Financial targets & outcome
Skanska's financial targets are to ensure that Skanska creates value for shareholders, as well as reflecting the business environment in which Skanska is active.
Financial targets 2016-2020
Skanska's business plan for the period 2016–2020 sets a number of targets. These financial targets are judged to be those that best reflect the profitability of operations and show the Group's financial capacity for investment and growth. Return on equity and on capital employed are measures of how well shareholder and lender capital are being used (capital efficiency), and are considered a fair measurement for the Group and the Project Development streams. Operating margin, which indicates profitability in the business after selling and administrative expenses, is an important measure of performance in the Construction business stream. The margins depend on the type of business being conducted and can also vary between different geographical markets.
Return on equity will be greater than or equal to 18 percent.
Operating margin will be greater than or equal to 3.5 percent.
The combined return on capital employed in Skanska's three Project Development operations will be greater than or equal to 10 percent.
Outcome - 2017
The table shows the financial targets for the period 2016–2020 as well as the outcome for 2017. In 2017, all of the financial targets in the business plan were reached except for the Construction target.
|Area||Targets 2016-2020||Outcome 2017||Goal met|
Return on equity for the period of ≥ 18%
|Group: Return on equity was 18.6%||Yes|
|Financial strength||Net operating financial assets/liabilities can be negative if opportunities arise||Net operating financial assets/liabilities were SEK 9.7 billion||Yes|
Average margin over a business cycle ≥ 3.5%
The operating margin was
Annual return on capital employed for the combined project development operations ≥ 10 %
Return on capital employed was
Read more about how Skanska plans to reach the targets on Strategy.