KONE Sustainability Report 2017

KONE 2017 | SUSTAINABILITY REPORT Value creation 8 N E W EQUIPME N T 5 3 % M A I N T E N A N C E 3 2 % M O D E R N I Z A T I O N 1 4 % Share of sales MANUFACTURING AND INSTALLATION • 13 manufacturing units in 9 countries • ~2,000 component suppliers • Thousands of installation suppliers • Logistics network BRAND AND REPUTATION FINANCIAL • Equity EUR 2.9 billion • Interest-bearing net debt EUR -1.7 billion • Net working capital EUR -0.9 billion • Capital expenditure 1.3% of sales NATURAL RESOURCES • Materials used 737,200 tonnes • Heating and vehicle fleet fuels 424,600 MWh • Electricity and district heat 82,000 MWh • Water consumption 403,000 m3 BUSINESS MODEL INPUTS PEOPLE AND LEADERSHIP • >55,000 employees in >60 countries, >half of them in the field • Personnel turnover rate 7.7% • 92% of employees with individual development plan • Wide training opportunities on all organizational levels around the world • >35 training centers • 3,900 courses in 30 different languages • Management systems and certificates (e.g. ISO 14001, ISO 9001, OHSAS 18001) • Governance structures and Code of Conduct INNOVATIONS AND PROCESSES • >3,000 patents • R&D spend 1.8% of sales, 9 global R&D units • >1,000 technology professionals in R&D • Global KONE Way processes and systems • Safe and efficient maintenance and installation methods PARTNERING • Co-creation with customers • Partnering to develop new technologies • Collaboration with >300 universities and educational institutions • Distributors and agents important part of go-to-market WINNING WITH CUSTOMERS Creating value for customers through the whole life cycle of the building KONE provides value for the customers through the whole life cycle of the build- ing. In the new equipment business, we offer innovative and sustainable elevators, escalators, automatic building doors and integrated access control solutions to deliver the best people flow experience. In maintenance, we improve the safety and availability of the equipment in oper- ation, and in modernization we offer solu- tions for aging equipment ranging from the replacement of components to full replacements. The key growth drivers of the new equipment business are urbanisation and changing demographics. New equipment deliveries are the main growth driver of the maintenance business as the majority of units delivered will end up in KONE’s maintenance base. However, KONE also maintains equipment manufactured by others. In maintenance, KONE is also looking to boost growth by introduc- ing services that utilize new technol- ogies to create value for customers in new ways. The main growth drivers for modernization are the aging installed base and higher requirements for effi- cient people flow, safety and sustainabil- ity. Having a strong maintenance base is crucial for the growth in modernization. KONE’s business model is capital light as the working capital is negative in all businesses and we work extensively with component suppliers to complement our own manufacturing capacity. The maintenance business is very stable due to high requirements for safety and reliability. The customer relationships CREATING VALUE FOR THE SOCIETY CREATING VALUE BY IMPROVING THE FLOW OF URBAN LIFE