Skanska to launch new business plan for profitable growth ? focus on expansion in construction and project development
Jan 11, 2011
After several years of strong expansion around the time of the millennium, with numerous acquisitions, followed by seven years of successful consolidation, Skanska is now ready for the next phase.
The next phase is investment in profitable growth. Consequently, Skanska has prepared a new business plan for 2011 – 2015, with continued strong focus on profitability and capital efficiency, but also on expanding construction operations and significantly increasing investments in project development. Skanska will also strengthen the financial synergies and increase the reinvestment rate of the cash flow generated by the construction operations to expand in all areas of project development.
“We are well-equipped to commence expansion now. After a few years of consolidation, we currently have a strong focus on risk management and excellent profitability; we have also survived the financial crisis and are strongly equipped financially. We now have excellent growth potential in construction operations as well as in our project development,” says Johan Karlström, Skanska’s President and CEO.
The key areas of the plan are:
- Construction operations will increase in volume and maintain good margins, among the best in the industry. The volume must increase more rapidly than general market growth, which means that Skanska will capture market shares. Growth will also occur through broad geographic presence and range of services in existing home markets, such as the civil construction market in the U.S.
- Residential development will expand to enable Skanska to become the leading residential developer in the Nordic region, in terms of volume as well as customer satisfaction, environmental consideration, etc. The operation in large cities and growth cities in Sweden, Norway and Finland will intensify, with the aim of acquiring more land and developing new, larger residential areas. Skanska will also invest in launching residential development in the U.K. and Poland.
- Commercial property development of projects with distinct green profiles will grow significantly by intensifying the exchange of the concept that has been successful for many years in Sweden and Central Europe. The operation will continue to expand to the U.S., where in addition to Washington D.C., Boston and Houston, Seattle will now also be a prioritized market. Development will also commence in Oslo, Norway and expansion is planned for several regional growth cities in Poland.
- Infrastructure development will grow through increased investments in projects in the markets in which Skanska has construction operations. New opportunities will be utilized in the U.S. and Central Europe, primarily with respect to hospitals, schools and transport infrastructure, but also in such new sectors as wind power and waste-to- energy production plants.
- Skanska will also be a leader in crucial areas such as workplace safety, green construction, business ethics, risk management and personnel development.
Financial goals 2011-2015:
Construction operation | Goal: |
Operating margin, % | 3.5-4.0 |
(average during the period) | |
Project development operations | Goal: |
Return on capital employed, % | 10-15 |
(Per year) | |
Group | Goal |
Return on shareholders’ equity, % | 18-20 |
(Per year) | |
Dividend ratio per share, % | 40-70 |
(Per year) |
Net cash in hand
The investments in proprietary project development is expected to increase up to the end of 2015 and thus also capital employed. Skanska’s goal is for positive net cash in hand, excluding net pension liabilities and housing credits (for tenant-owners’ associations and housing companies).
Skanska AB
Peter Gimbe
Tel: +46 104488838
Internet: http://www.skanska.com
More News and Articles
Apr 29, 2024
News
Minimising cultural impacts with trenchless
Through the benefits of trenchless technology, Yarra Valley Water is minimising impacts on the Upper Darebin Creek branch sewer project.
The project consists of building a 2.7km sewer pipe in Epping, …
Apr 26, 2024
News
Bothar’s cutting head innovation
The trenchless industry in Australia continues to grow and the need to provide customised solutions becomes vital for a leading subsurface contractor.
Recognising the need for advanced solutions to meet the growing …
Apr 24, 2024
News
Sustainable drainage solutions: German Start-up transforms urban water management.
Germany boasts a well-established infrastructure for managing rainwater and wastewater, yet many developing countries lack such systems. Addressing this gap, …
Apr 22, 2024
News
HDD tooling that gets the job done
Horizontal directional drilling is a dynamic process that constantly changes and adapts to suit a range of applications across utilities and infrastructure. Operators looking to get the most from their equipment …
Apr 19, 2024
News
WATCH: Overnight with SAERTEX-LINER H20 in São Paulo
Available through Pipe Core, high-quality liner SAERTEX-LINER H20 performed under pressure in São Paulo, Brazil.
Maintaining aging potable water pipe infrastructure is a constant challenge …
Apr 17, 2024
News
Immersive media provides wastewater experience in Denmark
An immersive media experience (IMX) may not be what most people want when they think about industrial wastewater, but that is exactly what visitors can expect when they visit a new installation …
Apr 15, 2024
News
Spotlight on gender diversity at Pipe Core
Since founding in 2008, Pipe Core’s team has grown across all areas of the business and is now in a position where there are more females than males across the organisation. Research published in Harvard …
Apr 12, 2024
News
New Wave of Startups Scale Innovation to Solve Global Water Challenges
Innovators from Around the World Join Xylem’s 2024 Accelerator Program to Deploy Breakthrough Innovations for Utilities and Industrial Users of Water
A new group of startups …
Apr 08, 2024
News
Integrated sustainable electricity and clean drinking water systems
Altitude Water and New Use Energy Solutions have partnered to create integrated, mobile solar-plus-water generation systems that produce sustainable electricity and clean drinking …
Apr 05, 2024
News
How to Evaluate Hydraulic Fracture Risk in HDD Design
The design of horizontal directional drill (HDD) installations often requires an evaluation of the potential for hydraulic fracture of the soil layers through which an HDD passes. Evaluating …
Apr 02, 2024
News
Historic Project Linking Rome and Vatican City Uses Advanced Technology and Local Knowledge to Keep Water Flowing
Relocation of Major Sewer Infrastructure Enables Construction of Pedestrian Link for 35 Million Visitors to the 2025 Jubilee
Water …
Mar 27, 2024
News
USU Study Looks at Water Main Break Rates in the U.S. and Canada
Report Highlights Correlation Between Material and Diameter
Utah State University (USU) has published new research on water main breaks in the United States and Canada, examining …