Skanska. How to cope with a multinational project business. Oslo November 23, 2011 Petter Eiken Adm.dir. Skanska Norge

Transcription

1 Skanska How to cope with a multinational project business Oslo November 23, 2011 Petter Eiken Adm.dir. Skanska Norge

2 Facts about Skanska AB Skanska is a leading international project development and construction company. By combining our expertise and financial strength, we develop offices, homes and publicprivate partnership projects. We create sustainable solutions and aim to be a leader in quality, green construction, work safety and business ethics. Of course, we also aim to maximize the potential of Skanska with regard to returns. - Revenue 2010: SEK 121,4 billion - 4,000 recurring customers employees - 4 business streams - Selected home markets in Europe, the U.S., Latin America

3 Local market global strength

4 The Skanska Group Senior Executive Team Skanska Financial Services Group staff units Construction Skanska Sweden Skanska Norway Residential Development Commercial Development Infrastructure Development Skanska Residential Development Nordic Skanska Commercial Development Nordic Skanska Infrastructure Development Skanska Finland Skanska Industrial Production Nordic Skanska Poland Skanska Czech Republic Skanska UK Skanska USA Building Skanska USA Civil Skanska Latin America Skanska Residential Development Poland Skanska Residential Development UK Skanska Commercial Development Europe Skanska Commercial Development USA

5 Skanska in the Nordic region 50 bill. SEK revenue (Swe, Fin, Nor - Danmark) 5 Business units 70 regions 200 districts employees From decentralized to integrated

6 Specialization / globalization An increased need for profesionals that have an overall view

7 Some consequenses of our multi national organization Enormous availibility of competence and experience You can t do to much in parallell Focus on targets and incentives We have much to learn when it comes to structure and long term focus We can contribute a lot when it comes to enthusiasm and involvment

8 Managament / meetings / follow up Senior Executive Team (SET) Strategy Targets Synergies Follow up Finance CoC HR Project approval ORA (Operational Risk Assesment) Development projects CEO, EVP er og SVP er + Business controllere

9 Meeting points Management Meeting (yearly) Board meetings in the BU s 4 times a year Management Review 2 times a year Quarterly Review (finance and other targets) 4 times a year Cluster meetings Bi-monthly

10 ORA Heat maps in all BU. Bid projects are approved on certain organizational levels depending on Size Complecity Segments Experience SRT SET Review Team Experienced specialists STB SET Tender Board Standard templates for structured information IT systems for follow up

11 The five zeroes Zero loss-making projects Zero environmental incidents Zero accidents Zero ethical breaches Zero defects

12 The six big rocks Live Our Values Be Market Makers Explore New Horizons Work Smarter Learn and Lead in Safety Build Winning Teams

13 Some new challenges for us up here Confidential

14 Construction Chinese construction companies have grown rapidly in recent years Now 3 out of 5 of ENRs Top Ranking 2010 of largest contractors in the world are Chinese Huge domestic market All large Chinese contractors have approx 90% of their revenues within China and the rest mainly in Africa (Skanska. 20% of revenues in Sweden) Annual investments in the rail sector will peak around 2013 which will leave the Chinese players with enormous spare capacity. They are already offering highly competitive prices and a package of cheap financing 5 Year plan puts expectations on Chinese construction companies to grow in developed markets, such as the US. Example China State Construction has recently hired Goldman Sachs to help them acquire civil contractor(s) in the US. We visited several spectacular office buildings and the quality looked good Safety is not near our standards 14

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16 Torpedoes in the sea Public sector in southern Europe have to save money Construction capacity will go North Norway is a small nation but with a big budget We have to expect more competition It is important to compete in a way that the society develops in a sustainable way

17 Some challenges Quality issues Too high price focus migth ruin predictability and quality Social standards and safety What can we accept when it comes to conditions for foreign workers Do we want to be part of the whole value chain in Norway The politicians have to decide on this and set the rules

18 Public sector in Norway Conservative (too rich) 429 municipalities are 200 to much The sector is important for the construction industry without knowing I see progress - and better communication Hopefully they will in an increasingly pace act as a demanding client getting value for their money and developing a responsible construction industry

19 Population - Our Shrinking Earth Source: WTO 2007, Geodata Portal compiled from UNPD 2007 World bank 2006

20 Urbanisation city growth

21 Demographics shifting population by 2050

22 Energy Information Administration (2006). Emissions of Greenhouse Gases in the United States.

23 Skanska HQ USA Empire State building, 32 floor Energy saving >38% LEED Platinum Certified Built in 1932

24 Production Productivity 30% 40% Waiting Moving 30%

25 Skanska Xchange is a Nordic program Skanska Xchange Center Residential

26 Large difference in production cost Multi Building cost keur per sellable area (m 2 ) 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0 Sweden Finland** Norway

27 Waste Construction is one of the most inefficient industries when it comes to consumption of finite resources

28 Example Multi in Mäntylinna Waste during production Target waste level in Skanska Fin Average level in Skanska Fin south Mäntylinna 5 kg/m3 5,8 kg/m3 1,4 kg/m3

29 Learnings We will move more production to factories We have to standardize the components that does not affect the design We have to benchmark projects based on cost and time We have to create best practice Products Processes

30 A Great Boss is passionate about people Sets clear expectations Builds diverse effective teams Adjusts communication style Listens Assesses peoples strengths and weaknesses Assesses peoples potential Develops and implements development plans Coaches rather than directs Confronts performance problems Provides feedback often - very often Shows understanding of others thoughts and feelings Recognizes, praises and celebrates

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