Untitled

Contents

2022 highlights

Report of the Board of Directors

Konecranes Group 2018–2022

Calculation of key figures

Financial Statements

Consolidated statement of income – IFRS

Consolidated balance sheet – IFRS

Consolidated statement of changes in equity – IFRS

Consolidated cash flow statement – IFRS

Notes to the consolidated financial statements

Company list

Parent company statement of income – FAS

Parent company balance sheet – FAS

Parent company cash flow – FAS

Notes to the parent company’s Financial Statement

Board of Directors’ proposal to the Annual General Meeting

Auditor’s report

Independent Auditor’s Report on Konecranes Plc’s

ESEF Consolidated Financial Statements

Company information for ESEF reporting

Shares and shareholders

112

114

115

116

117

119

120

124

125

126

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

2022 highlights

Sales & order intake, MEUR

Adjusted EBITA by Segment, 2022

Adjusted EBITA, MEUR & Adjusted EBITA margin, %

Personnel by Segment, 2022

Earnings & dividend per share, EUR

72%

Service

249.4 MEUR

18%

Port Solutions

63.5 MEUR

Industrial Equpment

32.5 MEUR

47%

Service

7,802

19%

Port Solutions

3,102

34%

Industrial Equpment

5,529

2018 2019 2020 2021 2022

Sales Order intake

1,000

2,000

3,000

4,000

3,185.7

3,175.5

3,364.8

3,928.9

3,178.9

2,727.3

3,156.1

3,090.3

3,326.9

3,167.3

38%

Service

1,343.3 MEUR

28%

Port Solutions

1,015.0 MEUR

34%

Industrial Equpment

1,205.6 MEUR

Sales by Business Area, 2020

100

150

200

250

300

350

Adjusted EBITA, MEUR/ Adjusted EBITA margin, %

2018 2019 2020 2021 2022

Adjusted EBITA

Adjusted EBITA margin

312.2

318.4

260.8

257.1

275.1

0.0

0.5

1.0

1.5

2.0

Earnings & dividend per share, EUR

2018 2019 2020 2021 2022

Earnings per share, basic Dividend per share

1.29

1.20

1.03

1.20

1.86

1.77

1.25 1.25

1.54

0.88

*The Board's proposal to the AGM

Sales by Segment, 2022

Percentages have been rounded and may not total to 100%.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Return on equity, %

Order book, MEUR

ROCE, % & Adjusted ROCE, %

Year-end net working capital, MEUR

Year-end market capitalization*, MEUR

Year-end net debt, MEUR & Gearing, %

100

200

300

400

500

600

2018 2019 2020 2021 2022

410.4

446.0

424.5

581.2

337.2

200

400

600

800

1,000

2018 2019 2020 2021 2022

Net debt

545.3

655.3

577.1

541.6

688.3

100

Gearing

2018 2019 2020 2021 2022

Return on capital employed, %

Adjusted return on capital employed, %

7.9

12.5

6.3

8.3

12.7

11.1

9.3

13.4

9.0

13.4

500

1,000

1,500

2,000

2,500

3,000

2018 2019 2020 2021 2022

1,715.4

1,824.3

2,036.8

2,901.7

1,715.5

2018 2019 2020 2021 2022

7.7

6.5

9.8

11.3

9.9

500

1,000

1,500

2,000

2,500

3,000

2018 2019 2020 2021 2022

2,080.0

2,160.2

2,277.5

2,782.4

2,276.8

* Excluding treasury shares

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Report of the Board of Directors

Unless otherwise stated, the figures in brackets in the

sections below refer to the same period in the previous year.

Market review

In 2022, the global manufacturing sector was negatively

impacted by high inflation, economic uncertainty and supply

chain constraints. In addition, the war in Ukraine increased

energy costs and market volatility particularly in Europe.

The world’s manufacturing sector’s operating conditions,

according to the global manufacturing Purchasing Managers’

Index (PMI), were in contraction at the end of the fourth

quarter of 2022. Before turning to deterioration below

the neutral 50 mark in September, the PMI had been in

expansion territory for more than two years. December’s

PMI of 48.6 was the lowest reading since mid-2020, and

excluding the lows seen in the beginning of the COVID-19

pandemic, it was the lowest level since the first half of 2009.

In the eurozone, December’s manufacturing PMI was

in deterioration with a reading of 47.8. It was the sixth

successive month in contraction although the PMI

slightly improved from November. In the US, December’s

manufacturing PMI was in contraction with a reading of

46.2. The PMI fell below the neutral 50 mark in November

and December’s level was among the lowest readings since

2009. In the emerging markets, December’s manufacturing

PMI was in expansion territory in India while in Brazil and

China, the PMI was in deterioration.

The manufacturing industry capacity utilization rate in the

European Union decreased in the fourth quarter. The capacity

utilization rate was at a lower level on a year-on-year

basis, it dropped back to approximately the same readings

registered prior to the start of the COVID-19 pandemic. The

manufacturing industry capacity utilization rate in the US

decreased in December. The capacity utilization rate was at

a lower level on a year-on-year basis, it returned below the

recent highs recorded earlier during 2022.

Global container throughput, according to the RWI/ISL

Container Throughput Index, began 2022 at a relatively

strong level compared to the historical readings. At the end

of 2022, the global container throughput was approximately

on the same level as the year before, although there was

some fluctuation during the year.

Regarding raw material prices, at the end of the fourth

quarter both steel and copper prices were below the

previous year’s levels. The average EUR/USD exchange

rate was approximately 11 percent lower compared to the

year-ago period.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Orders received

In full year 2022, orders received totaled EUR 3,928.9

million (3,175.5), representing an increase of 23.7 percent.

On a comparable currency basis, order intake increased

19.2 percent. Orders received increased in the Americas,

EMEA and APAC.

In Service, order intake increased 7.8 percent on a

reported basis and 1.5 percent on a comparable currency

basis. In Industrial Equipment, orders received increased

18.5 percent on a reported basis and 13.3 percent on a

comparable currency basis. External orders received in

Industrial Equipment increased 15.3 percent on a reported

basis and 9.9 percent on a comparable currency basis. In

Port Solutions, order intake increased 47.3 percent on a

reported basis and 46.8 percent on a comparable currency

basis.

Order book

At the end of December, the value of the order book

totaled EUR 2,901.7 million (2,036.8), which was

42.5 percent higher compared to previous year. On a

comparable currency basis, the order book increased 41.1

percent. The order book increased 29.7 percent in Service,

20.8 percent in Industrial Equipment and 62.6 percent in

Port Solutions.

Sales

In full year 2022, Group sales totaled EUR 3,364.8 million

(3,185.7), representing an increase of 5.6 percent. On a

comparable currency basis, sales increased 1.8 percent.

Sales increased 11.5 percent in Service and 10.7 percent

in Industrial Equipment but decreased 5.4 percent in Port

Solutions. Industrial Equipment’s external sales increased

11.3 percent.

At the end of December, the regional breakdown of sales,

calculated on a rolling 12-month basis, was as follows: EMEA

51 (52), Americas 36 (33) and APAC 13 (16) percent.

Financial result

In full year 2022, the Group adjusted EBITA increased to EUR

318.4 million (312.2). The adjusted EBITA margin decreased

to 9.5 percent (9.8). The adjusted EBITA margin increased

in Service to 18.6 percent (18.5) but decreased in Industrial

Equipment to 2.7 percent (3.5) and in Port Solutions to 6.3

percent (7.4). The decrease in the Group adjusted EBITA

margin was mainly attributable to lower underlying sales

volumes and cost inflation primarily in Industrial Equipment.

In full year 2022, the consolidated adjusted operating

profit increased to EUR 286.6 million (279.1). The adjusted

operating margin decreased to 8.5 percent (8.8).

In full year 2022, the consolidated operating profit totaled

EUR 223.2 million (220.0). The operating profit includes

adjustments of EUR 63.5 million (59.1), which mainly

comprised of costs related to the impacts of the war in

Ukraine, merger related costs, and restructuring costs. Year-

on-year, the operating margin increased in Service to 17.3

percent (17.0) and decreased in Industrial Equipment to

-0.9 percent (1.7) and in Port Solutions to 3.8 percent (7.0).

In full year 2022, depreciation and impairments totaled EUR

124.4 million (120.1). The impact arising from the purchase

price allocation amortizations and goodwill impairments

represented EUR 31.8 million (33.2) of the depreciation and

impairments. In Q3 2022, EUR 3.9 million of goodwill in the

Agilon business was impaired.

In full year 2022, the share of the result in associated

companies and joint ventures was EUR 0.4 million (0.3).

In full year 2022, financial income and expenses totaled

EUR -32.9 million (-27.8). Net interest expenses accounted

for EUR 26.1 million (15.7) of the sum and the remainder

was mainly attributable to other financing expenses.

In full year 2022, profit before taxes was EUR 190.7 million

(192.5).

In full year 2022, income tax was EUR 52.2 million (45.1).

The Group’s effective tax rate was 27.4 percent (23.4).

10–12/2022 10–12/2021 Change %

Change % at

comparable

currency rates 1–12/2022 1–12/2021 Change %

Change % at

comparable

currency rates

Orders received, MEUR 879.1 892.3 -1.5 -4.5 3,928.9 3,175.5 23.7 19.2

Net sales, MEUR 1,020.9 948.9 7.6 4.4 3,364.8 3,185.7 5.6 1.8

Orders received and net sales

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

In full year 2022, net profit was EUR 138.5 million (147.4).

In full year 2022, the basic earnings per share were EUR

1.77 (1.86) and the diluted earnings per share were EUR

1.77 (1.85).

On a rolling 12-month basis, the return on capital employed

was 9.0 percent (9.3) and the return on equity 9.9 percent

(11.3). The adjusted return on capital employed was 13.4

percent (13.4).

Balance sheet

At the end of December, the consolidated balance sheet

amounted to EUR 4,340.6 million (3,845.8). The total equity

at the end of the reporting period was EUR 1,433.0 million

(1,360.6). The total equity attributable to the equity holders

of the parent company was EUR 1,432.9 million (1,351.4) or

EUR 18.10 per share (17.08).

Net working capital totaled EUR 581.2 million (424.5). The

increase in net working capital resulted mainly from an

increase in inventories. Sequentially, net working capital

increased by EUR 2.7 million.

Cash flow and financing

In full year 2022, net cash from operating activities was EUR

66.7 million (168.4). The decrease in net cash from operating

activities was mainly due to change in net working capital

during the period. Cash flow before financing activities was

EUR 23.1 million (137.7), which included cash inflows of

EUR 2.6 million (9.8) related to sale of property, plant and

equipment, and EUR 0.1 million (0.0) related to divestment of

Businesses. It included cash outflows of EUR 1.6 million (0.0)

related to acquisition of Group companies, and EUR 44.7

million (40.5) related to capital expenditure.

At the end of December, interest-bearing net debt was EUR

688.3 million (541.6). Net debt increased mainly due to

weaker operating cash flow. The equity to asset ratio was

37.9 percent (38.9) and gearing 48.0 percent (39.8).

At the end of December, cash and cash equivalents

amounted to EUR 413.9 million (320.7). None of the Group’s

committed EUR 400 million back-up financing facility was in

use at the end of the period.

In June 2022, Konecranes paid dividends, amounting to EUR

98.9 million or EUR 1.25 per share, to its shareholders.

Capital expenditure

In full year 2022, capital expenditure excluding acquisitions

and joint arrangements amounted to EUR 37.0 million

(49.8). The amount consisted mainly of investments in

machinery and equipment, buildings, office equipment and

information technology.

Acquisitions and divestments

In full year 2022, the cash impact of capital expenditure for

acquisitions and joint arrangements was EUR -1.6 million

(0.0). The cash impact of divestment of Businesses was

EUR 0.1 million (0.0).

In July 2022, Konecranes acquired a small crane service

business of Garabi Industrial Technologies in Spain. In

September 2022, Konecranes acquired the non-controlling

interest of 6 percent of Konecranes Real Estate GmbH & Co.

KG in Germany. In November 2022, Konecranes became

the sole owner and provider of TBA software products by

acquiring the non-controlling interest of 30.22 percent of

Ports Software Solutions B.V. in the Netherlands.

In September 2022, Konecranes divested the small

automation business Motronica in Italy from the Port

Solutions segment. In September-December 2022,

Konecranes divested the service business in Russia to local

management who have established their own companies.

Personnel

In full year 2022, the Group had an average of 16,563

employees (16,625). On December 31, the number of

personnel was 16,522 (16,573). In full year 2022, the

Group’s personnel decreased by 51 people net.

At the end of December, the number of personnel by

operating segment was as follows: Service 7,802 employees

(7,890), Industrial Equipment 5,529 employees (5,516),

Port Solutions 3,102 employees (3,083) and Group staff 89

employees (84).

The Group had 9,565 (9,683) employees working in EMEA,

3,131 (3,016) in the Americas and 3,826 (3,874) in APAC.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

In full year 2022, orders received totaled EUR 1,161.9

million (1,078.3), corresponding to an increase of 7.8

percent. On a comparable currency basis, orders received

increased 1.5 percent.

The order book increased 29.7 percent to EUR 445.5 million

(343.5). On a comparable currency basis, the order book

increased 26.0 percent.

The annual value of the agreement base increased 5.7

percent year-on-year to EUR 306.9 million (290.4). On

a comparable currency basis, the annual value of the

10–12/2022 10–12/2021 Change %

Change % at

comparable

currency rates 1–12/2022 1–12/2021 Change %

Change % at

comparable

currency rates

Orders received, MEUR 283.2 307.7 -7.9 -13.7 1,161.9 1,078.3 7.8 1.5

Order book, MEUR 445.5 343.5 29.7 26.0 445.5 343.5 29.7 26.0

Agreement base value, MEUR 306.9 290.4 5.7 3.4 306.9 290.4 5.7 3.4

Net sales, MEUR 376.0 332.2 13.2 7.7 1,343.3 1,205.3 11.5 5.4

Adjusted EBITA, MEUR

79.3 69.7 13.9 249.4 222.4 12.2

Adjusted EBITA, %

21.1% 21.0% 18.6% 18.5%

Purchase price allocation amortization, MEUR -3.6 -3.9 -7.1 -14.3 -15.5 -8.1

Adjustments, MEUR -0.8 -1.0 -2.9 -2.0

Operating profit (EBIT), MEUR 74.9 64.8 15.6 232.3 204.9 13.4

Operating profit (EBIT), % 19.9% 19.5% 17.3% 17.0%

Personnel at the end of period 7,802 7,890 -1.1 7,802 7,890 -1.1

Segments

Service

agreement base increased 3.4 percent. Sequentially,

the annual value of the agreement base decreased 2.7

percent on a reported basis and increased 1.2 percent on a

comparable currency basis.

Sales increased 11.5 percent to EUR 1,343.3 million

(1,205.3). On a comparable currency basis, sales increased

5.4 percent. Both field service sales and parts sales

increased.

The adjusted EBITA was EUR 249.4 million (222.4) and

the adjusted EBITA margin was 18.6 percent (18.5).

The increase in the adjusted EBITA margin was mainly

attributable to higher sales driven by pricing. The operating

profit was EUR 232.3 million (204.9) and the operating

margin 17.3 percent (17.0).

Excluding adjustments and purchase price allocation amortization. See also note 3 in the notes to the consolidated financial statements.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

10–12/2022 10–12/2021 Change %

Change % at

comparable

currency rates 1–12/2022 1–12/2021 Change %

Change % at

comparable

currency rates

Orders received, MEUR 306.2 274.5 11.6 7.8 1,389.2 1,172.5 18.5 13.3

of which external, MEUR 258.6 242.4 6.7 2.9 1,192.4 1,033.7 15.3 9.9

Order book, MEUR 857.2 709.9 20.8 18.3 857.2 709.9 20.8 18.3

Net sales, MEUR 376.9 332.1 13.5 9.2 1,205.6 1,088.7 10.7 5.9

of which external, MEUR 335.1 294.1 13.9 9.2 1,068.8 960.2 11.3 6.0

Adjusted EBITA, MEUR

22.5 20.6 9.3 32.5 38.0 -14.4

Adjusted EBITA, %

6.0% 6.2% 2.7% 3.5%

Purchase price allocation amortization, MEUR -1.8 -2.7 -34.3 -11.0 -10.8 1.4

Adjustments, MEUR -9.7 -1.1 -32.5 -8.5

Operating profit (EBIT), MEUR 11.0 16.8 -34.2 -10.9 18.7 -158.6

Operating profit (EBIT), % 2.9% 5.0% -0.9% 1.7%

Personnel at the end of period 5,529 5,516 0.2 5,529 5,516 0.2

In full year 2022, orders received totaled EUR 1,389.2

million (1,172.5), corresponding to an increase of 18.5

percent. On a comparable currency basis, orders received

increased 13.3 percent. External orders received increased

15.3 percent on a reported basis and 9.9 percent on a

comparable currency basis. Order intake increased in

standard cranes, process cranes and components.

The order book increased 20.8 percent to EUR 857.2 million

(709.9). On a comparable currency basis, the order book

increased 18.3 percent.

Sales increased 10.7 percent to EUR 1,205.6 million

(1,088.7). On a comparable currency basis, sales increased

5.9 percent. External sales increased 11.3 percent on a

reported basis and 6.0 percent on a comparable currency

basis. Sales increased in standard cranes, process cranes

and components.

The adjusted EBITA was EUR 32.5 million (38.0) and the

adjusted EBITA margin 2.7 percent (3.5). The decrease in

the adjusted EBITA margin was mainly attributable to cost

inflation and low underlying sales volumes. The operating

profit was EUR -10.9 million (18.7) and the operating

margin -0.9 percent (1.7).

Industrial Equipment

Excluding adjustments and purchase price allocation amortization. See also note 3 in the notes to the consolidated financial statements.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

10–12/2022 10–12/2021 Change %

Change % at

comparable

currency rates 1–12/2022 1–12/2021 Change %

Change % at

comparable

currency rates

Orders received, MEUR 355.7 354.9 0.2 0.4 1,639.5 1,112.7 47.3 46.8

Order book, MEUR 1,599.0 983.5 62.6 63.5 1,599.0 983.5 62.6 63.5

Net sales, MEUR 328.4 337.9 -2.8 -2.6 1,015.0 1,072.9 -5.4 -6.0

of which service, MEUR 64.7 50.9 27.1 23.0 226.1 181.9 24.3 20.4

Adjusted EBITA, MEUR

21.4 28.8 -25.7 63.5 79.9 -20.5

Adjusted EBITA, %

6.5% 8.5% 6.3% 7.4%

Purchase price allocation amortization, MEUR -1.6 -1.6 -0.1 -6.6 -6.8 -3.6

Adjustments, MEUR 2.9 1.4 -18.6 1.7

Operating profit (EBIT), MEUR 22.6 28.5 -20.7 38.4 74.8 -48.7

Operating profit (EBIT), % 6.9% 8.4% 3.8% 7.0%

Personnel at the end of period 3,102 3,083 0.6 3,102 3,083 0.6

Excluding adjustments and purchase price allocation amortization. See also note 3 in the notes to the consolidated financial statements.

In full year 2022, orders received totaled EUR 1,639.5

million (1,112.7), corresponding to an increase of 47.3

percent. On a comparable currency basis, orders received

increased 46.8 percent.

The order book increased 62.6 percent to EUR 1,599.0

million (983.5). On a comparable currency basis, the order

book increased 63.5 percent.

Sales decreased 5,4 percent to EUR 1,015.0 million

(1,072.9). On a comparable currency basis, sales decreased

6.0 percent.

The adjusted EBITA was EUR 63.5 million (79.9) and the

adjusted EBITA margin 6.3 percent (7.4). The decrease in

the adjusted EBITA margin was mainly attributable to lower

sales due to timing of customer deliveries. In addition, the

Port Solutions

comparison period included a provision release of EUR 5

million. Gross margin increased on a year-on-year basis.

Operating profit was EUR 38.4 million (74.8) and the

operating margin 3.8 percent (7.0).

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Group overheads

In full year 2022, the adjusted unallocated Group overhead

costs and eliminations were EUR 27.0 million (28.1),

representing 0.8 percent of sales (0.9).

The unallocated Group overhead costs and eliminations

were EUR 36.6 million (78.4), representing 1.1 percent of

sales (2.5). These included adjustments of EUR 9.5 million

(50.3), consisting mainly of merger related costs.

The impact of the war in Ukraine on

Konecranes

Konecranes operates a crane and component factory in

Zaporizhzhia, in the south-eastern part of Ukraine. The

factory is one of the Industrial Equipment supply factories

for crane components and a crane manufacturing unit

for Eastern Europe deliveries. It also offers extra capacity

for Konecranes’ western crane deliveries specializing in

large steel structures. The factory has approximately 350

employees.

In addition, Konecranes has approximately 70 people

working in crane service, port service, spare parts, and

industrial crane sales operations mainly in Odessa, Mariupol

and Zaporizhzhia.

Konecranes has supported its employees and their families

based in Ukraine throughout the war and has continued to

pay salaries and wages to the Ukrainian employees. The

safety and well-being of Konecranes’ employees based in

Ukraine, and their families, are a number one priority for

Konecranes.

The production at the Ukrainian factory was stopped

immediately after the war started. The planned production

has been redirected to other Konecranes manufacturing

sites. This has generated additional operating costs mainly

within Industrial Equipment. In full year 2022, these costs

totaled approximately EUR 4 million.

As the level of uncertainty regarding Konecranes’ operations

in Ukraine remains high due to the ongoing war, Konecranes

impaired all Ukraine-related assets, including inventories

and receivables, in the first quarter. The impact of the

impairments on operating profit was approximately EUR 4.0

million negative in January-December.

Konecranes condemns Russia’s aggression towards

Ukraine and has decided not to take any new business

from Russia. As a result of this decision, Konecranes

wrote off EUR 78.9 million of orders from Russian the

first quarter. In total, in 2022, the Russia-related sales

reversals totaled EUR 33.5 million, out of which EUR 21.2

million in Port Solutions and EUR 12.3 million in Industrial

Equipment. The negative result impact of Russia-related

actions totaled EUR 37.8 million, out of which EUR 17.8

million in Port Solutions, EUR 19.6 million in Industrial

Equipment, EUR 0.4 million in Service and EUR 0.1 million

unallocated items. These amounts have been included in

adjustments.

In the fourth quarter, Konecranes divested its Russian Service

business to local management who had established their own

companies. Konecranes cancelled all Russian maintenance

agreements already in the third quarter, and they were

written off from the Konecranes service agreement base, with

a EUR 3.5 million negative impact on the agreement base

value.

At the end of December, Konecranes’ order book included

EUR 0.3 million of orders from Russia.

The war has increased market volatility and uncertainty

by increasing cost inflation and global material availability

concerns and other supply chain issues. It is too early to

estimate how long and to what extent they will impact

Konecranes’ business and performance.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Administration

Abandonment of the planned merger of

Konecranes Plc and Cargotec Corporation

On October 1, 2020, Konecranes Plc (“Konecranes”) and

Cargotec Corporation (“Cargotec”) announced that their

respective Boards of Directors had signed a combination

agreement and a merger plan (“the Merger Plan”) to

combine the two companies through a merger (“the

Merger”).

On March 29, 2022, Konecranes announced that the UK

Competition & Markets Authority (“CMA”) had blocked the

merger. According to the CMA’s final report issued on the

same day, the remedies – which had been accepted by the

European Commission (“EC”) – would not be effective in

addressing the CMA’s concerns and thus the planned merger

between Konecranes and Cargotec could not be completed.

The completion of the planned merger would have required

approvals from all relevant competition authorities. Thus,

Konecranes and Cargotec decided to cancel the planned

merger and immediately ceased the pursuit of the merger

and the related processes and continue to operate

separately as fully independent companies.

Service and Industrial Equipment under one

leadership

On April 27, 2022, Konecranes announced that as a result

of the Industrial Assessment, which was started in October

2021, it had decided to focus Service and Industrial

Equipment under one leadership to strengthen Konecranes’

role as the global lifting leader. As a result, since the

beginning of June, Konecranes has had two Business Areas:

Industrial Service and Equipment, and Port Solutions.

Despite the change, Konecranes continues to report three

operating segments: Service, Industrial Equipment and Port

Solutions, and the segment financials are comparable with

historical figures.

Decisions of the Annual General Meeting

The Annual General Meeting of Konecranes Plc

(“Konecranes” or the “Company”) was held on June 15,

2022. The meeting approved the Company’s annual

accounts for the fiscal year 2021, discharged the members

of the Board and the CEO from liability, and approved

all proposals made by the Board and its committees

to the AGM.

The AGM approved the Board’s proposal that a dividend of

EUR 1.25 per share is paid. The dividend was paid on

June 28, 2022.

The AGM decided to approve the Konecranes Remuneration

Report. The resolution on the report is advisory.

The AGM confirmed that the annual remuneration for the

Board of Directors and the meeting fee for the committees

remain unchanged, in addition to which a meeting fee for

meetings of the Board of Directors was introduced.

The AGM approved the Shareholders’ Nomination Board’s

proposals: the number of members of the Board is ten, the

election of members of the Board according to the proposal,

and the election of Christoph Vitzthum as Chairman and

Pasi Laine as Vice Chairman of the Board.

The AGM decided to re-elect Ernst & Young Oy as the

Company’s auditor. The remuneration will be paid according

to an invoice approved by the Company.

The AGM authorized the Board to decide on the repurchase

and/or on the acceptance as pledge of the Company’s own

shares.

The AGM authorized the Board to decide on the issuance

of shares as well as the issuance of special rights entitling

to shares.

The AGM authorized the Board to decide on the transfer of

the Company’s own shares.

The AGM authorized the Board to decide on a directed

issuance of shares without payment for the Employee Share

Savings Plan.

The AGM authorized the Board to decide on donations.

The resolutions of the AGM have been published in the

stock exchange release dated June 15, 2022.

Board of Directors

The Board of Directors elected in the Annual General

Meeting 2022 consists of

• Christoph Vitzthum, Chairman of the Board

• Pasi Laine, Vice Chairman of the Board

• Pauli Anttila, Member of the Board

• Janina Kugel, Member of the Board

• Ulf Liljedahl, Member of the Board

• Niko Mokkila, Member of the Board

• Per Vegard Nerseth, Member of the Board

• Päivi Rekonen, Member of the Board

• Helene Svahn, Member of the Board

• Sami Piittisjärvi, Member of the Board

The term of office ends at the closing of the Annual General

Meeting in 2023.

On June 15, 2022, Konecranes announced that the

Board had held its first meeting. The Board decided to

continue with an Audit Committee and a Human Resources

Committee.

Ulf Liljedahl was elected Chairman of the Audit Committee,

and Niko Mokkila and Päivi Rekonen as Committee

members. Janina Kugel was elected Chairwoman of the

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Human Resources Committee, and Per Vegard Nerseth and

Christoph Vitzthum as Committee members.

All Board members with the exception of Sami Piittisjärvi are

deemed to be independent of the Company and all Board

members with the exception of Niko Mokkila and Pauli

Anttila are deemed to be independent of the Company’s

significant shareholders.

Sami Piittisjärvi is deemed not to be independent of the

Company due to his current position as an employee of

Konecranes. Niko Mokkila is deemed not to be independent

of a significant shareholder of the Company based on his

current position as Managing Director at Hartwall Capital

Oy Ab. Pauli Anttila is deemed not to be independent of

a significant shareholder of the Company based on his

current position as Investment Director and Member of the

Management Team at Solidium Oy.

Konecranes Leadership Team

In full year 2022, Konecranes Leadership Team consisted of

• Anders Svensson, President and CEO (since October 19,

2022)

• Teo Ottola, CFO, Deputy CEO (also interim CEO until

October 18, 2022)

• Fabio Fiorino, Executive Vice President, Industrial Service

and Equipment (until May 31, 2022, Executive Vice

President, Service)

• Carolin Paulus, Executive Vice President, Industrial

Equipment (until May 31, 2022)

• Mika Mahlberg, Executive Vice President, Port Solutions

• Juha Pankakoski, Executive Vice President, Technologies

• Anneli Karkovirta, Senior Vice President, People and

Culture

• Sirpa Poitsalo, Senior Vice President, General Counsel

• Topi Tiitola, Senior Vice President, Integration and Project

Management Office

Shareholders’ Nomination Board

On September 20, 2022, Konecranes announced the

composition of the Shareholders’ Nomination Board. The

Shareholders’ Nomination Board is comprised of one

member appointed by each of the four largest shareholders

of Konecranes Plc. The Nomination Board consists of:

• Reima Rytsölä, CEO of Solidium, appointed by Solidium Oy,

• Peter Therman, Deputy Chairman of the Board of

Directors of Hartwall Capital, appointed by HC Holding

Oy Ab,

• Mikko Mursula, Deputy CEO, Investments of Ilmarinen,

appointed by Ilmarinen Mutual Pension Insurance

Company, and

• Stig Gustavson, appointed by Stig Gustavson and family.

In addition, Christoph Vitzthum, the Chairman of the Board

of Directors, serves as an expert in the Nomination Board

without being a member.

On December 22, 2022, Konecranes announced that

the Shareholders’ Nomination Board had submitted its

proposals for the 2023 Annual General Meeting to the

Board of Directors. The proposals were published in a stock

exchange release on the same day.

Shares and trading

Share capital and shares

On December 31, 2022, the Company’s registered share

capital totaled EUR 30.1 million. On December 31, 2022,

the number of shares including treasury shares totaled

79,221,906.

Treasury shares

On December 31, 2022, Konecranes Plc was in possession

of 55,307 treasury shares, which corresponds to 0.1 percent

of the total number of shares, and which had on that date a

market value of EUR 1.6 million.

On June 20, 2022, 32,140 treasury shares were conveyed

without consideration to the key employees as a reward

payment for the Konecranes Restricted Share Unit Plan 2017.

Market capitalization and trading volume

The closing price for the Konecranes shares on the Nasdaq

Helsinki on December 30, 2022, was EUR 28.76. The volume-

weighted average share price in full year 2022 was EUR

27.14, the highest price being EUR 38.43 in January and

the lowest EUR 19.61 in September. In full year 2022, the

trading volume on the Nasdaq Helsinki totaled 63.7 million,

corresponding to a turnover of approximately EUR 1,729.3

million. The average daily trading volume was 251,844 shares

representing an average daily turnover of EUR 6.8 million.

On December 31, 2022, the total market capitalization of

Konecranes Plc was EUR 2,278.4 million including treasury

shares. The market capitalization was EUR 2,276.8 million

excluding treasury shares.

Performance Share Plans 2020, 2021 and 2022

On February 3, 2022, Konecranes announced that Board of

Directors had resolved adjusted earnings per Share (EPS)

as the criterion for 2022, which is the third measurement

period of the Performance Share Plan 2020 and the second

measurement period of the Performance Share Plan 2021.

Adjustments to the EPS include defined restructuring costs,

mergers and acquisitions related deal costs and other

unusual items.

Additional information, including essential terms and

conditions of the Plan 2020 are available in a stock

exchange release published on July 23, 2020, and those

of the Plan 2021 in a stock exchange release published on

February 3, 2021.

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CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

On March 30, 2022, Konecranes announced that the Board of

Directors had resolved to establish a new Performance Share

Plan 2022. The Plan has a performance period from 2022 to

2024 with three separate measurement periods and separate

targets for 2022, 2023 and 2024.

The criterion for the measurement period 2022 is adjusted

earnings per Share (EPS). The EPS target for the first

measurement period was also resolved by the Board of

Directors.

The target group of the Plan for the performance period

2022–2024 consists of a maximum of 170 key employees of

the Konecranes group.

Additional information, including essential terms and

conditions of the Plan, is available in the stock exchange

release dated March 30, 2022.

Employee Share Savings Plan

On March 30, 2022, Konecranes announced that the Board of

Directors had decided to launch a new Plan Period relating to

the Employee Share Savings Plan. The new Plan Period began

on August 1, 2022, and will end on June 30, 2023. The other

terms and conditions of the Plan Period 2022–2023 approved

by the Board on March 30, 2022, have been published in the

stock exchange release on the same day.

Notifications of major shareholdings

In full year 2022, Konecranes received the following

notifications of major shareholdings.

Research and development

In 2022, Konecranes’ research and product development

expenditure totaled EUR 47.7 (47.7) million, representing

1.4 (1.5) percent of sales. R&D expenditure includes

product development projects aimed at improving the

quality and cost efficiency of both products and services.

Technological leadership forms a foundation for Konecranes’

competitiveness and positive impact. Through innovation,

new solutions and ways of working, Konecranes supports

customers’ operations and boosts sustainability in the lifting

and material handling industries.

Konecranes’ offering is based on Core of Lifting hardware

and software componentry. These central components have

been designed and constructed for the specific purpose

of lifting, enabling optimal performance and sustainability

as well as maximized lifetime. The componentry is well-

designed to meet the Industry 4.0 transition, and integrates

with Konecranes’ digitized and automated offering.

Konecranes’ research and development efforts are focused

around creating tangible customer benefits, improved

business operations and a positive impact. Around half of

all Konecranes’ research and development is directed to

environmental topics.

Konecranes develops new solutions both internally and in

cooperation with others. In 2022, Konecranes participated

in DIMECC’s InDEx program, focusing on the data economy

and communication between equipment in factory settings.

The crane has a critical role in manufacturing and big

potential as a central piece of a smart factory, coordinating

communication between equipment as well as gathering

data critical for improving operations. High-quality data is

also crucial for Konecranes’ industry-leading service offering,

supporting timely maintenance. This minimizes equipment

downtime, lengthens its lifecycle, and supports the proper

identification of defects, a crucial part of equipment safety.

The development in electronics and automation has

allowed Konecranes to expand its offering of smart features

more widely, now available for standard and configurable

cranes as well. Tapping into the increased digitalization of

solutions, combined with growing eco-offering as evident

in 2022 in the addition of battery power options to RTGs

and straddle carriers, ensures that Konecranes maintains its

technological edge.

The ability to provide customers with the latest solutions

enhancing safety, sustainability and productivity strengthens

Konecranes’ position as the provider of choice and ability to

push the industry forward.

In innovation efforts, Konecranes also utilizes the agility of

startups both as partners and through methods associated

with them. The collaboration is mutually beneficial, with

Konecranes benefitting from the agile, leading startups

in their field and with the startups getting access to an

industry-leading company and possible references. The

collaboration is also always commercial, with Konecranes

paying for the projects. Konecranes utilizes experience to

support the collaboration between corporations and startups

at large, for instance by publishing a publicly available

guidebook in 2022 on fruitful cooperation.

Konecranes’ REACH program, an invitation to collaboration

with startups based on predefined themes, ran also in 2022.

Accelerator, our internal program inspiring Konecranes

people to take on board the best practices from startups

in their own ways of working was also arranged in 2022. A

Date Shareholder Threshold

% of shares

and voting

rights

% of shares and

voting rights through

financial instruments Total, % Total, shares

May 20, 2022 Solidium Oy Above 10% 10.02 10.02 7,934,506

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CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

total of 90 employees have now participated in the program

arranged in collaboration with Maria 01, the leading startup

campus in the Nordics, bringing the new ways of thinking

and working back to their teams.

Statement of non-financial information

The scope of the reporting includes non-financial topics that

relate to Konecranes’ key impacts and reflect stakeholder

expectations. These topics Konecranes identifies through

materiality assessment. The most essential non-financial

topics for Konecranes are responsible business conduct;

anti-corruption; safety of employees; product-related safety

and security; respect of human rights; diversity, equity and

inclusion, greenhouse gas emissions, circular economy and

fair sourcing.

Konecranes reports the disclosed information in accordance

with the Accounting Act amendment 1376/2016, which is

based on the EU Directive 2014/95/EU on the disclosure of

non-financial and diversity information. More information

about the topics is available in the Sustainability Report

2022 that is prepared according to the international

framework of Global Reporting Initiative (GRI),

Sustainability Accounting Standards Board’s SASB standards

as well as following the recommendations of Task Force on

Climate-related Financial Disclosures (TCFD). Konecranes is

a signatory of the United Nations Global Compact striving

for the same goals as the UN regarding human and labor

rights, protecting the environment and fighting corruption.

More information about Konecranes’ external commitments

is available in the Sustainability Report 2022.

Business model and value creation

Konecranes’ business aims to deliver optimal productivity

while improving the safety and environmental sustainability

of the company’s customers’ operations by manufacturing

intelligent and connected lifting devices, adopting new

technologies and optimizing material handling flows.

Safe ways of working are an integral part of Konecranes’

business. By prioritizing safety and security in all areas of

its operations, the company can improve safety throughout

its value chain and provide solutions for uninterrupted and

secure material handling. Information security is essential –

from manufacturing and servicing equipment to Konecranes’

digital ecosystem. Konecranes’ systematic way to manage

information security ensures compliance with legal and

customer requirements. With its knowledge, products,

services and solutions, Konecranes provides monetary value

with sustained profitability and stability and seeks to maximize

the positive contributions for its stakeholders and the society.

Konecranes enables reliable and optimized material handling

performance and can support decarbonization with its

innovative material handling and lifting technologies.

Investing in new technologies and substituting existing

technology with lower-emission alternatives is a big

opportunity for Konecranes and for its customers by

reducing their carbon footprint. Including circular economy

principles in various processes and utilizing several circular

business models helps Konecranes improve its resource

and energy efficiency while creating value for the customer.

For example, the Business Segment Service executes the

product lifecycle extension strategy by offering maintenance

and repairs, remanufacturing of parts, modernization, and

retrofitting. Maintaining the lifecycle value of a device for as

long as possible saves natural resources, as well as reduces

greenhouse gas emissions. The use phase of Konecranes

products can last for decades, so investing in data-driven,

eco- and resource-efficient products means the customer can

preserve the value of their equipment for a longer period of

time and thus also reduce its environmental impact.

Being a preferred partner and being able to select

trustworthy partners is paramount for the whole

Konecranes value chain. Sustainable business practices

and systematic risk management are crucial for creating

longer-term shareholder value and financial stability.

In 2022, Konecranes issued a total of EUR 300 million

Schuldschein loan that has floating and fixed rate tranches

with maturities until 2026, 2027 and 2030. The interest

margin will be adjusted based on Konecranes’ EcoVadis ESG

(Environmental, Social and Governance) rating. The issuing

of the loan demonstrates Konecranes’ commitment to ESG

by connecting the company’s sustainability performance to

financing.

To remain a key player and an attractive employer within

local communities, Konecranes strives to make a positive

impact on the societies in which the company operates. This

is done by providing jobs and income for employees, by

boosting local economies as an employer, supporting non-

profit organizations, providing and buying of local services

and goods, and also being a significant taxpayer in many

countries where the company operates.

In 2022, a total of EUR 458 million (2021: 427) in taxes

and other compulsory tax-like payments were paid and

collected in countries where the Group operates, implying

an effective tax rate of 27.4 percent (2021: 23.4). A total of

EUR 207 million (2021: 182) was paid (taxes borne) directly

by the Group itself, while EUR 251 million (2021: 244)

was collected (taxes collected). Konecranes is a compliant

taxpayer in each country where it operates and does not

practice aggressive tax planning that would artificially

decrease the Group’s taxable income.

Konecranes’ innovation focuses not only on products,

technologies, and service solutions, but also on new ways

of working and leveraging workforce diversity to drive

innovation. Konecranes’ employees, with their expertise and

motivation, are central to the company’s success and bring

the company’s strategy to life. In Konecranes’ view, varied

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CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

skill sets are a key driver of creativity and value creation

to the company’s customers. To ensure that the company

continues to deliver value it focuses on maintaining close

ties with its key stakeholders to understand their evolving

needs and expectations; engaging and developing the best

talent; implementing smart technologies in its product and

service offering; innovating new business models; and

improving product development and reliability.

Environmental responsibility and climate

related disclosures

Konecranes follows the recommendations of the Task

Force on Climate-related Financial Disclosures (TCFD) to

share Konecranes’ approach to climate-related topics in a

transparent manner.

Konecranes’ environmental responsibility agenda is driven

by decarbonization and advancing circularity. The scope

of the agenda includes the company’s own operations,

customers and our supply chain. Konecranes’ commitment

to science-based emission targets to limit the global

warming to 1.5°C is guiding its environmental sustainability

strategy. Konecranes’ commitments concerning

environmental responsibility including all aspects of climate

action and circularity can be found in the company’s Code

of Conduct and in its Environmental Policy, updated in 2021

and available publicly at Konecranes.com. They outline

Konecranes’ principles for managing the environmental

impact, and the company’s Global Vehicle Policy as well as

Corporate Travel Policy support the work.

In 2021, Konecranes extended its climate roadmap to

cover its impacts in the value chain holistically. In 2022

Konecranes focused on developing its eco-optimized

portfolio, continuing the electrification of ports equipment

and decreasing the carbon impact of its supply chain with

a particular focus on steel. Konecranes also updated its

Design for Environment concept.

Climate governance

Sustainability, including climate matters, is embedded

into Konecranes’ governance processes at several levels.

The Board of Directors’ HR Committee is the official

supervisory Board Committee following climate topics

on an annual basis. The Board of Directors approves the

long-term focus, ambition level and targets. The Board

of Directors’ HR Committee reviews performance and

activities annually.

The Konecranes Leadership Team (KLT) plays a significant

role in the company’s management system, strategy

preparation and decision making and is involved in risk

and financial planning process but has no official statutory

position based on legislation or the Articles of Association.

Sustainability is integrated into Konecranes’ strategy. The

KLT reviews the sustainability strategy annually as well

as all major climate related action plans and targets. It

follows emissions data on a monthly basis and oversees

other climate-related issues when needed. Of the KLT

members, Senior Vice President Human Resources (SVP

HR) is responsible for the climate topics and participates

in HR Committee meetings. The Sustainability Council,

nominated by the KLT, sponsored by the SVP People and

Culture and chaired by the Head of Sustainability defines,

guides and reviews the overall sustainability strategy

including climate-related topics, short-term targets and

action plans. The Head of Sustainability is responsible

for taking actions and decisions to the operative level,

and for building and coordinating climate action plans,

proposing activities and targets, and following the

progress.

Climate targets and metrics

Konecranes climate ambition is aligned with the ambition

of Paris Agreement in limiting the global warming to 1.5°C.

The targets were validated by the Science Based Target

initiative in January 2022.

Within Scope 1 and 2 greenhouse gas (GHG) targets,

Konecranes is committed to reducing its absolute carbon

emissions by 50 percent by 2030. As part of the science-

based targets ambition, Konecranes tightened the schedule

to reach the previous target of powering the company’s

factories with 100 percent renewable electricity from 2025

to 2022. The share of renewable electricity in 2022 was 100

percent (2021: 67). Konecranes succeeded in decreasing

emissions from own operation by 50 percent compared to

2019 baseline.

Ninety-nine percent of Konecranes’ emissions originate from

the value chain. The two main Scope 3 emissions categories

are the use of sold products as well as the purchased

goods and services. For scope 3, Konecranes aims to

reduce absolute carbon emissions by 50 percent by 2030,

encompassing the use of sold products and steel related

purchases. This target covers more than 70 percent of the

value chain emissions. As a supportive action, Konecranes

will also fully offset flight emissions. Scope 1 and 2 emissions

data is collected monthly to monitor progress. Scope 3 data

is currently collected at least on an annual basis.

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Environmental management in Konecranes’

own operations

Konecranes focuses on improving the energy efficiency as

well as the waste and chemical management of its own

operations, in both service and manufacturing operations.

In addition to the Science Based Targets, Konecranes has

signed national voluntary agreements on energy efficiency.

The company will meet improvement targets by investing

in energy efficiency actions such as in heat recovery and

lighting as well as to more fuel-efficient cars and route

optimization. In chemical management the objective is to

substitute hazardous chemicals with less harmful ones and

to minimize the amount of hazardous chemicals in products.

Waste management focuses on resource efficiency and

increasing the recycling rate.

Konecranes’ environmental work is driven by the

HSE Excellence that focuses on certifying operations

with ISO14001 Environmental Management System,

implementing rules for environmental behaviour as well as

minimum requirements for environmental management.

Konecranes aims to certify all its manufacturing sites with

ISO 14001:2015. In 2022 total of 83 percent (2021: 80) of

the company’s factories have an ISO 14001 environmental

management system certificate requiring systematic

continuous development and the establishment of local

annual targets. The coverage has increased from 2021.

The company assesses the environmental risks of its

service and manufacturing operations in greater details

as part of the local environmental management system,

where each of the company’s units is responsible for

evaluating, prioritizing, and mitigating their risks on a local

level. Environmental incidents and near-miss cases are

reported through the company’s global Health, Safety and

Environment (HSE) reporting tool, and root causes are

investigated, and corrective actions are taken accordingly.

In addition, the company aims to minimize waste and reuse

and recycle as much as possible.

Eco-optimized offering and circularity

Konecranes promotes decarbonization by substituting

existing technologies with lower-emission alternatives and

by extending product lifecycles with its solutions and service

concepts. Konecranes’ customers gain clear benefits by

investing in durable equipment that can be repaired and

modernized and receive added value from uninterrupted

operations.

In 2021 Konecranes defined a company-level strategy to

further improve the overall environmental responsibility

of its offering that enables the Science Based Targets

pathway and advances circularity. Konecranes’ main focus

is on electrifying the offering as well as ensuring product

development focuses on energy efficiency. For diesel-

powered vehicles, the company provides innovative power

options ranging from hybrids to full electric and battery

technology, with additional energy-saving features such

as regenerative braking. To provide accurate data on the

environmental impact of its solutions for decision making,

the company calculates its products’ energy consumption

and CO

emissions, and critically assesses this data

with the help of a third party (as part of the company’s

Environmental Product Declarations).

Konecranes designs its products with their complete lifecycle

in mind, as the majority of the environmental impact of a

product’s lifecycle is defined at the product design stage.

Konecranes’ product design is based on smart design

principles focusing on maintainability, repairability, durability,

and material selections, including recyclability and energy

efficiency. In 2022 the Design for Environment guideline

was upgraded to ensure all products and services shall be

more sustainable than the previous generation.

Konecranes wants to be a leader in advancing circular

economy. Therefore, the company puts efforts into

investigating new circular solutions and their possible

business potential. During 2022, three circular innovation

ideas were moved to a phase, where the company

further studies and evaluates their business opportunities.

Konecranes’ circular economy thinking focuses on using

Emissions 2022 2021 2020 2019

Scope 1 40,100 44,500 43,000 52,500

Scope 2 2,900 14,400 30,300 33,100

Scope 3 4,650,700 5,106,900 4,900,300 5,667,700

• GHG emissions calculated in line with the GHG Protocol methodology.

• Scope 1 includes emissions from fuel, natural gas and LPG consumption and fugitive emissions (refrigerants).

• Scope 2 includes emissions from electricity and district heat consumption. Scope 2 indirect emissions are calculated according to the GHG

Protocol Scope 2 Guidance dual reporting requirement: location-based and market-based method.

• The figures cover all forms of energy used in Konecranes’ manufacturing locations and service units. Potential renewable shares are not taken

into account for fuels. All fuel consumption from Konecranes’ service operations and the electricity consumption from the company’s largest

service office sites are included. Figures on the use of natural gas, LPG and district heat from Konecranes’ service operations are excluded

because collecting this data from the company’s service network is challenging and the consumption amounts are estimated to be very marginal.

• Scope 3 includes emissions from use of sold products, purchased goods and services, upstream transportation and distribution, employee

commuting, investments, fuel- and energy related activities, downstream transportation and distribution, end-of-life treatment of sold products,

capital goods, business travel and waste generated in operations.

• Scope 3 emission factor for category use of sold products was updated. For data comparability, Konecranes applied the new factor also to the

2021 and 2020 figures.

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CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

less, using longer, and using again. Circularity plays an

essential role also in tackling climate change as greenhouse

gas emissions can be reduced by improving resource

efficiency, designing out waste and keeping materials and

products longer in use.

Konecranes’ service operations promote circular economy

by extending the lifecycle of equipment through

maintenance and repairs, remanufacturing of parts,

modernization, and retrofitting; this helps Konecranes

improve its own resource efficiency while reducing

its customers’ environmental footprints. Preventive

maintenance supports emissions reductions as the data

can be used to optimize maintenance activities (service

visits and spare parts needs). Konecranes’ retrofitting

and modernization services can provide a complete

transformation of an existing crane as an alternative

to replacing it by updating the equipment to meet

today’s standards. On top of improved performance,

modernizations save a significant amount of steel and in

most cases reduce use phase emissions when traditional

diesel generators are retrofitted as hybrids or full electric.

Climate risk management

Konecranes has a Group-wide process for evaluating

risks. Climate risks are integrated into multi-disciplinary

company-wide risk management process. The Board of

Directors of Konecranes has defined and adopted a set

of risk management principles based on widely accepted

international management practices. These principles

serve as part of the company’s system of controls and are

designed to ensure that any risks related to the company’s

business operations are identified and managed adequately

and appropriately to safeguard the continuity of Konecranes’

business at all times. As part of the process, risk points are

discussed, documented, and prioritized. For assessing risks,

Konecranes uses the scale of probability, costs of mitigation,

and impacts for the business.

Company-level climate-related risks and opportunities are

assessed systematically at least bi-annually. As a basis

for climate assessment, Konecranes uses the information

received from natural hazard risk evaluations, climate risk

scenario analysis as well as the insights from internal experts

and business segments’ management team members. Short-,

medium- and long-term (0–20 years) risks and opportunities

are identified and assessed. Local environmental and climate-

related risks are assessed according to the requirements of

the ISO 14001 environmental management system. The key

risks are reported to risk management (legal department),

the KLT and to the Board of Directors’ Audit Committee. KLT

and business segment management teams are responsible

to act for supporting in mitigating risks with the needed

activities. More information about climate risks management

can be found from Konecranes CDP answer (chapter

C2), available at Konecranes.com.

Identified risks and opportunities and resilient

business strategy

The potential effects of climate change are far reaching.

Konecranes has reviewed both aspects of climate change –

how does climate change affect Konecranes and how does

Konecranes contribute to climate change. In 2022 Konecranes

updated its climate scenario analysis and verified key risks and

opportunities in all business segments. During the process

potential short to long-term financial impacts were considered.

Konecranes recognizes climate risks having potential

negative impact on short-, medium- and long-term. Among

the most significant physical risks are floods and severe

storms that might damage Konecranes manufacturing

sites or customers’ sites and cause business interruption

and delays in the manufacturing and transportation. The

company has conducted several natural hazard assessments

with its insurance company to understand the probability,

time scale and actual risks involved. This information is

taken into consideration in the business continuity planning.

Technological development is identified to be one of

the most significant transitional risks and opportunities

for Konecranes. In case Konecranes product offering is

not attractive to its customers and does not solve their

environmental targets Konecranes could lose market

share. To mitigate these risks Konecranes has committed

to electrify its offering, continue developing the energy

efficiency of its equipment and seek new services and

solutions that accelerate circularity and digitalization. The

most relevant climate opportunities reside in Konecranes’

offering, enabling the decarbonization of customers’

operations by providing equipment and solutions that

reduce emissions and advance electrification. Transition

to a low-carbon society is faster in the climate scenarios

where global warming is less than 2°C. In these scenarios,

Konecranes has identified possible increased sales

opportunities due to the current and future eco-optimized

offering. The company offers hybrid and electric cranes

as an alternative to traditional diesel-fueled cranes, and

energy-saving features such as regenerative braking to

help customers minimize their emissions. Konecranes

conducts at least three studies annually to seek new

circular opportunities that further support its eco-optimized

offering development.

Emerging regulations create a significant climate-related

risk for the company as they might lead to increased

cost of energy and materials e.g. due to taxes of

carbon-intensive raw-materials. To mitigate this risk,

Konecranes is closely following how the regulations

develop, is applying smart design principles to maximize

the resource efficiency and is investing in renewable

energy sources.

Konecranes considers production methods that improve

energy efficiency and minimize waste as a climate-related

opportunity. The company continues to expand lean

manufacturing with the Konecranes Way program.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

An extensive list of climate risk and opportunities is available

on the website at Konecranes.com. More information is

also available in Konecranes CDP answer (chapter C2).

Respect for human rights

Konecranes respects human rights and promotes the

principles set in the International Bill of Human Rights, UN

Guiding Principles on Business and Human Rights and the

Declaration on Fundamental Principles and Rights at Work

of the International Labor Organization (ILO). Konecranes’

commitment to human rights is evident in multiple internal

policies. The basic principles are stated in Konecranes Code

of Conduct and in 2022 the company published a Human

Rights Policy. Konecranes has also a corporate policy, the

Fair Labor Frame, which sets a standard and ambition to

workforce-related activities, such as working hours and

freedom of association.

Additionally, human rights are addressed in the company’s

Health & Safety and Diversity & Inclusion Policies, as well as

in the data protection compliance requirements. To ensure

that human rights are also respected in Konecranes’ supply

chain, the company has included its basic requirements in

its Supplier Code of Conduct. Human rights are part of the

company’s annual, mandatory Code of Conduct training.

As part of Konecranes’ overall human rights due diligence,

the company regularly assesses human rights risks and

impacts, engages with affected stakeholders and develops

and implements procedures for preventing, mitigating and

monitoring potential and actual adverse human rights impacts

in its own operations and business relationships. The company

works continuously to improve the due diligence process.

In 2022 Konecranes updated its human rights risk and

impact assessment by combining an earlier human rights

risk screening conducted with the help of an external

service provider with results received from different

monitoring sources, such as audits, surveys and a

whistleblowing channel. Amongst relevant potential human

rights risks in the company’s own or in its value chain’s

operations are occupational safety and health, working

conditions, non-discrimination and harassment, slavery and

forced labor, privacy and environmental degradation.

The company has several processes in place to prevent and

mitigate the identified risks. The section Safety explains

how the company is addressing health and safety topics,

while the section Diversity describes the company’s strong

Diversity, Equity & Inclusion program, which proactively

prevents discrimination. The environmental degradation

caused by climate change has various negative impacts on

people. Konecranes works to reduce its carbon emissions,

as written in the section Environmental responsibility

and climate related disclosures. Konecranes takes data

privacy seriously and has a data protection program in place

with a structured governance model and periodic trainings.

Since 2021 Konecranes has conducted third-party social

responsibility assessments in the company’s operations

located in high-risk countries, paying special attention to

issues identified in the human rights risk screening, such as

working conditions. The company took action to mitigate

identified non-conformities locally and is developing global

processes to address topics recurring across the sites.

Assessments will continue in 2023.

To manage the above-mentioned human rights risks within

its complex supplier base, Konecranes has a set of supply

chain compliance management processes. Read more in the

section Responsible business conduct.

Safety

Safety is an integral part of Konecranes’ business and

prioritizing safety in all areas of operation creates a

competitive advantage for the company. Konecranes’ goal

is for everyone to get home safe, every day. Konecranes

seeks to achieve this goal through strategic, centrally led

programs and business-specific initiatives. Transparent

and comprehensive safety reporting and follow-up

procedures help the company build a coherent safety

culture, recognize its most significant risks and validate the

effectiveness of its safety work. Konecranes’ occupational

health and safety principles are defined in the company’s

Code of Conduct and Health and Safety policy. In addition,

the company has several safety management tools and

global practices in place.

There are considerable occupational health and safety

risks in the material handling industry. Konecranes’ most

significant safety risks are related to factory work, vehicle

incidents, crane and equipment installation, and the service

business, where the working conditions of technicians vary

from job to job. All Konecranes employees receive trainings

to perform their tasks safely and correctly.

The company follows incidents and hazards using two

management systems, the ARMOR HSE reporting tool

and the AIR product compliance management system, as

well as through customer feedback collected after each

major delivery. Currently 69 percent of the manufacturing

sites are ISO 45001 certified. Safety performance data

is continuously available to management through online

safety performance dashboards and is addressed on

all management levels. Overall performance trends are

reviewed monthly in the Konecranes Leadership Team and

Business Area leadership meetings, focusing especially

on leading indicators and preventive actions and safety

incidents with Serious Injury or Fatality Potential or Actual

Serious or Fatal outcomes called.

The KPI for Konecranes’ safety is the Total Recordable

Incident (TRI) rate, which refers to the number of injuries

requiring medical treatment per one million working hours.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

The recordable incident rate for 2022 was 5.6 (6.7 in 2021),

an improvement of 16 percent compared to the previous

year. The company also tracks the number of Safety

Observations made as a leading KPI. In 2022, Konecranes

personnel made a total of 71,382 safety observations, which

was 40 percent more than in 2021 (51,004).

People strategy

Konecranes’ talented, diverse, innovative, and engaged

employees help its customers improve safety and

productivity every day. The Konecranes people strategy

supports this by ensuring that the needed resources

and competencies for the future are in place, and that

employees are engaged, motivated and capable to meet

future business requirements.

Konecranes believes in engagement and continuous learning

and development, and offers its employees a variety of

training courses and activities in areas like technology,

sales, communication, leadership, health and safety,

language, culture and project management. In addition,

employees can enrich their work, for example, by learning

from peers or on the job, and by joining communities, such

as employee resource groups.

At Konecranes employee engagement is measured by

conducting pulse surveys and employee engagement

surveys across the organization. The main risk related

to low employee engagement is the loss of talent and

competencies. At Konecranes this risk is mitigated through

fair and competitive compensation, culture and leadership

development programs, succession planning, internal

job rotation and talent management, as well as various

programs to support professional growth and well-being.

Diversity

Konecranes aims to create a diverse and inclusive working

environment where people feel trusted, they can be

themselves and there is a sense of belonging. Konecranes

wants to represent the multicultural communities where

it operates and be a great partner for its customers. All

backgrounds and the variety of talents are an asset for

the company’s growth. Konecranes’ work is based on a

Diversity, Equity and Inclusion (DEI) vision, supported

by a “4T” strategy (Talented, Transforming, Trusted and

Togetherness). The company has already successfully

integrated Diversity and Inclusion into the company’s

cultural foundation and business agenda.

During 2022, Konecranes further developed its approach,

expanded it to cover equity, and embedded inclusion and

equity in the company’s processes. The objective is to make

sure that everybody can have the opportunity to succeed,

and that their diverse backgrounds are valued. By assuring

psychological safety, variety of ideas and viewpoints

inherent in diverse backgrounds, we aim to be the company

of choice for employees with the potential to be the

best in the industry. Inclusion means that the strengths

of differences are welcomed and leveraged and that

Konecranes offers a working environment where everyone

can be themselves and feel valued for their contribution.

In Konecranes’ view, varied skillsets are a key driver of

creativity and value creation, and diversity and inclusivity

result in teams that deliver better results.

Konecranes continued to raise awareness on DEI topics

internally. Key activities in 2022 included internal “Coffee

and Culture” webinar series focusing on the company’s

culture and belonging; launching new learning paths related

to resilience and detecting biases; running Employee

Resource Groups on various DEI-related topics that focus

in raising awareness, providing support, and improving the

work environment.

The current gender balance for all Konecranes employees

is 18.2 percent female and 81.7 percent male. Konecranes

has a goal to have at least 22 percent gender diversity in

the total organization and in leadership by the end of 2025.

The progress is followed on a monthly basis. Mentoring and

the fast-track program continued, supporting the increase

of women in leadership positions. At the end of 2022, there

were 14.3 percent women in leadership positions (2021:

14.3). Konecranes takes gender and geographic diversity

into consideration in the talent and succession plan process.

The company involved the entire organization in its inclusive

talent process, allowing to identify talents and create

development actions. Our efforts and systematic approach

in DEI was rewarded in 2022 by the Finnish Foundation

for Share Promotion (Pörssisäätiö) where Konecranes has

been recognized as the best Finnish Large Cap company

furthering diversity.

Responsible business conduct

Konecranes’ Code of Conduct and Corporate Governance

Framework guide the everyday activities of the company

by clearly describing internal standards and ethical values

as well as legal obligations. The Code of Conduct is

complemented by several Group-wide policies covering

areas including safety, environment, supplier requirements,

anti-corruption, data protection, competition compliance

and diversity. The main compliance policies and the yearly

Code of Conduct training are available in 35 languages. All

employees are expected to understand and abide by the

Code of Conduct. Konecranes has a regular compliance

and ethics risk assessment process supported by risk

assessment surveys to gather insights throughout the

organization. Konecranes global Compliance & Ethics

program is managed by the Group’s Compliance & Ethics

team and its development and quality are overseen by an

executive-level Compliance and Ethics Committee and Audit

Committee of the Board of Directors of Konecranes Plc.

Konecranes promotes a healthy speak-up culture

where people can feel safe reporting ethical concerns.

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CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Multiple ways to raise concerns are offered, including

an externally hosted Whistleblowing Channel open to

the company’s employees as well as all externals, which

enables anonymous reporting when allowed by local

laws. All reports made are reviewed and investigated,

as appropriate. There is a clear policy of no retaliation.

Konecranes also encourages its suppliers and other

business partners to report on any compliance and ethics

concerns relating to Konecranes.

During 2022 the focus was put on updating the

Group’s whistleblowing and investigation processes and

related guidance to ensure compliance with the new

whistleblowing law requirements especially in the EU.

Also, multiple awareness-raising activities took place in

2022, with the main focus on advanced competition law

trainings, relaunch of our trade sanctions and export

controls e-learning and the yearly Code of Conduct

training. The Code of Conduct training is mandatory for all

employees globally, including operatives, and over 15,000

employees were trained during 2022.

To help mitigate risks and drive ethical practices in supply

chains, the Konecranes Supplier Code of Conduct (SCoC)

states the sustainability standards expected from third

parties. The SCoC has requirements, for example, on

anti-corruption, human rights, safety, environmental and

compliance topics. The SCoC forms a key part of any

agreements made with key suppliers and subcontractors.

By the end of 2022, 52 percent of suppliers (as share

of spend) had a signed commitment to the SCoC or

equivalent requirements. Background checks on suppliers

and subcontractors are done before entering into business

relationships and defined suppliers are assessed based

on self-assessments. The requirements are regularly

reviewed and developed to ensure that environmental and

social impacts are managed properly through responsible

sourcing. In 2022 Konecranes continued third-party supplier

audits concentrating particularly on compliance with

Konecranes’ Supplier Code of Conduct.

Anti-corruption and bribery prevention

Konecranes’ Anti-Corruption policy and Code of Conduct

demonstrate the company’s commitment to work against

corruption in all forms, including extortion and bribery and

set the foundation for our anti-corruption program. The Anti-

Corruption Policy has compliance protocols and guidelines

in place to detect and address risks, with a zero-tolerance

approach embedded in the monitoring and follow-up

processes. Several actions and processes are set up to

mitigate corruption and fraud risks including internal controls,

a Gift and Hospitality Portal and Conflict of Interest portal.

Anti-Corruption matters form an important element of

the Code of Conduct training. Konecranes’ zero-tolerance

approach is also promoted to business partners in the

Konecranes Distributor Code of Conduct, Supplier Code of

Conduct and Supplier Manual. Konecranes uses a risk-

based Know-Your-Counterparty process to conduct due

diligence and background screenings, identify red-flags and

carry out risk assessments on third parties worked with

whereby the level of scrutiny and required approval process

are determined by considering, for example, the risks

associated with the business in question, country risks and

business partner risks. Selected suppliers are also audited

for their anti-corruption work.

Taxonomy eligibility and alignment

Konecranes has activities that qualify as environmentally

sustainable according to the EU Taxonomy as per EU

Regulation 2020/852. Konecranes has activities that are

in the scope of Technical Screening Criteria (TSC) 3.6.

Manufacture of other low carbon technologies and 8.2.

Data-driven solutions for greenhouse gas (GHG) emissions

reductions. These activities are, according to Article 16 of

the Taxonomy Regulation, enabling substantial contribution

towards climate change mitigation, which is one of the

objectives defined in Article 9 of the Regulation.

The process for reviewing taxonomy-eligibility and

alignment of all Konecranes activities was completed

in 2022. It included identifying the eligible activities,

reviewing the technical screening criteria (TSC) and the

Do-No-Significant-Harm criteria (DNSH) for each of the

environmental objectives for all relevant business activities

and carrying out an assessment of the Minimum Social

Safeguards (MSS) at corporate level. The purpose of the

process was to define the taxonomy-eligibility and alignment

and to gather evidence of the substantial contribution.

The relevant activities of Konecranes are eligible with the

objective of Climate Change Mitigation (CCM) according

to the Technical Screening Criteria of 3.6. Manufacture

of other low carbon technologies and 8.2. Data-driven

solutions for greenhouse gas (GHG) emissions reductions.

The calculation of the revenue percentage is based on

low carbon technology such as inverter-controlled drives,

regenerative braking and hybrid and electric power options.

These technologies substitute existing technology with

lower-emission alternatives. These activities are enabling

substantial contribution towards climate change mitigation

according to representative life cycle assessments (LCA)

made in comparison to the best performing alternative

technologies. Eligibility of revenue was evaluated at product

level and represent only sales to external customers for

each Business Segment. Taxonomy-eligible products

represent 14 percent of Konecranes’ revenue. The revenue

percentage of software solutions eligible for TSC 8.2.

represents 0–1 percent of total revenue.

Subsequent assessments made for all the eligible

activities confirmed that Konecranes has adequate social

minimum safeguards in place. Konecranes is committed

to UN guiding principles on Business and Human rights

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

and OECD guidelines. Konecranes has analyzed the

Do No Significant Harm criteria towards remaining five

environmental objectives. Konecranes has identified that

its products include commercial components that on low

concentrations include Substances of Very High Concern

(SVHC) e.g. lead that is restricted in the Pollution prevention

and control criterion g. Konecranes is compliant with the

REACH Regulation. Konecranes fulfils the other four Do

No Significant Harm criteria. Konecranes is expecting the

EU to publish more guidance related to the “essential for

the society” exemption to define whether the revenue is

taxonomy-aligned. For this reason, Konecranes will not

report its alignment.

CapEx and the specifically defined categories of OpEx

described in the Taxonomy Regulation are reported at

company level. 12 percent of CapEx and 36 percent of

specifically defined taxonomy OpEx is taxonomy eligible.

These activities include, for example, facility improvements,

sourcing of green activities and research and development

projects. They support the transition towards a low carbon

economy and achieving the Science Based Targets set for

own operations and for the value chain.

Economic activity

Revenue

FY 2022

Revenue

FY 2021

Revenue

FY 2022

Climate

change

mitigation

Climate

change

adaptation

Climate

change

mitigation

Climate

change

adaptation

Water &

marine

resources

Circular

economy Pollution

Biodiversity

and

ecosystems

Minimum

social

safeguards

Taxonomy-

aligned

proportion

of revenue

2022

Taxonomy-

aligned

proportion

of revenue

2021

Of which

Enabling or

Transitional

activity

MEUR MEUR % % % Y/N Y/N Y/N Y/N Y/N Y/N

Company

level

% % E/T

A. TAXONOMY-ELIGIBLE ACTIVITIES

A1. Environmentally sustainable activities (Taxonomy-

aligned)

N/A N/A N/A Y Y Y Y N/A Y Y N/A N/A E

A2. Taxonomy-eligible but not environmentally

sustainable activities (not Taxonomy-aligned)

N/A N/A N/A Y Y Y Y N/A Y Y N/A N/A E

Turnover of eligible activities with substantial contribution 462 289 14%

Segment Port Solutions: Electric and hybrid equipment

(activity 3.6.)

326 155 10% 10% 0% Y Y Y Y N/A Y Y N/A N/A E

Segment Industrial Equipment: Wire rope hoists with

inverter-controlled drives and winches with regenerative

braking (activity 3.6.)

136 134 4% 4% 0% Y Y Y Y N/A Y Y N/A N/A E

Segment Industrial Service: Wire rope hoists with inverter-

controlled drives and winches with regenerative braking

(activity 3.6.)

3 2 0% 0% 0% Y Y Y Y N/A Y Y N/A N/A E

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

Turnover of Taxonomy-non-eligible activities 2,903 2,897 86%

Total (A+B) 3,365 3,186 100%

Table 1. Revenue

Substantial

contribution criteria DNSH criteria (Does Not Significantly Harm)

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Economic activity

Capex

FY 2022

Capex

FY 2021

Capex

FY 2022

Climate

change

mitigation

Climate

change

adaptation

Climate

change

mitigation

Climate

change

adaptation

Water &

marine

resources

Circular

economy Pollution

Biodiversity

and

ecosystems

Minimum

social

safeguards

Taxonomy-

aligned

proportion

of capex

2022

Taxonomy-

aligned

proportion

of capex

2021

Of which

Enabling or

Transitional

activity

MEUR MEUR % % % Y/N Y/N Y/N Y/N Y/N Y/N Corp. E/T

A. TAXONOMY-ELIGIBLE ACTIVITIES

A1. Environmentally sustainable activities (Taxonomy-

aligned)

N/A N/A N/A Y Y Y Y N/A Y Y N/A N/A E

A2. Taxonomy-eligible but not environmentally

sustainable activities (not Taxonomy-aligned)

N/A N/A N/A Y Y Y Y N/A Y Y N/A N/A E

Turnover of eligible activities 5 2 12%

Related to taxonomy-eligible assets or processes,

enabling to become aligned, purchase of taxonomy-

eligible activities, enabling activities to become low-

carbon or to reduce emissions

5 2 12% 12% Y Y Y Y Y Y Y 12% 5% E

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

Turnover of Taxonomy-non-eligible activities 32 47 88%

Total (A+B) 37 50 100%

Table 2. Capex

Substantial

contribution criteria DNSH criteria (Does Not Significantly Harm)

Economic activity

Opex

FY 2022

Opex

FY 2021

Opex

FY 2022

Climate

change

mitigation

Climate

change

adaptation

Climate

change

mitigation

Climate

change

adaptation

Water &

marine

resources

Circular

economy Pollution

Biodiversity

and

ecosystems

Minimum

social

safeguards

Taxonomy-

aligned pro-

portion of

opex 2022

Taxonomy-

aligned pro-

portion of

opex 2021

Of which

Enabling or

Transitional

activity

MEUR MEUR % % % Y/N Y/N Y/N Y/N Y/N Y/N E/T

A. TAXONOMY-ELIGIBLE ACTIVITIES

A1. Environmentally sustainable activities (Taxonomy-

aligned)

N/A N/A N/A Y Y Y Y N/A Y Y N/A N/A E

A2. Taxonomy-eligible but not environmentally

sustainable activities (not Taxonomy-aligned)

N/A N/A N/A Y Y Y Y N/A Y Y N/A N/A E

Turnover of eligible activities 24 26 36%

Related to taxonomy-eligible assets or processes,

enabling to become aligned, purchase of taxonomy-

eligible activities, enabling activities to become low-

carbon or to reduce emissions

24 26 36% 36% Y Y Y Y Y Y Y

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

Turnover of Taxonomy-non-eligible activities 43 40 64%

Total (A+B) 67 66 100%

Table 3. Opex

Substantial

contribution criteria DNSH criteria (Does Not Significantly Harm)

Konecranes continues to develop taxonomy assessment and

reporting in 2023 as the final technical screening criteria for

the four remaining objectives will be finalized. According to

the current draft criteria it is possible that certain service

activities of Konecranes will be eligible and aligned according

to the new objectives. The total taxonomy-eligible and

aligned revenue is therefore expected to increase in 2023

as the activities related to service are expected to partially

fall in the forthcoming scope of the environmental objective

“Transition to a circular economy and waste prevention”.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Litigation

Various legal actions, claims, and other proceedings are

pending against the Group in different countries. These

actions, claims, and other proceedings are typical for this

industry and are consistent with the global business offering

that encompasses a wide range of products and services.

These matters involve contractual disputes, warranty claims,

product liability (including design defects, manufacturing

defects, failure to warn, and asbestos legacy), employment,

auto liability, and other matters involving liability claims.

Risks and uncertainties

Global pandemics, such as COVID-19, have and may

have a negative impact on Konecranes’ customers and its

own operations. Physical restrictions on the daily conduct

of people and businesses can lead to lower revenue

recognition and adversely impact cash flow. Physical

restrictions may also lead to component availability and

other supply chain issues and inventory obsolescence.

Furthermore, global pandemics can increase the likelihood

of weaker demand conditions and, as a result, may lead to

overcapacity, impairment of assets and credit losses.

Global component and labor availability issues and other

global supply chain constraints may lead to production and

customer delivery delays and have a negative impact on

Konecranes sales and cash flow. Accelerated inflation may

increase risk for negative impact on Konecranes cash flow

and result.

Konecranes operates in emerging countries that face

political, economic, and regulatory uncertainties. Adverse

changes in the operating environment of these countries

may result in currency losses, elevated delivery costs, or

loss of assets. Konecranes operates a crane factory in

Zaporizhzhia, Ukraine. In 2022, Konecranes impaired all

Ukraine-related assets as the level of uncertainty regarding

Konecranes’ operations in Ukraine remains high due to the

ongoing war.

The operations in emerging countries have had a negative

impact on the aging structure of accounts receivable and

may increase credit losses or the need for higher provisions

for doubtful accounts.

Political risks and uncertainties have also increased outside

the emerging countries due to the emergence of populism,

patriotism, and protectionism in a number of Western

economies. This has led and can lead to further increases

in tariffs on imported goods, such as components that

Konecranes manufactures centrally before exporting them

to most of the countries in which it operates. The resulting

tariffs may result in a decrease in profitability.

Konecranes has made several acquisitions and expanded

organically into new countries. A failure to integrate the

acquired businesses, MHPS and MHE-Demag in particular, or

grow newly established operations may result in a decrease

in profitability and impairment of goodwill and other assets.

One of the key strategic initiatives of Konecranes is

oneKONECRANES. This initiative involves a major capital

expenditure on information systems. A higher-than-

expected development or implementation costs, or a

failure to extract business benefits from new processes and

systems may lead to an impairment of assets or decrease in

profitability.

Konecranes delivers projects, which involve risks related,

for example, to engineering and project execution with

Konecranes’ suppliers. A failure to plan or manage these

projects may lead to higher-than-estimated costs or

disputes with customers.

Challenges in financing, e.g. due to currency fluctuations,

may force customers to postpone projects or even cancel

the existing orders. Konecranes intends to avoid incurring

costs for major projects under construction in excess of

advance payments. However, it is possible that the cost-

related commitments in some projects temporarily exceed

the number of advance payments.

The Group’s other risks are presented in the Notes to the

Financial Statements and the Governance Supplement to

the Annual Report.

Date Release

December 22,

2022

Konecranes Plc's Shareholders' Nomination

Board's proposals for the composition and

compensation of the Board of Directors

October 26, 2022

Konecranes Plc: Interim report January–

September 2022

October 25, 2022

Konecranes Plc's financial information and AGM

in 2023

September 20,

2022

Composition of the Shareholders' Nomination

Board of Konecranes Plc

July 27, 2022

Konecranes Plc: Half-year financial report

January–June 2022

July 15, 2022

Anders Svensson to start as President and CEO

of Konecranes on October 19, 2022, Konecranes

plans to host a CMD in H1/2023

July 12, 2022

Profit warning: Konecranes lowers full-year 2022

financial guidance

June 15, 2022

Konecranes Restricted Share Unit Plan 2017 -

directed share issue

June 15, 2022

Konecranes Plc: Board of Directors' organizing

meeting

Stock exchange releases during full

year 2022

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Date Release

June 15, 2022

Resolutions of Konecranes Plc's Annual General

Meeting of shareholders

June 10, 2022

Anders Svensson appointed President and CEO

of Konecranes

May 20, 2022

Konecranes Plc: Notice pursuant to the Finnish

Securities Market Act, Chapter 9, Section 10

May 13, 2022

Konecranes Plc's Board of Directors convenes the

Annual General Meeting 2022

May 11, 2022

Konecranes Plc's Shareholders' Nomination Board

revises its proposals for the Annual General

Meeting

April 27, 2022 Konecranes Plc: Interim report January–March 2022

April 27, 2022 Changes in Konecranes Leadership Team

April 26, 2022

Konecranes plans to hold the Annual General

Meeting on June 15, 2022; the Board has

decided its dividend proposal

April 21, 2022

Konecranes comments on the impacts of the

war in Ukraine on its business and financial

performance

March 30, 2022

The Board of Directors of Konecranes Plc has

resolved to establish a new Performance Share Plan

March 30, 2022

The Board of Directors of Konecranes Plc decided

to continue the Employee Share Savings Plan

March 29, 2022

Konecranes comments on its strategy and next

steps following the abandonment of the planned

merger and cancels its Annual General Meeting

scheduled for March 30, 2022

March 29, 2022

The UK CMA blocks the merger between

Konecranes and Cargotec and thus the

Companies have Jointly Decided to Cancel the

Planned Merger

February 28,

2022

Konecranes Plc's Annual Report 2021 published

February 25,

2022

Notice to the Annual General Meeting of

Konecranes Plc

February 24,

2022

The European Commission Conditionally

Approved the Proposed Merger; the Completion

Remains Subject to Further Authority Approvals

Date Release

February 3, 2022

Proposals by the board of directors to the annual

general meeting 2022

February 3, 2022

The Board of Directors of Konecranes Plc has

resolved the criterion for the measurement

period 2022 of the Performance Share Plans

2020 and 2021

February 3, 2022 Konecranes Plc: Financial statement release 2021

February 3, 2022

Konecranes and Cargotec provide an update on

planned merger: Remedy requirements are more

complex than expected, dialogue with relevant

competition authorities continues

January 28, 2022

Konecranes Plc's Shareholders' Nomination

Board's proposals for the composition and

compensation of the Board of Directors

Corporate press releases during full

year 2022

• On December 22, 2022, Konecranes announced that

a Port in the Bahamas ordered a Konecranes Gottwald

Generation 6 Mobile Harbor Crane to raise productivity

and eco-efficiency. The order was booked in November

2022.

• On December 13, 2022, Konecranes announced that its

climate work was rewarded with an A- rating in CDP’s

Climate Change performance ranking.

• On December 1, 2022, Konecranes announced that

an Indian port operator ordered three Generation 6

Konecranes Gottwald Mobile Harbor Cranes to electrify

bulk handling. The order was booked in September 2022.

• On October 27, 2022, Konecranes announced that it is to

deliver a complete automated container handling solution

to London Gateway. The order was booked in April 2022.

• On October 12, 2022, Konecranes announced that its

January–September 2022 interim report will be published

on October 26, 2022.

• On October 6, 2022, Konecranes announced that Port

Houston ordered 26 eco-efficient hybrid Konecranes

RTGs. The order was booked in Q3 2022.

• On October 4, 2022, Konecranes announced that CSP

Spain ordered 11 Konecranes hybrid RTGs. The order was

booked in Q3 2022.

• On September 30, 2022, Konecranes announced that a

North Italian terminal ordered a Generation 6 Konecranes

Gottwald Mobile Harbor Crane to lift productivity and eco-

efficiency. The order was booked in July 2022.

• On September 15, 2022, Konecranes announced that the

Konecranes-led international research project OPTIMUM

was awarded by ITEA for Excellence for leaps in smart

factory development.

• On September 5, 2022, Konecranes announced that

Georgia Ports Authority ordered 12 Konecranes RTGs for

the Port of Savannah. The order was booked Q3 2022.

• On July 13, 2022, Konecranes announced that it had

successfully placed a EUR 300 million ESG-linked

Schuldschein loan on strong demand from investors.

• On July 13, 2022, Konecranes announced that its

January–June 2022 half-year financial report will be

published on July 27, 2022.

• On July 1, 2022, Konecranes announced that Kemi

Shipping ordered eight Konecranes E-VER electric forklifts

to its fleet in northern Finland. The order was booked in

June 2022.

• On May 31, 2022, Konecranes announced that it is to

supply nuclear fuel handling machines to Sweden’s

largest nuclear power plant. The order was booked in

April 2022.

• On May 18, 2022, Konecranes announced that it had

been named best Finnish Large Cap company on

furthering diversity.

• On April 26, 2022, Konecranes announced that Georgia

Ports Authority had ordered a fleet of 22 Konecranes

container cranes. The order was booked in Q1 2022.

• On April 13, 2022, Konecranes announced that its

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

January–March 2022 interim report will be published on

April 27, 2022.

• On February 1, 2022, Konecranes presented new climate

targets in line with limiting global warming to 1.5°C.

• On January 26, 2022, Konecranes announced that it

provides 17 Automated Rubber-Tired Gantry Cranes in

fully integrated solution for Port of Felixstowe. The order

was booked in Q4 2021.

• On January 20, 2022, Konecranes announced that its

financial statement release 2021 will be published on

February 3, 2022.

• On January 10, 2022, Konecranes announced that it

partnered with Pesmel to supply automated warehouse

container handling systems.

Events after the end

of the reporting period

On February 1, 2023, Konecranes announced that the Board

of Directors had decided to establish a new Performance

Share Plan 2023 for Konecranes key employees. The Plan

has a three-year performance period from 2023 to 2025.

The Plan has two performance criteria: the cumulative

adjusted Earnings per Share (EPS) for the financial

years 2023–2025 with a 60 percent’s weighting and the

compound annual growth rate (CAGR) for Sales for the

financial years 2023–2025 with a 40 percent’s weighting.

The targets for the three-year performance period have

also been decided by the Board of Directors. The target

group of the Plan consists of a maximum of 170 Konecranes

key employees. Additional information, including essential

terms and conditions of the Plan, is available in the stock

exchange release dated February 1, 2023.

On February 1, 2023, Konecranes announced that the Board

of Directors had decided the criterion for the measurement

period 2023 of the Performance Share Plans 2021 and

2022. The criterion is adjusted earnings per share (EPS).

Also the targets for the measurement period 2023 were

decided by the Board of Directors. Additional information on

the criterion is available in the stock exchange release dated

February 1, 2023.

On February 1, 2023, Konecranes announced that the

Board of Directors had decided to launch a new Plan Period

relating to the Employee Share Savings Plan. The new Plan

Period will begin on July 1, 2023, and will end on June 30,

2024. The other terms and conditions approved by the

Board have been published in the stock exchange release

on dated February 1, 2023.

First quarter demand outlook

The worldwide demand picture remains subject to volatility

and uncertainty.

Despite the weakened global macro indicators, our overall

demand environment within industrial customer segments

has remained good and continues on a healthy level. That

said, we have started to see some signs of weakening in

all three regions.

Global container throughput continues high, and long-

term prospects related to global container handling

remain good overall.

Financial guidance

Konecranes expects net sales to increase in full-year 2023

compared to 2022. Konecranes expects the full-year 2023

adjusted EBITA margin to improve from 2022.

Board of Directors’ proposal for

disposal of distributable funds

The parent company’s non-restricted equity is EUR

956,868,289.67, of which the net income for the year is

EUR 100,324,987.85. The Group’s non-restricted equity is

EUR 1,364,732,000.

According to the Finnish Companies Act, the distributable

funds of the company are calculated based on the parent

company’s non-restricted equity. For the purpose of

determining the amount of the dividend, the Board of

Directors has assessed the liquidity of the parent company

and the economic circumstances subsequent to the end of

fiscal year.

Based on such assessments, the Board of Directors

proposes to the Annual General Meeting to be held on

March 29, 2023, that a dividend of EUR 1.25 be paid on

each share and that the remaining non-restricted equity

is retained in shareholders’ equity. The proposal will be

included in the notice to the Annual General Meeting, which

will be published during February 2023.

A PDF version of the Konecranes’ full audited financial

statements, including the report of the Board of Directors,

and corporate governance statement will be available

as pdf documents on Konecranes website on Tuesday,

February 28, 2023.

Espoo, February 1, 2023

Konecranes Plc

Board of Directors

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Konecranes Group 2018−2022

Business development 2022 2021 2020 2019 2018

Orders received MEUR 3,928.9 3,175.5 2,727.3 3,167.3 3,090.3

Order book MEUR 2,901.7 2,036.8 1,715.5 1,824.3 1,715.4

Net sales MEUR 3,364.8 3,185.7 3,178.9 3,326.9 3,156.1

of which outside Finland MEUR 3,262.0 3,098.1 3,096.3 3,244.2 3,056.3

Export from Finland MEUR 789.6 955.2 1,075.9 969.6 777.0

Personnel on average 16,563 16,625 17,027 16,104 16,247

Personnel on December 31 16,522 16,573 16,862 16,196 16,077

Capital expenditure MEUR 37.0 49.8 42.8 39.5 35.4

as % of Net sales % 1.1% 1.6% 1.3% 1.2% 1.1%

Research and development costs MEUR 47.7 47.7 48.5 41.1 42.1

as % of Net sales % 1.4% 1.5% 1.5% 1.2% 1.3%

Profitability

Net sales MEUR 3,364.8 3,185.7 3,178.9 3,326.9 3,156.1

Adjusted EBITA MEUR 318.4 312.2 260.8 275.1 257.1

as % of net sales % 9.5% 9.8% 8.2% 8.3% 8.1%

Adjusted operating profit MEUR 286.6 279.1 224.9 250.4 219.6

as % of net sales % 8.5% 8.8% 7.1% 7.5% 7.0%

Operating profit MEUR 223.2 220.0 173.8 148.7 166.2

as % of net sales % 6.6% 6.9% 5.5% 4.5% 5.3%

Income before taxes MEUR 190.7 192.5 170.3 118.5 138.7

as % of net sales % 5.7% 6.0% 5.4% 3.6% 4.4%

Net income

(incl. non-controlling interest)

MEUR 138.5 147.4 122.9 82.8 98.3

as % of net sales % 4.1% 4.6% 3.9% 2.5% 3.1%

Key figures and balance sheet 2022 2021 2020 2019 2018

Equity (incl.

non-controlling interest)

MEUR 1,433.0 1,360.6 1,251.1 1,246.7 1,284.1

Balance sheet MEUR 4,340.6 3,845.8 4,016.5 3,854.2 3,567.0

Return on equity % 9.9 11.3 9.8 6.5 7.7

Return on capital employed % 9.0 9.3 8.3 6.3 7.9

Current ratio 1.6 1.2 1.4 1.4 1.3

Equity to asset ratio % 37.9 38.9 34.1 35.4 39.8

Net working capital MEUR 581.2 424.5 337.2 446.0 410.4

Interest-bearing net debt MEUR 688.3 541.6 577.1 655.3 545.3

Gearing % 48.0 39.8 46.1 52.6 42.5

Shares in figures

Earnings per share, basic EUR 1.77 1.86 1.54 1.03 1.29

Earnings per share, diluted EUR 1.77 1.85 1.54 1.03 1.29

Equity per share EUR 18.10 17.08 15.69 15.70 16.06

Cash flow per share EUR 0.84 2.13 5.15 2.19 1.39

Dividend per share EUR 1.25* 1.25 0.88 1.20 1.20

Dividend/earnings % 70.6 67.2 57.1 116.5 93.0

Effective dividend yield % 4.3 3.6 3.1 4.4 4.5

Price/earnings 16.2 18.9 18.7 26.6 20.5

Trading low / high** EUR 19.61/38.43 28.80/42.31 14.05/33.08 24.84/38.15 25.05/42.43

Average share price** EUR 27.14 36.41 23.03 29.98 33.56

Share price on December 31** EUR 28.76 35.16 28.78 27.40 26.39

Year-end market capitalization MEUR 2,276.8 2,782.4 2,277.5 2,160.2 2,080.0

Number traded*** (1,000) 87,275 56,561 121,487 96,906 123,158

Stock turnover % 110.3 71.5 153.6 122.9 156.3

Average number of shares

outstanding, basic

(1,000) 79,152 79,134 79,078 78,836 78,811

Average number of shares

outstanding, diluted

(1,000) 79,508 79,607 79,272 78,836 78,811

Number of shares outstanding,

at end of the period

(1,000) 79,167 79,134 79,134 78,839 78,817

* The Board’s proposal to the AGM

** Source: Nasdaq Helsinki

*** Source: Intercontinental Exchange

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Calculation of key figures

Operating profit (EBIT)

Sales + Other operating income − Materials, supplies and subcontracting −

Personnel cost − Depreciation and impairment − Other operating expenses

Adjusted EBITA

Operating profit (EBIT) + purchase price allocation impacts and

impairment + restructuring costs + transaction costs + other items

affecting to comparability

Adjusted Operating profit

Operating proft (EBIT) + restructuring costs + transaction costs + other

items affecting to comparability

Return on equity (%):

Net profit for the period

X 100

Total equity (average during the period)

Return on capital employed

(%):

Income before taxes + interest paid + other financing cost

X 100

Total amount of equity and liabilities − non-interest bearing debts

(average during the period)

Current ratio:

Current assets

Current liabilities

Equity to asset ratio (%):

Shareholders' equity

X 100

Total amount of equity and liabilities – advance payment received

Gearing (%):

Interest-bearing liabilities – liquid assets – loans receivable

X 100

Total equity

Earnings per share:

Net profit for the shareholders of the parent company

Average number of shares outstanding

Earnings per share, diluted:

Net profit for the shareholders of the parent company

Average fully diluted number of shares outstanding

Equity per share:

Equity attributable to the shareholders of the parent company

Number of shares outstanding

Cash flow per share:

Net cash flow from operating activities

Average number of shares outstanding

Effective dividend yield (%):

Dividend per share

X 100

Share price at the end of financial year

Price per earnings:

Share price at the end of financial year

Earnings per share

Net working capital:

Non interest-bearing current assets + deferred tax assets (excluding Purchase

Price Allocation) – Non interest-bearing current liabilities – deferred tax liabilities

(excluding Purchase Price Allocation) – provisions

Interest-bearing net debt:

Interest-bearing liabilities (non current and current) – cash and

cash equivalents – loans receivable (non current and current)

Year-end market capitalization:

Number of shares outstanding multiplied by the share price

at the end of year

Average number of personnel: Calculated as average of number of personnel in quarters

Number of shares outstanding: Total number of shares - treasury shares

Operating profit % and EBITA % are used to measure business profitability

before financial items and taxes. Adjusted operating profit and Adjusted

EBITA are used to reflect the underlying business performance and to

enhance comparability between financial periods and is frequently used by

management, analysts and investors. See also note 3 for reconciliation.

Return on equity % represents the rate of return that shareholders receive

on their investments and Return on capital employed % represent relative

profitability or the rate of return that has been received on capital employed

requiring interest or other return.

Current ratio, Equity to asset ratio, Interest-bearing net debt, Interest-

bearing net debt / Equity are used to measure solvency and indebtedness

of the Konecranes Group. Some of Konecranes’ loan agreements include

a covenant measured by Gearing percentage. Capital expenditure and Net

working capital give additional information of the cash flows and funding needs

of the Konecranes Group. Share related alternative performance measures

enhance the information of equity, cash flow and dividend attributable to

the shareholders and development of the Konecranes share value in the

stock exchange.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Reconciliation of certain alternative

performance measures

Reconciliation of adjusted operating profit and adjusted EBITA (MEUR) 2022 2021

Operating profit 223.2 220.0

Restructuring costs

Employment termination costs 4.8 13.5

Impairments of non-current assets 2.9 0.3

Impairments of inventories 4.8 -0.1

Other restructuring costs and income 4.5 -2.3

Restructuring costs, total 17.0 11.3

Transaction and integration costs 8.7 47.8

Costs related to the impacts of the war in Ukraine 37.8 0.0

Adjusted operating profit 286.6 279.1

Purchase price allocation and goodwil impairment impacts 31.8 33.2

Adjusted EBITA 318.4 312.2

Reconciliation of interest-bearing net debt

Interest-bearing liabilities 1,106.2 865.1

Loans receivable -3.9 -2.8

Cash and cash equivalents -413.9 -320.7

Interest-bearing net debt 688.4 541.6

Reconciliation of net working capital

Total current assets 2,369.2 1,842.6

- Interest bearing current assets -3.9 -2.8

- Cash and cash equivalents -413.9 -320.7

Non-interest-bearing current assets 1,951.4 1,519.0

Deferred tax assets (excluding purchase price allocation) 103.8 120.2

Total current liabilities -1,480.8 -1,585.9

- Current Interest-bearing liabilities 49.8 418.0

Non-interest-bearing current liabilities -1,431.0 -1,167.9

Deferred tax liabilities (excluding purchase price allocations) -23.9 -26.2

Non-current provisions -19.0 -20.7

Net working capital 581.2 424.5

Transaction and integration costs 2022 and 2021 relate to the cancelled merger with Cargotec Oyj.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Consolidated statement of income − IFRS

(1,000,000 EUR)

Jan 1–Dec 31

2022

Jan 1–Dec 31

2021

Note:

3,5,6 Sales 3,364.8 3,185.7

Other operating income 8.1 11.3

7 Materials, supplies and subcontracting -1,510.2 -1,413.0

7,8 Personnel cost -1,091.9 -1,023.5

9 Depreciation and impairments -124.4 -120.1

7 Other operating expenses -423.2 -420.4

Operating profit 223.2 220.0

4,16 Share of associates' and joint ventures' result 0.4 0.3

10 Financial income 26.8 28.6

10 Financial expenses -59.7 -56.4

Profit before taxes 190.7 192.5

11 Taxes -52.2 -45.1

PROFIT FOR THE PERIOD 138.5 147.4

Profit for the period attributable to

Shareholders of the parent company 140.3 146.9

Non-controlling interest -1.8 0.5

12 Earnings per share, basic (EUR) 1.77 1.86

12 Earnings per share, diluted (EUR) 1.77 1.85

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

(1,000,000 EUR)

Jan 1–Dec 31

2022

Jan 1–Dec 31

2021

Note:

Profit for the period 138.5 147.4

Items that can be reclassified into

profit or loss

34 Cash flow hedges 2.0 -11.0

Exchange differences on translating

foreign operations

-3.2 22.8

11.3

Income tax relating to items that

can be reclassified into profit or loss

-0.4 2.2

Items that cannot be reclassified

into profit or loss

Re-measurement gains (losses) on

defined benefit plans

62.6 17.6

11.3

Income tax relating to items that cannot

be reclassified into profit or loss

-18.7 -5.8

Other comprehensive income

for the period, net of tax

42.3 25.8

TOTAL COMPREHENSIVE INCOME

FOR THE PERIOD

180.8 173.2

Total comprehensive income

attributable to:

Shareholders of the parent company 183.1 172.6

Non-controlling interest -2.3 0.6

The accompanying notes form an integral part of the consolidated financial statements.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Consolidated balance sheet − IFRS

EQUITY AND LIABILITIES

(1,000,000 EUR) Dec 31, 2022 Dec 31, 2021

Note:

Equity attributable to equity holders

of the parent company

Share capital 30.1 30.1

Share premium 39.3 39.3

Paid in capital 752.7 752.7

34 Fair value reserves -1.1 -2.7

Translation difference 8.3 11.0

Other reserve 67.8 65.7

Retained earnings 395.5 308.4

Net profit for the period 140.3 146.9

Total equity attributable to equity

holders of the parent company

1,432.9 1,351.4

16 Non-controlling interest 0.1 9.2

Total equity 1,433.0 1,360.6

Non-current liabilities

26,27,32 Interest-bearing liabilities 1,056.4 447.1

28 Other long-term liabilities 217.7 289.0

24 Provisions 19.0 20.7

17 Deferred tax liabilities 133.7 142.6

Total non-current liabilities 1,426.8 899.4

Current liabilities

26,27,32 Interest-bearing liabilities 49.8 418.0

6 Advance payments received 564.3 344.7

Accounts payable 306.2 255.4

24 Provisions 93.4 105.4

Other short-term liabilities

(non-interest-bearing)

56.1 53.2

32 Other financial liabilities 15.9 16.9

Income tax payables 31.7 23.0

Accrued costs related to delivered

goods and services

165.1 178.3

25 Accruals 198.3 190.9

Total current liabilities 1,480.8 1,585.8

Total liabilities 2,907.6 2,485.2

TOTAL EQUITY AND LIABILITIES 4,340.6 3,845.8

The accompanying notes form an integral part of the consolidated financial statements.

ASSETS

(1,000,000 EUR) Dec 31, 2022 Dec 31, 2021

Note:

Non-current assets

13 Goodwill 1,019.6 1,022.1

14 Intangible assets 475.4 503.1

15 Property, plant and equipment 345.9 339.3

Construction in progress 18.1 10.9

Investments accounted for

using the equity method

7.8 6.8

Other non-current assets 0.8 0.8

17 Deferred tax assets 103.8 120.2

Total non-current assets 1,971.4 2,003.2

Current assets

18 Inventories 992.7 726.4

19 Accounts receivable 585.6 492.1

20 Other receivables 36.8 28.1

Income tax receivables 15.0 16.2

6 Contract assets 183.5 161.3

32 Other financial assets 43.7 3.6

21 Deferred assets 98.0 94.2

22 Cash and cash equivalents 413.9 320.7

Total current assets 2,369.2 1,842.6

TOTAL ASSETS 4,340.6 3,845.8

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Consolidated statement of changes in equity − IFRS

Equity attributable to equity holders of the parent company

(1,000,000 EUR) Share capital

premium

account

Paid in

capital

Cash flow

hedges

Translation

difference

Other

reserve

Retained

earnings Total

Non-

controlling

interest

Total

equity

Balance at January 1, 2022 30.1 39.3 752.7 -2.7 10.9 65.7 455.4 1,351.4 9.2 1,360.6

Dividends paid to equity holders -98.9 -98.9 -0.3 -99.2

Equity-settled share based

payments (note 29)

2.1 0.0 2.1 2.1

Acquisitions -4.8 -4.8 -6.5 -11.3

Profit for the period 140.3 140.3 -1.8 138.5

Other comprehensive income 1.6 -2.6 43.8 42.8 -0.5 42.3

Total comprehensive income 1.6 -2.6 184.1 183.1 -2.3 180.8

Balance at December 31, 2022 30.1 39.3 752.7 -1.1 8.3 67.8 535.8 1,432.9 0.1 1,433.0

Balance at January 1, 2021 30.1 39.3 752.7 6.0 -11.7 58.0 367.6 1,242.0 9.1 1,251.1

Dividends paid to equity holders -69.6 -69.6 -0.2 -69.8

Equity-settled share based

payments (note 29)

7.7 0.0 7.7 7.7

Acquisitions -1.3 -1.3 -0.3 -1.6

Profit for the period 146.9 146.9 0.5 147.4

Other comprehensive income -8.7 22.6 11.8 25.7 0.1 25.8

Total comprehensive income -8.7 22.6 158.7 172.6 0.6 173.2

Balance at December 31, 2021 30.1 39.3 752.7 -2.7 10.9 65.7 455.4 1,351.4 9.2 1,360.6

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Consolidated cash flow statement − IFRS

(1,000,000 EUR)

Jan 1−Dec 31

2022

Jan 1−Dec 31

2021

Note:

Cash flow from operating activities

Profit for the period 138.5 147.4

Adjustments to net profit for the period

Taxes 52.2 45.1

Financial income and expenses 32.9 27.8

Share of associates' and joint ventures'

result

-0.4 -0.3

Depreciation and impairments 124.4 120.1

Profits and losses on sale of fixed assets -2.4 -4.2

Other adjustments -0.7 10.1

Operating income before change

in net working capital

344.5 346.0

Change in interest-free current receivables -159.9 -28.0

Change in inventories -264.4 -65.3

Change in interest-free current liabilities 262.0 -5.7

Change in net working capital -162.3 -99.0

Cash flow from operations before

financing items and taxes

182.2 247.0

Interest received 28.0 13.1

Interest paid -56.5 -28.1

Other financial income and expenses -33.7 -16.2

11 Income taxes paid -53.3 -47.4

Financing items and taxes -115.5 -78.6

NET CASH FROM OPERATING ACTIVITIES 66.7 168.4

(1,000,000 EUR)

Jan 1−Dec 31

2022

Jan 1−Dec 31

2021

Note:

Cash flow from financing activities

4 Acquisition of Group companies, net of cash -1.6 0.0

4 Divestment of businesses, net of cash 0.1 0.0

Capital expenditures -44.7 -40.5

Proceeds from sale of property, plant

and equipment and other

2.6 9.8

NET CASH USED IN INVESTING

ACTIVITIES

-43.6 -30.7

Cash flow before financing activities 23.1 137.7

Cash flow from financing activities

27.6 Proceeds from borrowings 600.0 0.0

27.6 Repayments of borrowings -331.7 -155.6

27.6 Repayments of lease liability -44.1 -42.6

27.6

Proceeds from (+), payments of (-) current

borrowings

-43.7 -146.4

Change in loans receivable -1.2 -1.0

Acquired non-controlling interest -11.0 -1.6

Dividends paid to equity holders of the

parent company

-98.9 -69.6

Dividends paid to non-controlling interests -0.3 -0.2

NET CASH USED IN FINANCING

ACTIVITIES

69.1 -417.0

Translation differences in cash 1.0 8.1

CHANGE OF CASH AND CASH

EQUIVALENTS

93.2 -271.2

Cash and cash equivalents at beginning

of period

320.7 591.9

22 Cash and cash equivalents at end of period 413.9 320.7

CHANGE OF CASH AND CASH

EQUIVALENTS

93.2 -271.2

The effect of changes in exchange rates has been eliminated by converting the beginning balance at the rates

current on the last day of the year.

The accompanying notes form an integral part of the consolidated financial statements.

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1. Corporate information

Konecranes Plc (“Konecranes Group” or “the Group”) is a

Finnish public limited company organized under the laws of

Finland and domiciled with its principal place of business in

Hyvinkää. The company is listed on the NASDAQ Helsinki.

Konecranes is a world-leading manufacturer and servicer

of cranes, lifting equipment and machine tools, serving

a broad range of customers, including manufacturing

and process industries, shipyards, ports and terminals.

Konecranes operates internationally, with its products being

manufactured in North and South America, Europe, Africa,

the Middle East, and Asia and sold worldwide. Konecranes

has three reportable segments: Service, Industrial

Equipment and Port Solutions.

2. Accounting principles

2.1. Basis of preparation

The consolidated financial statements of Konecranes Plc

have been prepared in accordance with International

Financial Reporting Standards (IFRS) as adopted

by the EU.

The consolidated financial statements have been prepared

on a historical cost basis, except for items that are required

by IFRS to be measured at fair value, principally certain

financial instruments.

The consolidated financial statements including notes

thereto are presented in millions of euros and all values

are rounded to the nearest million (€000,000) except when

otherwise indicated.

Due to the rounding, some totals might differ from the sum

of individual figures as calculations are done originally in

thousands of euros.

The financial statements were approved for issuance by the

Board of Directors on February 1, 2023.

Principles of consolidation

The consolidated financial statements comprise the

consolidated balance sheet of Konecranes Plc and its

subsidiaries as at December 31, 2022 and 2021 and the

consolidated statements of income and cash flows for

the periods ended December 31, 2022 and 2021. Control

is achieved when the Group is exposed, or has rights, to

variable returns from its involvement with the investee and

has the ability to affect those returns through its power over

the investee. Specifically, the Group controls an investee if,

and only if, the Group has:

• Power over the investee (i.e., existing rights that give

it the current ability to direct the relevant activities of

the investee)

• Exposure, or rights, to variable returns from its

involvement with the investee

• The ability to use its power over the investee to affect

its returns

Generally, there is a presumption that majority of voting

rights result in control. To support this presumption and

when the Group has less than majority of the voting

or similar rights of an investee, the Group considers all

relevant facts and circumstances in assessing whether it has

power over an investee, including:

• The contractual arrangement with the other vote

holders of the investee

• Rights arising from other contractual arrangements

• The Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an

investee if facts and circumstances indicate that there are

changes to one or more of the three elements of control.

Consolidation of a subsidiary begins when the Group obtains

control over the subsidiary and ceases when the Group

loses control of the subsidiary. Assets, liabilities, income and

expenses of a subsidiary acquired or disposed of during the

year are included in the consolidated financial statements

from the date the Group gains control until the date the

Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive

income (OCI) are attributed to the equity holders of the

parent of the Group and to the non-controlling interests, even

if this results in the non-controlling interests having a deficit

balance. When necessary, adjustments are made to the

financial statements of subsidiaries to bring their accounting

policies into line with the Group’s accounting policies. All

intra-group assets and liabilities, equity, income, expenses

and cash flows relating to transactions between members of

the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without

a loss of control, is accounted for as an equity transaction.

Notes to the consolidated financial statements

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If the Group loses control over a subsidiary, it derecognizes

the related assets (including goodwill), liabilities, non-

controlling interest and other components of equity while

any resultant gain or loss is recognized in profit or loss. Any

investment retained is recognized at fair value.

Investment in associates and joint ventures

An associate is an entity over which the Group has

significant influence. Significant influence is the power to

participate in the financial and operating policy decisions

of the investee but is not control or joint control over

those policies.

A joint venture is a type of joint arrangement whereby

the parties that have joint control of the arrangement

have rights to the net assets of the joint venture. Joint

control is the contractually agreed sharing of control of an

arrangement, which exists only when decisions about the

relevant activities require unanimous consent of the parties

sharing control.

The Group’s investments in its associates and joint

ventures are accounted for using the equity method.

Under this method, the consolidated financial statements

show the Group’s investment in and share of net assets

of the associate or joint venture. Any premium over net

assets paid to acquire an interest in an associate or joint

venture is recognized as goodwill within the same line

as the underlying investment. The statement of profit or

loss reflects the Group’s share of the results of operations

of the associate or joint venture. Any change in OCI of

those investees is presented as part of the Group’s OCI. In

addition, when there has been a change recognized directly

in the equity of the associate or joint venture, the Group

recognizes its share of any changes, when applicable, in the

statement of changes in equity. Unrealized gains and losses

resulting from transactions between the Group and the

associate or joint venture are eliminated to the extent of the

interest in the associate or joint venture.

After application of the equity method, the Group

determines whether it is necessary to recognize an

impairment loss on its investment in its associate or joint

venture. At each reporting date, the Group determines

whether there is objective evidence that the investment in

the associate or joint venture is impaired. If there is such

evidence, the Group calculates the amount of impairment

as the difference between the recoverable amount of the

associate or joint venture and its carrying value, and then

recognizes the loss as share of profit of an associate and a

joint venture in the statement of profit or loss.

2.2. Use of estimates and judgments

The preparation of the financial statements in accordance

with IFRS requires management to make estimates and

judgments that affect the valuation of reported assets

and liabilities and other information, such as contingent

liabilities and recognition of income and expenses in

the statement of income. These assumptions, estimates

and judgments are based on management’s historical

experience, best knowledge about the events and other

factors, such as expectations on future events, which

the company assess to be reasonable in the given

circumstances. Although these estimates and judgments

are based on the management’s best understanding of

current events and circumstances, actual results may differ

from the estimates. Changes in estimates and assumptions

are recognized in the financial period the estimate or

assumption is changed.

The most important items in the consolidated financial

statements, which require management’s estimates and

that involve complex and subjective judgments and the

use of assumptions, some of which may be for matters

that are inherently uncertain and susceptible to change

are impairment testing, recognition of deferred taxes,

measurement of the fair value of assets and actuarial

assumptions in defined benefit plans, and percentage of

completion revenue recognition in long term projects.

Impairment testing

The recoverable amount for goodwill has been determined

based on value in use of the relevant cash generating unit

to which the goodwill is allocated. The recoverable amounts

of all material intangible assets and property, plant and

equipment have also been based on their value in use.

The impairment testing of goodwill is based on numerous

judgmental estimates of the present value of the cash flows

which effect the valuation of the cash generating units (CGU)

pertaining to the goodwill. Cash flow forecasts are made based

on CGU specific historical data, order book, the current market

situation, and industry specific information of the future

growth possibilities. These assumptions are reviewed annually

as part of management’s annual and strategic planning

cycles and can be subject to significant adjustment as arising

from the development of the global economy, pressure from

competitors’ products, climate risks and opportunities as well

as changes in raw material prices and operating expenses.

The value of the benefits and savings from the efficiency

improvement programs already announced and included in

certain cash flow estimates are also subjective and based on

management’s best estimate of the impact. The fair value of

the CGUs is determined using a derived weighted average cost

of capital as the rate to discount estimated future cash flows.

The discount rate used may not be indicative of actual rates

obtained in the markets in the future. See note 13.

Business Combinations

Acquisitions of subsidiaries are accounted for using the

acquisition method according to which the acquired

company’s identifiable assets, liabilities and contingent

liabilities are measured at fair value on the date of

acquisition. The excess of the consideration transferred

for the business combination over the acquirer’s interest

in the net fair value of the identifiable assets, liabilities

and contingent liabilities is recorded as goodwill. The

measurement of fair value of the acquired net assets is

based on market value of similar assets (property, plant

and equipment), or an estimate of expected cash flows

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CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

(intangible assets). The valuation, which is based on

prevailing repurchase value, expected cash flows or

estimated sales price, requires management judgement,

estimates and assumptions. See note 4.

Recognition of deferred taxes

The ultimate realization of deferred tax assets is dependent

upon the generation of future taxable income during the

periods in which those temporary differences become

deductible or in which tax losses can be utilized. The tax

effect of unused tax losses is recognized as a deferred tax

asset when it becomes probable that the tax losses will

be utilized. In making assessments regarding deferred tax

assets, management considers the scheduled reversal of

deferred tax liabilities, projected future taxable income and

tax planning strategies. The actual current tax exposure is

estimated together with assessing temporary differences

resulting from differing treatment of items, such as

depreciation, provisions and accruals, for tax and accounting

purposes. When recording the deferred tax assets judgments

have been based on the estimates of the taxable income in

each subsidiary and country in which Konecranes operates,

and the period over which the deferred tax assets will be

recoverable based on the estimated future taxable income

and planned tax strategies to utilize these assets. The

amount of deferred tax assets considered realizable could

however be reduced in subsequent years if estimates of

future taxable income during their carry forward periods are

reduced, or rulings by the tax authorities are unfavourable.

Estimates are therefore subject to change due to both

market related and tax authorities related uncertainties, as

well as Konecranes’ own future decision matters such as

restructuring. Konecranes is unable to accurately quantify

the future adjustments to deferred income tax expense that

may occur as a result of these uncertainties. See note 17.

Actuarial assumptions in defined benefit plans

The net pension liability and expense for defined benefit

plans is based on various actuarial assumptions such as the

assumed discount rate, expected development of salaries

and pensions and mortality rates. Significant differences

between assumptions and actual experience, or significant

changes in assumptions, may materially affect the pension

obligations. The effects of actual results differing from

assumptions and the changing of assumptions are included

in Remeasurement gains/loss on defined benefit plans in

other comprehensive income. Discount rates are determined

annually based on changes in long-term, high quality

corporate bond yields.

Decreases in the discount rates results in an increase in the

defined benefit obligation and in pension costs. Conversely,

an increase in the discount rate results in a decrease in the

defined benefit obligation and in pension costs. Increases

and decreases in mortality rates have an inverse impact on

the defined benefit obligation and pension costs. Increases

and decreases in salary and pension growth rates have a

direct correlating impact on the defined benefit obligation

and pension costs.

The assumed discount rate, which is based on rates

observed at the end of the preceding financial year may

not be indicative of actual rates realized. The actual

development for salaries and pensions may not reflect the

estimated future development due to the uncertainty of the

global economy and various other factors. Konecranes uses

generational mortality tables to estimate probable future

mortality improvements. These tables assume that the

trend of increasing life expectancy will continue, resulting in

pension benefit payments to younger members being likely

to be paid for longer time periods than older members’

pensions, given that assumed retirement ages are those

defined in the rules of each plan.

The funded status, which can increase or decrease based on

the performance of the financial markets or changes in our

assumptions, does not represent a mandatory short-term cash

obligation. Instead, the funded status of a defined benefit

pension plan is the difference between the defined benefit

obligation and the fair value of the plan assets. See note 28.

Revenue recognition over time in long-term projects

Konecranes applies the percentage of completion method

for recognizing revenue over time from certain long-term

large crane projects and modernizations in accordance with

IFRS 15 Revenue Recognition. The percentage of completion

is based on the cost-to-cost method. Under this method,

progress of contracts is measured by actual costs incurred

in relation to management’s best estimate of total estimated

costs at completion, which are reviewed and updated

routinely for contracts in progress. The cumulative effect of

any change in estimate is recorded in the period in which the

change in estimate is determined.

The percentage of completion method of accounting involves

the use of assumptions and projections, principally relating

to future material, labour and project-related overhead costs.

As a consequence, there is a risk that total contract costs

will exceed those originally estimated and the margin will

decrease, or the contract may become unprofitable. This risk

increases as the duration of a contract increases because

there is a higher probability that the circumstances upon

the estimates were originally based will change, resulting

in increased costs that may not be recoverable. Factors

that could cause costs to increase include: unanticipated

technical problems with equipment supplied or developed by

us which may require us to incur additional costs to remedy,

changes in the cost of components, materials or labour,

project modifications creating unanticipated costs, suppliers’

or subcontractors’ failure to perform, and delays caused by

unexpected conditions or events. By recognizing changes in

estimates cumulatively, recorded revenue and costs to date

reflect the current estimates at the stage of completion for

each project. Additionally, losses on long-term contracts are

recognized in the period when they are identified and are

based upon the anticipated excess of contract costs over the

related contract revenues.

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COVID-19 and the war in Ukraine

The impacts of the Covid-19 pandemic and the war in

Ukraine on estimates in the financial reporting rely on

management’s best judgement. The Group has assessed the

impacts to goodwill, other intangible and tangible assets as

part of the impairment testing process, and to defined benefit

plans, provisions, valuation of inventory, recoverability of

deferred tax assets and collectability of account receivables

as part of the regular reporting process.

Uncertainties remain regarding the COVID-19 pandemic and

related component availability issues as well as other supply

chain constraints.

Konecranes operates a crane and component factory

in Zaporizhzhia, in the south-eastern part of Ukraine.

The production at the Ukrainian factory was stopped

immediately after the war in Ukraine started. The planned

production has been redirected to other Konecranes

manufacturing sites. As the level of uncertainty regarding

Konecranes’ operations in Ukraine remains high due to

the ongoing war, Konecranes impaired all Ukraine-related

assets, including inventories and receivables. Konecranes

also decided not to take any new business from Russia,

wrote off orders and reversed sales related to Russian

projects, divested its Russian Service business to local

management who have established their own companies

and cancelled all Russian maintenance agreements. The war

has increased market volatility and uncertainty by increasing

cost inflation and global material availability concerns and

other supply chain issues. See note 24.

Significant judgement has been used for the cash flows

used for calculation of recoverable amounts of cash

generating units in impairment testing. The estimates

and assumptions for market development, growth, and

other significant factors used in the impairment testing are

based on management’s best estimates under the current

circumstances. See note 13.

Konecranes reviews and estimates its customer credit risks

related to accounts receivable and ongoing projects as part

of normal reporting process. Provision for doubtful accounts

has been prepared based on the historical credit loss pattern,

but it is also adjusted case by case with forward-looking

risk positions. There has not been any significant change in

payment delays related to customer receivables. To limit the

risks, the Group applies a conservative credit policy towards

customers. It is Konecranes practice to review customers

carefully before entering formal business relationships and to

require credit reports from new customers. Customer credit

risks are mitigated with advance payments, letters of credits,

payment guarantees and credit insurance where applicable.

See note 19.

Although COVID-19 and the war in Ukraine have impacted

the delays in deliveries and have led to increase in certain

inventory levels, Konecranes does not see material increase

of the risk for obsolete inventory values. There have not

been major order cancellations, but rather the orders and

deliveries have been postponed. The risks related to work in

progress and contract assets are also mitigated with advance

payments collected from customers.

Climate risks

Climate risks might have a significant impact on our

operations, which requires significant judgment for example

in revenue recognition (especially in long-term projects),

provisions, collectability of accounts receivable and

impairment of assets.

The biggest climate-related risks are physical risks related

to own operations and supply chain, transitional risks

related to technological decisions, and market risks related

to cost impacts. Market risks can relate to increased

production costs due to changing input prices (energy,

raw materials etc.) and output requirements (for example

waste treatment). Technological development pressure

in carbon-intensive industries might also increase the

development costs as well as the availability of technology

or key components. The potential physical risks are mostly

related to transportation or production locations. An

increase in extreme weather conditions could especially

affect our crane installations and project sites. Heavy

rainfall and floods would put some of our production

sites at risk. Extreme weather conditions can also have

a potential impact on the shipment of our products or

spare parts. The impacts of the climate risks on estimates

and assumptions used in the financial reporting rely on

management’s best judgement and knowledge under the

current circumstances.

2.3. Summary of significant accounting policies

Revenue recognition

Revenue is recognized at an amount of consideration to

which the Group expects to be entitled in exchange for

transferring promised goods or services to a customer and

to the extent that it is probable that the economic benefits

will flow to the company, that revenue can be reliably

measured, and that collectability is reasonably assured.

Revenue is measured at the fair value of the consideration

received or receivable. The creditworthiness of the buyer is

assessed before engaging into a sale. However, if a risk of

non-payment arises after revenue recognition, a provision

for non-collectability is established.

The company recognizes revenue when it satisfies an

identified performance obligation by transferring promised

goods or service to the customer. Goods and services are

generally considered to be transferred when the customer

obtains the control to it. Control means that the customer

can direct the use of and obtain benefit from the good and

service and also prevent others from directing the use of

and receiving the benefits from them. Thus, the customer

has sole possession of the right to use the good or service

for the remainder of its economic life or to consume the

good or service in its own operations.

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The transaction price is usually fixed but may also include

variable considerations such as volume or cash discounts

or penalties. Variable consideration is included in the

revenue only to the extent that it is highly probable that

the amount will not be subject of significant reversal when

the uncertainty is resolved. The variable considerations

are estimated using the most likely value method if not yet

realized in the end of the reporting period. If the contract

is separated in to more than one performance obligation,

Konecranes allocates the total transaction price to each

performance obligation based on the estimated relative

standalone selling prices of the promised goods or services

in each performance obligation or if the standalone selling

prices do not exist Konecranes typically uses the expected

cost plus a margin approach to estimate the standalone

selling price.

Contract assets relate to receivables arising from

percentage of completion method. Net asset balances

are balances where the sum of contract costs, recognized

profits and recognized losses exceed advance payments

received. Where advance payments received exceed the

sum of contract costs, recognized profits, and recognized

losses these liabilities are included in the line-item

advance payments received. Contract assets are subject

to impairment assessment. See also financial assets at

amortized cost.

Nature of goods and services and timing of

satisfaction of performance obligations and

significant payment terms

Service segment principally generates revenue from

providing maintenance and consultative services as well

as spare parts for all types and makes of industrial cranes

and hoists. Service also provides modernizations which

are complete transformations of existing cranes as an

alternative to replacing them. Revenue from services is

recognized when the outcome of the transaction can be

estimated reliably and by customer acknowledgement for

the completion of the service work or by reference to the

stage of completion based on services performed at the

end of the reporting period if it can be measured. The

assessment of the stage of completion is dependent on the

nature of the contract but will generally be based on costs

incurred to the extent these relate to services performed

up to the reporting date. In modernization projects,

typically customer controls the assets that is enhanced

thus the revenue is recognized over time according to the

percentage of completion method. In spare parts business,

the transfer of control and revenue recognition usually

takes place either when goods are shipped or made

available to the buyer for shipment, depending on the

terms of the contract or when the customer has accepted

the delivery. Usually, customers pay according to agreed

payment terms after the services and products have been

delivered. Sometimes it is required that the payment is

done in advance. In these cases, for example in annual

maintenance contracts, the payment is periodized to

meet the revenue recognition in accordance with the

delivery of services and goods. In modernization projects

the customers are typically required to make advance

payments according to the milestones defined in the

modernization project contract.

Industrial Equipment segment generates revenue from

hoists, cranes and material handling solutions for a

wide range of customers. For standard equipment and

components, the revenue is recognized when goods are

shipped or made available to the buyer for shipment,

depending on the terms of the contract or when the

customer has accepted the delivery, which is typically

an installed crane. The revenue from large, engineered

crane projects is recognized over time according to the

percentage of completion (POC) method as those contracts

are specifically negotiated for the construction of an asset

or a combination of assets that are closely interrelated or

interdependent in terms of their design, technology and

function or their ultimate purpose or use. Konecranes is

then also entitled to an amount that at least compensates

the entity for performance completed to date even if the

customer can terminate the contract for the reasons other

than our failure to perform as promised. In general, the

warranty period for cranes is two years for which Group

records a warranty provision based on historical data.

The revenue for extended warranty is recognized over the

extended warranty period. In crane projects the customers

are typically required to make advance payments in

accordance with the milestones defined in the crane

project contract.

Port Solutions segment generate revenue from container

handling equipment, shipyard equipment, mobile harbor

cranes, heavy-duty lift-trucks and Port Solutions related

software. All equipment deliveries are supported by a

complete range of services. Most of the container handling

and shipyard equipment are tailored and engineered to

the customer needs so the revenue from these projects

is recognized over time according to the percentage

of completion (POC) method as those contracts are

specifically negotiated for the construction of an asset or

a combination of assets that are closely interrelated or

interdependent in terms of their design, technology and

function or their ultimate purpose or use. Konecranes is

then also entitled to an amount that at least compensates

the entity for performance completed to date even if the

customer can terminate the contract for the reasons other

than our failure to perform as promised. The revenue of

lift trucks and standard ports equipment is recognized

when goods are shipped or made available to the buyer

for shipment, depending on the terms of the contract or

when the customer has accepted the delivery. The general

warranty period for ports equipment differs to some extent

depending on the components used in the projects. For

general warranty the Group records a warranty provision

based on historical data. The revenue for possible

extended warranty is recognized over the extended

warranty period. In Port Solutions projects the customers

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are typically required to make advance payments

according to the milestones defined in the project contract.

The advance payments from clients do not generally

include a significant financing component, because

typically the payment schedule of advances follows the

timing of performance obligations to be satisfied.

Measurement of stage of completion for

performance obligations satisfied over time

The stage of completion of a contract is determined

by the proportion that the contract costs incurred for

the work performed to date bear to the estimated total

contract costs (cost-to-cost method) at completion. This

depicts best the transfer of control to the customer, which

occurs as we incur costs on our contracts. When the final

outcome of a project cannot be reliably determined, the

costs arising from the project are expensed in the same

reporting period in which they occur, but the revenue from

the project is recorded only to the extent that the Group

will receive an amount corresponding to actual costs. An

expected loss on a contract is recognized immediately in

statement of income. Revenue in respect of variations

to the contract scope and claims is recognized when it is

probable that it will be received and is capable of being

measured reliably.

Research and development costs

Research costs are expensed as incurred. Development

expenditures on an individual project are recognized as an

intangible asset when the Group can demonstrate:

• The technical feasibility of completing the

intangible asset so that it will be available for use or sale.

• Its intention to complete and its ability to use or

sell the asset.

• How the asset will generate future economic benefits.

• The availability of resources to complete the asset.

• The ability to reliably measure the expenditure during

development.

Amortization of capitalized development costs begins when

development is complete, and the asset is available for use.

Adjusted EBITA (alternative performance measure)

Group is using adjusted EBITA as alternative performance

measure, to reflect the underlying business performance

and to enhance comparability between financial periods.

It is frequently used by management, analysts and

investors. Adjusted operating profit before amortization

and impairment of purchase price allocations (a non-GAAP

measure) represents earnings from continuing operations

before income taxes (a GAAP measure), excluding

restructuring, transaction and restructuring related

asset impairment costs as well as other adjusting items,

amortization and impairment of purchase price allocations

and financial income and expense. Alternative Performance

measures should not be considered as a substitute for

measures of performance in accordance with the IFRS. See

also note 3.

Earnings per share

Basic earnings per share are computed by dividing net

income from continuing operations and net income

from discontinued operations all attributable to ordinary

shareholders by the weighted average number of shares

outstanding during the year. Diluted earnings per share

are calculated by assuming conversion or exercise of all

potentially dilutive share-based payment plans.

Dividend distribution

The company recognizes a liability to make dividend

distributions to equity holders when the distribution is

approved by the shareholders. A corresponding amount is

recognized directly in equity.

Employee benefits

Konecranes companies have various pension plans in

accordance with local conditions and practices. Pensions

are generally managed for the Group companies by

outside pension insurance companies or by similar

arrangements. These pension plans are classified either

as defined contribution or defined benefit plans. Under

defined contribution plans, expenses are recognized for

the period the contribution relates to. The Group has no

legal or constructive obligation to pay further contributions

if the fund does not hold sufficient assets to pay employee

benefits. The Konecranes Group accounts for the Finnish

system under the Employees’ Pensions Act (TyEL) within

insurance system as a defined contribution plan.

Under defined benefit plans, a liability recognized in the

balance sheet equals to the net of the present value

of the defined benefit obligation (calculated using the

Projected Unit Credit Method) less the fair value of the

plan assets at the balance sheet date. Actuarial gains

and losses are recognized in the consolidated statement

of other comprehensive income as remeasurement items

when they occur. Remeasurement recorded in other

comprehensive income is not recycled. Past service cost

is recognized in the statement of profit or loss in the

period of plan amendment. Net-interest is calculated by

applying the discount rate to the net defined liability or

asset. Independent actuaries calculate the defined benefit

obligation by applying the Projected Unit Credit Method.

The Group presents service cost, past-service cost, gains

and losses on curtailments and settlements and net

interest expense or income as Personnel cost – Pension

costs: Defined benefit plans in the statement of income

(see note 8).

A liability for termination benefit is recognized at the earlier

of when the entity can no longer withdraw the offer of the

termination benefit and when the entity recognizes any

related restructuring costs.

Share-based payments

Employees (including senior executives) of the Group

and its subsidiaries receive remuneration in the form

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of share-based payments, whereby employees render

services as consideration for equity instruments (equity-

settled transactions) or receive settlement in cash

(cash-settled transactions).

Equity-settled transactions

The cost of equity-settled transactions is determined by

the fair value at the date when the grant is made using an

appropriate valuation model.

That cost is recognized, together with a corresponding

increase in other reserves in equity, over the period in which

the performance and/or service conditions are fulfilled in

Personnel cost – Other personnel expense in the statement

of income. The cumulative expense recognized for equity-

settled transactions at each reporting date until the vesting

date reflects the extent to which the vesting period has

expired and the Group’s best estimate of the number of

equity instruments that will ultimately vest. The expense

or credit recorded in the statement of income for a period

represents the movement in cumulative expense recognized

as at the beginning and end of that period.

No expense is recognized for awards that do not ultimately

vest, except for equity-settled transactions for which

vesting is conditional upon a market or non-vesting

condition. These are treated as vesting irrespective of

whether or not the market or non-vesting condition is

satisfied, provided that all other performance and/or

service conditions are satisfied.

When the terms of an equity-settled award are modified,

the minimum expense recognized is the expense had

the terms not been modified, if the original terms of

the award are met. An additional expense is recognized

for any modification that increases the total fair value

of the share-based payment transaction or is otherwise

beneficial to the employee as measured at the date

of modification.

The tax laws or regulations usually obliges Konecranes

to withhold an amount for an employee’s tax obligation

associated with a share-based payment and transfer that

amount, normally in cash, to the tax authority on the

employee’s behalf. To fulfil this obligation, the terms of

the share-based payment arrangement permit Konecranes

to withhold the number of equity instruments equal to

the monetary value of the employee’s tax obligation from

the total number of equity instruments that otherwise

would have been issued to the employee upon vesting

of the share-based payment. This share-based payment

arrangement with a net settlement feature is classified

in its entirety as an equity-settled share-based payment

transaction and the payment made shall be accounted for

as a deduction from equity for the shares withheld.

Cash-settled transactions

The cost of cash-settled transactions, which is usually

related to the additional employee social cost or taxes of

the share-based payments, is measured initially at fair

value at the grant date using a binomial model. This fair

value is expensed over the period until the vesting date

with recognition of a corresponding liability. The liability is

remeasured to fair value at each reporting date up to, and

including the settlement date, with changes in fair value

recognized in Personnel cost – Other personnel expenses in

the statement of income (see Note 8).

Foreign currency translation

The Group’s consolidated financial statements are reported

in euros, which is the Group’s presentation currency. Each

entity in the Group determines its own functional currency

and items included in the financial statements of each entity

are measured using that functional currency.

Transactions and balances

Transactions in currencies other than the entity’s functional

currency (foreign currencies) are recognized by the Group

entities at their respective functional currency rates prevailing

at the date of the transaction. At the end of each reporting

period, foreign currency monetary items are retranslated

at the functional currency spot exchange rate in effect

at the reporting date. The resulting foreign currency

exchange differences are recorded in the statement of

income with the exception of differences that arise on

monetary items that provide an effective hedge for a net

investment in a foreign operation (such as intragroup

loans where settlement is neither planned nor likely to

occur in the foreseeable future). These are recognized in

other comprehensive income until the disposal of the net

investment, at which time they are recognized in the income

statement. Tax charges and credits attributable to exchange

differences on those monetary items are also recorded in

other comprehensive income.

Non-monetary items that are measured in terms of

historical cost in a foreign currency are translated using the

exchange rates as of the date of the initial transaction. Non-

monetary items measured at fair value in a foreign currency

are translated using the exchange rates at the date when

the fair value is determined.

Foreign operations

The assets and liabilities of foreign operations are translated

into euros at the rate of exchange prevailing at the

reporting date and their income statements are translated

at average exchange rates for the period. The exchange

differences arising on the translation are recognized in other

comprehensive income. On disposal of a foreign operation,

the component of other comprehensive income relating

to that particular foreign operation is recognized in the

income statement.

Any goodwill arising on the acquisition of a foreign

operation and any fair value adjustments to the carrying

amounts of assets and liabilities arising on the acquisition

are treated as assets and liabilities of the foreign operation

and translated at the closing rate.

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Income tax

Taxes shown in the consolidated statement of income

include income taxes to be paid on the basis of local tax

legislations, tax adjustments from previous years as well

as the effect of the annual change in the deferred tax

balances. Taxes are calculated using rates enacted or

substantively enacted at the balance sheet date.

Deferred tax liabilities and deferred tax assets are

calculated on all temporary differences arising between

the tax basis and the book value of assets and liabilities.

Deferred tax is not recognized for non-deductible

goodwill on initial recognition and temporary differences

in investments in subsidiaries to the extent that they

probably will not reverse in the foreseeable future.

The main temporary differences arise from unused tax

losses, depreciation differences, provisions, defined

benefit pension plans, inter-company inventory margin

and derivative financial instruments. In connection with

an acquisition, the Group records provisions for deferred

taxes on the difference between the fair values of the

net assets acquired and their tax bases. A deferred tax

asset is recognized to the extent that it is probable that

it can be utilized.

Business combinations

Acquisitions of subsidiaries are accounted for using the

acquisition method according to which the acquired

company’s identifiable assets, liabilities and contingent

liabilities are measured at fair value on the date of

acquisition. The excess of the consideration transferred

for the business combination over the acquirer’s interest

in the net fair value of the identifiable assets, liabilities

and contingent liabilities is recorded as goodwill. For each

acquisition the non-controlling interest in the acquiree, if

any, can be recognized either at fair value or at the non-

controlling interest’s proportionate share of the acquiree’s

net assets. If the purchase consideration is less than the fair

value of the Group’s share of the net assets acquired, the

difference is recognized directly through the profit and loss.

Direct acquisition transaction costs are expensed as incurred.

Assets held for sale

The Group classifies non-current assets and disposal

groups as held for sale if their carrying amounts will

be recovered principally through a disposal rather than

through the continuing use. Such 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.

The criteria for held for sale classification is regarded as

met only when the sale is highly probable, and the asset

or disposal group is available for immediate disposal in its

present condition. Actions required to complete the disposal

should indicate that it is unlikely that significant changes

to the disposal will be made or that the decision to dispose

will be withdrawn. Management must be committed to the

disposal expected within one year from the date of the

classification.

Property, plant and equipment and intangible assets are not

depreciated or amortized once classified as held for sale.

Intangible assets

Intangible assets include service contracts, patents

and trademarks as well as software licenses and

implementation costs. Intangible assets acquired

separately are measured on initial recognition at cost.

The cost of intangible assets acquired in a business

combination is their fair value at the date of acquisition.

Intangible assets with definite useful life are amortized

on the straight-line basis over expected useful lives,

which may vary from 5 to 20 years with service contracts

and patents and trademarks and from 4 to 7 years with

software licenses. They are assessed for impairment

whenever there is an indication that the intangible asset

may be impaired.

Intangible assets with indefinite useful life are not

amortized, but they are tested annually for

impairment in a manner equivalent to that for testing

goodwill. The assessment of indefinite life is reviewed

annually to determine whether the indefinite life

continues to be supportable. If not, the change in

useful life from indefinite to finite is made on a

prospective basis.

Impairment testing of goodwill

Goodwill acquired in a business combination is tested for

impairment annually or whenever events or changes in

circumstances indicate that the carrying amount may not

be recoverable. For the purpose of impairment testing,

goodwill acquired in a business combination is, from the

acquisition date, allocated to each of the Group’s cash

generating units that are expected to benefit from the

combination, irrespective of whether other assets or

liabilities of the acquiree are assigned to those units. If

the carrying amount for a CGU exceeds its recoverable

amount, an impairment loss equal to the difference is

recognized. Konecranes uses a discounted cash flow

analyses to assess the fair value of goodwill. In assessing

value-in-use, the estimated future cash flows are

discounted to their present value using a pre-tax discount

rate that reflects current market assessments of the time

value of money and the risks specific to the asset. The

Group bases its impairment calculation on detailed budgets

and forecast calculations, which are prepared separately

for each of the Group’s CGUs to which the individual assets

are allocated. These budgets and forecast calculations

cover a period of five years. A previously recognized

impairment loss on goodwill is not reversed even if there is

a significant improvement in circumstances having initially

caused the impairment.

Property, plant and equipment

Property, plant and equipment are stated at cost less

accumulated depreciation and any impairment losses.

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Depreciation is recorded on a straight-line basis over the

estimated useful economic life of the assets as follows:

• Buildings 10–40 years

• Machinery and equipment 3–10 years

No depreciation is recorded for land.

Improvements made for existing property, plant and

equipment that will provide future economic benefit are

capitalized and depreciated over the remaining useful life

of the asset.

For leased right-of-use assets please see the accounting

principles section for leases.

Impairment of assets subject to amortization

and depreciation

The carrying values of intangible assets subject to

amortization, property, plant and equipment and

investments in associates and joint ventures are reviewed

for impairment whenever events and changes in

circumstances indicate that the carrying amount of an asset

may not be recoverable. If such an indication exists, the

recoverable amount of the assets will be estimated.

The recoverable amount is the higher of the asset’s fair

value less selling costs and value in use which is the present

value of the cash flows expected from the asset’s use and

eventual disposal. An impairment loss is recognized in the

statement of income when the recoverable amount of an

asset is less than its carrying amount. Impairment losses

on these assets are reversed if their recoverable amounts

subsequently increase.

Valuation of inventories

Raw materials and supplies are valued at the acquisition

cost or, if lower, at the net realizable value. Net realizable

value is the estimated selling price in the ordinary course

of business, less estimated costs of completion and

the estimated costs necessary to make the sale. Semi-

manufactured goods are valued at variable production costs

including a share of production overheads based on normal

capacity. Work in progress of uncompleted orders includes

direct labour and material costs, as well as a proportion of

overhead costs related to production and installation. Raw

materials and supplies are valued using weighted average

cost or the first-in, first-out (FIFO) basis. The inventory

stock obsolescence provision is based on the best estimate

of slow-moving and obsolete inventory at the balance sheet

date. The estimates are based on frequent review and

evaluation of inventory ageing and composition.

Account and other receivables

Account and other receivables are initially recorded at

fair value after which they are subsequently measured at

amortised cost. Account receivables represent the Group’s

right to an amount of consideration that is unconditional

(i.e., only the passage of time is required before payment

of the consideration is due). The provision for doubtful

accounts is estimated based on the Group’s historical

credit loss experience adjusted with current conditions and

reasonable and supportable forecasts about the future.

The effect is recognized in the statement of income.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and

deposits with banks and other liquid investments that

are held for the purpose of meeting short-term cash

commitments that are readily convertible to a known amount

of cash and are subject to an insignificant risk of changes in

value as the instruments have a maturity of three months

or less from the date of acquisition. Bank overdrafts are

included in current interest-bearing liabilities.

Fair value measurement

Fair value is the price that would be received to sell an

asset or paid to transfer a liability in an orderly transaction

between market participants. The Group categorizes

assets and liabilities measured at fair value into one of

three levels depending on the ability to observe inputs

employed in their measurement. Level 1 inputs are

quoted prices in active markets for identical assets or

liabilities. Level 2 inputs are inputs that are observable,

either directly or indirectly, other than quoted prices

included within level 1 for the asset or liability. Level 3

inputs are unobservable inputs for the asset or liability

reflecting significant modifications to observable related

market data or Konecranes’ assumptions about pricing by

market participants.

Derivative financial instruments and hedge accounting

The Group’s global operations expose it to currency risk and

to a lesser extent interest rate risk.

The Group uses derivative financial instruments, primarily

forward contracts and interest rate swaps, to hedge its

risks associated with foreign currency fluctuations relating

to certain commitments and forecasted transactions and

interest rate risks. Derivative financial instruments are

used for hedging purposes in accordance with the Group’s

hedging policy and not for speculative purposes. These

instruments are initially recognized at fair value at the

derivative contract date and are re-measured to fair value

at subsequent reporting dates. Derivatives are presented

as financial assets when the fair value is positive and as

financial liabilities when the fair value is negative.

For certain large crane projects, the Group applies hedge

accounting. The Group designates hedges of the foreign

currency risk of firm commitments and highly probable

forecasted transactions to a cash flow hedge. Changes in

the fair value of derivative financial instruments that are

designated as effective hedges of future cash flows are

recognized directly in other comprehensive income, while

the ineffective portion is recognized immediately in the

income statement. See note 34.

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Amounts recognized as OCI are transferred to profit or

loss when the hedged transaction affects profit or loss,

such as when the hedged financial income or financial

expense is recognized or when a forecast sale occurs.

When the hedged item is the cost of a non-financial asset

or non-financial liability, the amounts recognized as OCI

are transferred to the initial carrying amount of the non-

financial asset or liability.

If the hedging instrument expires or is sold, terminated

or exercised without replacement or rollover (as part of

the hedging strategy), or if its designation as a hedge

is revoked, or when the hedge no longer meets the

criteria for hedge accounting, any cumulative gain or

loss previously recognized in OCI remains separately in

equity until the forecast transaction occurs or the foreign

currency firm commitment is met. If a hedged transaction

is no longer expected to occur, the net cumulative gain

or loss recognized in the other comprehensive income is

transferred to profit or loss for the period.

Changes in the fair value of derivative financial instruments

that do not qualify for hedge accounting are recognized in

the statement of income as they arise.

The Group does not apply fair value hedging.

Financial assets

Financial assets are classified, at initial recognition, as

financial assets at fair value through profit or loss; financial

assets at fair value through OCI; or financial assets at

amortized cost. Financial assets are classified according

to their cash flow characteristics and the business model

they are managed in. Trade day accounting is applied

to regular purchases and sales of financial assets. They

include account and other receivables, interest bearing

investments and derivative financial instruments. The

subsequent measurement of financial assets depends on

their classification, as follows:

Financial assets at amortized cost

Financial assets at amortized cost are subsequently

measured using the effective interest rate method. Account

receivables and other receivables are recognised at their

anticipated realisable value which is the original invoice

amount less an estimated provision for doubtful accounts

for impairment. The increase in the credit risk for financial

assets measured at amortised cost is assessed at the end of

the reporting period. The credit loss allowance is estimated

based on the Group’s historical credit loss experience

adjusted with current conditions and reasonable and

supportable forecasts about the future. The Group applies

the simplified approach to record expected credit losses on

its accounts receivable by using a provision matrix where

accounts receivable is grouped based on different customer

bases and different historical loss patterns.

Financial assets at fair value through profit or loss

Interest-bearing investments, which are non-derivative

financial assets and have fixed or determinable payments and

are not quoted on active markets, are measured at fair value

through the statement of income. This category also includes

derivatives that are not qualifying for hedge accounting.

Financial assets at fair value through other

comprehensive income

Derivatives that are qualifying for hedge accounting are

classified as financial assets at fair value through other

comprehensive income. The treatment of gains and

losses arising from revaluation is described above in the

accounting policy for derivative financial instruments and

hedge accounting.

Financial liabilities

Financial liabilities are classified as financial liabilities at

fair value through profit or loss; financial liabilities at fair

value through other comprehensive income; or as financial

liabilities measured at amortized cost, as appropriate.

Financial liabilities include trade and other payables, finance

debt and derivative financial instruments. The Group

determines the classification of its financial liabilities at

initial recognition. The measurement of financial liabilities

depends on their classification, as follows:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss are

carried on the balance sheet at fair value with gains or losses

recognized in the income statement. Derivatives, other than

those designated as effective hedging instruments, are

classified as held for trading and are included in this category.

Financial liabilities at fair value through other

comprehensive income

These financial liabilities are typically derivatives designated

for hedge accounting and are carried on the balance sheet

at fair value. The treatment of gains and losses arising from

revaluation is described above in the accounting policy for

derivative financial instruments and hedge accounting.

Financial liabilities measured at amortized cost

All other financial liabilities are initially recognized at fair

value. For interest-bearing loans and borrowings this is

the fair value of the proceeds received net of issue costs

associated with the borrowing. After initial recognition,

other financial liabilities are subsequently measured

at amortized cost using the effective interest method.

Amortized cost is calculated by taking into account any

issue costs, and any discount or premium on settlement.

Gains and losses arising on the repurchase, settlement

or cancellation of liabilities are recognized respectively in

interest and other finance income and finance costs. This

category of financial liabilities includes accounts payables

and interest-bearing liabilities.

Offsetting of financial instruments

Financial assets and financial liabilities are offset, and the

net amount reported in the consolidated statement of

financial position if, and only if, there is a currently existing,

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legally enforceable, unconditional right of offset that applies

to all counterparties of the financial instruments in all

situations, including both normal operations and insolvency.

Derecognition of financial instruments

Financial assets are derecognized when the rights to

receive cash flows from the assets have expired or the

Group has transferred its rights to receive cash flow; and

either the Group has transferred substantially all the risks and

rewards of the assets, or the Group has neither transferred

nor retained substantially all the risks and rewards of the

assets but has transferred the control of the assets.

Financial liability is derecognized when the obligation

is discharged or cancelled or expires. When an existing

financial liability is replaced by another from same lender

on substantially different terms, or terms of existing

loan are substantially modified, such an exchange or

modification is accounted for as an extinguishment of

the original liability and the recognition of a new financial

liability. The difference between the respective carrying

amounts is recognised in the income statement.

Provisions

Provisions are recognized in the balance sheet when the

Group has a present legal or constructive obligation as a

result of a past event and it is considered probable that

an outflow of resources embodying economic benefits

will be required to settle the obligation and a reliable

estimate can be made of the amount of the obligation.

Provisions may arise from restructuring plans, onerous

contracts, guarantees and warranties, among other events.

Obligations arising from restructuring plans are recognized

when the detailed and formal restructuring plans have been

established, the personnel concerned have been informed

and when there is a valid expectation that the plan will

be implemented. The warranty provision is based on the

history of past warranty costs and claims on delivered

products under warranty. Additionally, warranty provisions

can be established on a case by case basis to take into

consideration the potentially increased risks.

When the Group expects some or all of a provision to be

reimbursed, for example, under an insurance contract, the

reimbursement is recognized as a separate asset, but only

when the reimbursement is virtually certain.

Leases

The Group assesses at contract inception whether a

contract is, or contains, a lease. That is, if the contract

conveys the right to control the use of an identified asset

for a period of time in exchange for consideration.

The Group as a lessee

The Group applies a single recognition and measurement

approach for all leases, except for short-term leases and

leases of low-value assets. The Group recognizes lease

liabilities to make lease payments and right-of-use assets

representing the right to use the underlying assets.

Right-of-use assets

The Group recognizes right-of-use assets at the

commencement date of the lease (i.e. asset is available

for use). Right-of-use assets are measured at cost less

any accumulated depreciation and impairment losses and

adjusted for any remeasurement of lease liabilities. The cost

of right-of-use assets includes the amount of lease liabilities

recognized, possible initial cost incurred, lease payments

done before the commencement date and less any lease

incentives received. The recognized right-of-use assets are

mainly rentals of premises and vehicles which are typically

depreciated on a straight-line basis over the shorter of the

lease term and estimated useful life of the asset. Right-

of-use assets are subject to possible impairment.

Lease liabilities

At the commencement date of a lease the Group recognizes

lease liabilities measured at the present value of the lease

payments to be made over the lease term. The lease

payments include fixed payments less any lease incentives,

variable lease payments that depend on an index or a rate

and amounts expected to be paid under residual value

guarantees. The variable lease payments that do not

depend on an index or a rate are recognized as expense

in the period on which the event or condition that triggers

the payment occurs. In calculating the present value

of the lease payments, the group uses the incremental

borrowing rate at the lease commencement date if the

interest rate implicit in the lease is not determinable. After

the commencement date, the amount of lease liabilities is

increased to reflect the accretion of interest and reduced for

the lease payments made. In addition, the carrying amount

of lease liabilities is remeasured if there is a modification,

a change in lease term, a change in the fixed lease

payments or a change in the assessment to purchase the

underlying asset.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition

exemption to its short-term leases of machinery and

equipment (i.e. those leases that have a lease term of 12

months or less from the commencement date and do not

contain a purchase option). It also applies the recognition

exemption to equipment that are considered of low value.

Lease payments on short term leases and leases of low value

assets are recognized as an expense over the lease term.

Judgment in determining the lease term

The Group has various lease agreements for office

equipment, vehicles and premises with varying terms and

renewal rights. The Group determines the lease term as the

non-cancellable term of the lease together with any periods

covered by an option to extend or early terminate the

lease if it is reasonably certain to be exercised. The Group

uses judgment especially for the use of extension options

as well as when defining the lease term for open end

lease agreements so that they are based on the business

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requirements, factors that create an economic incentive and

real estimated useful lifetime of the underlying asset.

Cash flow statement

The cash flow statement has been prepared in accordance

with the indirect method. In the cash flow statement a

distinction is made between cash flows from operating,

investing and financing activities. Currency differences

on cash and cash equivalents are recognized separately

in the cash flow statement. Revenue and expenses for

income tax are recognized under Cash flows from operating

activities. Interest costs and interest revenues are recognized

under Cash flows from operating activities. Cash flows as

a result of the acquisition or disposal of financial interests

(subsidiaries and interests) are recognized under Cash flows

from investing activities, taking into account the cash, cash

equivalents and repaid third party debts present in these

interests. Dividends paid out, as well as obtained and repaid

loans, are recognized under Cash flows from financing

activities.

2.4. Application of new and amended IFRS

standards and IFRIC interpretations

The relevant new or revised IFRSs that Konecranes has

adopted from January 1, 2022 were the following:

Annual Improvements to IFRS Standards 2018-2020:

Improvement in IFRS 9, Financial Instruments, clarifies

that when assessing if a modification of a financial liability

results in a modification of an existing debt instrument

or recognition of a new one, the entity should prepare

a present value test of the cash flows related to financial

liability before and after modification including fees paid and

received between the lender and borrower.

Reference to the Conceptual Framework amends IFRS 3

Business combinations. The amendments update the

reference to the 2018 Conceptual Framework, as well as

add an exception to the recognition principle for liabilities

and contingent liabilities within the scope of IAS 37 or

IFRIC 21. In addition, the amendments add clarification

on the prohibition to recognize contingent assets at the

acquisition date.

Amendments to IAS 16, Property, Plant, and Equipment:

Proceeds before Intended Use, the amendment clarifies how

to account for sales proceeds when items are produced and

while an item of property, plant, and equipment is brought

to the location and condition necessary for it to be capable

of operating in the manner intended by management.

In accordance with the clarification, such proceeds should

be reported as revenues and not as a reduction of costs.

Amendments to IAS 37, Onerous Contracts - Cost of

Fulfilling a Contract. The amendments specify which

costs an entity needs to include when assessing whether

a contract is loss-making. These costs relate directly to

the contract such as labor and materials and allocation

of other costs that relate directly to fulfilling the contract

such depreciation charge related to property, plant, and

equipment used in fulfilling the contract.

None of these amendments for IFRS standards had

significant impact to the financial statements of Konecranes.

New and amended standards issued applicable from

January 1, 2023, but not yet effective are disclosed below.

The Group adopts new and amended standards and

interpretations, if applicable, when they become effective.

Amendments to IAS 1 – Classification of Liabilities as Current

or Non-current, the amendment specifies the requirements

for classifying liabilities as current or non-current.

Disclosure of Accounting Policies – Amendments to IAS 1

and IFRS Practice Statement 2, The amendment replaces the

requirement to disclose significant accounting policies with

a requirement to disclose material accounting policies. The

amendment aims to help companies to disclose accounting

policies, which are material for users to understand the

information in the company’s financial statements.

Amendments to IAS 12 – Deferred Tax Related to

Assets and Liabilities Arising from a Single Transaction,

the amendment clarifies deferred tax accounting for

transactions and events, such as leases that lead to the

initial recognition of both an asset and a liability. The

amendments require companies to recognize a separate

deferred tax asset and deferred tax liability when the

temporary differences arising on the initial recognition of an

asset and a liability are equal.

New or amended standards, improvements or annual

improvements applicable from January 1, 2023 or later do

not have significant effect for the Group.

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3. Segment information

For management purposes, the Group is organized into

business units based on its products and services and had

three reportable segments in 2022 and 2021: Service,

Industrial Equipment and Port Solutions.

The Service segment provides maintenance and installation

Service segment provides maintenance and installation

services of industrial equipment, the Industrial Equipment

segment produces industrial cranes and their components

to variety of industries and the Port Solutions segment

produces lifting equipment for ports and provides services

for port equipment.

Some business units have been aggregated to form the

above reportable operating segments due to the similar

economic characteristics with respect to the nature of the

production process, product type and class of customers

for their products.

The above reportable segments are based on the Group’s

management reporting and organizational structure.

Konecranes Group’s chief operating decision maker is the

Board of Directors.

Segment performance is evaluated based on profit or

loss and is measured consistently with profit or loss in

the consolidated financial statements. However, the

performance of the investees accounted for using the equity

method is evaluated using proportionate consolidation.

The assets and liabilities of the reportable segments include

only items directly connected with the business as well as

the goodwill related to them. Taxes and financial income

and expenses are managed on Group level and are not

allocated to segments.

Konecranes reports also three geographical areas, which

are the main market areas: EMEA (Europe, Middle East and

Africa), AME (Americas) and APAC (Asia-Pacific). Sales are

reported by the customer location and assets and capital

expenditure by the location of the assets.

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3.1. Operating segments

Service Industrial Equipment Port Solutions

Corporate functions

and unallocated Eliminations Total

2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021

Sales

Sales to external customers 1,292.8 1,161.3 1,068.8 960.2 1,003.2 1,064.3 0.0 0.0 3,364.8 3,185.7

Inter-segment sales 50.6 44.0 136.8 128.5 11.9 8.6 9.8 9.2 -209.0 -190.3 0.0 0.0

Total sales 1,343.3 1,205.3 1,205.6 1,088.7 1,015.0 1,072.9 9.8 9.2 -209.0 -190.3 3,364.8 3,185.7

Adjusted EBITA 249.4 222.4 32.5 38.0 63.5 79.9 -27.1 -28.1 0.1 0.0 318.4 312.2

% of net sales 18.6% 18.5% 2.7% 3.5% 6.3% 7.4% 9.5% 9.8%

Purchase price allocation amortization -14.3 -15.5 -11.0 -10.8 -6.6 -6.8 -31.8 -33.2

Adjusted operating profit 235.2 206.9 21.5 27.2 57.0 73.1 -27.1 -28.1 0.1 0.0 286.6 279.1

% of net sales 17.5% 17.2% 1.8% 2.5% 5.6% 6.8% 8.5% 8.8%

Adjustments to operating profit

Transaction and integration costs -0.1 -8.6 -47.8 -8.7 -47.8

Restructuring costs -2.6 -2.0 -12.9 -8.5 -0.6 1.7 -0.9 -2.5 -17.0 -11.3

Costs related to the impacts of the war in Ukraine -0.4 0.0 -19.6 0.0 -17.8 0.0 -0.1 0.0 -37.8 0.0

Total -2.9 -2.0 -32.5 -8.5 -18.6 1.7 -9.5 -50.3 -63.5 -59.1

Operating profit 232.3 204.9 -10.9 18.7 38.4 74.8 -36.6 -78.4 0.1 0.0 223.2 220.0

% of net sales 17.3% 17.0% -0.9% 1.7% 3.8% 7.0% 6.6% 6.9%

Share of associates and joint ventures result

(note 16)

0.4 0.3 0.4 0.3

Financial income 26.9 28.6 26.9 28.6

Financial expenses -59.7 -56.4 -59.7 -56.4

Profit before tax 190.7 192.5

Segment assets 1,502.5 1,422.6 1,112.0 926.6 1,070.0 900.4 3,684.5 3,249.6

Investment accounted for using the equity

method (note 16)

7.8 6.8 7.8 6.8

Cash and cash equivalents 413.9 320.7 413.9 320.7

Deferred tax assets 103.8 120.2 103.8 120.2

Income tax receivables 15.0 16.2 15.0 16.2

Other unallocated and corporate function

level assets

115.6 132.4 115.6 132.4

Total assets 1,502.5 1,422.6 1,112.0 926.6 1,070.0 900.4 656.1 596.2 4,340.6 3,845.8

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Revenue expected to be recognized in the future periods related to performance obligations

that are unsatisfied or partially unsatisfied

Service Industrial Equipment Port Solutions

Corporate functions

and unallocated Eliminations Total

2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021

Segment liabilities 252.5 212.7 503.3 376.6 539.3 405.8 1,295.2 995.1

Interest-bearing liabilities 1,106.2 865.1 1,106.2 865.1

Deferred tax liabilities 133.7 142.6 133.7 142.6

Income tax payables 31.7 23.0 31.7 23.0

Other unallocated and corporate function level

liabilities

340.9 459.5 340.9 459.5

Total liabilities 252.5 212.7 503.3 376.6 539.3 405.8 1,612.4 1,490.2 2,907.6 2,485.2

Other disclosures

Capital expenditure 8.9 10.9 20.9 28.8 7.3 10.2 0.0 0.0 37.0 49.8

Personnel 7,802 7,890 5,529 5,516 3,102 3,083 89 84 16,522 16,573

During 2023 During 2024 From 2025 onwards Total

Service 397.3 18.4 29.9 445.5

Industrial Equipment 701.3 117.0 38.9 857.2

Port Solutions 1,015.6 514.3 69.0 1,599.0

Total 2,114.2 649.7 137.8 2,901.7

The transaction price associated with unsatisfied or partially

unsatisfied performance obligations does not include

variable consideration that is constrained. The Group total

revenue will also include new orders, scope changes and

contract extensions which are not known at reporting date

and thus are excluded in this table.

3.1. Operating segments (continued)

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

3.2. Geographical areas

2022 EMEA* AME APAC Total

External sales* 1,714.1 1,201.1 449.7 3,364.8

Assets* 3,052.7 643.6 644.3 4,340.6

Capital expenditure 27.2 3.6 6.3 37.0

Personnel 9,565 3,131 3,826 16,522

2021 EMEA* AME APAC Total

External sales* 1,645.9 1,042.2 497.7 3,185.7

Assets* 2,637.8 546.1 661.9 3,845.8

Capital expenditure 36.4 1.0 12.4 49.8

Personnel 9,683 3,016 3,874 16,573

* External sales to Finland EUR 102.8 million. Non-current assets (excluding deferred tax assets) in Finland: EUR 175.6 million and in other

countries: EUR 1,692.0 million.

* External sales to Finland EUR 87.6 million. Non-current assets (excluding deferred tax assets) in Finland: EUR 172.8 million and in other

countries: EUR 1,710.2 million.

There are no single customers which have over 10% of Group’s sales.

4. Acquisitions and divestments

Acquisitions

In July 2022, Konecranes acquired a small crane service

business of Garabi Industrial Technologies in Spain and

paid EUR 1.5 million as purchase price for the acquired

assets. The fair values of the acquired business were EUR

1.6 million for Intangible assets (clientele), EUR 0.1 million

for Property, plant and equipment, EUR 0.3 million for

Inventories and EUR 0.4 million for Deferred tax liability. If

the business had been acquired on January 1, 2022, the

full year sales 2022 of the acquiree would have been EUR

3,365.9 million and EBIT EUR 223.2 million.

Acquisitions of non-controlling interests

In September 2022, Konecranes acquired the non-

controlling interest of 6% of Konecranes Real Estate

GmbH & Co. KG in Germany and paid EUR 2.7 million as

purchase price.

In November 2022 Konecranes became the sole owner and

provider of TBA software products by acquiring the non-

controlling interest of 30.22% of Ports Sofware Solutions

B.V. in the Netherlands. TBA Group provides software as

well as port planning and optimizing consultancy services

in the ports, intermodal and warehousing sectors. The

acquisition price was EUR 8.0 million of which EUR 5.0

million was paid in cash and EUR 3.0 million was recorded

as deferred purchase price. At the same time the TBA design

consultancy operations were transferred to a new legal entity

of which Konecranes Group now owns 49%. The total effect

from these acquisitions was EUR -4.8 million in retained

earnings and EUR -6.5 million in non-controlling interest.

Divestments

In September 2022 Konecranes divested from the Port

Solutions segment the small automation business Motronica

in Italy. Konecranes received proceeds of EUR 0.4 million

and recorded EUR 0.4 million pre-tax profit from the

transaction. Between September and December Konecranes

also divested the service business in Russia and received

proceeds of EUR 0.3 million and recorded EUR 0.4 million

pre-tax loss from the transactions.

Acquisitions and divestments in 2021

There were no acquistions or divestments during 2021.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

5. Disaggregation of revenue in sales

Customer contract revenue 2022 2021

Sale of goods 2,308.4 2,242.4

Rendering of services 1,047.1 936.1

Total customer contract revenue 3,355.5 3,178.5

Other revenue

Leasing of own products 8.9 6.9

Royalties 0.4 0.4

Total other revenue 9.3 7.3

Total sales 3,364.8 3,185.7

2022 2022 2022 2021 2021 2021

Timing of satisfying performance

obligations by Segments

At a point

of time

Over

time Total

At a point

of time

Over

time Total

Service 165.3 1,127.5 1,292.8 150.1 1,011.2 1,161.3

Industrial Equipment 882.5 165.1 1,047.6 778.8 181.4 960.2

Port Solutions 877.6 146.8 1,024.4 836.4 227.9 1,064.3

Corporate functions 0.0 0.0 0.0 0.0 0.0 0.0

Total 1,925.4 1,439.4 3,364.8 1,765.3 1,420.5 3,185.7

6. Contract balances

6.1. Contract assets and liabilities

6.2. Advances received

Contract assets 2022 2021

The cumulative revenues

of non-delivered projects

641.3 682.8

Advances received netted 457.9 521.5

Total 183.5 161.3

Transfers to receivables from contract

assets recognized at the

beginning of period

303.2 220.3

Contract liabilities

Gross advance received from

percentage of completion method

572.2 593.8

Advances received netted 457.9 521.5

Total 114.3 72.3

Revenue recognised in the current

period that was included in the

contract liability opening balance

257.4 185.8

Increases due to cash received 284.0 306.5

2022 2021

Advance received from percentage

of completion method (netted)

114.3 72.3

Other advance received

from customers

450.1 272.4

Total 564.3 344.7

Contract assets relate to receivable arising from percentage

of completion method. Net asset balances are balances

where the sum of contract costs, recognized profits and

recognized losses exceed progress billings. Where progress

billings exceed the sum of contract costs, recognized profits

and recognized losses these liabilities are included in the line

item contract liabilities.

See note 3 for revenue expected to be recognized in the future

periods related to performance obligations that are unsatisfied

or partially unsatisfied and note 21 for unbilled revenue.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

7.1. Audit and non-audit fees to Group auditor

7. Operating Expenses

8. Personnel expenses

and number of personnel

8.1. Personnel expenses

8.2. Number of personnel

8.3. Personnel by Reportable Segment

at the end of period

2022 2021

Audit 4.1 3.8

Non-audit services 0.2 0.3

Total 4.3 4.0

2022 2021

Change in work in progress -170.9 -35.0

Production for own use -1.1 -0.7

Material and supplies 1,267.5 1,030.7

Subcontracting 414.7 418.1

Materials, supplies and subcontracting 1,510.2 1,413.0

Wages and salaries 884.8 829.6

Pension costs 66.9 65.1

Other personnel expenses 140.2 128.8

Personnel cost 1,091.9 1,023.5

Other operating expenses 423.3 420.4

Total operating expenses 3,025.3 2,856.9

2022 2021

Wages and salaries 884.8 829.6

Pension costs: Defined benefit plans 9.5 10.7

Pension costs: Defined

contribution plans

57.5 54.5

Other personnel expenses 140.2 128.8

Total 1,091.9 1,023.5

2022 2021

Average number of personnel 16,563 16,625

Number of personnel as

at December 31

16,522 16,573

Number of personnel as

at December 31 in Finland

2,151 2,065

2022 2021

Service 7,802 7,890

Industrial Equipment 5,529 5,516

Port Solutions 3,102 3,083

Group Staff 89 84

Total 16,522 16,573

Research and development costs recognized as an expense

in the statement of income amount to EUR 47.7 million in

the year 2022 (EUR 47.7 million in 2021).

9. Depreciation, amortization

and impairments

9.1. Depreciation and amortization

9.2. Impairments

2022 2021

Intangible assets 38.0 44.2

Buildings 31.4 30.7

Machinery and equipment 45.7 45.0

Total 115.2 119.8

2022 2021

Property, plant and equipment 5.3 0.3

Goodwill 3.9 0.0

Total 9.2 0.3

The nature of the impairments is described in the

disclosures of goodwill, intangible assets and property, plant

and equipment (see notes 13, 14 and 15).

10. Financial income and expenses

10.1. Financial income

2022 2021

Interest income on bank deposits

and loans

6.1 2.1

Exchange rate gains 20.4 25.6

Other financial income 0.4 0.9

Total 26.8 28.6

10.2. Financial expenses

2022 2021

Interest expenses on liabilities 26.5 19.0

Net loss on financial instruments

at fair value through profit or loss

27.2 30.8

Other financial expenses 6.0 6.6

Total 59.7 56.4

Financial income

and expenses net

-32.9 -27.8

The company applies hedge accounting on derivatives

used to hedge cash flows in certain large crane projects.

The cash flow hedges of the expected future cash flows

are assessed to be highly effective and a net unrealized

effect of EUR +2.0 million (2021: EUR -11.0 million)

with deferred taxes of EUR -0.4 million (2021: EUR +2.2

million) relating to the hedging instruments is included

in equity. The hedged operative cash flows are expected

to occur during the next 3–18 months. The realized and

recycled currency differences from these hedges recorded

in the statement of income were EUR -17.8 million in 2022

(EUR -0.4 million in 2021).

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

11. Income taxes

11.1. Taxes in statement of income

11.2. Reconciliation of income before taxes

with total income taxes

11.3. Tax effects of components in other

comprehensive income

2022 2021

Local income taxes of group

companies

63.8 47.7

Taxes from previous years -0.6 1.4

Change in deferred taxes -11.0 -3.9

Total 52.2 45.1

2022 2021

Cash flow hedges -0.4 -2.2

Re-measurement gains (losses)

on defined benefit plans

-18.7 5.8

Total -19.1 3.6

2022 2021

Profit before taxes 190.7 192.5

Tax calculated at the domestic corpora-

tion tax rate of 20.0% (2021: 20.0%)

38.1 38.5

Effect of different tax rates of foreign

subsidiaries

16.0 10.2

Taxes from previous years -0.6 1.4

Tax effect of non-deductible expenses

and tax-exempt income

0.1 -1.2

Tax effect of unrecognized tax losses

of the current year

2.4 0.6

Tax effect of utilization of previously

unrecognized tax losses

-4.0 -4.6

Tax effect of recognition of previously

unrecognized tax losses

-2.2 -0.3

Tax effect of impairment of previously

recognized deferred tax assets

1.7 -1.1

Tax effect of recognizing the controlled

temporary difference from investment

in subsidiaries

-1.8 2.4

Tax effect of tax rate change -0.1 0.2

Other items 2.5 -1.0

Total 52.2 45.1

Effective tax rate % 27.4% 23.4%

The company evaluates regularly the net realizable value of

its deferred tax assets.

12. Earnings per share

Basic earnings per share are 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 are

calculated by adjusting the weighted average number of

shares outstanding during the year for the dilutive effect

of the shares issued under the share based incentive

plans. Weighted average number of shares is excluding the

number of treasury shares.

2022 2021

Net profit attributable to shareholders

of the parent company

140.3 146.9

Weighted average number of shares

outstanding (1,000 pcs)

79,152 79,134

Effect of share based incentive plans

(1,000 pcs)

357 473

Weighted average number of shares

outstanding, diluted (1,000 pcs)

79,508 79,607

Earnings per share, basic (EUR) 1.77 1.86

Earnings per share, diluted (EUR) 1.77 1.85

13. Goodwill and goodwill

impairment testing

13.1. Goodwill

2022 2021

Acquisition costs as of January 1 1,036.8 1,031.4

Translation difference 1.5 5.4

Acquisition costs as of December 31 1,038.3 1,036.8

Accumulated impairments as of

January 1

-14.7 -14.7

Impairments for the financial year -3.9 0.0

Total as of December 31 1,019.6 1,022.1

13.2. General principles

Management monitors the performance of the Group

through the monthly meetings and monthly reporting that

take place on a business unit level. Impairment testing is

done at the lowest level of the Group at which goodwill is

monitored internally.

13.3. Total goodwill in reportable segments

after impairments

2022 2021

Industrial Cranes 153.7 154.0

Agilon 0.0 3.9

Goodwill in Industrial

Equipment total

153.7 157.9

Industrial Crane Service 662.9 660.0

Machine Tool Service 3.9 4.1

Goodwill in Service total 666.8 664.1

Port Cranes 163.3 163.4

Lift trucks 35.8 36.7

Goodwill in Port Solutions total 199.1 200.0

Total goodwill in reportable

segments as of December 31

1,019.6 1,022.1

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Compound

annual

growth rate

Discount

rate

Industrial Cranes 4.0% 14.6%

Agilon 13.8% 14.5%

Industrial Crane Service 7.5% 15.2%

Machine Tool Service 4.5% 13.3%

Lift trucks 9.9% 12.7%

Port Cranes 6.5% 13.8%

The recoverable amounts of the CGUs are determined

based on value in use calculations using the discounted

cash flow method. The forecasting period of cash flows

is five years and it is based on financial forecasts of the

management responsible for that CGU, and adjusted by

Group management if needed. Cash flows beyond the

five-year period were calculated using the terminal value

method. The forecasts have been made based on the CGU

specific historical data, order book, the current market

situation and industry specific information of the future

growth possibilities. The present increase of cost inflation is

considered to be covered mostly by the increases in sales

prices while on the long-term cost inflation is expected to

return back to a lower level. The productivity and efficiency

assumptions are based on internal targets, which are

evaluated against actual performance. These assumptions

are reviewed annually as part of management’s annual

planning and strategic planning cycles. Calculations are

prepared during the fourth quarter of the year.

The discount rate applied to cash flow projections is the

weighted average (pre-tax) cost of capital and is based on

risk-free long-term government bond rates and market and

industry specific risk premiums. These risk premiums are

derived based on the business portfolio of companies which

operate in a similar industry.

The key assumptions, being the average compound annual

growth rate for the forecasted sales of the five years and

the discount rate are as follows:

Impairment charges

Konecranes impaired the goodwill of Agilon Cash Generating

Unit due to decreased discounted cash flow projections.

Agilon is an automated storage and retrieval system

designed especially for maintenance, production and

distribution operations and warehouse management. The

development of the sales has not met the targets and

consequently the cash flows have been insufficient. The

business is partially based on a rental model, which employs

capital. The Agilon business operates mainly in region

Europe and belongs to Industrial Equipment segment.

According to the goodwill test, the recoverable amount of

the unit is EUR 2.4 million, which is based on its value in

use calculations. The discount rate used for the calculation

was 14.5% (13.2% on December 31, 2021).

The impairment testing performed in 2021 did not result in

any impairments being recognized.

Sensitivity analyses

In addition to impairment testing using the base case

assumptions, four separate sensitivity analyses were

performed for each CGU:

1) A discount rate analysis where the discount rate was

increased by 5% points.

2) A Group management adjustment to the future

profitability. The cash flow of each CGU was analyzed

by the Group management. Based on the CGU specific

historical data and future growth prospects the cash

flows were decreased by 10% in each year including

terminal year.

The average compound growth rate for the gross profit is

consistent with that of sales. Furthermore for all the CGUs a

1% terminal growth rate has been applied.

3) A higher discount rate (+5% points) analysis combined

with lower (-10%) cash flows as mentioned above.

4) A decrease in the compound annual growth rate

for the sales for each of the five forecasted years

(- 2% points) combined with the current discount rate.

2022

There was no indication of impairment of goodwill for

any other CGU than Agilon from the sensitivity tests.

The probability for material impairment losses is low for

the other CGUs in which under the basic scenario, the

calculated value in use was approximately two times higher

than the CGUs’ assets employed.

2021

Sensitivity tests using both higher discount rate

(+5% points) and lower cash flow estimates (-10%)

indicated that the goodwill in Agilon would have been

impaired by EUR 0.6 million. There was no indication

of impairment of goodwill for any other CGU from the

sensitivity tests.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

14. Intangible assets

2022

Patents

and trademarks Software Other

Intangible

assets total

Acquisition costs as of January 1 243.8 191.7 504.1 939.6

Additions 0.0 9.8 0.0 9.8

Disposals -0.3 -0.6 -1.1 -2.0

Business combinations 0.0 0.0 1.6 1.6

Transfer within assets 0.0 0.0 0.0 0.0

Translation difference 0.0 0.0 0.0 0.0

Acquisition costs as of December 31 243.5 200.9 504.6 949.0

Accumulated amortization as of

January 1

-19.5 -168.4 -248.5 -436.4

Translation difference 0.0 0.1 0.2 0.3

Accumulated amortization relating

to disposals

0.3 0.2 0.0 0.5

Amortization for financial year -1.4 -10.0 -26.5 -38.0

Total as of December 31 222.8 22.7 229.8 475.4

2021

Patents

and trademarks Software Other

Intangible

assets total

Acquisition costs as of January 1 243.7 180.2 504.8 928.8

Additions 0.0 12.2 0.0 12.2

Disposals 0.0 -0.7 -1.3 -2.0

Transfer within assets 0.0 0.0 0.0 0.0

Translation difference 0.0 0.0 0.5 0.5

Acquisition costs as of December 31 243.8 191.7 504.1 939.6

Accumulated amortization as of

January 1

-17.7 -158.0 -217.0 -392.7

Translation difference 0.0 -0.1 -0.3 -0.4

Accumulated amortization relating

to disposals

0.0 0.7 0.2 0.9

Amortization for financial year -1.8 -11.1 -31.3 -44.2

Total as of December 31 224.2 23.3 255.6 503.1

The category Other consists mainly of customer lists

and technology acquired in business combinations. They

are stated at cost and amortized on a straight-line basis

over their expected useful lives. The normal amortization

period of intangible assets varies from 4 to 20 years.

The amortization of intangible assets is included in the

depreciation and impairments line in the consolidated

statement of income. On December 31, 2022 and December

31, 2021, the intangible assets having indefinite useful

life consisted of the Demag and Gottwald trademarks of

EUR 167.0 million and EUR 51.0 million. As there is no

foreseeable limit on the period over which the asset is

expected to generate net cash inflows for the entity, it is

classified as intangible assets having an indefinite useful life.

The carrying amounts of these assets are tested on a yearly

basis in connection with the goodwill impairment testing.

The addition of EUR 9.8 million (EUR 12.2 million in 2021)

mainly consisted of capitalized development costs of the

Group’s ERP systems.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

15. Property, plant and equipment

2022 Land Buildings

Machinery &

Equipment

Property,

plant and

equipment

total

Acquisition costs as of January 1 29.8 288.8 418.4 737.0

Additions 0.0 40.2 48.4 88.6

Disposals 0.0 -8.7 -15.0 -23.7

Transfer within assets -0.2 0.1 0.0 0.0

Impairment 0.0 -1.1 -3.6 -4.8

Translation difference 0.1 -0.2 0.6 0.5

Acquisition costs as of December 31 29.7 319.0 448.8 797.5

Accumulated depreciation as of

January 1

0.0 -113.0 -284.7 -397.7

Translation difference 0.0 0.3 0.4 0.7

Accumulated depreciation relating

to disposals

0.0 8.3 14.4 22.7

Depreciation for financial year 0.0 -31.4 -45.7 -77.2

Total as of December 31 29.7 183.1 133.1 345.9

2021 Land Buildings

Machinery &

Equipment

Property,

plant and

equipment

total

Acquisition costs as of January 1 30.1 263.3 391.6 685.0

Additions 0.0 30.9 43.0 74.0

Disposals -0.6 -10.6 -19.0 -30.2

Transfer within assets 0.0 0.4 -0.4 0.0

Impairment 0.0 0.0 -0.3 -0.3

Translation difference 0.3 4.8 3.3 8.5

Acquisition costs as of December 31 29.8 288.8 418.4 737.0

Accumulated depreciation as of

January 1

0.0 -88.3 -254.9 -343.2

Translation difference 0.0 -0.3 -0.4 -0.7

Accumulated depreciation relating

to disposals

0.0 6.3 15.6 21.9

Depreciation for financial year 0.0 -30.7 -45.0 -75.6

Total as of December 31 29.8 175.8 133.7 339.3

Classification of Property, plant and equipment 2022 2021

Property, plant and equipment, owned 213.5 223.8

Right-of-use assets, leased 132.5 115.6

Total 345.9 339.3

2022

Right of use assets

Land and

Buildings

Machinery and

Equipment Total

Balance as of January 1 76.5 39.1 115.6

Translation difference 0.3 0.6 0.9

New contracts and changes in lease contracts 36.0 23.5 59.6

Depreciation during the year -23.2 -20.3 -43.5

Total as of December 31 89.6 42.9 132.5

2021

Right of use assets

Land and

Buildings

Machinery and

Equipment Total

Balance as of January 1 78.5 42.5 121.0

Translation difference 2.0 1.4 3.4

New contracts and changes in lease contracts 18.1 15.6 33.6

Depreciation during the year -22.1 -20.4 -42.5

Total as of December 31 76.5 39.1 115.6

In impairments of Property, Plant and Equipment in 2022, EUR 1.6 million relate to the war in

Ukraine, EUR 2.9 million to restructuring actions and EUR 0.3 million to old rental assets, and in

2021 (EUR 0.3 million) to restructuring actions.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

16. Interests in other entities

and non-controlling interests

16.1. Investments accounted for using

the equity method

The following table illustrates the summarized financial information of the Group’s investments and reconciliation

with the carrying amount of the investments in consolidated financial statements.

16.3. Joint operations

Konecranes has classified the interest in AS Konesko

(domiciled in Estonia) as a joint operation based on the

joint arrangement agreement. AS Konesko is a strategic

supplier of components used in Konecranes products.

Konecranes has the exclusive right to purchase certain

motors and end carriages from AS Konesko at a price to be

agreed upon with AS Konesko. However Konecranes retains

ownership of the current motor designs and the trademark

rights to the end carriages.

Associated Companies 2022 2021

Acquisition costs as of January 1 1.7 1.7

Share of associated companies' result

after taxes*

0.1 0.1

Dividends received -0.1 -0.1

Change from subsidiary shares 0.8 0.0

Total as of December 31 2.5 1.7

Joint Ventures 2022 2021

Acquisition costs as of January 1 5.1 4.8

Share of joint ventures' result after

taxes*

0.3 0.2

Dividends received -0.1 0.0

Translation difference 0.0 0.1

Total as of December 31 5.3 5.1

2022

Carrying

amount

of the

investment

Non-

current

assets*

Current

assets*

Non-

current

liabilities*

Current

liabilities* Revenue*

Profit/

loss after

tax from

continuing

operations*

Total com-

prehensive

income*

Dividends

received

Investments in

associated companies

and joint ventures

7.8 3.6 54.5 0.9 31.3 69.3 1.4 1.4 0.2

Total 7.8 3.6 54.5 0.9 31.3 69.3 1.4 1.4 0.2

2021

Carrying

amount

of the

investment

Non-

current

assets*

Current

assets*

Non-

current

liabilities*

Current

liabilities* Revenue*

Profit/

loss after

tax from

continuing

operations*

Total com-

prehensive

income*

Dividends

received

Investments in

associated companies

and joint ventures

6.8 3.8 52.5 0.8 31.4 58.5 1.1 1.1 0.1

Total 6.8 3.8 52.5 0.8 31.4 58.5 1.1 1.1 0.1

* Including adjustments from purchase price allocation.

*Asset and liability values, revenue and profit/loss represent values according to the latest published financial information.

Konecranes owns as of December 31, 2022 49.5% of

AS Konesko shares.

Konecranes has recognized and accounted for the assets,

liabilities, revenues and expenses relating to its interest in

AS Konesko in accordance with IFRS 11.

16.2. Investments in Associated Companies and Joint Ventures

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

16.4. Subsidiaries with material non-controlling interest

17. Deferred tax assets and liabilities

17.1. Deferred tax assets

17.2. Deferred tax liabilities

2022

Accumulated

non-controlling

Interest Goodwill

Non-current

assets Current assets

Non-current

liabilities

Current

liabilities Revenue

Profit/loss

after tax from

continuing

operations

Total

comprehensive

income

Non-controlling interests 0.1 0.0 1.4 5.3 0.1 6.9 6.6 -0.6 -0.6

Total 0.1 0.0 1.4 5.3 0.1 6.9 6.6 -0.6 -0.6

2021

Accumulated

non-controlling

Interest Goodwill

Non-current

assets Current assets

Non-current

liabilities

Current

liabilities Revenue

Profit/loss

after tax from

continuing

operations

Total

comprehensive

income

Non-controlling interests 9.2 0.0 66.6 38.1 10.6 58.0 42.4 4.4 4.4

Total 9.2 0.0 66.6 38.1 10.6 58.0 42.4 4.4 4.4

Assets and liabilities as well as revenue and profit/loss values represent the total company values including purchase price allocations. See also the company list for the ownership and principal place of business

of the subsidiaries.

2022 2021

Employee benefits 30.2 53.1

Provisions 18.0 18.1

Unused tax losses 10.1 9.6

Other temporary differences 45.4 39.4

Total 103.8 120.2

2022 2021

Intangible and tangible assets 114.8 121.0

Other temporary difference 18.9 21.6

Total 133.7 142.6

Other temporary differences include timing differences

arising for example from accrued costs, advances received

and unrealized currency differences that are not deductible

in taxation until they occur.

The deferred tax assets and deferred tax liabilities have

been netted on a juridical company level when there is a

legally enforceable right to offset income tax receivables

against income tax payables related to income taxes levied

by the same tax authority. The gross amount of deferred

tax assets in 2022 were EUR 110.9 million (EUR 125.3

million in 2021) and deferred tax liabilities EUR 140.8 million

(EUR 147.7 million in 2021).

Konecranes has not recognized the temporary differences in

investments in subsidiaries to the extent that they probably

will not reverse in the foreseeable future.

17.3. Tax losses carried forward

At the end of year 2022, Konecranes recorded a deferred

tax asset of EUR 10.1 million (EUR 9.6 million in 2021)

related to unused tax losses on the carry-forward losses

of EUR 187.2 million (EUR 199.9 million in 2021) in total.

The tax losses, for which no deferred tax assets are

recognized due to the uncertainty of the utilization of

the losses, amounted to EUR 144.4 million in the year

2022 (EUR 157.8 million in 2021). EUR 134.7 million of

these carry-forward tax losses available have unlimited

expiry, EUR 18.8 million expire later than in five years and

EUR 33.7 million expire in five years.

Part of the carry-forward losses relate to Morris Material

Handling, Inc., USA, which was acquired in 2006. The

overall carry-forward losses of Morris Material Handling, Inc.

amounted to EUR 23.1 million (EUR 24.1 million in 2021).

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Tax losses carried forward and related deferred tax assets on December 31

by the most significant countries as following:

2022

Tax losses

carried forward

Potential deferred

tax assets

Deferred tax assets

not recorded

Deferred

tax assets

France 75.2 18.8 18.8 0.0

India 25.1 6.3 6.3 0.0

USA 23.1 5.5 0.0 5.5

Austria 16.4 4.1 4.1 0.0

Australia 10.7 3.2 0.0 3.2

Philippines 5.3 1.3 1.3 0.0

Germany 4.4 1.4 1.4 0.0

Japan 4.0 1.2 1.2 0.0

Great Britain 3.4 0.9 0.9 0.0

South Africa 3.3 0.9 0.9 0.0

Other 16.2 3.0 1.7 1.4

Total 187.2 46.7 36.6 10.1

2021

Tax losses

carried forward

Potential deferred

tax assets

Deferred tax assets

not recorded

Deferred

tax assets

France 77.4 20.0 20.0 0.0

India 34.5 10.8 10.8 0.0

USA 24.2 5.7 0.0 5.7

Austria 17.9 4.5 4.2 0.3

Australia 3.2 1.0 0.0 1.0

Philippines 2.6 0.7 0.0 0.7

Germany 4.4 1.4 1.4 0.0

Japan 3.8 1.2 1.2 0.0

Great Britain 9.1 1.7 1.7 0.0

South Africa 5.1 1.4 1.4 0.0

Other 17.8 3.8 1.7 2.0

Total 199.9 52.0 42.4 9.6

To assess if the convincing evidence threshold per IAS

12 was met, Konecranes has prepared tax forecasts for

future periods considering the restructuring done and the

tax planning opportunities that were being implemented

at that time.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

18. Inventories

19. Ageing analysis of accounts receivable

2022 2021

Raw materials and semi-manufactured goods 357.3 278.4

Work in progress 551.9 380.7

Finished goods 38.1 46.2

Advance payments 45.3 21.1

Total 992.7 726.4

2022 2022 2021 2021

Accounts

receivable

including

impairment of

Accounts

receivable

including

impairment of

Not overdue 376.2 2.7 326.7 3.2

1−30 days overdue 92.9 0.8 81.7 0.5

31−60 days overdue 41.9 0.6 40.1 0.2

61−90 days overdue 26.4 1.1 19.4 0.7

more than 91 days overdue 48.1 19.2 24.3 22.2

Total 585.6 24.5 492.1 26.8

2022

Balance at the

beginning

of the year

Translation

difference

Business

combinations

Utilized during

the period

Provision not

needed Additions

Balance

at the end

of the year

Provision

for obsolete

inventory

42.0 0.3 0.0 -2.8 -1.2 13.9 52.2

2021

Balance at the

beginning

of the year

Translation

difference

Business

combinations

Utilized during

the period

Provision not

needed Additions

Balance

at the end

of the year

Provision

for obsolete

inventory

42.7 1.1 0.0 -9.2 -0.7 8.0 42.0

The carrying amount of accounts receivable approximates to their fair value. Accounts receivable are subject to only minor

credit risk concentrations due to the Group’s extensively diversified customer portfolio. Credit losses recognized from the

customer contracts for the financial year totaled EUR 5.9 million (EUR 5.8 million in 2021).

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

2022

Balance at

the beginning

of the year

Translation

difference

Business

combinations

Utilized

during

the period

Provision not

needed Additions

Balance

at the end

of the year

Provision for

doubtful accounts

(Impairment)

26.8 0.0 0.0 -5.8 -8.2 11.7 24.5

2021

Balance at

the beginning

of the year

Translation

difference

Business

disposals

Utilized

during

the period

Provision not

needed Additions

Balance

at the end

of the year

Provision for

doubtful accounts

(Impairment)

31.8 1.5 0.0 -5.7 -5.8 5.0 26.8

The release of the provision for doubtful accounts relates to the cash received from individual receivables which were

historically provided for due to management’s uncertainty of their collectability.

19. Ageing analysis of accounts receivable (continues)

20. Other receivables

21. Deferred assets

22. Cash and cash equivalents

2022 2021

Notes receivable 5.6 4.7

Value added tax 31.2 23.4

Total 36.8 28.1

2022 2021

Interest 1.9 0.5

Prepaid expenses 23.0 23.1

Unbilled revenue 39.7 36.8

Other 33.4 33.8

Total 98.0 94.1

2022 2021

Short-term deposits 25.7 77.9

Cash in hand and at bank 388.2 242.8

Total 413.9 320.7

23. Equity

23.1. Shareholders’ equity

Number of

treasury

As of January 1, 2021 79,134,459 87,447

Share subscriptions with share

awards

0 0

As of December 31, 2021 79,134,459 87,447

Share subscriptions with share

awards

32,140 -32,140

As of December 31, 2022 79,166,599 55,307

The total shareholders’ equity consists of share capital,

share premium, paid in capital, cash flow hedges,

translation difference, other reserves and retained earnings.

Consistent with local legislation Konecranes’ share has no

nominal value. All issued shares are fully paid and listed on

Nasdaq Helsinki.

Share premium includes the value of shares, which exceeds

the accounting par value of the shares, for shares issued

before 1 September, 2006. Cash flow hedges include

changes in the fair values of derivative financial instruments

used to hedge operational cash flows. Translation

differences comprise the differences arising from translating

non-euro functional currency entities to euro, which is the

Group’s presentation currency. Other reserves include the

credit for equity settled share-based payment cost. The

paid in capital includes the portion of shares’ subscription

price, which is not recorded to share capital or to liabilities

according to IFRS. The paid in capital includes also other

capital contributions to the Group, which are not recorded

to some other reserve within the equity. The paid in capital

includes also the possible amount of share capital decrease,

which is not netted against accumulated losses or is not

distributed to shareholders.

Dividend proposal per share for 2022 was EUR 1.25 and

dividend for 2021 was EUR 1.25.

23.2. Distributable earnings

See page 119 / Board of Directors’ Proposal to the Annual

General Meeting.

Short-term deposits have a maturity of three months or

less. Cash and cash equivalents are carried at nominal

value, which corresponds to their fair value.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

24. Provisions

2022 Warranty Restructuring

Pension

commitments Other Total

Total provisions as of January 1 56.4 39.8 8.0 21.8 126.1

Translation difference -0.1 0.0 0.5 0.3 0.7

Increase through business combination 0.0 0.0 0.0 0.0 0.0

Additional provision in the period 24.1 7.9 1.0 8.4 41.4

Utilization of provision -11.0 -19.1 0.0 -6.9 -37.0

Unused amounts reversed -14.1 -0.9 -2.0 -1.8 -18.7

Total provisions as of December 31 55.4 27.7 7.5 21.9 112.4

2021 Warranty Restructuring

Pension

commitments Other Total

Total provisions as of January 1 63.7 64.8 6.0 26.5 161.0

Translation difference 0.9 0.4 0.5 0.6 2.4

Increase through business combination 0.0 0.0 0.0 0.0 0.0

Additional provision in the period 22.6 8.7 1.9 6.2 39.4

Utilization of provision -16.9 -32.3 0.0 -8.6 -57.8

Unused amounts reversed -13.8 -1.7 -0.4 -2.9 -18.9

Total provisions as of December 31 56.4 39.8 8.0 21.8 126.1

The provision for warranties covers the expenses due to

the repair or replacement of products during their warranty

period. The warranty liability is based on historical realized

warranty costs for deliveries of standard products and

services. The usual warranty period is 12 months. For more

complex contracts, mainly including long-term projects, the

warranty reserve is calculated contract by contract and the

warranty period can be significantly longer. The restructuring

provision is recognized when the Group has prepared a

detailed reorganization plan and begun implementation of

the plan or announced the matter. Pension commitments

include provisions for local pension schemes.

Other provisions include provisions for claims, litigations

and provisions for loss contracts in which the amount is not

provided for as part of work in progress or percentage of

completion receivable of the loss making project.

Restructuring costs

Konecranes has recorded EUR 17.0 million of restructuring

costs during 1–12/2022 (EUR 11.3 million expenses in

1–12/2021) of which EUR 2.9 million was impairment of

assets (EUR 0.3 million for 1–12/2021). The remaining

restructuring items are reported 1–12/2022 in personnel

costs (EUR 4.8 million), materials and supplies

(EUR 4.8 million) and in other operating expenses

(EUR 4.5 million).

War in Ukraine

Konecranes has reviewed the risks related to the

war in Ukraine for the effects to assets and ongoing

projects and impaired the values of property, plant and

equipment (EUR 2.1 million), inventories (EUR 1.5 million),

receivables (EUR 0.5 million) and deferred tax assets

(EUR 0.4 million) in Ukraine due to the circumstances,

which indicated that the carrying amount is unlikely to

be recoverable. Konecranes has also recorded additional

losses and provisions to the inventories and receivables

in Russia (EUR 1.1 million) and for the projects to Russia

(EUR 31.0 million), which includes a EUR 33.5 million

reversal of sales.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

25. Current liabilities

25.1. Accruals

2022 2021

Wages, salaries

and personnel expenses

127.7 119.8

Pension costs 8.6 10.4

Interest 11.5 7.0

Other items 50.5 53.7

Total 198.3 190.9

2022 2021

Value added tax 24.3 23.2

Payroll tax liability 17.6 18.8

Other short-term liabilities 14.2 11.2

Total 56.1 53.2

Maturity

of undiscounted cash flows 2022 2021

within 1 year 40.3 40.1

1−5 years 73.4 70.4

over 5 years 45.8 24.0

Total 159.5 134.5

Lease liabilities included

in the balance sheet 2022 2021

Non current interest-bearing liabilities 104.0 85.1

Current interest-bearing liabilities 36.5 38.3

Total as of December 31 140.5 123.4

25.2. Other current liabilities

(non-interest bearing)

26. Lease accounting

Amounts recognized

in statement of income 2022 2021

Depreciation for right of use asset 43.5 42.5

Income for subleasing right of

use asset

-1.1 -1.1

Expenses related to short-term leases 4.0 4.2

Expenses related to leases of

low-value assets

2.4 2.5

Interest on lease liabilities 4.1 3.6

Total expenses 52.9 51.6

Total cash flow of leases 54.7 52.7

2022 2021

Loans from financial institutions 928.8 328.5

Pension loans 20.0 25.0

Lease liabilities 104.0 85.1

Other long-term loans 3.6 8.5

Total 1,056.4 447.1

2022 2021

Loans from financial institutions 0.0 77.9

Bonds 0.0 249.8

Pension loans 5.0 5.0

Lease liabilities 36.5 38.3

Commercial papers 0.0 40.0

Other short-term loans 8.3 7.0

Total 49.8 418.0

The Group leases land and buildings for its production and

office space. The leases of production facilities typically

run for a period of two to seven years, and leases of office

space for one to ten years. Some leases include an option

to renew the lease for an additional period after the end

of the contract term. Konecranes Group has major lease

agreements of factory and office buildings in Hyvinkää and

Hämeenlinna, Finland. During 2022 the second extention

option of 5 years for these buildings was applied. Group

has also included one additional 5-year option in the lease

liability value. The Group has various other leases for office

equipment, vehicles and premises with varying terms and

renewal rights. Vehicles have typically a lease term from

three to seven years. Leasing contracts comply with normal

practices in the countries concerned. The average interest

rate in lease contracts was 3.54 % (3.24% in 2021).

27. Interest-bearing liabilities

27.1. Non-current

27.2. Current

During the year 2022 the Group cancelled the merger related

EUR 392 million committed financing facility (originally EUR

635 million) in full and prepaid the EUR 250 million senior

bond. In addition, the Group issued a new EUR 300 million

Schuldschein loan and repaid the EUR 73 million bilateral loan

which matured during the fourth quarter.

At the end of 2022, the Group’s liquid cash reserves were

EUR 413.9 million (31.12.2021: EUR 320.7 million). For

safeguarding the Group’s cash position, the Group has

established EUR 400 million committed revolving credit facility

with an international loan syndication (2017–2024), which

remained undrawn at the end of December 2022. In addition,

the Group may draw short-term financing from the domestic

commercial paper markets within the EUR 500 million

limit, which was unutilized at the end of December 2022

(December 31, 2021: EUR 40 million).

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

At the end of December 2022, the outstanding short- and

long-term loan portfolio consists of: EUR 550 million term

loans, EUR 377 million Schuldschein loan and EUR 25 million

employment pension loan. The loan portfolio contains

floating and fixed rate tranches and interest swaps. The

weighted average interest rate for these loans is at the end

of period 2.50% per annum. The Group is in compliance with

the quarterly monitored financial covenant (gearing). No

specific securities have been given for the loans. The Group

continues to have healthy gearing ratio of 48.0% (December

31, 2021: 39.8%), which is in compliance with the financial

covenants the Group has to comply with.

Derivatives are initially recorded in the balance sheet at

fair value and subsequently measured at fair value at each

balance sheet date. All derivatives are carried as assets

when fair value is positive and liabilities when fair value is

negative. Derivative instruments that are not designated as

hedges (hedge accounting) are measured at fair value, and

the change in fair value is recognized in the consolidated

statement of income. When the derivative is designated

as a hedge (hedge accounting) the effective part of the

change in fair value is recognized in other comprehensive

income. Any ineffective part is recognized in the consolidated

statement of income. The foreign exchange forward contracts

are measured based on the closing date’s observable spot

exchange rates and the quoted yield curves of the respective

currencies. Interest rate swaps are measured based on

present value of the cash flows, which are discounted based

on the quoted yield curves.

In addition, the Group has certain revolving facilities the

details of which can be found in note 33.3.

The average interest rate of the non-current liabilities

portfolio at December 31, 2022 was 2.51% (2021: 1.42%)

and that of the current liabilities portfolio was 3.93%

(2021: 1.54%). The effective interest rate for EUR loans

varied between 0.80–4.05% (2021: 0.06–3.80%).

27.3. Maturity tables of financial liabilities

and liquidity risk

The following table reflects the maturity of interest

bearing liabilities.

2022 Maturity

Currency

Avg.

duration

Avg.

rate %

Less than

1 year 1–5 years

Over

5 years

Amount

MEUR

EUR 1.5 years 2.18 23.5 973.5 40.4 1,037.4

INR 1.7 years 8.62 0.3 0.6 0.0 0.8

CNY 1.5 years 4.59 1.6 1.2 0.0 2.8

USD 1.7 years 4.01 7.8 15.7 0.5 24.0

GBP 1.8 years 3.33 1.3 4.2 0.3 5.8

Others 1.1–3.0 years 1.43–20.78 15.3 13.3 6.7 35.3

Total 2.58 49.8 1,008.5 47.9 1,106.2

2021 Maturity

Currency

Avg.

duration

Avg.

rate %

Less than

1 year 1–5 years

Over

5 years

Amount

MEUR

EUR 1.5 years 1.23 387.6 386.5 17.5 791.6

INR 1.1 years 8.86 0.5 0.1 0.0 0.6

CNY 1.5 years 4.97 1.0 0.8 0.0 1.8

USD 1.7 years 3.62 7.5 14.3 0.6 22.5

GBP 1.8 years 2.81 2.0 4.6 0.7 7.2

Others 1.0–3.1 years 1.38–20.78 19.3 15.6 6.5 41.4

Total 1.48 418.0 421.8 25.2 865.1

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

The following table reflects all contractually fixed pay-

offs for settlement, repayments and interest resulting

from recognized financial liabilities, excluding derivatives.

The amounts disclosed are undiscounted net cash outflows

for the respective upcoming fiscal years, based on the

2022 Maturity

Currency

Avg.

duration

Avg.

rate %

Less than

1 year

1–5

years

Over

5 years

Amount

MEUR

EUR 1.5 years 2.18 53.4 1,024.5 43.3 1,121.2

INR 1.7 years 8.62 0.3 0.6 0.0 0.9

CNY 1.5 years 4.59 1.7 1.3 0.0 3.0

USD 1.7 years 4.01 8.6 17.3 0.4 26.2

GBP 1.8 years 3.33 1.6 3.9 0.6 6.1

Others 1.1–3.0 years 1.43–20.78 17.0 15.5 13.2 45.7

Total debt 2.58 82.6 1,063.2 57.4 1,203.2

Other financial

liabilities

362.4 7.9 0.0 370.3

Total financial

liabilities

444.9 1,071.1 57.4 1,573.4

2021 Maturity

Currency

Avg.

duration

Avg.

rate %

Less than

1 year

1–5

years

Over

5 years

Amount

MEUR

EUR 1.5 years 1.23 399.9 400.7 13.9 814.6

INR 1.1 years 8.86 0.6 0.1 0.0 0.6

CNY 1.5 years 4.97 1.1 0.9 0.0 1.9

USD 1.7 years 3.62 7.8 14.4 0.8 22.9

GBP 1.8 years 2.81 1.4 3.9 0.9 6.2

Others 1.0–3.1 years 1.38–20.78 23.6 14.3 13.8 51.7

Total debt 1.48 434.4 434.3 29.4 898.1

Other financial

liabilities

308.6 10.5 0.0 319.1

Total financial

liabilities

743.0 444.8 29.4 1,217.2

27.4. Liquidity risk, containing undiscounted cash flows of non-derivative

financial liabilities by currency

earliest date on which Konecranes could be required to pay.

Cash outflows for financial liabilities (including interest)

without fixed amount or timing are based on the conditions

existing at December 31.

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

27.5. Maturity profile of the Group’s financial liabilities

The following table reflects the maturity of all financial liabilities.

27.6. Changes in Group’s liabilities arising from financing activities

2022 Maturity of financial liabilities

Liability type

Amount

drawn

Less than

1 year

1–5

years

Over

5 years

Loans from financial institutions 928.8 0.0 918.8 10.0

Lease liabilities 140.5 36.5 66.2 37.8

Commercial paper program 0.0 0.0 0.0 0.0

Pension loans 25.0 5.0 20.0 0.0

Other long-term debt and short-term loans 11.9 8.3 3.5 0.2

Derivative financial instruments 15.9 15.9 0.0 0.0

Account and other payables 370.3 362.4 7.9 0.0

Total 1,492.3 428.0 1,016.4 47.9

2021 Maturity of financial liabilities

Liability type

Amount

drawn

Less than

1 year

1–5

years

Over

5 years

Loans from financial institutions 406.4 77.9 328.5 0.0

Bonds 249.8 249.8 0.0 0.0

Lease liabilities 123.4 38.3 68.2 16.9

Commercial paper program 40.0 40.0 0.0 0.0

Pension loans 30.0 5.0 20.0 5.0

Other long-term debt and short-term loans 15.5 7.0 6.1 2.4

Derivative financial instruments 16.9 16.9 0.0 0.0

Account and other payables 319.1 308.6 10.5 0.0

Total 1,201.0 743.5 433.2 24.4

2022

Non-current

interest

bearing loans

Non-current

lease

liabilities

Current

interest

bearing

loans

Current

lease

liabilities

Financial

derivatives Total

Total liabilities as of

January 1

362.0 85.1 379.7 38.3 16.9 882.0

Proceeds 600.0 0.0 0.0 0.0 0.0 600.0

Repayments -8.7 0.0 -366.7 -44.1 0.0 -419.5

Acquisitions and disposals 0.0 0.0 0.0 0.0 0.0 0.0

Foreign exchange

movement

0.2 0.6 0.0 0.3 0.0 1.1

Changes in fair values 0.0 0.0 0.0 0.0 -1.0 -1.0

Changes in lease contracts 0.0 61.5 0.0 -1.2 0.0 60.3

Other -1.0 -43.3 0.2 43.3 0.0 -0.8

Total as of December 31 952.4 104.0 13.3 36.5 15.9 1,122.1

2021

Non-current

interest

bearing loans

Non-current

lease

liabilities

Current

interest

bearing

loans

Current

lease

liabilities

Financial

derivatives Total

Total liabilities as of

January 1

768.8 90.9 273.2 37.9 5.5 1,176.3

Proceeds 0.0 0.0 0.0 0.0 0.0 0.0

Repayments -5.6 0.0 -296.4 -42.6 0.0 -344.6

Acquisitions and disposals 0.0 0.0 0.0 0.0 0.0 0.0

Foreign exchange

movement

0.3 2.5 0.6 1.1 0.0 4.5

Changes in fair values 0.0 0.0 0.0 0.0 11.4 11.4

Changes in lease contracts 0.0 36.3 0.0 -2.7 0.0 33.6

Other -401.6 -44.6 402.3 44.6 0.0 0.8

Total as of December 31 362.0 85.1 379.7 38.3 16.9 882.0

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28. Other long-term liabilities

28.1. Employee benefits

The company and most of its subsidiaries offer retirement

plans which cover the majority of employees in the Group.

Many of these plans are defined contribution, where

Konecranes’ contribution and resulting charge is fixed at a

set level or is a set percentage of employees’ pay. However

the Group has significant defined benefit pension plans in

the United Kingdom, Germany and Switzerland as well as

individually insignificant plans in other countries. Companies

in many countries have also other long-term employee

benefits such as part-time pension benefits and jubilee

benefits, which are reported as defined benefit plans.

The UK defined benefit plan is administered by an

independent trustee company that is legally separated

from the Group. The investments are managed by a

professional and independent Fiduciary Manager who is

appointed by the trustees. The Fiduciary Manager appoints

Investment Managers as he/she see fit in order to achieve

the Trustees’ stated objectives for the scheme funding

level and taking into account the agreed risk appetite.

The Fiduciary Manager has trigger points set in conjunction

with the Trustees which when reached allows he/she to

make changes to the investments to repatriate the gains to

achieve full funding position. The UK plan is subject to the

UK’s pensions legislation, is regulated by the UK Pensions

Regulator and is exempt from most UK taxation through its

registered status. The UK plan was closed to new members

in 2005. Under the UK plan the employees are entitled

to post-retirement installments calculated as an average

annual basic salary from the best three years within the last

ten years. The net liability in the United Kingdom was EUR

0.0 million (EUR 0.0 million in 2021).

2022 2021

Employee benefits 209.7 278.5

Other non-interest-bearing long-term

liabilities

7.9 10.5

Total 217.7 289.0

In Germany the defined benefit pension plans are direct

pension promises which are unfunded and administered

by a service provider. The payments to plan participants

start after retirement or in case of disability or death.

Benefits are based on the number of years worked and

the final salary. The commencement of pension payments

depends on the beginning of the state pension, which

is the earliest at age 63 in case of early retirement and

otherwise 65 for old age pension. The biggest defined

benefit pension plan in Germany is the Mannesmann

Leistungsordnung (MLO), which is closed to new employees.

The monthly pension benefit provided by this plan is

calculated as the ratio Individual pay/Average pay, times

the years of service, times 3.07, and has to be at least

equal to 2.10 times the years of service. The net liability

in Germany was EUR 184.8 million (EUR 242.4 million

in 2021) of which the MLO plan was EUR 124.3 million

(EUR 169.5 million in 2021).

The Swiss pension plans are administered via pension funds,

which are legally separated from the Group. The board

of Trustees of the pension funds are equally composed of

representatives of both the employer and employees. The

Trustees are required by law to act in the interest of all

relevant beneficiaries and are responsible for the investment

policy with regard to the assets and the administration and

financing of the benefits. The plans function in and comply

with a large regulatory framework and comply with the

local minimum funding requirements. The plans are open

to new members. Both the company and employees pay

contributions to fund the plans. The pension plans qualify as

defined benefit plan for IFRS purposes, because accruals are

by law subject to a minimum guaranteed rate of return and

the plan has to guarantee a certain legal minimum level of

benefits. There is hence a risk that the company may have

to pay additional contributions. Under the plans, participants

are also insured against the financial consequences of old

age, disability and death. The net liability in Switzerland

was EUR 1.8 million (EUR 7.4 million in 2021) of which the

pension plan was EUR 1.6 million (EUR 7.2 million in 2021).

The defined benefit plans typically expose the company

to actuarial risks such as: investment risk, interest rate

risk, longevity risk and salary risk. The investment risk is

being mitigated by investing the funds both to equity and

debt instruments.

The following tables summarize the components of net

benefit expense recognized in the statement of profit or

loss and the funded status and amounts recognized in the

balance sheet for the respective plans:

28.2. Amounts recognized in the balance sheet

2022 2021

Present value of obligation

wholly unfunded

207.9 271.2

Present value of obligation

wholly or partly funded

55.8 86.8

Defined benefit plan obligations 263.7 358.0

Fair value of plan assets -53.9 -79.5

Total net liability recognized 209.7 278.5

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2022 2021

Obligation as of January 1 358.0 380.8

Translation difference -2.4 5.6

Settlements and curtailments 0.0 -0.1

Current service cost 6.9 9.4

Interest cost 4.3 2.9

Past service cost -0.2 -0.3

Actuarial gains (-) / losses (+)

arising from changes in demographic

assumptions

-0.1 -3.1

Actuarial gains (-) / losses (+) arising

from changes in financial assumptions

-96.3 -20.2

Actuarial gains (-) / losses (+) arising

from experience

13.6 2.2

Benefits paid (-) -20.2 -19.1

Obligation as of December 31 263.7 358.0

Movements of the fair value

of plan assets 2022 2021

Fair value of plan assets as of January 1 79.5 81.6

Translation difference -1.9 5.1

Interest income 1.4 1.1

Employee contributions 0.4 1.4

Employer contributions 0.8 0.1

The return on plan assets

(excluding amounts included in the

net interest expense)

-20.2 -3.7

Benefits paid (-) -6.1 -6.2

Fair value of plan assets as of

December 31

53.9 79.5

2022 2021

Service cost:

Current service cost 6.7 9.3

Net interest cost 2.9 1.8

Past service cost -0.2 -0.3

Effect of settlement and curtailments 0.0 -0.1

Components of defined benefit

plan costs recorded in profit or loss

9.5 10.7

2022 2021

Remeasurement on

the net defined benefit liability:

The return on plan assets (excluding

amounts included in the net interest

expense) gains (-) / losses (+)

20.2 3.7

Actuarial gains (-) / losses (+)

arising from changes in demographic

assumptions

-0.1 -3.1

Actuarial gains (-) / losses (+) arising

from changes in financial assumptions

-96.3 -20.2

Actuarial gains (-) / losses (+) arising

from experience

13.6 2.2

Components of defined benefit

plan costs recorded in other

comprehensive income

-62.6 -17.6

Total (income (-) / expense (+)) -53.1 -6.9

28.3. Components of defined benefit plan

recorded in comprehensive income

The actuarial gains / losses in 2022 and 2021 were mainly

caused by the change of discount rates in the defined

benefit plans of Germany, Switzerland and the United

Kingdom.

28.4. Movements of the present value

of defined benefit obligation

Of the benefits paid, EUR 6.1 million (2021: EUR 6.2

million) was paid from plan assets and EUR 14.1 million

(2021: EUR 12.9 million) by employer directly.

28.5. Major categories of plan assets

at the end of the reporting period

2022 2021

Equity instruments 4.6 13.6

Debt instruments 30.7 51.5

Insurances 13.6 1.6

Real estate 3.3 7.2

Others 1.7 5.5

Total plan assets 53.9 79.5

The plan assets do not contain any Konecranes shares or

assets.

Virtually all equity and debt instruments have quoted prices

in active markets. The plan assets originate from the United

Kingdom, Switzerland, Germany and India. It is the policy

of the UK fund to invest approximately 20–25% to growth

assets such as equity instruments as well as property and

growth funds and 75–80% to risk reducing assets such as

corporate bonds and fixed or index-linked gilts. The Swiss

pension funds are secured by insurances. The company can

only indirectly and partially determine the asset allocation

through the 50/50 employer/employee representation

in the board of Trustees. The return on plan assets was

EUR -18.8 million (2021: EUR -2.6 million).

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Sensitivity analysis Increase Decrease

0.5% points change in the

discount rate

-5.6% 6.2%

0.5% points change in the expected

development of salaries

0.4% -0.4%

0.5% points change in the expected

development of pensions

4.2% -3.8%

28.6. Defined benefit plan:

the main actuarial assumptions

With the objective of presenting the assets and liabilities

of the defined benefit plans at their fair value on the

balance sheet, assumptions under IAS 19 are set by

reference to market conditions at the valuation date.

Qualified independent actuaries have updated the actuarial

valuations under IAS 19 of the major defined benefit

schemes operated by the Group to December 31, 2022.

The assumptions used by the actuaries are chosen from

a range of possible actuarial assumptions which, due to

the long-term nature of the schemes, may not necessarily

be borne out in practice. The actuarial assumptions used

to calculate the benefit liabilities therefore vary according

to the country in which the plan is situated. The following

table shows the assumptions, weighted by liabilities, used to

value the principal defined benefit plans.

Germany 2022 2021

Discount rate % 3.71 1.05

Expected development of salaries % 2.66 2.42

Expected development of pensions % 2.00 1.65

Mortality table: Richttafeln 2018 G von Klaus Heubeck

UK 2022 2021

Discount rate % 5.00 1.80

Expected development of pensions % 3.10 3.30

Mortality table: SAPS base table of S3PA, applied at year of birth

and weighted by male/female deferred members and pensioners,

and CMI 2020 (2021: CMI 2020) projections with a long term

improvement parameter of 1.25% (2021: 1.25%) per annum.

Switzerland 2022 2021

Discount rate % 2.15 0.17

Expected development of salaries % 1.50 1.25

Mortality table: BVG 2020 Generational and improvement factors

CMI 2019 LTR 1.5%.

Other 2022 2021

Discount rate % 2.80 - 10.50 0.60 - 12.42

Expected development of salaries % 1.16 - 11.00 1.10 - 10.05

Expected development of pensions % 2.00 - 10.57 1.61 - 10.57

The below table shows the % effect of a change in the

significant actuarial assumptions used to determine

the retirement benefits obligations in our main defined

benefit pension obligation countries. The effect shows the

increase or decrease in the liability. In the calculation of the

sensitivity of the discount rate any effect from the return of

plan assets has been ignored.

The sensitivity analyses above have been determined

based on reasonably possible changes of the respective

assumptions occurring at the end of the reporting period

and may not be representative of the actual change. It is

based on a change in the key assumption while holding all

other assumptions constant. A linear extrapolation of these

amounts based on alternative changes in the assumptions

as well as an addition of combined changes in the individual

assumptions is not possible.

There are no changes in the way the sensitivity analyses

were performed compared to the previous years.

The average duration of the defined benefit obligation

weighted by the present value of the defined benefit

obligation is 12 years (2021: 15 years).

The Group expects to contribute EUR 0.8 million to the

above defined benefit pension plans in 2023 (Employer

contribution).

29. Share-based payments

Performance Share Plan

The Board of Directors of Konecranes Plc has resolved in

2017 to establish a long-term incentive plan for the Group

key employees and the President and CEO. The share-

based incentive plans are a Performance Share Plan 2017

for the Group key employees, a Restricted Share Unit Plan

2017 for selected Group key employees and a Performance

Share Plan 2017–2021 for the President and CEO. The

potential rewards from the incentive plans will be paid partly

in Konecranes Plc shares and partly in cash to be used for

taxes and tax-related costs after the performance periods

or vesting periods. As a rule, no reward will be paid if a

plan participant’s employment or service ends before the

reward payment. The Performance Share Plan included

three performance periods, calendar years 2017–2019,

2018–2020 and 2019–2021. The Board of Directors

resolved on the performance criteria and on the required

performance levels for each criterion at the beginning of

each performance period.

The Board of Directors of Konecranes Plc resolved that the

performance criteria for the performance period 2019–2021

under the company’s Performance Share Plan (the “Plan”)

are the cumulative adjusted Earnings per Share (EPS) and

the cumulative annual growth rate (CAGR) for Sales of the

financial years 2019–2021. Adjustments to the EPS include

defined restructuring costs, purchase price allocation

amortization and certain other unusual items. The target

group of the Plan for the performance period 2019–2021

consists of a maximum of 200 key employees of the

Konecranes Group. The rewards to be paid on the basis of

the performance period 2019–2021 correspond to the value

of a maximum total of 670,000 Konecranes Plc shares. If

the target determined by the Board of Directors is attained,

the reward payout may be half of the maximum reward.

The maximum reward payout requires that the target is

clearly exceeded.

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The Board of Directors of Konecranes Plc resolved in

2020 to establish a new Performance Share Plan 2020 for

Konecranes key employees. The Plan has a performance

period from 2020 to 2022 with three separate measurement

periods and separate targets for 2020, 2021 and 2022.

The criterion for the measurement periods 2020, 2021 and

2022 is adjusted Earnings per Share (EPS). Adjustments to

the EPS include defined restructuring costs, mergers and

acquisitions related deal costs and other unusual items.

The target group of the Plan for the performance period

2020–2022 consists of a maximum of 170 key employees of

the Konecranes group. The rewards to be paid on the basis

of the performance period 2020–2022 correspond to the

value of a maximum total of 600,000 Konecranes Plc shares.

The payment of the total reward takes place in 2023 if the

plan term conditions are met. The potential rewards from

the Plan will be paid partly in company shares and partly in

cash after the performance periods. The cash proportion is

intended to cover taxes and tax-related costs arising from

the rewards to the plan participants. As a rule, no reward

will be paid if plan participant’s employment or service ends

before the reward payment.

The Board of Directors of Konecranes Plc resolved in

2021 to establish a new Performance Share Plan 2021 for

Konecranes key employees. The Plan has a performance

period from 2021 to 2023 with three separate measurement

periods and separate targets for 2021, 2022 and 2023.

The criterion for the measurement period 2021 and 2022

is adjusted Earnings per Share (EPS). Adjustments to

the EPS include defined restructuring costs, mergers and

acquisitions related deal costs and other unusual items.

The target group of the Plan for the performance period

2021–2023 consists of a maximum of 170 key employees of

the Konecranes group. The rewards to be paid on the basis

of the performance period 2021–2023 correspond to the

value of a maximum total of 634,921 Konecranes Plc shares.

The payment of the total reward takes place in 2024 if the

plan term conditions are met. The potential rewards from

the Plan will be paid partly in company shares and partly in

cash after the performance periods. The cash proportion is

intended to cover taxes and tax-related costs arising from

the rewards to the plan participants. As a rule, no reward

will be paid if plan participant’s employment or service ends

before the reward payment.

The Board of Directors of Konecranes Plc resolved in

2022 to establish a new Performance Share Plan 2022 for

Konecranes key employees. The Plan has a performance

period from 2022 to 2024 with three separate measurement

periods and separate targets for 2022, 2023 and 2024.

The criterion for the measurement period 2022 is adjusted

Earnings per Share (EPS). Adjustments to the EPS include

defined restructuring costs, mergers and acquisitions

related deal costs and other unusual items. The EPS target

for the first measurement period has also been resolved by

the Board of Directors. The target group of the Plan for the

performance period 2022–2024 consists of a maximum of

170 key employees of the Konecranes group. The rewards

to be paid based on the Plan correspond to the value of

a maximum total of 600,000 Konecranes Plc shares. The

payment of the total reward takes place in 2025 if the plan

term conditions are met. The potential rewards from the

Plan will be paid partly in Konecranes Plc shares and partly

in cash after the performance period. The cash proportion

is intended to cover taxes and tax-related costs arising from

the rewards to the plan participants. As a rule, no reward

will be paid if plan participant’s employment or service ends

before the reward payment.

Restricted Share Unit Plan

The Restricted Share Unit Plan 2017 is directed to selected

key employees in Konecranes. The vesting periods will last

for 12 to 36 months. The prerequisite for reward payment is

that a key employee’s employment or service continues until

the end of the vesting period. The rewards to be allocated

on the basis of the entire plan will amount to a maximum

total of 200,000 Konecranes Plc class shares including also

the proportion to be paid in cash. 17,170 shares (no shares

in 2021) of the restricted share unit plan were allocated

during 2022.

Restricted Share Unit Plan 2020

Konecranes Plc and Cargotec Corporation signed on October

1, 2020 a combination agreement and a merger plan to

combine the two companies through a merger. The Board of

Directors of Konecranes Plc decided to establish a share-

based incentive plan for the Group key employees. The

Restricted Share Unit Plan 2020 was intended to function as

a bridge plan for the transition period before the closing of

the Transaction and forming the combined company in the

merger. The aim of the Plan was to align the objectives of

the shareholders and the key employees, to secure business

continuity during the Transition Period, andto retain key

employees at the company.

As the merger was cancelled in March 2022, also the

Restricted Share Unit Plan 2020 was cancelled in 2022.

Ownership Obligations

A member of the Konecranes Leadership Team must hold

a minimum of 50 percent of any net shares given on the

basis of these plans, until the member’s shareholding in the

company in total corresponds to the value of the member’s

annual salary and the member’s membership in the

Konecranes Leadership Team continues.

The fair value of the equity-settled portion of the share

rights granted is estimated at the date of grant using a

Monte-Carlo simulation model, taking into account the

terms and conditions upon which the share rights were

granted. The model simulates the TSR and compares it

against the group of principal competitors. It takes into

account historical and expected dividends, and the share

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price fluctuation covariance of the Group and its competitors

to predict the distribution of relative share performance.

Fair value of the cash-settled portion is measured at each

reporting date using a binomial option pricing model taking

into account the terms and conditions upon which the

instruments were granted and the current likelihood of

achieving the specified target.

Employee Share Savings Plan

The Group has launched an Employee Share Savings Plan

(ESSP) in which each participant will receive one free

matching share for every two acquired savings shares.

Matching shares will be delivered to a participant if the

participant holds the acquired shares from the plan until the

end of the designated holding period. The matching shares

will be paid in Konecranes shares and partly in cash. The

expenses of the plan are recognized over the vesting period

based on the quarterly acquired savings share amounts.

The fair value of the equity-settled portion of the share

options granted is estimated at the date of grant using a

binominal option pricing model, taking into account the

terms and conditions upon which the share options were

granted. Fair value of the cash-settled portion is measured

at each reporting date using a binomial option pricing model

taking into account the terms and conditions upon which

the instruments were granted and the current likelihood of

achieving the specified target.

29.1. Expenses for employee service

29.3. Changes in the number of net share

rewards in Restricted Share Unit Plan 2020

29.2. Changes in the number of gross share

rewards in Performance Share Plan

2022 2021

Expense arising from equity-settled

share-based payment transactions

6.7 9.5

Expense arising from cash-settled

share-based payment transactions

-1.9 2.5

Total expense arising from share-

based payment transactions

4.7 11.9

2022 2021

Number

of shares

Number

of shares

As of January 1 1,715,800 1,947,600

Share rewards granted 581,670 633,300

Share rewards awarded -149,661 -2,000

Share rewards expired -477,839 -668,933

Share rewards forfeited -14,500 -194,167

Total as of December 31 1,655,470 1,715,800

2022 2021

Number

of shares

Number

of shares

As of January 1 110,686 119,246

Share rewards granted 0 8,238

Share rewards expired -110,686 0

Share rewards forfeited 0 -16,798

Total as of December 31 0 110,686

The carrying amount of the liability arising from cash settled

portion was EUR 0.8 million (2021: EUR 3.0 million).

29.4. Changes in the number of gross share

rewards in Employee Share Savings Plan

2022 2021

Number

of shares

Number

of shares

Outstanding as of January 1 190,438 182,160

Share rewards granted 84,047 64,142

Share rewards awarded -52,620 -45,751

Share rewards forfeited -12,288 -10,113

Outstanding as of December 31 209,577 190,438

29.5. Assumptions made in determining the

fair value of Performance Shares Plan

The fair value for the cash settled portion is remeasured at

each reporting date until the possible share delivery. The

fair value of the liability will thus change in accordance with

the Konecranes Plc share price.

For the 2019–2021 vesting periods granted in 2019 the fair

value for the equity settled portion is based on two non-

market vesting conditions (adjusted EPS and annual growth

rate of sales). For the 2020–2022 vesting periods granted

in 2020 the fair value for the equity settled portion is based

on one non-market vesting condition (adjusted EPS). For

the 2021–2023 vesting periods granted in 2021 the fair

value for the equity settled portion is based on one non-

market vesting condition (adjusted EPS) for the year 2021

and 2022 when the condition for 2023 is still open. For the

2022–2024 vesting periods granted in 2022 the fair value

for the equity settled portion is based on one non-market

vesting condition (adjusted EPS) for the year 2022 when the

conditions for 2023 and 2024 are still open. The fair value

for the equity settled portion based on non-market vesting

condition has been determined at grant using the fair value

of Konecranes share as of the grant date and expected

dividend yield.

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2022 plan 2021 plan

2020

Restricted

share unit plan 2020 plan 2019 plan

Share price at grant, EUR 22.13 38.77 27.74 26.95 31.09

Share price at reporting period end

31.12., EUR

28.76 28.76 28.76 28.76 28.76

Expected volatility, % * 48.0% 26.0% 31.0% 32.0% 25.0%

Risk-free interest rate, % 0.7% 0.0% 0.0% 0.0% 0.0%

Expected dividend per share, pa, EUR 1.3 1.7 3.2 1.7 1.1

Expected contractual life in years 2.8 2.8 0.0 2.5 2.8

Weighted average fair value of the share

rewards at the grant date

18.20 33.75 24.54 22.59 27.66

Model used Black-Scholes Black-Scholes Black-Scholes Black-Scholes Black-Scholes

* Expected volatility was determined by calculating the historical volatility of the Konecranes share using monthly observations over

corresponding maturity.

30. Related party transactions

The related parties of Konecranes include subsidiaries

(see Company list), associated companies, joint ventures

and joint operations, pension fund in the United Kingdom

and the key management personnel of the Group and major

shareholders. The key management personnel of the Group

is comprised of the Board of Directors, the CEO and the

Konecranes Leadership Team.

30.1. Key Management compensation

Board of Directors

The remuneration packages for Board members are

resolved by the Annual General Meeting (AGM) on proposal

by the Nomination Committee. The AGM 2022 confirmed an

annual fee of EUR 140,000 for the Chairman of the Board

(2021: EUR 140,000), EUR 100,000 for the Vice Chairman

of the Board (2021: EUR 100,000), and EUR 70,000 for

other Board members (2021: EUR 70,000). In case the term

of office of a Board member ends before the closing of the

Annual General Meeting in 2023, he or she is entitled to

the prorated amount of the annual remuneration calculated

on the basis of his or her actual term in office. In addition,

compensation of EUR 1,500 was approved per meeting

for attendance at Board committee meetings (2021: EUR

1,500). However, the chairman of audit committee is

entitled to a compensation of EUR 3,000 (2021: EUR 3,000)

per meeting for attendance at audit committee meetings.

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2022

Total compensation to

the Board of directors

Number of shares

as part of

compensation

Value of

compensation

in shares, EUR

Compensation paid

in cash, EUR

Total

compensation, EUR

Chairman of the Board 1,874 51,298 90,036 141,334

Board members 7,167 192,005 394,831 586,836

Total 9,041 243,304 484,866 728,170

2021

Total compensation to

the Board of directors

Number of shares

as part of

compensation

Value of

compensation

in shares, EUR

Compensation paid

in cash, EUR

Total

compensation, EUR

Chairman of the Board 1,508 55,908 96,092 152,000

Board members 3,770 139,771 288,229 428,000

Total 5,278 195,680 384,320 580,000

According to the proposal, 50% of the annual remuneration

is to be used for acquiring shares in the company. The

remuneration may also be paid by transferring treasury

shares based on the authorization given to the board of

directors by the general meeting. In case such purchase

of shares cannot be carried out due to reasons related

either to the company or to a board member, the annual

remuneration shall be paid entirely in cash.

Travel expenses will be compensated against receipt.

President and CEO 2022 2021

Salary and benefits, EUR (Anders Svensson October 19 – December 31, 2022, Teo Ottola January 1 – October

18, 2022, Rob Smith January 1, 2021 – December 31, 2021)

750,905 901,303

Annual variable pay, EUR 1,087,088 256,284

Total 1,837,993 1,157,587

Expense of statutory pension plans (Anders Svensson October 19 – December 31, 2022,

Teo Ottola January 1 – October 18, 2022, Rob Smith January 1, 2021 – December 31, 2021)

203,162 184,172

Expense of voluntary pension plans (Anders Svensson October 19 – December 31, 2022,

Teo Ottola January 1 – October 18, 2022, Rob Smith January 1, 2021 – December 31, 2021)

48,802 106,664

Total 251,964 290,836

Accrued annual variable pay of CEO 48,557 615,815

The accrual of variable pay is paid during the following year.

Shareholding in Konecranes Plc (number of shares) 0 0

Performance share rights allocated (number of share rights)

17,170 0

Share-based payment costs, EUR -68,933 -218,859

Retirement age 63 years 63 years

Period of notice 6 months

Severance payment (including 6 months notice period)

18 months

salary and

fringe benefits

Performance share rights allocated to Rob Smith on December 31, 2021 are reported zero as he is not entitled to receive them.

Expense of statutory pension plans was EUR 0.1 million in 2022 (EUR 0.0 million in 2021).

President and CEO

The Human Resources Committee reviews the President

and CEO’s performance. Based on this review and relevant

facts, the Board sets the total compensation package for the

President and CEO.

August 6, 2021 Konecranes announced that Rob Smith

has decided to leave the company. He left Konecranes

on December 31, 2021. The company’s CFO, Teo Ottola,

who also serves as Deputy CEO, acted as the interim CEO

from January 1, 2022 until October 18, 2022. Konecanes

announced 10 June 2022 that Anders Svensson has been

appointed as Konecranes’ new President and CEO and he

assumed his role on October 19, 2022.

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Konecranes Leadership Team

The Konecranes Leadership Team (KLT) convenes as

frequently as necessary, normally on a monthly basis.

Business Areas have their own management teams that

convene on a regular basis. Only the KLT is classified to key

management personnel due to the decision making power.

The Konecranes Leadership Team consists of the following

members:

• President and CEO

• Chief Financial Officer, Deputy CEO

• Executive Vice President, Industrial Service and Equipment

• Executive Vice President, Port Solutions

• Executive Vice President, Technologies

• Senior Vice President, Human Resources

• Senior Vice President, General Counsel

• Executive Vice President, Senior Vice President,

Integration and Project Management Office

The Human Resources Committee of the Board will, based

upon a recommendation by the President and CEO, make a

proposal to the Board concerning the approval of the base

compensation review and incentive levels for KLT members.

The retirement age of the Finnish members of the KLT

(excluding the President and CEO) is set according to the

Employees Pensions Act (TyEL). The Finnish members of the

KLT also participate in the contribution-based group pension

insurance scheme offered to key personnel in Finland.

The defined contribution payment by the company is 1% of

annual salary excluding performance based compensation

(annual or long term incentives). The Finnish KLT members

also have life insurance and disability insurances. Non-

Finnish members have local insurances.

Konecranes Leadership Team excluding the President and CEO 2022 2021

Salary and benefits, EUR 1,952,574 2,227,618

Annual variable pay, EUR 1,859,503 864,377

Total 3,812,077 3,091,995

Expense of statutory pension plans 430,913 335,934

Expense of voluntary pension plans 14,358 19,688

Total 445,271 355,622

Shareholding in Konecranes Plc (number of shares) 162,796 156,161

Performance share rights allocated (number of share rights) 256,000 317,419

Share-based payment costs, EUR 196,577 2,014,697

There were no loans outstanding to the Konecranes Leadership Team at end of the period 2022 and 2021.

There were no guarantees on behalf of the Konecranes Leadership Team in year 2022 and 2021.

The employee benefits to the key management personnel of the Group were in total EUR 6.6 million in year 2022

(EUR 7.3 million in year 2021).

2022 2021

Sales of goods and services with associated companies and joint arrangements 25.4 18.0

Receivables from associated companies and joint arrangements 4.1 3.3

Purchases of goods and services from associated companies and joint arrangements 64.5 53.6

Liabilities to associated companies and joint arrangements 1.5 1.7

30.2. Transactions with associated companies and joint arrangements

Sales to and purchases from related parties are concluded using terms equivalent to arm’s length transaction.

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2022 2021

Financial assets

Fair value

through

OCI

Fair value

through income

statement

Amortized

cost

Carrying amounts

by balance

sheet item

Fair value

through

OCI

Fair value

through income

statement

Amortized

cost

Carrying amounts

by balance

sheet item

Current financial assets

Account and other receivables 0.0 0.0 622.5 622.5 0.0 0.0 520.2 520.2

Derivative financial instruments 12.2 31.5 0.0 43.7 1.5 2.1 0.0 3.6

Cash and cash equivalents 0.0 0.0 413.9 413.9 0.0 0.0 320.7 320.7

Total 12.2 31.5 1,036.3 1,080.0 1.5 2.1 840.9 844.5

Financial liabilities

Non-current financial liabilities

Interest-bearing liabilities 0.0 0.0 1,056.4 1,056.4 0.0 0.0 447.1 447.1

Other payables 0.0 0.0 7.9 7.9 0.0 0.0 10.5 10.5

Current financial liabilities

Interest-bearing liabilities 0.0 0.0 49.8 49.8 0.0 0.0 418.0 418.0

Derivative financial instruments 10.7 5.2 0.0 15.9 7.0 9.9 0.0 16.9

Account and other payables 0.0 0.0 362.4 362.4 0.0 0.0 308.6 308.6

Total 10.7 5.2 1,476.4 1,492.3 7.0 9.9 1,184.2 1,201.1

30.3. Transactions with Pension Fund

in the United Kingdom

30.4. Transactions with Board members

31. Guarantees and contingent

liabilities

2022 2021

Employer contributions 0.2 0.0

2022 2021

Board member holding the bond

of Konecranes Plc through a 100%

owned company

Interest-bearing short-term liabilities 0.0 0.1

2022 2021

For own commercial obligations

Guarantees 862.5 783.0

Other 72.7 55.1

Total 935.2 838.2

From time to time Konecranes provides customers with

guarantees that guarantee Company’s obligations pursuant

to the applicable customer contract. In sales of investment

goods (machinery) the typical guarantees are the following:

• tender guarantees (bid bonds) given to the customer to

secure the bidding process

• advance payment guarantees given to the customer to

secure their down payment for project

• performance guarantees to secure customers over the

company’s own performance in customer contracts, and

• warranty period guarantees to secure the correction of

defects during the warranty period.

Contingent liabilities relating to litigation

Various legal actions, claims and other proceedings pend

against the Group in various countries. These actions,

claims and other proceedings are typical of this industry and

consistent with a global business offering that encompasses

a wide range of products and services. These matters

involve contractual disputes, warranty claims, product

liability (including design defects, manufacturing defects,

failure to warn and asbestos legacy), employment, vehicles

and other matters involving claims of general liability.

While the final outcome of these matters cannot be

predicted with certainty, Konecranes has the opinion, based

on the information available to date and considering the

grounds presented for such claims, the available insurance

coverage and the reserves made, that the outcome of

such actions, claims and other proceedings, if unfavorable,

would not have a material, adverse impact on the financial

condition of the Group.

32. Financial assets and liabilities

32.1. Carrying amounts of financial assets and liabilities

Additional information on financial instruments is presented in Note 34.

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32.2. Fair values

Set out below is a comparison, by class, of the carrying amounts

and fair value of the Group’s financial assets and liabilities:

Carrying amount Fair value

Financial assets 2022 2021 2022 2021 Note

Current financial assets

Account and other receivables 622.5 520.2 622.5 520.2 19,20

Derivative financial instruments 43.7 3.6 43.7 3.6 34.1

Cash and cash equivalents 413.9 320.7 413.9 320.7 22

Total 1,080.0 844.5 1,080.0 844.5

Financial liabilities

Non-current financial liabilities

Interest-bearing liabilities 1,056.4 447.1 1,082.4 448.3 27.1

Other payables 7.9 10.5 7.9 10.5

Current financial liabilities

Interest-bearing liabilities 49.8 418.0 49.8 419.1 27.2

Derivative financial instruments 15.9 16.9 15.9 16.9 34.1

Account and other payables 362.4 308.6 362.4 308.6 25.2

Total 1,492.3 1,201.0 1,518.3 1,203.4

The management assessed that cash and short-term

deposits, trade receivables, trade payables, bank overdrafts

and other current liabilities approximate their carrying

amounts largely due to the short-term maturities of

these instruments.

The fair value of the financial assets and liabilities is

included at the amount at which the instrument could be

exchanged in a current transaction between willing parties,

other than in a forced or liquidation sale. Long-term fixed-

rate and variable-rate borrowings are evaluated by the

Group based on parameters such as interest rates and the

risk characteristics of the loan.

IFRS 7 requires that the classification of financial

instruments at fair value be determined by reference to

the source of inputs used to derive the fair value. This

classification uses the following three-level hierarchy:

• Level 1 − quoted prices in active markets for identical

financial instruments

• Level 2 − inputs other than quoted prices included within

level 1 that are observable for the financial instrument,

either directly (i.e. as prices) or indirectly (i.e. derived

from prices)

• Level 3 − inputs for the financial instrument that are not

based on observable market data (unobservable inputs)

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32.3. Hierarchy of fair values

The following table allocates financial assets and financial

liabilities measured at fair value to the three levels of the

fair value hierarchy.

2022 2021

Financial assets Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Derivative financial instruments

Foreign exchange forward contracts 0.0 41.9 0.0 0.0 3.5 0.0

Fuel oil derivate 0.0 0.0 0.0 0.0 0.1 0.0

Interest rate derivative 0.0 1.8 0.0 0.0 0.0 0.0

Total 0.0 43.7 0.0 0.0 3.6 0.0

Other financial assets

Cash and cash equivalents 413.1 0.0 0.8 320.7 0.0 0.0

Total 413.1 0.0 0.8 320.7 0.0 0.0

Total financial assets 413.1 43.7 0.8 320.7 3.6 0.0

Financial liabilities

Derivative financial instruments

Foreign exchange forward contracts 0.0 15.8 0.0 0.0 16.9 0.0

Fuel oil derivative 0.0 0.1 0.0 0.0 0.0 0.0

Total 0.0 15.9 0.0 0.0 16.9 0.0

Other financial liabilities

Interest bearing liabilities 0.0 1,106.2 0.0 0.0 865.1 0.0

Other payables 0.0 0.0 0.8 0.0 0.0 3.0

Total 0.0 1,106.2 0.8 0.0 865.1 3.0

Total financial liabilities 0.0 1,122.1 0.8 0.0 882.0 3.0

There were no significant changes in classification of fair

value of financial assets and financial liabilities in the period

2021 to 2022. There were also no significant movements

between the fair value hierarchy classifications.

33. Management of financial risks

The nature of Konecranes’ business and its global

presence exposes it to a range of financial risks. These

risks include (i) market risks, which include potential

unfavorable changes in foreign exchange rates, interest

rates and commodities (ii) liquidity risk and (iii) credit and

counterparty risk.

33.1. Market risk

The responsibility of identifying, evaluating and controlling

the financial risks arising from the Group’s global business

operations is divided between the business units and the

Group Treasury. However, the Group uses an approach

in which most of the management of financial risks is

centralized to Konecranes’ Group Treasury. The Group

Treasury functions within the legal entity Konecranes

Finance Corporation. By centralization and netting of

internal foreign currency cash flows, the Group’s external

hedging needs can be minimized.

Konecranes Finance Corporation is not a profit center in

the sense that it would pursue to maximize its profits.

The company aims to serve the operating companies of the

Group in reducing their financial risks.

The Group’s global business operations involve market risks

in the form of currency, interest rate and commodity risk.

The Group’s objective is to increase the short-term stability

of the financial environment for the business operations by

reducing the negative effects caused by price fluctuations

and other uncertainties in the financial markets.

Business units hedge their risks internally with the Group

Treasury. As a result of this, most of the financial risks of

the Group are concentrated into one company, Konecranes

Finance Corporation, and can be evaluated and controlled in

an efficient way.

The level 3 valuations in other payables are contingent

consideration liabilities resulting from business combinations

or the acquisition of non-controlling interest and the cash

settled share based payment liability.

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Almost all funding, cash management and foreign exchange

with banks and other external counterparties are centralized

to and managed in Konecranes Finance Corporation in

accordance with the Group’s Treasury Policy. In a few

special cases, when the local central bank regulation

prohibits using group services in hedging and funding, this

must be done directly between an operating company and a

bank under the supervision of the Group Treasury.

Konecranes Finance Corporation uses a treasury system,

which enables practically a real-time processing of

transactions and in-depth records of activities and

performance. The standard reporting is done on a weekly

basis and it covers group-level commercial and financial

cash flows, foreign currency transaction exposure, debt

positions, portfolio of derivatives and counterparty credit

exposure for financial transactions. In addition, all Group

companies participate in the monthly managerial and

statutory reporting.

Foreign exchange risk

The Group’s global business operations generate foreign

exchange risk. However, most of the business units only

have transactions in their own currency, i.e. these units

have their sales and costs as well as internal funding

from Konecranes Finance Corporation in their local home

currency. Only 30 out of some 150 Group companies

operate regularly in a foreign currency. These companies

hedge their foreign exchange risk with Group Treasury.

Depending on the business area and the probability of

the cash flows, the hedging covers operative cash flows

for the next 1–24 months and is done by using internal

foreign exchange forward contracts. In this way, Konecranes

Finance Corporation can manage the foreign exchange risk

of the whole Group. The foreign currency funding of the

other Group companies and possibly some external foreign

currency funding can net some of these foreign currency

items. The residual net exposure can be covered with

commercial banks using foreign exchange forward contracts

or currency options. Currency derivatives belonging to

hedge accounting are managed in a separate portfolio than

derivatives hedging other commercial flows and funding

and cannot thus be netted out against other internal items.

These instruments are used when the hedging effect cannot

be obtained through internal netting and matching of cash

flows within the Group.

The business units’ commercial bids in a foreign currency can

be hedged by using currency options or exchange forwards,

but, in general, using currency clauses covers the risk.

For certain large crane projects, the Group applies hedge

accounting under IAS 39. Hedges are done by using

foreign exchange forward contracts. Currently, only USD

denominated projects are included in the hedge accounting.

The hedge accounting portfolio comprises both USD sales

and purchases where gross flows are hedged separately.

At the end of 2022, the hedge accounting net cash flows

totaled USD 338 million (USD 201 million in 2021).

The following table shows the transaction exposure of

Konecranes Finance Corporation as of December 31, 2022,

and December 31, 2021 (in EUR millions):

2022 2021

AED 1 1

AUD 57 38

BRL 3 5

CAD 36 20

CHF 4 3

CLP 1 1

CNY -35 -2

CZK -15 12

DKK 8 5

GBP 85 53

HUF -3 0

IDR 8 9

INR 2 3

JPY 1 2

KZT -1 0

MXN -2 -1

MYR 14 4

NOK 2 2

PHP 5 3

PLN 1 0

RON 1 0

SEK -181 -131

SGD -27 -10

THB 6 4

TWD 0 1

USD 427 284

VND 1 2

ZAR 4 6

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2022 2021

AED 10 11

AUD 12 10

BDT 1 1

BRL 19 14

CAD 11 12

CHF 9 3

CLP 11 8

CNY 90 124

CZK 10 9

DKK 6 6

GBP -18 -19

HKD 1 0

HUF 3 3

INR 8 5

IDR 17 19

JPY -8 -8

MAD 2 2

MXN 1 2

MYR 11 14

NOK 1 1

PEN 6 6

PHP 4 6

PLN 2 1

RON 2 2

RUB 6 7

SAR -2 -1

SGD 5 -37

SEK -10 -6

THB 15 18

TRY -1 0

TWD 4 4

UAH -1 2

USD 57 33

VND 1 1

ZAR 4 2

The following table shows the translation exposure, which

represents the equity of the Group in a local currency

as of December 31, 2022, and December 31, 2021

(in EUR millions):

See note 34 for the notional and fair values of derivative

financial instruments.

Changes in currency rates can affect the profitability and

equity of the Group. The US dollar has the biggest impact,

as many of the large crane projects outside the United

States are denominated in USD and because the Group has

a lot of local business operations in the United States. A

depreciation of the USD would have a negative impact.

The following table shows the theoretical effects that

changes in the EUR/USD exchange rate would have on

the Group’s annual EBIT and equity. An appreciation of US

dollar against euro for 10 % increases EBIT by EUR 48.9

million (36.9 million in 2021) and increases equity by EUR

6.4 million (3.6 million in 2021). The below table provides a

sensitivity analysis over the past two years:

Change in

EUR/USD

rate

2022

EBIT

2022

Equity

2021

EBIT

2021

Equity

+10% -40.0 -5.3 -30.2 -2.9

-10% +48.9 +6.4 +36.9 +3.6

The EBIT effect comprises transaction exposure for euro-

based companies having frequent sales in USD and the

translation exposure from EBIT generated in USD translated

into euros. The transaction position is estimated for 2022

as the USD positions change from one year to another

and these changes are mainly due to timing of major

ports projects and currencies used in them. The estimate

of the effects is based on the assumption that the USD

denominated transactions are not hedged. In practice,

however, all large projects with long maturities generating a

substantial portion of the annual changes in the transaction

position are hedged and subject to project specific pricing

and the sensitivity changes based on the net exposure

of the outstanding payables and receivables at the year

end 2022 are not material. The change in equity is the

translation exposure on the Group’s equity in USD.

Appreciating US dollar has a positive impact on Group’s

operating margin when it impacts the revenues and costs

reported in euros asymmetrically. This is due to the fact

that the exchange rate change impacts mostly both Group’s

revenues and costs and partly only either of these. If the

EBIT generated in USD based entities as well as cash flows

from long lasting projects, as they are subject to project

specific pricing which in practice may be adjusted to reflect

the currency rate changes, are excluded from the sensitivity

analysis the effect on EBIT is estimated to be approximately

a EUR 12 million increase (EUR 9 million in 2021) when the

dollar appreciates 10 percent.

Interest rate risk

Changes in market interest rates have an impact on the

Group’s net interest expenses and the market value of

interest rate derivatives. The objective for interest rate risk

management is to reduce the volatility impact the market

interest rate changes cause by optimizing the allocation

between fixed and floating interest rates according to

principles set in capital structure management.

Approximately 94% of the Group’s interest-bearing liabilities

are denominated in euro (92% in 2021). See note 27.3 for

the currency split of outstanding debt.

The portion of the Group’s long-term debt of total debt is

related to the Group’s gearing ratio. The higher the ratio

is, the bigger the share of long-term debt should be of the

total loan portfolio in line with principles set in the capital

structure management. The interest rate risk related to long

term loans may be hedged with interest rate derivatives

such as interest rate swaps for which hedge accounting is

applied. Other instruments that can be used for which no

hedge accounting is applied are forward rate agreements,

interest rate futures and interest rate options.

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A change of one percentage point in interest rates in the

Group’s long-term debt portfolio would have the following

effect on the Group’s income statement and equity:

Change in

interest

rates

2022

Income

statement

2022

Equity

2021

Income

statement

2021

Equity

+1 -7.5 +2.8 -3.6 +0.0

- 1 +7.8 -3.0 +0.9 -0.0

The sensitivity analysis is excluding the interest-bearing

assets. The effect on income statement is comprised of the

Group’s floating long-term debt which is recognized through

the statement of income. The effect on equity is comprised

of the changes in fair value of interest rate derivatives,

measured through other comprehensive income, which are

hedging the debt portfolio.

Commodity risk

By using fuel oil derivatives, the Group may reduce the

negative effect caused by oil price fluctuation. The overall

importance of the energy price risk is small compared

to other financial risks and cannot be described

as significant.

See note 34 for the notional and fair values of derivative

financial instruments.

Steel prices are fixed as a normal part of the procurement

process. Price changes naturally affect the future

procurement, but these changes can be taken into

consideration in the price quotes to the end customers.

In large crane projects, the steel structures are subcontracted

and as a normal part of the subcontracting process, the steel

is included in the price of the subcontracting (i.e. the price is

fixed with the subcontractor).

The Group can procure steel and steel components and thus

may have an inventory of those. Market price fluctuation of

steel can impact the profitability of customer projects or

cause inventory obsolescence.

33.2. Credit and counterparty risks

Credit risk arises from the potential failure of a commercial

counterparty to meet its commercial payment obligations.

To limit this risk, the Group applies a conservative credit

policy towards customers. It is Konecranes practice to

review customers carefully before entering into formal

business relationships and to require credit reports from

new customers. Customer credit risks are mitigated with

advance payments, letters of credits, payment guarantees

and credit insurance where applicable. With these actions

and careful monitoring of the customer payments credit

risks can be mitigated.

The business units manage credit risks related to their

commercial flows. There is currently no significant

concentration of credit risk regarding the commercial

activities, as the number of customers is high and their

geographic distribution is wide. It is the Group’s policy

not to fund its customers beyond regular payment terms.

See note 19 for a table of an aging analysis of accounts

receivable. The theoretical maximum credit risk equals the

carrying amount of all receivables.

Counterparty risk arises from the potential failure of

a financial institution to meet its payment obligations

regarding financial instruments. All credit risks related

to other financial instruments than the regular accounts

receivable are managed by Konecranes Group Treasury.

There is no substantial concentration of credit risk

regarding the financial instruments, since investments

are rare and hedging instruments are done with a

number of banks. Additionally, counterparties for

financial instruments are limited to the core banks of

the Group. These are all major banks with good credit

ratings. The majority of all financial instruments are of

short-term nature, with maturity of less than one year.

There are no significant deposits or loans granted with

external counterparties.

The Group has counterparty risk in form of cash holdings

in several banks around the world. Despite the active

cash management structures the Group has in place, cash

holdings globally with several banks are needed to ensure

the liquidity of Group companies. The Group Treasury

follows closely the exposure in the Group according to

principles set out in the Treasury Policy and takes necessary

actions for reducing the risk.

A credit risk is run on the financial assets of the Group,

which consist of cash and cash equivalents, receivables

and certain derivatives arising from default of the other

party, with a maximum risk equal to the carrying amount of

these instruments.

33.3. Liquidity risks

Liquidity risks concern the availability of liquid assets or

funding. Lack of funding might jeopardize normal business

operations and eventually might endanger the ability to

fulfill daily payment obligations.

For managing the liquidity risks, the Group has established

EUR 400 million committed revolving credit facility with an

international loan syndication (2017–2024). At the end of

2022 the facility was unutilized. To cover the short-term

funding needs, Konecranes Finance Corporation can borrow

from institutional investors through domestic commercial

paper program (totaling EUR 500 million). In addition,

business units around the world have working capital

facilities totaling some EUR 270 million to cover the day-

to-day funding needs. Cash and cash equivalents totalled

EUR 417.8 million at the end of 2022 (EUR 323.5 million in

2021).

See note 27.3 for the maturity profile of the Group’s

financial liabilities.

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33.4. Capital structure management

The primary objective of the Group’s capital structure

management is to ensure that it maintains a good credit

status and a healthy capital ratio to support its business

operations. At the same time, the Group also aims to

maximize shareholder value by effective use of capital.

The Group manages its capital structure and fine-tunes it to

adjust to probable changes in economic conditions. These

actions may include adjusting the dividend payment to

shareholders, buying back own shares or issuing new shares.

The Group monitors its capital structure using gearing ratio.

This is calculated as a ratio of interest-bearing liabilities less

liquid assets less loans receivable to total equity. At the end

of 2022, the gearing ratio was 48.0% (39.8% in 2021).

The Group has a quantitative target for the capital structure

in which the Interest-bearing net debt to equity ratio

(gearing) should be below 80%.

The Group decides on the split between long-term and short-

term debt in relation to the gearing ratio level. The following

table shows the rough guidelines for the portion of long–term

debt of total debt under different gearing ratio levels:

Gearing ratio level

Portion of long–term

of total debt

Under 50% Under 1/3

Between 50–80% Between 1/3 and 2/3

Over 80% Over 2/3

The Group monitors the gearing ratio level on a weekly

basis. The target of the Group’s capital management has

been met in recent years.

34. Hedge activities and derivatives

Derivatives are initially recorded in the balance sheet at

fair value and subsequently measured at fair value at each

balance sheet date. All derivatives are carried as assets

when fair value is positive and liabilities when fair value is

negative. Derivative instruments that are not designated as

hedges (hedge accounting) are measured at fair value, and

the change in fair value is recognized in the consolidated

statement of income. When the derivative is designated

as a cash-flow hedge (hedge accounting) the effective

part of the change in fair value is recognized in other

comprehensive income. Any ineffective part is recognized in

the consolidated statement of income. The foreign exchange

forward contracts are measured based on the closing

date’s observable spot exchange rates and the quoted yield

curves of the respective currencies. Interest rate swaps are

measured based on present value of the cash flows, which

are discounted based on the quoted yield curves.

34.1. Nominal and fair values of derivative

financial instruments

2022

Nominal

value

2022

Fair

value

2021

Nominal

value

2021

Fair

value

Foreign exchange

forward contracts

1,609.6 26.1 1,060.1 -13.4

Interest rate

derivative

300.0 1.8 88.4 0.0

Fuel oil derivative 1.7 -0.1 1.4 0.1

Total 1,911.3 27.8 1,149.9 -13.3

Derivatives not designated as hedging instruments

The Group also enters into other derivatives, foreign

exchange or currency options with the intention of reducing

the risk in expected sales and purchases, these other

contracts are not designated in hedge relationships and are

measured at fair value through profit or loss.

See note 32.3 for the fair values of the derivatives recognized in assets

and liabilities.

Cash flow hedges

Foreign currency and interest risk

Foreign exchange forward contracts and interest rate swaps

measured at fair value through OCI are designated as

hedging instruments in cash flow hedges of forecast sales

and purchases in US dollar and interest expenses. These

forecast transactions are highly probable, and they comprise

about 35.5% of the Group’s total hedged transaction flows.

The foreign exchange forward contract balances vary with

the level of expected foreign currency sales and purchases

and changes in foreign exchange forward rates.

At the inception of these deals the Group assess whether

the critical terms of the foreign currency forward contracts

and interest rate swaps match the terms of the expected

highly probable forecast transactions. On a quarterly

basis the Group performs qualitative effectiveness test

by checking that the hedging instrument is linked on

the relevant assets and liabilities, projected business

transactions or binding contracts according to the hedging

strategy and that there are no related credit risks. Hedge

ineffectiveness is recognized through profit or loss.

The cash flow hedges of the expected future sales,

purchases and interest expenses in 2022 and 2021 were

assessed to be highly effective and a net unrealized gain

or loss, with a deferred tax asset relating to the hedging

instruments, is included in OCI. The amounts recognized in

OCI are shown in the table below and the reclassifications

to profit or loss during the year are as shown in the

consolidated statement of income.

34.2. Fair value reserve of cash flow hedges

2022 2021

Balance as of January 1 -2.8 6.0

Gains and losses deferred to equity

(fair value reserve)

2.0 -11.0

Change in deferred taxes -0.4 2.2

Balance as of December 31 -1.2 -2.8

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Company list

(1,000 EUR)

Subsidiaries owned

by the parent company

Book

value of

Parent

company’s

share, %

Group’s

share, %

Finland: Konecranes Finance Oy 46,448 100 100

Konecranes Finland Oy 17,163 26.02 100

Konecranes Global Oy 102,391 100 100

Subsidiaries

owned by the group

Book value

of shares

Group’s

share, %

Australia: Konecranes and Demag Pty Ltd 22,172 100

MHE-Demag Australia Pty Ltd 16,858 100

Austria: Konecranes and Demag Ges.m.b.H. 29,775 100

Bangladesh: Konecranes and Demag (Bangladesh) Ltd. 111 100

Belgium: S.A. Konecranes N.V. 6,150 100

Brazil: Konecranes Demag Brasil Ltda. 32,688 100

Canada: Konecranes Canada Inc. 893 100

Chile: Konecranes Chile SpA 1 100

China: Cranes and Parts Trading (Shanghai) Co., Ltd. 5,862 100

Dalian Konecranes Company Ltd. 2,343 100

Demag Cranes & Components (Shanghai) Co., Ltd. 14,349 100

Konecranes (Shanghai) Co. Ltd. 0 100

Konecranes (Shanghai) Company Ltd. 4,499 100

Konecranes Manufacturing (Jiangsu) Co., Ltd. 29,637 100

Konecranes Port Machinery (Shanghai) Co., Ltd. 7,623 100

SWF Krantechnik Co., Ltd. 833 100

Czech Republic: Konecranes and Demag s.r.o. 2,823 100

Denmark: Konecranes Demag A/S 12,531 100

Estonia: Konecranes Oü 0 100

Finland: Nosturiexpertit Oy 10 100

France: KCI Holding France SAS 40,500 100

Konecranes (France) SAS 3,752 100

MHPS Cranes France SAS 13,180 100

Verlinde SAS 10,720 100

Germany: Demag Cranes & Components GmbH 744,202 100

Eurofactory GmbH 1,239 100

Konecranes GmbH 483,804 100

Konecranes Holding GmbH 315,262 100

Konecranes Noell GmbH 37,501 100

Konecranes Real Estate GmbH Co. & KG 36,364 100

Konecranes Real Estate Verwaltungs GmbH 28 100

Kranservice Rheinberg GmbH 1,492 100

SWF Krantechnik GmbH 15,500 100

(1,000 EUR)

Subsidiaries

owned by the group

Book value

of shares

Group’s

share, %

Greece:

Konecranes Hellas Lifting Equipment and Services

S.A.

60 100

Hong Kong: Konecranes Hong Kong Limited 0 100

Hungary: Konecranes Kft. 889 100

Konecranes Supply Hungary Kft. 1,856 100

India: Konecranes and Demag Private Limited 17,434 100

Indonesia: PT. Konecranes 2,505 100

PT MHE-Demag Indonesia 3,600 100

PT MHE-Demag Technology Indonesia 304 67

Ireland: Konecranes and Demag Limited 300 100

Israel: Konecranes Israel Ltd 0 100

Italy: Demag Cranes & Components S.r.l. 13,997 100

Donati Sollevamenti S.r.l. 2,561 100

MHPS Italia S.r.l. 0 100

Japan: Konecranes Company, Ltd. 0 100

Latvia: SIA Konecranes Latvija 2 100

Lithuania: UAB Konecranes 139 100

Luxembourg: Materials Handling International S.A. 300 100

Malaysia: Konecranes Sdn. Bhd. 534 100

Mechanical Handling Engineering (M) Sdn Bhd 427 100

MHE-Demag Logistics Malaysia Sdn Bhd 2,669 100

MHE-Demag Malaysia Sdn Bhd 7,003 100

Rainfields Estate Sdn Bhd 1,299 100

Mexico: Konecranes Mexico S.A. de C.V. 2,188 100

Morocco: Konecranes Maghreb S.a.r.l. 50 100

The

Netherlands:

Konecranes B.V. 4,201 100

Konecranes Holding B.V. 313,851 100

Port Software Solutions B.V. 37,412 100

TBA B.V. 3,678 100

Norway: Konecranes AS 3,588 100

Peru: Konecranes Peru S.R.L. 0 100

Philippines: MHE-Demag (P), Inc. 5,826 100

Poland: Konecranes and Demag Sp. z o.o. 1,359 100

Portugal: Konecranes and Demag, Lda. 3,293 100

Romania: S.C. Konecranes S.A. 98 100

S.C. TBA RO S.r.l. 10 100

Russia: AO "Konecranes Demag Rus" 0 100

Saudi Arabia: Saudi Cranes & Steel Works Factory Co. Ltd. 9,635 100

112

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

(1,000 EUR)

Subsidiaries

owned by the group

Book value

of shares

Group’s

share, %

Singapore: KCI Cranes Holding (Singapore) Pte. Ltd. 114,764 100

MHE-Demag (S) Pte. Ltd. 199,621 100

Slovakia: Konecranes Slovakia s.r.o. 200 100

Slovenia: Konecranes, d.o.o. 200 100

South Africa: Konecranes and Demag (Pty) Ltd. 0 100

Port Equipment Southern Africa (Pty) Ltd 0 100

Spain: Konecranes and Demag Ibérica, S.L.U. 31,799 100

Sweden: Konecranes AB 1,229 100

Konecranes Lifttrucks AB 20,892 100

Konecranes Sweden Holding AB 1,682 100

Ulvaryd Fastighets AB 1,168 100

Switzerland: Konecranes and Demag AG 17,205 100

Taiwan: MHE-Demag Taiwan Company Limited 1,813 100

Thailand: Katrolin Enterprise (T) Ltd 86 100

Katrolin Holding (T) Ltd 98 100

Konecranes (Thailand) Ltd.* 118 49

Mahakorn (T) Ltd 83 100

MHE-Demag (T) Ltd 301 100

MHE-Demag Technology (T) Ltd 260 100

Scenic Wealth (T) Ltd 144 100

Turkey: Konecranes Ticaret Ve Servis Limited Sirketi 93 100

Ukraine: Konecranes Ukraine JSC 2,049 100

PJSC "Zaporozhje Kran Holding" 204 100

JSC "Zaporozhcran" 0 90.43

United Arab

Emirates:

Demag Cranes & Components Holding Ltd. 0 100

Demag Cranes & Components (Middle East) FZE 14,991 100

Konecranes Middle East FZE 1,774 100

United

Kingdom:

KCI Holding UK Ltd. 13,656 100

Konecranes Demag UK Limited 6,387 100

Lloyds Konecranes Pension Trustees Ltd. 0 100

Morris Material Handling Ltd. 564 100

TBA Doncaster Limited 2,011 100

TBA Leicester Limited 10,342 100

UKMHPS Limited 39,198 100

U.S.A. Demag Cranes & Components Corp. 63,501 100

KCI Holding USA Inc. 53,901 100

Konecranes, Inc. 49,962 100

Konecranes Nuclear Equipment & Services, LLC 0 100

MMH Americas, LLC 0 100

Morris Material Handling, Inc. 66,978 100

R&M Materials Handling, Inc. 7,688 100

(1,000 EUR)

Subsidiaries

owned by the group

Book value

of shares

Group’s

share, %

Vietnam: Konecranes Vietnam Co., Ltd 0 100

MHE-Demag Vietnam Company Ltd 2,790 100

* Konecranes Group has the majority representation on the entity’s board of directors and approves all major

operational decisions and thereby Konecranes consolidates them in the Group’s financial statements.

Other shares and joint operations

Assets

value

Group’s

share, %

Estonia: AS Konesko 4,448 49.46

Finland: Kiinteistöosakeyhtiö Kuikantorppa 261 50

Investments accounted for using the equity method

Assets

value

Group’s

share, %

China: Guangzhou Technocranes Company, Ltd. 428 25

Jiangyin Dingli Shengshai High Tech Industrial Crane

Company, Ltd.

65 30

Shanghai High Tech Industrial Crane Company, Ltd. 2,925 28

Finland: Fantuzzi Noell Baltic Oy 388 25

France: Boutonnier Adt Levage S.A. 551 25

Levelec S.A. 228 20

Manulec S.A. 213 25

Manelec S.A.R.L. 106 25

S.E.R.E. Maintenance S.A. 255 25

Germany:

AQZ Ausbildungs- und Qualifizierungszentrum

Düsseldorf GmbH

0 30

The

Netherlands:

TBA Consultancy B.V. 773 49

Singapore: MHE-Demag Techonology (S) Pte. Ltd. 552 49.99

Switzerland: Demag IP Holdings GmbH 159 50

Thailand: CSA Crane Service Asia Company Ltd 74 49

United Arab

Emirates:

Crane Industrial Services LLC 1,074 49

Available-for-sale investments

Book value

of shares

Group’s

share, %

Finland: East Office of Finnish Industries Oy 50 5.26

Dimecc Oy 120 5.69

Kiinteistö Oy Pärjä 26 46.67

Levator Oy 0 19

Vierumäen Kuntorinne Oy 326 3.3

France: Heripret Holding SAS 53 19

Malaysia: Kone Products & Engineering Sdn. Bhd. 0 10

Venezuela: Gruas Konecranes CA 20 10

Others: 187

Total: 782

113

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Parent company statement of income − FAS

(1,000 EUR)

Jan 1–Dec 31

2022

Jan 1–Dec 31

2021

Note:

2 Depreciation and impairments -184 -179

3 Other operating expenses -15,627 -48,913

Operating profit -15,810 -49,092

4 Financial income and expenses 81,669 35,841

Income before appropriations and taxes 65,859 -13,251

5 Appropriations 39,445 52,388

6 Income taxes -4,979 -362

Net income 100,325 38,775

114

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Parent company balance sheet − FAS

(1,000 EUR) Dec 31, 2022 Dec 31, 2021

Note:

ASSETS

NON-CURRENT ASSETS

Tangible assets

7 Machinery and equipment 364 547

364 547

8 Investments

Investments in Group companies 153,040 153,040

Other shares and similar rights of ownership 171 170

153,211 153,210

Total non-current assets 153,575 153,758

CURRENT ASSETS

Long-term receivables

Loans receivable from Group companies 763,780 1,043,232

763,780 1,043,232

Short-term receivables

Accounts receivable 0 10,988

Amounts owed by Group companies

Accounts receivable 4,397 4,538

10 Deferred assets 103,155 74,897

Other receivables 3,560 8,407

10 Deferred assets 374 2,703

111,485 101,534

Cash in hand and at banks 3 3

Total current assets 875,268 1,144,769

TOTAL ASSETS 1,028,843 1,298,527

(1,000 EUR) Dec 31, 2022 Dec 31, 2021

Note:

SHAREHOLDERS’ EQUITY

AND LIABILITIES

11 EQUITY

Share capital 30,073 30,073

Share premium account 39,307 39,307

Paid in capital 775,176 774,591

Retained earnings 81,367 141,510

Net income for the period 100,325 38,775

1,026,248 1,024,256

APPROPRIATIONS

Depreciation difference 0 65

LIABILITIES

Long-term liabilities

Loans payable - Intercompany 0 893

0 893

Current liabilities

12 Bond 0 249,841

Accounts payable 1,163 9,892

Liabilities owed to Group companies

Accounts payable 144 140

13 Accruals 0 2,102

Other short-term liabilities 71 1,001

13 Accruals 1,216 10,338

2,595 273,313

Total liabilities 2,595 274,206

TOTAL SHAREHOLDERS’ EQUITY AND

LIABILITIES

1,028,843 1,298,527

115

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Parent company cash flow − FAS

(1,000 EUR)

Jan 1–Dec 31

2022

Jan 1–Dec 31

2021

Cash flow from operating activities

Operating income -15,810 -49,092

Adjustments to operating profit

Depreciation and impairments 184 179

Group contributions from subsidiaries 52,340 58,320

Operating income before changes in net working capital 36,713 9,407

Change in interest-free short-term receivables 11,977 -4,435

Change in interest-free short-term liabilities -18,060 7,300

Change in net working capital -6,084 2,864

Cash flow from operations before financing items and taxes 30,630 12,271

Interest received 5,352 5,231

Interest paid -4,371 -4,514

Other financial income and expenses -1,969 -1,866

Income taxes paid -26 -5,049

Financing items and taxes -1,014 -6,198

NET CASH FROM OPERATING ACTIVITIES 29,616 6,073

(1,000 EUR)

Jan 1–Dec 31

2022

Jan 1–Dec 31

2021

Cash flow from investing activities

Investments in other shares -1 0

Capital expenditure and advance payments to tangible assets 0 -35

Dividends received 40,000 37,500

NET CASH USED IN INVESTING ACTIVITIES 39,999 37,465

Cash flow before financing activities 69,615 43,537

Cash flow from financing activities

Proceeds from share based payments and share issues 585 0

Repayments of long-term receivables 278,560 26,101

Repayments of long-term liabilities -249,841 0

Dividends paid -98,918 -69,638

NET CASH USED IN FINANCING ACTIVITIES -69,614 -43,537

CHANGE OF CASH AND CASH EQUIVALENTS 0 0

Cash and cash equivalents at beginning of period 3 3

Cash and cash equivalents at end of period 3 3

CHANGE OF CASH AND CASH EQUIVALENTS 0 0

116

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Notes to the parent company’s Financial Statement

1. Accounting principles

The financial statements of the company have been

prepared in euro and in accordance with accounting

principles generally accepted in Finland.

STATEMENT OF INCOME

(1,000,000 EUR)

2. Depreciation and impairments

2022 2021

Machinery and equipment 0.2 0.2

Total 0.2 0.2

2022 2021

Wages and salaries 3.2 3.3

Pension costs 0.5 0.5

Other personnel expenses 0.1 0.0

Other operating expenses 0.4 0.4

Total 4.2 4.2

2022 2021

Remuneration to Board 0.7 0.6

Other wages and salaries 2.5 2.7

Total 3.2 3.3

The average number of personnel 4 5

Auditors fees

Audit 0.7 0.6

Other services 0.1 0.0

Total 0.8 0.6

2022 2021

Financial income from

long-term investments:

Dividend income from Group companies 80.0 37.5

Dividend income total 80.0 37.5

Interest income from

long-term receivables:

From Group companies 5.2 5.2

Interest income from long-term

receivables total

5.2 5.2

Financial income from long-term

investments total

85.2 42.7

Interest and other financial income 0.0 0.1

Interest and other financial income

total

0.0 0.1

Interest expenses and other financial

expenses:

Other financial expenses 3.5 7.0

Interest expenses and other financial

expenses total

3.5 7.0

Financial income and expenses total 81.7 35.8

3. Other operating expenses

and personnel

Costs and expenses in the Statement of Income were

as follows:

Wages and salaries in accordance with the Statement

of Income:

4. Financial income and expenses

5. Appropriations

6. Income taxes

BALANCE SHEET

7. Machinery and equipment

2022 2021

Difference between planned

and untaxed depreciations

0.1 0.0

Group contributions received

from subsidiaries

39.4 52.3

Total 39.4 52.4

2022 2021

Taxes on appropriations 7.9 10.5

Taxes on ordinary operations -2.9 -10.1

Taxes from previous years 0.0 0.0

Total 5.0 0.4

2022 2021

Acquisition costs as of January 1 1.2 1.2

Increase 0.0 0.0

Acquisition costs as of December 31 1.2 1.2

Accumulated depreciation January 1 -0.7 -0.5

Accumulated depreciation -0.2 -0.2

Total as of December 31 0.4 0.5

The values of fixed assets are based on original acquisition

values. Depreciation periods, which are based on estimated

financial operating times, are as follows:

• Immaterial rights 5–10 years

• Machines and inventory 4–10 years

117

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

8. Investments 11. Equity

9. Treasury shares

10. Deferred assets

12. Interest-bearing liabilities

14. Contingent liabilities

and pledged assets

15. Nominal and fair values of

derivative financial instruments

2022 2021

Acquisition costs as of January 1 153.2 153.2

Increase 0.0 0.0

Total as of December 31 153.2 153.2

2022 2021

Share capital as of January 1 30.1 30.1

Share capital as of December 31 30.1 30.1

Share premium account as of January 1 39.3 39.3

Share premium account

as of December 31

39.3 39.3

Paid in capital as of January 1 774.6 774.6

Increase 0.6 0.0

Paid in capital as of December 31 775.2 774.6

Retained earnings as of January 1 180.3 211.1

Dividend paid -98.9 -69.6

Retained earnings as of December 31 81.4 141.5

Net income for the period 100.3 38.8

Shareholders’ equity

as of December 31

1,026.2 1,024.3

Distributable equity

Paid in capital as of December 31 775.2 774.6

Retained earnings as of December 31 81.4 141.5

Net income for the period 100.3 38.8

Total 956.9 954.9

2022 2021

Number of shares as of January 1 87,447 87,447

Decrease -32,140 0

Number of shares as of December 31 55,307 87,447

2022 2021

Group contributions 39.4 52.3

Income taxes 3.5 8.4

Payments which will be realized during

the next financial year

61.9 22.7

Interest 2.4 2.6

Total 107.1 86.0

2022 2021

Bond, short-term 0.0 249.8

Total 0.0 249.8

2022 2021

For obligations of subsidiaries

Group guarantees 1,238.0 1,235.2

Leasing liabilities

Next year 0.5 0.5

Later on 0.1 0.5

Total 0.6 0.9

2022 2022 2021 2021

Fair

value

Nominal

value

Fair

value

Nominal

value

Foreign exchange

forward contracts

0.0 1.6 0.0 0.0

2022 2021

Total by category

Guarantees 1,238.0 1,235.2

Other liabilities 0.6 0.9

Total 1,238.6 1,236.2

2022 2021

Domicile

Carrying

amount

Carrying

amount

Konecranes Finance Corp. Hyvinkää 46.4 46.4

Konecranes Finland Corp. Hyvinkää 4.2 4.2

Konecranes Global Corp. Hyvinkää 102.4 102.4

Total 153.0 153.0

2022 2021

East Office of Finnish Industries Oy 0.1 0.1

Dimecc Oy 0.1 0.1

China Office of Finnish

Industries

0.0 0.0

Total 0.2 0.2

Investments in Group companies

Other shares and similar rights of ownership

Leasing contracts mainly have a maturity of three years

and they have no terms of redemption.

Derivatives are used for currency rate hedging only.

The derivative financial instruments are recognized

according to KPL 5:2a at fair value in the parent company

financial statements and the company does not apply hedge

accounting for these derivatives.

A EUR 250 million bond was issued on June 9, 2017 and it

matured on June 9, 2022. The bond had a three-month per

call and an annual coupon rate of 1.75%.

13. Accruals

2022 2021

Wages, salaries and other personnel

expenses

1.0 1.9

Interest 0.0 2.5

Other items 0.2 8.0

Total 1.2 12.4

118

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Board of Directors’ proposal to the Annual General Meeting

The parent company’s non-restricted equity is EUR 956,868,289.67 of which the net income for the year is

EUR 100,324,987.85.

The Group’s non-restricted equity is EUR 1,364,732,000.

According to the Finnish Companies Act, the distributable funds of the company are calculated based on the parent

company’s non-restricted equity. For the purpose of determining the amount of the dividend the Board of Directors has

assessed the liquidity of the parent company and the economic circumstances subsequent to the financial year-end.

Based on such assessments the Board of Directors proposes to the Annual General Meeting that a dividend of EUR 1.25

will be paid on each share and that the remaining non-restricted equity is retained in shareholders’ equity.

Espoo, February 1, 2023

Christoph Vitzthum

Chairman of the Board

Pauli Anttila

Board member

Ulf Liljedahl

Board member

Per Vegard Nerseth

Board member

Päivi Rekonen

Board member

Anders Svensson

CEO

Pasi Laine

Vice chairman

Janina Kugel

Board member

Niko Mokkila

Board member

Sami Piittisjärvi

Board member

Helene Svahn

Board member

119

FINANCIAL REVIEW 2022

CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Auditor’s report

(Translation of the Swedish original)

To the Annual General Meeting of Konecranes Plc

Report on the Audit of Financial Statements

Opinion

We have audited the financial statements of Konecranes

Plc (business identity code 0942718-2) for the year ended

December 31, 2022. The financial statements comprise the

consolidated balance sheet, statement of income, statement

of comprehensive income, statement of changes in equity,

statement of cash flows and notes, including a summary

of significant accounting policies, 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 as well as its

financial performance and its cash flows in accordance

with International Financial Reporting Standards (IFRS)

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 7.1 to the consolidated financial statements

and note 3 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.

120

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CORPORATE GOVERNANCE STATEMENT 2022 REMUNERATION RISK MANAGEMENT FINANCIAL REVIEW

Key Audit Matter How our audit addressed the Key Audit Matter

Revenue recognition of long-term contracts

and related provisions

Refer to note 2.2 Use of estimates and judgments,

note 2.3 Summary of significant accounting

policies, note 5, note 6 and note 24.

In accordance with its accounting principles,

Konecranes applies the percentage of completion

(PoC) method (performance obligations satisfied

over time) for recognizing revenue from long-term

crane projects. The percentage of completion is

based on the cost-to-cost method.

The percentage of completion method of accounting

involves the use of significant management

assumptions, estimates and projections, principally

relating to future material, labor and project-

related overhead costs and the estimated stage

of completion. In year 2022, approximately 9

% percent of the sales of 3.4 billion euro were

recognized under the PoC method. Revenue

recognition of long-term contracts is a key audit

matter and a significant risk of misstatement as

defined by EU Regulation No 537/2014, point (c)

of Article 10(2).

Konecranes makes several types of provisions

related to risks associated with long-term project

contracts and PoC accounting. These PoC related

provisions require high level of management

judgment and are a key audit matter due to that

reason.

Our audit procedures to address the risk of material

misstatement in respect of the long-term contracts

included among others:

• Assessing the Group’s accounting policies over

revenue recognition of long-term contracts;

• Gaining an understanding of the PoC revenue

recognition process;

• Examination of the project documentation

and testing the PoC calculations and inputs of

estimates in the calculations and comparing the

estimates to actuals;

• Analytical procedures;

• Assessing significant judgments made by

management based on an examination of the

associated project documentation and discussion

on the status of projects under construction with

finance and project managers of the Company;

and

• Assessing the Group’s disclosures in respect of

revenue recognition.

We have designed our audit procedures to be

responsive to this specific audit area and our

procedures included among others:

• Gaining an understanding of the PoC related

provisions process;

• Testing the provision calculations and the inputs

of estimates in these calculations and comparing

estimates to actuals; and

• Performing inquiries with management with

regards to any significant events or legal matters

that could affect the provisions.

Key Audit Matter How our audit addressed the Key Audit Matter

Revenue recognition

Refer to note 2.3 Summary of significant

accounting policies and note 5.

According to the Group’s accounting policies

revenue is recognized at an amount of

consideration to which the Group expects to be

entitled in exchange for transferring promised

goods or services to a customer. Goods and

services are generally considered to be transferred

when the customer obtains control. The terms and

conditions of sales contracts vary by market and, in

addition, the local management might feel pressure

to achieve the revenue targets set.

Revenue recognition is a key audit matter and a

significant risk of material misstatement as defines

by EU Regulation No 537/2014, point (c) of Article

10(2) due to the significant risk relating to an

incorrect timing of recognition of revenue.

Our audit procedures to address the risk of material

misstatement in respect of correct timing of

revenue recognition included among others:

• Analytical procedures;

• Assessing the Group’s accounting policies over

revenue recognition compared to applicable

accounting standards;

• Assessing the revenue recognition process and

–methodologies and testing controls;

• Testing revenue with substantive analytical

procedures and by testing sales transactions;

• Assessing the Group’s disclosures in respect of

revenues.

Valuation of goodwill

Refer to note 2.2 Use of estimates and judgments,

note 2.3 Summary of significant accounting policies

and note 13.

The value of goodwill at the date of the financial

statements on 31 Dec 2022 amounted to 1.0 billion

euros representing 23 % of total assets and 71 %

of equity (2021: 1.0 billion euro, 27% of the total

assets and 75 % of equity).

Valuation of goodwill is tested annually through

goodwill impairment test. Konecranes has allocated

goodwill to cash generating units (CGUs) which

is the level for goodwill impairment test. The

recoverable amount of a cash generating unit is

based on value in use calculations, the outcome

of which could vary significantly if different

assumptions were applied. There are a number of

assumptions used to determine the value in use

of the cash generating units, including revenue

growth, development of fixed costs, the operating

margin and the discount rate applied. Changes in

the above-mentioned assumptions may result in an

impairment of goodwill.

Our audit procedures to address the risk of

material misstatement relating to goodwill

valuation included among others, involving our

valuation specialists to assist us in evaluating

the assumptions and methodologies used by

the Group, in particular those relating to the

discount rate. We specifically focused on the

cash generating units for which reasonably

possible changes in assumptions could cause

the carrying value to exceed its recoverable

amount. We also assessed the historical accuracy

of managements’ estimates. We assessed the

Group’s disclosures in note 13 in the financial

statements about the assumptions to which

the outcome of the impairment tests were

more sensitive.

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Key Audit Matter How our audit addressed the Key Audit Matter

The annual impairment test is a key audit matter

because

• The assessment process is complex and is based

on numerous judgmental estimates;

• It is based on assumptions relating to market or

economic conditions; and

• Of the significance of the goodwill to the balance

sheet total.

Valuation of goodwill is a significant risk of

misstatement as defined by EU Regulation No

537/2014, point (c) of Article 10(2).

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 International Financial Reporting Standards (IFRS)

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.

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• Obtain sufficient appropriate audit evidence regarding

the financial information of the entities or business

activities within the group to express an opinion on the

consolidated financial statements. We are responsible for

the direction, supervision and performance 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

Information on our audit engagement

We were first appointed as auditors by the Annual General

Meeting on March 8, 2006, and our appointment represents

a total period of uninterrupted engagement of 17 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 Governance publication 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

Governance publication 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 accordance with the

applicable laws and regulations.

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 accordance with the applicable

laws and regulations.

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.

Opinions based on assignment of the Audit Committee

We support that the financial statements should be

adopted. The proposal by the Board of Directors regarding

the use of the distributable equity shown in the balance

sheet for the parent company is in compliance with the

Limited Liability Companies Act. We support that the

Members of the Board of Directors and the Managing

Director of the parent company should be discharged from

liability for the financial period audited by us.

Helsinki, February 1, 2023

Ernst & Young Oy

Authorized Public Accountant Firm

Toni Halonen

Authorized Public Accountant

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Independent Auditor’s Report on Konecranes Plc’s ESEF-

Consolidated Financial Statements

(Translation of the Swedish original)

To the Board of Directors of Konecranes Plc

We have performed a reasonable assurance engagement on

the iXBRL tagging of the consolidated financial statements

included in the digital files 549300EF0CDEQZBMA096-

2022-12-31-sv.zip of Konecranes Plc for the financial year

January 1 – December 31, 2022 to ensure that the financial

statements are marked/tagged with iXBRL in accordance

with the requirements of Article 4 of EU Commission

Delegated Regulation (EU) 2018/815 (ESEF RTS).

Responsibilities of the Board of Directors

and Managing Director

The Board of Directors and Managing Director are

responsible for the preparation of the Report of Board

of Directors and financial statements (ESEF financial

statements) that comply with the ESESF RTS. This

responsibility includes:

• preparation of ESEF-financial statements in accordance

with Article 3 of ESEF RTS

• tagging the consolidated financial statements included

within the ESEF- financial statements by using the iXBRL

mark ups in accordance with Article 4 of ESEF RTS

• ensuring consistency between ESEF financial statements

and 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 ESEF RTS.

Auditor’s Independence and Quality Control

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 auditor applies International Standard on Quality

Control (ISQC) 1 and therefore maintains a comprehensive

quality control system including documented policies and

procedures regarding compliance with ethical requirements,

professional standards and applicable legal and regulatory

requirements.

Auditor’s Responsibilities

In accordance with the Engagement Letter we will express an

opinion on whether the electronic tagging of the consolidated

financial statements complies in all material respects with

the Article 4 of ESEF RTS. We have 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 tagging of the primary financial statements

in the consolidated financial statements complies in all

material respects with Article 4 of the ESEF RTS

• whether the tagging of the notes to the financial

statements and the entity identifier information in the

consolidated financial statements complies in all material

respects with Article 4 of the ESEF RTS

• whether the ESEF-financial statements are consistent

with the audited financial statements

The nature, timing and extent of the procedures selected

depend on the auditor’s judgement including the

assessment of risk of material departures from requirements

sets out in the ESEF RTS, whether due to fraud or error.

We believe that the evidence we have obtained is sufficient

and appropriate to provide a basis for our statement.

Opinion

In our opinion the tagging of the consolidated financial

statement included in the ESEF financial statement of

Konecranes Plc for the year ended December 31, 2022

complies in all material respects with the requirements of

ESEF RTS.

Our audit opinion on the consolidated financial statements

of Konecranes Plc for the year ended December 31, 2022 is

included in our Independent Auditor’s Report dated February

1, 2023. In this report, we do not express an audit opinion

any other assurance on the consolidated financial statements.

Helsinki 28.2.2023

Ernst & Young Oy

Authorized Public Accountant Firm

Toni Halonen

Authorized Public Accountant

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Company information for ESEF reporting

Domicile of entity Hyvinkää

Legal form of entity Publicly Listed Company

Country of incorporation Finland

Address of entity's registered office Koneenkatu 8, 05830 Hyvinkää, Finland

Principal place of business Hyvinkää

Description of nature of entity's

operations and principal activities

Konecranes is a world-leading manufacturer and servicer of

cranes, lifting equipment and machine tools, serving a broad range

of customers, including manufacturing and process industries,

shipyards, ports and terminals. Konecranes operates internationally,

with its products being manufactured in North and South America,

Europe, Africa, the Middle East, and Asia and sold worldwide.

Konecranes has three reportable segments: Service, Industrial

Equipment and Port Solutions.

Name of parent entity Konecranes Plc

Name of ultimate parent of group Konecranes Plc

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Shares and shareholders

Number of

and votes

% of shares

and votes

1 Solidium Oy 8,000,000 10.1%

2 HC Holding Oy Ab 7,931,238 10.0%

3 Gustavson Stig and family* 2,366,157 3.0%

4 Ilmarinen Mutual Pension Insurance Company 2,100,000 2.7%

5 Varma Mutual Pension Insurance Company 1,785,293 2.3%

6 Holding Manutas Oy 1,065,000 1.3%

7 Elo Mutual Pension Insurance Company 1,025,000 1.3%

8 Nordea Funds 725,103 0.9%

9 Svenska Litteratursällskapet i Finland 724,000 0.9%

10 Samfundet Folkhälsan i Svenska Finland rf 615,600 0.8%

Ten largest registered shareholders' total ownership 26,337,391 33.2%

Nominee registered shares 28,253,413 35.7%

Other shareholders 24,575,795 31.0%

Shares held by Konecranes Plc 55,307 0.1%

Total 79,221,906 100.0%

Change in

shareholding

in 2022

Number

of shares

owned

% of

and votes

Board of Directors 9,577 34,631 0.0%

Group Executive Board 6,635 162,796 0.2%

Total 16,212 197,427 0.2%

Number of

shareholders

% of

shareholders

Number of

and votes

% of shares

and votes

1−100 33,052 57.5% 1,373,869 1.7%

101−1,000 21,489 37.4% 7,079,533 8.9%

1,001−10,000 2,682 4.7% 6,819,275 8.6%

10,001−100,000 169 0.3% 4,565,655 5.8%

100,001−1,000,000 25 0.0% 7,153,852 9.0%

1,000,001− 8 0.0% 23,976,309 30.3%

Registered shareholders total 57,425 100.0% 50,968,493 64.3%

Nominee registered shares 11 0.0% 28,253,413 35.7%

Total 57,436 100.0% 79,221,906 100.0%

% of shares

and votes

Households 21.3%

Public sector organizations 17.6%

Private companies 13.7%

Financial and insurance institutions 5.5%

Non-profit organizations 5.3%

Foreigners 1.0%

Nominee registered shares 35.7%

Total 100.0%

According to the register of Konecranes Plc’s shareholders kept by Euroclear Finland Oy, there

were 57,448 (2021: 49,299) shareholders at the end of the 2022.

Largest shareholders according to the share register on December 31, 2022

Shares owned by the members of the Board and of Directors and of the Group

Executive Board on December 31, 2022

Breakdown of share ownership by number or shares owned

on December 31, 2022

Breakdown of share ownership by shareholder category

on December 31, 2022

* Konecranes Plc has on December 28, 2011 received information according to which the Chairman of the

company’s Board of Directors Stig Gustavson has donated all of his shares in Konecranes Plc to his near relatives

retaining himself for life the voting rights and right to dividend attached to the donated shares. The donation

encompassed in total 2,069,778 shares.

Source: Euroclear Finland Oy, December 31, 2022.

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