Strategy


The main strategic framework for the Group will be continued in the coming period with further joint focus on a safe working environment and high levels of customer and employee satisfaction in all the companies in the Group. Group management will continue to focus primarily on the revitalisation of the parent company MT Højgaard.

Strategy

Improving operations and earnings, especially in the parent company MT Højgaard’s Danish business, and generally ensuring that all the Group’s areas of activity are healthy and profitable in order to provide a sustainable foundation for the Group’s long-term development and growth remain a strategic key priority for 2019. This work will continue under the heading “Revitalisation”, with the following focus areas: 

 

Critical segmentation of activities

The parent company will continue to aim for a broad presence in the Danish market for both construction and civil works, including residential and commercial building, hospitals, schools, infrastructure, and data centres. Within this market the actual bids will be assessed for risk, attractiveness and the possibility of efficient execution. The business will focus on those projects that offer the best opportunity for reasonable contribution margins and where the Group’s special skills can be used to drive a profitable business. 

Within this framework, we must ensure that the Danish part of MT Højgaard in particular achieves a broader and more balanced project portfolio than previously by focusing even more extensively on large, complex projects, medium-sized projects, and especially on smaller projects. This is essential in order to reduce dependence on very large one-off projects. 

In addition, it is necessary to create critical mass in all the parent company’s active segments in order to ensure sufficient robustness and flexibility in relation to the skills and resources needed to create quality and profitability on projects. 

The Group will regularly assess whether there are any non-core activities that do not offer synergies or create value. We will try to adapt or discontinue these activities in order to ensure competitiveness and earnings. 

Quality in bids and execution

There is focus on avoiding large negative variations on projects. This will be done by ensuring quality in bidding and efficiency in the execution of projects. Work on this is underway at several levels in the parent company. 

Firstly we must ensure that processes and procedures are functioning properly and are adequate and that data is available in order to show whether the projects are progressing atypically or breaking the norm. 

Secondly we must ensure that there is robust management, that processes are embedded, and that management indicators are in place in order to avoid such things as incorrect assessments or overly-optimistic risk assessments, which could have serious consequences. 

It is our opinion that processes and procedures are efficient, including with the use of a stage-gate model in the parent company MT Højgaard that is designed to optimise and improve transitions between the tender and contract phases and the execution and follow-up phases. In addition, the Group’s Contract Board must review tender documents before the final decision on submitting the bid is made by the Executive Board, and, in special cases, by the chairmanship of the Board of Directors.

Leadership presence

The focus on the importance of open dialogue and short chains of command in day-to-day project management will be tightened, so that the employees involved execute the projects in the best possible way. Work will be done on strengthening leadership presence by creating a more efficient organisation with fewer layers of management and shorter distances between the projects and top management. 

Market trends

The construction and civil engineering industry is affected by a number of trends that may impact the Group’s position in the market. Group management has analysed the trends that it considers could have the biggest impact on the Group’s development and operations. 

Digitalisation

Digitalising projects based on VDC (Virtual Design & Construction) creates the basis for major efficiency gains in the industry. 

VDC makes it possible to design, plan and construct projects digitally before actual construction begins. A number of digital initiatives have been put in place in the industry, and the biggest challenge now is integrating the digital tools in the culture and throughout the project value chain. 

The Group is today one of the leaders in VDC in Denmark and has VDC laboratories at its permanent locations and mobile laboratories on major construction sites. 

The Group is still working on the implementation of VDC, with particular focus on ensuring greater adoption of VDC in the production units. With its high degree of in-house production, the Group benefits from moving the same efficient teams from project to project, so that they can take their knowledge and experience of digital tools with them from one construction site to the next.

Partnerships and new forms of collaboration

Contractors now bring skills into play earlier in order to avoid inefficient use of resources on prequalification and tender documents for projects that turn out not to be achievable. This applies to both private and public projects, where collaboration agreements concerning the initial construction phases are signed before a main or design and build contract is finalised. 

The Group has taken the lead in the industry with a new form of collaboration, in which the construction partners join together over a number of years in strategic partnerships for framework agreements with clients. The TRUST business unit has thus been created by Enemærke & Petersen in cooperation with various industry players. 

Project development 

The Group develops and constructs residential, commercial and retail property projects, comprising both relatively small, one-off pro-jects and full urban development. Some projects are developed using the Group’s own property portfolio as a starting point, with the Group either developing, constructing or selling in-house, or developing them in collaboration with property owners, clients and investors with a view to sale to third parties. 

The Group is also one of the most experienced collaborative partners in Denmark within the construction of projects such as hospitals and schools on a PPP basis. 

Industrialisation

Prefabricated buildings are becoming increasingly popular. The main advantages of prefabricated buildings are shorter delivery times, lower costs, higher quality, greater sustainability and not being dependent on the weather, as production takes place in enclosed environments. 

Scandi Byg is a major player in the Danish market for modular construction and, in 2018, was the first player in the industry to have its construction system certified with the Nordic Swan Ecolabel, which reflects a documented sustainable solution for new construction projects as standard. 

Scandi Byg is also increasingly using standard residential construction concepts, where housing is developed and constructed using standard formats and proven solutions and materials. 

MT Højgaard has developed the MultiFlex Living and Multiflex Office concepts, where projects are built in standard formats. This helps to ensure a high, uniform quality on construction projects and makes the construction process more efficient due to, for example, faster official approvals and competitive prices.

Building management systems

The construction industry is seeing an increased focus on building management systems, with growing demand for buildings featuring equipment such as daylight control, energy optimisation and automated indoor climate control. 

Lindpro supplies high-technology solutions for hospitals, data centres, private homes, office buildings and other types of buildings.

Sustainability

The construction industry has a major impact on the consumption of resources and raw materials. In Europe, the construction industry accounts for around 40% of materials consumed and 40% of energy consumption, and in Denmark it accounts for around 30% of the total volume of waste. This has sharpened the focus on creating sustainable construction, for example through improved quality in the construction process, choice of materials, efficient use of raw materials and recycling, and the building’s energy consumption. The indoor climate of the buildings also plays a growing part in respect of the health and wellbeing of its occupants. 

The Group’s construction projects are certified to the leading certification systems DGNB, LEED, BREEAM and the Nordic Swan Ecolabel, and the Group has been participating in the work on DGNB certification in Denmark from the outset. The Group has thus been involved in 10% of all construction projects certified to DGNB in Denmark up to 2018.

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