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Strategy

Our Group strategy

Four megatrends – namely demographic change, decarbonisation, the digitalisation of construction processes, and deglobalisation, i.e. the “four Ds” – serve as the framework conditions defining the future of construction.

The vision “PORR – Home of Construction. To Build a Better World.” sets the direction for the Group strategy. The strategic focus remains on Intelligent Growth with Green and Lean. In concrete terms, this means expanding the leading market positions in the European home markets. This will be achieved by selectively expanding the depth of value creation and strengthening the Group’s regional presence. As a technology pioneer and with strong, Group-wide expertise in circular construction, PORR is positioning itself as a sustainable infrastructure provider. It serves as a one-stop shop for holistic solutions in all areas of construction. The primary goal is to increase the value of the company long term. And to do this for and with every stakeholder.

The future of building

The PORR Group strategy is influenced by complex, long-term framework conditions. The following four Ds not only define our society today but are also determining the future evolution of the European construction industry. In terms of demand, demographic change and deglobalisation are playing a decisive role. Digitalisation is having a significant impact on construction processes in particular, while decarbonisation is changing the industry as a whole.

Demographic change

  • Urbanisation: The urban population will double by 2050. This can go hand in hand with an increase in productivity and innovation. However, it also requires complex challenges to be overcome such as the creation of affordable housing, sustainable infrastructure and reliable transport systems – smart mobility, for short.
  • Ageing society: The global average age will increase by over five years by 2050. This is due to a longer life expectancy and a lower birth rate. Older generations will need more support and their housing needs will shift towards rehabilitation clinics and care homes. A well-developed public transport network is essential for long-term mobility.

Deglobalisation

  • In search of resilience for production and supply chains. Globalisation has increased growth and instability. Its weaknesses are causing many companies to rethink. Supply bottlenecks, geopolitical uncertainties and national legislation are leading to what is known as nearshoring or reshoring – this means relocating production and supply chains to one’s own country or neighbouring countries.
  • Regionalisation requires extensive adjustments. Shorter supply chains and increased trade within a region in turn place greater demands on local logistics. This requires long-term investment in public transport and digital infrastructure. Meanwhile, companies are focusing on building new production and storage facilities.

Decarbonisation

  • Plus 1.5 degrees Celsius – maximum. With the Paris Agreement, around 200 countries have made a joint commitment to stop global warming. The focus is on reducing greenhouse gas (GHG) emissions and increasing resilience to climate change. This opens up extensive new opportunities, particularly in the areas of energy and transport.
  • Europe: First climate-neutral continent with EU Green Deal and EUR 600 bn investment. The ultimate goal is to reduce GHG emissions by 55% by 2030. Sustainable transport, a clean energy system, the refurbishment of buildings, and the green industrial revolution are the keys to achieving this. The latter requires extensive adjustments and innovations in processes and technologies, particularly in the resource-intensive construction industry.

Digitalisation

  • Level-up with artificial intelligence. New technologies are taking digitalisation to the next level. As part of NextGenerationEU, the EU is investing around EUR 250 bn in areas such as digital skills, markets and administration. In addition to artificial intelligence (AI), the programme also focuses on competitiveness in chip manufacturing, cybersecurity and big data.
  • Digitalisation in construction: Here to stay. Data collection with sensitive sensors and 3D scanners, process automation with robotics, 3D printers and drones – it’s all almost standard now. With building information modelling (BIM), augmented and virtual reality, artificial intelligence and digital twins, the construction industry is increasingly becoming a digital industry.

Intelligent growth with Green and Lean.

PORR continues to focus on intelligent growth. This strategy has been supplemented by Green and Lean to help shape the future of construction sustainably. The aim is to be the market leader for resource-conscious, circular construction. Partnership-based concepts and lean structures and processes are key factors for future collaboration and profitability.

The Group strategy is based on twelve action fields in four pillars: Company, Staff, LEAN and ESG. Strategic projects – the strategic project portfolio – are driven forward within this framework. The measures implemented are evaluated in a continuous strategy process based on predefined key indicators.

Company

PORR’s ambition is not to be one of the biggest, but to be the best. This can only be achieved with the right personnel and first-class solutions. The focus is on lean, partnership-based project management. At the same time, the focus is on securing the company’s strong market position by strengthening its own construction value chain. PORR aims to achieve sustainable profitability by digitalising processes and optimising risk management. A strong equity and liquidity position as well as reliable investment management provide a stable foundation for this.

Staff

The five PORR Principles form the basis for working together at PORR. To continue to secure skilled labour and talent, the focus – in addition to occupational safety – is on establishing the company as a top employer. With the PORR Academy, PORR consistently promotes its strengths from within its own ranks, thereby ensuring staff loyalty to the company. Occupational health management (OHM) and the new social policy emphasise the company’s position on health, diversity and performance.

LEAN

The more complex the projects, the more important the expertise. As a design-build contractor, PORR relies on in-house expertise and its own construction value chain. This delivers innovative solutions in design and construction from a single source. BIM has long since become the standard. At the same time, it is driving forward the development of digital future topics as a technology pioneer. Efficient and standardised processes are essential for outstanding quality and the optimised use of resources. Flexibility, cost awareness and clear responsibilities are key aspects of the ongoing LEAN transformation.

ESG

As a construction company, PORR bears a high level of responsibility to the environment. For us, sustainable construction is an opportunity and not a contradiction. Various initiatives and measures are aimed at the careful use of energy and resources. The focus is on decarbonisation and circularity. Ethical, fair and transparent behaviour is a matter of course for every member of staff and means stability. This is the only way to build long-term trust among all stakeholders and live sustainable business practices.

Green and Lean.

Climate change and digitalisation are two of the most important challenges of this decade. For us as a company and for us as a society. Climate change is an existential risk, but it, together with digitalisation, also offers huge opportunities for our generation. In the EU (Green Deal), in the USA (Climate Plan), in China (14th Five-Year-Plan) and globally (Paris Agreement), an economic realignment towards ecological targets has already been laid out. And we want to proactively shape this transformation as one of Europe’s leading construction companies. Because we are building change.

PORR has been around for more than 150 years and innovation and diversity have always been the building blocks of our success. And that will remain the case in future. We have developed the new strategy “Green and Lean” by applying our experience, the enormous knowledge base in the Group and the challenges of our time. It means the next step into the future.

What these three words “Green and Lean” – and yes, all three of them – mean in concrete terms:

  • We will change the way people build.
  • We will apply a holistic mindset and strive for a circular economy.
  • We will promote partnering models.
  • And we will be agile – with our lean management approach and in our operations with LEAN Design and Construction.

Green. means one thing first and foremost: responsibility. After all, we are not building for today and tomorrow, but for the day after that as well. We want to be the market leader for resource-efficient construction that fits within a circular economy. Our goal is to integrate construction processes into closed material cycles wherever possible. We want to increase the percentage of sustainable projects and strive for climate neutrality. This does not only relate to absorbing a significant part of the emissions already generated, but also using technologies of the future to reduce them.

That is why, from design and planning, in the construction process and in operations, as well as for renovations, we apply solutions that deliver a climate-neutral future. This is not uncharted territory for PORR. We have long focused on conserving resources and on environmental awareness. With clear success: in July, the renowned ratings agency ISS awarded us a best-in-class ESG rating. With a C+, we have achieved Prime Status, simultaneously becoming number 1 in the industry on our home markets. This is also what distinguishes PORR: being a visionary and combining this foresight with outstanding skill in implementation.

And. means more than the link between Green and Lean. After all, change can only occur when we join forces. That’s why we engage in partnering models in the construction industry. This facilitates integration into the various stages of the construction value creation cycle and utilises the leveraging effect: Good and meaningful aspects multiply. The project is assessed over its entire lifecycle (design, construction, operations and renovations) and then everything is offered as a one-stop shop.

The benefits are plain to see: maximum risk mitigation coupled with high security in terms of quality, deadlines and costs. We intend to strengthen this approach in future and apply it even more broadly. That’s our “And”: partnerships between everyone involved in a project, with common goals.

Lean. relates to the way our organisation is structured. Lean is seen in our management approaches and is applied in practice in our construction process with the help of LEAN Design and Construction. Lean may sound abstract, but it is already our reality at PORR – we have implemented a streamlined organisation with short decision-making chains this year. This includes digital efficiency and smart innovation. They are instruments we are using to expand our position as technology leaders. Digitalising value chains is more topical than ever before.

And LEAN Design and Construction are our future for operational construction processes. This approach should be understood as an integrated, continuous process. Projects like BMW Freimann clearly demonstrate this – the new BMW complex is genuinely a collaborative achievement. The client as well as PORR and our subcontractor partners worked closely together in the form of a partnering model from the design right through to the turnkey realisation.

As this shows: Green and Lean is more than a strategy, it is a milestone on the path to the future. It is the foundation of our future success and the basis on which we embrace our responsibility towards society as a big company. After all, intelligent building not only connects people, it also shapes our future.

Future programme PORR 2025.

The goals of the future programme PORR 2025 are to secure sustainable profitable growth and improve resilience to any cyclical and geopolitical influences. Far-reaching measures such as adjusting cost and organisational structures and optimising the broad service portfolio are being implemented to achieve this. At the same time, growth topics and innovative digital technologies are being driven forward in order to guarantee PORR’s future competitiveness.

  Strategy Targets
Markets
Greater focus
PORR remains convinced of the long-term potential of its seven European home markets. The aim is to safeguard and expand the strong market position in Europe. The focus is on selective, results-oriented growth and sustainable construction.
 
  • Unite economy, environment and society
  • Intelligent growth with Green and Lean
  • Expand on leading position in home markets
  • Build on general contractor/design-build approach
Operational excellence and digitalisation
Realising future potential
With the transformation currently underway, uniform standards should be secured across the whole Group along with connected processes. Digital, efficient solutions across the entire construction value chain and new, data-based business models open up a new dimension in terms of potential.
 
  • Innovation leader in construction & technology
  • Utilise digital opportunities
  • Optimise construction processes
  • Increase project margins by 1.1% - 1.3%
    by 2025 (based on 2021)
Staff and organisation
Greater efficiency
The rapidly changing market environment demands new flexibility. With a lean and efficient organisation, PORR should be strong and well prepared for (un)foreseeable external impacts. A modern and appreciative working environment is intended to provide an ongoing Best Place to Work.
 
  • LEAN Management – flat hierarchies &
    fast decision paths
  • Best Place to Work: increase staff satisfaction & reduce fluctuation
  • Cut overheads – increase EBT margin
    by 0.2% - 0.4% (based on 2021)
Finance


Enhancing value
The changing market conditions and PORR’s strong growth in the last few years have necessitated an improvement in earnings power and cost structures along with optimising capital employed and the capital structure.

  • Improve capital employed: Sustainable increase in free cash flow, reduce working capital, maintain adequate liquidity
  • Optimising capital structure: Improve equity ratio (20% - 25%), reduce hybrid capital (medium-term equity < 30%), reduction in financial liabilities

Innovation as a clear competitive advantage.

Since its very beginnings, development and innovation have played a key role at PORR: at the start of the 20th century, the inventions of our founder Arthur Porr led to a significant breakthrough in concrete construction methods and formed the foundation for many prestigious buildings.

This passion for innovation has driven us ever since and is an omnipresent feature at PORR. Every PORRian makes a significant difference to PORR's future fitness through his or her ideas and creative concepts. The central point for further development is the "Technology Management and Innovation" department. It offers advice and support to our employees from the operating units. 

Our goal is to optimise the value chain by adopting a customised approach to innovative technologies: from project acquisition to design, calculation and construction, right through to the start-up and maintenance of a property. Here all of our measures have been implemented in such a way that they bring marked benefits for customers and end users.

One of PORR's greatest strengths lies in its pioneering spirit. As a powerhouse of the construction industry, we work with state-of-the-art methods and constantly apply new developments. LEAN Design, LEAN Construction and BIM have made us more creative, faster and more productive throughout the entire value chain. We are not working on the future, we are already working with the future. Go to "Services" for more information on LEAN Design, Construction and BIM.

In addition, PORR is involved in multiple committees in order to develop mandatory standards for the industry. We are determined to be proactive and make the most of every opportunity in this changing competitive environment, while cementing our role as trailblazers in driving the European construction industry forward.