maintains a retrofit process to address identified

actual or potential safety risks, and where appropriate, notifies

customers and/or the industry of known defects that are

subject to product recall and repairs. Sources include, but are

not limited to, actual user incidents, near misses, quality or

warranty claims, Quality Issue Management (QIM) tickets,

audits, third party inspections and technical callouts. When

required, KONE works closely with local authorities to

remediate potential negative impact for users of its equipment.

For any compliance-related concerns, the KONE

Compliance Line reporting channel is available to all KONE

stakeholders, including customers, consumers, and end-

Share of KONE employees working in an

ISO certified unit

ISO standard

Share of employees

ISO 9001

90%

ISO 14001

87%

ISO 45001

68%

Key policies related to consumers and end-users

Management system

Material topics addressed

Scope

Management bodies

Codes and Standards Policy

Health and safety

All KONE units

Executive Board

Customer Solutions

Engineering Policy

Health and safety

All KONE units; Target audience:

KONE Supply Units and Front Lines

Executive Board

Board of Directors’ Report | Sustainability Statement

76 KONE Annual Review 2024

users. The line is open to all and available at all times on

KONE’s website. Refer to G1, Mechanisms for identifying,

reporting and investigating concerns for more information on

the Compliance Line. KONE requires its suppliers and

distributors to provide its employees with a whistleblowing

channel for reporting violations of the KONE Supplier and/or

Distributor Code of Conduct. This requirement is set forth in

the KONE Supplier and Distributor Code of Conduct and

addressed in human rights questionnaires directed to these

groups. Additionally, KONE highlights the availability of the

Compliance Line in the customer contract templates,

providing a clear channel for raising concerns.

Internal and external audits of KONE’s management

system ensure the consistent implementation and

effectiveness of the incident management process and

reporting channels. Refer to S1, Policies and S1, Remediating

negative impacts on own workforce to read more about

KONE’s auditing practices.

Actions

KONE is committed to effectively managing the material

negative impacts associated with its operations, products,

services, and value chain. To ensure the safety, reliability, and

sustainability of its elevators, escalators, and building doors,

KONE has allocated resources across various functions within

the organization.

At the completion of installation, KONE provides the

owners with product owner documentation, hazard warning

signs and information about the correct use of the equipment.

KONE maintains the safety of elevators, escalators, and

automatic doors using preventive maintenance methods.

KONE’s maintenance technicians receive comprehensive

training, coaching and mobile tools to ensure they have the

required competence and up-to-date information to perform

their work safely. All KONE’s methods for installation, service

and modernization are defined and risk assessed with user

and third-party risks considered.

KONE develops modernization solutions for upgrading or

replacing existing equipment, where possible, with new

solutions that meet or exceed the latest safety standards,

improving equipment reliability and user safety.

Onboarding of further KONE units and their management

systems under the relevant KONE group certificate (OneISO)

for quality (ISO 9001), environment (ISO 14001), occupational

health and safety (ISO 45001) and lifts directive (2014/33/EU)

aims to harmonize the management practices globally and

control their compliance with relevant standards and KONE

operating model (KONE Way).

Various product development and continual improvement

initiatives applying Lean Six Sigma or similar methodology are

initiated to improve KONE processes, service and products.

Inputs for continual improvement are collected for example

from KONE Front Lines using the QIM process. During the

reporting period more than 2000 define, measure, analyze,

improve and control (DMAIC) or change request (CR) projects

have been initiated, out of which a share is focusing on end-

user safety improvements.

In 2024, KONE piloted an escalator video monitoring

system which can automatically detect unsafe passenger

behavior or other pre-defined scenarios that could potentially

lead to user incidents. In case of a recognized incident, the

passengers can be guided towards safer behavior by audio-

visual responses. Furthermore, this system records each

observation and thus provides insights, which enables a

targeted approach to further improve the safety of end-users.

An extension of this solution to elevators is currently in

progress.

KONE is participating and contributing to the development

of national and international standards improving safety and

accessibility for lifts and escalators. For example, the ISO

8100 standard series intends to provide globally recognized

requirements for ensuring safe design, installation,

maintenance, and operation of elevators and escalators.

In 2024, KONE published two new end-user safety

promotion videos for the safe use of elevators and escalators,

available for anyone, including customers, to utilize freely for

safety promotion. Targeted materials for children, such as a

safety playbook, are also available. Read more about the

promotion videos and materials for children on kone.com.

In relation to other severe human rights incidents, KONE is

not aware of, such incidents connected to its consumers or

end-users during the reporting period.

KONE identifies actions to address negative impacts on

consumers and end-users by analyzing incident data,

conducting risk assessments, and gathering stakeholder

feedback. KONE tracks and monitors the effectiveness of its

actions in mitigating material risks and impacts through

ongoing safety performance tracking and incident response

procedures. This includes reviewing safety incidents involving

end-users and third parties. KONE’s process adheres to a

standard workflow, which incorporates an evaluation of

existing risk assessments. Refer to S1, Remediating negative

impacts on own workforce and S1, Actions for more details on

how KONE’s incident management process addresses actual

impacts with corrective measures.

Targets

KONE’s ultimate goal of zero injuries reflects its commitment

to consumer and end-user safety. The process for setting

health and safety targets is collaborative and data-driven,

involving inputs from safety performance metrics, regulatory

requirements, identified improvement opportunities, and

KONE’s strategic objectives and policies. Customer feedback,

obtained through customer loyalty surveys and from KONE’s

global safety and quality networks, directly informs these

targets, ensuring they address the specific safety needs of

consumers and end-users across all KONE operations.

To evaluate progress towards zero injuries, KONE tracks

the number of consumer and end-user safety incidents, which

helps assess performance and identify common causes.

Incident data is recorded in KSS (excluding KONE Americas)

and analyzed to inform preventative actions and minimize the

recurrence of similar issues. Although no specific quantitative

injury reduction target has been set due to data collection

challenges, tracking and analyzing near misses enables

KONE to proactively address safety risks of consumers and

end-users by preventing potential incidents before they occur.

Maintaining the equipment and ensuring that their

technical condition is on the required level is one key element

to ensure end-user safety. Therefore, KONE has identified

‘field operational enablers’ since 2020 with increasing numeric

targets for all its Frontlines to ensure high standards in

equipment maintenance. In 2024 those targets included:

• Modular based maintenance (MBM) visits completion

(>98%)

• MBM audits completion by KONE supervisors (four

audits/SPV/month)

• 24/7 Connected Services need completion (>98%)

To reinforce consumer and end-user safety at every level,

KONE has established a global target of at least 12

management workplace visits per leadership team member

and one safety promotion event or meeting per 2,000 units in

service. This goal supports the material impact of enhancing

safety awareness and compliance. Unit-level management

meetings closely monitor progress, ensuring these targets

Board of Directors’ Report | Sustainability Statement

77 KONE Annual Review 2024

remain aligned with KONE’s broader safety objectives and

policies for consumers and end-users and contribute to

KONE’s zero-injury vision.

Unit annual budget planning takes place every year to set

the targets. The annual budget plan defines the unit’s budget,

objectives, targets, and an action plan explaining how the unit

will support KONE to achieve its financial and non-financial

targets.

The annual budget plan is created based on:

• The stakeholders’ needs, expectations and requirements,

e.g., KONE financial targets and budget instructions,

considering associated risks and opportunities

• Regular unit performance reviews

• Area Quarterly Business Review

Refer to S1, Targets to learn more about KONE’s

approach on establishing health and safety targets and

performance tracking.

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78 KONE Annual Review 2024

G1 Business Conduct

Material impacts, risks and opportunities

The DMA assessment highlighted KONE’s positive influence

of corporate culture, the protection of whistleblowers, and the

widespread prevention of bribery and corruption. However,

KONE also recognizes that the complete elimination of all

negative impacts related to material topics may not be

achievable. As a result, KONE has incorporated preventive

measures to mitigate these risks and enhance the

transparency of the disclosures. Refer to ESRS 2,

Sustainability-related impacts, risks and opportunities for a

description of the materiality assessment methodology.

Material IROs are described in the table Material impacts,

risks and opportunities related to business conduct.

KONE culture

KONE’s culture is the foundation for everything it does, which

is built on safety, quality, sustainability, and KONE values:

care, customer, collaboration, and courage. These values are

embedded in the ways people at KONE collaborate, how they

view and impact the world, and how they bring KONE culture

and values to life.

During 2024, KONE continued developing its culture to

ensure that it supports strategic targets. KONE focused on

embedding cultural development into existing processes and

transformational activities thus strengthening inclusive culture

by establishing, for example, new ERGs.

KONE Code of Conduct forms an integral part of KONE’s

company culture and is the foundation of its ethical business

practices. Furthermore, inclusivity is deeply embedded in

KONE’s culture and values. KONE believes that future

success relies on its collective ability to build inclusive teams,

communities, and networks. When individuals are valued for

their authentic selves, they are happier and perform at their

best. To reinforce the importance of KONE’s values as part of

its culture, KONE has embedded the values as a criterion in

its annual performance evaluation which indirectly links to

KONE’s global short-term incentive program.

Policies

KONE Code of Conduct sets out the responsible and ethical

conduct expected of KONE employees and companies. A

revised version of the Code of Conduct was published in

2024. The Code addresses a range of topics such as conflicts

of interest, corruption, competition compliance, third-party due

diligence, human rights, fraud and theft, and how to report

violations of the Code. The Code also emphasizes KONE’s

non-retaliation policy: KONE does not tolerate any form of

retaliation against anyone who has made a compliance report

in good faith. As a committed participant of the United Nations

Global Compact, KONE upholds its ten principles on human

rights, labor, environment, and anti-corruption. KONE’s

general Code of Conduct is complemented by KONE Supplier

and Distributor Codes of Conduct. Refer to S2, Policies for

details on the Codes. Refer to G1, Prevention and detection of

corruption and bribery for a description of KONE’s Anti-Bribery

and Corruption (ABC) Policy. KONE’s Global Delegation

Authority policy defines when matters need to be escalated to

Executive Board Members, CEO or Board of Directors.

Policies are introduced in the table Key policies related to

business conduct.

The development of KONE’s culture through training and

awareness building remains the most important action when it

comes to the internal mitigation of compliance risks and

continued to be a focus in 2024. Regular online, video and

face-to-face compliance training is provided to employees.

Material impacts, risks and opportunities related to business conduct

Material topic

(time horizon)

Material impacts, risks and opportunities

Management response

Corporate

culture in own

operations

(medium-term)

↑ Positive impact

A positive corporate culture prioritizes ethical

practices and sustainability and can improve

responsible decision making throughout the value

chain. This benefits the society.

• KONE’s culture, built on the core principles and values,

is the foundation of everything at KONE

• Corporate culture related KPI’s are included in KONE’s

Sustainability program monitoring, such as values,

ethics, and compliance

• In 2024, KONE assigned an annual, mandatory Code of

Conduct e-learning for all employees

Protection of

whistle-blowers

in own

operations

(medium-term)

↑ Positive impact

Protecting whistleblowers empowers the workforce

and value chain to speak up about potential code of

conduct violations, fostering transparency and

accountability. This benefits the society by promoting

responsible business practices, which, in turn, leads

to increased consumer trust and positive societal

perceptions.

The KONE Compliance Line allows for KONE

employees, suppliers, distributors, and the public to

report specific concerns relating to violations of the

KONE Code of Conduct.

• The KONE Compliance Line is available for employees,

suppliers, distributors, and the public at all times

• KONE’s Code of conduct emphasizes KONE’s non-

retaliation policy: no form of retaliation is tolerated

against anyone who has made a compliance report in

good faith

Corruption and

bribery in own

operations

(medium-term)

↑ Positive impact

Effective prevention and detection of corruption

support transparent and fair business practices that

benefit the entire society. This fosters public trust and

confidence in the business sector, leading to

increased societal cooperation and support for

sustainable initiatives. KONE's new Anti-bribery and

Corruption (ABC) Policy and mandatory e-learning set

out KONE's zero tolerance towards bribery and

corruption and explain preventive measures KONE

takes to mitigate risks identified in its 2021 ABC risk

assessment.

• Global Compliance works closely with KONE’s

Assurance, Internal Controls and Risk Management

teams to identify ABC risks and track the effectiveness of

KONE’s ABC program

• Implementation of a conflict-of-interest declaration tool

throughout KONE in 2024

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79 KONE Annual Review 2024

KONE refreshes and assigns its key compliance e-learnings

(including Code of Conduct, Competition Compliance, and

Anti-bribery and corruption) on a regular basis ensuring each

year one mandatory compliance training is rolled out covering

all KONE employees, Executive Board members included.

KONE’s 2021 Code of Conduct e-learning was refreshed

and re-issued to all KONE employees globally in 2024. KONE

also extended the 2024 Code of Conduct training to the Board

of Directors. The refreshed e-learning course is a 20-minute

online module that provides an overview of the Code and

includes real-life scenarios employees may encounter in their

daily work covering topics such as corruption and fraud,

conflicts of interest, gifts and hospitality, how to apply the

Code, and how to report actual or potential misconducts. The

Code is available in over 30 languages on kone.com. All new

joiners at KONE are required to complete the most recent

Code of Conduct e-learning, and the competition compliance

e-learning (refreshed in 2022) is also assigned as mandatory

training to all new staff and supervisors at KONE.

Mechanisms for identifying, reporting and

investigating concerns

All KONE employees are expected to understand and abide

by KONE’s Code of Conduct and to report any violations

using the channels available for this purpose. KONE’s internal

reporting channels include reporting to management, Human

Resources, Legal, or Compliance. KONE also has a

confidential reporting channel, the KONE Compliance Line,

available 24/7 for its employees, suppliers, distributors, and

the public (including consumers and end-users) worldwide. It

is highlighted to employees in all compliance trainings and

awareness materials, such as articles, posters, and shared on

info screens. The Compliance Line is also highlighted in

KONE Supplier and Distributor Codes of Conduct. More

information, including clear instructions on how to report

suspected violations of KONE Codes of Conduct, can be

found on kone.com. The Compliance Line is operated by an

independent third party and is accessible via phone and/or

web in over 30 languages. Reports can be made in the

reporter’s native language and can be anonymous where

permitted under data protection laws. Reports can be

submitted on a range of topics related to the Code of Conduct

violations and other topics relevant to the Code, such as

fraud, theft, corruption, harassment, conflicts of interest,

human rights, environment, and safety.

KONE has implemented the requirements set forth by the

local implementations of the EU Whistleblowers Directive (EU

2019/1937) in KONE’s operating locations. Where required by

local whistleblower laws, KONE subsidiaries have local

reporting lines and processes allowing for the local reporting

of compliance concerns. The local staff have been given

virtual training on how to handle reports coming through the

local reporting lines covering the background requirement of

the reporting line, how the process works, what to do if they

receive a report, and the basics of compliance investigations.

KONE investigates reported concerns independently,

objectively and in a timely and professional manner by a

dedicated, impartial KONE compliance team, free from any

conflicts of interest. Corrective actions are taken when

necessary, including disciplinary action (including termination

of employment or business relationships), process

improvements, and further training. In cases where a

compliance investigation establishes that a Code of Conduct

violation has occurred, relevant functions and stakeholders,

e.g. Compliance, Management, Legal and Human Resources,

agree on remedial steps based on the facts of the case and

local law. When appropriate, individuals are assigned to follow

up on specific remedial actions to ensure that it has taken

place. KONE’s case management system integrates the web,

phone, and other reporting channels to allow for a secure and

confidential system for managing reports and follow up. KONE

consistently monitors such reports by area, type, country, and

other criteria, looking for any trends or other meaningful

information. To ensure the effectiveness of its reporting

channels, KONE uses multiple communication methods to

make people aware of the ways they can report concerns,

such as Code of Conduct and other policies, regular

communications, trainings, postings on the Intranet and

others. KONE conducts periodic surveys and assessments to

test the awareness level of its reporting channels and the

willingness of employees to report such concerns. Refer to

S1, Remediating negative impacts on own workforce for

details on incidents and complaints.

Key compliance cases and statistics on all compliance

cases are reported to the Global Compliance Committee on a

quarterly basis. Individual compliance cases are also

discussed as necessary with the Committee, KONE’s

President and CEO and/or the responsible Executive Board

member during the intervening period. A summary of key

compliance cases and statistics is provided to the Audit

Committee and external auditors annually.

KONE clearly communicates in its Code of Conduct, the

Supplier and Distributor Codes of Conduct and other policies,

training materials and Compliance Line Speak up Guidelines,

that it prohibits retaliation against any individual who reports a

Code of Conduct violation in good faith. A report is made in

good faith when the reporting person has reasonable grounds

to believe that the information provided was true at the time of

reporting. In addition, to the extent allowed by local law,

KONE maintains the confidentiality of reporters’ identities to

further reduce the risk of retaliation. In countries where

anonymous reporting is not allowed, all other reporting

channels are available. All the reports are kept confidential on

a strict need to know basis, while maintaining KONE’s

prohibition against retaliation. Access to the reporting system

is limited to dedicated trained individuals tasked with handling

compliance reports.

Prevention and detection of corruption and

bribery

KONE’s operations are divided into seven global functions:

Commercial and Operations, Technology and Innovation,

Supply Chain, Strategy and Transformation, People and

Communications, Finance and Legal and four geographical

areas: Americas, Europe, Greater China, and Asia-Pacific,

Middle East and Africa. To enhance its efforts in preventing

Key policies related to business conduct

Management system

Material topics addressed

Scope

Management bodies

Code of Conduct

Corporate culture, Corruption and

bribery, Protection of whistle-blowers

Own workforce and all

KONE companies

Executive Board

Anti-Bribery and Corruption (ABC) Policy

Corruption and bribery

Own workforce

Executive Board

Global Delegation of Authority Policy

Corruption and bribery

Own workforce

Executive Board

Board of Directors’ Report | Sustainability Statement

80 KONE Annual Review 2024

and detecting bribery and corruption, KONE conducted a

comprehensive global anti-bribery and corruption risk

assessment in 2021. In the assessment KONE identified

procurement, sales, and marketing to have an elevated risk

for bribery and corruption. These high-risk functions are

categorized under Supply Chain and Commercial and

Operations. In addition, some geographical areas pose a

greater risk for bribery and corruption namely Asia-Pacific,

Middle East and Africa and Greater China. These risks are

evaluated internally on an annual basis. KONE reports metrics

at a global function level to ensure consistent coverage of all

relevant roles with elevated risk for corruption and bribery.

This approach accounts for variations in role names and

descriptions, which may not always capture all at-risk

positions. In addition, when KONE reports training

completions of these functions, only active KONE employees

are included. Those on leave are excluded from the scope

and are assigned the course upon return to work.

Anti-bribery and corruption program and training

To prevent bribery and corruption, KONE has developed a

comprehensive anti-bribery and corruption program. As a part

of ongoing efforts to prevent bribery and corruption, KONE

published a new Anti-Bribery and Corruption (ABC) Policy in

2023. The ABC Policy builds on the Code of Conduct to

provide guidance to employees on how to deal with risky ABC

situations. Read more about the ABC Policy, which is

available both internally and externally in over 30 languages,

on kone.com. The policy states KONE's zero tolerance

towards bribery and corruption, explains prohibited

arrangements (including direct and indirect bribery, facilitation

payments, excessive gifts and hospitality, and inappropriate

donations and sponsorships), outlines third-party risks,

describes KONE’s risk-based approach towards the

prevention of bribery and corruption, gives examples of

practical risk situations that employees should look out for,

and provides guidance on how to report any suspected

violations. KONE’s Anti-Bribery and Corruption policy is

aligned with the United Nations Convention against

corruption, reinforcing KONE’s dedication to ethical standards.

KONE accompanied the ABC policy with a related training

and assigned mandatory ABC e-learning courses for all

KONE employees in 2023, including Executive Management.

Two versions were issued comprising different risk scenarios

for staff and operatives. Both versions cover the definition of

corruption and bribery, KONE’s zero-tolerance policy, and

provide guidance on preventing, detecting, and responding to

corrupt business practices. Additionally, employees are

instructed on how to report misconduct. The training includes

clear confirmation from employees that they agree to comply

with the ABC Policy. Respectively 85% of all active KONE

employees (close to 54,000 completions) had completed the

training by year end 2023. 86% of employees in functions with

higher risk for bribery and corruption had completed the

training. The ABC e-learning is part of onboarding and

assigned to all new employees. Separate targeted training to

frontlines and corporate functions on anti-bribery and

corruption as well as gifts and corporate hospitality continued

during 2024. KONE is planning to reissue the ABC training

annually to at risk functions for bribery and corruption. In

addition to KONE’s ABC e-learning course, bribery and

corruption are addressed in the Code of Conduct e-learning

covering the definition of corruption and bribery, KONE’s

policy on it and procedures for handling suspicion and

detection. Please see the completion rates of the annual Code

of Conduct e-learning in the table Code of conduct training.

For more information on business conduct policies and Code

of Conduct training see G1, Policies.

Preventive measures and actions

KONE continues to implement frontline compliance risk

assessments and localized programs with a strong focus on

addressing bribery and corruption. In 2023, KONE initiated

local assessments in eight countries across KONE Middle

East, Türkiye, and Africa (KMTA) and in 2024 continued the

work in the remaining seven countries. During 2023-2024,

100% of the KMTA countries were assessed. KONE’s

regional compliance manager conducted face-to-face training

sessions on the Code of Conduct and the KONE Compliance

Line for employees in eight different countries. In 2024, KONE

extended the same process to Europe.

Furthermore, KONE issued global instructions on gifts and

corporate hospitality in 2022 and continued to implement

these measures in 2024. Additionally, KONE’s cross-

functional fraud working group actively identifies fraud risks

and implements controls to mitigate those risks.

KONE actively seeks reliable and fair relations with

suppliers, distributors, and other partners for mutual benefit.

To ensure transparency and compliance, KONE has a third-

party due diligence process in place for distributors and

centralized information on global distributor management.

Refer to S2, Respect for human rights for details on the

process. Additionally, KONE conducts annual distributor

training sessions, covering essential topics such as sanctions,

bribery, corruption, and human rights. These trainings were

conducted also during 2024. KONE ensures that the latest

version of the distributor Code of Conduct has been signed by

active KONE distributors. In 2024, KONE revised its

distributor annual due diligence questionnaire and included

more detailed questions on bribery and corruption, as well as

working conditions. KONE holds its suppliers to the same high

standards regarding anti-bribery and corruption. KONE

Supplier Code of Conduct includes an extensive chapter

dedicated to these critical issues, emphasizing KONE’s

shared commitment to ethical business practices. Refer to S2,

Policies for more information on KONE Distributor and

Supplier Codes of Conduct.

In global customer contract templates, KONE has

incorporated a new anti-bribery and corruption clause in 2024

to better align business relationships with customers with

KONE’s stringent anti-corruption policies. In addition, Global

Compliance systematically screens target entities during

mergers and acquisitions as part of KONE’s risk management

strategy. This process helps KONE maintain its commitment

to ethical conduct and compliance with anti-bribery

regulations.

In 2024, KONE created a new conflict of interest

declaration tool integrated into KONE’s HR system.

Employees can disclose any potential conflicts of interest to

their manager through the tool, where all relevant information

is documented including any necessary resolutions. The tool

Code of conduct training in 2024

Target

group

Completions

Employees

65,673

95%

Employees in at-risk functions

37,464

98%

The Board of Directors and

Executive management

100%

All mandatory compliance training courses are monitored through KONE’s

learning management system, which records completion rates for each

training module. In China, operatives are trained on a separate China

Learning Management system (China LMS). The Greater China Compliance

team monitors and tracks completions through the China LMS and reports

these to Global Compliance function periodically.

Board of Directors’ Report | Sustainability Statement

81 KONE Annual Review 2024

also provides the capability for requiring employees to “self-

affirm” that they do not have any conflicts. The tool serves as

a risk mitigation mechanism to detect and prevent situations

where employees’ personal interests may conflict with those

of the company. In addition, all employees are encouraged to

speak up if they suspect or become aware of a violation of the

Code of Conduct, including those related to corruption and

bribery.

Consolidated financial statements | Consolidated statement of income

82 KONE Annual Review 2024

Consolidated statement of income
		Jan 1–Dec		Jan 1–Dec
MEUR	Note	31, 2024	%	31, 2023	%
Sales	2.1	11,098.4		10,952.3
Costs, expenses and depreciation	2.2, 2.3	-9,849.5		-9,752.2
Operating income		1,249.0	11.3	1,200.1	11.0
Financing income	2.5	48.3		50.0
Financing expenses	2.5	-43.1		-43.9
Income before taxes		1,254.1	11.3	1,206.1	11.0
Taxes	2.6	-293.1		-274.6
Net income		961.0	8.7	931.6	8.5
Net income attributable to:
Shareholders of the parent company		951.3		925.8
Non-controlling interests		9.7		5.8
Total		961.0		931.6
Earnings per share for profit attributable to the shareholders of the parent company, EUR	2.7
Basic earnings per share, EUR		1.84		1.79
Diluted earnings per share, EUR		1.84		1.79

Consolidated statement of comprehensive income
		Jan 1–Dec	Jan 1–Dec
MEUR	Note	31, 2024	31, 2023
Net income		961.0	931.6
Other comprehensive income, net of tax:	2.8
Translation differences		78.4	-96.2
Hedging of foreign subsidiaries		-12.8	15.9
Cash flow hedges		-3.7	-18.1
Items that may be subsequently reclassified to statement of income		61.9	-98.4
Changes in fair value		-1.6	-23.8
Remeasurements of employee benefits		-8.7	-17.2
Items that will not be reclassified to statement of income		-10.3	-41.0
Total other comprehensive income, net of tax		51.6	-139.5
Total comprehensive income		1,012.6	792.1
Total comprehensive income
attributable to:
Shareholders of the parent company		1,002.9	786.3
Non-controlling interests		9.7	5.8
Total		1,012.6	792.1

Consolidated financial statements

Consolidated financial statements | Consolidated statement of financial position

83 KONE Annual Review 2024

Assets,
MEUR		Note	Dec 31, 2024	Dec 31, 2023
Non-current assets
Goodwill		4.2	1,558.4	1,469.0
Other intangible assets		4.3	333.3	287.2
Tangible assets		4.4	898.5	779.7
Employee benefit assets	I	5.6	15.0	9.2
Deferred tax assets	II	3.6	365.7	320.2
Shares and other non-current assets	I/II	5.4	150.3	101.5
Total non-current assets			3,321.2	2,966.8
Current assets
Inventories	II	3.1	856.7	820.9
Accounts receivable	II	3.2, 5.3	2,494.8	2,495.1
Deferred assets	II	3.3, 5.3	693.6	641.0
Income tax receivables	II		119.0	118.7
Deposits and other current assets	I	5.4	1,223.0	1,263.9
Cash and cash equivalents	I	5.3	576.0	424.5
Total current assets			5,963.1	5,764.0
Total assets			9,284.3	8,730.8

Equity and liabilities,
MEUR		Note	Dec 31, 2024	Dec 31, 2023
Equity attributable to the equity holders
of the parent
Share capital		5.2	66.2	66.2
Share premium account			100.3	100.3
Paid-up unrestricted equity reserve			245.7	245.7
Fair value and hedge reserves			-25.3	-20.0
Translation differences			135.3	69.7
Remeasurements of employee benefits			-105.2	-96.5
Retained earnings			2,449.7	2,386.6
Total shareholders' equity			2,866.8	2,752.1
Non-controlling interests			26.3	33.9
Total equity			2,893.1	2,786.0
Non-current liabilities
Loans and other interest-bearing liabilities	I	5.3	700.5	438.7
Employee benefit liabilities	I	5.6	141.4	132.9
Deferred tax liabilities	II	3.6	87.3	86.3
Total non-current liabilities			929.3	657.9
Provisions	II	3.5	185.9	196.9
Current liabilities
Loans and other interest-bearing liabilities	I	5.3	145.1	116.1
Advance payments received and deferred revenue	II	3.2	2,016.9	1,915.7
Accounts payable	II	5.3	982.9	927.0
Accruals	II	3.4, 5.3	1,986.6	1,993.4
Income tax payables	II		144.4	137.7
Total current liabilities			5,275.9	5,090.0
Total equity and liabilities			9,284.3	8,730.8

Items designated " I " comprise interest-bearing net debt.

Items designated " II " comprise net working capital.

Consolidated statement of financial position

Consolidated financial statements | Consolidated statement of changes in equity

84 KONE Annual Review 2024

Consolidated statement of changes in equity
						Attributable to the equity holders of the parent
			Share	Paid-up
		Share		premium unrestricted equity	Fair value and	Translation	Remeasurements of	Retained Non-controlling
MEUR	Note	capital	account	reserve	other reserves	differences	employee benefits	earnings	interests	Total equity
Jan 1, 2024		66.2	100.3	245.7	-20.0	69.7	-96.5	2,386.6	33.9	2,786.0
Net income for the period		-	-	-	-	-	-	951.3	9.7	961.0
Other comprehensive income:	2.8
Translation differences		-	-	-	-	78.4	-	-	-	78.4
Hedging of foreign subsidiaries		-	-	-	-	-12.8	-	-	-	-12.8
Cash flow hedges		-	-	-	-3.7	-	-	-	-	-3.7
Changes in fair value		-	-	-	-1.6	-	-	-	-	-1.6
Remeasurements of employee benefits		-	-	-	-	-	-8.7	-	-	-8.7
Transactions with shareholders and non-controlling interests:	5.2
Profit distribution		-	-	-	-	-	-	-905.5	-	-905.5
Change in non-controlling interests		-	-	-	-	-	-	-8.4	-17.3	-25.7
Share-based compensation		-	-	-	-	-	-	25.6	-	25.6
Dec 31, 2024		66.2	100.3	245.7	-25.3	135.3	-105.2	2,449.7	26.3	2,893.1

Jan 1, 2023		66.2	100.3	393.1	21.9	150.1	-79.3	2,184.2	29.9	2,866.5
Net income for the period		-	-	-	-	-	-	925.8	5.8	931.6
Other comprehensive income:	2.8
Translation differences		-	-	-	-	-96.2	-	-	-	-96.2
Hedging of foreign subsidiaries		-	-	-	-	15.9	-	-	-	15.9
Cash flow hedges		-	-	-	-18.1	-	-	-	-	-18.1
Changes in fair value		-	-	-	-23.8	-	-	-	-	-23.8
Remeasurements of employee benefits		-	-	-	-	-	-17.2	-0.6	-	-17.8
Transactions with shareholders and non-controlling interests:	5.2
Profit distribution		-	-	-	-	-	-	-904.9	-	-904.9
Change in non-controlling interests		-	-	-	-	-	-	-	-1.8	-1.8
Share-based compensation ¹		-	-	-147.4	-	-	-	182.1	-	34.7
Dec 31, 2023		66.2	100.3	245.7	-20.0	69.7	-96.5	2,386.6	33.9	2,786.0

¹ As at 1 January, 2023 the cumulative effect arising from recognition of share-based payment rewards has been reclassified from paid-up unrestricted equity to retained earnings to improve presentation.

Consolidated financial statements | Consolidated statement of cash flows

85 KONE Annual Review 2024

MEUR	Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
Cash receipts from customers	11,233.1	11,087.6
Cash paid to suppliers and employees	-9,643.8	-9,602.4
Cash flow from operations before financing items and taxes	1,589.3	1,485.2
Interest received	16.2	22.5
Interest paid	-25.2	-19.1
Dividends received and capital repayments	0.0	5.4
Other financing items	-1.1	-62.4
Income taxes paid	-329.9	-303.7
Cash flow from operating activities	1,249.3	1,127.9
Capital expenditure	-168.4	-148.2
Proceeds from sales of fixed assets	0.2	0.9
Acquisitions, net of cash	-119.2	-169.2
Proceeds from sales of subsidiary shares	-	-3.0
Cash flow from investing activities	-287.4	-319.4
Cash flow after investing activities	962.0	808.5
Profit distribution	-905.5	-904.9
Change in deposits and loan receivables, net	72.4	210.5
Change of current creditors	-149.7	-134.2
Change in non-current liabilities	189.3	-31.8
Change in non-controlling interests	-19.5	-0.8
Cash flow from financing activities	-813.0	-861.3
Change in cash and cash equivalents	149.0	-52.8
Cash and cash equivalents at beginning of period	424.5	495.5
Translation difference	2.5	-18.2
Cash and cash equivalents at end of period	576.0	424.5

The impact of changes in exchange rates has been eliminated in the statement of cash flows by

translating the opening balance sheet with the closing rates of the period.

Reconciliation of operating income to cash flow from
operations before financing items and taxes,
MEUR	Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
Operating income	1,249.0	1,200.1
Change in working capital before financing items and taxes	48.1	15.7
Depreciation and amortization	292.2	269.4
Cash flow from operations before financing items and taxes	1,589.3	1,485.2

Consolidated statement of cash flows

Consolidated financial statements | Notes to the consolidated financial statements | Basis of preparation

86 KONE Annual Review 2024

Basis of preparation

KONE Corporation is a Finnish, public limited company

domiciled in Helsinki, Finland. KONE Corporation and its

subsidiaries together form the KONE Group (“KONE” or “the

Group”). KONE is a global leader in the elevator and escalator

industry with a purpose to shape the future of cities. KONE

provides elevators, escalators and automatic building doors,

as well as solutions for maintenance and modernization to

add value to buildings throughout their life cycle. KONE

moves two billion people every day, making their journeys

safe, convenient, and reliable with smart and sustainable

People Flow®. KONE operates in close to 70 countries

around the world , serving close to 600,000 customers.

Headquartered in Helsinki, Finland, we have seven global

R&D units and 10 manufacturing units in seven countries, as

Consolidated financial statements | Notes to the consolidated financial statements | Basis of preparation

Basis of preparation

Notes to the consolidated

financial statements

In this section

This section comprises following information about the

basis of preparation of KONE’s consolidated financial

statements:

• Basis of preparation

• Consolidation principles

• Hyperinflation

• Segment information

• Accounting estimates and management

judgements

• Effects of climate-related matters in financial

statements

Accounting principles are presented in connection with

notes in sections 2–6.

Consolidated financial statements | Notes to the consolidated financial statements | Basis of preparation

87 KONE Annual Review 2024

well as a worldwide network of agents and authorized

distributors.

The consolidated financial statements of KONE

Corporation have been prepared in accordance with the IFRS

(International Financial Reporting Standards) Accounting

Standards as adopted by the EU, observing the standards

and interpretations effective on December 31, 2024.

KONE has adopted the new standards and interpretations

that took effect during the accounting period and are relevant

to its operations. The IFRS standards and amendments

thereto that took effect in 2024 did not have a material impact

on the Group’s consolidated financial statements.

IFRS 18 Presentation and Disclosure in Financial

Statements, effective for reporting periods beginning on or

after January 1, 2027, will replace the standard IAS 1

Presentation of Financial Statements. The standard will have

an impact on the presentation of primary financial statements

and the accompanying notes of KONE consolidated financial

statements.

The consolidated financial statements have been prepared

for the reporting period of 12 months from January 1 to

December 31, 2024 and the basis that the Group will continue

to operate as going concern. The financial statements have

been authorized for issue by the Board of Directors of KONE

Corporation on February 11, 2025. According to the Finnish

Companies’ Act the Annual General Meeting has the right to

approve, reject or make changes to the financial statements

after the publication.

The consolidated financial statements are presented in

millions of euros and prepared under the historical cost

convention except as disclosed in the accounting principles.

Further, trade date accounting has been applied to all

financial assets and liabilities. Amounts presented in these

financial statements have been rounded from exact values

and therefore the sum of amounts presented individually can

deviate from the presented sum amount calculated based on

the exact values. Key figures have been calculated using

exact values.

Consolidation principles

The consolidated accounts include the parent company and

those companies in which the parent company held, directly

or indirectly, more than 50 percent of the voting power or had

control through management agreements with shareholders

holding the majority of the voting power at the end of the

reporting period. In addition to these holdings, the

consolidated accounts include possible holdings that are of a

controlling-right nature (units/companies established for a

specific reason).

Subsidiaries acquired during the period were included in

the consolidated financial statements from the date of

acquiring the control, and divested subsidiaries up to the date

of loss of control. The acquisition consideration, including

deferred and contingent consideration, as well as the

identifiable assets acquired and liabilities assumed, are

measured at the acquisition date fair values. The acquisition-

related costs are recognized as expenses in the period in

which they are incurred.

At the acquisition date, the non-controlling interests are

valued either at the acquisition date fair values or at non-

controlling interests’ proportionate share in the recognized

amounts of the identifiable net assets. Consolidated statement

of income includes an allocation of net income between the

shareholders of the parent company and the non-controlling

interest. The allocation of the comprehensive income to the

shareholders of the parent company and non-controlling

interests is presented in the statement of comprehensive

income. Non-controlling interests’ share of total equity is

presented separately under total consolidated equity.

All inter-corporate transactions, receivables, liabilities and

unrealized profits, as well as the distribution of profits within

the Group have been eliminated in the consolidated financial

statements. Inter-corporate shareholdings have been

eliminated using the acquisition method.

The results and financial position of foreign operations that

have a functional currency different from the presentation

currency of the Group, have been translated into the

presentation currency as follows: assets and liabilities at the

statement of financial position date closing rate, and income

and expenses at average exchange rates of the reporting

period. The resulting exchange rate differences have been

recognized in other comprehensive income.

Hyperinflation

Following continued growth in inflation rate, the accounting

firms and regulatory authorities have based on criteria set-out

in IAS 29 classified Türkiye as a hyperinflationary economy for

reporting periods ending on or after June 30, 2022. KONE is

active in both New Building Solutions as well as service

business in Türkiye through its local subsidiary. KONE has

assessed the impact of application of hyperinflationary

accounting for the Group concluding that this would be

immaterial. Consequently, the consolidated statement of

income or statement of financial position does not reflect the

impact arising from remeasurement of operations in Türkiye

for hyperinflation.

Segment reporting

The profitability of KONE is presented as a single entity.

KONE’s business concept is to serve its customers by

providing solutions throughout the entire life cycle of the

equipment, beginning from the installation of new building

solutions to the maintenance and modernization during their

life cycle and the full replacement of the equipment. Most of

the equipment that are delivered are converted into long-term

KONE maintenance contracts. Material operative decisions

are made by the Board of Directors of KONE. Such decisions

are prepared and presented by the Chairman of the Board

and the President and Chief Executive Officer. Due to the

business model of KONE, the nature of its operations and its

governance structure, the Group as a whole is considered the

relevant operating segment to be reported. KONE renewed its

operating model in 2023. Related changes in financial

reporting and governance implemented in 2024 did not impact

KONE’s reportable segments.

Accounting estimates and management

judgements

The preparation of the financial statements in accordance with

the IFRS requires management to make judgements,

estimates and assumptions that affect the measurement of

the reported assets and liabilities and other information, such

as contingent assets and liabilities and the recognition of

income and expenses in the consolidated statement of

income. Although these estimates and assumptions are based

on the management’s best knowledge of current events,

actual results may differ from the estimates.

For KONE the most significant judgements, estimates and

assumptions made by the management relate to revenue

recognition, especially to defining and determining principles

for revenue recognition in project business, to project

estimates for long-term major projects, assumptions used in

impairment testing, valuation of accounts receivables and

inventories, determining the lease term applied in the lease

Consolidated financial statements | Notes to the consolidated financial statements | Basis of preparation

88 KONE Annual Review 2024

accounting and recognition of provisions and evaluation of

uncertain tax positions.

Effects of climate-related matters in financial

statements

Climate-related matters have limited direct and indirect

impacts in the following areas of KONE's consolidated

financial statements in 2024:

• KONE has a sustainability-linked undrawn revolving

credit facility of EUR 850.0 (850.0) million. The

climate-related target impacting the fees of for the

facility is linked to the reduction of KONE’s Scope 1,

2 and 3 greenhouse gas emissions.

• KONE's long-term incentive plans include a target

related to reducing KONE’s carbon footprint from

Scope 1, 2 and 3 greenhouse gas emissions, and it

has an impact on the share-based payment

amounts.

• KONE’s investments in low-emission vehicle fleet

have increased the amount of right-of-use assets

and lease liabilities as well as related depreciation

and interest expenses.

• The climate-related risks and opportunities impact

the cash flow estimates, terminal growth rate and

discount rates used in the goodwill impairment

testing.

• The general transition towards a low-carbon

economy impact KONE’s revenues, expenses, and

cash flows. Such impact arises particularly through

the demand for energy efficient equipment and the

related cost of sales and R&D expenditure.

Potential future impacts of climate change on the consolidated

financial statements may include, for example, revenues and

cash inflows from increased demand for sustainable offering;

costs and cash flows related to climate change and transition

towards low-carbon economy; capital expenditure in energy-

efficient assets and related depreciation; impairment of assets

due to physical damage from severe weather conditions and

changes in the value of certain financial instruments due to

climate risks. The nature and magnitude of potential future

financial impacts of climate change are difficult to estimate.

None of the separately identifiable financial impacts is

assessed to be material to KONE as of the date of these

financial statements. KONE continues to evaluate its

exposure to climate-related impacts, risks and opportunities,

and these matters will be reflected in consolidated financial

statements, as appropriate .

89 KONE Annual Review 2024

Consolidated financial statements | Notes to the consolidated financial statements | Financial performance

In this section

This section comprises the following notes providing

insights into KONE’s financial performance:

2.1 Sales

2.2 Costs and expenses

2.3 Depreciation and amortization

2.4 Foreign exchange sensitivity

2.5 Financing income and expenses

2.6 Income taxes

2.7 Earnings per share

2.8 Other comprehensive income

Financial targets

KONE has defined the following mid-term financial

targets to be achieved by the end of 2027:

• Growth: Mid-single-digit annual sales growth

• Profitability: Adjusted EBIT margin of 13⁠–⁠14%

KONE’s long-term financial targets are:

• Growth: Faster than the market

• Profitability: To reach an EBIT margin of 16%

• Cash flow: Improved working capital rotation

Financial performance

Consolidated financial statements | Notes to the consolidated financial statements | Financial performance

Sales

11,098 MEUR

EBIT

1,249 MEUR

90 KONE Annual Review 2024

Consolidated financial statements | Notes to the consolidated financial statements | Financial performance

Accounting principles

Revenue recognition

Revenue from contracts with KONE’s customers is recognized

at an amount that reflects the consideration to which KONE

expects to be entitled to in exchange for delivering promised

goods or services to a customer.

KONE recognizes revenue when or as it satisfies a

performance obligation by transferring control on the promised

goods or services (performance obligation) to a customer.

A performance obligation is a distinct good or service

within a contract that a customer can benefit from on a stand-

alone basis. For KONE’s New Building Solutions and

Modernization contracts, a performance obligation typically

means delivery and installation of a single unit, i.e. an

elevator, an escalator or other People Flow solution. For

KONE’s maintenance contracts, maintenance of a single unit

is considered as a distinct performance obligation and for

repairs business, typically a service order is a performance

obligation for KONE.

In New Building Solutions and Modernization contracts,

KONE transfers the control of a single unit to a customer over

time and, therefore, satisfies the performance obligation and

recognizes revenue over time.

The transfer of control is initiated when ordered equipment

is delivered to a customer site as then the customer has the

ability to direct the use of, and obtain substantially all of the

remaining benefits from, a unit constructed by KONE. Upon

this milestone and onwards up to the project handover,

revenue is recognized under the percentage of completion

method using a cost-to-cost input method. Based on KONE’s

assessment it best depicts the transfer of control on the

deliverable to the customer. Percentage of completion is

defined as the proportion of an individual performance

obligation’s cost incurred to date from the total estimated costs

for that particular performance obligation.

The percentage of completion method requires accurate

estimates of future revenues and costs over the full term of

the contracts. These significant estimates form the basis for

the amount of revenue to be recognized and include the

latest updated estimate of total revenue and costs, adjusted

with risks based on historical experience on typical

estimation revisions for similar types of contracts. These

estimates may materially change due to the stage of

completion of the contract, changes in the contract scope,

cost estimates and customer’s plans and other factors.

Revenues from the rendering of maintenance services and

repairs are recognized when the Services have been

rendered or over the contract term when the work is being

carried out.

For maintenance contracts the performance obligation is

satisfied over time because the customer simultaneously

receives and consumes the benefits provided as KONE

performs the Services.

Most of KONE’s revenue is derived from fixed-price

contracts and, therefore, the amount of revenue to be earned

from each contract is determined by reference to those fixed

prices. KONE’s customer contracts do not typically contain

any significant financing components. In New Building

Solutions and Modernization contracts payment terms are

typically based on either specific contractual milestones or

progress of work performed. In maintenance contracts

customers generally pay based on fixed payment schedules.

When customer contracts contain multiple performance

obligations, the transaction price is allocated to each

performance obligation based on the standalone selling

prices. Where these are not directly observable, they are

estimated based on estimated costs plus margin approach .

2.1 Sales

Due to KONE’s business model, the nature of its operations

and its governance structure, KONE has one operating

segment.

KONE’s customer base consists of a large number of

customers in several market areas with no significant

customer concentration. In 2024, the single biggest customer,

residing in China, generated 0.5% of total revenue.

Sales by business,	Jan 1–Dec 31,		Jan 1–Dec 31,
MEUR	2024	%	2023	%
New Building Solutions	4,506.9	41	4,921.5	45
Service	4,503.6	41	4,127.0	38
Modernization	2,088.0	19	1,903.8	17
Total	11,098.4		10,952.3

Sales by Area,	Jan 1–Dec 31,		Jan 1–Dec 31,
MEUR	2024	%	2023	%
Americas	2,727.1	25	2,469.4	23
Europe	4,233.8	38	4,000.7	37
APMEA	1,609.3	14	1,470.9	13
Greater China	2,528.2	23	3,011.3	27
Total	11,098.4		10,952.3

Top 10 countries by sales, %

21% 21%

3% 3% 3% 3%

1. China

2. USA

3. Germany

4. France

5. Great Britain

6. Italy

7. India

8. Australia

9. Canada

10. Finland

91 KONE Annual Review 2024

Consolidated financial statements | Notes to the consolidated financial statements | Financial performance

2.2 Costs and expenses

The majority of expenses of operations arise from direct

materials and supplies, as well as cost of subcontracting.

Other production costs comprise of logistics, tools and

consumables, operative car fleet and traveling as well as

other miscellaneous items of direct costs. Selling,

administrative and other expenses include costs related to

premises, consulting and external services, IT and traveling

as well as other miscellaneous administrative costs. Expense

arising from leases of low-value assets and short-term leases

amounted to EUR 13.0 (12.8) million in 2024.

In 2024, items affecting comparability amounted to EUR

54.0 million including EUR 36 million restructuring costs and

EUR 18 million expensed development costs as a result of

redirecting development activities in alignment with KONE's

new strategy. Majority of the items affecting comparability

pertain to the restructuring of China operations. In the

comparison period, items affecting comparability included

restructuring costs and a positive effect recognized on

completion of the sale of operations in Russia.

Other income comprises rental income, received grants,

interest on late payments including cancellation penalties,

gains on sale of fixed assets and scrap as well as other

miscellaneous income.

Accounting principles

Research and development costs

Research and development costs are typically expensed

as they incur, because the future economic benefits of

new products and development of existing products and

services can only be proven after their successful

introduction to the market. In 2024, KONE has continued

capitalizing development costs specific to two programs .

Cost and expenses,
MEUR	Note	Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
Direct materials, supplies and subcontracting		3,947.5	4,168.4
Wages, salaries, and other employment expenses including pensions	5.6	3,907.0	3,656.1
Other production costs		882.4	885.9
Selling, administrative and other expenses		806.0	774.0
Items affecting comparability		54.0	48.3
Depreciation and amortization	2.3	292.2	269.4
Costs, expenses, depreciation and amortization		9,889.1	9,802.2
Other income		39.6	50.0
Total costs, expenses, depreciation and amortization		9,849.5	9,752.2

Research and development costs,
MEUR or as indicated		Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
R&D costs included in total costs		203.6	185.0
As percentage of sales	%	1.8	1.7

Auditors' fee,
MEUR	Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
Audit (to member firms of Ernst & Young network)	4.3	3.9
Auditors' statements	0.0	-
Tax services	0.4	0.6
Other services	1.7	0.7
Total	6.3	5.2

92 KONE Annual Review 2024

Consolidated financial statements | Notes to the consolidated financial statements | Financial performance

Accounting principles

Depreciation and amortization Depreciation and amortization are recorded on a straight- line basis over the economic useful lives of the assets, or over the lease contract periods, when applicable, if shorter. Economic useful lives:
Customer-related intangibles	10–15 years
Other intangible assets	3–10 years
Buildings	5–40 years
Machinery and equipment	2–15 years
Land	Infinite

2.3 Depreciation and amortization

Depreciation and amortization,
MEUR	Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
Intangible assets:
Customer-related intangibles	46.7	47.0
Other Tangible assets:	11.5	10.3
Buildings	81.6	80.7
Machinery and equipment	152.4	131.4
Total	292.2	269.4

93 KONE Annual Review 2024

Consolidated financial statements | Notes to the consolidated financial statements | Financial performance

2.4 Foreign exchange sensitivity

Foreign exchange risks

KONE operates internationally and is thus exposed to risks

arising from fluctuations in foreign exchange rates related to

currency flows of revenues and expenses (transaction risk)

and from the translation of statement of income and statement

of financial position of the foreign subsidiaries from respective

functional currencies into euros (translation risk).

Transaction risks

A substantial part of KONE’s operations is denominated in

local functional currencies of the subsidiaries and do not

therefore give rise to transaction risk. The sales of New

Building Solutions and Modernizations, including installation,

typically take place in the local currency of the customer.

Component and material expenses may occur in other

currencies than the sales currency, which exposes KONE to

transaction risks. KONE policy is to substantially hedge the

foreign exchange exposure of firm commitments and other

highly probable future sales and purchases with foreign

exchange forward contracts. The business units are

responsible for evaluating and hedging the transaction risks in

their operations according to the KONE treasury policy. The

most significant transaction risk exposures arising from

business operations are in the Chinese yuan, Canadian dollar,

Australian dollar, United Arab Emirates dirham, and British

pound. The majority of the currency forward contracts expire

within one year.

Hedge accounting is applied in business units, where

there are significant revenues or expenses in foreign

currency. When hedge accounting is applied, the gains and

losses from the hedges are recognized in the statement of

income at the same time as the exchange rate gains and

losses for the hedged items are recognized.

The financial assets and liabilities of KONE subsidiaries

are in the local currencies of the subsidiaries whenever

possible. In case a subsidiary company has a financial asset

or liability in other than its local currency, these assets and

liabilities are hedged with foreign exchange forward contracts

whenever possible and required by the KONE Treasury

Policy.

KONE’s internal loans and deposits are primarily initiated

in the local currencies of the subsidiaries in which case the

possible foreign exchange risks are hedged, by the parent

company, using foreign exchange swap contracts.

Foreign exchange risk sensitivity analysis of

financial assets and liabilities

The foreign exchange risk sensitivity analysis for the most

important currency pairs has been calculated for the KONE

companies’ foreign currency denominated financial assets

and liabilities, including foreign exchange forward contracts

outstanding at the statement of financial position date. The

order book or forecasted cash flows are not included. The

exposures in the most important currency pairs are disclosed

in the table below.

Sales by currency 1–12/2024

Accounting principles

Foreign currency transactions and translation

The items included in the financial statements are initially

recognized in the functional currencies, which are defined

for each group subsidiary based on their primary

economic environment.

The presentation currency of the financial statements

is the euro, which is also the functional currency of the

parent company.

The initial recognition of transactions denominated in

foreign currencies in the functional currency takes place

at the rate of exchange prevailing at the date of the

individual transaction. Foreign currency denominated

receivables and liabilities are translated using period end

exchange rates.

Foreign exchange gains and losses related to

business transactions are treated as adjustments within

operating income. Foreign exchange gains and losses

associated with financing transactions are included in

financing income and expenses.

The statements of income of foreign subsidiaries,

whose functional currency is not the euro, are translated

into euros based on the average exchange rate of the

accounting period. Items in the statement of financial

position, with the exception of net income for the

accounting period, are translated into euros at the closing

date exchange rates. Exchange rate differences arising

from net investments and associated companies in non-

euro currency subsidiaries, as well as the exchange rate

differences resulting from translating income and

expenses at the average rates and assets and liabilities

at the closing rate, are recorded in translation differences

within equity.

Respective changes during the period are presented

in other comprehensive income. Exchange rate gains and

losses resulting from financial instruments designated as

hedges of net assets in foreign subsidiaries have been

recognized as translation differences in other

comprehensive income. The cumulative translation

differences related to foreign operations are reclassified

from equity to statement of income upon the disposal of

the foreign operation .

Foreign currency exposure related to foreign currency denominated balance sheet items and derivatives,
MEUR						Against EUR				Against USD				Against CNY
	HKD GBP SEK			USD CNY		JPY Others		Total	CAD CNY Others			Total	USD SGD Others			Total
Dec 31, 2024	-331	-80	-66	-38	-24	93	-42	-487	-88	-	-4	-93	-303	-62	-128	-493
Dec 31, 2023	-441	-90	-79	-72	73	95	-10	-523	-94	88	-10	-17	-	-55	-123	-178

94 KONE Annual Review 2024

Consolidated financial statements | Notes to the consolidated financial statements | Financial performance

The foreign exchange risk sensitivity analysis presents the

impact of a change in the foreign exchange rates of 10

percent on net income and on equity at the statement of

financial position date. Changes in the equity are mainly

caused by foreign exchange forwards designated in cash flow

hedge accounting. The sensitivity analysis is calculated before

taxes. A 10% change in the foreign exchange rates

(strengthening of the euro, Chinese yuan and US dollar) at the

statement of financial position date would have resulted in an

impact of EUR -72.1 (-31.7) million on the net income and an

impact of EUR 164.1 (103.4) million on equity.

Translation risks

Changes in consolidation exchange rates affect KONE’s

statement of income, statement of cash flows and statement

of financial position, which are presented in euros. As

approximately 73% of KONE’s revenues occur in functional

currencies other than euro, the translation risk is significant for

KONE. A change of 10% in the annual average foreign

exchange rates would have caused a 7.3% (7.4%) change in

2024 consolidated sales in euros. Such a change would have

had a higher impact on KONE’s operating income and

therefore also some impact on KONE’s relative operating

income. The translation of the subsidiaries’ balance sheets

into euros caused translation differences of EUR 78.4 (-96.2)

million in 2024. The translation risk is not hedged as a rule as

KONE’s business consists of continuous operations in various

currency areas. However, in individual cases, KONE can also

hedge translation risk related to net assets of subsidiaries.

The most significant translation risk exposures arising from

business operations are in the Chinese yuan, US dollar,

British pound, Indian rupee and Australian dollar.

		Jan 1–Dec 31, 2024		Jan 1–Dec 31, 2023
Key exchange rates		Average rate	End rate	Average rate	End rate
Chinese yuan	EUR/CNY	7.7793	7.5833	7.6589	7.8509
US dollar	EUR/USD	1.0826	1.0389	1.0816	1.1050
British pound	EUR/GBP	0.8469	0.8292	0.8702	0.8691
Indian rupee	EUR/INR	90.6243	88.9335	89.3371	91.9045
Australian dollar	EUR/AUD	1.6424	1.6772	1.6297	1.6263

Impact of 10% change in the annual average foreign
exchange rates
Impact on sales	Impact on operating
	income (EBIT)
	Higher impact on
7.3% change in	operating income as
consolidated sales in	compared to sales and
euros	some impact on relative
	operating income

95 KONE Annual Review 2024

Consolidated financial statements | Notes to the consolidated financial statements | Financial performance

2.5 Financing income and expenses

Financing income and expenses,
MEUR	Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
Dividend income ¹	0.0	5.4
Interest income:
Change in fair value of interest ²	26.2	19.4
Interest income on foreign exchange rate derivatives	0.0	2.2
Interest income on loan receivables and financial assets	15.2	17.9
Other financing income	1.6	0.2
Exchange rate gains ³	5.2	4.8
Financing income	48.3	50.0
Interest expenses:
Change in fair value of interest ²	-2.2	-
Interest expense on foreign exchange rate derivatives	-2.9	-
Interest expenses on other financial liabilities ⁴	-30.2	-25.3
Other financing expenses ⁵	-5.2	-5.5
Exchange rate losses ³	-2.5	-13.1
Financing expenses	-43.1	-43.9
Total	5.2	6.1

Primarily consists of dividend received from TELC in 2023. More information about TELC is available in note 5.4 Shares, deposits and other assets.

Change in fair value of interest includes EUR 25.4 (20.8) million relating to interest rate funds measured at fair value through the statement of income.

Exchange rate gains and losses include exchange rate differences on loans and other receivables of EUR -38.9 (55.7) million and fair value changes of

foreign exchange derivatives of EUR 41.6 (-64.0) million.

Includes interest expenses on the lease liabilities amounting to EUR -23.4 (-15.8) million.

Includes

commitment

fees for undrawn revolving credit facilities EUR -0.8 (-0.7) million and banking charges and other expenses EUR -4.3 (-4.8) million.

96 KONE Annual Review 2024

Consolidated financial statements | Notes to the consolidated financial statements | Financial performance

2.6 Income taxes

Pillar 2 legislation entered into force in Finland on January 1,

2024. The Group has applied the mandatory exception to

recognizing and disclosing information about deferred tax

assets and liabilities arising from Pillar 2 income taxes. KONE

is in scope of this legislation and has performed an

assessment of its potential Exposure of Pillar 2 income taxes

taking into consideration the OECD “Transitional Safe

Harbour and Penalty Relief” for Pillar 2 purposes. Based on

the assessment, most of the jurisdictions in which the Group

operates fall under the Safe Harbour rules. The main

jurisdictions in which the potential exposure to top-up-tax exist

are in the Middle East. The assessment indicates the impact

in terms of potential top-up tax to be at the level of EUR 2.2

million.

Taxes in the statement of income,
MEUR	Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
Tax expense for current year	332.0	314.3
Change in deferred tax assets and liabilities	-47.1	-45.4
Tax expense for previous years	8.2	5.7
Total	293.1	274.6

Reconciliation of income before taxes with total income taxes in the statement of
income,
MEUR or as indicated		Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
Income before taxes		1,254.1	1,206.1
Tax calculated at the domestic corporation tax rate (20%)		250.8	241.2
Effect of different tax rates in foreign subsidiaries		17.0	6.5
Permanent differences		-3.7	3.9
Taxes from previous years and reassessment of deferred tax assets		11.7	-3.5
Deferred tax liability on undistributed earnings		13.6	23.6
Other		3.7	2.9
Total		293.1	274.6
Effective tax rate	%	23.4	22.8
Tax rate of parent company	%	20.0	20.0

Accounting principles

Income tax

The Group tax expense includes taxes of subsidiaries

based on taxable income for the period, together with tax

adjustments for previous periods and changes in deferred

taxes. Deferred taxes are provided for temporary

differences arising from difference between the tax bases

of assets and liabilities and their carrying amounts in

financial reporting and measured with enacted tax rates.

Typical temporary differences arise from provisions,

depreciation and amortization, inter-company inventory

margins, defined benefit type post-retirement plans and tax

losses carried forward. Deferred tax assets on unused tax

losses and other temporary differences are recognized to

the extent it is probable that taxable profit is available to

offset losses in the future.

A deferred tax liability is recognized on the undistributed

profits of subsidiaries where such tax is applicable, and it is

expected to realize in the foreseeable future.

The positions taken in tax returns are evaluated

periodically by the management to identify situations in

which applicable tax regulation is subject to interpretation.

Based on the evaluation, adjustments for the uncertain tax

positions are recognized when it is considered more likely

than not that certain tax positions will be challenged by the

tax authorities. The amounts recorded are based upon the

estimated final taxes to be paid to the tax authorities .

97 KONE Annual Review 2024

Consolidated financial statements | Notes to the consolidated financial statements | Financial performance

2.7 Earnings per share

Accounting principles

Earnings per share

The basic earnings per share figure is calculated by

dividing the net income attributable to the shareholders of

the parent company by the weighted average number of

shares outstanding during the year. Diluted earnings per

share is calculated by adjusting the weighted average

number of shares by the effect of potential diluting shares

due to share-based incentive plans of the Group. KONE

has two classes of shares that are both included in the

calculation of earnings per share .

Earnings per share,
MEUR or as indicated		Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
Net income attributable to the shareholders of the parent
company		951.3	925.8
Weighted average number of shares	1,000 shares	517,501	517,217
Basic earnings per share	EUR	1.84	1.79
Dilution effect of share-based incentive plans	1,000 shares	514	378
Weighted average number of shares, dilution adjusted	1,000 shares	518,014	517,595
Diluted earnings per share	EUR	1.84	1.79

98 KONE Annual Review 2024

Consolidated financial statements | Notes to the consolidated financial statements | Financial performance

2.8 Other comprehensive income

Components of other comprehensive income,
MEUR	Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
Translation differences	78.4	-96.2
Hedging of foreign subsidiaries	-12.8	15.9
Changes in fair value	-1.6	-23.8
Remeasurements of employee benefits	-10.7	-17.2
Cash flow hedges:
Gains/losses incurred during the year	8.0	-12.7
Reclassifications included in profit or loss	-11.7	-7.4
Cash flow hedges, net	-3.8	-20.1
Income tax relating to components of other comprehensive income	2.1	2.0
Total other comprehensive income, net of tax	51.6	-139.5

Tax effects relating to components of other		Jan 1–Dec 31, 2024			Jan 1–Dec 31, 2023
comprehensive income,	Gross Tax expense/		Net of tax	Gross Tax expense/		Net of tax
MEUR	amount	benefit	amount	amount	benefit	amount
Translation differences	78.4	-	78.4	-96.2	-	-96.2
Hedging of foreign subsidiaries	-12.8	-	-12.8	15.9	-	15.9
Cash flow hedges	-3.8	0.1	-3.7	-20.1	2.0	-18.1
Items that may be subsequently reclassified
to statement of income	61.8	0.1	61.9	-100.5	2.0	-98.4
Changes in fair value	-1.6	-	-1.6	-23.8	-	-23.8
Remeasurements of employee benefits	-10.7	2.0	-8.7	-17.2	0.0	-17.2
Items that will not be reclassified to statement
of income	-12.3	2.0	-10.3	-41.0	0.0	-41.0
Total other comprehensive income, net of tax	49.5	2.1	51.6	-141.5	2.0	-139.5

Consolidated financial statements | Notes to the consolidated financial statements | Net working capital

99 KONE Annual Review 2024

KONE’s net working capital

• Our business model enables us to operate with negative

net working capital

• KONE operates with advance payments across

businesses and Areas

Net working capital,
MEUR	Dec 31, 2024	Dec 31, 2023
Inventories	856.7	820.9
Advance payments received and deferred revenue	-2,016.9	-1,915.7
Accounts receivable	2,494.8	2,495.1
Deferred assets and income tax
receivables	812.5	759.7
Accruals and income tax payables	-2,131.0	-2,131.1
Provisions	-185.9	-196.9
Accounts payable	-982.9	-927.0
Other non-current assets	47.0	-
Net deferred tax assets/liabilities	278.4	233.9
Total	-827.2	-861.2

In this section

This section comprises the following notes, describing

components of KONE’s net working capital:

3.1 Inventories

3.2 Accounts receivable and contract assets and liabilities

3.3 Deferred assets

3.4 Accruals

3.5 Provisions

3.6 Deferred tax assets and liabilities

Consolidated financial statements | Notes to the consolidated financial statements | Net working capital

Net working

capital -827

MEUR

Net working capital

Cash flow from operations before financing items and taxes

Cash flow

1,589 MEUR

Consolidated financial statements | Notes to the consolidated financial statements | Net working capital

100 KONE Annual Review 2024

3.1 Inventories

Inventories,
MEUR	Dec 31, 2024	Dec 31, 2023
Raw materials, supplies and finished goods	364.2	360.7
Work in progress	476.7	441.5
Advance payments	15.9	18.7
Total	856.7	820.9

Accounting principles

Inventories

Inventories are valued at the lower of cost or net realizable

value. Raw materials and supplies are valued based on

weighted average cost method or at standard cost. Semi-

manufactures are valued at production costs.

Work in progress includes direct labor and material costs

as of the consolidated statement of financial position date

with a proportion of indirect costs related to manufacturing

and installation allocated to the firm customer order when

control has not yet transferred to the customer. Firm

customer orders are mainly fixed price contracts with

customers for the sale of new equipment or for the

modernization of old equipment.

An allowance is recorded for obsolete items based on

management’s estimate of expected net realizable value .

Consolidated financial statements | Notes to the consolidated financial statements | Net working capital

101 KONE Annual Review 2024

3.2 Accounts receivable and contract assets and

liabilities

Changes in contract assets and liabilities

The order book representing the unsatisfied performance

obligations with respect to new equipment and modernization

contracts stood at EUR 9,058.6 (8,715.7) million as at Dec 31,

2024. The majority of the order book is expected to be

recognized as revenue within the next 12 months from the

end of the reporting period. However, lead-times especially in

the long-term major projects are somewhat longer depending

on the size and complexity of the projects.

The changes in unbilled contract revenue, advance

payments received and deferred revenue follow the

developments in business but are also impacted by the

normal fluctuation in project progress when applying

percentage of completion method for recognition of revenue.

Deferred income on maintenance contracts represents the

unsatisfied part of transaction price invoiced for maintenance

contracts. Typically, this will be recognized as revenue within

the next 12 months from the end of the reporting period.

No material amounts of revenue were recognized during

the reporting period due to changes in transaction prices or

changes in estimates for performance obligations partially or

fully satisfied in previous years. There were no significant

impairment charges recognized during the reporting period for

the contract assets.

Customer credit risk management

Customer credit risks relate to advance payments receivable

from customers or to unbilled revenue and accounts

receivable related to equipment deliveries or to services

rendered. This risk is managed by defining the rules for

tendering, payment terms, authorizations and credit control as

well as project management controls. Advance payments,

documentary credits and guarantees are used in payment

terms to minimize customer credit risks. KONE proactively

manages its accounts receivable in order to minimize the risk

of customer defaults. KONE’s customer base consists of a

large number of customers in several market areas and

geographic split of receivables and contract assets well

mirrors distribution of sales. During the reporting period KONE

management has followed particularly closely the credit risks

related to Chinese developers .

Accounts receivable

Accounts receivable is recognized when the right to

consideration becomes unconditional and are measured at

amortized cost. For KONE’s new equipment and modernization

contracts, a receivable is typically recognized upon invoicing

when the goods are delivered and for KONE maintenance

contracts upon invoicing according to customer contract terms

and conditions.

KONE applies the expected credit loss model to assess

impairment loss for the doubtful accounts receivable since the

accounts receivable does not contain a significant financing

component. To measure the lifetime expected credit losses

trade receivables have been grouped based on shared credit

risk characteristics and aging category and measured based on

historical loss rates adjusted by forward looking estimates and

individual assessment. A final impairment loss is recognized

when receivership or bankruptcy is confirmed or when it is

otherwise obvious that the customer will be unable to meet its

payment obligations. Changes in impairment loss for doubtful

accounts receivable and final impairment losses are recognized

under cost and expenses in the consolidated statement of

income.

Unbilled contract revenue

Unbilled contract revenue relates to consideration for

performance obligations satisfied over time in KONE’s new

equipment and modernization contracts. It is recognized when

the revenue recognized exceeds the amounts billed to the

customer and receipt of transaction price is considered to be

conditional upon factors other than the passage of time.

Unbilled contract revenue is valued at net realizable value

and is classified as contract asset and presented under

deferred assets in the consolidated statement of financial

position. An impairment loss for contract assets is estimated

based on lifetime expected credit loss model and individual

analysis.

Deferred and accrued income on maintenance

contracts

When revenue recognized exceeds the amounts billed to

the customer, an accrued income on maintenance

contracts is recognized. It is stated at net realizable value

and classified as contract assets and presented under

deferred assets in the consolidated statement of financial

position. When the amounts billed to the customer exceed

the recognized revenue, deferred income on maintenance

contracts is recognized. These balances are classified as

contract liabilities and are presented under accruals in the

consolidated statement of financial position.

Advance payments received and deferred

revenue

Advance payments received and deferred revenue relates

to payments received in advance of performance or billing

in excess of revenue recognized under KONE’s new

equipment and modernization contracts. Advance

payments received and deferred revenue are recognized

as revenue as (or when) KONE performs under the

contracts and are classified as contract liabilities.

Other contract assets

Other contract assets consist of capitalized costs required

to fulfil future performance obligations under long-term

maintenance contracts. Such assets include for example

the capitalized cost of remote monitoring devices of

equipment in KONE's service base. The assets are valued

at amortized cost and depreciated over a period of three

years or over the underlying contract period, if shorter.

Accounting principles

Consolidated financial statements | Notes to the consolidated financial statements | Net working capital

102 KONE Annual Review 2024

The credit quality of advance payments receivable and

accounts receivable is evaluated according to KONE’s credit

policy. According to this policy, the rules for credit quality

evaluation are set separately for the new equipment business

and the service business. The credit quality is evaluated both

on the basis of the aging of the receivables as well as on the

basis of individual case by case customer analysis in order to

identify customers with a potentially higher credit risk due to

individual customer specific reasons. The bad debt provision

for the accounts receivable is recognized on the basis of this

credit quality evaluation using the expected credit loss model.

As at December 31, 2024, the gross amount of accounts

receivable totaled to EUR 2,953.6 (2,858.2) million. The

amount of bad debt provision recorded to cover doubtful

accounts was EUR 458.8 (363.1) million at the end of the

financial period. Most of the bad debt provision relate to the

oldest receivable aging category. Increase to comparison

period is reflecting increased uncertainties in the Chinese

markets.

Aging of accounts receivable,
MEUR	Dec 31, 2024	Dec 31, 2023
Not past due and less than one month due receivables	1,772.1	1,796.5
Past due 1–3 months	313.6	303.6
Past due 3–6 months	194.3	176.0
Past due > 6 months	214.8	219.0
Total	2,494.8	2,495.1

Assets and liabilities related to contracts with customer,
MEUR	Note	Dec 31, 2024	Dec 31, 2023
Accounts receivable		2,494.8	2,495.1
Accrued income on maintenance contracts	3.3	45.5	35.1
Unbilled contract revenue	3.3	346.3	337.7
Other contract assets	3.3	3.5	-
Assets related to contracts with customers		2,890.1	2,867.9
Deferred income on maintenance contracts	3.4	418.1	433.3
Advance payments received and deferred revenue		2,016.9	1,915.7
Liabilities related to contracts with customers		2,435.0	2,349.0

Consolidated financial statements | Notes to the consolidated financial statements | Net working capital

103 KONE Annual Review 2024

3.4 Accruals

Accruals,
MEUR	Note	Dec 31, 2024	Dec 31, 2023
Accrued interests		2.6	1.7
Deferred income on maintenance contracts	3.2	418.1	433.3
Late cost accruals ¹		212.0	261.3
Accrued salaries, wages and employment costs		625.8	583.8
Derivative liabilities	5.3	44.5	28.5
Value added tax liabilities		75.1	100.5
Accruals on acquisitions		26.7	29.1
Other accruals		581.8	555.3
Total		1,986.6	1,993.4

Includes accrual for invoices still pending to be received on completed New Building Solutions and Modernization contracts.

3.3 Deferred assets

Deferred assets,
MEUR	Note	Dec 31, 2024	Dec 31, 2023
Deferred interests		1.9	2.4
Accrued income on maintenance contracts	3.2	45.5	35.1
Unbilled contract revenue	3.2	346.3	337.7
Derivative assets	5.3	44.4	11.5
Value added tax assets		78.3	72.5
Prepaid expenses and other receivables		173.7	181.8
Other contract assets	3.2	3.5	-
Total		693.6	641.0

Consolidated financial statements | Notes to the consolidated financial statements | Net working capital

104 KONE Annual Review 2024

3.5 Provisions

Accounting principles

Provisions

Provisions are recognized when KONE has a current

legal or constructive obligation as a result of past

event, and it is probable that an outflow of resources

will be required to settle the obligation and a reliable

estimate of the amount of the obligation can be made.

Recognition and measurement of a provision

generally employs managerial estimates on the

probability and the amount of the liability.

Provisions for warranties cover the estimated

liability to repair or replace products still under

warranty at the statement of financial position date.

This provision is calculated based on historical

experience of levels of repairs and replacements.

Provision for claims is recognized when the claim

has been received and it is probable that it will be

settled, and the settlement amount can be estimated

reliably.

A provision for business restructuring is

recognized only when a detailed and formal plan has

been established, there is a valid expectation that

such a plan will be carried out and the plan has been

communicated.

Provisions for onerous (loss) contracts are

recognized when it is probable that the costs will

exceed the estimated total revenue or other income

arising from the contract. The probable loss is

recognized as an expense immediately.

Other provisions include for example provisions for

contractual and other obligations arising from

disputes, labor relations or other regulatory matters .

				Jan 1–Dec 31, 2024
			Provision for	Provision
Changes in provisions,	Provision	Provision	business	for loss	Other
MEUR	for warranty	for claims	restructuring	contracts	provisions	Total
Total provisions at beginning of period	74.0	8.2	26.4	48.3	40.0	196.9
Translation differences	1.1	0.0	0.5	1.2	0.6	3.3
Increase	16.9	2.9	26.9	50.5	20.4	117.6
Provisions used	-14.3	-2.0	-16.4	-46.1	-8.9	-87.7
Reversal of provisions	-14.0	-3.7	-6.2	-9.3	-12.2	-45.5
Companies acquired	0.0	0.2	0.3	0.0	0.9	1.4
Total provisions at end of period	63.6	5.5	31.4	44.5	40.9	185.9
of which non-current						42.0
of which current						143.9

				Jan 1–Dec 31, 2023
Changes in provisions,			Provision for	Provision
	Provision	Provision	business	for loss	Other
MEUR	for warranty	for claims	restructuring	contracts	provisions	Total
Total provisions at beginning of period	64.8	8.4	14.9	46.2	43.0	177.4
Translation differences	-2.1	-0.4	-0.2	-1.9	-1.0	-5.6
Increase	27.9	2.5	30.8	41.1	21.1	123.3
Provisions used	-15.8	-1.5	-15.9	-28.0	-5.5	-66.6
Reversal of provisions	-1.5	-1.2	-3.3	-9.3	-17.7	-33.0
Companies acquired	0.6	0.4	-	0.2	0.2	1.4
Total provisions at end of period	74.0	8.2	26.4	48.3	40.0	196.9
of which non-current						46.5
of which current						150.4

Consolidated financial statements | Notes to the consolidated financial statements | Net working capital

105 KONE Annual Review 2024

Accounting principles

Deferred taxes

Deferred taxes are provided for temporary differences

arising between the tax bases of assets and liabilities

and their carrying amounts in financial reporting and

measured with enacted tax rates. Typical temporary

differences arise from revenue recognition, provisions,

depreciation and amortization, inter-company

inventory margins, defined benefit type post-

retirement plans, lease contracts and tax losses

carried forward. Deferred tax assets on unused tax

losses and other temporary differences are

recognized to the extent it is probable that taxable

profit is available to take advantage of the asset in the

future.

A deferred tax liability is recognized on the

undistributed profits of subsidiaries where such tax is

applicable, and it is expected to realize in the

foreseeable future. Deferred tax assets and liabilities

are offset for presentation purposes when there is a

legally enforceable right to offset income tax

receivables against income tax payables and when

the deferred tax assets and liabilities relate to income

taxes levied by the same taxation authority .

3.6 Deferred tax assets and liabilities

Deferred tax assets by category,
MEUR	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022
Tax losses carried forward	2.5	1.2	1.1
Provisions and accruals	311.6	297.3	270.2
Post-retirement obligations	15.8	9.2	15.9
Inventory	32.5	30.0	23.9
Property, plant and equipment	14.0	13.3	13.2
Other temporary differences	103.3	87.3	90.0
Offset against deferred tax liabilities	-114.0	-118.1	-106.7
Total	365.7	320.2	307.5

Changes in deferred tax assets during the period,
MEUR	Dec 31, 2024	Dec 31, 2023
Total at beginning of period	320.2	307.5
Translation differences	7.3	-16.7
Change in statement of income	31.7	21.2
Charged or credited to equity	2.1	2.0
Acquisitions, divestments and other	4.5	6.1
Total at end of period	365.7	320.2

Deferred tax liabilities by category,
MEUR	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022
Property, plant and equipment	12.5	22.7	21.5
Goodwill and intangible assets	87.1	88.1	85.3
Other temporary differences	101.7	93.6	84.7
Offset against deferred tax assets	-114.0	-118.1	-106.7
Total	87.3	86.3	84.8

Changes in deferred tax liabilities during the period,
MEUR	Dec 31, 2024	Dec 31, 2023
Total at beginning of period	86.3	84.8
Translation difference	4.8	5.0
Change in statement of income	-15.4	-24.2
Acquisitions, divestments and other	11.6	20.8
Total at end of period	87.3	86.3
Net deferred tax assets and liabilities	278.4	233.9

Consolidated financial statements | Notes to the consolidated financial statements | Acquisitions and capital expenditure

106 KONE Annual Review 2024

Acquisitions and capital expenditure

• KONE’s business is capital light and labor-intensive in

nature, particularly in Service. On the New Building

Solutions side, we cooperate with many component

suppliers. As a result, the level of tangible and intangible

assets is relatively low in the business.

• Capital expenditure on leases consists mainly of

maintenance vehicles and office and warehouse facilities.

• Capital expenditure is mainly related to R&D, IT,

manufacturing, and service operations.

• KONE’s acquisitions in 2024 predominantly consisted of

service-related acquisitions in Europe.

In this section

This section comprises the following notes, which

describe acquisitions and capital expenditure at KONE:

4.1 Acquisitions and divestments

4.2 Goodwill

4.3 Other intangible assets

4.4 Tangible assets

Acquisitions and capital

expenditure

Consolidated financial statements | Notes to the consolidated financial statements | Acquisitions and capital expenditure

Acquisitions and

capex

523 MEUR

Number of

acquisitions

KONE´s capital expenditure 3.6% of sales in

2024

Consolidated financial statements | Notes to the consolidated financial statements | Acquisitions and capital expenditure

107 KONE Annual Review 2024

4.1 Acquisitions and divestments

Acquisitions

KONE completed 29 (25) acquisitions during 2024 for a total

consideration of EUR 125.6 (190.3) million. The acquired

businesses are specialized in the elevator, escalator and

automatic building door businesses and are predominantly

located in Europe. The acquisitions completed during the

financial period were not material individually or as a whole to

KONE’s 2024 financial statements. The sales consolidated

from the companies acquired during 2024 did not have a

material impact on KONE’s sales for the financial period. Of

the total consideration, based on provisional assessments,

EUR 67.8 million was allocated to customer-related

intangibles in other intangible assets. Acquired customer-

related intangibles are typically amortized over ten years.

Note 4.3 provides more detail on other intangible assets.

The fair values of the acquired net assets, based on a

provisional assessment, as well as the acquisition costs, are

summarized in the following table. The considerations were

paid for in cash, except for certain deferred considerations,

expected to be paid later. For most of the completed

acquisitions, the acquisition cost includes a contingent

consideration, which is typically determined by the financial

performance of the acquired business after the date of the

acquisition. Changes in the fair value of the contingent

consideration after the acquisition date are recognized in the

profit or loss. However, contingent considerations are typically

realized in the amount initially recognized. KONE acquired a

100% interest in all businesses acquired in 2024, with the

exception of four acquisitions.

Divestments and non-current assets held for sale

and discontinued operations

KONE completed the sale of its Russia operations to Russia-

based S8 Capital diversified Holding on October 23, 2023. On

completion of the sale in 2023, an income of EUR 8.5 million

was recognized following reclassification of cumulative

translation differences from other comprehensive income to

statement of income and reversal of remaining liabilities

related to sold operations.

Accounting principles

Acquisitions

Businesses acquired during the period have been combined

in the consolidated financial statements from the date when

Group has obtained control of the business and divested

businesses up to the date when control has ceased. The

acquisition consideration, including deferred and contingent

consideration, as well as the identifiable assets acquired,

and liabilities assumed, are measured at the acquisition

date fair values. The acquisition related costs are

recognized as expenses for the period in which they are

incurred.

At the acquisition date, any non-controlling interest is

measured either at the acquisition date fair value or at non-

controlling interest’s proportionate share in the recognized

amounts of the identifiable net assets.

Non-current assets held for sale and discontinued

operations

The Group classifies non-current assets and disposal

groups as held for sale if their carrying amounts will be

recovered principally through a sale transaction rather than

through continuing use. Non-current assets and disposal

groups classified as held for sale are measured at the lower

of their carrying amount and fair value less costs to sell .

Consolidated financial statements | Notes to the consolidated financial statements | Acquisitions and capital expenditure

108 KONE Annual Review 2024

Assets and liabilities of the acquired businesses,
MEUR	Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
Customer-related intangibles	67.8	109.0
Other intangible assets	0.1	0.1
Tangible assets	3.4	7.7
Deferred tax assets	1.0	6.1
Inventories	5.0	7.9
Accounts receivables and other assets	18.3	20.2
Cash and cash equivalents	4.4	8.7
Total assets	100.0	159.7
Employee benefit liabilities	0.7	0.7
Interest-bearing loans	0.5	4.9
Provisions	1.4	1.4
Deferred tax liabilities	11.6	20.8
Other liabilities	15.1	23.6
Total liabilities	29.3	51.3
Net assets	70.2	108.4
Non-controlling interest	0.5	-
Acquisition cost paid in cash	106.7	168.5
Contingent and deferred consideration	18.8	21.8
Acquisition cost at date of acquisitions	125.6	190.3
Goodwill	55.4	82.0

Changes in the acquisition cost occurring after the acquisition date and recognized in the statement of income totaled EUR -0.2

(0.6) million.

Consolidated financial statements | Notes to the consolidated financial statements | Acquisitions and capital expenditure

109 KONE Annual Review 2024

4.2 Goodwill

Goodwill allocation

For the purposes of impairment testing, goodwill is allocated

to cash-generating units (CGUs). A cash generating unit is

typically the country unit in which the acquired business

operates in accordance with KONE’s business model and

organization structure. As at Dec 31, 2024 the carrying

amount of goodwill tested for impairment is allocated to 20

different CGUs. The number of CGUs remained at the same

level compared to 2023. The five largest CGUs carry 78% of

the goodwill. The carrying amount of goodwill is below EUR

10 million for seven CGUs. The geographical allocation of

goodwill and the weighted average discount rates are

presented in the adjacent table.

Impairment testing

The value-in-use calculations have been prepared utilizing

cash flow projections that are based on CGU specific financial

estimates approved by the Group management. The explicit

forecast period covers the following three years for each

CGU.

Key parameters underlying the cash flow projections

include assumptions on business growth, sales price and cost

development. These assumptions embedded in the CGU

specific cash flow projections are based on management

assessment of the market demand and environment, which

are examined against external information sources. The

productivity and efficiency assumptions are based on internal

targets, which are evaluated against actual performance. The

cash flows for subsequent terminal year are assumed

prudently without growth, except as stated below.

The discount rates are based on the risk-free interest

rates, risk factors (beta coefficient) and market risk premiums

available on financial markets. The value-in-use calculations

are validated against KONE’s market capitalization.

As a result of the annual impairment test, no goodwill

impairment losses were recognized during the accounting

period.

The impairment testing process includes a sensitivity

analysis in which the CGU specific cash flow estimates were

reduced by 10–40 percent and the discount rates were

increased by 1–4 percentage points. With the terminal growth

set at zero, the results are most sensitive for changes in the

cash flows. Based on the sensitivity analysis, the probability

for material impairment losses was very low in all CGUs. First

Accounting principles

Goodwill

Acquisitions are accounted for using the acquisition method.

Goodwill is calculated as the excess of acquisition cost over

the fair values of identified net assets acquired. Goodwill

typically represents the value of the acquired market share,

business knowledge and the synergies obtained in

connection with the acquisition. The carrying amount of

goodwill is not amortized but is annually tested for

impairment.

Impairment testing

The Group assesses the carrying amount of goodwill

annually or more frequently if any indication of impairment

exists. Goodwill is allocated to the cash generating units

(CGUs) of the Group, which are identified according to the

country of operation and business area at the level at which

goodwill is monitored for internal management purposes. The

recoverable amount of a CGU is determined by value-in-use

calculations. In assessing the recoverable amount, estimated

future cash flows are discounted to their present value. Cash

flow estimates are based on management’s estimates. The

discount rate is the weighted average cost of capital (WACC)

for the main currency area in the location of the CGU (country

or business area), which reflects the market assessment of

the time value of money and the risks specific in KONE’s

business.

Any impairment loss of goodwill is recognized immediately

as an expense and is not subsequently reversed .

Goodwill by Area,			Discount rates used			Discount rates used
MEUR	Dec 31, 2024	%	(pre-tax), %	Dec 31, 2023	%	(pre-tax), %
Americas	383.4	25	11.23	362.5	25	10.19
Europe	924.1	59	8.90	867.8	59	8.17
APMEA	64.6	4	10.77	58.8	4	9.96
Greater China	186.2	12	8.60	179.9	12	9.72
Total	1,558.4

1,469.0

Changes in goodwill,
MEUR	Note	Dec 31, 2024	Dec 31, 2023
Opening net book value		1,469.0	1,414.7
Translation differences		34.0	-27.6
Companies acquired	4.1	55.4	82.0
Closing net book value		1,558.4	1,469.0

Consolidated financial statements | Notes to the consolidated financial statements | Acquisitions and capital expenditure

110 KONE Annual Review 2024

immaterial impairment loss would take place in two CGUs if

the CGU specific cash flow estimates would be reduced by

20% or discount rates increased by +2 percentage points.

Assumptions specific to China local second brand CGU have

been kept on a revised level as per last year with the

operating environment largely remaining the same. In the

base scenario, the terminal growth for China local second

brand CGU is determined as 2% and discount rate as 8,6%.

Headroom between value in use and assets employed with

the base scenario has increased in this CGU and there is no

reasonable scenario that would lead to recognition of

impairment. Immaterial impairment would be recognized in the

most conservative sensitivity scenario. Fair value less cost to

sell analysis has been prepared for the CGU to validate the

outcome from value in use analysis. This analysis supports

the recoverable value provided by the base scenario. On

December 31, 2024, goodwill carried by respective CGU

amounts to EUR 185.3 million.

Under the basic scenario for other CGUs, the value-in-use

calculations were on average 7.6 times higher than the value

of CGUs’ assets employed. The respective ratio for the five

largest CGUs was 6.8; for the five smallest 18.9 and

respectively for the other CGUs 8.6.

Consolidated financial statements | Notes to the consolidated financial statements | Acquisitions and capital expenditure

111 KONE Annual Review 2024

4.3 Other intangible assets

KONE often acquires elevator, escalator, and door service

companies, where the excess of consideration transferred

over the net assets of the acquiree as at closing is allocated to

the acquired customer-related intangibles, and consequently

majority of intangible assets carried consist of these customer

contract assets. Intangible assets also include expenditure on

acquired patents, trademarks and licenses, development

expenditure related to certain software as well as acquired

software licenses.

Accounting principles

Intangible assets

Intangible assets that are acquired separately are initially

measured at cost. These assets are amortized on a

straight-line basis over their expected useful lifetime, which

does not usually exceed five years. The customer-related

intangibles are recognized at acquisition date fair values

and are amortized over their useful economic lives,

typically ten years.

Impairment of assets

The carrying amounts of non-current intangible assets and

tangible assets are reviewed for impairment at each

reporting date or whenever there is indication of that the

carrying value of the asset may not be recoverable.

Impairment test involves estimating the recoverable

amount of the asset, subject to testing. The recoverable

amount is the higher of the asset’s fair value less cost of

disposal and the value in use. An impairment loss is

recognized in the statement of income whenever the

carrying amount exceeds the recoverable amount.

A previously recognized impairment loss is reversed

only if there has been a significant change in the estimates

used to determine the recoverable amount, but not,

however, to an amount higher than the carrying amount

that would have been determined without the impairment

loss recognized in prior years, deducted by accumulated

depreciation .

Other intangible assets,		Customer-related	Jan 1–Dec 31, 2024
MEUR	Note	intangibles	Other	Total
Opening gross acquisition cost		612.9	279.1	892.0
Opening accumulated amortization and impairment		-372.3	-232.5	-604.8
Opening net book value		240.6	46.6	287.2
Changes during the period
Translation differences		2.1	0.4	2.5
Increase		3.0	36.8	39.8
Decrease		-3.0	-2.8	-5.7
Reclassifications		-	-0.2	-0.2
Companies acquired	4.1	67.8	0.1	67.9
Amortization		-46.7	-11.5	-58.2
Closing net book value		263.8	69.5	333.3
Closing gross acquisition cost		682.8	308.4	991.2
Closing accumulated amortization and impairment		-419.0	-238.9	-657.9
Closing net book value

263.8

69.5

333.3

Other intangible assets,		Customer-related	Jan 1–Dec 31, 2023
MEUR	Note	intangibles	Other	Total
Opening gross acquisition cost		501.6	256.2	757.8
Opening accumulated amortization and impairment		-325.4	-224.2	-549.6
Opening net book value		176.3	31.9	208.2
Changes during the period
Translation differences		-1.2	-1.2	-2.4
Increase		3.8	26.5	30.3
Decrease		-0.4	-0.4	-0.8
Reclassifications		-	0.1	0.1
Companies acquired	4.1	109.0	0.1	109.1
Amortization		-47.0	-10.3	-57.3
Closing net book value		240.6	46.6	287.2
Closing gross acquisition cost		612.9	279.1	892.0
Closing accumulated amortization and impairment		-372.3	-232.5	-604.8
Closing net book value		240.6	46.6

287.2

Consolidated financial statements | Notes to the consolidated financial statements | Acquisitions and capital expenditure

112 KONE Annual Review 2024

4.4 Tangible assets

Accounting principles

Property, plant and equipment

Property, plant and equipment are measured at cost less

accumulated depreciation and any impairment losses, when

applicable. Depreciation is recognized on a straight-line

basis over the economic useful lives of the assets or over

the lease contract period, if shorter. Economic useful lives

are as follows:

Buildings

Machinery and equipment

Land

5–40 years

2–15 years

Infinite

Expenditure on repairs and maintenance of property, plant

and equipment is recognized as expense when incurred.

The carrying amount of any tangible asset is impairment

tested (see impairment of assets accounting principles)

when an indication of impairment exists.

Leases

As a lessee, KONE recognizes a right-of-use asset

representing its right to use the underlying asset and a

lease liability representing its obligation to make lease

payments, amounting to the present value of the future

lease payments. The value of right-of-use asset

corresponds the value of future lease payments at the

inception of the lease, discounted with the incremental

borrowing rate.

Right-of-use assets are depreciated over the contract

period or over the useful life of the asset, which is the

shorter. An option to extend or terminate the lease contract

is included to the lease period when exercising such option

is considered highly probable. The cost arising from short-

term leases and leases of low value assets are recognized

as an expense on a straight-line basis over the contract

period .

							Jan 1–Dec 31, 2024
						Machinery	Leased Fixed assets
Tangible assets,				Leased		& machinery &	under	Advance
MEUR	Note	Land Buildings		buildings	equipment	equipment	construction	payments	Total
Opening gross acquisition cost		5.9	350.9	435.6	750.8	280.4	50.5	3.6	1,877.8
Opening accumulated depreciation		-	-173.1	-243.3	-547.3	-134.3	-	-	-1,098.1
Opening net book value		5.9	177.8	192.3	203.5	146.0	50.5	3.6	779.7
Changes during the period
Translation differences		0.0	3.3	4.1	4.1	4.0	-0.6	0.0	14.9
Increase		-	15.3	72.3	62.2	159.9	48.9	1.7	360.2
Decrease		0.0	-0.4	-9.8	-2.9	-6.5	-5.8	-0.4	-25.9
Reclassifications		-	30.7	0.5	18.7	0.0	-46.9	-2.8	0.2
Companies acquired	4.1	-	0.2	0.7	2.4	0.1	-	0.0	3.4
Depreciation		-	-16.7	-64.9	-69.3	-83.1	-	-	-234.0
Closing net book value		5.9	210.1	195.3	218.7	220.4	46.1	2.1	898.5
Closing gross acquisition cost		5.9	402.4	486.1	806.4	376.4	46.1	2.1	2,125.4
Closing accumulated depreciation		-	-192.3	-290.8	-587.7	-156.1	-	-	-1,226.9
Closing net book value		5.9	210.1	195.3	218.7	220.4	46.1	2.1	898.5

During the period of Jan 1–Dec 31, 2024, capital expenditure totaled to EUR 397.0 (322.4) million, consisting of investments

into production facilities, installation equipment, R&D tools, patents and licenses and expenditure on two development

programs, as well as new assets recognized for lease agreements. Capital expenditure on leases consists mainly of

maintenance vehicles and office facilities.

Lease payments in cash flow totaled to EUR -138.3 (-124.5) million.

Consolidated financial statements | Notes to the consolidated financial statements | Acquisitions and capital expenditure

113 KONE Annual Review 2024

							Jan 1–Dec 31, 2023
						Machinery	Leased Fixed assets
Tangible assets,				Leased		& machinery &	under	Advance
MEUR	Note		Land Buildings	buildings	equipment	equipment		construction payments		Total
Opening gross acquisition cost		5.9	336.7	403.6	714.2	249.5	25.3	1.6	1,736.9
Opening accumulated depreciation		-	-164.6	-212.8	-515.9	-126.7	-	-	-1,020.0
Opening net book value		5.9	172.1	190.8	198.3	122.8	25.3	1.6	716.8
Changes during the period
Translation differences		0.0	-5.7	-4.7	-5.9	-2.1	-0.6	-0.3	-19.2
Increase		-	16.7	72.0	68.6	89.1	45.4	4.0	295.9
Decrease		0.0	-0.8	-4.0	-1.6	0.0	-2.7	-0.2	-9.2
Reclassifications		-	10.3	0.0	8.6	0.0	-16.9	-2.0	0.0
Companies acquired	4.1	-	0.0	4.0	2.3	0.9	-	0.4	7.7
Depreciation		-	-15.0	-65.7	-66.7	-64.7	-	-	-212.1
Closing net book value		5.9	177.8	192.3	203.5	146.0	50.5	3.6	779.7
Closing gross acquisition cost		5.9	350.9	435.6	750.8	280.4	50.5	3.6	1,877.8
Closing accumulated depreciation		0.0	-173.1	-243.3	-547.3	-134.3	0.0	0.0	-1,098.1
Closing net book value		5.9	177.8	192.3	203.5	146.0	50.5	3.6	779.7

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

114 KONE Annual Review 2024

KONE’s capital structure

• KONE’s cash position is strong due to the cash-

generative operating model including collection of

significant advance payments in the New Building

Solutions business

• KONE has not defined a specific target for its capital

structure, but the aim is to ensure strong credit quality to

provide for ample access to external funding sources to

support the growth ambitions of the business

Capital structure

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

Interest-bearing

net debt

-831 MEUR

Equity per

5.54 EUR

In this section

This section comprises the following notes, which

describe the capital structure of KONE:

5.1 Capital management

5.2 Shareholders’ equity

5.3 Financial risks and instruments

5.4 Shares, deposits and other assets

5.5 Commitments

5.6 Employee benefits

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

115 KONE Annual Review 2024

5.1 Capital Management

KONE aims to manage its capital in a way that supports the

profitable growth of operations by securing an adequate

liquidity and capitalization of the Group at all times. The target

is to maintain a capital structure that contributes to the

creation of shareholder value.

The assets employed in KONE’s business consist

principally of net working capital, fixed assets, and financial

investments which are funded by equity and net debt, as

shown in the adjacent table. Due to the business model and

the business processes of KONE, the level of total assets

employed is relatively low. KONE aims to maintain a negative

net working capital to ensure a healthy cash flow even when

the business is growing and to maintain a high return on

assets employed.

Cash flow from operations is the principal source of

KONE’s financing. External funding, as well as cash and

financial investments, are managed centrally by KONE

Treasury according to the KONE Treasury Policy. Financial

investments are made only with counterparties with high

creditworthiness and mainly in short term instruments to

ensure continuous liquidity.

KONE has not defined a specific target for its capital

structure, but the aim is to ensure strong credit quality to

provide for ample access to external funding sources and to

support the growth ambitions of the business. KONE

considers its current capital structure to be a strength, as it

allows for capturing potential value creating business

opportunities, should such opportunities arise. If deemed

necessary, KONE could also utilize its borrowing capacity,

which could result in a higher level of debt and financial

gearing for a period of time. At the end of 2024, the funding of

KONE was secured through existing committed credit

facilities, loan arrangements, cash, and financial investments.

KONE has not defined a specific target for dividends or

share buy-backs. The dividend proposal by the Board of

Directors is determined on the basis of the overall business

outlook, business opportunities, as well as the present capital

structure and the anticipated changes in it. In 2020–2024, the

dividend payout ratio has been 97.8%–124.0% for class B

shares (2024 proposal by the Board of Directors of KONE

Corporation). At the end of December 2024, KONE had

11,867,752 class B shares in its possession.

To ensure an efficient internal allocation and utilization of

its capital resources, KONE measures internally the financial

results of its business activities after a capital allocation

charge. The capital allocation charge is based on the assets

employed in the business activity and the weighted average

cost of capital (WACC).

The WACC is also used as a hurdle rate when evaluating

the shareholder value creation potential of new acquisitions,

major capital expenditure and other investments. The

valuation methods used are payback time, discounted cash

flow as well as earnings and cash flow multipliers.

Non-current assets by country,
MEUR	Dec 31, 2024	Dec 31, 2023
USA	602.1	501.2
China	457.9	434.7
Germany	377.8	329.3
Spain	276.2	258.9
France	221.9	198.0
Finland	219.2	194.6
Other	1,166.1	1,050.1
Total	3,321.2	2,966.8

Capital management,
MEUR	2024	2023	2022	2021	2020
Assets employed
Goodwill and shares	1,657	1,567	1,536	1,550	1,470
Tangible and other intangible assets	1,232	1,067	925	954	933
Net working capital	-827	-861	-904	-1,468	-1,160
Total assets employed	2,062	1,773	1,557	1,035	1,243
Capital employed
Equity	2,893	2,786	2,867	3,199	3,197
Interest-bearing net debt	-831	-1,013	-1,309	-2,164	-1,954
Total capital employed	2,062	1,773	1,557	1,035	1,243
Gearing	-28.7%	-36.4%	-45.7%	-67.6%	-61.1%
Equity ratio	39.8%	40.9%	40.3%	41.2%	45.5%

Change in interest-bearing net debt,
MEUR	Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
Interest-bearing net debt at beginning of period	-1,013.4	-1,309.0
Interest-bearing net debt at end of period	-831.2	-1,013.4
Change in interest-bearing net debt	182.2	295.7

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

116 KONE Annual Review 2024

5.2 Shareholders’ equity

Shares and share capital

At the end of the 2024 financial year, the number of shares

outstanding was 529,395,860. The share capital was EUR

66.2 million and the total number of votes was 121,527,427.

Each class A share is assigned one vote, as is each block of

10 class B shares, with the provision that each shareholder is

entitled to at least one vote. The accounting par value of both

classes of shares is EUR 0.125.

At the end of the financial year, the Board of Directors of

KONE Corporation had a valid authorization granted by the

Annual General Meeting in February 2024 to increase the

share capital and to issue stock options. The authorization

remains in effect until the conclusion of the following annual

general meeting, however at the latest until June 30, 2025.

In accordance with the Articles of Association, class B

shares are preferred for a dividend which is at least 1% and

no more than 2.5% higher than the dividend paid to the

holders of class A shares, calculated based on the amount

obtained by dividing the share capital entered into the Trade

In 2024 or 2023 there were no changes in the share

capital of KONE Corporation.

Authority to buy own shares

KONE Corporation’s Annual General Meeting held on

February 29, 2024 authorized the Board of Directors to

repurchase the company’s own shares Altogether no more

than 52,930,000 shares may be repurchased, of which no

more than 7,620,000 may be class A shares and 45,310,000

class B shares.

The minimum and maximum consideration for the shares

to be purchased is determined for both class A and class B

shares on the basis of the trading price for class B shares

determined on the Nasdaq Helsinki Ltd. on the time of

purchase.

All treasury shares at the end of the reporting period

consisted of B class shares.

Accounting principles

Equity and profit distribution

The total shareholders’ equity consists of the share capital,

the share premium account, the fair value and other

reserves, translation differences, the paid-up unrestricted

equity reserve, remeasurements of employee benefits and

retained earnings. The fair value and other reserves

include changes in the fair value of cash flow hedges.

Differences arising from the application of the acquisition

method on the translation of the net investment in foreign

subsidiaries and associated companies are recognized as

translation differences. Exchange rate differences resulting

from financial instruments intended as hedges of the net

assets in foreign subsidiaries are also recognized as

translation differences. Actuarial gains and losses arising

from revaluation of employee benefits are recognized as

remeasurements of employee benefits. The purchase price

of own shares purchased by KONE Corporation is

deducted from retained earnings. The net income for the

accounting period is recognized directly in retained

earnings.

When KONE Corporation purchases its own shares,

the consideration paid and costs directly attributable to the

purchase transaction are recognized as a deduction in

equity. When such shares are sold, the consideration

received, net of directly attributable transaction costs, is

included in equity.

Profit distribution includes dividends and donations

decided by the Shareholders’ Meeting. The dividend and

distribution of profits proposed by the Board of Directors of

KONE Corporation for the financial year ended, is not

deducted from the equity prior to acceptance by a

Shareholders’ Meeting .

For more information on share-based incentive

payments, please refer to section 6.2.

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

117 KONE Annual Review 2024

Treasury shares	Number of shares	Purchase cost, MEUR
Jan 1, 2024	12,159,159	230.2
Distributed to the share-based incentive plan, January	-280,902	-12.3
Distributed as the annual compensation of the Board, April	-9,027	-0.4
Distributed to the share-based incentive plan, December	-1,478	-0.1
Dec 31, 2024	11,867,752	217.5
Jan 1, 2023	12,306,640	236.6
Distributed to the share-based incentive plan, January	-121,084	-5.3
Distributed as the annual compensation of the Board, April	-7,912	-0.3
Distributed to the share-based incentive plan, June	-18,485	-0.8
Dec 31, 2023	12,159,159	230.2

Reconciliation of own shares	Quantity
December 31, 2023	12,159,159
January 31, 2024	-280,902
April 25, 2024	-9,027
December 3, 2024	-1,478
December 31, 2024	11,867,752

Purchase cost, MEUR

Average price, EUR

230.2

18.93

-12.3

43.81

-0.4

44.15

-0.1

44.15

217.5

18.32

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

118 KONE Annual Review 2024

5.3 Financial risks and instruments

KONE’s business activities are exposed to financial risks

such as foreign exchange risks, interest rate risks,

liquidity risks and credit risks. These financial risks are

managed as part of the total KONE risk portfolio. KONE

Treasury is responsible for the centralized management

of financial risks in accordance with the KONE Treasury

Policy approved by the Executive Board. KONE business

units manage their financial risks locally in accordance

with the KONE Treasury Policy.

Financial credit risk

KONE has substantial amounts of cash and financial

investments. In order to diversify the financial credit risk

and manage liquidity risk, funds are invested into highly

liquid interest rate funds and deposits with several banks.

All open exposures such as cash on bank accounts,

investments, deposits and other financial assets, for

example derivatives contracts, are included when

measuring the financial credit risk exposure. When

selecting counterparty banks and other investment

targets, only counterparties with high creditworthiness are

approved. The size of each limit reflects the

creditworthiness of the counterparty. Counterparty

creditworthiness is evaluated constantly and the required

actions are considered case by case if significant

changes in the creditworthiness of a counterparty occur.

The fair values of interest rate funds are measured based

on market information (fair value hierarchy level 2).

Refinancing and liquidity risks

KONE’s cash and cash equivalents was EUR 576.0

(424.5) million and financial investments EUR 1,221.9

(1,263.2) million on December 31, 2024.

Cash and financial investments are managed centrally

by KONE Treasury. Due to local regulations, part of the

funds resides in local investments and on decentralized

bank accounts in a number of KONE countries. A

substantial part of the funds is nevertheless accessible to

KONE Treasury. Changes in the local regulations can

also in the future have an impact on the location of the

cash and financial investments.

Accounting principles

Derivative financial instruments and hedge accounting

Derivative financial instruments are initially and subsequently

recognized at fair value in the statement of financial position. The

fair values of foreign exchange forward contracts are calculated

by discounting the future cash flows of the contracts with the

relevant market interest rate yield curves on the valuation date

and by calculating the difference between the discounted values

as at the forward contract date and balance sheet date in euros.

Currency options are valued as of each reporting date by using

the Garman & Kohlhagen option valuation model.

At the contract date the derivatives are classified according to

the foreign exchange policy as hedging instruments of a business

transaction arising from a firm or highly probable purchase or

sales contract. These are partly included in cash flow hedge

accounting, hedges against fair value changes of assets or

liabilities or hedges of net investments in foreign entities.

In cash flow hedge accounting KONE may use foreign

currency forward contracts and options to hedge its exposure in

foreign currency dominated cash flows which ensures economic

relationship between the hedged item and the hedging instrument

and full effectiveness as the value of the hedging instrument and

the value of the hedged item move in the opposite direction

because of the common underlying denominator. The full fair

value of derivatives, including transaction related forward points,

is designated in the hedging relationship.

The effective portion of changes in the fair values of the

foreign exchange, where hedge accounting is applied, is

recognized through the statement of comprehensive income to

the hedge reserve within equity. The cumulative changes of fair

values are transferred into the statement of income as adjustment

items to costs and expenses simultaneously when the hedged

sale or purchase realizes. When cash flow hedge accounting is

applied, at the inception of the hedging transaction the economic

relationship between hedging instruments and hedged items is

documented including whether the hedging instrument is

expected to offset changes in cash flows of hedged items. Also,

the risk management objective and strategy for undertaking

various hedge transactions is documented at the inception of

each hedge relationship. Hedge effectiveness is assessed before

hedge accounting is applied and at least on a quarterly basis

thereafter.

The gain or loss relating to the ineffective portion is recognized

immediately as an adjustment to cost and expenses. In hedges of

foreign currency transaction, ineffectiveness may arise if the

timing of the forecast transaction changes from what was

originally estimated. If a foreign exchange derivative included in

the cash flow hedge accounting expires or is sold or when a

hedge no longer meets the criteria for hedge accounting, the

cumulative change in the fair value of the hedging instrument will

remain in the hedge reserve and is recognized in the income

statement at the same time with the hedged sale or purchase.

The cumulative fair values of the hedging instruments are

transferred from the hedge reserve to adjust cost and expenses

immediately if the hedged cash flow is no longer expected to

occur.

The changes in the fair values of derivatives that are

designated as hedging instruments but are not accounted for

according to the principles of cash flow hedge accounting are

recognized based on their nature either in the operative income or

costs, or as financial income or expenses: if the hedged risk

arises from an operative transaction, the fair values of the hedging

instruments are recognized in costs and expenses, and if the

hedged item is a monetary item, the fair values are recognized in

financing items.

Changes in the fair values of foreign exchange derivatives are

recognized in financing income and expenses if the hedged item

is a loan receivable, deposit or a financial asset or liability

denominated in a foreign currency.

The effective portion of the change in the fair values of

currency forward contracts hedging translation differences arising

from net investments in foreign subsidiaries, are recognized

through the statement of comprehensive income to the translation

differences within equity and would be transferred to the income

statement in case the net investment were disposed of partially or

in its entirety. The hedged risk is designated as movements in the

spot rate (excluding changes due to interest rates i.e. forward

points). Changes in fair value of the hedging instrument due to the

forward points (cost of hedging) are immediately recognized in the

consolidated statement of income.

Fair values of derivative instruments are recognized under

current assets and liabilities in the balance sheet .

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

119 KONE Annual Review 2024

KONE has a fixed rate loan of EUR 200.0 (200.0) million

and a floating rate loan of EUR 200.0 (0.0) million from the

European Investment Bank (EIB) for R&D purposes. The fixed

rate loan will mature in 2026 and floating rate loan will mature

in 2031. The fair value of the loan is estimated based on

discounted cash flow method using a current borrowing rate

(level 2 fair value hierarchy) as the discount rate. KONE has

also an uncommitted commercial paper program of EUR

500.0 (500.0) million and a sustainability-linked revolving

credit facility of EUR 850.0 (850.0) million to ensure sufficient

liquidity. The sustainability targets included in the facility relate

to KONE’s decarbonization and gender diversity

commitments.

Interest rate risks

KONE’s cash and short-term investments were EUR 1,797.9

(1,687.7) million at the statement of financial position date. At

the same time, KONE’s interest-bearing debt was EUR 987.1

(687.8) million and consisted of EUR 834.2 (550.4) million of

financial debt including lease liabilities, EUR 9.2 (2.3) million

of option liabilities from acquisitions, and EUR 141.4 (132.9)

million of employee benefit liabilities. Additionally, KONE had

an asset on employee benefits of EUR 15.0 (9.2) million.

As KONE’s financial investments are mainly invested in

tenors of less than one year, changes in the interest rates do

not have any significant impact on their market values.

Changes in the interest rates may however impact future

interest income.

When calculating the interest rate sensitivity analysis, the

interest-bearing net financial debt, excluding foreign exchange

forward contracts, is assumed to remain on the level of the

closing balance of 2024 during the following financial period.

The sensitivity analysis presents the impact of a 1 percentage

point change in the interest rate level on the net interest

income for the financial period by taking into account the net

financial debt tied to interest periods of less than one year,

EUR -1,853.8 (-1,572.1) million. For 2024 a 1 percentage

point change in the interest rate level would mean a change of

EUR -18.5 (-15.7) million in net interest income. The interest

rate sensitivity is calculated before taxes.

A change in interest rates does not have a material impact

on the net interest on employee benefits, on financial debt or

option liabilities from acquisition.

Derivatives

Treasury policy for hedging purposes is applied to all

derivative contracts. The majority of the foreign exchange

derivatives and swaps mature within a year.

The fair values of foreign exchange derivatives and swaps

are measured based on price information derived from active

markets and commonly used valuation methods (fair value

hierarchy level 2). Financial contracts are executed only with

counterparties that have high credit ratings. The credit risk of

the counterparties and KONE is considered when assessing

the fair values of outstanding financial assets and liabilities.

The fair values of the derivatives are represented in the

balance on a gross basis and can be set off on conditional

terms such as breach of contract or bankruptcy. Derivative

financial receivables from counterparties after set off would be

EUR 9.2 (1.3) million and payables EUR 9.4 (18.3) million.

Loans and other interest-bearing liabilities

Loans and other interest-bearing liabilities in the consolidated

statement of financial position consist of loans, lease

liabilities, option liabilities from acquisitions and other

liabilities. KONE’s non-current lease liabilities were EUR

299.8 (238.3) million and current lease liabilities were EUR

132.8 (EUR 110.9) million at the statement of financial

position date.

Accounting principles

Loans

Loans payable are in the consolidated statement of financial

position presented as part of other financial liabilities. They are

measured initially at fair value net of directly attributable

transaction costs incurred and are subsequently carried at

amortized cost using the effective interest rate method. Lease

liabilities are measured to the present value of future lease

payments discounted with the incremental borrowing rate.

Lease liabilities

Lease liabilities are measured to the present value of future

lease payments discounted with the incremental borrowing rate.

Financial assets

Financial assets are classified into three categories: measured

at amortized cost, at fair value through other comprehensive

income (FVOCI) and at fair value through profit or loss.

The classification is made at the time of the original

acquisition based on the objective of the business model and

the characteristics of contractual cash flows of the investment.

KONE assesses on a forward-looking basis the expected

credit losses associated with its assets carried at amortized

cost. The impairment methodology applied depends on whether

there has been a significant increase in credit risk.

All of these financial assets are considered to have low credit

risk, and thus the impairment provision assessment is based on

12 months expected losses.

Current deposits and loans receivable

Current deposits and loans receivable are initially recognized at

fair value and thereafter at amortized cost using the effective

interest rate method except for interest rate funds which are

classified and measured as investments at fair value through

profit or loss. Only substantial transaction costs are considered

for when measuring the acquisition cost.

Investments in commercial papers, short-term bank

deposits, interest rate funds and other money market

instruments are included in deposits and loans receivable.

Cash and cash equivalents

Cash and cash equivalents include cash-in-hand and bank

account balances. Bank overdrafts are included in other

current liabilities .

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

120 KONE Annual Review 2024

Maturity analysis of financial liabilities			Dec 31, 2024				Dec 31, 2023
and interest payment,
MEUR	< 1 year	1-5 years	> 5 years	Total	< 1 year	1-5 years	> 5 years	Total
Interest-bearing debt
Loans	-	-200.7	-200.0	-400.7	0.0	-200.0	-0.4	-200.4
Lease liabilities	-132.8	-265.1	-34.7	-432.6	-110.9	-206.1	-32.2	-349.1
Current loans and other liabilities	-2.2	-	-	-2.2	-2.2	-	-	-2.2
Used bank overdraft limits	-0.9	-	-	-0.9	-0.8	-	-	-0.8
Option liabilities from acquisitions	-	-9.2	-	-9.2	-	-2.3	-	-2.3
Non-interest-bearing debt
Accounts payable	-982.9	-	-	-982.9	-927.0	-	-	-927.0
Derivatives
Capital inflow	3,241.7	153.5	-	3,395.2	3,118.0	164.3	-	3,282.3
Capital outflow	-3,245.2	-152.7	-	-3,397.9	-3,135.0	-168.8	-	-3,303.8
Interest payments	-24.3	-50.3	-16.7	-91.3	-12.1	-17.5	-3.2	-32.8
Net outflow	-1,146.5	-524.6	-392.9	-2,064.0	-1,070.0	-430.4	-168.7	-1,669.1

		Dec 31, 2024		Dec 31, 2023
Fair values of derivative financial instruments,		Derivative
MEUR	Derivative assets	liabilities	Fair value, net	Fair value, net
Foreign exchange derivatives
In cash flow hedge accounting	13.3	-26.7	-13.5	-13.2
In net investment hedge accounting	-	-13.3	-13.3	0.0
Other foreign exchange hedges	31.2	-4.5	26.7	-3.9
Total	44.4	-44.5	-0.1	-17.0

Nominal values of derivative financial instruments,
MEUR	Dec 31, 2024	Dec 31, 2023
Foreign exchange derivatives
In cash flow hedge accounting	1,313.5	1,114.3
In net investment hedge accounting	315.9	437.9
Other foreign exchange hedges	1,765.8	1,730.2
Total	3,395.2	3,282.3

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

121 KONE Annual Review 2024

					Dec 31, 2024
					Measured at fair
			Measured at		value through
Values of financial assets and liabilities by			fair value	Measured at	other
category,			through profit	amortized	comprehensive	Total book
MEUR		Note	or loss	cost	income	value
Non-current assets
Shares and other non-current financial assets		5.4	-	-	98.9	98.9
Non-current loans receivable	I	5.4	-	4.4	-	4.4
Current assets
Accounts receivable			-	2,494.8	-	2,494.8
Derivative assets			31.2	-	13.3	44.4
Current deposits and loans receivable	I	5.4	909.1	313.9	-	1,223.0
Cash and cash equivalents	I		-	576.0	-	576.0
Total financial assets			940.3	3,389.1	112.2	4,441.5
Non-current liabilities ¹
Loans	I		-	400.7	-	400.7
Current liabilities
Other interest-bearing liabilities ²	I		-	3.1	-	3.1
Option liabilities from acquisitions	I		9.2	-	-	9.2
Accounts payable			-	982.9	-	982.9
Derivative liabilities			4.5	-	40.0	44.5
Total financial liabilities			13.7	1,386.7	40.0	1,440.5

Excluding non-current lease liabilities of EUR 299.8 million.

Excluding current lease liabilities of EUR 132.8 million.

The fair values of the financial assets and liabilities are not materially different from their book values.

Interest-bearing net debt comprises items marked with “ I ”.

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

122 KONE Annual Review 2024

					Dec 31, 2023
					Measured at fair
			Measured at		value through
Values of financial assets and liabilities by			fair value	Measured at	other
category,			through profit	amortized	comprehensive	Total book
MEUR		Note	or loss	cost	income	value
Non-current assets
Shares and other non-current financial assets		5.4	-	-	97.9	97.9
Non-current loans receivable	I	5.4	-	3.5	-	3.5
Current assets
Accounts receivable			-	2,495.1	-	2,495.1
Derivative assets			5.7	-	5.8	11.5
Current deposits and loans receivable	I	5.4	972.0	291.9	-	1,263.9
Cash and cash equivalents	I		-	424.5	-	424.5
Total financial assets			977.7	3,215.0	103.7	4,296.4
Non-current liabilities ¹
Loans	I		-	200.4	-	200.4
Current liabilities
Other interest-bearing liabilities ²	I		-	3.0	-	3.0
Option liabilities from acquisitions	I		2.3	-	-	2.3
Accounts payable			-	927.0	-	927.0
Derivative liabilities			9.6	-	19.0	28.6
Total financial liabilities			11.9	1,130.5	19.0	1,161.3

Excluding non-current lease liabilities of EUR 238.3 million.

Excluding current lease liabilities of EUR 110.9 million.

The fair values of the financial assets and liabilities are not materially different from their book values.

Interest-bearing net debt comprises items marked with “ I ”.

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

123 KONE Annual Review 2024

5.4 Shares, deposits and other assets

Shares include a 19.9% holding in Toshiba Elevator and

Building Systems Corporation (TELC) which is an investment

in equity instruments that does not have a quoted price in an

active market. The fair value of TELC shares is determined

using a discounted cash flow model with the key inputs to the

model including forecasted future dividends and other cash

inflows to KONE, and the discount rate. While the fair value of

the investment is sensitive to changes in these two

assumptions, there is no reasonably possible change to these

assumptions that would result in material impact on the total

assets or equity of KONE.

Other non-current financial assets include investments in

smaller holdings in other companies without public quotation.

The fair values of deposits and loans receivable are not

materially different from their carrying amounts. Current

deposits mature within one year and consist of EUR 909.1

(972.0) million and EUR 312.8 (291.2) million of interest rate

funds and short-term bank deposits, respectively.

5.5 Commitments

Banks and financial institutions have guaranteed obligations

arising in the ordinary course of business of KONE companies

up to a maximum of EUR 1,891.8 (1,983.7) million as of

December 31, 2024.

Accounting principles

Shares and other non-current financial assets

Shares include long-term strategic investments, which are

investments in equity instruments that do not have a quoted

price in an active market.

Shares are classified as investments measured at fair

value through other comprehensive income. The fair value is

measured using income or market approach valuation

techniques under fair value hierarchy level 3. Upon disposal of

these investments, any balance within the fair value and other

reserves for these investments is reclassified to retained

earnings and is not reclassified to the statement of income.

Other non-current financial assets are measured at cost.

Investment properties

Investment properties include properties held by KONE to

earn rental income or capital appreciation accounted for under

IAS 40. On a longer term KONE expects to sell

these assets. Investment properties are measured using the

cost model with the carrying value equaling to initial cost less

accumulated depreciation and impairment losses.

Other non-current receivables

Other non-current receivables include credits obtained from

residential sector customers in modernization projects. These

credits are utilized by netting them against income tax and

other related charges becoming payable through regular

business activities in the following years and are accounted for

under IAS 12. The receivables are subject to review for

impairment in reporting periods subsequent to initial

recognition. There were no impairment charges recognized

during the reporting period. The receivables are not

discounted .

Shares, deposits and other assets,
MEUR		Dec 31, 2024	Dec 31, 2023
Shares and other non-current assets
Shares		96.2	95.0
Other financial assets		2.7	2.9
Non-current loans receivable	I	4.4	3.5
Investment properties	II	0.4	-
Other non-current receivables	II	46.6	-
Total		150.3	101.5
Deposits and other current assets
Current deposits	I	1,221.9	1,263.2
Current loans receivable	I	1.1	0.6
Total		1,223.0	1,263.9

Items designated " I " comprise interest-bearing net debt.

Items designated " II " comprise net working capital.

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

124 KONE Annual Review 2024

5.6 Employee benefits

KONE operates various employee benefit plans throughout its

locations. These plans include both defined contribution and

defined benefit schemes. The pension benefits provided by

KONE to its employees are primarily organized through

defined contribution plans.

KONE’s most significant funded defined benefit plans are

in the United Kingdom and in the United States. Defined

benefit pension plans are funded by KONE to satisfy local

statutory funding requirements. The assets are managed by

external fund managers. The funds are allocated between

equities and fixed income instruments in order to provide

return at target level and limited risk profile. The valuations of

the obligations are carried out by independent qualified

actuaries. The discount rates used in actuarial calculations of

the employee benefit liabilities are adjusted to market rates.

In the United Kingdom, the pension scheme is designed

according to the Definitive Trust Deed and Rules and

complies with the guidelines of the UK Pension Regulator.

The pension scheme has been closed for new members as of

March 2002 and is managed through KONE Pension Trustees

Ltd. The UK subsidiary is reviewing their pension scheme to

assess any potential impacts from a recent Section 37 court

ruling, including checking past amendments and necessary

approvals.

In the United States, a part of KONE’s employees are

members of the Employees’ Retirement Plan, which is a

funded defined benefit plan. The plan is managed by KONE

Inc.’s Pension Committee. In addition to this pension plan,

KONE also provides post-employment medical and life

insurance benefits. These predominantly unfunded other post-

employment benefit plans qualify as defined benefit plans

under IFRS. The plan has been frozen as of July 2024. KONE

is also a participant in a multi-employer employee benefit plan

in the United States. In this defined contribution plan KONE

pays a contribution based on the hours worked by

participating employees, KONE’s obligation is limited to this

payment.

KONE’s main unfunded defined benefit plans are in

Germany, Italy (TFR Trattamento di Fine Rapporto,

termination indemnity plan) and in Sweden. The pension

schemes in Germany and the TFR plan in Italy are closed

from new entrants. In Sweden, the pension cover is organized

through defined contribution as well as unfunded defined

benefit plans (ITP system, Industrins och handelns

tilläggspension).

KONE has defined contribution plans for pensions and

other post-employment benefits in most countries. Under

defined contribution plans KONE’s contributions are recorded

as an expense in the accounting period to which they relate.

Recognition of a liability is not required because KONE’s

obligation is limited to the payment of the contributions into

these plans or funds.

The defined contribution pension plan in Finland is the

statutory Finnish employee pension scheme (Finnish

Statutory Employment Pension Scheme “TyEL“), according to

which the benefits are directly linked to the beneficiary’s

earnings. TyEL is arranged through pension insurance

companies.

Defined benefit obligations expose KONE to various risks.

Corporate bond yields are used as a reference in determining

the discount rates used for calculation of defined benefit plan

related obligations. A decrease in corporate bond yields

hence will increase the present value of the defined benefit

obligation. A plan deficit can occur if the performance of the

plan assets is below the above-mentioned yield. These

potential deficits may require further contributions to the plan

assets by the Group.

Some of the Group’s defined benefit obligations are linked

to general inflation and salary level development. Higher level

of inflation and salary level will result in a higher present value

of the benefit obligation.

Some of the defined benefit plans obligate KONE to

provide benefits to plan members for their lifetime. Therefore,

any increase in life expectancy will increase defined benefit

liability of these plans.

Accounting principles

Employee benefits

The Group operates various employee benefit plans in

accordance with local conditions and practices. The

plans are classified as either defined contribution

plans or defined benefit plans. The pension plans are

generally funded by payments from employees and by

the relevant KONE companies. The assets of these

plans are generally held in separate insurance

companies or trustee-administered funds. Pension

costs and liabilities are based on calculations by the

local authorities or independent qualified actuaries.

Contributions to the defined contribution plans are

charged directly to the statement of income in the year

to which these contributions relate. For defined benefit

plans, pension cost is determined based on the advice

of qualified actuaries who carry out a full valuation of

the plan on a regular basis using the projected unit

credit method. Under this method, the costs of

providing pensions are charged to the statement of

income so as to spread the regular costs over the

working lives of employees. KONE presents the

service cost relating to defined benefit obligations in

employment expenses while the net interest is

presented in financing expenses.

The liability arising from the defined benefit post-

employment plans is the present value of the defined

benefit obligation less the fair value of plan assets.

The discount rates used in the actuarial calculations of

employee benefits liabilities are adjusted to market

rates. Obligations to pay long-term disability benefit,

the level of which is dependent on the length of

service of the employee, are measured to reflect the

probability that payments will be required and the

length of service for which it is expected to be made .

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

125 KONE Annual Review 2024

				Other post-employment
Changes in benefit plan assets and liabilities by	Defined benefit plan liability			benefit liability	Fair value of plan assets		Net defined benefit balance
category, MEUR	Dec 31, 2024	Dec 31, 2023	Dec 31, 2024	Dec 31, 2023	Dec 31, 2024	Dec 31, 2023	Dec 31, 2024	Dec 31, 2023
Balance at beginning of period	535.1	519.2	7.5	8.9	418.7	398.2	123.9	130.0
Current service costs	18.0	17.3	0.2	0.2	-	-	18.2	17.4
Interest expense	23.5	23.3	0.3	0.4	-	-	23.8	23.6
Interest income	-	-	-	-	18.8	18.7	-18.8	-18.7
Other	-3.9	-3.8	-	-	-3.2	-3.0	-0.7	-0.8
Components of defined benefit costs recognized	37.7	36.8	0.5	0.5	15.6	15.7	22.6	21.6
in the consolidated statements of income
Return on plan assets, excluding interest income	-	-	-	-	-18.9	5.0	18.9	-5.0
Remeasurements	-11.7	12.2	0.3	-1.1	-	-	-11.5	11.1
Remeasurements recognized in the consolidated	-11.7	12.2	0.3	-1.1	-18.9	5.0	7.4	6.1
statements of comprehensive income
Employer contributions	-	-	-	-	20.6	26.0	-20.6	-26.0
Plan participants’ contributions	2.2	2.0	0.2	0.2	2.4	2.2	-	-
Benefits paid	-27.2	-35.0	-0.8	-0.8	-21.3	-28.9	-6.7	-6.9
Settlement payments	-0.1	-0.3	-	-	-0.1	-	-	-0.3
Business combinations, disposals and other	0.7	0.7	-	-	-	-	0.7	0.7
Foreign currency translation effects	17.3	-0.7	0.5	-0.3	18.5	0.4	-0.7	-1.3
Other reconciling items	-7.2	-33.2	-0.1	-0.9	20.1	-0.2	-27.4	-33.9
Balance at end of period	553.8	535.1	8.1	7.5	435.5	418.7	126.5	123.9
Present value of unfunded obligations	97.9	86.1	8.1	7.5	-	-	106.1	93.6
Present value of funded obligations	455.9	449.0	-	-	-	-	455.9	449.0
Fair value of benefit plans' assets	-	-	-	-	435.5	418.7	-435.5	-418.7
Total	553.8	535.1	8.1	7.5	435.5	418.7	126.5	123.9

As of December 31, 2024 employee benefit liabilities were EUR 561.9 (542.5) million. Employee benefit liabilities comprise EUR 537.4 (519.2) million with weighted average duration of over

5 years and EUR 24.6 (23.3) million with weighted average duration of 1–5 years.

The expected contributions to defined benefit type arrangements in 2025 are EUR 29.8 million.

The actual return on defined benefit plans’ assets was EUR 0.0 (23.7) million.

Consolidated financial statements | Notes to the consolidated financial statements | Capital structure

126 KONE Annual Review 2024

Fair values of major classes of plan assets,
MEUR	Dec 31, 2024	Dec 31, 2023
Fair value of plan assets with a quoted market price	402.6	388.6
Other	32.9	30.1
Total	435.5	418.7

Amounts recognized in the statement of income,
MEUR	Jan 1–Dec 31, 2024		Jan 1–Dec 31, 2023
Defined contribution pension plans	341.9		323.5
Defined benefit pension plans	22.1		21.1
Other post-employment benefits	0.5		0.5
Total	364.5	.	345.0

Defined benefit plans: assumptions used in	Dec 31, 2024		Dec 31, 2023
calculating benefit obligations	Europe	USA	Europe	USA
Discount rate	4.1%	5.5%	4.0%	4.8%
Future salary increase	1.6%	-	1.1%	4.0%
Future pension increase	4.6%	-	1.3%	0.0%

Sensitivity of the defined benefit		Impact on defined benefit obligation
obligation to changes in actuarial	Change in
assumptions	assumptions	Dec 31, 2024	Dec 31, 2023
Discount rate	+0.25p.p.	-1.9%	-2.5%
Discount rate	-0.25p.p.	3.0%	2.7%
Future pension increase	+0.25p.p.	1.1%	1.0%
Future pension increase	-0.25p.p.	-1.0%	-1.0%

Sensitivities are calculated by changing one assumption at a time while keeping other variables constant.

Consolidated financial statements | Notes to the consolidated financial statements | Other notes

127 KONE Annual Review 2024

In this section

This section comprises the following notes concerning

rewards and related parties to KONE:

6.1 Management remuneration

6.2 Share-based payments

6.3 Related party transactions

Other notes

Consolidated financial statements | Notes to the consolidated financial statements | Other notes

128 KONE Annual Review 2024

6.1 Management remuneration

KONE’s management remuneration covers the Board of

Directors, President and CEO and the Executive Board.

More information is available in KONE Remuneration Report.

Board of Directors

Decided by the Annual General Meeting, the annual

compensation for the Board of Directors is paid 40% in KONE

Corporation class B shares and 60% in cash. The annual

compensation of the members of the board committees is

paid in cash. Board fees are not paid to a board member who

is employed by the company with a separate employment

contract.

The Vice Chair of the Board, Jussi Herlin has a separate

employment contract for his role as Executive Vice Chair of

the Board at KONE. The employment-based compensation for

Jussi Herlin consists of a base salary, benefits and an annual

short-term incentive decided by the Board on the basis of the

Group’s financial result. The short-term incentive may not

exceed 100 percent of the recipient’s annual base salary. The

Executive Vice Chair’s retirement age and pension are

determined in accordance with Finland’s Pensions Act.

Statutory pension cost for the year 2024 was EUR 39.6

thousand. No separate agreement regarding early retirement

has been made.

The carrying value of the pension liability for Board

Member Matti Alahuhta (served as President & CEO until

March 31, 2014) included in the balance sheet is EUR 4,608.2

thousand at the end of 2024 and the yearly pension paid to

him by KONE in 2024 was EUR 312.4 thousand.

Compensation paid to the Board of Directors, ¹ ²
EUR, thousand	Jan 1–Dec 31, 2024	Jan 1–Dec 31, 2023
Herlin Antti, Chairman of the Board	230.0	230.0
Herlin Jussi, Vice Chair of the Board ³	241.3	126.5
Alahuhta Matti	120.0	130.0
Duinhoven Susan	130.0	130.0
Herlin Iiris	110.0	110.0
Kant Ravi	110.0	120.0
Mikkilineni Krishna	110.0	110.0
Fredriksson Marika	130.0	120.0
Ihamuotila Timo ⁴	120.0	-
Manubens Marcela ⁵	-	110.0
Total	1,301.3	1,186.5

Holdings of the shares are presented in the Corporate Governance Statement.

Includes also the annual compensation of the Board which was performed by using shares of KONE Corporation decided by the Annual General Meeting held on

February 29, 2024

Remuneration paid based on employment.

Board member since February 29, 2024.

Board member until February 29, 2024.

Consolidated financial statements | Notes to the consolidated financial statements | Other notes

129 KONE Annual Review 2024

President and CEO

Philippe Delorme joined KONE as the President and CEO on

January 1, 2024. The compensation for the President and

CEO Philippe Delorme consists of an annual base salary,

short-term incentive plan, long-term incentive plan, fringe

benefits and contribution towards pension as determined by

the Board. Since Philippe Delorme joined KONE in January

2024, he was not eligible for short-term incentive payment in

2024. The performance criteria applied to the annual short-

term incentive in 2024, payable in 2025, was based on

KONE’s financial and strategic performance as well as

individual performance. It may not exceed 150 percent of his

annual salary. In addition, Philippe Delorme is included in the

performance based long-term incentive plan 2024 for the

Group’s top management. Additional information concerning

share-based incentives of the President and CEO is disclosed

in note 6.2 Share-based payments. Philippe Delorme’s

retirement age and pension are determined in accordance

with Finland’s Pensions Act. Statutory pension cost for the

year 2024 was EUR 158.9 thousand. In addition, he receives

a contribution of EUR 80 thousand to maintain his French

pension scheme. There is no separate agreement regarding

early retirement. His employment contract includes a

severance entitlement to an equivalent of 18 months’ salary,

which includes the salary for a six-month term of notice in

case of termination before retirement.

Henrik Ehrnrooth, the President and CEO until 31

December 2023, received total of 135,417 gross shares from

LTI 2021, LTI 2022 and LTI 2023 in January 2024 based on

an exit agreement and Board of Directors’ decision.

Additionally, a cash amount of EUR 2,488.7 thousand

equaling to 49,339 KONE class B shares granted by the

Board were paid to Henrik Ehrnrooth as an additional

incentive in November 2024 based on the achievement of

specific performance metrics. The early payment of LTI 2022

and LTI 2023 together with the additional share-based

incentive replaced the contractual notice of termination and

severance payments.

Executive Board

The compensation for the members of the Executive Board

(excl. the President and CEO) comprises an annual base

salary, short-term incentive plan, long-term incentive plan and

fringe benefits. The short-term incentive is based on KONE’s

financial targets and strategic performance, as well as

individual performance. The achievement of pre-set targets is

determined by the Nomination and Compensation Committee

and may not exceed 75 percent of the annual base salary.

The members of the Executive Board are included in the

performance based long-term incentive plans for the top

management. Additional information concerning share-based

incentives of the Executive Board is disclosed in note 6.2

Share-based payments. No separate agreement regarding

early retirement has been made for the members of the

Executive Board. The compensation for the termination of the

employment contract prior to retirement is a maximum of 15

months’ salary, which includes the salary for a six-month term

of notice.

Remuneration paid to the President and CEO and to the members of the Executive Board

EUR, thousand ¹

		Jan 1–Dec 31, 2024		Jan 1–Dec 31, 2023
	The President & CEO	Members of the	The President & CEO	Members of the
	Philippe Delorme	Executive Board	Henrik Ehrnrooth	Executive Board
Base salary	819,4	3,880.2	737.9	5,705.8
Benefits	131,7	999.0	24.8	657.7
Annual short-term incentive ²	-	2,502.1	465.7	1,987.8
Long-term incentive plan	-	3,854.7	-	2,076.2
Pensions	80,0	18.3	-	19.2
Total compensation	1,031.2	11,254.3	1,228.4	10,446.7

Performance based long-term incentive plans for the President and CEO and the Executive Board as of December 31, 2024

			President and CEO -	The President and	Executive Board -		Executive Board -
			Number of shares,	CEO - Number of	Number of shares, Number of transferred
	Performance		maximum earning	transferred shares for	maximum earning	shares for vested
Plan ³	Period	Vesting Year	opportunity ⁴	vested plans	opportunity ⁴	plans
LTI 2021	Jan 2021 -	2024	-	-	-	48,937
	Dec 2023
LTI 2022	Jan 2022 -	2025	-	-	250,445	-
	Dec 2024
LTI 2023	Jan 2023 -	2026	-	-	296,081	-
	Dec 2025
LTI 2024	Jan 2024 -	2027	85,247	-	332,465	-
	Dec 2026

Holdings of the shares are presented in the Corporate Governance Statement.

Short-term incentive paid in 2024 (2023) was earned in 2023 (2022). President & CEO Henrik Ehrnrooth's 2023 annual short-term incentive of EUR 1,084.8

thousand was paid in 2024.

LTI 2023, LTI 2022 and LTI 2021 were granted to Henrik Ehrnrooth and paid as part of exit agreement. LTI 2024 was granted to Philippe Delorme.

The maximum number of KONE class B shares available for earning (gross before deduction for applicable taxes).

Consolidated financial statements | Notes to the consolidated financial statements | Other notes

130 KONE Annual Review 2024

6.2 Share-based payments

KONE has two share-based incentive plan structures, a

performance-based long-term incentive plan structure (LTI)

and a restricted share plan structure (RSP).

Share-based payments recognized as an expense in the

statements of income amounted to EUR 38.0 (34.3) million in

2024.

Performance based long-term incentive plan

structure

The performance based long-term incentive plan structure

(LTI) emphasizes profitable growth and sustainability. It

consists of annually commencing individual share plans, each

with a three-year rolling performance period. The performance

criteria for each commencing performance year is determined

on an annual basis. The plans vest and are delivered in one

portion after the three-year performance period, based on

accumulated outcomes of each performance year. If the

participant's employment or service relationship with KONE

Group terminates before the end of the performance period,

the participant, as a rule, forfeits the share award without

compensation.

The target group and targets for each annually

commencing long-term incentive plan as well as possible

rewards are decided upon annually by the Board. As part of

the plan for the top management, a long-term share

ownership target has been set. For the Executive Board

members, the ownership target of KONE shares corresponds

to a minimum of five years’ annual base salary. For other

selected top management positions, the ownership target

corresponds a minimum of two years’ base salary.

The performance based long-term incentive plan is

targeted to approximately 570 top leaders annually, including

the President and CEO, members of the Executive Board and

selected key employees of KONE Group. The performance

criteria applied to the 2021, 2022, 2023 and 2024

performance years are based on annual growth in sales,

adjusted EBIT margin (jointly 80%) and improvements in

sustainability. The sustainability performance condition is a

combination of reductions in carbon footprint, diversity and

inclusion as well as safety related targets.

Performance based long-term incentive plans as of December 31, 2024

Plan	LTI 2021		LTI 2022	LTI 2023	LTI 2024
	Jan 2021 -		Jan 2022 -	Jan 2023 -	Jan 2024 -
Performance Period	Dec 2023		Dec 2024	Dec 2025	Dec 2026
Vesting year 2024			2025	2026	2027
Performance criteria			Adjusted EBIT Margin % and Sales Growth: 80%
			Sustainability: 20%
Maximum number of shares ¹	751,334		788,768	1,025,056	1,216,229
Number of shares outstanding as of Dec 31, 2024 ¹	-		516,233	647,548	936,527
Share price at initial grant date, EUR	64.92		56.80	52.48	44.73
Performance outcome for vested plans, %	68.5%	-	-		-
Number of transferred shares for vested plans	220,637	-	-		-

¹ Gross before deduction for applicable taxes

Accounting principles

Share-based payments

KONE share-based incentive plan structures are targeted to

the top management and other key employees of KONE.

Pursuant to the plan rules, the potential rewards are settled

as a combination of KONE class B shares and/or cash when

the criteria set in the terms and conditions for the plan are

met. The number of shares earned by participants under the

share-based incentive plan structures are determined on

gross basis with deduction for taxes made when applicable

before delivery of the shares to the participants. The

arrangements are equity settled only. The fair value of the

share-based payments settled with KONE class B shares

has been determined at the grant date and will be recognized

as an expense over the vesting period. The total amount to

be expensed over the vesting period is determined based on

the Group’s estimate of the number of the shares that are

expected to be vested by the end of the vesting period.

The impact of any non-market vesting conditions has been

excluded, but they are included in assumptions about the

number of shares that are expected to be distributed. At each

statement of financial position date, the Group revises its

estimates of the number of shares that are expected to be

distributed. It recognizes the impact of the revision of original

estimates in the statement of income. The fair value of the

cash settled part of share-based payments reward has been

determined so that it covers taxes and taxable benefit costs

that are incurred. KONE recognizes the impact of the revision

of original estimates, if any, in the statement of income .

Consolidated financial statements | Notes to the consolidated financial statements | Other notes

131 KONE Annual Review 2024

Restricted share plan structure

The restricted share plan structure (RSP) serves as a

complementary incentive structure used as a commitment

instrument for retention and recruitment purposes for top

management (excluding the President and CEO) and other

selected key employees. The restricted share plan structure

does not have a performance condition. Each annually

commencing plan has a commitment period up to three years,

after which the potentially granted share awards will be paid to

the participant, provided that their employment or service

relationship with KONE Group is in force at the time of

payment.

6.3 Related party transactions

KONE’s related parties comprise its subsidiaries as well as

the Board of Directors, the President & CEO, and the

Executive Board including any companies controlled or

significantly influenced by them. The Corporate Controlling

function evaluates and monitors transactions between the

Group and its related parties to ensure that any conflicts of

interest are taken into account appropriately in KONE’s

decision making process.

Except for management remuneration there have not been

any material transactions between KONE and its members of

the Board of Directors, the President & CEO, the Executive

Board including any companies controlled or significantly

influenced by them. Information concerning management

remuneration is disclosed in note 6.1 and shares held by the

members of the Board of Directors, the President & CEO, the

Executive Board is disclosed in the Corporate Governance

Statement. KONE’s subsidiaries are disclosed in the

Subsidiaries section of the Annual Review.

Restricted share plans as of December 31, 2024

Plan	RSP 2021	RSP 2022	RSP 2023	RSP 2024
	Jan 2021 -	Jan 2022 -	Jan 2023 -	Jan 2024 -
Plan Period	Dec 2023	Dec 2024	Dec 2025	Dec 2026
Maximum number of shares ¹	15,650	55,650	163,429	80,000
Number of shares outstanding as of Dec 31, 2024 ¹	11,650	43,650	136,641	72,483
Weighted average share price for outstanding shares, EUR	66.62	39.97	41.01	45.54
Number of transferred shares as of Dec 31, 2024	9,828	-	-	-

¹ Gross before deduction for applicable taxes

Consolidated financial statements | Parent company financial statements | Parent company statement of income

132 KONE Annual Review 2024

Parent company statement of income

EUR

Note

Jan 1–Dec 31, 2024

Jan 1–Dec 31, 2023

Sales

794,523,245.93

709,021,837.20

Other operating income

33,694,001.11

36,889,574.39

Materials and services

-5,135,986.94

-488,951.11

Personnel expenses

-152,081,083.45

-134,907,238.89

Depreciation and amortization

-15,605,945.04

-14,846,087.30

Other operating expenses

-426,162,175.92

-395,792,547.08

Operating income

229,232,055.69

199,876,587.21

Financing income and expenses

919,570,764.94

1,843,565,052.71

Income before appropriations and taxes

1,148,802,820.63

2,043,441,639.92

Appropriations

1,112,864.03

264,380.90

Income taxes

-31,404,547.07

-35,573,529.68

Deferred taxes

-6,728,537.55

-11,869,192.31

Net income

1,111,782,600.04

1,996,263,298.83

Consolidated financial statements | Parent company financial statements | Parent company statement of financial position

133 KONE Annual Review 2024

Parent company statement of financial position

Assets,

EUR

Note

Dec 31, 2024

Dec 31, 2023

Non-current assets

Intangible assets

56,602,979.68

33,370,511.66

Tangible assets

42,771,760.94

40,972,570.21

Investments

Subsidiary shares

3,897,726,022.62

3,749,867,304.70

Other shares

2,001,098.85

2,001,818.47

3,899,727,121.47

3,751,869,123.17

Total non-current assets

3,999,101,862.09

3,826,212,205.04

Current assets

Non-current receivables

Loans receivable

322,413,317.64

208,208,242.27

322,413,317.64

208,208,242.27

Current receivables

Accounts receivable

93,731,442.23

36,217,979.44

Loans receivable

284,819,544.13

502,522,143.43

Deferred tax assets

1,038,806.65

7,767,344.20

Other receivables

8,236,355.19

4,506,623.92

Deferred assets

286,870,688.56

209,037,676.32

674,696,836.76

760,051,767.31

Financial investments

999,417,433.67

970,155,522.23

Cash and cash equivalents

146,313,867.04

113,183,568.81

Total current assets

2,142,841,455.11

2,051,599,100.62

Total assets

6,141,943,317.20

5,877,811,305.66

Equity and liabilities,

EUR

Note

Dec 31, 2024

Dec 31, 2023

Equity

Share capital

66,174,482.53

Share premium account

100,328,064.58

Other reserves

Paid-up unrestricted equity reserve

220,089,095.16

Retained earnings

1,893,221,113.77

802,025,209.03

Net income

1,111,782,600.04

1,996,263,298.83

Total equity

3,391,595,356.08

3,184,880,150.13

Cumulative accelerated depreciation

7,055,198.63

8,168,062.66

Appropriations

7,055,198.63

8,168,062.66

Provisions

1,119,317.40

2,374,945.72

Liabilities

Non-current liabilities

Loans

462,529,183.24

244,116,651.99

462,529,183.24

244,116,651.99

Current liabilities

Accounts payable

127,505,984.61

97,317,018.02

Loans

1,996,085,646.76

2,197,980,076.36

Other liabilities

3,343,225.47

3,671,303.56

Accruals

152,709,405.01

139,303,097.22

2,279,644,261.85

2,438,271,495.16

Total liabilities

2,742,173,445.09

2,682,388,147.15

Total equity and liabilities

6,141,943,317.20

5,877,811,305.66

Consolidated financial statements | Parent company financial statements | Parent company cash flow statement

134 KONE Annual Review 2024

EUR

Jan 1–Dec 31, 2024

Jan 1–Dec 31, 2023

Cash receipts from customers

689,928,274.56

691,025,848.66

Cash receipts from other operative income

33,694,001.11

36,889,574.39

Cash paid to suppliers and employees

-547,475,408.53

-568,075,393.54

Financing items

939,048,863.65

1,822,386,551.96

Taxes paid

-41,617,561.96

-28,405,593.63

Other financing items

-36,819,846.54

11,186,054.53

Cash flow from operating activities

1,036,758,322.29

1,965,007,042.37

Capital expenditure

-40,640,041.79

-32,141,448.70

Subsidiary investments

-147,858,717.92

-1,200,000,000.00

Cash flow from investing activities

-188,498,759.71

-1,232,141,448.70

Net change in short-term debt

-201,920,690.65

-46,510,014.76

Net change in long-term debt

218,412,531.25

-55,273,413.19

Profit distribution

-905,465,283.47

-904,927,510.22

Group contributions received

1,500,000.00

Other financing items

73,844,178.52

268,602,391.39

Cash flow from financing activities

-815,129,264.35

-736,608,546.78

Change in cash and cash equivalents

33,130,298.23

-3,742,953.11

Cash and cash equivalents, Jan 1

113,183,568.81

116,926,521.92

Cash and cash equivalents, Dec 31

146,313,867.04

113,183,568.81

Change in cash and cash equivalents

33,130,298.23

-3,742,953.11

Reconciliation of net income to the cash flow from

operating activities, EUR

Jan 1–Dec 31, 2024

Jan 1–Dec 31, 2023

Net income

1,111,782,600.04

1,996,263,298.83

Depreciation and amortization

15,605,945.04

14,846,087.30

Other adjustments

-709,817.03

-4,368,680.74

Income before change in working capital

1,126,678,728.05

2,006,740,705.39

Change in receivables

-132,349,668.75

24,113,028.11

Change in liabilities

42,429,262.99

-65,846,691.13

Cash flow from operating activities

1,036,758,322.29

1,965,007,042.37

Parent company cash flow statement

Consolidated financial statements | Parent company financial statements | Notes to the parent company financial statements

135 KONE Annual Review 2024

The parent company financial statements have been prepared

according to the Finnish Accounting Standards. Financial

statements have been prepared for the period of 12 months

between January 1 and December 31, 2024.

Foreign currency transactions and translation

Transactions in foreign currencies are recorded at the rate of

exchange prevailing on the date of the individual transaction.

Foreign currency denominated receivables and liabilities are

translated using the period end exchange rates.

Foreign exchange gains and losses associated with loans,

deposits and other statement of financial position items are

included under financing income and expenses.

Loan receivables and financial investments

Loan receivables are initially recognized at nominal values

and subsequently measured at amortized cost. Management

estimates that the fair values of the loan receivables do not

materially differ from the carrying values at the statement of

financial position dates.

Financial investments in commercial papers, short-term

bank deposits, interest rate funds and other money market

instruments are initially recognized at fair value and thereafter

at amortized cost using the effective interest rate method

except for interest rate funds which are classified and

measured as investments at fair value through profit or loss.

Derivative instruments

Derivative financial instruments are used to hedge currency

and the interest rate risks. Derivatives are measured at fair

value in accordance with Accounting Act 5:2a §. The fair

values of foreign exchange forward contracts are estimated by

discounting the future cash flows of the contracts with the

relevant market interest rate yield curves on the valuation date

and by calculating the difference between the discounted

values as at the forward contract date and balance sheet date

in euros. Currency options are valued as of each reporting

date by using the Garman & Kohlhagen option valuation

model. The fair values of derivative financial instruments are

presented in note 18.

Changes in the fair values of foreign exchange derivatives

are recognized in financing income and expenses if the

hedged item is a loan receivable, deposit or a financial asset

or liability denominated in a foreign currency.

Revenue recognition

Royalty revenue from the licensing of intellectual property

rights is recognized over the contract period. The sales of

services are recognized when the services have been

rendered or when the work has been completed.

Research and development cost

Research and development costs are typically expensed as

they incur, because the future economic benefits of new

products and development of existing products and services

can only be proven after their successful introduction to the

market. In 2024, KONE has continued capitalizing

development costs specific to two programs.

Pensions

An external pension insurance company manages the parent

company statutory pension plan. Contributions to the pension

plan are charged directly to the statement of income in the

year to which these contributions relate.

Leases

Leasing payments are charged to the statement of income on

a straight-line basis over the leasing term. Remaining future

leasing liabilities from existing contracts are presented in note

17.

Taxes

Tax expense includes taxes based on taxable income for the

period, together with tax adjustments for previous periods and

changes in deferred taxes. Deferred taxes are provided for

temporary differences arising between the tax basis of assets

and liabilities and their book values in financial reporting and

measured with enacted tax rates.

Deferred tax liabilities arising from temporary differences

are fully recognized with prudency, whereas the deferred tax

assets are recognized only to the extent of the probable future

tax benefit.

Non-current assets

Intangible assets and property, plant and equipment are

stated at the cost less accumulated depreciation and

amortization. Depreciation and amortization are recorded on a

straight-line basis over the economic useful lives of the assets

as follows:

Buildings 5–40 years

Machinery and equipment 4–15 years

Other long-term expenditure 4–10 years

Land Infinite

Investments in subsidiaries and other companies are

measured at cost, or fair value in case the fair value is less

than cost.

Provisions

Future outflows of cash, which the parent company has

committed to that are not expected to contribute future

revenues and unavoidable losses, which are probable, are

recognized in provisions. Parent company provisions consist

of warranty provisions.

Notes to the parent company financial statements

Accounting principles

Consolidated financial statements | Parent company financial statements | Notes to the parent company financial statements

136 KONE Annual Review 2024

Financial risk management

Parent company business activities are exposed to financial

risks such as foreign exchange risks, interest rate risks,

liquidity risks and credit risks. These financial risks are

managed in accordance with the KONE Treasury Policy.

Parent company financials risks are not significantly different

from the Group’s financials risks, see notes 2.4 and 5.3 to the

consolidated financial statements.

Cash and cash equivalents

Cash and cash equivalents include cash-in-hand and bank

account balances. Used bank overdrafts are included in other

current liabilities.

Share-based payments

Share-based incentive plans of KONE consist of a

performance based long-term incentive plan structure (LTI)

and a restricted share plan structure (RSP). The performance

based long-term incentive plan structure is targeted to the

President and CEO, members of the Executive Board and

selected key employees of KONE Group. The restricted share

plan structure serves as a complementary incentive plan used

as a commitment instrument for retention and recruitment

purposes for top management (excluding the President and

CEO) and other selected key employees. Pursuant to the plan

rules, the potential rewards are settled as a combination of

KONE class B shares and/or cash when the criteria set in the

terms and conditions for the plan are met. The number of

shares earned by participants under the share-based

incentive plans are determined on gross basis with deduction

for taxes made when applicable before delivery of the shares

to the participants. The shares to be transferred as part of the

plans are obtained in public trading. The acquisition of shares

is recognized as an increase of treasury shares, reducing

equity, and transfer of shares as decrease in treasury shares

and retained earnings within equity.

Consolidated financial statements | Parent company financial statements | Notes to the parent company financial statements

137 KONE Annual Review 2024

Notes to the statement of income

1. Sales

2. Other operating income

EUR 1,000

Jan 1–Dec 31, 2024

Jan 1–Dec 31, 2023

Subsidies received

3,800.5

5,393.3

Recharged energy

1,050.7

1,298.3

Service charges

716.2

808.6

Others

28,126.6

29,389.4

Total

33,694.0

36,889.6

3. Personnel expenses

EUR 1,000

Jan 1–Dec 31, 2024

Jan 1–Dec 31, 2023

Wages and salaries

128,583.6

111,299.2

Pension costs

21,333.0

20,338.6

Other employment expenses

2,164.5

3,269.4

Total

152,081.1

134,907.2

Sales EUR 794,523.2 (709,021.8) thousand primarily consists of royalty income from the licensing of intellectual property rights to the

subsidiaries of KONE Oyj.

The salaries and fees paid to the President & CEO and to the Board of Directors are presented in the note 6 of the consolidated

financial statements. Average number of staff employed by the parent company was 1,254 during the financial year (1,239).

Consolidated financial statements | Parent company financial statements | Notes to the parent company financial statements

138 KONE Annual Review 2024

4. Depreciation and amortization

EUR 1,000

Jan 1–Dec 31, 2024

Jan 1–Dec 31, 2023

Intangible rights

397.4

344.8

Other long-term expenditure

7,044.1

6,583.7

Buildings

1,510.2

1,374.6

Machinery and equipment

6,654.2

6,543.1

Total

15,605.9

14,846.1

5. Auditors’ fees

EUR 1,000

Jan 1–Dec 31, 2024

Jan 1–Dec 31, 2023

Audit

1,327.1

953.6

Auditors´ statements

3.9

Tax services

25.1

49.4

Other services

1,068.9

390.8

Total

2,425.0

1,393.8

6. Financing income and expenses

EUR 1,000

Jan 1–Dec 31, 2024

Jan 1–Dec 31, 2023

Dividend income from subsidiaries

975,711.8

1,852,180.9

Other dividends received

0.4

1.1

Interest income from subsidiaries

33,412.5

46,414.3

Interest income from others

31,374.6

27,414.0

Interest expenses to subsidiaries

-96,869.0

-99,661.5

Interest expenses to others

-5,530.4

-1,533.7

Other financing income and expenses

-18,529.1

18,749.9

Total

919,570.8

1,843,565.1

7. Appropriations

EUR 1,000

Jan 1–Dec 31, 2024

Jan 1–Dec 31, 2023

Cumulative accelerated depreciation charge

1,112.9

264.4

Total

1,112.9

264.4

Consolidated financial statements | Parent company financial statements | Notes to the parent company financial statements

139 KONE Annual Review 2024

8. Intangible assets

Jan 1–Dec 31, 2024,

EUR 1, 000

Intangible rights

Other long-term

expenditure

Advance payments

Total

Opening gross acquisition cost

6,017.8

129,017.6

14,579.1

149,614.4

Opening accumulated depreciation and impairment

-5,035.9

-110,995.9

-212.1

-116,243.9

Opening net book value

981.9

18,021.7

14,366.9

33,370.5

Opening net book value

981.9

18,021.7

14,366.9

33,370.5

Increase

373.9

5,742.8

24,557.3

30,674.0

Decrease

Reclassifications

Amortization

-397.4

-7,044.1

-7,441.6

Closing net book value

958.4

16,720.4

38,924.2

56,603.0

Closing gross acquisition cost

6,391.7

134,760.4

39,136.4

180,288.5

Closing accumulated amortization and impairment

-5,433.3

-118,040.1

-212.1

-123,685.5

Closing net book value

958.4

16,720.4

38,924.2

56,603.0

Jan 1–Dec 31, 2023,

EUR 1, 000

Intangible rights

Other long-term

expenditure

Advance payments

Total

Opening gross acquisition cost

5,468.1

120,118.9

1,747.1

127,334.1

Opening accumulated depreciation and impairment

-4,691.1

-104,689.8

-212.1

-109,593.0

Opening net book value

777.0

15,429.2

1,534.9

17,741.1

Opening net book value

777.0

15,429.2

1,534.9

17,741.1

Increase

549.7

8,123.9

13,884.2

22,557.9

Decrease

Reclassifications

1,052.3

-1,052.3

Amortization

-344.8

-6,583.7

-6,928.5

Closing net book value

981.9

18,021.7

14,366.9

33,370.5

Closing gross acquisition cost

6,017.8

129,017.6

14,579.1

149,614.4

Closing accumulated amortization and impairment

-5,035.9

-110,995.9

-212.1

-116,243.9

Closing net book value

981.9

18,021.7

14,366.9

33,370.5

Notes to the statement of financial position

Consolidated financial statements | Parent company financial statements | Notes to the parent company financial statements

140 KONE Annual Review 2024

9. Tangible assets

Jan 1–Dec 31, 2023,

EUR 1, 000

Land

Buildings

Machinery &

equipment

Fixed assets

under

construction

Total

Opening gross acquisition cost

182.3

31,741.1

60,853.4

3,636.1

96,412.9

Opening accumulated amortization and impairment

-13,715.8

-42,741.7

-656.4

-57,113.9

Opening net book value

182.3

18,025.3

18,111.7

2,979.7

39,299.0

Opening net book value

182.3

18,025.3

18,111.7

2,979.7

39,299.0

Increase

868.8

3,369.0

5,370.5

9,608.3

Decrease

-16.0

-16.9

-32.9

Reclassifications

54.4

1,203.6

-1,258.0

Depreciation

-1,374.6

-6,526.2

-7,900.8

Closing net book value

182.3

17,574.0

16,142.0

7,075.3

40,973.6

Closing gross acquisition cost

182.3

32,664.3

64,687.4

7,731.7

105,265.7

Closing accumulated amortization and impairment

-15,090.3

-48,545.3

-656.4

-64,292.0

Closing net book value

182.3

17,574.0

16,142.0

7,075.3

40,973.6

Jan 1–Dec 31, 2024,

EUR 1, 000

Land

Buildings

Machinery &

equipment

Fixed assets

under

construction

Total

Opening gross acquisition cost

182.3

32,664.3

64,687.4

7,731.7

105,265.7

Opening accumulated amortization and impairment

-15,090.3

-48,545.3

-656.4

-64,292.0

Opening net book value

182.3

17,574.0

16,142.0

7,075.3

40,973.6

Opening net book value

182.3

17,574.0

16,142.0

7,075.3

40,973.6

Increase

814.7

3,666.9

6,305.5

10,787.0

Decrease

-2.4

-821.0

-823.4

Reclassifications

36.7

3,613.0

-3,649.7

Depreciation

-1,510.2

-6,654.2

-8,164.4

Closing net book value

182.3

16,915.2

16,765.3

8,910.1

42,771.8

Closing gross acquisition cost

182.3

33,515.7

71,381.3

9,566.4

114,645.7

Closing accumulated amortization and impairment

-16,600.5

-54,616.1

-656.4

-71,872.9

Closing net book value

182.3

16,915.2

16,765.3

8,910.1

42,771.8

Consolidated financial statements | Parent company financial statements | Notes to the parent company financial statements

141 KONE Annual Review 2024

10. Subsidiary shares

11. Other shares

12. Non-current receivables

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Acquisition cost, Jan 1

3,749,867.3

2,049,869.3

Increase

147,858.7

1,700,000.0

Decrease

-2.0

Net book value, Dec 31

3,897,726.0

3,749,867.3

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Acquisition cost, Jan 1

2,001.8

2,002.4

Decrease

-0.7

-0.5

Net book value, Dec 31

2,001.1

2,001.8

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Loans receivable from subsidiaries

320,247.9

206,014.3

Loans receivable from externals

2,165.5

2,193.9

Non-current receivables

322,413.3

208,208.2

Consolidated financial statements | Parent company financial statements | Notes to the parent company financial statements

142 KONE Annual Review 2024

13. Current receivables

Receivables from subsidiaries,

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Accounts receivables

93,300.4

31,197.4

Loans receivable

284,819.5

502,522.1

Deferred assets

177,687.2

145,629.9

Total

555,807.2

679,349.4

Receivables from externals,

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Accounts receivables

431.0

5,020.6

Others

8,236.4

4,506.6

Deferred assets

109,183.5

63,407.8

Total

117,850.9

72,935.0

Deferred tax assets

1,038.8

7,767.3

Total short-term receivables

674,696.8

760,051.8

Deferred assets,

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Derivative assets

63,714.8

24,423.8

Deferred income taxes

25,804.7

15,903.8

Unbilled revenue

155,002.6

129,468.5

Others

42,348.6

39,241.6

Total

286,870.7

209,037.7

Consolidated financial statements | Parent company financial statements | Notes to the parent company financial statements

143 KONE Annual Review 2024

14. Equity and changes in equity

EUR 1,000

capital

premium

account

Paid-up

unrestricted

equity reserve

Retained

earnings ¹

Net income for

the period

Total

Book value Jan 1, 2024

66,174.5

100,328.1

220,089.1

2,798,288.5

3,184,880.2

Profit distribution

-905,465.3

Purchase of own shares

Share-based compensation

397.9

Net income for the period

1,111,782.6

Net book value Dec 31, 2024

66,174.5

100,328.1

220,089.1

1,893,221.1

1,111,782.6

3,391,595.4

As at 1 January, 2024, the effect arising from recognition of share-based payment rewards has been reclassified from paid-up unrestricted

equity to retained earnings to improve presentation.

Non-restricted equity includes the paid-up unrestricted equity reserve, retained earnings deducted by own shares and the profit for the

financial year. The non-restricted equity was EUR 3,225,092,808.97 (3,018,377,603.80) at the end of the period. Distributable profit

deducted by capitalized development costs was EUR 3,215,181,251.13. From 2024 onwards, share-based compensation paid to board

is shown in retained earnings.

EUR 1,000

capital

premium

account

Paid-up

unrestricted

equity reserve

Retained

earnings

Net income for

the period

Total

Book value Jan 1, 2023

66,174.5

100,328.1

219,679.6

1,706,952.7

2,093,134.9

Profit distribution

-904,927.5

Purchase of own shares

Share-based compensation

409.5

Net income for the period

1,996,263.3

Net book value Dec 31, 2023

66,174.5

100,328.1

220,089.1

802,025.2

1,996,263.3

3,184,880.2

Consolidated financial statements | Parent company financial statements | Notes to the parent company financial statements

144 KONE Annual Review 2024

15. Non-current liabilities

Liabilities to subsidiaries,

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Liabilities falling due in 1–5 years

62,529.2

44,116.7

Total

62,529.2

44,116.7

Liabilities to externals,

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Liabilities falling due in 1–5 years

400,000.0

200,000.0

Total

400,000.0

200,000.0

Total non-current liabilities

462,529.2

244,116.7

Consolidated financial statements | Parent company financial statements | Notes to the parent company financial statements

145 KONE Annual Review 2024

16. Current liabilities

Liabilities to subsidiaries,

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Accounts payable

51,441.0

31,662.5

Loans

1,996,085.6

2,197,980.1

Accruals

50,347.3

50,604.7

Total

2,097,873.9

2,280,247.3

Liabilities to externals,

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Accounts payable

76,065.0

65,654.6

Other liabilities

3,343.2

3,671.3

Accruals

102,362.1

88,698.3

Total

181,770.4

158,024.2

Total current liabilities

2,279,644.3

2,438,271.5

Accruals,

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Accrued wages, salaries and employment costs

37,289.1

38,413.4

Derivative liabilities

49,673.9

28,673.5

Others

65,746.5

72,216.2

Total

152,709.4

139,303.1

Consolidated financial statements | Parent company financial statements | Notes to the parent company financial statements

146 KONE Annual Review 2024

17. Commitments

18. Derivatives

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Guarantees

For subsidiaries

3,946,166.8

3,474,182.0

For others

63.1

Leasing commitments

Due next year

8,189.8

7,324.7

Due over a year

13,724.8

13,631.2

Other commitments

818.4

966.0

Total

3,968,899.9

3,496,167.0

Fair values of derivative instruments,

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Foreign exchange forward contracts with external parties

6,112.0

-14,333.8

Foreign exchange forward contracts with subsidiaries

7,929.0

10,084.0

Total

14,041.0

-4,249.7

Nominal values of derivative instruments,

EUR 1,000

Dec 31, 2024

Dec 31, 2023

Foreign exchange forward contracts with external parties

3,124,729.9

2,976,926.6

Foreign exchange forward contracts with subsidiaries

1,067,642.2

840,595.2

Total

4,192,372.1

3,817,521.8

Derivative contracts are entered for hedging purposes in line with KONE Treasury policy and are recognized at fair value. Derivatives

are classified as financial assets at fair value through profit or loss. The majority of the foreign exchange derivatives mature within a

year. The fair values of the foreign exchange derivatives are measured based on the price information derived from the active markets

and commonly used valuation methods.

More information about financial risks management is described in the notes 2.4 and 5.3 to the consolidated financial statements.

Consolidated financial statements | Parent company financial statements | Subsidiaries

147 KONE Annual Review 2024

Subsidiaries

The following list includes companies where the parent company KONE Oyj has control as of December 31, 2024. Additional information is included in note 1 of the consolidated financial

statements.

			Shareholding %
Country/Region	Company	Group	Parent
			company
Andorra	KONE Ascensors i Escales, S.A.	100
Australia	KDB Australia Pty Ltd	100
	KONE Elevators Employee Benefits Pty Limited	100
	KONE Elevators Pty Ltd	100
	KONE Holdings (Australia) Limited	100
	Orbitz Elevators Services Pty Ltd	100
Austria	KONE AG	100	100
Bahrain	KONE Bahrain W.L.L.	0
	KONE Elevators W.L.L.	49
Belgium	KDB Belgium SRL	100	100
	KONE Belgium S.A.	100	100
Bosnia and Herzegovina	KONE d.o.o. Sarajevo	100
Bulgaria	KONE EOOD	100	100
Canada	KONE Inc.	100	49
China mainland	Giant Kone Elevator Co., Ltd.	100	40
	KONE Elevator (Shanghai) Co., Ltd.	100
	KONE Elevators Co., Ltd.	100
	Kunshan KONE Industrial Machinery Co., Ltd.	100	100
Croatia	KONE d.o.o.	100	100
Cyprus	KONE Elevators Cyprus Limited	100	100
Czech Republic	KONE, a.s.	100	100
	KONE Industrial - koncern s.r.o.	100	100
Denmark	KDB Denmark ApS	100
	KONE A/S	100	100
Egypt	KONE LLC	100
Estonia	AS KONE	100	100
Finland	Finescal Oy	100	100
	KDB Finland Oy	100
	KONE Digital Services Oy	100	100
	KONE Hissit Oy	100	100

			Shareholding %
Country/Region	Company	Group	Parent
			company
	KONE Industrial Oy	100	100
France	2STP S.A.S.	100
	Ascenseurs Portes Automatiques Arnaud S.A.S.	100
	Ascenseurs Soulier S.N.C.	100
	ATPE SAS	100
	ATS-ATPE S.A.S.	100
	Automatismes du Mont Blanc S.A.S.	100
	Delta Ascenseurs S.A.S.	100
	KDB France S.A.S.	100
	KONE ATS S.A.S	100
	KONE Développement S.N.C.	100
	KONE Holding France S.A.S.	100	100
	KONE S.A.	99.99
	Liftman S.A.S.	100
	MP2 Gestion Participation	100
	PACA Ascenseurs Services	100
	Prokodis S.A.S.	100
	R.M.D. S.A.S.	100
	Technique & Mecanique des Elevateurs S.A.S.	100
Germany	Alois Kasper GmbH	100
	ATB Aufzugtechnik Berlin GmbH	100
	ATB-Aufzugstechnik GmbH	100
	ATH Aufzüge GmbH	100
	Aufzugstechnik Rhein Ruhr GmbH	100
	DANY Aufzüge GmbH	100
	JESCH-Aufzüge GmbH & Co. KG	100
	JESCH GmbH	100
	KONE Automatiktüren GmbH	100
	KONE Escalator Supply Service Center Europe	100
	GmbH
	KONE Garant Aufzug GmbH	100

Consolidated financial statements | Parent company financial statements | Subsidiaries

148 KONE Annual Review 2024

			Shareholding %
Country/Region	Company	Group	Parent
			company
	KONE GmbH	100	100
	KONE Servicezentrale GmbH	100
	Matthias Schernikau GmbH	100
	Trierer Aufzugbau Baasch & Didong GmbH	100
Greece	KONE S.A.	100
Hong Kong SAR KONE Elevator (HK) Limited		100	0.00
	Shan On Engineering Company Limited	100
Hungary	KONE Felvonó Kft.	100	100
Iceland	KONE ehf	100	100
India	KONE Elevator India Private Limited	100	99.99
Indonesia	PT KONE Indo Elevator	100	1.04
	PT. Mitra Indo Utama	0
Ireland	Ennis Lifts Limited	100
	KONE (Ireland) Limited	100
Israel	KONE LTD	100	100
Italy	ACMA S.r.l.	60
	Ascensori & Ascensori S.r.l.	64
	Cerqueti Servizi S.r.l.	100
	Cofam S.r.l.	100
	CRON.UP S.r.l.	80
	Elevant Servizi S.r.l.	70
	Elevatori Bari S.r.l.	89
	Elevators S.r.l.	60
	Eurolift Ascensori S.r.l.	70
	Euroservice Merano S.r.l.	90
	Ferrara Ascensori S.r.l.	60
	Gianfranceschi Ascensori S.r.l.	97
	GSB Ascensori S.r.l.	65
	KONE Industrial S.p.A.	100	100
	KONE S.p.A.	100	26.86
	L.A.M. Lombarda Ascensori Montacarichi S.r.l.	70
	MARIBO-SIMA ascensori S.r.l.	70
	Nettuno S.r.l.	75
	Neulift S.p.A.	100
	Neulift Service Molise S.r.l.	51
	Neulift Service Triveneto S.r.l.	100
	Rimma S.r.l.	60

		Shareholding %
Country/Region	Company	Parent	Group
		company
	SIE Elevatori S.r.l.		100
	Slimpa S.p.A.		100
	Tecnocram S.r.l.		91.5
	Tosca Ascensori S.r.l.		66.67
	Unilift S.r.l.		89.97
	Vitali Ascensori S.r.l.		100
Kazakhstan	KONE Kazakhstan LLP		100
Kenya	KONE Kenya Limited		49
Kuwait	Al-Sabriyah Elevators and Escalators Company,		49
	W.L.L.
Latvia	SIA KONE Lifti Latvija	0.5	100
Lithuania	UAB KONE	100	100
Luxembourg	KONE Luxembourg Sàrl		100
Macedonia	KONE Makedonija Dooel Skopje		100
Malaysia	KONE Elevator (M) Sdn. Bhd.	29.88	29.88
Mexico	KONE Industrial, S.A. de C.V.		100
	KONE Mexico, S.A. de C.V.	0.1	100
Monaco	S.A.M. KONE		99.87
Montenegro	KONE d.o.o. Podgorica		100
Morocco	KONE Elevators and Escalators Sàrl AU	100	100
Netherlands	Hissi B.V.		100
	KDB Holding B.V.		100
	KDB Netherlands B.V.		100
	KONE B.V.		100
	KONE Deursystemen B.V.		100
	KONE Finance Holding B.V.		100
	KONE Holland B.V.	100	100
	KONE Nederland Holding B.V.		100
New Zealand	KONE Elevators (NZ) Limited		100
	Orbitz Elevators (NZ) Pty Limited		100
Norway	KDB Norway AS		100
	KONE Aksjeselskap	100	100
	KONE Dører og Rulletrapper AS	100	100
Oman	KONE Assarain LLC		70
Philippines	Elevators Philippines Construction, Inc.		39.80
	KPI Elevators, Inc.		99.99
Poland	KONE Sp.z o.o.	100	100

Consolidated financial statements | Parent company financial statements | Subsidiaries

149 KONE Annual Review 2024

			Shareholding %
Country/Region	Company	Group	Parent
			company
Portugal	KONE Portugal - Elevadores, Lda.	100	1
Qatar	KONE Elevators W.L.L.	49	49
Romania	KONE Ascensorul S.A.	100	99.99
Saudi Arabia	KONE Areeco Limited	50	10
	KONE Regional Headquarters LLC	100
Serbia	KONE d.o.o. Beograd-Novi Beograd	100
Singapore	KONE Pte Ltd.	100
Slovak Republic KONE Business Services, s.r.o.		100	100
	KONE s.r.o.	100	100
Slovenia	KONE d.o.o.	100	100
South Africa	Addo Private Equity Fund 2 (Pty) Ltd.	100
	KONE Elevators South Africa (Pty) Ltd	100
	United Elevators (Pty) Ltd.	100
Spain	Ascensores HERCO S.L.	100
	Ascensores Muguerza, S.A.U.	100
	KONE Elevadores, S.A.	100	99.99
	Neulift, S.L.	100
	Serki Instalaciones Y Servicios S.l.	98
	Técnicas Autocontrol, S.L.U.	100
Sweden	KDB Sweden AB	100
	KONE AB	100
Switzerland	KONE (Schweiz) AG	100	100

		Shareholding %
Country/Region	Company	Parent	Group
Taiwan, China	Kang-En Taiwan Elevator Technology Service Co., Ltd	company	100
	KONE Elevators Taiwan Co. Ltd		100
Thailand	KONE Public Company Limited		84.08
	Thai Elevators and Escalators Company Limited		74
	Thai Elevators Holding Company Limited		49
Tunisia	KONE Elevators & Escalators Assembly		100
	KONE Elevators & Escalators Sarl		100
Türkiye	KONE Asansör Sanayi ve Ticaret A.S.		100
Uganda	KONE Uganda Limited		100
Ukraine	KONE Lifts LLC		100
United Arab	KONE (Middle East) LLC	49	49
Emirates
United Kingdom Consult Lift Services Ltd			100
	KONE Pension Trustees Ltd.		100
	KONE Plc	100	100
	KONE (NI) Limited		100
USA	ENOK Electrical Company, LLC		100
	KONE Holdings, Inc.		100
	KONE Inc.		100
	Marine Elevators LLC		100
Vietnam	KONE Vietnam Limited Liability Company		100

Board of Directors' dividend proposal and signatures

150 KONE Annual Review 2024

Board of Directors’ dividend proposal

The parent company’s distributable profits on December

31, 2024 is EUR 3,215,181,251.13 of which the net income

for the financial year is EUR 1,111,782,600.04.

The Board of Directors proposes to the Annual General

Meeting that a dividend of EUR 1.7975 be paid on the

outstanding 76,208,712 class A shares and EUR 1.80 on

the outstanding 441,319,396 class B shares, resulting in a

total amount of proposed dividend of EUR 931,360,072.62.

The Board of Directors further proposes that the remaining

distributable profits, EUR. 2,283,821,178.51 be retained

and carried forward.

The Board proposes that the dividend payment date is

March 14, 2025.

Signatures to the Board of Directors’ report and Financial statements

The financial statements, prepared in accordance with

applicable accounting regulations, give a true and fair view

of the assets, liabilities, financial position, and profit or loss

of both the company and the group of companies included

in its consolidated financial statements.

The management report contains a fair review of the

development and performance of the business operations

of both the company and the group of companies included

in its consolidated financial statements, as well as a

description of the most significant risks and uncertainties

and other aspects of the company's condition.

The sustainability report included in the management

report has been prepared in accordance with the reporting

standards referred to in Chapter 7 and Article 8 of the

Taxonomy Regulation.

Helsinki, February 11, 2025

Antti Herlin

Jussi Herlin

Matti Alahuhta

Susan Duinhoven

Marika Fredriksson

Iiris Herlin

Timo Ihamuotila

Ravi Kant

Krishna Mikkilineni

Philippe Delorme,

President & CEO

The Auditor’s Note

Our auditor´s report has been issued today.

Helsinki, February 11, 2025

Ernst & Young Oy

Authorized Public Accountants

Heikki Ilkka

Authorized Public Accountant

Board of Directors' dividend proposal and signatures

Auditor’s report

151 KONE Annual Review 2024

Auditor’s report

(Translation of the Finnish original)

To the Annual General Meeting of KONE Corporation

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of KONE Corporation (business identity code

1927400-1) for the year ended 31 December, 2024. The financial statements comprise the

consolidated balance sheet, income statement, statement of comprehensive income,

statement of changes in equity, statement of cash flows and notes, including material

accounting policy information, as well as the parent company’s balance sheet, income

statement, statement of cash flows and notes.

In our opinion

• the consolidated financial statements give a true and fair view of the group’s financial

position, financial performance and cash flows in accordance with IFRS Accounting

Standards as adopted by the EU.

• the financial statements give a true and fair view of the parent company’s financial

performance and financial position in accordance with the laws and regulations governing

the preparation of financial statements in Finland and comply with statutory requirements.

Our opinion is consistent with the additional report submitted to the Audit Committee.

Basis for Opinion

We conducted our audit in accordance with good auditing practice in Finland. Our

responsibilities under good auditing practice are further described in the Auditor’s

Responsibilities for the Audit of the Financial Statements section of our report.

We are independent of the parent company and of the group companies in accordance with

the ethical requirements that are applicable in Finland and are relevant to our audit, and we

have fulfilled our other ethical responsibilities in accordance with these requirements.

In our best knowledge and understanding, the non-audit services that we have provided to the

parent company and group companies are in compliance with laws and regulations applicable

in Finland regarding these services, and we have not provided any prohibited non-audit

services referred to in Article 5(1) of regulation (EU) 537/2014. The non-audit services that we

have provided have been disclosed in note 2.2 to the consolidated financial statements and

note 5 to the parent company financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most

significance in our audit of the financial statements of the current period. These matters were

addressed in the context of our audit of the financial statements as a whole, and in forming

our opinion thereon, and we do not provide a separate opinion on these matters.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of

the Financial Statements section of our report, including in relation to these matters.

Accordingly, our audit included the performance of procedures designed to respond to our

assessment of the risks of material misstatement of the financial statements. The results of

our audit procedures, including the procedures performed to address the matters below,

provide the basis for our audit opinion on the accompanying financial statements.

We have also addressed the risk of management override of internal controls. This includes

consideration of whether there was evidence of management bias that represented a risk of

material misstatement due to fraud.

Auditor’s report

152 KONE Annual Review 2024

Key Audit Matter

How our audit addressed the Key Audit Matter

Revenue recognition of new equipment and modernization sales and related accruals

The accounting principles and disclosures about revenue recognition of new equipment and

modernization sales and related accruals are included in notes 1 and 2.1.

In accordance with its accounting principles KONE applies the percentage of completion (PoC)

method for recognizing revenue over time from new equipment and modernization contracts.

The percentage of completion is based on the cost-to-cost method. In year 2024, approximately

60 % percent of the KONE´s sales of 11,1 billion euros were recognized under the PoC

method.

The recognition of revenue by applying PoC method and the estimation of the outcome of

projects require significant management judgement in estimating the cost-to-complete. We

assessed the risk to mainly relate to the stage of completion of projects, which were incomplete

at 31 December 2024.

The Group makes several types of accruals related to risks associated with revenue recognition

by applying PoC method. These accruals require high level of management judgment.

Based on above, revenue recognition based on PoC method, including related accruals, was a

key audit matter. Revenue recognition based on PoC method was also a significant risk of

material misstatement referred to in EU Regulation No 537/2014, point (c) of Article 10(2).

Our audit procedures to address the risk of material misstatement in respect of the revenue

recognition from new equipment and modernization projects, included, among others:

• Assessment of the Group’s accounting policies over revenue recognition over time and

recognition of project related accruals.

• Gaining an understanding of the revenue recognition process including related accruals.

• Inspecting on a sample basis the project documentation such as contracts and other

written communication.

• Testing on a sample basis the percentage of completion and accrual calculations and the

inputs of estimates in the calculations, as well as comparing the estimates to actuals.

• Analytical procedures.

• Evaluation of financial development and current status by

o analyzing the changes in assumptions relating to estimated revenues, costs, and

related accruals and receipts of project payments, and

o discussions with different levels of the organization including project level and

financial organization.

• Performing inquiries with management with regards to any significant events or legal

matters that could affect the project estimates and provisions.

• Assessing the Group’s disclosures in respect of revenue recognition and related accruals.

Valuation of accounts receivable

The accounting principles and disclosures relating to accounts receivable are included in notes

1 and 3.2.

Valuation of accounts receivable was a key audit matter due to the significance of the account

balance and because valuation requires management to make significant judgments especially

due to uncertainties related to Chinese real estate market. Valuation of accounts receivable

requires management to evaluate the probability of the recoverability of receivables and to

record an impairment loss for doubtful accounts over the portion for which payment is unlikely.

As of balance sheet date 31 December 2024, the carrying value of accounts receivable

amounted to 2 494,8 million euros.

The carrying value of account receivable shown in the balance sheet as of 31 December 2024

is a result of gross receivables deducted by reserve of expected credit losses which is based on

management’s judgment and amounting to 458,8 million euros as of 31 December 2024.

We performed, among others, the following audit procedures:

• We evaluated the valuation methods applied on valuation of accounts receivable as well as

performed quarterly analyses of overdue and undue gross receivable balance

development and corresponding movement in expected credit loss reserve during the year.

• We sent receivable balance confirmation requests to counterparties and compared trade

receivable balances to subsequent cash receipts.

• We analysed management’s estimates of expected credit losses of the most significant

aged and overdue receivables considering historical payment patterns as well as recent

communications with the counterparties and dunning procedures.

• We considered the appropriateness of the Group’s disclosures in respect of trade

receivables.

Auditor’s report

153 KONE Annual Review 2024

Responsibilities of the Board of Directors and the Managing Director for the Financial Statements

The Board of Directors and the Managing Director are responsible for the preparation of

consolidated financial statements that give a true and fair view in accordance with IFRS

Accounting Standards as adopted by the EU, and of financial statements that give a true and

fair view in accordance with the laws and regulations governing the preparation of financial

statements in Finland and comply with statutory requirements. The Board of Directors and the

Managing Director are also responsible for such internal control as they determine is

necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors and the Managing Director are

responsible for assessing the parent company’s and the group’s ability to continue as going

concern, disclosing, as applicable, matters relating to going concern and using the going

concern basis of accounting. The financial statements are prepared using the going concern

basis of accounting unless there is an intention to liquidate the parent company or the group

or cease operations, or there is no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance on whether the financial statements as a

whole are free from material misstatement, whether due to fraud or error, and to issue an

auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,

but is not a guarantee that an audit conducted in accordance with good auditing practice will

always detect a material misstatement when it exists. Misstatements can arise from fraud or

error and are considered material if, individually or in aggregate, they could reasonably be

expected to influence the economic decisions of users taken on the basis of the financial

statements.

As part of an audit in accordance with good auditing practice, we exercise professional

judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements,

whether due to fraud or error, design and perform audit procedures responsive to those

risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for

our opinion. The risk of not detecting a material misstatement resulting from fraud is

higher than for one resulting from error, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the parent company’s or the group’s

internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s

use of the going concern basis of accounting and based on the audit evidence obtained,

whether a material uncertainty exists related to events or conditions that may cast

significant doubt on the parent company’s or the group’s ability to continue as a going

concern. If we conclude that a material uncertainty exists, we are required to draw

attention in our auditor’s report to the related disclosures in the financial statements or, if

such disclosures are inadequate, to modify our opinion. Our conclusions are based on

the audit evidence obtained up to the date of our auditor’s report. However, future events

or conditions may cause the parent company or the group to cease to continue as a

going concern.

• Evaluate the overall presentation, structure and content of the financial statements,

including the disclosures, and whether the financial statements represent the underlying

transactions and events so that the financial statements give a true and fair view.

• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding

the financial information of the entities or business units within the group as a basis for

forming an opinion on the group financial statements. We are responsible for the

direction, supervision and review of the audit work performed for purposes of the group

audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the

planned scope and timing of the audit and significant audit findings, including any significant

deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with

relevant ethical requirements regarding independence, and communicate with them all

relationships and other matters that may reasonably be thought to bear on our independence,

and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those

matters that were of most significance in the audit of the financial statements of the current

period and are therefore the key audit matters. We describe these matters in our auditor’s

report unless law or regulation precludes public disclosure about the matter or when, in

extremely rare circumstances, we determine that a matter should not be communicated in our

report because the adverse consequences of doing so would reasonably be expected to

outweigh the public interest benefits of such communication.

Other Reporting Requirements

Auditor’s report

154 KONE Annual Review 2024

Information on our audit engagement

We were first appointed as auditors by the Annual General Meeting with effect from 2 March

2021, and our appointment represents a total period of uninterrupted engagement of 4 years.

Other Information

The Board of Directors and the Managing Director are responsible for the other information.

The other information comprises the report of the Board of Directors and the information

included in the Annual Report, but does not include the financial statements and our auditor’s

report thereon. We have obtained the report of the Board of Directors prior to the date of this

auditor’s report, and the Annual Report is expected to be made available to us after that date.

Our opinion on the financial statements does not cover the other information.

In connection with our audit of the financial statements, our responsibility is to read the other

information identified above and, in doing so, consider whether the other information is

materially inconsistent with the financial statements or our knowledge obtained in the audit, or

otherwise appears to be materially misstated. With respect to report of the Board of Directors,

our responsibility also includes considering whether the report of the Board of Directors has

been prepared in compliance with the applicable provisions, excluding the sustainability report

information on which there are provisions in Chapter 7 of the Accounting Act and in the

sustainability reporting standards.

In our opinion, the information in the report of the Board of Directors is consistent with the

information in the financial statements and the report of the Board of Directors has been

prepared in compliance with the applicable provisions. Our opinion does not cover the

sustainability report information on which there are provisions in Chapter 7 of the Accounting

Act and in the sustainability reporting standards.

If, based on the work we have performed on the other information that we obtained prior to the

date of this auditor’s report, we conclude that there is a material misstatement of this other

information, we are required to report that fact. We have nothing to report in this regard.

Helsinki, 11 February, 2025

Ernst & Young Oy

Authorized Public Accountant Firm

Heikki Ilkka

Authorized Public Accountant

Independent Auditor’s Report on the ESEF Consolidated Financial Statements of KONE Oyj

155 KONE Annual Review 2024

Independent Auditor’s Report on the ESEF Consolidated Financial Statements of KONE Oyj

(Translation of the Finnish original)

To the Board of Directors of KONE Oyj

We have performed a reasonable assurance engagement on the financial statements KONE-

2024-12-31-fi.zip of Kone Oyj (y-identifier: 1927400-1) that have been prepared in accordance

with the Commission’s regulatory technical standard for the financial year ended 31.12.2024.

Responsibilities of the Board of Directors and Managing Director

The Board of Directors and Managing Director are responsible for the preparation of the

company’s report of Board of Directors and financial statements (the ESEF financial

statements) in such way that they comply with the regulatory technical standard adopted by

the European Commission. This responsibility includes:

• preparing the ESEF-financial statements in XHTML format in accordance with Article 3 of

the Commission’s regulatory technical standard

• tagging the primary financial statements, notes and company’s identification data in the

consolidated financial statements that are included in the ESEF financial statements with

iXBRL tags in accordance with Article 4 of the Commission’s regulatory technical

standard and

• ensuring the consistency between the ESEF financial statements and the audited

financial statements

The Board of Directors and Managing Director are also responsible for such internal control

as they determine is necessary to enable the preparation of ESEF financial statements in

accordance with the requirements of the Commission’s regulatory technical standard.

Auditor’s Independence and Quality Management

We are independent of the company in accordance with the ethical requirements that are

applicable in Finland and are relevant to the engagement we have performed, and we have

fulfilled our other ethical responsibilities in accordance with these requirements.

The firm applies International Standard on Quality Management (ISQM) 1, which requires the

firm to design, implement and operate a system of quality management including policies or

procedures regarding compliance with ethical requirements, professional standards and

applicable legal and regulatory requirements.

Auditor’s Responsibilities

Our responsibility is to, in accordance with Chapter 7, section 8 of the Securities Market Act,

provide assurance on the financial statements that have been prepared in accordance with

the Commission’s technical regulatory standard. We express an opinion on whether the

consolidated financial statements that are included in the ESEF financial statements have

been tagged, in all material respects, in accordance with the requirements of Article 4 of the

Commission's regulatory technical standard.

Our responsibility is to indicate in our opinion to what extent the assurance has been

provided. We conducted a reasonable assurance engagement in accordance with

International Standard on Assurance Engagements (ISAE) 3000.

The engagement includes procedures to obtain evidence on:

• whether the primary financial statements in the consolidated financial statements that are

included in the ESEF financial statements have been tagged, in all material respects, with

iXBRL tags in accordance with the requirements of Article 4 of the Commission's

regulatory technical standard and

• whether the notes and company's identification data in the consolidated financial

statements that are included in the ESEF financial statements have been tagged, in all

material respects, with iXBRL tags in accordance with the requirements of Article 4 of the

Commission's regulatory technical standard and

• whether there is consistency between the ESEF financial statements and the audited

financial statements.

The nature, timing and extent of the selected procedures depend on the auditor’s judgement.

This includes an assessment of the risk of material deviations due to fraud or error from the

Independent Auditor’s Report on the ESEF Consolidated Financial Statements of KONE Oyj

156 KONE Annual Review 2024

requirements of the Commission’s technical regulatory standard. We believe that the evidence

we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

Our opinion pursuant to Chapter 7, Section 8 of the Securities Markets Act is that the primary

financial statements, notes and company's identification data in the consolidated financial

statements that are included in the ESEF financial statements of Kone Oyj KONE-2024-12-

31-fi.zip for the financial year ended 31.12.2024 have been tagged, in all material respects, in

accordance with the requirements of the Commission's regulatory technical standard.

Our opinion on the audit of the consolidated financial statements of Kone Oyj for the financial

year ended 31.12.2024 has been expressed in our auditor's report dated 11.2.2025. With this

report we do not express an opinion on the audit of the consolidated financial statements nor

express another assurance conclusion.

Helsinki 11.2.2025

Ernst & Young Oy

Authorized Public Accountant Firm

Heikki Ilkka

Authorized Public Accountant

Assurance report on the sustainability statement

157 KONE Annual Review 2024

Assurance report on the sustainability statement

(Translation of the Finnish original)

To the Annual General Meeting of Kone Oyj

We have performed a limited assurance engagement on the group sustainability statement of

Kone Oyj (1927400-1) that is referred to in Chapter 7 of the Accounting Act and that is

included in the report of the Board of Directors for the financial year 1.1.–31.12.2024.

Opinion

Based on the procedures we have performed and the evidence we have obtained, nothing

has come to our attention that causes us to believe that the group sustainability statement

does not comply, in all material respects, with

1) the requirements laid down in Chapter 7 of the Accounting Act and the sustainability

reporting standards (ESRS);

2) the requirements laid down in Article 8 of the Regulation (EU) 2020/852 of the

European Parliament and of the Council on the establishment of a framework to

facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (EU

Taxonomy).

Point 1 above also contains the process in which Kone Oyj has identified the information for

reporting in accordance with the sustainability reporting standards (double materiality

assessment) and the tagging of information as referred to in Chapter 7, Section 22 of the

Accounting Act.

Our opinion does not cover the tagging of the group sustainability statement with digital XBRL

sustainability tags in accordance with Chapter 7, Section 22, Subsection 1(2), of the

Accounting Act, because sustainability reporting companies have not had the possibility to

comply with that provision in the absence of the ESEF regulation or other European Union

legislation.

Basis for Opinion

We performed the assurance of the group sustainability statement as a limited assurance

engagement in compliance with good assurance practice in Finland and with the International

Standard on Assurance Engagements (ISAE) 3000 (Revised) Assurance Engagements Other

than Audits or Reviews of Historical Financial Information.

Our responsibilities under this standard are further described in the Responsibilities of the

Group Sustainability Auditor section of our report.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion

Other Matter

We draw attention to the fact that the group sustainability statement of Kone Oyj that is

referred to in Chapter 7 of the Accounting Act has been prepared and assurance has been

provided for it for the first time for the financial year 1.1.–31.12.2024. Our opinion does not

cover the comparative information that has been presented in the group sustainability

statement. Our opinion is not modified in respect of this matter.

Assurance report on the sustainability statement

158 KONE Annual Review 2024

Group sustainability auditor´s Independence and Quality Management

We are independent of the parent company and of the group companies in accordance with

the ethical requirements that are applicable in Finland and are relevant to our engagement,

and we have fulfilled our other ethical responsibilities in accordance with these requirements.

The group sustainability auditor applies International Standard on Quality Management ISQM

1, which requires the sustainability audit firm to design, implement and operate a system of

quality management including policies or procedures regarding compliance with ethical

requirements, professional standards and applicable legal and regulatory requirements.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director of Kone Oyj are responsible for:

• the group sustainability statement and for its preparation and presentation in

accordance with the provisions of Chapter 7 of the Accounting Act, including the

process that has been defined in the sustainability reporting standards and in which

the information for reporting in accordance with the sustainability reporting standards

has been identified as well as the tagging of information as referred to in Chapter 7,

Section 22 of the Accounting Act and

• the compliance of the group sustainability statement with the requirements laid down

in Article 8 of the Regulation (EU) 2020/852 of the European Parliament and of the

Council on the establishment of a framework to facilitate sustainable investment, and

amending Regulation (EU) 2019/2088;

• such internal control as the Board of Directors and the Managing Director determine

is necessary to enable the preparation of a group sustainability statement that is free

from material misstatement, whether due to fraud or error.

Inherent Limitations in the Preparation of a Sustainability Statement

The preparation of the group sustainability statement requires a materiality assessment from

the company in order to identify relevant disclosures. This significantly involves management

judgment and choices. Group sustainability reporting is also characterized by estimates and

assumptions, as well as measurement and estimation uncertainty.

The determination of greenhouse gases is subject to inherent uncertainty due to the

incomplete scientific data used to determine the emission factors and the numerical values

needed to combine emissions of different gases.

In addition, when reporting forward-looking information, the company must make assumptions

about possible future events and disclose the company's possible future actions in relation to

these events. The actual outcome may be different because predicted events do not always

occur as expected.

Responsibilities of the Group Sustainability Auditor

Our responsibility is to perform an assurance engagement to obtain limited assurance about

whether the group sustainability statement is free from material misstatement, whether due to

fraud or error, and to issue a limited assurance report that includes our opinion.

Misstatements can arise from fraud or error and are considered material if, individually or in

the aggregate, they could reasonably be expected to influence the decisions of users taken on

the basis of the group sustainability statement.

Compliance with the International Standard on Assurance Engagements (ISAE) 3000

(Revised) requires that we exercise professional judgment and maintain professional

skepticism throughout the engagement. We also:

• Identify and assess the risks of material misstatement of the group sustainability

statement, whether due to fraud or error, and obtain an understanding of internal

control relevant to the engagement in order to design assurance procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on

the effectiveness of the parent company’s or the group’s internal control.

• Design and perform assurance procedures responsive to those risks to obtain

evidence that is sufficient and appropriate to provide a basis for our opinion. The risk

of not detecting a material misstatement resulting from fraud is higher than for one

resulting from error, as fraud may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control.

Assurance report on the sustainability statement

159 KONE Annual Review 2024

Description of the Procedures That Have Been Performed

The procedures performed in a limited assurance engagement vary in nature and timing from,

and are less in extent than for, a reasonable assurance engagement. The nature, timing and

extent of assurance procedures selected depend on professional judgment, including the

assessment of risks of material misstatement, whether due to fraud or error. Consequently,

the level of assurance obtained in a limited assurance engagement is substantially lower than

the assurance that would have been obtained had a reasonable assurance engagement been

performed.

Our procedures included for ex. the following:

• We have interviewed the key persons responsible for collecting and reporting the

information included in the group sustainability statement.

• Through interviews, we gained an understanding of the group's control environment

related to the group sustainability reporting process.

• We evaluated the implementation of the company's double materiality assessment

process against the requirements of ESRS standards and the compliance of the

information provided for the double materiality assessment with ESRS standards.

• We assessed whether the group sustainability statement in material respect meets

the requirements of ESRS standards for material sustainability topics:

- We have tested the accuracy of the information presented in the group

sustainability statement by comparing the information on a sample basis

with supporting company documentation.

- We have on a sample basis performed analytical assurance procedures

and related inquiries, recalculation and inspected documentation, as well as

tested data aggregation to assess the accuracy of the group sustainability

statement.

• We gained an understanding of the process by which a company has defined

taxonomy-eligible and taxonomy-aligned economic activities and evaluate the

regulatory compliance of the information provided.

Helsinki 11.2.2025

Ernst & Young Oy

Authorized Sustainability Audit Firm

Heikki Ilkka

Authorized Sustainability Auditor

Corporate Governance Statement

160 KONE Annual Review 2024

KONE’s Corporate Governance Statement for the financial

year 2024 has been prepared in accordance with the

requirements of the Finnish Corporate Governance Code

2025. KONE Corporation complies with the Finnish Corporate

Governance Code 2025 issued by the Securities Market

Association, with the exception of recommendations 17

(Independence of the company of the members of the

remuneration committee) and 18 (Independence of the

company of the members of the nomination committee).

These exceptions are due to the company’s ownership

structure. The company’s largest shareholder, Antti Herlin,

controls 62 percent of the company’s voting rights and 23

percent of its shares. The significant entrepreneurial risk

associated with ownership is considered to justify the main

shareholder serving as the Chairman of the Board of Directors

and a member of the Board’s Nomination and Compensation

Committee and, in this capacity, overseeing shareholders’

interests.

The Corporate Governance Code in its entirety is available

at the Securities Market Association website www.cgfinland.fi.

This statement is available on the company’s website at

www.kone.com and it has been issued separately of the

Board of Directors’ Report.

Regulatory Framework

KONE follows, among others, the Finnish Limited Liability

Companies Act, the Securities Markets Act and other laws

and regulations applicable to publicly listed companies in

Finland, its Articles of Association, the Rules of the Helsinki

Stock Exchange, as well as the regulations and guidelines

issued by the Finnish Financial Supervisory Authority.

Governing Bodies

KONE’s governance bodies and officers with the greatest

decision-making power are the General Meeting of

Shareholders, the Board of Directors of KONE Corporation,

the Chairman of the Board and the President and CEO. The

Board of Directors is responsible for the administration of the

company and the appropriate organization of its operations.

The President and CEO, supported by the Executive

Board, is responsible for operative management of the

company.

Annual General Meeting

At the Annual General Meeting, the shareholders of the

company exercise their decision-making power. The Annual

General Meeting of Shareholders decides on the matters

stipulated in the Finnish Companies Act and the Articles of

Association, including the shareholders approve the

consolidated financial statements, decide on the distribution of

profits, select the members of the Board of Directors and the

auditors and determine their compensation.

KONE Corporation’s Annual General Meeting is convened

by the Board of Directors. According to the Articles of

Association, the Annual General Meeting of Shareholders

shall be held within three months of the closing of the financial

year on a date decided by the Board of Directors.

Board of Directors

Duties and responsibilities

The Board of Directors’ duties and responsibilities are defined

primarily by the Articles of Association and the Finnish Limited

Liability Companies’ Act. The Board’s duties include:

• ensuring appropriate arrangement of the control of the

company accounts and finances

• approving the financial statements, the Board’s report

including the Sustainability Statement, the Corporate

Governance Statement as well as the interim reports

• monitoring and evaluating the financial and sustainability

reporting processes, the efficiency of the company’s

internal control, internal audit and risk management

systems

• preparing issues to be presented to the shareholders’

meeting

• appointing the President and CEO, and determining

his/her remuneration

• approving the remuneration policy and remuneration

report

• approving and confirming strategic guidelines and the

principles of risk management

• approving annual budgets and plans

• decisions on the company’s corporate structure

• decisions on major acquisitions and investments

• decisions on other matters falling under the Board’s

responsibility by law.

The Board has created rules of procedure stipulating the

duties of the Board, its Chairman and its Committees. The

Board of Directors holds seven regular meetings a year and

additional meetings as required. The Board of Directors

reviews its own performance and procedures once a year.

Members of the Board

The Annual General Meeting elects five to ten members and

no more than three deputy members to the Board of Directors

in accordance with KONE Corporation’s Articles of

Corporate Governance Statement

161 KONE Annual Review 2024

Association. The term of the Board of Directors shall expire at

the end of the next Annual General Meeting. The Board of

Directors elects a Chairman and Vice Chair among its

members. The proposals for Board members are prepared by

the Nomination and Compensation Committee under the

steering of the Chairman of the Board.

The Board has defined the Board diversity policy which

gives guidance to the nomination of the Board of Directors.

The objective is to have a Board composition that is diverse

and balanced, fostering a dynamic and inclusive environment

where members’ backgrounds complement each other and

create synergies that benefit KONE, its stakeholders and

operations.

Board members are nominated and selected based on

their merits, qualifications, competencies, skills, and integrity

as well as their ability to dedicate time and contribute to the

Board’s overall effectiveness and the strategic direction of the

company.

During the preparation and in the proposal to the General

Meeting of Shareholders, attention is paid to the board

candidates’ broad and mutually complementary background,

professional experience, expertise, cultural background,

nationality, age, gender and views of both KONE’s business

and other industries. The Board members should have

combined experience in different markets and geographies

and in strategically important focus areas for KONE. The

objective is to have balanced gender representation on the

Board. The independence of the members of the Board is

assessed in line with the independence criteria of the Finnish

Corporate Governance Code.

Committees

The Board of Directors has appointed two committees

consisting of its members: the Audit Committee and the

Nomination and Compensation Committee. The Board has

confirmed rules of procedure for both Committees. The

Secretary to the Board acts as the Secretary of both

Committees.

The Audit Committee monitors the Group’s financial

situation and monitors and evaluates reporting processes

related to the financial statements and interim reports as well

as the sustainability statement. The Audit Committee monitors

and evaluates the adequacy and appropriateness of KONE’s

internal control and risk management, as well as the

compliance with rules and regulations. It also deals with the

Corporation’s internal audit plans and reports. The Head of

Assurance reports the internal audit results to the Committee.

The Audit Committee also monitors and evaluates how

agreements and other transactions between the company and

its related parties meet the requirements relating to ordinary

business operations and general market terms and monitors

and oversees the financial statement and financial reporting

process. In addition, the Audit Committee processes the

description of the main features of the internal control and risk

management systems pertaining to the financial reporting

process included in the company’s corporate governance

statement.

The Audit Committee evaluates the auditing of the Group’s

companies and the appropriateness of the related

arrangements and auditing services and reviews the auditors’

reports. Furthermore, the committee monitors and evaluates

the independence of the external auditors including

particularly the provision of non-audit services to the company

and approves the principles of accepting fees for non-audit

services. The Audit Committee prepares a proposal to the

Annual General Meeting regarding the auditors to be elected

for the Corporation. The Audit Committee also monitors the

assurance of the sustainability reporting and prepares a

proposal for the election of assurance service provider for

sustainability reporting.

The Nomination and Compensation Committee prepares

proposals to be made to the Annual General Meeting

regarding the nomination of Board members and their

compensation, makes decisions regarding senior

management appointments and compensation and oversees

the succession planning of senior management, including the

President and CEO. The Committee also decides on the

compensation systems to be used, and prepares the

remuneration policy and remuneration report for the

company’s governing bodies.

Management

Chairman of the Board, Executive Vice Chair of the

Board and the President and CEO

KONE Corporation’s Board of Directors appoints the

Chairman of the Board, the possible executive Vice Chair of

the Board and the President and CEO. The Board determines

the terms and conditions of employment of the executive Vice

Chair of the Board and the President and CEO, and these are

defined in their respective written contracts. The Chairman of

the Board and the Vice Chair of the Board prepare matters to

be considered by the Board together with the President and

CEO and the corporate staff.

The Chairman of the Board, the Vice Chair of the Board

and the President and CEO are responsible for the execution

of the targets, plans, strategies and goals set by the Board of

Directors within the KONE Group. The President and CEO is

responsible for operational leadership within the scope of the

strategic plans, budgets, operational plans, guidelines and

orders approved by KONE Corporation’s Board of Directors.

The President and CEO presents operational matters to the

Board and is responsible for implementing the decisions of the

Board.

Executive Board

The Executive Board supports the President and CEO in

executing the corporate strategy. The Executive Board follows

business developments, initiates actions and defines

operating principles and methods in accordance with

guidelines handed down by the Board of Directors and the

President and CEO. The Executive Board holds regular

monthly meetings and additional meetings as required.

Corporate Governance Statement

162 KONE Annual Review 2024

Risk management, internal control, related party

transactions and audit

KONE Corporation’s Board of Directors has ratified the

principles of risk management, internal control and internal

auditing to be followed within the Group.

Risk management

The aim of risk management at KONE is to identify the risks

and uncertainties related to the achievement of KONE’s

objectives, assess the likelihood and magnitude of the risks

and opportunities and to identify necessary actions to mitigate

the negative impacts of identified risks.

KONE’s Global Risk Management function develops,

coordinates and facilitates systematic risk management

integrated into KONE’s core business processes and

decision-making. KONE’s business units are responsible for

identifying, assessing and managing risks that can threaten

the achievement of their business objectives as part of

KONE’s strategic planning and budgeting processes.

Key risks are reported to the Global Risk Management

function, which consolidates the risk information to the

Executive Board. Executive Board members for Areas and

global functions are owners of the key risks and opportunities

relevant to the objectives of their organization. The Executive

Board reviews and approves the Risk Management Policy and

approves KONE’s risk tolerance. KONE’s Board of Directors

approves the risk management principles of KONE and is

responsible for monitoring and evaluating the effectiveness of

KONE’s risk management systems. The Board of Directors

also reviews key risks and risk treatment action plans and

acts, when necessary, on key risks reported to the Board.

Internal control

The aim of KONE’s internal control environment is to ensure

that the Group’s operations are efficient and profitable, risks

and opportunities are managed to an acceptable level and

that the financial and operational reporting is reliable and in

compliance with the applicable regulations, policies and

practices.

The Board’s Audit Committee monitors the efficiency and

functioning of the internal control environment. The

management is responsible for establishing and maintaining

adequate internal controls and for monitoring their

effectiveness as part of operative management. The

management is supported by a dedicated Internal Controls

function, responsible for facilitating and coordinating the

internal control design, implementation and monitoring across

the organization.

KONE’s internal control framework is built and based on

corporate values, the KONE Code of Conduct, a culture of

honesty and high ethical standards. The framework is

supported by a dedicated leadership, training programs, a

positive and diligent corporate culture and working

environment as well as by attracting and promoting dedicated

and competent employees. Global and local policies and

principles are key part of the internal control framework.

KONE’s internal controls are designed to manage relevant

operational, financial, and compliance risks as part of KONE’s

processes and employee job roles. Internal controls are

supported by global and local policies and principles that are

continuously maintained by incorporating changes and

developments from the business operations and information

systems.

KONE’s business units are responsible for implementing

the control framework and for monitoring adherence to the

globally and locally agreed policies and principles. KONE’s

Global Finance has the oversight responsibility of the overall

framework.

Internal control procedures over financial

reporting

Correct financial reporting in KONE’s internal control

framework means that its financial statements give a true and

fair view of the financial performance of the operations and

the financial position of the Group and that such statements

do not include intentional or unintentional misstatements or

omissions both in respect of the figures and level of

disclosure.

Corporate-wide financial management and control of

operations is coordinated by the Global Finance function and

implemented by a network of subsidiary and business entity

controllers within KONE.

KONE’s monthly business planning and financial reporting

process represents a key control procedure within KONE in

ensuring the effectiveness and efficiency of operations. This

process includes in-depth analyses of deviations between

actual performance, budgets, prior year performance and

latest forecasts for the business on multiple levels of the

organization. The process covers financial information as well

as other key performance indicators that measure the

operational performance on a business unit and corporate

level. The process is designed to ensure that any deviations

from plans in terms of financial or operating performance and

financial management policies are identified, communicated

and reacted upon efficiently, in a harmonized and timely

manner. KONE’s financial statements are based on this

management reporting process.

Financial control tasks are built into the business

processes of KONE as well as into the management’s

ongoing business supervision and monitoring. KONE has

established Financial Control Models for the New Building

Solutions, Service and Modernization as well as for treasury

and tax matters. The models have been defined to ensure that

the financial control covers the relevant tasks in an efficient

and timely manner.

The interpretation, application and monitoring of the

compliance of accounting standards is centralized in the

Global Finance function, which maintains, under the

supervision of the Audit Committee, the KONE Accounting

Standards. Reporting and forecasting contents are defined in

the KONE Accounting and Reporting Instructions. These

standards and instructions are maintained and updated

centrally by the Global Finance function and applied uniformly

throughout KONE.

KONE has a global enterprise resource planning (ERP)

system which is built to reflect the KONE Accounting

Standards and the KONE Accounting and Reporting

Instructions. KONE applies a controlled change management

process ensuring that no changes to the financial reporting

logic of the ERP system can be made without approval from

the Global Finance function. Automatic interfaces between

different systems are principally applied in the period-end

financial reporting process of KONE. Transactional processing

is increasingly automated and centralized in dedicated shared

service centers.

Effective internal control over record to report processes,

from business processes and systems to the financial

More information

The most significant risks and uncertainties related

to KONE’s business are described in the Board of

Directors’ Report. Financial risk management is

described in notes 2.4 and 5.3 in the Annual Review.

Corporate Governance Statement

163 KONE Annual Review 2024

statements, is important in ensuring the correctness of

financial reporting. This is driven by the identification of key

data elements of the business and the quality of the data to

ensure correct financial reporting and forecasting ability.

Internal audit

The Corporation has an internal audit function, KONE

Assurance, which operates separately from the management.

The purpose, scope, authority, and principles of

independence and objectivity of the Assurance function are

outlined in the KONE Assurance Charter, approved by the

Audit Committee. The KONE Assurance function is

responsible for assessing the adequacy and effectiveness of

risk management, governance, compliance and internal

control systems, and providing recommendations to improve

these processes. It reports its findings to the Audit Committee

which also approves the risk-based assurance plan. The

Head of Assurance, Kristian Snäll, reports to the Vice Chair of

the Board.

Related party transactions

KONE evaluates and monitors related party transactions

between the company and its related parties. KONE maintains

a list of related parties. KONE’s related parties comprise its

subsidiaries as well as the Board of Directors, the President

and CEO, the Executive Board including any companies

controlled or significantly influenced by them. KONE’s Board

of Directors has approved guidelines for how to recognize,

handle, approve, monitor and report related party

transactions. According to the guidelines, the Corporate

Controlling function follows and monitors related party

transactions as part of KONE’s normal reporting and control

procedures and reports related party transactions to the Audit

Committee annually.

KONE’s Board of Directors decides on any related party

transactions which are not considered normal business

activities or differ from market terms. KONE reports relevant

and material related party transactions annually in the notes of

consolidated financial statements.

External audit

The objective of a statutory audit is to express an opinion on

whether the consolidated financial statements give a true and

fair view of the financial position, financial performance and

cash flows of the Group, as well as whether the parent

company’s financial statements give a true and fair view of the

parent company’s financial performance and financial

position. Statutory audit also encompasses the audit of the

accounting and governance in the company. The auditor

considers whether the information in the Board of Directors’

Report is consistent with the information in the financial

statements and the report of the Board of Directors has been

prepared in accordance with the applicable legal

requirements.

According to the Articles of Association, the company must

have a minimum of one and a maximum of three Auditors.

The Auditors must be authorized public accountants or

authorized public accounting firms. The Auditor is elected at

the Annual General Meeting for a term that ends at the

conclusion of the Annual General Meeting following the start

of the term of the Auditor.

Insiders

KONE Corporation adheres to the insider guidelines of the

Nasdaq Helsinki Ltd, which have been supplemented with

internal insider guidelines approved by the Board of Directors.

In compliance with the Market Abuse Regulation, the person

discharging managerial responsibilities in KONE Corporation

(managers) include the members and deputy members of the

Board of Directors, the President and CEO and the members

of the Executive Board. Managers are permitted to trade in

KONE shares and other financial instruments of KONE during

a six-week period starting on the next day after the publishing

of annual and interim results.

KONE does not maintain a list of permanent insiders. The

company maintains deal-specific insider lists for projects or

events constituting insider information. Deal-specific insiders

are prohibited from trading with financial instruments of KONE

during the validity of the project. KONE maintains up-to-date

information of the persons that participate in the preparation,

drawing-up and disclosure of quarterly and year-end financial

reports and who, therefore, are subject to the trading

restriction during the closed period. The closed period starts

six weeks following the publishing of the financial statements

bulletin or interim report and ends at the end of the day of

publication of the financial statements bulletin/interim report.

The person in charge of KONE’s insider matters is the

Secretary to the Board of Directors.

Corporate governance in 2024

Annual General Meeting

The Annual General Meeting was held in Helsinki, Finland on

February 29, 2024.

Board of Directors and committees

The Annual General Meeting elected nine members to

KONE’s Board of Directors: Antti Herlin (Chairman), Jussi

Herlin (Executive Vice Chair), Matti Alahuhta, Susan

Duinhoven, Marika Fredriksson, Iiris Herlin, Timo Ihamuotila,

Ravi Kant and Krishna Mikkilineni.

A majority of the Board members has international

professional experience in various types of positions, and they

are, or have been, members of the Board of Directors in both

listed and unlisted companies. Each board member has a

university degree and three of them a doctorate. These

degrees are from various fields, with technical fields and

economics in the majority. The members represent five

different nationalities. Of the Board members, six (67%) are

male and three (33%) are female. Regarding age, 22% of the

members are below 50 years of age, 44% between 51-65 and

33% over 65. Diversity of the Board is considered to be at a

good level to ensure wide range of perspectives and

experience and effective performance of the Board of

Directors to support KONE’s strategic goals.

Of the Board members, Matti Alahuhta, Susan Duinhoven,

Marika Fredriksson, Iiris Herlin, Timo Ihamuotila, Ravi Kant

and Krishna Mikkilineni are independent of the Corporation.

With the exception of Antti Herlin, Iiris Herlin and Jussi Herlin,

the Board members are independent of the Corporation’s

significant shareholders.

The Board of Directors convened seven times in 2024 in

addition to which one Board decision was made without

holding a meeting (per capsulam). The average participation

rate of the Board members in the meeting was 95%. Niina

Vilske serves as Secretary to the Board and to its committees.

Corporate Governance Statement

164 KONE Annual Review 2024

Audit committee

The Board of Directors’ Audit Committee comprises Marika

Fredriksson (Chair, independent member), Susan Duinhoven

(independent member), Jussi Herlin and Timo Ihamuotila

(independent member).

The Audit Committee held three meetings in 2024. The

average participation rate of the Audit Committee members in

the meetings was 100%.

Nomination and compensation committee

The Nomination and Compensation Committee comprises

Jussi Herlin (Chair), Matti Alahuhta (independent member),

Antti Herlin and Susan Duinhoven (independent member).

The Nomination and Compensation Committee held three

meetings in 2024. The average participation rate of the

Nomination and Compensation Committee members in the

meetings was 100%.

President and CEO

Philippe Delorme has served as KONE Corporation’s

President and CEO since January 1, 2024. KONE

Corporation’s former President and CEO, Henrik Ehrnrooth,

continued as Executive Advisor of KONE until the end of

March 2024 to support the transition and induction of the new

President and CEO.

Philippe Delorme’s holdings of shares are presented in the

table on the next page.

Executive Board

At the end of 2024, KONE’s Executive Board consisted of the

President and CEO and eleven members. Philippe Delorme

served as KONE Corporation’s President and CEO starting 1

January 2024. The other members of the Executive Board are

Nicolas Alchal (interim EVP, Europe), Joe Bao (EVP, Greater

China), Axel Berkling (EVP, Commercial & Operations), Kaija

Bridger (EVP, People & Communications), Johannes Frände

(General Counsel), Samer Halabi (EVP, Asia-Pacific, Middle

East and Africa), Ilkka Hara (Chief Financial Officer), Mikko

Korte (EVP, Supply Chain), Karla Lindahl (EVP, Europe; on

parental leave), Tomio Pihkala (EVP, Chief Technology

Officer), Ken Schmid (EVP, Americas) and Kaori Uehigashi

(interim EVP, Strategy & Transformation). Susanne Skippari

served as an executive board member until June 30, 2024.

Shareholdings of KONE Board on Dec 31, 2024 and changes in shareholding during the period Jan 1–Dec 31, 2024

Position

Born

Gender

Nationality

Education

Class A

Chang

Class B

Change

Antti Herlin

Chair

1956

Male

Finnish

D.Sc. (Econ.) h.c., D.Arts

h.c., D.Sc. (Tech.) h.c.

70,561,608

53,062,160

+2,006

Jussi Herlin

Vice Chair

1984

Male

Finnish

M.Sc. (Econ.)

105,467

Matti

Alahuhta

Member

1952

Male

Finnish

D.Sc. (Tech.), D.Sc. (Tech.)

h.c.

757,757

+1,003

Susan

Duinhoven

Member

1965

Female

Dutch

Ph.D. (Physical Chemistry),

B.Sc. (Physical Chemistry)

4,644

+1,003

Marika

Fredriksson

Member

1963

Female

Swedish

M.Sc. (Econ.)

1,882

+1,003

Iiris Herlin

Member

1989

Female

Finnish

M.Soc.Sc., Bachelor of

Natural Resources

138,804

+1,003

Timo

Ihamuotila

Member

1966

Male

Finnish

Lic. Sc. (Finance)

13,003

+1,003

Ravi Kant

Member

1944

Male

Indian

B.Tech. (Hons.), M.Sc., D.Sc.

(Hon.)

5,957

+1,003

Krishna

Mikkilineni

Member

1959

Male

American

Ph.D. (Electrical and

Computer Engineering),

B.Tech. (Electronics and

Communications

Engineering)

2,840

+1,003

The shares owned by companies in which a Board or Management member exercises controlling power are also included in these shareholdings.

Number of Board and Committee meetings in 2024 and participant attendance:

Board

Audit Committee

Nomination and

Compensation Committee

Antti Herlin

6/7

3/3

Jussi Herlin

7/7

3/3

Matti Alahuhta

7/7

1/1

3/3

Susan Duinhoven

7/7

3/3

2/2

Marika Fredriksson

7/7

3/3

Iiris Herlin

6/7

Timo Ihamuotila*

6/6

2/2

Ravi Kant

6/7

1/1

Marcela Manubens*

1/1

Krishna Mikkilineni

7/7

* Marcela Manubens served as Board member until February 29, 2024. Timo Ihamuotila was elected to the Board on February 29, 2024.

Corporate Governance Statement

165 KONE Annual Review 2024

The Executive Board members’ holdings of shares are

presented in the adjacent table.

Auditing

KONE Corporation’s Auditor is audit firm Ernst & Young Oy.

The auditor-in-charge is Heikki Ilkka. The fees paid to Ernst &

Young Oy during 2024 were EUR 1.3 million for auditing and

EUR 1.1 million for tax and other services.

Insiders

The shareholding of the members of the Board of Directors,

the Management of KONE and the corporations under their

control amounted to 125,069,627 shares on December 31,

2024, which represents 23.6% of total shares and 62.5% of

voting rights. Antti Herlin’s ownership is 123,623,768 shares

and 75,867,824 votes. The individual holdings of the members

of the Board of Directors and the KONE Management, and the

changes occurred in them during the financial year, are

presented in the adjacent tables.

Related party transactions

Except for management remuneration, there have not been

any material transactions between KONE and its members of

the Board of Directors, the President & CEO or the members

of the Executive Board including any companies controlled or

significantly influenced by them.

More information

As of July 3, 2016, the trades of KONE Board and

Management are published as stock exchange

releases.

Shareholdings of KONE Management on Dec 31, 2024 and changes in shareholding during the

period Jan 1–Dec 31, 2024

Position

Born

Gender

Nationality

Education

Class B

Change

Philippe

Delorme

President and CEO

1971

Male

French

M.Sc. (Manufacturing),

MBA (International

Business)

Nicolas

Alchal

Executive Vice President,

Europe (interim)

1981

Male

Greek

M.Sc. (Electrical

Engineering), MBA

(Business

Administration)

5,773

+1,478

Joe Bao

Executive Vice President,

Greater China

1982

Male

American

B.A. (Management

Information Systems)

Axel Berkling

Executive Vice President,

Commercial & Operations

1967

Male

German

M.Sc. (Econ)

75,226

+6,252

Kaija Bridger

Executive Vice President,

People &

Communications

1972

Female

Finnish

M.Sc. (Psychology)

Johannes

Frände

General Counsel

1979

Male

Finnish

LL.M., M.Sc. (Computer

Science)

5,494

+4,015

Samer

Halabi

Executive Vice President,

Asia-Pacific, Middle East

and Africa

1970

Male

Dominican

M.Sc. (Mechanical

Engineering)

40,140

+8,029

Ilkka Hara

Chief Financial Officer

1975

Male

Finnish

M. Sc. (Finance and

Accounting)

61,311

+6,022

Mikko Korte

Executive Vice President,

Supply Chain

1968

Male

Finnish

M.Sc. (Eng)

66,778

+6,022

Karla Lindahl

Executive Vice President,

Europe (on parental

leave)

1981

Female

Finnish

LL.M., M.A. (EC

Competition Law)

11,444

+1,505

Tomio

Pihkala

Chief Technology Officer

1975

Male

Finnish

M.Sc. (Mechanical

Engineering)

119,680

+6,022

Ken Schmid

Executive Vice President,

Americas

1963

Male

American

MBA (Business

Administration)

29,564

+5,048

Kaori

Uehigashi

Executive Vice President,

Strategy & Transformation

(interim)

1979

Female

Finnish

M.Sc. (Industrial

Engineering)

Corporate Governance Statement

166 KONE Annual Review 2024

Antti Herlin

Chairman of the Board

b. 1956, D.Sc. (Econ.) h.c., D.Arts h.c., D.Sc. (Tech) h.c.

Member of the Board since 1991.

Has served as Chairman of the Board since 2003. Previously

served as Executive Chairman of the Board of KONE 2006–

2021, as CEO of KONE 1996–2006, and as Deputy Chairman

1996–2003.

Current key positions of trust are Chairman of the Board of

Security Trading Oy, Chairman of the Board of Holding

Manutas Oy, and Chairman of the Board of the Tiina and Antti

Herlin Foundation.

Jussi Herlin

Vice Chair of the Board

b. 1984, M.Sc. (Econ)

Member of the Board since 2012.

Has served as Executive Vice Chair of the Board of KONE

since 2021 and Vice Chair of the Board since 2014.

Previously served as Senior Business Analyst and Strategy

Development Manager at KONE 2016–2020, as Consultant at

Accenture 2012–2014, and as Deputy Member of the Board of

KONE Corporation 2007–2012.

Current key positions of trust are Member of the Board of

Security Trading Oy, Member of the Board of Holding

Manutas Oy, Member of the Board of Technology Industries

of Finland and Member of the Board of the KONE Centennial

Foundation.

Matti Alahuhta

b. 1952, D. Sc. (Tech.), D.Sc. (Tech.) h.c.

Member of the Board since 2003.

Previously served as President and CEO of KONE 2006-

2014, as President of KONE 2005-2006, as Executive Vice

President of Nokia Corporation 2004, as President of Nokia

Mobile Phones 1998-2003, as President of Nokia

Telecommunications 1993-1998, and as SVP, Public

Networks 1992 and VP, Dedicated Networks 1986-1991 in

Nokia Telecommunications.

Current key positions of trust are Chairman of the Board of

DevCo Partners Corporation and Member of the Board of

Volvo Group (publicly listed company).

Susan Duinhoven

b. 1965, Ph.D. (Physical Chemistry), B. Sc. (Physical

Chemistry)

Member of the Board since 2020.

Previously served as President and CEO of Sanoma

Corporation (publicly listed company) from 2015 till January 1,

2024. Previously served as CEO of Koninklijke Wegener N.V.

2013–2015, as CEO of Western Europe / CEO Netherlands at

Thomas Cook Group Plc 2010–2013, as Managing Director of

Benelux & New Acquisitions Europe at Reader's Digest 2008–

2010, and as CEO at De Gule Sider A/S 2005–2007. Started

her career at Unilever in 1988.

Marika Fredriksson

b. 1963, M.Sc. (Econ.)

Member of the Board since 2023.

Previously served as CFO and Group Executive Vice

President of Vestas Wind Systems A/S 2013–2022, CFO of

Gambro AB 2009–2012, CFO of Autoliv Inc. 2008–2009, and

has held various positions, including CFO and Senior Vice

President Finance and Strategy at Volvo Construction

Equipment Corporation 1996–2008.

Current key positions of trust are Member of the Board of A.P.

Møller - Maersk A/S (publicly listed company), Member of the

Board of AB Industrivärden (publicly listed company), Member

of the Board of Sandvik AB (publicly listed company), Member

of the Board of Ecolean AB, and Chairman of the Board of

emagine Consulting.

Iiris Herlin

b. 1989, M.Soc.Sc., Bachelor of Natural Resources

Member of the Board since 2015.

Previously served as Deputy Member of the Board 2013–

2014.

Current key positions of trust are Member of the Board of

Security Trading Oy and Member of the Board of the Tiina

and Antti Herlin Foundation.

Timo Ihamuotila

b. 1966, Lic. Sc. (Finance)

Member of the Board since 2024

Serves as CFO of ABB Ltd since 2017. Previously served as

CFO of Nokia Corporation 2009–2016, Executive Vice-

President, Sales, Markets of Nokia Corporation 2008–2009,

and has held various other positions at Nokia Corporation,

including Executive Vice-President, Sales and Portfolio

Management, Mobile Phones 2007, Senior Vice-President,

CDMA Business Unit, Mobile Phones 2004–2007, director

positions in the finance function 1999–2004 and Manager of

Dealing & Risk Management 1993–1996. Prior to that, he

served as Vice-President of Nordic Derivatives Sales at

Citibank Plc 1996–1999 and Analyst, Assets and Liability

Management at Kansallis-Osake-Pankki 1990–1993.

Current key position of trust as a member of the board of Oras

Invest Oy.

Ravi Kant

b. 1944, B.Tech. (Hons.), M.Sc., D.Sc. (Hon)

Member of the Board since 2014.

Previously served in different positions at Tata Motors 1999–

2014 (as Managing Director and CEO 2005–2009 and after

that as the Vice Chairman of the Board of Directors until

2014). Prior to that, he served as Director, Consumer

Electronics at Philips India, as Director (Marketing) at LML

Ltd., and as Vice President (Marketing) at Titan Watches Ltd.

Current key positions of trust are Member of the Board of

Hawkins Cookers Ltd (publicly listed company), and Chairman

of the Advisory Board of both MedTherapy India and

Akhandjyoti Eye Hospital.

Krishna Mikkilineni

b. 1959, Ph.D. (Electrical and Computer Engineering),

B.Tech. (Electronics and Communications Engineering).

Member of the Board since 2022.

Board of Directors

Corporate Governance Statement

167 KONE Annual Review 2024

Previously served in different positions at Honeywell

International Inc. both in the U.S.A. and India 1985–2019

(latest positions were Chief Technology Officer, Chief

Information Officer, Chief of Integrated Supply Chain &

Customer Service globally across the Honeywell Corporation).

Prior to that, he was President of Honeywell Technology

Solutions.

Current key positions of trust are Senior Advisor for various

start-ups, General Partner in a Venture Capital fund, Member

of the Board of CompoSecure Inc. (publicly listed company),

and Member of the Board of a Private Equity firm. He actively

manages a private philanthropic foundation focused on

education and elderly care.

Marcela Manubens served as a Board member until February

29, 2024. Timo Ihamuotila was elected to the Board on

February 29, 2024.

Corporate Governance Statement

168 KONE Annual Review 2024

Executive Board

Philippe Delorme

President and CEO

b. 1971, M.Sc. (Manufacturing), MBA (International Business)

President and CEO of KONE and employed by the company

since 2024.

Prior to joining KONE, he worked at Schneider Electric in

various roles, most recently as Executive Vice President,

Europe Operations. Prior to that he held key positions in the

areas of strategy, technology, operations, and sales in

Europe, the US and Asia. He was a member of the Schneider

Electric Executive Committee from 2009 to 2023.

Nicolas Alchal

Europe (interim)

b. 1981, M.Sc. (Electrical Engineering), MBA (Business

Administration)

Member of the Executive Board since March 2024. Employed

by KONE since 2011.

Previously served at KONE as Managing Director for Middle

East, Türkiye and Africa 2022–2024, as New Equipment

Business Director and Delivery Operations Director for South

Europe, Middle East and Africa 2019– 2021, and as Managing

Director for UAE, Qatar, Oman and Bahrain 2011–2018.

Prior to joining KONE, he worked in various leadership roles

at ThyssenKrupp Elevator in the United Arab Emirates 2007–

2011.

Joe Bao

Greater China

b. 1982, B.A. (Management Information Systems)

Member of the Executive Board and employed by KONE

since October 2022.

Previously served as President of Microsoft China 2021–

2022, as well as in various leadership roles in the areas of

sales, marketing, and strategy at both Microsoft Corporate

headquarters and the Greater China Region 2004–2021.

Current key positions of trust: Member of the Board of

Governors for FinnCham Shanghai.

Axel Berkling

Commercial & Operations

b. 1967, M.Sc. (Econ.)

Member of the Executive Board since 2016. Employed by

KONE since 1998.

Previously served at KONE as Executive Vice President,

Strategy & Transformation July–October 2023, as Executive

Vice President, Central and North Europe 2021–2023, as

Executive Vice President, Asia-Pacific 2016–2021, as

Managing Director, KONE Germany 2012–2016, and in

various regional commercial roles (including Service Director

in Germany) 2007–2012. Prior to joining KONE, he served at

Nass Magnet GmbH as Managing Director 1996–1998 and at

Arthur Andersen in different roles 1992–1995.

Kaija Bridger

People & Communications

b. 1972, M.Sc. (Psychology)

Member of the Executive Board since 2024. Employed by

KONE since 2015.

Previously served at KONE as Vice President, People &

Communications for KONE Asia-Pacific, Middle East, and

Africa 2022–2024 and as Head of Talent Management and

Culture 2015–2022. Prior to joining KONE, she worked in

various Human Resources consulting positions at Psycon Oy

and Cubiks Finland Oy 2000–2015.

Johannes Frände

General Counsel

b. 1979, LL.M., M.Sc. (Computer Science)

Member of the Executive Board since 2021. Employed by

KONE since 2012.

Previously served as Secretary to the KONE Board of

Directors 2022–June 2024, Head of Legal for KONE's Service

Business and KONE's Technology and Innovation unit 2017–

2021 and as Senior Legal Counsel 2012–2016. Prior to joining

KONE, he worked as an attorney at Roschier Attorneys Ltd.

2005–2007 and 2009–2012 and at Debevoise & Plimpton LLP

2008–2009.

Samer Halabi

Asia-Pacific, Middle East and Africa

b. 1970, M.Sc. (Mechanical Engineering)

Member of the Executive Board since 2021. Employed by

KONE since 2001.

Previously served at KONE as Regional Managing Director,

KONE Middle East and Africa 2010–2021, as Managing

Director, KONE Qatar 2007–2010, as Managing Director,

KONE Distributor Business 2004–2007, and in various other

leadership roles in the Middle East and Africa region 2001–

2004.

Ilkka Hara

Chief Financial Officer

b. 1975, M.Sc. (Econ.)

Member of the Executive Board and employed by KONE

since 2016.

Previously served at KONE as interim leader for the South

Europe and Mediterranean region between December 2022

and June 2023. Prior to joining KONE, he served at Microsoft

Phones as General Manager and Chief Financial Officer

2014–2016, and at Nokia in various leadership roles 2004–

2014. Prior to this, he worked at ABN AMRO 2003–2004 and

at Morgan Stanley 2001–2003.

Current key positions of trust: Member of the Board of

Directors at Hartili Oy and Member of the Board of Helsinki

School of Economics Support Foundation.

Mikko Korte

Supply Chain

b. 1968. M.Sc. (Eng)

Member of the Executive Board since 2016. Employed by

KONE since 1995.

Previously served at KONE as Executive Vice President,

Operations Development 2016–2023, Head of New

Equipment Business, KONE Americas 2013–2015, as

Managing Director, KONE Finland and Baltics 2011–2013, as

Service Director, KONE Central and North Europe 2007–

2011, as Service Business Director, KONE Scandinavia

Corporate Governance Statement

169 KONE Annual Review 2024

2004–2007, and as Service Operations Manager, KONE

Finland 1999–2004.

Karla Lindahl

Europe (on parental leave)

b. 1981, LL.M., M.A. (EC Competition Law)

Member of the Executive Board since April 2022. Employed

by KONE since 2004.

Previously served at KONE as Executive Vice President,

South Europe and Mediterranean 2022–2023, as Managing

Director, KONE Finland and Baltics 2017–2022, as Vice

President, Strategy Development and Market Intelligence

2016–2017, as Vice President, Strategy Development and

Investor Relations 2014–2016, as Director, Investor Relations

2010–2014, as Legal Counsel 2005–2010, and as Assistant

Legal Counsel 2004–2005.

Current key position of trust: Member of the Board of NKT

A/S.

Tomio Pihkala

Chief Technology Officer

b. 1975, M.Sc. (Mechanical Engineering)

Member of the Executive Board since 2013. Employed by

KONE since 2001.

Previously served at KONE as Executive Vice President, New

Equipment Business 2019–2023, as Executive Vice

President, Chief Technology Officer 2015–2019, as Executive

Vice President, Operations Development 2013–2015, as Vice

President, Technology Finland 2011–2013, as Director,

Service Equipment Business, KONE China 2009–2010, and

as Director, Product Strategy and Marketing, KONE China

2007–2008.

Current key positions of trust: Member of the Board of

Toshiba Elevator and Building Systems Corporation and

Member of the Board of Vexve Oy.

Ken Schmid

Americas

b. 1963, B.A. (History), MBA (Business Administration)

Member of the Executive Board since 2020. Employed by

KONE since 1986 (Montgomery Elevator Company until

1994).

Previously served at KONE as Senior Vice President,

Finance, KONE Americas 2005–2020, as Senior Vice

President, Global Information Services 2003–2005, as Senior

Vice President, Chief Information Officer, KONE Americas

1998–2003, as Vice President, Quality 1995–1998, and in

various new equipment sales roles in multiple branch offices.

Current key positions of trust: President, Board of Directors,

National Elevator Industry, Inc. (NEII).

Kaori Uehigashi

Strategy & Transformation (interim)

b. 1979, M.Sc. (Industrial Engineering)

Member of the Executive Board and employed by KONE as of

January 2024.

Previously served as Managing Director and Senior Partner at

Boston Consulting Group (BCG) since 2017 and has most

recently acted as the Managing Partner for BCG in Finland

2021–2023.

Philippe Delorme started as President and CEO of KONE on

January 1, 2024. Henrik Ehrnrooth continued as Executive

Advisor until the end of March 2024, supporting the transition

and induction of the new CEO.

Kaori Uehigashi was appointed interim Executive Vice

President for Strategy & Transformation as of January 4,

2024.

Nicolas Alchal was appointed Executive Vice President,

Strategy & Transformation as of Jan 1, 2025. Before starting

in this role, Nicolas acts as an interim Executive Vice

President for Europe Area, as of March 1, 2024, when Karla

Lindahl started her parental leave.

The initial duration of these interim roles was planned to

be until early 2025. On December 9, 2024, KONE announced

that the interim EVP roles for Europe and Strategy &

Transformation will continue until the end of March 2025.

Karla Lindahl, Executive Vice President, Europe, will return

from parental leave in late March 2025.

On May 6, 2024, KONE announced the appointment of

Kaija Bridger as Executive Vice President, People &

Communications, and a member of the Executive Board at

KONE as of July 1, 2024, succeeding Susanne Skippari, who

decided to leave KONE for a position outside the company.

As of January 1, 2025 KONE’s Executive Board consisted

of the following members: Philippe Delorme (President and

CEO), Joe Bao (EVP, Greater China), Axel Berkling (EVP,

Commercial & Operations), Kaija Bridger (EVP, People &

Communications), Johannes Frände (Legal Counsel), Samer

Halabi (EVP, Asia-Pacific, Middle East and Africa), Ilkka Hara

(Chief Financial Officer), Mikko Korte (EVP, Supply Chain),

Nicolas Alchal (interim EVP, Europe), Tomio Pihkala (EVP,

Chief Technology Officer), Ken Schmid (EVP, Americas) and

Kaori Uehigashi (interim EVP, Strategy & Transformation).

More information

This statement is available on the company’s web

pages at www.kone.com and it has been given

separately of the Board of Directors’ Report.

Investor information

170 KONE Annual Review 2024

Annual General Meeting

KONE Corporation’s Annual General Meeting will be held on

Wednesday March 5, 2025 at 11.00 a.m. at Finlandia Hall,

Mannerheimintie 13e, in Helsinki, Finland.

Further instructions and schedules for shareholders can

be found on KONE’s website at kone.com and in the Notice to

the General meeting.

At general meetings, each KONE class A share is

assigned one vote, as is each block of 10 class B shares, with

the provision that each shareholder is entitled to at least one

vote.

Payment of dividends

The Board of Directors proposes to the Annual General

Meeting that for the financial year 2024 a dividend of EUR

1.7975 be paid for each class A share and a dividend of EUR

1.80 be paid for each class B share. All shares existing on the

dividend record date, March 7, 2025 are entitled to the

dividend. The dividend is proposed to be paid on March 14,

2025.

Listing of KONE securities

KONE Corporation has two classes of shares: the listed class

B shares and the non-listed class A shares. The KONE class

B shares are listed on the Nasdaq Helsinki Ltd. and are

registered at Euroclear Finland Ltd.

More information

For more information on the Board of Directors’ proposal

for the distribution of profit and Shares and shareholders,

please refer to the Board of Directors’ Report.

Information for shareholders

Investor information

171 KONE Annual Review 2024

Investor relations

Investor relations policy

KONE strives to offer liquid shares that present an attractive

investment alternative to domestic and foreign investors. The

primary task of KONE’s Investor Relations is to ensure that

the market has correct and sufficient information at its

disposal in order to determine the value of the KONE share at

all times. The aim of KONE’s written communications, such as

the financial statements and interim reports, the sustainability

report, stock exchange and press releases, the internet pages

as well as that of all other communication with investors and

analysts is to accomplish this task.

In all of its communications, KONE complies with the

requirements for listed companies as defined by EU

legislation, the Finnish Securities Markets Act, the rules of the

Nasdaq Helsinki Ltd. and any other applicable regulation

concerning prompt and simultaneous disclosure of

information.

Silent period

KONE observes a period of silence prior to releasing its

financial results. This means that there are no discussions

regarding financial issues with the capital markets or the

financial media during the three-week period preceding the

publication of interim results and the four-week period

preceding the publication of the annual financial statements.

This applies to meetings, telephone conversations and other

means of communication.

Contact information

Natalia Valtasaari

Vice President, Investor Relations

Tel. +358 (0)204 75 4705

investors@kone.com

KONE’s financial reporting schedule 2025

Financial Statements Bulletin for 2024

Thursday, January 30, 2025

Annual Review 2024 incl. Financial Statements

Wednesday, February 12, 2025

Interim Report for January 1–March 31, 2025

Wednesday, April 30, 2025

Half-year Financial Report for January 1–June 30, 2025

Friday, July 18, 2025

Interim Report for January 1–September 30, 2025

Thursday, October 23, 2025

172 KONE Annual Review 2024

This report contains forward-looking statements that are

based on the current expectations, known factors, decisions

and plans of the management of KONE. Although the

management believes that the expectations reflected in such

forward-looking statements are reasonable, no assurance can

be given that such expectations will prove to be correct.

Accordingly, results could differ materially from those implied

in the forward-looking statements as a result of, among other

factors, changes in economic, market and competitive

conditions, changes in the regulatory environment and other

government actions as well as fluctuations in exchange rates.

KONE Corporation

Corporate Offices

Keilasatama 3

P.O. Box 7

FI-02150 Espoo Finland

Tel. +358 (0)204 751

www.kone.com

For further information please contact:

Natalia Valtasaari

Vice President, Investor Relations

Tel. +358 (0)204 75 4705