Annual review 2004 Photo: Viru Centre, Tallinn, Estonia SRV GROUP LTD SRV VIITOSET LTD SRV TERÄSBETONI LTD SRV WESTERLUND LTD SRV INTERNATIONAL LTD Niittytaival 13 Niittytaival 13 Niittytaival 13 Niittytaival 13 Niittytaival 13 PO Box 500, 02201 Espoo PO Box 555, 02201 Espoo PO Box 505, 02201 Espoo PO Box 515, 02201 Espoo PO Box 525, 02201 Espoo FINLAND FINLAND FINLAND FINLAND FINLAND tel. +358 201 455 200 tel. +358 201 455 500 tel. +358 201 455 700 tel. +358 201 455 300 tel. +358 201 455 250 fax +358 201 455 245 fax +358 201 455 567 fax +358 201 455 750 fax +358 201 455 338 fax +358 201 455 278 [email protected] [email protected] [email protected] [email protected] [email protected] www.srv.fi www.srvviitoset.fi www.srvterasbetoni.fi www.srvwesterlund.fi www.srvinternational.fi Business idea Vision The SRV Group fulfils its The SRV Group will be the customers’ individual needs as leading developer and project users and owners of buildings in management contractor in its partnership with the customers. business area as well as a sought-after partner. Contents Values In its business, the SRV Group applies President’s Review 4 the following key values: Corporate Management Group 5 Reliability Key Figures and Main Events 6 Open cooperation Project and Real Estate Development 8 Service-mindedness Commercial and Business Premises Construction 10 Efficiency and productivity Industrial, Logistical and Infrastructure Construction 12 Development and Housing Construction 14 personal improvement International Construction 16 SRV’s Regional Business 18 Safety 19 The SRV Group’s strategic targets are as follows: Environment 21 Strategy Enhancing competitiveness In operations, particular effort is deployed in the Personnel Report 22 development of customer-centredness and partnership as well as in personnel and Board of Directors 24 operating processes. Group Companies 25 Profitability The management of business foci, costs and risks will be concentrated on. Review by the Board of Directors 26 Growth Focusing on housing construction, regional business in Finland, and Russia and the Baltic countries. Key Figures 28 Internationalisation Russia and the new EU member states are the main subjects. Profit and Loss Accounts 31 Business diversification The main thrust is on augmenting and developing the Balance Sheet 32 construction value chain on the basis of the customers’ needs. SRV in brief SRV Group Plc is Finland’s leading project management contractor, building commer- cial and business premises, housing, and industrial and logistical projects as well as de- veloping properties. The SRV Group’s business area is Finland plus the Baltic countries and Russia. The main emphasis in and orientation of the services of the SRV Group are towards the innovative development of projects and project management contracting with the in-house SRV model. SRV carries out its projects in a broad-based partnership with a professionally skilled network of specialists and suppliers. Of key importance to the SRV model are network management and the reliable and customer-friendly imple- mentation of the construction project process as well as professional total management. 2 Vision, mission, values and strategy 3 Business idea Vision The SRV Group fulfils its The SRV Group will be the customers’ individual needs as leading developer and project users and owners of buildings in management contractor in its partnership with the customers. business area as well as a sought-after partner. Contents Values In its business, the SRV Group applies President’s Review 4 the following key values: Corporate Management Group 5 Reliability Key Figures and Main Events 6 Open cooperation Project and Real Estate Development 8 Service-mindedness Commercial and Business Premises Construction 10 Efficiency and productivity Industrial, Logistical and Infrastructure Construction 12 Development and Housing Construction 14 personal improvement International Construction 16 SRV’s Regional Business 18 Safety 19 The SRV Group’s strategic targets are as follows: Environment 21 Strategy Enhancing competitiveness In operations, particular effort is deployed in the Personnel Report 22 development of customer-centredness and partnership as well as in personnel and Board of Directors 24 operating processes. Group Companies 25 Profitability The management of business foci, costs and risks will be concentrated on. Review by the Board of Directors 26 Growth Focusing on housing construction, regional business in Finland, and Russia and the Baltic countries. Key Figures 28 Internationalisation Russia and the new EU member states are the main subjects. Profit and Loss Accounts 31 Business diversification The main thrust is on augmenting and developing the Balance Sheet 32 construction value chain on the basis of the customers’ needs. SRV in brief SRV Group Plc is Finland’s leading project management contractor, building commer- cial and business premises, housing, and industrial and logistical projects as well as de- veloping properties. The SRV Group’s business area is Finland plus the Baltic countries and Russia. The main emphasis in and orientation of the services of the SRV Group are towards the innovative development of projects and project management contracting with the in-house SRV model. SRV carries out its projects in a broad-based partnership with a professionally skilled network of specialists and suppliers. Of key importance to the SRV model are network management and the reliable and customer-friendly imple- mentation of the construction project process as well as professional total management. 2 Vision, mission, values and strategy 3 A successful year of growth and ”The key themes are the development of development service, expertise and innovativeness.” For SRV, 2004 was marked by dynamic ing construction and initiated a number knowledge of the country’s business growth, a good net profit, and progress. of other projects in cooperation with its conditions will be strengthened. The Group’s net sales grew by almost 50 customers. A significant concern, in ad- The cyclic outlook for construction in per cent and the net profit improved by dition to enhancing profitability, is to 2005 is good. Construction of housing more than 40 per cent. A number of spread growth in operations more evenly and business premises will continue to development projects were launched in several market areas and segments. be brisk and office construction is during the year. The Viru Centre was This will promote the Group’s risk man- expected to recover. For industrial, lo- completed and the other big project, the agement and even out cyclic fluctua- gistical and infrastructure construction, Kamppi Centre, made positive progress. tions, facilitating strong growth also in the year ahead will also be filled with The SRV Group’s profit before taxes the future. work. In addition to the domestic mar- was MEUR 16,2. The Group improved A number of development projects ket, SRV seeks growth through interna- its profitability, particularly in respect of were carried out during 2004. The tionalisation. Growing business in Rus- housing construction and commercial Group’s management and incentive sys- sia is on the rise alongside operations in construction. The profitability of inter- tems were upgraded, and the personnel’s the Baltic countries. national business also remained good. career development and training systems A good market situation, the stream- Business also grew most dynamically in have been further augmented. The lining of operative functions in line with these same sectors. Return on equity was Group introduced a new key customer the strategy, and deployments in boost- 35.3 per cent and the equity ratio includ- system and continued training for the ing competitiveness, provide SRV with a ing the capital loan was 31.2 per cent. personnel in customer service. Develop- good basis to expect the growth and Orders in hand stood at MEUR 320.8 at ment work continued on environmental favourable trend in earnings to continue year-end. and safety matters, and at the same time in 2005. The Group’s biggest single project, efforts have been deployed in technical I express my thanks to all our partners the Kamppi Centre, made positive expertise in construction and project ma- and to SRV’s own personnel for a work- progress. Demand for the housing and nagement. These and numerous other filled year and for excellent results. business premises has outstripped actions on development have strength- expectations. Construction is ahead of ened SRV’s competitiveness, both as a Hannu Mikkonen schedule and the publicity that the service provider and as a sought-after President and Chief Executive Officer project has received has been positive. employer. The first part of Kamppi will be SRV will continue to invest strongly opened in spring 2005 and the entire in developing its operations in the futu- Management Group complex will be completed in spring re. The key themes will be the develop- 2006. During 2004, another big ment of service, expertise and innovati- The President, CEO Hannu Mikkonen is the chairman of the Group’s Corporate project, the Viru Centre in Tallinn, was veness. This will ensure the exploitation Management Group. The members of the Corporate Management Group are, completed and opened to the public in of the opportunities afforded by constant back row, from left Timo Nieminen (Executive Vice President, Project and Real the spring. The expertise and expe- changes in the business climate. The Estate Development), Marko Heino (SRV Westerlund), Risto Hiekka rience that these projects brought with operations of the Group’s subsidiaries (SRV International), Matti Ukkonen (Chief Financial Officer). Front row from left them form an excellent basis for SRV’s will be streamlined at the same time Matti Kärnä (Executive Director, Development Affairs), Arto Toikkanen future projects as a developer and builder with the goal of stronger focus on the (SRV Teräsbetoni), Juhani Väisänen (Executive Director, Regional Operations), of shopping centres.