Lemminkäinen’s business areas and markets
Lemminkäinen operates in all areas of the construction sector. Its main business sectors are building construction, infrastructure construction, technical building services and building products. Lemminkäinen’s main markets are in the Baltic Rim region, where the Group has established a presence by setting up local subsidiaries. In specialised areas of construction Lemminkäinen serves its clients all over the world.
Diversity and strength in the marketplace
The Group offers its clients a diverse range of high-level building expertise in projects of different types and sizes.
Lemminkäinen is able to exploit construction chain synergies in its operations.
The stability of Lemminkäinen’s business in both the short and long term is largely attributable to the diversity of the Group’s business portfolio. Operating in the fields of infrastructure construction, technical building services and the building products reduces the Group’s dependence on domestic demand for new construction and its cyclical fluctuations. Refurbishment contracting and operations abroad also lend support for the same purpose.
Lemminkäinen focuses on those markets and selected product or service segments in which the Group commands leading or significant positions. Examples include asphalt paving, in which Lemminkäinen is the second biggest operator in the Nordic countries, and Lemminkäinen Talo Oy´s subsidiaries, which enjoy significant positions in their respective geographical areas.
Speed of reaction and adaptability
Lemminkäinen continuously follows and anticipates social development. Changes in customer needs are taken into account when developing the Group’s business and service offering.
When necessary, Lemminkäinen is able to respond to the needs of the market in new business areas as well. Examples of this are Lemminkäinen’s expansion into technical building services, facility servicing and telecommunications network construction.
In its business operations Lemminkäinen emphasises the importance of speed of reaction and adaptability. The Group is continuously developing new and comprehensive service concepts. In developing its own products and services, Lemminkäinen makes a significant contribution to the development of the construction sector as a whole.
Local knowledge and independence
Lemminkäinen’s operations both in Finland and abroad are based on an understanding of the local conditions and construction environment.
Lemminkäinen’s regional units have sufficient autonomy to ensure operational flexibility and the maintenance of good customer relations. For the company’s employees this means added responsibility, but it also promotes motivation and commitment. Efficient management systems ensure that business is conducted appropriately.
This local and independent business model combined with close contacts to stakeholder groups promotes the development of products and services and helps to identify new business opportunities.
Financial targets
The Group’s strategic goals are profitable growth and the maintenance of good solvency. Good profitability is regarded as a long-term average return on investment in excess of 18 %. Good solvency is equated with an equity ratio in excess of 35 %.
Future growth areas
Lemminkäinen Group has grown at an average annual rate of 14 % over the past ten years and yet profitability has remained undiminished. Most of Lemminkäinen’s growth has been organic, but in the background there have also been acquisitions of companies and businesses both in Finland and abroad. The primary purpose of such acquisitions is to strengthen local market positions.
Lemminkäinen Group has the capabilities to increase its housing production, depending on the market situation.
Lemminkäinen will respond to the expected increase in demand for refurbishment contracting, servicing and maintenance, which already accounts for about 40 % of its business. The Group’s technical building services have been expanded from HVAC contracting to servicing and the modernisation of piped and ducted systems.
Over the next few years Lemminkäinen’s international business is expected to grow faster than its domestic operations. The asphalt paving and road construction markets in the Baltic states are clearly growing. As a consequence of Finnish industry’s increased investments, there is demand for Lemminkäinen’s services in China, India and other countries. The growing markets of Eastern Europe are also future growth areas for Lemminkäinen’s building services. Especially in Russia, the market outlook for building construction over the next few years is promising.
Continuity is essential
Lemminkäinen was founded in 1910 and continuity has always been an essential element of its business strategy.
Quality, reliability and the ability to foresee and adapt to change will enable Lemminkäinen to continue its sustained and profitable growth and thus serve as a durable foundation for the continuity of its business.