Investor Presentaiton

BOARD OF DIRECTORS' REPORT introduced during the second half of the year with approximately 12,000 employees completing the course. KONE hosts a European Employee Forum annually to bring together employee representatives and top management to discuss issues ranging from safety to business development. A smaller working group meets two to four times a year to ensure continuous discussion on important developments affecting our employees. In 2021, the Employee Forum was conducted virtually due to the COVID- 19 pandemic. In addition to regular business updates and discussion about the Sustainable Success with customers strategy, the specific focus areas in the forum were Lean KONE, smart and sustainable field operations as well as safety, sustainability and quality. Training and development We strive to have the best professionals with the right competencies in each position. We facilitate this effort, and increase the motivation, engagement and continuous development of the personnel, through regular performance discussions, which take place at least twice a year. In addition, we actively encourage all employees to prepare individual development plans and to complete their talent profiles. We promote the 70-20-10 approach for learning. This means that we believe that 70% of our learning happens through experiences, 20% through social learning and 10% through formal development and training. We provide a rich training offering for our employees, which includes more than 8,500 courses in 36 languages. The courses vary from 2- minute digital nanomodules to trainer-led courses lasting several days. Amidst the COVID-19 pandemic, we have actively encouraged employees to make use of learning opportunities as well as continued to develop new online learning offerings and virtualize our current instructor-led programs. Total learning hours increased by 12% compared to 2020. On average, KONE employees used 43 hours on formal development and training. In 2021, we established an upskilling program to support KONE Sustainable Success with Customer strategy realization from a competence development perspective. The program is focused on driving competence development efforts for organization-wide competences related to, for example, Lean thinking as well as digital and customer understanding, and it covers 80% of KONE employees. We have continued to invest in building capabilities to sell and deliver digital solutions and services. In connection to the continuing roll-out of KONE DX Class elevators, salespeople, engineers and field teams have been actively trained on these topics as well as on KONE 24/7 Connected Services and KONE's ecosystem partnering. Talent attraction A key focus area within the KONE people strategy is attracting the best talent by providing a great employee experience. Although recruitment volumes continued to fluctuate during 2021 due to COVID-19, we saw an overall increase in recruitment volumes. Targeting new competencies and increasing diversity through recruitment continued to be one of KONE's key focus areas. Efforts to increase diversity through recruitment realized during the year with a large number of applicants and hires outside of elevator and escalator industry. We were also able to recruit an increasing number of people with new competencies related to, for example, digitalization and solution selling to KONE. Systematic activities around talent attraction and building talent pipelines have helped us to reach shorter times to hire and improved quality of hires. Due to COVID-19 related travel restrictions, the annual KONE International Trainee Program (ITP) could not be organized. Instead, we offered local trainee positions for university students. KONE also continued to further strengthen its employer brand through active school collaboration. Safety Improving safety at work remained a top priority in 2021. KONE has a company-wide safety management system in place to guide us in achieving continual improvement. To support in controlling the main risks in the workplace and keep our workers safe, we introduced nine KONE core safety principles during the reporting year. The principles are common to all KONE employees, subcontractors and everyone we work with. KONE employees receive health and safety training relevant to their work, enabling it to be performed in a professional and safe manner. All KONE employees are required to complete a general safety training related to our safety management framework and KONE's Health and Safety Policy. At the end of the reporting year, over 80% of KONE employees had completed the general safety training. During the year, we focused on strengthening safety leadership competences by using a new interactive e- learning, which was completed by over 6,400 of our safety-, quality-, and people managers by the end of the year. Managers perform regular audits to measure compliance with KONE's policies, processes and defined working methods. Corrective actions are taken if deviations are identified. KONE also conducts process audits to identify possible obstacles to work safely. If any are found, the work in question is stopped until a safe method is approved. In 2021, the IIFR (Industrial Injury Frequency Rate) was 1.6 with the average lost days per incident of 27.8 (27.3). The previous year was exceptional due to the pandemic, with IIFR as low as 1.2. We continue to target zero injuries and expect our years of favorable safety progress to continue, with strong emphasis on safety culture and human factors. In order to move towards our ultimate target, we aim at getting IIFR below 1.0 by the end of 2024. The number of safety observations recorded in KONE Safety Solution, our global safety reporting tool that was fully deployed in 2021, increased by 22%. All employees are encouraged to actively report safety near misses and incidents as it provides valuable information for improving safety. Our objective during the year was to enhance the quality, investigation and analysis of our near miss and incident reports, as well as to improve transparency. The global KONE Safety Week was organized in all KONE units in May 2021 with a continued theme of safe behavior, complemented with elements of psychological safety. Various safety related activities were held during the week for both internal and external stakeholders. Due to the pandemic, most of the activities were organized virtually. A new global year- end safety campaign was also organized to strengthen safety commitments. The safety of the people using elevators, escalators and automatic building doors involves everyone from technology and maintenance service providers to building owners and equipment users. We work closely with our customers to help them recognize and deal with situations that could lead to safety risks. We communicate actively about safety, organize activities and provide training along with educational materials to our customers and the general public to help equipment users stay safe. 17 KONE ANNUAL REVIEW 2021