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At 31 December 2009, Veidekke had an equity ratio of 26.4 percent. This is well within an acceptable range with regard to capital strength, optimised risk-adjusted yield and future investment requirements. In the event of any capital increases, plans for the employment of the capital are put before the company’s Annual General Meeting.
The company's growth will primarily be based on organic growth, but the company also considers acquisition opportunities among small or medium-sized companies in Veidekke's business and geographical areas. Veidekke has a strong financial position and will use its own financial resources to carry out such acquisitions.
Veidekke aims to give shareholders a high and stable return on their investment in the company. This has been operationalised in targeted requirements. The company has a long-term goal to achieve a profit margin (earnings before tax) of 7 percent based on its current capital structure. Profit margin for 2009 was 3.4 percent, while averaging 4.8 percent the past five years. There are different margin requirements and/or required return on invested capital for the various business areas. Veidekke is working with a number of measures to ensure profitability through improved competitiveness. This includes both control of risk exposure and capital efficiency, which involves planning processes and other efficiency measures.
Dividend policy
Veidekke’s target is to distribute at least 50 percent of the profit for the year to shareholders. A dividend of NOK 2.50 per share (83.3 percent) is proposed for the financial year 2009. The high distribution ratio is based on, among other things, the Group's strong financial position. The distribution ratio average over the past five years is 59.7 percent
Board Authorisation
The Board of Directors has been authorised by the Annual General Meeting to buy back Veidekke shares. The reason for this authorisation is to ensure the highest possible return for the shareholders over time and, if the share price appears favourable, purchases of own shares will be a good supplement to dividends. Share buyback may also be relevant if the equity and liquidity situation is good and other attractive investment opportunities are limited at that time. It is the company’s intention to cancel these shares at the next Annual General Meeting. Authorisation to repurchase Veidekke shares is subject to the approval of the Annual General Meeting, and is valid until the next Annual General Meeting or until 31 May at the latest.
Veidekke works continuously to make necessary provisions to maintain the employees' ownership share, and strives each year to provide financing assistance for share purchases. Financed purchases are subject to a lock-in period of two to three years. At the end of 2009, a total of 3 300 employees held a 19.3 percent stake in the company.