Business Plan 2011–2015 - Skanska · Totoral Wind Farm, Chile. ... Zeros, Code of Conduct and to Green − Significant market size − Market growth > GDP growth with long-term

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Business Plan 2011–2015Johan Karlström, President and CEO

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Skanska in short− Founded 1887 in Sweden− International business since 1897− Listed on the Stockholm Stock Exchange− 2009 revenues: SEK 137 billion− 51,000 employees − A Fortune 500 company− Member of UN Global Compact

Älvsborgsbron, Gothenburg, Sweden

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UnitedStates

LatinAmerica

Local presence – global strength

Sweden, 19% Other Nordic countries, 14%Other European countries, 29%United States, 33%Latin America, 5%

Revenue 2009 by geographic areas

Sweden

Finland

Norway

Denmark

UnitedKingdom

PolandSlovakiaHungary

Czech Republic

Estonia

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Our four Business Streams

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Our journey

Rapid expansion1997−2003

Consolidation2004−2010

Profitable growth2011−2015

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Construction margin progress

1.4

2.52.8

3.4

2.7

3.7 3.8

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2004 2005 2006 2007 2008 2009 R12 Q32010

%

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Consolidation phase successfully completed

Strong financial and operational platform

Common value base and collaborative culture

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Our journey

Rapid expansion1997−2003

Consolidation2004−2010

Profitable growth2011−2015

Today

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Build on global trends and existing strengths

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Strengths and values

Decentralized/integrated

Home markets/local presence

People

Civil and building construction

Project Development

Financial strength and synergies

Project execution Risk management

Knowledge Brand

Code of Conduct and 5 Zeros

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One Skanska

People

Civil and building construction

Project Development

Financial strength and synergies

Project execution Risk management

Knowledge Brand

Code of Conduct and 5 Zeros

Decentralized/integrated

Home markets/local presence

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Increasing urbanizationSince 2007, 50% of the world’s population lives in cities

Requires huge investments in mass transit water health housingschools waste sports culture

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90%

of population growth

75%

of all energyconsumption

60%

of waste consumption

Increasing urbanizationMajority of growth and consumption in cities

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Demographic changes

− Ageing and growing population

− Need for healthcare

University Hospital in Coventry, UK

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Totoral Wind Farm, Chile

Global demand for energy andenergy efficiency will increase dramatically

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Market attractiveness

Feasibility for Skanska

Evaluation criteria for new opportunities

− Skanska has experience and distinct capabilities to be leading

− Multiple available acquisition candidates− An attractive growth roadmap possible, with several

strategies and actions− Remain true to Skanska’s commitment to its Five

Zeros, Code of Conduct and to Green

− Significant market size− Market growth > GDP growth with long-term stable

growth outlook− Industry profitability above Skanska targets − Low number of existing players, right type of entry

barriers, economies of scale to exploit− Acceptable complexity

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Profitable growth

Howto do it?

Whatto do and

our targets?

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Financial targets and dividend policy

− Group− ROE 18–20% per annum− Dividend pay out 40–70% of Earnings Per Share− Net cash position (pension liabilities and construction

credits in residential development co-ops excluded)

− Construction− EBIT margin 3.5–4.0% over a business cycle− Grow faster than the market

− RD, CD and ID− ROCE 10–15% per annum− Significantly grow investments

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External contracts

Internal contracts

C RD CD ID

Shareholders

Increase pace of financial synergies

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Leadingposition in Construction

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Significantly larger in Project Development

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Skanska in 2015

Better balance between Construction and Project Development

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Leader inRiskmanagement

Skanska in 2015

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Leader inPeople development

Skanska in 2015

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Leader inSafety

Skanska in 2015

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Leader inEthics

Skanska in 2015

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Leader inGreen

Skanska in 2015

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Manhattan Bridge, New York, USA

How we will reach our targetsConstruction

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Profitable growth in Construction

Expand range of services within home markets

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Profitable growth in Construction

Geographic expansionwithin home markets

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Profitable growth in Construction

Collaboration in Clusters of Business Units

Operational synergies

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Use our knowledge

World Trade CenterUSA Building and USA Civil

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Use our knowledge

Norra LänkenSkanska Sweden, Skanska Czech Republic and Slovakia

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Use our knowledge

Alaskan Highway, SeattleUSA Building and USA Civil

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Profitable growth in Construction

More Bundled Construction

Concert, Congress and Hotel, Malmö, Sweden

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Profitable growthin Construction

ExpandHealthcarebusiness

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Use our knowledge

Nya Karolinska Solna HospitalSkanska Sweden, Skanska UK, Skanska USA Building and Skanska ID

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Improve operational efficiency

New Meadowland Stadium, New Jersey, USA

Profitable growthin Construction

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Opportunities in Construction

Green business

Solar panels at Skanska’s Cortez office, Colorado, USA

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Commercial market adaption is moving fast

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Green refurbishment

− Large commercial property owners

− USA, UK, Norway, Sweden and Finland

− Fixed price Design Build construction agreement

− Time limited Energy Performance Guarantee

− LEED or BREEAM Guarantee

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Residential Development

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Expand Residential Development

− Grow Nordics

− Regain volumes in Czech Republic and Slovakia

− Enter UK and Poland

− Grow BoKlok

Skanska presenceNew markets

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Commercial Property Development

Skandia HQ, Stockholm, Sweden

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− Grow strong business in Sweden

− Grow Finland and Denmark

− Ramp up Norway

− More cities in Poland andCzech Republic

− Evaluate Slovakia andRomania

Growth in Commercial Property Development in Europe

Skanska presenceNew marketUnder evaluation

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Ramp-up Commercial Property Development U.S.

− Existing markets

− Enter Seattle

− Potential entry in the governmental sector

− First lease agreement signed in Washington D.C.

Washington D.C.

Boston, MA

Houston, Tx

Seattle, WA

Skanska presenceNew market

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Antofagasta highway, Chile

Infrastructure Development

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Infrastructure Development strategy

− Growing existing segments

− New segments − Waste to energy − Wind power− High speed rail − Hospitals in Americas