Bigger Picture
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BUILDING THE BIGGER PICTURE ANNUAL REPORT 2011 10 January 2011 16 February 2011 23 February 2011 3 May 2011 25 May 2011 17 August 2011 30 August 2011 15 September 2011 4 October 2011 Destia and Ramirent Destia wins a prize in the Destia participates in the Natural gas Civil engineering Agreement between Destia Main Road 51 bridge Oikarainen Bridge Destia highly commended in the enter co-operation Uusimaa occupational Liikennerevoluutio (traffic pipeline laid in contract for Destia at and the City of Vantaa for moving work begins completed and Environmental Structure of the Year safety competition revolution) ideas competition Hiidenvesi Ovako’s steel plant Tikkurilantie ST contract at Espoonlahti inaugurated competition 1 February 2011 The 21 February 2011 4 March 2011 20 April 2011 1 June 2011 4 July 2011 17 August 2011 13 September 2011 22 September 2011 7 October 2011 METRO consortium wins METRO signs a contract Destia at the Destia wins seven Area-wide contract Destia sells its Vaasa Destia’s construction Nationally significant Victoria Square in Destia gives award for the Safest Metro Site agreement for the Infra 11 event area-wide mainte- for Destia at Maaria- depot area to Kesko work at the centre of research work for traffic Tornio completed best dissertation in the competition Karhusaari metro tunnels nance contracts Paattinen in Turku Kalasatama begins and environmental planning field of infrastructure 2 2 BUILDING THE BIGGER PICTURE CONTENTS Destia in 2011 3 Destia’s business 12 Corporate responsibility 19 CEO’s review 4 Destia’s services 13 Financial responsibility 20 Destia’s strategy Infra construction 14 Social responsibility 20 2011 – 2014 6 Infra maintenance 15 Environmental Destia’s risk management 8 Railways 16 responsibility 22 Operating environment Rock 17 Organisation and and market review 10 Consulting services 18 main offices 23 30 November 2011 Destia sells its surfacing business to NCC DESTIA BUILDS, MAINTAINS AND DESIGNS TRAFFIC AND INDUSTRIAL ENVIRONMENTS, SO THAT THE LIVING ENVIRONMENT WILL BE EFFICIENT AND SAFE. THE COMPANY CREATES QUALITY INFRASTRUCTURE SOLUTIONS PROFESSIONALLY, UTILISING THE LATEST WORKING METHODS IN THE INDUSTRY. 11 October 2011 8 December 2011 Destia wins KU Destia signs a service agreement contract for the for the construction of the E18 Kuokkala Ring Road Koskenkylä-Kotka motorway ANNUAL REPORT 2011 3 3 DESTIA IN 2011 DESTIA IS A FINNISH infrastructure and Finland, Southwestern Finland, Eastern Finland and construction service company. We build, Cap of the North. The operating business units are maintain and design traffic routes, industrial Railways, Rock and Consulting Services. and traffic environments, as well as complete living environments. Our services cover the The business of Infra Construction includes the whole spectrum, from overground operations to construction of traffic routes, industrial and traffic subterranean construction. environments and complete living environments; the business of Infra Maintenance includes the DESTIA’S CUSTOMERS INCLUDE government maintenance of traffic routes, gravel roads, bridges agencies, municipalities and cities and industrial and and the traffic environment as well as the services of commercial companies. An extensive network of the road weather maintenance centre Kelikeskus. The regional offices ensures that Destia is always close to its Railways business unit includes maintenance work customers, in both Finland and the surrounding areas. for railway construction and infrastructure, the Rock business unit deals with aggregate services, rock and IN 2011, THE REVENUE OF THE DESTIA mining construction and Consulting Services with GROUP was about e 500 million. The Destia Group planning, measuring and international consulting. comprises the parent company Destia Ltd and its subsidiaries. KEY FIGURES, IFRS DESTIA EMPLOYS about 1,600 people. The MILL. EUROS 2011 2010 company is an expert organisation offering an Revenue 495.9 538.6 encouraging atmosphere and wide-ranging Operating result -8.1 11.6 opportunities for experts in the infrastructure industry. % of revenue -1.6 2.2 IN 2011, DESTIA RENEWED ITS Profit for the financial period -13.0 9.5 % of revenue -2.6 1.8 ORGANIsatIONAL structure by dividing its operations into five regional and three operating Return on investment, % -5.4 8.4 business units, so that decision-making is closer to Equity ratio, % 25.7 31.5 the field and to the customers. The regional business Net gearing, % 17.5 68.7 units, whose services are infrastructure construction Gross capital expenditure, % of revenue 1.0 2.2 and maintenance, are Southern Finland, Western Number of personnel, average 1,813 2,096 Oikarainen bridge, Northern Finland CEOS’S REVIEW CEO’s review POSITIVE DEVELOPMENT OVERSHADOWED BY DISAPPOINTMENTS 4 Destia’s three-phase strategic work In 2012, the streamlining of functions will continue with endeavouring to work more actively with and closer to the proceeding investments in managerial work and project management. customer. We have already achieved positive results from In development work, we are now focusing on core issues our work, although there is still a great deal to do. The revamping of basic structures and the reorganisation and are improving our service processes by increasing of the cost base started in 2009 has yielded the desired understanding and expertise in customer service work and Increasing profitability through successful results. In 2011, we focused on risk management in our project implementation. project management tendering activity and on work with customers, as well as continuing the improvement in the efficiency of support We have a good team In 2012, the main objective is to ensure profitability and processes. Work has made progress, but there is still cash flow and to improve competitiveness. The majority plenty to do in 2012. The successes of 2011 have been the efficiency of the of infrastructure contracts are based purely on price new leaner organisation, wins in tendering competitions for competition. Cost-efficiency is the foundation and starting In 2011, we took responsibility at the front line and trimmed major projects and the preservation of our strong position point for competitiveness and the core of profitability. If the organisation. This change improved the manageability in maintenance contracts. the foundation is in good condition, we can stand out for of operations and the passage of communications. our customers as a reliable partner by virtue of our strong We have also done much work with processes, so that I am also very pleased with how the organisation has expertise, which is available nationwide. business units will have strong support, and operating developed. During the year, a desire to show what we can methods will be sufficiently harmonised. do has clearly emerged. I certainly cannot say, however, In 2012, we are investing in project management. We that I am pleased with the fact that we failed to notice have launched the extensive PRO project management In 2011, the focus has been shifting from the revamping earlier the need for major corrections in the income entries coaching programme, in which we go through with project of basic structures to the improvement of operations. or allocations for long contracts. In 2012, we are tackling managers working at different levels of line organisations We have improved our tendering work, so that we can this weak aspect of project management through our PRO what is expected of them, what they are responsible for, better identify risks at the tendering stage and find development project. what the agreed ways of operating are and what the work factors that increase our competitiveness when making of a supervisor means. The aim is to spread good practices tendering calculations. In the 2011 key financials, We are focusing on work with customers and customer more widely and to improve performance levels, especially however, successes and progress were overshadowed by service. We are constantly improving our own operations in weak projects. corrections to income allocations for old projects. under the guidance of customer feedback. We are also ” WE WILL BE ABLE SUCCESSFULLY TO RESPOND TO COMPETITION THANKS TO OUR STRONG TECHNICAL KNOW-HOW, OUR VERSATILITY AND OUR LONG EXPERIENCE. ” 5 Demand for infrastructure construction on We will be able successfully to respond to competition the market thanks to our strong technical know-how, our versatility and our long experience. From the point of view of the whole sector, the next year for Destia is looking better than the last two, because major Busy at the front line earthworks projects are starting now. House building will decrease, but no great change in the overall market will be At Destia, we have achieved a competitive setup after evident as these large-scale projects begin. some difficult stages. Reorganisation is complete, and now we have a greater possibility to react to market 2011 was a year of company reorganisation in the fluctuations. infrastructure sector. In spite of reorganisations and mergers, the market remains fragmented. The opening- The whole of Destia is endeavouring to ensure that work up of the municipal and railway markets is linked to done in the field is successful and that we are continually changes in the social structure and, as these changes are improving our service to our customers. We will know we implemented, the number of open markets will increase. have succeeded if we are successful at the front line and the customer is satisfied. The greatest threat to the sector in 2012 will be the state of the European money markets, as economic uncertainty I would like to thank our customers and partners for their will directly affect the willingness of companies to invest. trust in us and for our fruitful co-operation. I would also With a small delay, it will also influence the realisation of like to extend my thanks to Destia’s employees for your major public investments. Destia’s internal challenge is to contribution and commitment to developing our company.