Lemminkäinen as an investment
Lemminkäinen is an expert in complex infrastructure construction and building construction in Northern Europe and one of the largest paving companies in its market. Together with our customers and 4,700 professionals we employ, we build a sustainable society.
During the coming years, our target is to improve our competitiveness in all business segments and to build a solid foundation to enable profitable growth in selected businesses.
In 2016, our net sales were EUR 1.7 billion. Lemminkäinen Corporation's share is quoted on Nasdaq Helsinki Ltd.
The long-term financial targets:
- ROCE above 15% in 2019
- EBIT margin above 4% in 2019
- Equity ratio above 35% during 2016-2019
We aim at a stable distribution of dividends, with at least 40 per cent of the profit for the financial year distributed to the shareholders.
Lemminkäinen's business operations are organised into four business segments
Lemminkäinen has a strong market position in infra projects in Northern Europe. Lemminkäinen's expertise is in foundation-, underground construction and excavation as well as road, bridge and railway construction.
Building construction, Finland
Lemminkäinen is one of the largest and most experienced building constructors in Finland. Building construction covers residential construction, commercial construction, industrial construction, renovation, property development and public-private partnership services.
We focus our operations to urban growth centres in the Helsinki Metropolitan area and Vaasa, Turku, Tampere, Oulu, Kuopio and Lappeenranta where
we aim to maintain a production volume that will enable profitable business and positive cash flow.
In order to maintain a moderate risk level in Russia, we will not to start new development projects in building construction in St Petersburg for the time being. We seek possibilities to negotiated contracting in building construction. Paving operations in Russia continue to seek growth in special works.
Lemminkäinen's financial situation subject to quarterly fluctuation
Lemminkäinen's business is subject to seasonal fluctuation. The most strongly affected business area is paving, where work starts in spring and comes to a standstill in winter. In Southern Norway and in Denmark, however, the paving season is usually longer than in Finland, sometimes even continuing throughout the year. Paving accounts for nearly half of Lemminkäinen's total net sales (in 2016 about 46%).
Seasonal fluctuation is reflected in Lemminkäinen's quarterly financials. Cash flow is clearly stronger in H2 than it is in H1. Also, a loss is typically posted for the first quarter, while the third quarter result is above average. Developed building construction production might boost the year-end result, in which the income is recognised according to sales rate only when projects are completed. The order book is the smallest in the end of Q4 and the highest in Q2.
Due to seasonal fluctuation, the amount of tied capital and interest-bearing liabilities are usually at its highest level in the end of H1. The key figures derived from the balance sheet might therefore differentiate a lot quarterly.
Updated 9 February 2017