New strategy for profitable growth at NCC 2016 - 2020

According to NCC's new strategy for profitable growth, the company aims to grow by an average of 5 percent per year and the operating margin will improve from the current figure of about 3 percent to a minimum of 4 percent during the 2016-2020 strategy period.

“We have noted that streamlined, specialized companies have greater opportunities for growth and profitability. With our new specialized Nordic organization, we will become more efficient and increase our profitability. At the same time, we expect to grow by focusing on segments with growth potential, such as large-scale infrastructure projects and refurbishment. Achieving this goal will create conditions for investment in further growth – through acquisitions, for example.”

- Peter Wågström, CEO of NCC

NCC (excluding Housing) has defined the following strategic objectives for the Group for the 2016-2020 strategy period:

  • An operating margin of at least 4 percent during the strategy period
  • Average annual sales growth of 5 percent during the strategy period
  • Annual return on equity after tax of at least 20 percent
  • Net indebtedness of less than 2.5 times
  • EBITDAEquity/assets ratio of at least 20 percent
  • Reduction of the accident frequency rate by half by 2020 (compared with the 2015 outcome)
  • Reduction of NCC's CO2 emissions by half by 2020 (compared with the 2015 outcome)

The following financial objectives apply for the three businesses and business areas:

  • NCC Industry: Operating margin of at least 4 percent, and average annual return on capital employed of at least 10 percent, during the strategy period
  • NCC Building and NCC Infrastructure: Operating margin of at least 3.5 percent per year
  • NCC Property Development: Operating margin of at least 10 percent, and average annual return on capital employed of at least 10 percent, during the strategy period

The starting point for the new strategy is NCC's vision to renew our industry and provide superior sustainable solutions. NCC has identified five megatrends that will change the construction and property industry: urbanization, globalization, sustainability, competition for the best talent and new technologies. These trends present opportunities for both profitability and growth.

NCC intends to realise this potential by continuing to develop our existing strengths, where broad geographic presence, strong expertise in the expected growth segments of building and infrastructure and a strong position close to the customer in the value chain, work to NCC's advantage.

The strategic initiatives required to achieve this level of ambition can be summarized in three little words "Must-Win Battles."

  • Operational excellence: NCC aims to become more efficient and profitable by strengthening our existing expertise, more efficient processes, more centralized purchasing processes and increased support for digitized information flows.
  • Market excellence: NCC sees major growth potential in the infrastructure and refurbishment segments through sales of sustainable lifecycle offerings, early marketing of these solutions and by being the customer's first choice.
  • Investment initiatives: Provided that the new strategy increases NCC's profitability and growth, there will be investment scope for growth through investments in, for example, company acquisitions, PPP projects and project development.