Lemminkäinen - Company Announcement

Lemminkäinen specifies its strategic focus and launches an efficiency programme to improve profitability; international operations forms the fourth business sector

LEMMINKÄINEN CORPORATION  STOCK EXCHANGE BULLETIN  10 OCTOBER 2011 AT 09.00 A.M


Lemminkäinen specifies its strategic focus and launches an efficiency programme
to improve profitability; international operations forms the fourth business
sector 

Lemminkäinen has specified its strategic focus for the strategic period ending
in 2013. The company's main targets continue to be profitable growth and
improving solvency. The focal point in businesses will be shifted to segments
providing stronger profitability. In addition to this, Lemminkäinen launches an
efficiency programme that is estimated to generate annual savings of EUR 50
million. Growth will be sought through international operations. In order to
accelerate profitable growth and ensure Lemminkäinen's competitiveness in an
international operating environment, the company is creating a new business
sector - the company's fourth - out of its international operations. 

Lemminkäinen is confirming its previous financial target levels for the
strategic period ending in 2013: 

•           over 18 per cent return on investment
•           equity ratio at least 35 per cent
•           net sales growth at an average of 10 per cent

The dividend distribution policy stays intact and Lemminkäinen's goal is to
distribute a minimum shareholders' dividend of 40 per cent of the company's
profit for the financial year. 

Strategic focus

In its operations in Finland, Lemminkäinen will focus on competitiveness and
improving profitability. In Building Construction the target is to increase the
proportion of Lemminkäinen's own housing development to over 50 per cent (about
25% in 2010) and strengthen the company's market share in residential
construction. Another significant area for development is Technical Building
Services' upkeep and maintenance services. The goal is to increase the share of
service operations in the business sector's turnover to about 50 per cent
(about 30% in 2010). 

Profitable growth will be sought through international operations. The goal for
residential construction in St Petersburg is to begin the construction of about
1,000 units every year. Further growth will be sought from the Norwegian,
Danish and Swedish infrastructure markets; the target is increase the company's
net sales by about EUR 100 million in years 2012-2013. In addition to paving
operations, Lemminkäinen is also seeking growth in infrastructure construction
through special contracting - where Lemminkäinen has gained a good competitive
position in, for example, the growing Nordic markets for rock and foundation
engineering. Growth can also be accelerated with acquisitions. 

International operations forms fourth business sector

As of 1 January 2012, International Operations will become Lemminkäinen's
fourth business sector. In addition to Finland, Lemminkäinen's main market area
comprises neighboring regions in Russia, the other Nordic countries and the
Baltic countries. "International operations account for about a third of Lemminkäinen's net sales
and we see the greatest potential for growth outside Finland. Our goal is for
international operations to account for about 40 per cent of our net sales in
the coming years. For example, since Lemminkäinen published its strategy in
November 2009, the company's net sales in Scandinavian infrastructure market
have risen by about EUR 100 million. By creating a separate business sector,
these growing markets will be get more focus from management and in operational
development," says Lemminkäinen's President & CEO, Timo Kohtamäki. 

 Efficiency programme to generate savings of EUR 50 million

Lemminkäinen is boosting profitability with an efficiency programme that seeks
annual cost savings of EUR 50 million from 2013 onwards. The company estimates
that it about half of these savings will be achived in 2012. The efficiency
programme will cover all operations. "Despite our strong order-book, we are not satisfied to our profitability. Also
the general economic uncertainty in has increased. Efficiency will be sought by
both improving our operations and cutting costs. We're, for example, evaluating
the lightening of management and administrative structures. Boosting efficiency
in procurements has a major role. Detailed plans will be drawn up the end of
2011. Unfortunately, we cannot most likely avoid personnel impact," says
Kohtamäki. 

Profit guidance for year 2011 intact

Though Lemminkäinen recognizes increase in general economic uncertainty, the
company's earlier profit guidance remains intact. The Company estimates that in
2011 its net sales will increase and that its pre-tax profit will clearly
improve on 2010. 



LEMMINKÄINEN CORPORATION
Corporate Communications

ADDITIONAL INFORMATION:
President and CEO Timo Kohtamäki
Lemminkäinen Corporation
Tel. +358 2071 53263

Robert Öhman, CFO
Lemminkäinen Corporation
Tel. +358 2071 53515



DISTRIBUTION:
NASDAQ OMX Helsinki
Key media
www.lemminkainen.com



Lemminkäinen Group operates in all areas of the construction sector. The
Group's business sectors are building construction, infrastructure construction
and technical building services. From the beginning of 2012, international
operations will become Lemminkäinen's fourth business sector. Net sales in 2010
were about EUR 2.0 billion, of which international operations accounted for
roughly a quarter. The Group employs an average of 8,000 people. Lemminkäinen
Corporation's share is quoted on NASDAQ OMX Nordic Exchange Helsinki.
www.lemminkainen.com