SRV's strategy and business operations

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.

Future perspectives

Lifecycle wisdom is our answer to the biggest questions of the future. To how we make this life with its homes, workplaces and common spaces more sustainable and cleaner - also for future generations. By acting in a life-cycle wise way, we promote the benefit of both people and the environment, and equally financial well-being. Because we believe that a better, cleaner future is built on these.

Sustainability

SRV's most important themes of SRV’s sustainability efforts compiled into a responsibility program based on the ESG framework. SRV's goal is to ensure that the sustainability efforts support the realization of strategic goals as well as possible and gives the business more resources to cope in an increasingly demanding operating environment.

Our business operations

In accordance with the company's strategy, SRV's business premises construction consists of project management and alliance contracts, lifecycle projects and self-developed projects. In lifecycle projects, SRV is responsible for both construction and building maintenance for the agreed service period for a separate service fee. A self-developed business premises 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 business premises construction, and SRV's own building technology services and energy and lifecycle services are seamlessly involved in the construction of business premises.

In accordance with SRV’s strategy, the company’s housing construction consists of residential development projects and developer-contracted housing projects in Finland’s strongest growth centres, and particularly in the Helsinki Metropolitan Area. In addition, SRV selectively carries out housing 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 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.

SRV’s infrastructure construction consists of urban infrastructure solutions. We deliver projects using all contract models, acting as the main contractor in large-scale infrastructure projects or as a subcontractor in various foundation engineering works. SRV’s infrastructure construction covers a wide range of specialties, including rock construction, earth and foundation works, transport routes, and demanding concrete construction.

We specialise in projects that require something extra – technical expertise, project management skills, composure under pressure and the ability to see a few steps ahead, or back, when needed.

Strategy and business operations