How Does Skanska Company Work?

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How Does Skanska Operate?

Skanska AB is a global leader in construction and development, reporting SEK 177.2 billion (US$17.3 billion) in revenue for 2024. This 13% increase was fueled by strong demand, particularly in the US infrastructure sector.

How Does Skanska Company Work?

With around 27,000 employees worldwide, Skanska undertakes major projects across the Nordics, Europe, and the USA, focusing on infrastructure, commercial, and residential developments.

Skanska's operational framework is built on a foundation of sustainability, aiming for net-zero emissions by 2045. The company has already achieved significant reductions in greenhouse gas emissions, with Scope 1 and 2 emissions 61% lower than in 2015, and Scope 3 emissions 37% lower than in 2020. This commitment to environmental responsibility is a key aspect of their business strategy, alongside their project execution. Understanding the dynamics of their market presence is vital, and a Skanska Porter's Five Forces Analysis can offer deeper insights into their competitive landscape.

What Are the Key Operations Driving Skanska’s Success?

Skanska's core operations are built around an integrated business model that spans four key areas: Construction, Commercial Property Development, Residential Development, and Investment Properties. This structure allows the company to create and deliver value across the entire property lifecycle, from initial concept to long-term asset management. The company's extensive reach includes markets such as Sweden, Norway, Finland, Poland, Czech Republic, Slovakia, the UK, and the USA.

Icon Construction Segment

This segment is the largest contributor to revenue, focusing on building resilient infrastructure and various types of buildings. Skanska's expertise in this area is evident in projects like the Portland International Airport redevelopment, featuring a significant mass timber roof.

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Skanska develops sustainable and energy-efficient commercial workplaces and attractive residential homes. These efforts are concentrated in the Nordics, Poland, and the Czech Republic, aiming to create living and working environments that are both modern and eco-conscious.

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This stream involves active investment in and management of high-quality properties, primarily within Sweden. It represents a strategic focus on long-term value creation through property ownership and stewardship.

Icon Operational Excellence

Skanska's operational processes are characterized by comprehensive project management, from design and sourcing to construction and delivery. The company leverages its global experience and local knowledge, supported by a strong supply chain and distribution networks, to successfully execute complex projects.

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Value Proposition: Sustainability and Expertise

Skanska's unique value proposition is deeply rooted in its unwavering commitment to sustainability, integrating Environmental, Social, and Governance (ESG) criteria across all its operations. The company has set an ambitious target to achieve net-zero carbon emissions by 2045, focusing on energy efficiency and the use of low-carbon materials.

  • Targeting net-zero carbon emissions by 2045.
  • Optimizing energy efficiency in buildings and infrastructure.
  • Utilizing low-carbon materials in construction.
  • Focusing on selective project engagement where competitive advantage exists.
  • Managing complex supply chains and labor challenges effectively.

The company's approach to project execution involves meticulous planning and management, ensuring that complex projects are delivered efficiently. For instance, in 2024, Skanska was involved in significant projects such as the redevelopment of Portland International Airport, which includes a substantial mass timber roof measuring 36,400 square meters. Additionally, new healthcare facilities in the Northwestern United States are slated for completion in Q4 2025. These Skanska projects exemplify the company's capability in handling large-scale, technically demanding endeavors. Understanding the company's history, as detailed in the Brief History of Skanska, provides context for its current operational strengths and strategic direction. The Skanska company structure supports this integrated approach, allowing for synergy between its various business areas.

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How Does Skanska Make Money?

Skanska's revenue generation is diversified across four main business streams: Construction, Residential Development, Commercial Property Development, and Investment Properties. This multi-faceted approach allows the company to capture value at different stages of the property lifecycle.

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Construction Revenue

The Construction segment is the largest revenue driver for Skanska. In Q1 2025, it generated SEK 41.8 billion, showing a significant increase from SEK 36.2 billion in Q1 2024. This segment operates with an operating margin of 2.8 percent.

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Residential Development

Revenue from Residential Development was SEK 1.5 billion in Q1 2025, a decrease from SEK 2.0 billion in the same period of 2024. Despite this, the segment reported an operating income of SEK 63 million.

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Commercial Property Development

Commercial Property Development contributed SEK 346 million in revenue in Q1 2025, slightly down from SEK 363 million in Q1 2024. The company strategically divested 11 properties in this segment during 2024.

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Investment Properties

Investment Properties generated SEK 116 million in revenue for Q1 2025, an increase from SEK 70 million in Q1 2024, indicating growth in this area of Skanska's operations.

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Overall Financial Performance

For the full year 2024, Skanska reported a total revenue of SEK 177.2 billion. The first quarter of 2025 saw a 16 percent revenue increase to SEK 42.3 billion, demonstrating positive momentum.

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Monetization Strategies

Skanska monetizes its business by managing the entire project value chain. This includes development, construction, and sometimes long-term property management, leveraging a strong order backlog.

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Strategic Growth and Project Pipeline

Skanska's monetization strategies are further bolstered by its robust order backlog, particularly in the US market for infrastructure and data centers. The company actively secures new projects, such as a US$55 million healthcare facility in California and a Nkr409 million ($37.5 million) school in Norway, booked in Q1 2025. Skanska's focus on Public-Private Partnerships (P3) and green infrastructure projects contributes to revenue stability and capitalizes on the growing demand for sustainable solutions. Understanding Skanska's approach to infrastructure development is key to appreciating its long-term revenue potential. The company's commitment to sustainable building practices is integrated into its project management methodologies explained in detail in this article on the Marketing Strategy of Skanska.

  • Strong demand in the US for infrastructure and data centers.
  • Securing new projects in various sectors and geographies.
  • Strategic divestments to optimize portfolio.
  • Focus on Public-Private Partnerships (P3).
  • Capitalizing on demand for green infrastructure.

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Which Strategic Decisions Have Shaped Skanska’s Business Model?

Skanska has marked significant achievements and strategic shifts, including the 2024 completion of Portland International Airport's Phase 1 and a record order backlog driven by US infrastructure and data centers. The company continues to secure major contracts, demonstrating its robust pipeline and operational capabilities.

Icon Key Milestones and Project Wins

In 2024, Skanska completed Phase 1 of the Portland International Airport redevelopment, a testament to its large-scale project execution. The company also reported a record-high order backlog, bolstered by strong performance in US infrastructure and data center sectors.

Icon Strategic Adaptations and Market Navigation

Skanska has focused on talent retention and domestic sourcing to counter supply chain and labor challenges in the US. A strategic pivot towards Public-Private Partnership (P3) projects and infrastructure development has helped stabilize operating margins amidst Nordic housing market volatility.

Icon Competitive Strengths and Sustainability Focus

Skanska's integrated business model and global experience provide a significant advantage. Its commitment to sustainability, recognized with an MSCI ESG Rating of 'A' in May 2024, enhances its appeal in an increasingly environmentally conscious market.

Icon Selective Bidding and Value Creation

The company employs a selective bidding strategy, prioritizing projects where it holds a distinct advantage and possesses the right teams. This approach minimizes risk and contributes to sustained profitability, aligning with its overall business strategy.

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Skanska's Competitive Edge in the Market

Skanska's competitive advantages stem from its integrated business model, global reach combined with local expertise, and a strong emphasis on sustainability. These factors allow the company to effectively manage complex projects and secure long-term value.

  • Integrated business model fostering synergy across segments.
  • Global experience and local market knowledge in Nordics, Europe, and USA.
  • Strong commitment to sustainability, evidenced by an MSCI ESG Rating of 'A' (May 2024).
  • Science-Based Targets initiative (SBTi) accreditation for environmental goals.
  • Selective bidding strategy focusing on projects with competitive advantages.
  • Expertise in Public-Private Partnership (P3) projects and infrastructure development.
  • Focus on sustainable design and green certifications, such as for the 17xM office tower in Washington D.C.
  • Talent retention and development to address labor market challenges.
  • Domestic sourcing and alternative procurement models for supply chain resilience.
  • Understanding Skanska's approach to infrastructure development is key to appreciating its market position.
  • The company's project management methodologies are designed for efficiency and risk mitigation.
  • Skanska's services span a wide range of construction and development activities.
  • Skanska operations are managed with a focus on safety and ethical conduct.
  • The Target Market of Skanska is diverse, encompassing public and private sector clients.

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How Is Skanska Positioning Itself for Continued Success?

The company holds a leading position in the global construction and project development sector, operating in select markets across the Nordics, Europe, and the USA. Its significant presence in the US civil market serves as a key growth driver, further solidified by a record-high order backlog in 2024, particularly in infrastructure and data centers.

Icon Industry Position

The company is recognized as one of the world's largest construction and project development firms. Its market presence is concentrated in the Nordics, Europe, and the USA, with a notable emphasis on the US civil market as a primary growth engine.

Icon Key Strengths and Market Influence

A record-high order backlog in 2024, especially in US infrastructure and data centers, demonstrates strong competitive standing and sustained customer demand. This robust performance underscores its significant influence within the industry.

Icon Identified Risks and Headwinds

The company faces challenges including ongoing supply chain disruptions, particularly for electrical switchgear and emergency generators. Persistent labor shortages also impact the construction industry, affecting project timelines and costs.

Icon Market and Geopolitical Factors

Market fluctuations, such as the slow recovery in European residential and commercial building markets and a downturn in the Nordic housing market, present risks. Geopolitical events and changes in tariffs on essential materials can also negatively affect project costs and schedules.

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Future Outlook and Strategic Focus

The company's future is guided by its commitment to achieving net-zero carbon emissions by 2045 and integrating sustainability into its operations. Strategic project selection and disciplined investment will drive profitability, with a focus on high-growth sectors like data centers and life sciences facilities.

  • The US market is expected to continue driving growth.
  • Stable civil projects in Europe are anticipated.
  • A gradual recovery is projected for other European building markets.
  • The company aims to enhance resilience through debt management and equity optimization in 2025.

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