Financial objectives 2005 - 2009
The level for the profitability objective is based on the margins that the various parts of the Group may be expected to generate on a sustainable basis, and on capital requirements in relation to the prevailing business focus.
FINANCIAL OBJECTIVES FOR 2010
- Return on shareholders’ equity after tax must amount to 20 percent.
- Net indebtedness must never exceed 1.5 times shareholders’ equity.
For 2010, the financial objectives have been aligned to the new accounting policies that will start being applied then. As of January 1, 2010, NCC will apply IFRIC 15, Agreements for the Construction of Real Estate. The new accounting policies will mainly affect housing operations, since as of 2010 sales of housing projects will generally not be recognized as profit until the projects have been transferred to the end customer,
in contrast to 2009 and prior years, when profit was recognized in pace with completion and sale.
NCC’s assets and liabilities will also be affected by the introduction of IFRIC 15. Interest-bearing liabilities will be higher than previously because ongoing construction of housing in Swedish tenant owner associations and Finnish housing companies will have to be recognized in NCC’s balance sheet. Accordingly, reported net indebtedness will increase. However, the changes will have no impact on NCC’s financial position
and risk.
NCC’s financial objective for the debt/equity ratio is being adapted and increased from 1.0 to 1.5, which means that net indebtedness must never exceed 1.5 times
shareholders’ equity at the end of any quarter. The objective for the return on shareholders’ equity remains unchanged at 20 percent after tax. The current objective for cash flow has been discontinued, due to the limitations on the
debt/equity ratio.
More information
Johan Bergman
Investor Relations Manager
Tel:+46 8 585 523 53
