Risk management
Konecranes’ Board of Directors has defined and adopted a set of risk management principles based on widely accepted international good management practices. The Audit Committee evaluates and reports on the adequacy and appropriateness of internal controls and risk management to the Board.
Risk is anything that will clearly affect Konecranes’ ability to achieve its business objectives and execute its strategies. Risk management is part of Konecranes’ control system and is designed to ensure that any risks related to the Company’s business operations are identified and managed adequately and appropriately to always safeguard the continuity of Konecranes’ business and operations.
Risk management is considered an integral part of running Konecranes’ operations. The Company’s corporate risk management principles provide a basic framework for risk management across Konecranes, and each legal entity and/or operating unit is responsible for its own risk management. This approach guarantees the best possible knowledge of local conditions, experience and relevance. The same principle is also applied to financial reporting.
The risk management principles define risk management as a continuous and systematic activity aimed at protecting employees from personal injury, safeguarding the assets of all Group companies and the Group as a whole, and ensuring stable and profitable financial performance. By minimizing losses due to realized risks and optimizing the cost of risk management, Konecranes can safeguard its overall long-term competitiveness. Konecranes has assessed its strategic, operational, financial and hazard-related risks.
Management of financial risks is described in note 33 to Konecranes’ Financial Statements 2025.
Internal Control
Konecranes has established a structured internal controls framework to support operational efficiency and risk management and ensure reliable financial and operational reporting. Internal control related to financial reporting is designed to provide reasonable assurance concerning the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, applicable laws and regulations, and other requirements covering listed companies.
Control environment
Corporate governance and business management at Konecranes are based on the Company’s four core values: Putting customers first, Doing the right thing, Driving for better and Winning together. The control environment is the foundation for all other components of internal control and for promoting employee awareness of key issues, supporting the execution of strategy and regulatory compliance. The Board of Directors and Management are responsible for defining Konecranes Group’s control environment through business management structures, corporate policies, instructions and financial reporting frameworks. These include Konecranes’ Code of Conduct, Anti-Corruption Policy, Konecranes’ Controller’s Manual, as well as other Konecranes policies and instructions. The interpretation and application of accounting standards is the responsibility of the global accounting function. Policies and instructions are updated when necessary and reviewed periodically.
In 2025, Konecranes had three Business Areas: Industrial Service, Industrial Equipment, and Port Solutions. Port Solutions also incorporates those service branches and spare part units which are dedicated to serve the port customer segment.
In 2025, Business Area Industrial Service had three business lines: Field Service, Component spare parts and Parts supply. Business Line Field Service was internally managed and reported as a line organization through three regions – Europe, Middle East and Africa (EMEA), Americas (AME) and Asia-Pacific (APAC). Other business lines were managed as line organizations globally.
Business Area Industrial Equipment had three business units: Standard Equipment, Solutions, and Warehouse Automation. Within Business Unit Standard Equipment, Business Line Industrial Cranes was managed and reported as a line organization through the same three regions as Field Service, and Business Line Components was managed and reported as a global line organization. Within Business Unit Solutions, Business Line Process Cranes was managed and reported through the three regions, and Business Line Nuclear Cranes was managed and reported as a global line organization.
Business Area Port Solutions was operated as line organizations further divided into business units, and under business units further into product lines. These Business Areas had clear product-line profit responsibilities, ensuring a flawless order-to-delivery process and enabling effective decision-making. Support functions, such as Finance, Legal, People and Culture, IT and Marketing and Communications were managed as line organizations.
In the finance operating model, management accounting (business controlling) and financial accounting are segregated where applicable. Management accounting employees support the business area management’s decision-making, whereas financial accounting primarily follows the Group’s legal structure with a close link to Group-level financial accounting and reporting. Group Internal Controls is focused on supporting local units in improving controls and processes and monitoring compliance with Konecranes’ internal controls and is part of Internal Audit.
Financial targets are set, and planning and follow-up activities are executed, along the business area and business unit structures in alignment with the overall business targets of Konecranes Group. The operations of Business Area Industrial Service are typically monitored based on profit-responsible service branches, which are further consolidated to country and region levels. Business Area Industrial Equipment is mainly monitored via the Standard Equipment and Solutions business units, which are divided into business lines Components, Industrial Cranes, and Process and Nuclear Cranes. The manufacturing of components, sub-assemblies and other parts have a separate set of key performance indicators (KPIs), as these supply operations are treated as cost centers rather than profit-generating units. Until June 30, 2025, Business Area Port Solutions included the business units Lift Trucks, Mobile Harbor Cranes, Port Cranes, Software, Solutions, and Port Services. From July 1, 2025, onwards, Port Solutions includes the business units Lift Trucks, Port Services, Quay & Horizontal and Yard, which are monitored in the same way as in Business Area Industrial Equipment.
Control activities
The Konecranes Leadership Team has operational responsibility for internal controls. Control activities are integrated into the business processes of Konecranes Group and management’s business supervision and monitoring procedures. Management follow-up is carried out through monthly management reporting routines and performance review meetings. These meetings are conducted at the Business Area and business unit levels, based on their own management structures, as well as at the Group level. Topics covered in the meetings include safety, review of the sales funnel, competitive situation, market sentiment, order intake and order book, monthly financial performance, monthly, quarterly and rolling 12-month forecasts, quality related matters and business risks. Matters related to personnel, customers and internal control topics are also taken into account. Management follows the most important development activities separately.
All legal entities and business units have their own defined controller functions. Representatives from controller functions participate in planning and evaluating unit performance and ensure that monthly and quarterly financial reporting follows the Company’s policies and instructions and that all financial reports are delivered on time in accordance with schedules set by the Company.
Konecranes has identified and documented the significant internal controls that relate to its business and financial processes either directly or indirectly through other processes. Group companies are responsible for implementing the identified and documented internal controls. Konecranes has a register of internal controls that applies to all entities globally. The register includes controls over assets, liabilities, internal processes, segregation of duties, revenue, and costs that require the involvement of Business and Financial Management. The register includes approximately 90 controls that are categorized as key controls or operational controls. The list of internal controls is reviewed annually.
Assessments and monitoring
Each operational legal entity/unit assesses and reports its compliance with the centrally determined set of significant internal controls through the completion of an annual controls assessment document. The responsibility for fulfilling this reporting requirement lies with the Managing Directors and controllers. This document is reviewed by Internal Audit, which ensures the completion of the assessment and provides feedback and guidance, when needed, on how to improve existing processes to fill possible gaps in controls.
In 2025, Internal Audit visits covered approximately 36% percent of the operational legal entities. In addition to the above-described self-assessment of the control environment and Internal Audit visits, Group Internal Controls coordinated a self-testing process for 35 operational legal entities. Remediation of the control deficiencies is the responsibility of the Managing Director of the legal entity, and Internal Audit validates the corrective actions taken before closing the audit finding.
Communication
The Controller’s Manual, together with the reporting instructions, control register and policies, is stored in the Konecranes Intranet for access by personnel. The Company, Business Areas and regions also arrange meetings to share information on financial processes and practices. Information for the Company’s external stakeholders is regularly communicated via the Konecranes website. To ensure that the information provided is comprehensive and accurate, Konecranes has established a set of external communication guidelines. These define how, by whom, and when information should be issued, and they are designed to ensure that Konecranes meets all its disclosure obligations and to further strengthen internal controls.
During 2025
In 2025, Konecranes continued to develop its IT systems to implement harmonized processes, increase operational visibility and improve decision-making, and to reduce the overall number of various IT systems. All three Business Areas are working with the oneKonecranes SAP ERP system for transaction handling and logistics. At the end of 2025, oneKonecranes SAP coverage was 95 percent of Konecranes entities, increasing from 2024 (94 percent). Konecranes also continued the implementation and development of the Shared Service Center concept to offer mainly financial transaction handling services and selected financial accounting, procurement and HR services.