SRV

SRV Annual Report 2017

SRV AS A COMPANY

SRV is a bold developer and innovator in the construction industry. We want to offer the best customer experience as a constructor of urban city centres, while also being the most attractive employer in the industry. Our genuine cooperation and enthusiasm for our work comes across in every encounter. Established in 1987, we are a publicly listed company that operates in selected growth centres in Finland, Russia and Estonia. Our revenue in 2017 was over EUR 1.1 billion. Just over 1,000 people work for us and we also employ a network of almost 4,000 subcontractors in our projects.

 

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2017 IN KEY FIGURES

Revenue by operations 2017 (%)
EUR 1.1 billion


Operative operating profit2 and operating profit
(EUR million)


Waste utilisation rate3 (%)


0

Order backlog, EUR million

0    0

Energy consumption, Mwh and                                         CO2 emissions, tons

0

TR measurement average at the SRV sites, %

0    0

Own personnel / personnel average at the SRV sites in 2017

1 Share of revenue, Operations in Finland
2 In order to improve comparability in the case of actual earnings, SRV has adopted the new concept of operative operating profit as of 20 July 2017. It differs from the IFRS definition of operative profit by eliminating the calculated differences in currency exchange rates and their potential hedging impacts included in financial items in Russian operations. As the operating currency was changed in September 2016, the figures from 2013–2015 are not effected by differences in currency exchange rates and their potential hedging impacts.
3 Domestic worksites. Reported amounts do not include demolition waste or soil excavation waste.

CEO’S REVIEW

The year 2017 was a well-deserved jubilee year for SRV. As Finland celebrated its 100th anniversary, SRV became officially 30. Now and then it’s good to take a breather and think back on all that we’ve achieved. The SRV story wonderfully showcases Finnish determination, entrepreneurship, professional skills, challenges and successes.

 

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Developing attractive cities is a team effort

Attractive and evolving city centres lie at the heart of SRV’s strategy. Cooperation with different parties, such as cities, investors, financiers and designers, plays a key role in making cities even better places to live.

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Developing attractive cities is a team effort


Attractive and evolving city centres lie at the heart of SRV’s strategy. Cooperation with different parties, such as cities, investors, financiers and designers, plays a key role in making cities even better places to live.

One example of effective cooperation can be found in Tampere, where an entirely new city district will be erected on top of the railway in the heart of the city over the next few years: the Central Deck and Arena. The new city district unites the eastern and western halves of Tampere. A deck will be built over the railway tracks for an arena with a capacity of more than 13,000 people, as well as a hotel, casino and the tallest tower buildings in the city.

Attractive and evolving city centres lie at the heart of SRV’s strategy. Cooperation with different parties, such as cities, investors, financiers and designers, plays a key role in making cities even better places to live.

“The Central Deck and Arena project has shown that by assembling a team of players that have the same goal, you can achieve results that would be impossible otherwise”, says Tero Tenhunen, Project Manager for the City of Tampere.

A record number of apartments are being built in growth centres due to urbanisation – is a housing bubble looming?

The Greater Helsinki Area, Tampere, Turku, Oulu and Jyväskylä have become the top five growth centres in Finland, where the population is on the rise, the economy is recovering and housing sales are thriving. More and more people are moving into cities to study, work and enjoy better services and quality of life.

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A record number of apartments are being built in growth centres due to urbanisation – is a housing bubble looming?


The Greater Helsinki Area, Tampere, Turku, Oulu and Jyväskylä have become the top five growth centres in Finland, where the population is on the rise, the economy is recovering and housing sales are thriving. More and more people are moving into cities to study, work and enjoy better services and quality of life. 

“Urbanisation will continue at a vigorous pace over the next few years. I don’t believe that there will be any great changes in the urbanisation rate even after that”, says Juhana Brotherus, Chief Economist at HYPO.

Rapid urbanisation in Finland has a strong impact on the housing markets in growth centres: new apartments are being built at a record-breaking rate, cities are becoming more compact and housing prices are rising. In the past few months, the Swedish news has reported that housing prices have declined. What will happen in Finland? “I believe that housing prices in the Greater Helsinki Area and other growth centres will continue to increase at an annual rate of about two per cent because demand is growing fast. On the other hand, apartment prices in areas with negative migration will decline”, says Brotherus.

The downside of urbanisation is that the Finnish housing market is splitting into two castes. Due to the prices of apartments, Finland is also becoming divided in terms of the haves and have-nots. This in turn might put the brakes on urbanisation: work is available in the growth centres, but people might not be able to afford to move there.

Multi-talented international experts on SRV’s sites

Of those working on SRV’s construction sites 24.9 per cent are foreign. Most of them are employed by subcontractors. One of these subcontractors is Real Construct, a Polish firm specialising in auxiliary construction work. SRV has cooperated with the company for 10 years now on projects such as Biomedicum, Helsinki City Theatre and the new campus building of Aalto University.

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Multi-talented international experts on SRV’s sites

Of those working on SRV’s construction sites 24.9 per cent are foreign. Most of them are employed by subcontractors. One of these subcontractors is Real Construct, a Polish firm specialising in auxiliary construction work. SRV has cooperated with the company for 10 years now on projects such as Biomedicum, Helsinki City Theatre and the new campus building of Aalto University.

“For each project, we assemble a suitable team capable of carrying out the widest range of construction work. For instance, a bricklayer should also be able to perform professional levelling and reinforcement. Stints abroad usually last a few months”, says Andrzej Daszynski, Regional Director, Finland at Real Construct.

The company has received particularly good feedback on how well it handles safety issues. “The safety of workers is one of our main priorities, no one wants to get injured. At our headquarters in Krakow, we also deal with occupational safety issues every day. It’s important for workers to understand how to follow all the safety instructions in the field”,  Daszynski adds.

Fine-tuning the design of the Keilaniemi Towers in line with customers’ wishes

SRV plans to build the tallest residential buildings in Finland in Keilaniemi, Espoo. During the autumn, the company held workshops for those interested in Keilaniemi apartments. The workshops considered issues such as apartment floor plans and communal areas.

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Fine-tuning the design of the Keilaniemi Towers in line with customers’ wishes


SRV plans to build the tallest residential buildings in Finland in Keilaniemi, Espoo. During the autumn, the company held workshops for those interested in Keilaniemi apartments. The workshops considered issues such as apartment floor plans and communal areas.

“The workshops reveal that the most important issues for the future residents are a good location, transport connections, good day-to-day functionality and views”, says Project Manager Terttu Peltonen.

The workshops had around 20 participants. They were given the current floor plans of Keilaniemi apartments and asked for their comments. One of the concrete wishes presented at the workshops was that the door to the apartment should have a clear view of the living room, whose windows showcase a beautiful marine landscape. The participants also wanted bigger windows. “The results of the surveys and workshops have been carefully reviewed with SRV’s experts and the SARC architects. On the basis of the results, the floor plans have been fine-tuned to cater to the expectations of the customers, the windows have been made bigger, and the comfort and functionality of bathrooms have been enhanced”, says Peltonen.

RENOVATION OF THE WOMEN’S HOSPITAL SERVES THE WHOLE FAMILY

Urho has a metro station in his own back yard

Eight-year-old Urho, who lives next to the Koivusaari metro station in Espoo, was able to follow the construction work on the station from the very start, directly from the windows of his home. At first, the blasting work on the site scared the small boy now and then. So Site Manager Reima Liikamaa and Area Manager Jussi Lahti paid him a visit and presented Urho with his personal site helmet and ear protectors. This was the beginning of good cooperation, and close contacts were maintained throughout the time of construction.

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Urho has a metro station in his own back yard

Eight-year-old Urho, who lives next to the Koivusaari metro station in Espoo, was able to follow the construction work on the station from the very start, directly from the windows of his home. At first, the blasting work on the site scared the small boy now and then. So Site Manager Reima Liikamaa and Area Manager Jussi Lahti paid him a visit and presented Urho with his personal site helmet and ear protectors. This was the beginning of good cooperation, and close contacts were maintained throughout the time of construction.

In this challenging project, construction took place 30 metres below sea level and to a tight schedule. SRV’s Koivusaari metro station deservedly won the Construction Site of the Year award in 2015. Maintaining good neighbourly relations also played an important role.

“Having a construction site only a few metres way certainly tested the residents’ nerves, but with SRV issues were always handled in an exemplary way. We received the very best service”, says Urho’s father, Kari, with satisfaction.

At the end of the interview, everyone wanted to know, of course, whether the Koivusaari project kindled some kind of spark in Urho for the construction industry? “When I grow up, I want to be a workman, a cook and an icebreaker”, lists Urho with a smile, placing the site helmet on his head.

GRANITE CLADDING TO BE REUSED FOR NEW FACADES IN THE LAPINMÄENTIE PROJECT

The Lapinmäentie project in Munkkivuori, Helsinki, took a major leap forward when the renewal of the block began in October with large-scale demolition work. The aim is to recycle 95 per cent of the demolition waste.

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GRANITE CLADDING TO BE REUSED FOR NEW FACADES IN THE LAPINMÄENTIE PROJECT

The Lapinmäentie project in Munkkivuori, Helsinki, took a major leap forward when the renewal of the block began in October with large-scale demolition work. The aim is to recycle 95 per cent of the demolition waste.

The old main building — Tower A and its foundations, which is known as the Pohjola Building — will be renovated. The other sections will be demolished, largely down to the cellar foundation slabs, while the retained sections, such as the swimming pool area, will be torn down to the park level. The total scope of this work is 45,000 square meter. Over the next years, seven residential towers will be erected on the plot.

The demolition works are expected to be completed in summer 2018. By then, around 130,000 tonnes of waste, such as concrete and bricks, will have been removed from the site.

“Demolition wastes are loaded into large lorry containers measuring 50 cubic metres — but even so, it will take more than 1,000 loads to transport it all”, say Design Manager Henri Nyroos and Project Manager Kimmo Hyry. “Other waste fractions will most likely amount to just under 20,000 tonnes.”

About 1,500 cubic metres of granite cladding will be removed intact from the facade. They will be used in the new facade of the remaining section and in the yard for gate construction”, says Nyroos.

What do the hockey players of Ilves and Tappara expect from Kansi and Areena?

CORPORATE GOVERNANCE

SRV’s corporate governance is based on finnish legislation, SRV’s articles of association and the 2015 finnish corporate governance code for listed companies. SRV’s shares are listed on Nasdaq OMX Helsinki, and SRV observes this exchange’s rules and regulations for listed companies. The company also complies with the regulations of the financial supervisory authority.

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ANNUAL REVIEW AND FINANCIAL STATEMENTS

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