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Our business model is based on a life-cycle
approach. This means that we provide value
for our customers, every step of the way for
the entire lifespan of the building. We offer
innovative and sustainable new equipment
solutions, ensure safety and availability
of the equipment in operation, and offer
modernization solutions for aging equipment.
The life-cycle nature is one of the strengths
of our business model. The new equipment
business is more cyclical in nature and fuels the
growth of our maintenance business in the long
term. Maintenance, on the other hand, brings
stability to the business over economic cycles,
whereas the aging equipment in maintenance
creates potential for modernization. We believe
that megatrends such as urbanization, aging
population, and growth of the global middle
class provide a strong basis for the continued
demand for our solutions.
Financial performance in 2016
In 2016, KONE’s orders received declined
by 4.2% (at comparable rates by -1.6%),
and stayed at a good level of EUR 7,621
million (2015: 7,959 MEUR). New equipment
orders received declined somewhat, while in
modernization, orders received grew clearly.
Orders received in the new equipment business
amounted to approximately 158,000 units
(2015: approximately 161,000 elevator and
escalator units), whereas our maintenance base
was clearly over 1.1 million units at the end of
2016 (close to 1.1 million units at the end of
2015). In 2016, KONE’s net sales grew by 1.6%
(at comparable rates 3.9%), and totaled EUR
8,784 million (2015: 8,647 MEUR). The share of
new equipment sales out of total sales was 55%,
whereas maintenance accounted for 31% and
modernization 14%. In terms of geographical
distribution, 40% of net sales came from the
EMEA region (Europe, Middle East and Africa),
19% from the Americas and 41% from Asia-
Pacific. China, the United States, France and
Germany were the largest individual countries
ECONOMIC
RESPONSIBILITY
ENABLING OUR PARTNERS
AND SOCIETIES TO PROSPER
KONE directly contributes to economic development in the over 60
countries where we operate. In addition, we work with approximately
20,000 suppliers who provide us with for example raw materials,
components and modules, and logistics and installation services. As a
responsible corporate citizen and business partner, we are committed to
making a positive impact throughout the whole value chain.
G4 INDICATORS RELATED TO THIS SECTION
G4 EC1: Direct economic value generated and distributed
G4-EC6: Proportion of senior management hired from the local
community at significant locations of operation
G4-SO4: Communication and training on anti-corruption policies and
procedures
G4-SO7: Total number of legal actions for anti-competitive behavior, anti-
trust, and monopoly practices and their outcomes
G4-SO8: Monetary value of significant fines and total number of non-
monetary sanctions for non-compliance with laws and regulations
G4-EN32: Percentage of new suppliers that were screened using
environmental criteria
G4-LA14: Percentage of new suppliers that were screened using labor
practices criteria