Financials

KONE’s accounting principles are based on the International Financial Reporting Standards (IFRS) as adopted by the European Union, observing the standards and interpretations effective on the date of the financial statements. The accounting principles applied in each financial period are presented in the notes to the consolidated financial statements of the corresponding year and can be found in the Annual Review of the year in question.

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. 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. In the event that significant attractive investment or acquisition opportunities were available, KONE could also utilize its borrowing capacity.

In such cases, the level of debt and financial gearing could be higher for a period of time. At the end of 2025, the funding of KONE was guaranteed by existing committed credit facilities, 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.

To ensure an efficient internal allocation and utilization of its capital resources, KONE measures 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.

To ensure sufficient liquidity, KONE has a sustainability-linked revolving credit facility of EUR 850 million. The sustainability targets included in the facility relate to KONE’s decarbonization and gender diversity commitments. Additionally, KONE has a credit facility of EUR 200 million and a loan of EUR 200 million from the European Investment Bank (EIB) for R&D purposes. The fixed interest rate loan will mature in 2026. KONE also has an uncommitted commercial paper program of EUR 500 million.

Credit rating

KONE Corporation does not have credit ratings.