Strategy for 2014–2016

In the summer of 2014, we reviewed our strategy in order to sharpen our strategic focus after the divestment of the technical building services business. We now have a more focused business portfolio – infrastructure construction and building construction. We seek profitable growth in infrastructure project construction as well as in residential development and construction in the Helsinki metropolitan area in Finland. We concentrate on improving operational efficiency in paving and building construction contracting.

The implementation of our new strategy is supported by the new organisational structure, valid as of 1 January 2015, in which we divided infrastructure construction into two segments. This way, we ensure the right management models both for infrastructure construction projects and for paving, as these segments have different development needs.

Going forward, our reporting segments will be:

  • Paving
  • Infra projects
  • Building construction, Finland
  • Russian operations

Improving competitiveness

In the summer of 2014, we identified several measures for improving the profitability, operational efficiency and long-term competitiveness of our business operations. In the autumn of 2014, we launched internal development initiatives to improve the efficiency and competitiveness of our business. The first phases of the initiatives will be completed during the first half of 2015, and all phases of the initiatives will be completed by the end of 2016.

The internal development initiatives focus on:

  • Harmonisation of tendering processes with regard to pricing and operating models, for example
  • Development of project management, project tracking and claims management 
  • Fleet optimisation in paving and infrastructure construction

We are also investing in the improvement of capital efficiency by accelerating invoicing and by optimising fixed assets and inventories according to our profit performance, for example.

In addition, we are seeking better profitability in the paving business, supported by the inclusion of these business operations into one business segment. This will help us to share best practices and utilise economies of scale across geographical boundaries and to adapt local presence and fleets to business needs.

Focusing our operations in building construction

In the future, our building construction will focus more strongly on the growing areas of Helsinki and St Petersburg. In Finland, we are investing in residential development and construction projects and negotiated construction contracting projects in the Helsinki metropolitan area and in other urban growth centres.

In St Petersburg, we are building comfort-class apartments for the needs of the growing middle class. The apartments combine high technical quality with individually tailored housing solutions. We estimate that our net sales in Russia will not increase during the next few years, due to the economic and political uncertainty in the country.

We are reducing the amount of competitive contracting in building construction both in Finland and in Russia.

Investing in a strong position in infrastructure construction in northern Europe

We have a strong position in the provision of infrastructure construction solutions and services in the Nordic and Baltic countries. In the long term, we are focusing on leveraging this position and aiming to expand our operations in growing infrastructure construction markets outside Finland through our technical expertise and versatile competences. We are seeking profitable growth in the energy and logistics sectors, for example.

Our financial targets

Our long-term financial targets are:

  • Return on investment: 18% over the cycle
  • Equity ratio: at least 35%

In addition, we have defined a short-term financial target of reaching a return on investment of >15% by the end of 2016.

We are aiming for a stable distribution of dividends, with at least 40% of the profit for the financial year distributed to shareholders. The Board of Directors proposes that no dividend will be paid for 2014.

Return on investment, %

10 11 12 13 14
Return on investment 7.0 10.8 10.8 -9.4 13.5

Equity ratio, %

10 11 12 13 14
Equity ratio 35.0 30.8 37.2 27.3 37.1

Earnings per share, dividend per share

10 11 12 13 14*
Earnings per share, EUR 0.01 1.68 1.94 -4.81 0.40
Dividend per share, EUR 0.50 0.50 0.60 0.00 0.00
The profit for the financial year distributed to shareholders as dividends, % 50 28 27 0 0

*The Board of Directors proposes that no dividend will be paid for 2014.

Figures for 2010-2013 include a retrospective adjustment due to the effect of the rights offering in 2014 on the weighted average number of shares



Progress of the strategy


 Actions in 2014

Actions in 2015

Profitability improvement

  • Deliver 2014 cost-saving programme
  • Completion of the Deliver 2014 cost-saving programme

Strengthening the balance sheet and capital

  • 5-year, EUR 100 million
  • EUR 30 million rights offering
  • EUR 70 million hybrid bond
  • Divestment of non-core business operations and assets
  • Divestment of non-core business operations and assets
  • Improvement in working capital efficiency
  • Improved profitability of business operations

Competitiveness improvement

  • Lightening of the cost structure
  • Improvement of risk and project management
  • New operating model
    • Harmonised ways of working and the sharing of best practices
    • Wintertime planning
  • Internal development initiatives
    • Harmonisation of tendering processes
    • Improvement of project management
    • Fleet optimisation


Our strengths

Presence in the growing markets

We have a strong position in the growing infrastructure construction market in Nordic countries. In residential construction we focus on urban growth centres in St Petersburg area in Russia and in the Helsinki metropolitan area in Finland.

Strong position in paving in the
main operating area

We benefit from our strong position in operational efficiency and product development, for example.

Versatile know-how for demanding infrastructure construction projects

We estimate that we are the leading provider of demanding infrastructure construction solutions in Finland. Long experience and strong expertise will enable us to strengthen our position also outside Finland.

Experience and proven track record of new types of demanding project models

We have experience of projects that are based on new types of cooperation models and alternative financing models. They create new innovations to customers and tie less of our capital.

Well-known brand associated with reliability and long history

We are a reliable and respected player in Finland, and our brand awareness is growing steadily in other key markets.

Balanced and diversified customer base

We have a diverse customer base in both private and public sectors, and our business is not dependent on any individual customer.