Strategy for 2016–2019

In October 2015, we published our reviewed strategy for 2016–2019 in which we move gradually from strengthening our balance sheet to improving our competitiveness and profitable growth.

Our target in the coming years is to improve our competitiveness in all business segments and build a solid foundation to enable profitable growth.

We will continue strengthening the balance sheet structure and further improving our capital efficiency by focusing on investments and by releasing capital through improved internal processes and procedures.

Operational efficiency in Paving 

We seek to improve our competitiveness in the Paving business segment in all markets through a more optimised operating model and more efficient processes. We are moving from a regional structure towards an agile, customer- and activity-oriented operating model, which allows us to react to the changes in the market more quickly and to utilise economies of scale better. At the same time, we are improving the implementation of best practices across country borders.

The operating model renewal is being carried out in phases during the strategy period, and the new operating model was first taken into use in Finland in the beginning of 2016.

In connection with the operating model renewal, we turned the mineral aggregates business into an independent business unit, and earthworks operations in Finland was transferred to the Infra projects business segment.

Infra projects seeks profitable growth

Urbanisation and investments in 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 infrastructure construction solutions in selected business areas in northern Europe.

We seek growth especially in Sweden and Norway where the market outlook is attractive, as governmental infrastructure development programmes will continue until the 2020s.

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

Focus of Building construction, Finland, on urban growth centres

In Building construction, Finland, we continue to focus our operations to urban growth centres in the Helsinki Metropolitan area and Vaasa, Turku, Tampere, Oulu, Kuopio and Lappeenranta. In these cities we aim to maintain a production volume that will enable profitable business and positive cash flow.

New development project start-ups on hold in Russian operations 

In order to maintain a moderate risk level, we will not start new development projects in building construction in Russia for the time being. We are continuing negotiated contracting in building construction. In paving, we seek growth particularly in special works, such as special surfaces for bridges. 

Financial targets

We also made adjustments to our financial targets. At the end of 2019, we aim at a ROCE above 15%, which is equivalent to the earlier target ROI of 18%. In addition, an EBIT margin above 4% at the end of 2019 is a new target. The equity ratio target above 35% remains unchanged.

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.

Financial target


Actual 2015

Actual 2014

Actual 2013

Previous: Return on investment, ROI*, %

18% over cycle (15% at the end of 2016)




New: Return on capital employed, ROCE**, %

15% at the end of 2019




New: EBIT margin, %

More than 4% at the end of 2019




Equity ratio***, %

Above 35%




Dividend policy, %

At least 40% of the profit for the financial year




* Includes the effect of discontinued operations
** Calculation: Operating profit, rolling 12 months / (Total equity (quarterly average) + interest-bearing liabilities (quarterly average)) x 100
*** Equity ratio, if hybrid bonds were treated as debt: 12/2015: 28.6% and 12/2014: 24.6%.
**** Board of Directors’ proposal for the AGM 

Actions to reach our targets in 2015–2016


Actions in 2015

Actions in 2016

Strengthening the balance sheet and capital

  • Divestment of non-core business operations and assets
  • Improvement in working capital efficiency
  • Implementation of new processes and operation models related to risk management and investments 
  • Boosting of housing sales
  • Releasing of capital through improved internal processes and procedures

Improving profitability and competitiveness

  • Completion of the Deliver 2014 cost saving programme
  • Internal development initiatives:
    • Development of tendering processes
    • Development of project management
    • Fleet optimisation
  • New operating model in Paving in Finland
  • The planning of the new operating model in Paving in Norway and in the Baltic countries
  • The shortening of turn-around times in building construction projects
  • Development of procurement
  • Internal development initiatives

Profitable growth in selected areas

  • Building a foundation for profitable growth in Infra projects:
    • Tendering processes
    • Project management
  • New operating model in Infra projects
  • Development of unified tools