SRV's strategy: Sustainably profitable
SRV’s strategic objectives are increasing shareholder value, excellent customer and employee experience and mitigating climate change.
Profitable growth from business premises and residential construction based on SRV’s own project development
SRV seeks profitable growth in its strategy by gradually increasing the share of residential construction and, in particular, business premises and residential construction based on SRV’s own project development as soon as market conditions allow. The company believes that urbanization will continue and is expected to restore consumer and investor demand, especially in residential construction but also in business premises construction, over the coming years. To be ready to meet growing demand, SRV has actively strengthened its project development pipeline required for the growth of development and developer-contracted production. At the same time, various forms of contracting—such as lifecycle projects, data centers, and residential contracting, and especially slightly lower-margin and lower-risk cooperative contracting—remain an important cornerstone for us.
SRV focuses on three main aspects in portfolio management and the goal is to
- strengthen SRV’s leading position in cooperative and other contracting
- increase the share of development and developer-contracted projects to 30–40% of revenue
- grow residential projects to 30–40% of revenue.
The gradual strengthening of SRV’s balance sheet enhances the company’s ability to finance land acquisitions for development and developer-contracted production and, in particular, the capital tied to developer-contracted production as its volume grows.
Our aim is to build SRV into a sustainably profitable company. We will steer our profitability by tapping into market opportunities and engaging in prudent risk management. The key factor in risk management is the careful selection of projects. We also proactively manage our risks by diversifying our portfolio geographically, by intended use and contract type, and by limiting the amount of capital tied up in projects.
SRV’s long-term financial objectives
The company’s operations are guided by the following long-term financial objectives that it aims to achieve by 2029-2030:
• Operative operating profit of at least EUR 50 million
• Revenue > EUR 900 million
The company’s dividend policy objective is to distribute 30–50% of annual profit, taking into account the company’s outlook and capital requirements.
Business operations
SRV's business operations consists of non-residential and residential construction in Finland's largest growth centers, i.e. the capital region and the regions of Turku, Tampere and Oulu. Non-residential construction consists of project management and alliance contracts and lifecycle projects for clients as well as self-developed projects. Residential construction consists of self-founded and self-developed housing projects, and construction contracts for customers.
Non-residential construction
In accordance with the company's strategy, SRV's business premises construction consists of project management and alliance contracts, lifecycle projects and development projects. In lifecycle projects, SRV is responsible for both construction and building maintenance for the agreed service period for a separate service fee. A development project refers to a project developed by SRV, which SRV sells to an investor before the start of construction, and where SRV bears the risk of construction and leasing. Renovation services are also part of non-residential construction, and SRV's own building technology services and energy and lifecycle services are seamlessly involved in the non-residential construction.
Residential construction
In accordance with SRV’s strategy, the company’s residential construction consists of development projects and developer-contracted projects in Finland’s strongest growth centres, and particularly in the Helsinki Metropolitan Area. In addition, SRV selectively carries out residential construction projects for public and private sector clients.
A developer-contracted project is based on in-house project development: SRV designs, builds and sells residential units to consumers. SRV bears the sales and construction risks. A residential development project is also based on in-house project development, but is sold to an investor before construction begins. SRV typically bears the financial risk and the project is recognised as income according to the degree of completion. These are construction projects of external customers, where SRV acts as the main contractor.