LEMMINKÄINEN CORPORATION STOCK EXCHANGE RELEASE 11 OCTOBER 2013 AT 11.00 A.M.
LEMMINKÄINEN'S 2014–2018 STRATEGY AND FINANCIAL TARGETS: FOCUS ON INSIGHTFUL INFRASTRUCTURE SOLUTIONS AND RUSSIA
Lemminkäinen will focus on insightful customer solutions, especially in infrastructure construction. The company will also seek profitable growth in residential development and construction in Russia. Furthermore, Lemminkäinen will examine strategic options for its technical building services business. Lemminkäinen's profitability and solvency targets for the strategy period are: return on investment 18 per cent over the cycle and equity ratio at least 35 per cent.
Lemminkäinen aims to grow into one of the leading providers of demanding infrastructure solutions in Northern Europe. This will mean an enhanced offering especially for the traffic and energy industry and urban infrastructure projects. Growth will also be sought through acquisitions.
In Russia, the residential development and construction business will be extended from St. Petersburg to other selected urban growth centres. The company will also explore options for widening its infrastructure construction offering in Russia. By the end of the strategy period, Lemminkäinen estimates that Russia comprises approximately 20 per cent of Group net sales.
In paving and mineral aggregates, Finnish building construction and technical building services, Lemminkäinen will continue to focus on improving operational and capital efficiency. Strategic options for technical building services will be examined.
Lemminkäinen’s financial targets for 2014–2018 are:
Return on investment 18 per cent over the cycle
Equity ratio at least 35 per cent
Lemminkäinen estimates that its net sales at the end of the strategy period will be slightly higher than in 2013.
Lemminkäinen is aiming for a stable distribution of dividends, with at least 40 per cent of the profit for the financial year distributed to shareholders.
New reporting structure
Based on the new strategy, Lemminkäinen will renew its reporting structure. The renewal will increase the transparency of reporting regarding Scandinavia and Russia. From 1 January 2014, its reporting segments will be:
Finland, building construction
Finland and the Baltic countries, infrastructure construction
Finland, technical building services
President and CEO Timo Kohtamäki comments:
"Our new vision is to provide insightful solutions above the ground and underground. Our emphasis will increasingly be on the early stages of the construction value chain. Through more intensive customer collaboration we will gain predictive insight into their needs. This in turn will guide our solutions development. We will also seek strategic partnerships in creating true customer value," says Timo Kohtamäki, President and CEO of Lemminkäinen.
"The infrastructure market especially in Sweden and Norway is very attractive for us. We have high-level technical competence and strong references in demanding solutions. These, together with good customer relationships, provide a firm foundation for profitable growth."
"In Russia, we serve the growing middle-class which is looking for modern, high-quality apartments in good locations. The growth of this market is supported by urbanisation and demographic changes as well as the development of the mortgage market."
"Finland continues to be an important market for Lemminkäinen. Despite the challenging market, we see plenty of potential in urban growth centres, both in building and infrastructure construction."
Timo Kohtamäki, President & CEO
tel. +358 (0)2071 53263
Robert Öhman, CFO
tel. +358 (0)2071 53515
NASDAQ OMX Helsinki
Together with our customers we create conditions that make living, working and travelling functional, safe and healthy. We operate in northern Europe and employ about 8,200 experts. In 2012, our net sales were about EUR 2.3 billion. Lemminkäinen Corporation’s share is quoted on NASDAQ OMX Nordic Exchange Helsinki. www.lemminkainen.com