LEMMINKÄINEN REVISES ITS STRATEGY

LEMMINKÄINEN CORPORATION      STOCK EXCHANGE BULLETIN 15.2.2006, 09.15

LEMMINKÄINEN REVISES ITS STRATEGY

Lemminkäinen Corporation’s Board of Directors has revised the
Group’s business strategy.

The Group’s strategic goals remain profitable growth and the
maintenance of good solvency. The target level set for return on
investment was raised. Good profitability is now 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 %.

The means by which Lemminkäinen will achieve its goals are
business diversity, local knowledge, strong market positions, and
the ability to foresee demand changes and react quickly to them.

Lemminkäinen’s service offering is the most diverse of all the
Finnish construction companies. Activity in all areas of the
construction sector, operations abroad, and the significant role
that maintenance and refurbishment contracting plays in
Lemminkäinen’s business are the key elements of the Group’s
steady long-term growth. Steady cash flow has enabled the Company
to pursue an owner-friendly dividend policy.

Over the next few years the Group’s international business is
expected to grow faster than its domestic operations.
International business already accounts for a third of the
Group’s net sales. The growth in demand for servicing and
maintenance is also expected to continue.



LEMMINKÄINEN CORPORATION
Juhani Sormaala


Distribution: Helsinki Stock Exchange, key media
Appendices: Lemminkäinen Group Strategy




LEMMINKÄINEN GROUP STRATEGY

Lemminkäinen’s business areas and markets

Lemminkäinen operates in all areas of the construction sector.
Its main business areas are building contracting, infrastructure
construction, the building materials industry and technical
building services.

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
materials industry 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 Palmberg’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.

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.