Lemminkäinen's strategy for 2016–2019

During the strategy period 2016–2019, Lemminkäinen moves from balance sheet strengthening to improving competitiveness and profitable growth.

We will continue to strengthen the balance sheet structure and to further improve our capital efficiency by focusing investments, by boosting housing sales and releasing capital through improved internal processes and procedures.

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. We will implement best practices across segments and country borders in order to utilise economies of scale.

Infra projects seeks profitable growth

Urbanisation and investments to the energy sector increase the demand for complex infra projects. By utilising our expertise gained in the Finnish market, we aim to grow into one of the leading providers of selected infrastructure business areas in Northern Europe.

The Infra projects segment seeks growth especially in Sweden and Norway where the market outlook is attractive, as governmental infrastructure development programmes will continue until 2020’s.

Our growth areas are infra projects related to complex transport infrastructure, heavy industry and power plants as well as heavy city infra.

Paving concentrates on improving operational efficiency

In Paving, we seek to improve our operational efficiency in all markets through a more streamlined operating model and efficient processes.

In order to react faster to the changes in the market and to better utilise economies of scale we will renew the Paving segment‘s operating model. During the strategy period, the paving operations will move from a regional structure towards a more agile, customer and activity-oriented organisation model. Mineral aggregates will be led as independent business.

Building construction, Finland, focus to urban growth centres

In Building construction in Finland, we continue to 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.

Russian operations will not start new own development projects for the time being

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.

Financial targets

Our financial targets are:

  • 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.

 

Updated  30 October 2015