We are committed to the creation of one united Lemminkäinen
Timo Kohtamäki in Lemminkäinen's Annual Report 2009:
2009 was a year of change for Lemminkäinen. We renewed our strategy and published new shared values for the whole Group. We set about simplifying the group structure and streamlining our business in accordance with our new strategy. At the same time the weakened market situation demanded improved business efficiency and adjustment to reduced demand for construction.
The net sales of all of Lemminkäinen’s business sectors were down on the previous year due to the general state of the economy. The Group’s net sales as a whole contracted by about a fifth. Even so, 2009 can be regarded as being satisfactory from the business perspective. In spite of the weak market situation, we achieved successes in all of our business sectors, and in some business areas we were even able to increase our market share. The year began in an atmosphere of gloom, but it brightened up in the second half. The Group’s result fell short of the level achieved in the previous year.
Period of modest growth
We are looking forward to 2010 with cautious optimism. There are positive signs of economic development: for example, the employment situation in the construction sector is better than was feared a year ago. According to several forecasts, Finland’s gross domestic product will return to growth and construction will follow on behind with its customary lag. There are no signs of rapid economic recovery, so Lemminkäinen is preparing for a period of modest growth. We are following the development of our markets closely and we are ready to react to any changes.
Going forward, we will focus on business areas and markets with growth potential where it is possible to achieve a significant market position or where our special expertise is required. We also aim to strengthen our position in our existing key businesses. Our strategic development focus areas are renovation construction, technical building services, residential construction in Russia, and infrastructure construction in the Nordic countries. Renovation construction is expected to continue growing steadily, and demand for technical building services is expected to increase over the long term. The volume of residential construction in Russia is likely to grow already this year. Especially the Scandinavian countries will continue to allocate additional funding for infrastructure investments, which will have a favourable effect on the markets for some years to come.
New strategy will synergise the whole Group
Lemminkäinen was already well down the path of developing its business as it entered 2009, and the work will continue this year, too. The main goal of the new strategy is the creation of one united Lemminkäinen. This means developing synergistic business models, streamlining the group structure, and bringing all the companies of the Group under the Lemminkäinen brand. The key economic goals for the strategy period are profitable growth and strengthening of the Group’s financial position.
Our new strategy responds to the challenging market situation and the changed needs of our customers, adding more flexibility and cost-effectiveness to the Company’s business. We are bringing together the diverse expertise existing within the Group and offering our customers all the solutions and services they need in new construction, renovation construction, servicing and maintenance, and project development under one unified Lemminkäinen brand.
Business diversity as a strength
Lemminkäinen’s business diversity and local presence are its strengths. Business diversity brings stability against cyclical fluctuations in particular, and this aspect of Lemminkäinen certainly proved its worth last year. Local presence close to the customer promotes the development of products and services and makes it easier to identify new business opportunities. We are particularly strong in those business areas that require special expertise.
Shared vision based on sound values
In early 2009 we published our new values together with our Principles of Good Business Practice. They guide the work of every single Lemminkäinen employee. Our core values of respect and trust lay the foundations for constructive collaboration as well as sustainable growth and development. The Principles of Good Business Practice were written down because we wanted to concretise our shared vision of what the company ought to be and how it should operate. Thinking and acting in a responsible manner is emphasised in the development of all of Lemminkäinen’s activities. We never want to see a recurrence of anything like the competition infringement fine handed down by the Supreme Administrative Court in 2009.
The next hundred years
Lemminkäinen celebrates its centenary this year. Despite the challenging market situation, we believe that our next hundred years will be even better than our first century in business. As a result of the strategy work, we have found a lot of things that we can do better and more effectively. We are determined to make this year a good beginning of our second hundred years in business.
I would like to thank all of our present and former employees for their contribution to Lemminkäinen’s success, for their commitment to the Company’s change process and for the part they have played in Lemminkäinen’s growth and development over the past hundred years. Many thanks to our customers and other stakeholders for their valued co-operation. And finally, thanks to Lemminkäinen’s shareholders for the confidence they have shown in the Company.
Timo Kohtamäki
President & CEO of Lemminkäinen Corporation
Source: Lemminkäinen's Annual report 2009, p. 12-13