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Peab
Quarterly Report • May 6, 2024
2954_10-q_2024-05-06_021cf02b-aac5-46b8-8ea4-78f45b2e81b9.pdf
Quarterly Report
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Strong level of orders received during the quarter
In this report amounts and comments are based on segment reporting if not otherwise specified. The Group has different accounting principles in segment reporting compared to reporting according to IFRS for our own housing development projects and for IFRS 16 (previously operational leasing contracts). For more information on our accounting principles and the differences between segment reporting and reporting according to IFRS, see note 1 and 3. For information on alternative performance measures, see the section Alternative performance measures and definitions.
Summary according to segment reporting
- Net sales SEK 11,141 million (12,690)
- Operating profit SEK -106 million (-156)
- Operating margin -1.0 percent (-1.2)
- Pre-tax profit SEK -182 million (-196)
-
Earnings per share SEK -0.45 (-0.54)
-
Orders received SEK 17,889 million (11,042)
- Order backlog SEK 47,808 million (44,595)
- Cash flow before financing SEK -218 million (-908)
- Net debt SEK 9,139 million (7,984)
- Net debt/equity ratio 0.6 (0.5)
Group
| _ | Jan-Mar | Jan-Mar | Apr 2023- | Jan-Dec |
|---|---|---|---|---|
| MSEK | 2024 | 2023 | Mar 2024 | 2023 |
| Segment reporting | ||||
| Net sales | 11,141 | 12,690 | 57,272 | 58,821 |
| Operating profit | -106 | -156 | 1,903 | 1,853 |
| Operating margin, % | -1.0 | -1.2 | 3.3 | 3.2 |
| Pre-tax profit | -182 | -196 | 1,909 | 1,895 |
| Profit for the period | -129 | -154 | 1,439 | 1,414 |
| Earnings per share, SEK | -0.45 | -0.54 | 5.01 | 4.92 |
| Return on equity, % 1) | 9.6 | 12.9 | 9.6 | 9.5 |
| Return on capital employed, $\%$ 1) | 8.9 | 11.1 | 8.9 | 8.7 |
| Net debt | 9,139 | 7,984 | 9,139 | 8,676 |
| Net debt/equity ratio, multiple | 0.6 | 0.5 | 0.6 | 0.6 |
| Equity/assets ratio, % | 34.1 | 34.4 | 34.1 | 34.0 |
| Cash flow before financing | -218 | -908 | -627 | -1,317 |
| Average number of employees | 12,033 | 13,267 | 13,471 | 13,808 |
| Reporting according to IFRS | ||||
| Net sales, IFRS | 11,450 | 12,978 | 60,072 | 61,600 |
| Operating profit, IFRS | -12 | 7 | 2,567 | 2,586 |
| Pre-tax profit, IFRS | -99 | -45 | 2,532 | 2,586 |
| Profit for the period, IFRS | -56 | -35 | 1,967 | 1,988 |
| Earnings per share, IFRS, SEK | -0.20 | -0.12 | 6.84 | 6.92 |
| Net debt, IFRS | 14,929 | 16,940 | 14,929 | 14,537 |
| Equity/assets ratio, IFRS, % | 29.6 | 27.4 | 29.6 | 29.4 |
| Cash flow before financing, IFRS | -19 | -179 | 2,815 | 2,655 |
1) Calculated on rolling 12 months
Net sales
Operating profit
Orders received
Comments from the CEO
The level of orders received in the first quarter was high, the highest in Peab's history. Our broad business model enables us to take advantage of the demand currently in civil engineering, paving and other building construction.
Group development
The beginning of 2024 was characterized by continued varied activity on Peab's different markets. Civil engineering and other building construction developed well while the Nordic housing market continued to be weak. Group net sales contracted by twelve percent during the first quarter and amounted to SEK 11,141 million. Operating profit was SEK -106 million (-156). The first quarter is always clearly affected by the season, particularly in business area Industry, since the paving season does not begin until the second quarter. This means that the beginning of the year is characterized by substantial deficits which affect cash flow and net debt. The net debt/equity ratio was 0.6 (0.5) at the end of March.
The level of orders received amounted to SEK 17,889 million during the first quarter compared to SEK 11,042 in the corresponding quarter last year. This is the strongest quarter ever in the history of Peab, and despite the weak demand on the housing market. During the quarter we received some major orders in business area Civil Engineering but we were also entrusted with a wide variety of other projects. This is undeniable proof of the strength of Peab's business model and also means we will now extend our order backlog.
Operations in Construction and Civil Engineering increasingly participate in dialogues early on with customers prior to planned projects and we are therefore experiencing a greater number of preliminary agreements, so-called phase 1 contracts. Through the preliminary agreements Peab is contracted to arrive at, together with the customer, an optimal product with the right quality and also deal with risks and uncertainties. During the first quarter several projects went from phase 1 to phase 2 and therefore Peab received larger orders. At the same time new projects continue to flow into phase 1. Currently the potential worth of the final construction contracts from these preliminary agreements is around SEK 20 billion over the next two years (SEK 19 billion December 31, 2023).
Business area development
There is a greater element of other building construction in business area Construction. Business area Civil Engineering continues to have a high level of production and orders received. In total, the operating margin for the construction contract businesses during the quarter amounted to 1.9 percent (2.1).
In business area Industry paving has been affected by a long winter and the first quarter was filled with preparations for the coming season. During the quarter we received a number of paving orders throughout the Nordic region, particularly in Finland. Both prefab and rental operations have been affected by the weak housing market and activity in them was lower compared to the first quarter 2023.
In business area Project Development the level of sales of our own developed homes continues to be low but on the bright side we are selling them at an even pace and have noted greater interest after the start of the year, above all in Sweden. During the quarter we started up three housing projects; one in Sweden, one in Norway and one in Finland.
During the quarter we completed a strategic investment in which Peab acquired, for future development, all the shares in Sicklaön Bygg Invest AB that owns development rights in Kvarnholmen in Nacka. At the same time we divested our entire ownership in Tornet Bostadsproduktion that owns property in the management stage. The total effect on profit was SEK 220 million.
Target outcome
We are reporting the outcome for three of our nine external targets this quarter: operating margin, net debt/equity ratio and serious accidents. The operating margin was 3.3 percent on a rolling twelve month basis compared to the target of six percent, which is a reflection of the weak housing market. The net debt/equity ratio was 0.6 at the end of the quarter, which is inside the target interval 0.3-0.7.
Our target for serious accidents is a contracting trend and calculated on a rolling twelve month basis the number of serious accidents was 43 per March 31, 2024 (48 per December 31, 2023).
Sustainability
One important development in sustainability related progress during the quarter is that our ECO-Betong (ECO-Concrete) will be the standard concrete in all our Swedish construction contracts going forward. With ECO-Betong carbon emissions are reduced by at least ten percent compared to traditional concrete. We see a rapidly growing demand for our ECO-products which is very positive for Peab's ongoing transition work towards carbon neutrality.
Market and prospects for the future
Prospects for the Nordic construction markets are on the whole the same as they were in our submarkets the previous quarter although we see a slight improvement in Norway already in 2024 where the forecast for private premises has become more positive. The housing markets are expected to continue to decline while civil engineering markets are expected to be stable.
Declining inflation and expectations of lower interest rates improve the conditions for housing production starts, although recovery will take time. We are following inflation and interest rate developments with great interest. Peab has a well-dimensioned development rights portfolio in attractive locations in the Nordic region and in anticipation of market recovery we are further developing and preparing projects for the future.
Peab's business model with four business areas and local roots has served us well in good and hard times alike. Our four collaborating business areas, extensive Nordic local presence and our skilled employees make Peab less vulnerable in the current market situation, which the excellent level of orders received during the quarter demonstrates. We are well-equipped to handle both a continued weak housing market and meet an upswing in the market.
Jesper Göransson President and CEO
Net sales and profit
January - March 2024
Group net sales during the first quarter 2024 decreased by twelve percent and amounted to SEK 11,141 million (12,690). The decrease is due to the weak demand on the housing market. Even after adjustments for divested units and exchange rate effects, net sales decreased by twelve percent. Net sales for the latest rolling 12 month period amounted to SEK 57,272 million compared to SEK 58,821 million for the full year 2023. Of net sales calculated on a rolling 12 month basis, the share of public sector customers continued to increase and accounted for 50 percent (44) and private customers for 50 percent (56).
Net sales in business area Construction decreased by 22 percent compared to the same period last year. The decrease is due to less activity in new housing production which has not been fully compensated for by other types of projects, and has been experienced in all the countries we operate in. Activity in business area Civil Engineering continued to be on a high level during the period and net sales increased by seven percent compared to the corresponding quarter last year. Net sales in business area Industry decreased by 13 percent with decreases in most of the product areas. Net sales in business area Project Development decreased by 43 percent due to the weak demand for housing throughout the Nordic region and this has affected net sales in Housing Development.
Operating profit for the first quarter 2024 amounted to SEK -106 million (-156) and the operating margin was -1.0 percent (-1.2). The first quarter is clearly affected by the season, particularly in business area Industry, where the beginning of the year is characterized by substantial deficits since the paving season does not start until the second quarter.
In business area Construction the operating margin decreased to 1.7 percent (2.2) while the operating margin in business area Civil Engineering increased to 2.2 percent (1.8). Overall, the operating margin for construction contract operations amounted to 1.9 percent (2.1). In business area Industry, which has a clear seasonal pattern primarily in paving operations, operating profit amounted to SEK -479 million (-435) and the operating margin was -19.9 percent (-15.7). The operating profit in paving was on a par with the first quarter 2023 but both prefab and rental operations have been affected by the weak housing market with a lower level of activity compared to the first quarter last year. Operating profit in business area Project Development improved to SEK 246 million (127). The improvement is attributable to Property Development where capital gains had a positive effect of SEK 258 million (1), of which the sale of the shares in the partially owned company Tornet Bostadsproduktion contributed by SEK 220 million. Operating profit was lower in Housing Development and the operating margin was -1.5 percent (7.3).
Depreciation and write-downs for the first quarter were SEK -350 million (-343).
Elimination and reversal of internal profit in our own projects affected operating profit during the period by net SEK 7 million (4).
Net financial items amounted to SEK -76 million (-40) of which net interest was SEK -102 million (-68). Higher net debt and interest rates have had a negative impact on net interest during the quarter.
Pre-tax profit was SEK -182 million (-196). Profit for the period was SEK -129 million (-154).
Seasonal variations
Group operations, particularly in Industry and Civil Engineering, are normally affected by fluctuations that come with the cold weather during the winter half of the year. The first quarter is usually weaker than the rest of the year.
Operating profit and operating margin, per quarter
* Operating margin excluding effect of MoS was 4.4%. For more information on arbitration in Mall of Scandinavia. see the Annual and Sustainability Report 2023
Operating profit and operating margin, rolling 12 months
* Operating margin rolling 12 months excluding effect of MoS was 3.8% as of June 30, 2023, 3.6% as of September 30, 2023, 2.5% as of December 31, 2023 and 2.6% as of March 31, 2024.
Financial position and cash flow
Financial position
Total assets according to segment reporting per March 31, 2024 were SEK 43,949 million (42,713). Equity amounted to SEK 14,976 million (14,687), which means the equity/assets ratio was 34.1 percent (34.4).
Interest-bearing net debt amounted to SEK 9,139 million (7,984) per March 31, 2024. The increase in net debt refers to more tied up working capital mainly in business area Project Development. Net debt includes project financing of the unsold part of our own housing developments while they are in production. The unsold part was SEK 2,649 million (2,612). Interest-bearing receivables amounted to SEK 2,583 million (1,532). The increase is primarily due to a capital claim of SEK 1,067 million on Unibail Rodamco Westfield according to the arbitration decision announced on June 30, 2023. For details regarding the arbitration decision, see Annual and Sustainability Report 2023. The average interest rate in the loan portfolio, including derivatives, was 5.8 percent (4.2) on March 31, 2024.
Group liquid funds according to IFRS, including unutilized credit facilities but excluding project financing, were SEK 5,751 million at the end of the period compared to SEK 6,410 million on December 31, 2023.
As a consequence of Peab consolidating Swedish tenant-owner associations per January 1, 2020 according to IFRS, surety for tenant-owner associations under production is not reported. When homebuyers take possession of their apartments and the tenant-owner association is no longer consolidated in Peab's accounts, Peab then reports the part of surety that covers unsold homes. Peab has a guarantee obligation to acquire unsold homes six months after completion. Group contingent liabilities, excluding joint and several liabilities in trading and limited partnerships, amounted to SEK 2,395 million at the end of the period compared to SEK 2,428 million on December 31, 2023. Surety for credit lines in tenant-owner associations regarding the unsold part after deconsolidation made up SEK 335 million of contingent liabilities compared to SEK 328 million on December 31, 2023.
Investments and divestments
During the quarter tangible and intangible fixed assets were net invested for SEK 336 million (390). The investments mainly refer to investments in machines in business area Industry.
Net investments in project and development properties, which are recognized as inventory items, totaled SEK 886 million (694) during the quarter. The investments mainly refer to the acquisition of building rights in Nacka through the acquisition of Sickalön Bygg Invest AB.
Cash flow
Cash flow from current operations amounted to SEK -874 million (-701) in the first quarter. Cash flow included higher interest costs. Cash flow from changes in working capital was SEK -388 million (-553) and the negative cash flow was primarily generated in business area Project Development through the acquisition of building rights.
Cash flow from investment activities was SEK 656 million (-207). Cash flow has been positively affected by the sale of the shares in the partly owned company Tornet Bostadsproduktion in business area Project Development. Cash flow has been charged by investments in machines and vehicles in business area Industry.
Cash flow before financing amounted to SEK -218 million (-908).
Net debt
| MSEK | Mar 31 2024 |
Mar 31 2023 |
Dec 31 2023 |
|---|---|---|---|
| Bank loans | 5,775 | 4,758 | 5,380 |
| Commercial papers | 369 | 247 | 523 |
| Bonds | 3,067 | 2,747 | 3,047 |
| Financial leasing liabilities | 820 | 777 | 837 |
| Project financing, unsold part of housing projects | 2,649 | 2,612 | 2,685 |
| Other interest-bearing liabilities | 65 | 82 | 85 |
| Interest-bearing receivables | -2,583 | -1,532 | -2,638 |
| Liquid funds | -1,023 | -1,707 | -1,243 |
| Net debt, segment reporting | 9,139 | 7,984 | 8,676 |
| Additional leasing liabilities according to IFRS 16 | 1,458 | 1,590 | 1,420 |
| Project financing, sold part of housing projects | 4,332 | 7,366 | 4,441 |
| Net debt, IFRS | 14,929 | 16,940 | 14,537 |
Net debt and net debt/equity ratio
Cash flow before financing
Order situation
January - March 2024
The level of orders received increased dramatically during the first quarter 2024 and amounted to SEK 17,889 million (11,042). The level of orders received increased in all business areas but particularly in business areas Civil Engineering and Construction. Business area Civil Engineering includes a part of Västlänken's Haga-Rosenlund stage in Gothenburg worth about SEK 1.5 billion, a new dock in Skellefteå worth about SEK 1.1 billion and operation and maintenance contracts worth about SEK 1.1 billion. A new swimming pool block in Partille worth about SEK 1.3 billion is included in business area Construction. In business area Industry several paving contracts were received during the quarter, among them in Finland. The level of orders received from public customers continued to be good in the quarter.
Order backlog yet to be produced at the end of the period increased and amounted to SEK 47,808 million compared to SEK 44,595 million at the end of the corresponding period last year. The increase in order backlog primarily concerns production that will be carried out next year and thereafter. Of the total order backlog, 46 percent (42) is expected to be produced after 2024 (2023). Swedish operations accounted for 81 percent (79) of the order backlog.
Preliminary agreements
Operations in Construction and Civil Engineering increasingly participate in dialogues early on with customers prior to planned projects and we are therefore experiencing a greater number of preliminary agreements, so-called phase 1 contracts. Through the preliminary agreements Peab is contracted to arrive at, together with the customer, an optimal product with the right quality and also deal with risks and uncertainties. As of this report we will present the potential value of the final construction contracts generated by these preliminary agreements.
At the start of 2024 the potential value was approximately SEK 19 billion. During the first quarter of the year several projects went from phase 1 to phase 2, which meant that the projects became construction contracts and are included in Peab's orders received. At the same time new projects continue to flow into phase 1. The value of the construction contracts generated from these preliminary agreements was at the end of March around SEK 20 billion, and these orders will potentially be received over the next two years.
Orders received
| Jan-Mar | Jan-Mar | Apr 2023- | Jan-Dec | |
|---|---|---|---|---|
| MSEK | 2024 | 2023 | Mar 2024 | 2023 |
| Construction | 6,654 | 4,804 | 24,629 | 22,779 |
| Civil Engineering | 8,188 | 4,442 | 18,836 | 15,090 |
| Industry | 2,932 | 2,689 | 11,429 | 11,186 |
| Project Development | 627 | 143 | 620 | 136 |
| Eliminations | -512 | -1,036 | -3,559 | -4,083 |
| Group | 17,889 | 11,042 | 51,955 | 45,108 |
Order backlog
| Mar 31 | Mar 31 | Dec 31 | |
|---|---|---|---|
| MSEK | 2024 | 2023 | 2023 |
| Construction | 25,483 | 26,577 | 24,469 |
| Civil Engineering | 18,623 | 15,087 | 13,905 |
| Industry | 6,211 | 6,092 | 3,954 |
| Project Development | 1,709 | 4,165 | 1,620 |
| Eliminations | -4,218 | -7,326 | -4,888 |
| Group | 47,808 | 44,595 | 39,060 |
Project size of order backlog, March 31, 2024
Order backlog allocated over time
We received a number of major construction projects and contracts in the first quarter, including:
- Construction of a new dock in Skelleftehamn. The customer is Skellefteå Municipality. The contract is worth SEK 1,132 million
-
- Construction of a new fire station in Kaarina. The customer is the City of Kaarina. The contract is worth EUR 11 million.
- Rebuilding Uddebo wastewater treatment plant in Luleå. The customer is Luleå miljöresurs AB (Lumire). The contract is worth SEK 157 million.
- Construction of 191 apartments, offices and a garage in Jönköping. The rental apartment customer is Brandtornet AB and the office building customer is Hamhus AB. The total contract amount is SEK 368 million.
- Expansion of the municipal water and wastewater net in Borlänge Municipality. The customer is Borlänge Energi. The contract is worth SEK 126 million.
- Construction of a new building at Langhaugen High School in Bergen. The customer is Vestland Municipality. The contract is worth NOK 257 million.
- Construction of a new swimming pool block in Partille Municipality. The customer is Partillebo. The contract is worth SEK 1.3 billion.
- Construction of new railway sidings for local and regional trains in Lärje, north of Gothenburg. The customer is the Swedish Transport Administration. The contract is worth SEK 392 million.
- Renovation of a school in Lund. The customer is Lundafastigheter. The contract is worth SEK 139 million.
-
Construction of a pilot platform facility for clean energy in Espoo. The customer is VTT Technical Research Centre of Finland Ltd. The contract is worth EUR 19 million.
-
Construction of an apartment building in Tapanila in Helsinki. The customer is the City of Helsinki. The contract is worth EUR 13 million.
- Construction of a new assisted living facility in Åmål. The customer is Åmål Municipality. The contract is worth SEK 220 million
- Construction of another building for inmates at the Sörbyn Prison, south of Umeå. The customer is Specialfastigheter Sverige AB. The contract is worth SEK 104 million.
- Renovation and extension of Stora kontoret for SSAB in Oxelösund. This is a turnkey contract and worth SEK 160 million.
- Five new operation contracts for road maintenance from the Swedish Transport Administration. In total Peab will maintain around 6,070 kilometers of state roads over the next four years with an extension option for another two years. The cumulative worth of the contracts is SEK 1,061 million.
- Commission to tear down the existing bridge over Nattviken in central Härnösand and build a new openable bridge in the same place. The customer is Härnösand Municipality. The contract is worth SEK 247 million.
- Rebuilding Kristine Hall, Dala Sinfonietta's concert hall, in Falun. The customer is Falun Municipality. The contract is worth SEK 227 million.
- Construction of part of Västlänken's Haga-Rosenlund stage in Gothenburg. The customer is the Swedish Transport Administration. The contract's estimated worth is SEK 1.5 billion.
- Rebuilding of a school in Malmö. The customer is Revelop. The contract is worth SEK 186 million.
The following own housing developments were production-started in the first quarter:
- Brf Havtornet on Tjörn comprising 54 apartments. The project takes the environmental and climate into consideration in both the choice of materials and the construction stage by, for example, using Peab's ECO-products, requiring fossil-free transportation, reuse and rainwater systems as well as a sedum roof on the building. The project is expected to be completed in February 2027.
- Allegro in Ylöjärvi comprising 50 apartments. The apartment building is being constructed according to EU Taxonomy criteria for environmental sustainability and environmental certification according to BREEAM is planned. Green financing will be applied on the project, which is expected to be completed in October 2025.
- Engene hage in the center of Drammen comprising 33 homes. There are green areas next to the property and the shared roof terraces provide opportunities for cultivation. The project is expected to be completed in December 2025.
We received a number of federal and municipal paving contracts in the first quarter, including:
- One-year federal contract in Nyland worth EUR 12.2 million.
- One-year federal contract in Southwest Finland worth EUR 9.0 million.
- One-year federal contract in Southwest Finland worth EUR
7.3 million. - One-year federal contract in South Ostrobothnia worth EUR
7.3 million. - One-year federal contract in South Ostrobothnia worth EUR 7.0 million.
-
One-year federal contract in Nyland worth EUR 6.5 million.
-
- One-year federal contract in Nyland worth 6.4 MEUR.
- Two-year federal contract in Norrbotten County worth SEK 65 million.
- Two-year federal contract in Gävleborg County worth SEK 58 million.
- Two-year federal contract in Västernorrland County worth SEK 58 million.
- Two-year federal contract in Värmland County worth SEK 42 million.
- One-year federal contract in Randers Municipality worth DKK 26 million.
Overview business areas
The Peab Group is presented in four different business areas: Construction, Civil Engineering, Industry and Project Development. The business areas are also operating segments.
For more information regarding the differences between segment reporting and reporting according to IFRS, see note 1 and note 3.
In addition to the business areas central companies, certain subsidiaries and other holdings are presented as Group functions. The central companies primarily consist of the parent company Peab AB and Peab Finans AB.
Net sales and operating profit per business area
| Net sales | Operatir | g profit | ||||||
|---|---|---|---|---|---|---|---|---|
| MSEK | Jan-Mar 2024 |
Jan-Mar 2023 |
Apr 2023- Mar 2024 |
Jan-Dec 2023 |
Jan-Mar 2024 |
Jan-Mar 2023 |
Apr 2023- Mar 2024 |
Jan-Dec 2023 |
| Construction | 5,788 | 7,422 | 26,146 | 27,780 | 101 | 162 | -20 | 41 |
| Civil Engineering | 3,558 | 3,328 | 15,394 | 15,164 | 77 | 59 | 519 | 501 |
| Industry | 2,411 | 2,779 | 19,594 | 19,962 | -479 | -435 | 918 | 962 |
| Project Development | 1,055 | 1,841 | 4,936 | 5,722 | 246 | 127 | 423 | 304 |
| – of which Property Development | 23 | 9 | 548 | 534 | 261 | -6 | 374 | 107 |
| – of which Housing Development | 1,032 | 1,832 | 4,388 | 5,188 | -15 | 133 | 49 | 197 |
| Group functions | 329 | 377 | 1,439 | 1,487 | -58 | -73 | -284 | -299 |
| Eliminations | -2,000 | -3,057 | -10,237 | -11,294 | 7 | 4 | -53 | -56 |
| Group, segment reporting excl. MoS | 11,141 | 12,690 | 57,272 | 58,821 | -106 | -156 | 1,503 | 1,453 |
| Construction – effect Mall of Scandinavia (MoS) | 400 | 400 | ||||||
| Group, segment reporting | 11,141 | 12,690 | 57,272 | 58,821 | -106 | -156 | 1,903 | 1,853 |
| Adjustment housing to IFRS | 309 | 288 | 2,800 | 2,779 | 85 | 153 | 628 | 696 |
| IFRS 16, additional leases | _ | - | - | - | 9 | 10 | 36 | 37 |
| Group, IFRS | 11,450 | 12,978 | 60,072 | 61,600 | -12 | 7 | 2,567 | 2,586 |
| Of which construction contract businesses according to segment reporting excl. MoS (Construction and Civil Engineering) | 9,346 | 10,750 | 41,540 | 42,944 | 178 | 221 | 499 | 542 |
| Operating margin | |||||
|---|---|---|---|---|---|
| Percent | Jan-Mar 2024 |
Jan-Mar 2023 |
Apr 2023- Mar 2024 |
Jan-Dec 2023 |
|
| Construction | 1.7 | 2.2 | -0.1 | 0.1 | |
| Civil Engineering | 2.2 | 1.8 | 3.4 | 3.3 | |
| Industry | -19.9 | -15.7 | 4.7 | 4.8 | |
| Project Development | 23.3 | 6.9 | 8.6 | 5.3 | |
| - of which Property Development | 1,134.8 | -66.7 | 68.2 | 20.0 | |
| - of which Housing Development | -1.5 | 7.3 | 1.1 | 3.8 | |
| Group functions | |||||
| Eliminations | |||||
| Group, segment reporting excl. MoS | -1.0 | -1.2 | 2.6 | 2.5 | |
| Group, segment reporting | -1.0 | -1.2 | 3.3 | 3.2 | |
| Adjustment housing to IFRS | |||||
| IFRS 16, additional leases | |||||
| Group, IFRS | -0.1 | 0.1 | 4.3 | 4.2 | |
| Of which construction contract businesses according to segment reporting excl. MoS (Construction and Civil Engineering) | 1.9 | 2.1 | 1.2 | 1.3 |
Business area Construction
With local roots close to customers business area Construction does construction work for both external and internal customers. Construction projects include everything from new production of housing, public and commercial premises to renovations and extensions as well as construction maintenance.
Operations in business area Construction are run via some 150 local offices around the Nordic region, organized in eleven regions in Sweden, three in Norway and two in Finland. There are specialized housing production units in Stockholm, Gothenburg and the Öresund region. Construction maintenance is a nationwide organization in Sweden focused on major cities. Other regions are responsible for all types of construction projects in their geographic area.
Net sales and profit
Net sales for the first quarter 2024 decreased by 22 percent and amounted to SEK 5,788 million (7,422). The reduction is primarily due to a lower demand in new production of housing in all countries. The proportion of other building construction, primarily to the public sector, has increased in net sales while the proportion of housing continues to decrease. Calculated on a rolling 12 month period per March 31, 2024 housing accounted for 36 percent (43) of net sales.
Operating profit contracted during first quarter and amounted to SEK 101 million (162) and the operating margin was 1.7 percent (2.2). The operating margin for the latest rolling 12 month period excluding the Mall of Scandinavia effect was -0.1 percent compared to 0.1 percent for the full year 2023. For more information regarding the Mall of Scandinavia arbitration see the Annual and Sustainability Report 2023. The operating margin was 1.5 percent calculated on a rolling 12 months compared to 1.6 percent for the full year 2023.
Orders received and order backlog
The level of orders received during the first quarter rose amounting to SEK 6,654 million (4,804). The quarter includes a new swimming pool block with a swimming pool facility, homes, commercial premises and parking space in Partille for a total worth of around SEK 1.3 billion. In addition, orders received from the public sector for other building construction continued to be good during the quarter.
Order backlog on March 31, 2024 amounted to SEK 25,483 million (26,577). The proportion of other building construction has continued to increase in order backlog while the proportion of housing projects has decreased.
Net sales
per product area, rolling 12 months
per geographic market, rolling 12 months
Order backlog, March 31, 2024
per product area
per project size
| Jan-Mar 2024 |
Jan-Mar 2023 |
Apr 2023- Mar 2024 |
Jan-Dec 2023 |
|
|---|---|---|---|---|
| Net sales, MSEK | 5,788 | 7,422 | 26,146 | 27,780 |
| Operating profit excl. MoS, MSEK | 101 | 162 | -20 | 41 |
| Operating margin excl. MoS, % | 1.7 | 2.2 | -0.1 | 0.1 |
| Operating profit, MSEK | 101 | 162 | 380 | 441 |
| Operating margin, % | 1.7 | 2.2 | 1.5 | 1.6 |
| Orders received, MSEK | 6,654 | 4,804 | 24,629 | 22,779 |
| Order backlog, MSEK | 25,483 | 26,577 | 25,483 | 24,469 |
| Operating cash flow, MSEK | 162 | 225 | 83 | 146 |
| Average number of employees | 4,554 | 5,214 | 4,886 | 5,067 |
Business area Civil Engineering
Business area Civil Engineering is a leading actor in Sweden and one of the larger players in Norway. Civil Engineering works with landscaping and pipelines, builds and maintains roads, railroads, bridges and other infrastructure as well as does foundation work. Operations are organized in seven geographic regions, one region for foundations, and one nationwide region in Sweden for operation and maintenance.
Local market, which represents more than half of net sales in business area Civil Engineering, works with landscaping, streets, pipelines, foundation work as well as construction of different kinds of facilities and water and pipeline systems. Infrastructure and heavy construction builds roads, railroads, bridges, tunnels and ports. Operation and maintenance handles national and municipal highways and street networks, tends parks and outdoor property as well as operates water and wastewater networks.
Net sales and profit
Activity was high in business area Civil Engineering during the first quarter and net sales increased by seven percent to SEK 3,558 million (3,328). Even adjusted for divested operations and exchange rate effects, net sales increased by seven percent. The increase is related to all product areas.
Operating profit increased and amounted to SEK 77 million (59) and the operating margin improved to 2.2 percent (1.8). The operating margin for the latest 12 month period was 3.4 percent compared to 3.3 percent for the full year 2023.
Orders received and order backlog
The level of orders received during the first quarter was high and amounted to SEK 8,188 million (4,442). The quarter included part of Västlänken's Haga-Rosenlund stage in Gothenburg worth around SEK 1.5 billion, a new dock in Skellefteå worth about SEK 1.1 billion and operation and maintenance contracts worth about SEK 1.1 billion.
Order backlog on March 31, 2024 increased and amounted to SEK 18,623 million (15,087).
Orders received after the reporting period
Peab has been commissioned to develop New Bodø Airport as the project moves from the development phase to the implementation phase. The customer is Avinor and the contract is worth NOK 3.3 billion. The construction contract consists of a development phase and an implementation phase. The first phase is a so-called phase 1 contract in which the customer Avinor and Peab, together with subcontractors and consultants, have developed and optimized solutions and set a target price for the project. The project is now entering phase 2 which is the implementation phase. The project comprises the construction of a new runway, taxiways and parking spaces for aircraft. Construction will begin immediately and the project is expected to be completed in June 2028. The project will be order registered in the second quarter of 2024.
Net sales
per product, rolling 12 months
per geographic market, rolling 12 months
Order backlog, March 31, 2024
per product
per project size
| Jan-Mar 2024 |
Jan-Mar 2023 |
Apr 2023- Mar 2024 |
Jan-Dec 2023 |
|
|---|---|---|---|---|
| Net sales, MSEK | 3,558 | 3,328 | 15,394 | 15,164 |
| Operating profit, MSEK | 77 | 59 | 519 | 501 |
| Operating margin, % | 2.2 | 1.8 | 3.4 | 3.3 |
| Orders received, MSEK | 8,188 | 4,442 | 18,836 | 15,090 |
| Order backlog, MSEK | 18,623 | 15,087 | 18,623 | 13,905 |
| Operating cash flow, MSEK | 299 | 140 | 857 | 698 |
| Average number of employees | 3,120 | 3,294 | 3,299 | 3,356 |
Business area Industry
Business area Industry provides the products and services needed to carry out more sustainable and cost-efficient construction and civil engineering projects on the Nordic market. With local roots we work with both external and internal customers.
Business area Industry offers everything from mineral aggregates, concrete, paving and temporary electricity to prefabricated concrete elements and frame assembly. Industry also assists with crane and machine rental, distribution of binder to the concrete industry, transportation as well as recycles residue from the construction and civil engineering industry. The business area is run in six product areas; mineral aggregates, paving, concrete, transportation and machines, rentals and construction system.
Net sales and profit
Business area Industry has a very clear seasonal pattern where the first quarter is characterized by substantial deficits since the paving season begins in the second quarter.
Net sales during the first quarter 2024 decreased by 13 percent and amounted to SEK 2,411 million (2,779). The reduction is related to most product areas.
Operating profit decreased to SEK -479 million (-435) and the operating margin was -19.9 percent (-15.7). The first quarter in paving entails preparing for the coming season but the long winter delayed starting up. Both prefab and rental operations have been affected by the weak housing market with a lower level of activity compared to the first quarter 2023. The operating margin for the latest rolling 12 month period was 4.7 percent compared to 4.8 percent for the full year 2023.
Capital employed at the end of the period was SEK 10,806 million compared to SEK 10,762 million at the end of same period last year.
Orders received and order backlog
The level of orders received during the first quarter amounted to SEK 2,932 million (2,689). The increase is mainly related to paving contracts, particularly in Finland. Order backlog per March 31, 2024 was SEK 6,211 million (6,092).
Net sales
per product area, rolling 12 months
per geographic market, rolling 12 months
| Jan-Mar 2024 |
Jan-Mar 2023 |
Apr 2023- Mar 2024 |
Jan-Dec 2023 |
|
|---|---|---|---|---|
| Net sales, MSEK | 2,411 | 2,779 | 19,594 | 19,962 |
| Operating profit, MSEK | -479 | -435 | 918 | 962 |
| Operating margin, % | -19.9 | -15.7 | 4.7 | 4.8 |
| Orders received, MSEK | 2,932 | 2,689 | 11,429 | 11,186 |
| Order backlog, MSEK | 6,211 | 6,092 | 6,211 | 3,954 |
| Capital employed at the end of the period, MSEK | 10,806 | 10,762 | 10,806 | 10,699 |
| Operating cash flow, MSEK | -536 | -390 | 866 | 1,012 |
| Average number of employees | 3,560 | 3,814 | 4,421 | 4,485 |
| Concrete, thousands of m 3 1) | 187 | 263 | 1,028 | 1,104 |
| Paving, thousands of tons 1) | 111 | 120 | 5,502 | 5,511 |
| Mineral Aggregates, thousands of tons $^{1)}$ | 4,426 | 4,230 | 24,980 | 24,784 |
1) Refers to sold volume
Business area Project Development
Business area Project Development, which comprises Housing Development and Property Development, develops sustainable and vibrant urban environments with residential, commercial and public property.
The business area is responsible for the Group's property acquisitions and divestitures as well as project development which generates contract work for the other business areas. Project Development works through wholly owned companies or in collaboration with other partners in joint ventures.
Housing Development offers a broad range of housing forms including apartment buildings with tenant-owner apartments, condominiums and apartments for rent.
Property Development develops office buildings, premises and sometimes entire city boroughs in collaboration with municipalities and other partners. Operations are primarily concentrated to the big city areas throughout the Nordic region.
Net sales and profit
Net sales in Project Development contracted in the first quarter and amounted to SEK 1,055 million (1,841). The decrease is attributable to Housing Development. Operating profit amounted to SEK 246 million (127) with an operating margin of 23.3 percent (6.9).
Capital employed in Project Development at the end of the period amounted to SEK 18,334 million (16,226). The increase is primarily due to investments in housing development rights.
Capital employed
| MSEK | Mar 31 2024 |
Mar 31 2023 |
Dec 31 2023 |
|---|---|---|---|
| Operations property | 145 | 116 | 146 |
| Investment property | 36 | 36 | 36 |
| Project and development property | 15,496 | 13,662 | 14,603 |
| of which housing development rights | 8,793 | 7,293 | 7,981 |
| of which commercial development rights | 960 | 770 | 901 |
| of which unsold part of ongoing housing projects | 2,337 | 2,532 | 2,461 |
| of which ongoing rental projects | 1,077 | 1,469 | 1,712 |
| of which ongoing commercial projects | 614 | 544 | 489 |
| of which completed property | 646 | 178 | 165 |
| of which other | 1,069 | 876 | 894 |
| Participation in joint ventures | 2,362 | 2,543 | 2,820 |
| Loans to joint ventures | 1,434 | 1,452 | 1,498 |
| Working capital and other | -1,139 | -1,583 | -1,010 |
| Total | 18,334 | 16,226 | 18,093 |
| of which Property Development | 4,590 | 4,712 | 5,034 |
| of which Housing Development | 13,744 | 11,514 | 13,059 |
| Jan-Mar 2024 |
Jan-Mar 2023 |
Apr 2023- Mar 2024 |
Jan-Dec 2023 |
|
|---|---|---|---|---|
| Net sales, MSEK | 1,055 | 1,841 | 4,936 | 5,722 |
| of which Property Development | 23 | 9 | 548 | 534 |
| of which Housing Development | 1,032 | 1,832 | 4,388 | 5,188 |
| Operating profit, MSEK | 246 | 127 | 423 | 304 |
| of which Property Development | 261 | -6 | 374 | 107 |
| of which Housing Development | -15 | 133 | 49 | 197 |
| Operating margin, % | 23.3 | 6.9 | 8.6 | 5.3 |
| of which Property Development | 1,134.8 | -66.7 | 68.2 | 20.0 |
| of which Housing Development | -1.5 | 7.3 | 1.1 | 3.8 |
| Capital employed at the end of the period, MSEK | 18,334 | 16,226 | 18,334 | 18,093 |
| Orders received, MSEK | 627 | 143 | 620 | 136 |
| Order backlog, MSEK | 1,709 | 4,165 | 1,709 | 1,620 |
| Operating cash flow, MSEK | 151 | -508 | -1,595 | -2,254 |
| Average number of employees | 182 | 249 | 206 | 222 |
Housing Development
The continued weak demand on the housing market throughout the Nordic region is evident in Housing Development. Net sales decreased during the quarter and amounted to SEK 1,032 million (1,832). Operating profit amounted to SEK -15 million (133) and the operating margin was -1.5 percent (7.3). The operating margin for the latest rolling 12 month period was 1.1 percent compared to 3.8 percent for the full year 2023. Less activity in our own ongoing housing developments contributed to the lower net sales and operating profit. During the quarter, two rental properties were divested, one in Partille to Annehem Fastigheter and one in Finland.
The level of sales of our own developed homes continues to be low but on the bright side we are selling them at an even pace and have noted greater interest after the start of the year, above all in Sweden. During the quarter we started up three housing projects; one in Sweden, one in Norway and one in Finland. The total number of production start-ups of our own developed homes was 137 (298) in the first quarter. All of these 137 (81) were tenant-owned apartments/condominiums. During the corresponding quarter last year there were also production start-ups of 217 homes in rental apartment projects on our own balance sheet. The total number of sold homes were 305 (245), of which 166 (101) were tenant-owner apartments/condominiums and 139 (144) were homes in rental apartments projects. The total number of homes in production was 2,810 (5,061).
There is a substantial underlying need for homes throughout the Nordic region but higher interest rates and the high cost of construction make it harder to make sound calculations. We see continued interest in our own housing developments but interest rate hikes and concern about the economy in general make it difficult to assess future developments, especially in projects with a long time before occupancy. Falling inflation and expectations of lower interest rate levels in the future create better conditions for production starts of homes, even though recovery will take time. As far as Peab is concerned, we have a well-dimensioned development rights portfolio in attractive locations and while we wait for the market to recover we are further developing and preparing projects for the future.
Capital employed increased at the end of the period and amounted to SEK 13,744 million (11,514). The increase is mainly due to investments in development rights.
In December 2023 Peab signed a contract to acquire Folksam's shares in Sicklaön Bygg Invest AB that partly and wholly owns development rights in Kvarnholmen in Nacka. The acquisition was concluded in January 2024 and Peab thereby increased its ownership from 50 to 100 percent. Peab has developed homes on Kvarnholmen since 2013. Sicklaön Bygg Invest AB has more than 270 zoning approved, wholly owned development rights for a gross area of 26,000 m². In addition, the company owns 50 percent of the shares in Kvarnholmen Utveckling AB that has an ongoing zoning process for more than 120,000 m² housing development rights. Half of them will be turned over to Peab.
Net sales
per geographic market, rolling 12 months
Development rights for housing
| Mar 31 | Mar 31 | Dec 31 | |
|---|---|---|---|
| Number, approx. | 2024 | 2023 | 2023 |
| Development rights on our own balance sheet | 22,800 | 21,500 | 22,000 |
| Development rights via joint ventures | 3,700 | 4,700 | 4,700 |
| Development rights via options etc. | 7,200 | 8,600 | 7,400 |
| Total | 33,700 | 34,800 | 34,100 |
| Own housing development construction | Jan-Mar | Jan-Mar | Apr 2023- | Jan-Dec |
|---|---|---|---|---|
| 2024 | 2023 | Mar 2024 | 2023 | |
| Tenant-owner associations, ownership and residential limited companies | ||||
| Number of production-started homes during the period | 137 | 81 1) | 177 | 121 2) |
| Number of sold homes during the period | 166 | 101 | 607 | 542 |
| Total number of homes under production, at the end of the period | 1,866 | 3,854 | 1,866 | 2,392 |
| Portion of sold homes under production, at the end of the period | 61% | 68% | 61% | 68% |
| Number of repurchased homes on our balance sheet, at the end of the period | 254 | 238 | 254 | 252 |
| Rentals | ||||
| Number of production-started homes during the period | - | 217 | 389 | 606 |
| Number of sold homes during the period | 139 | 144 | 387 | 392 |
| Number converted to tenant-owner associations during the period | - | 45 | 40 | 85 |
| Total number of homes under production, at the end of the period | 944 3) | 1,207 3) | 944 | 1,302 |
| Number of homes completed, at the end of the period | 225 | - | 225 | _ |
$^{1)}$ Includes 45 homes that have been converted from rentals
Time of completion of our own ongoing housing development projects
1) Refers to Swedish tenant-owner associations and single homes, Norwegian condominiums and share housing and Finnish residential limited companies
<sup>2) Includes 85 homes that have been converted from rentals
<sup>3) Of which 116 (722), respectively 12 percent (60), are under contract to be sold upon completion
Property development
Net sales and operating profit from operations are derived from acquisitions, development, running and managing wholly owned property, shares in the result from partly owned companies as well as capital gains/losses from the divestiture of completed property and shares in partly owned companies.
During the first quarter 2024 net sales were SEK 23 million (9) and operating profit was SEK 261 million (-6). Capital gains from property divestitures amounted to SEK 258 million (1) in total, of which the divestiture of the shares in Tornet Bostadsprodktion contributed by SEK 220 million. Profit contributions from partly owned companies amounted to SEK 19 million compared to SEK 10 million in the same quarter last year.
Capital employed in Property Development was SEK 4,590 million (4,712). A large part of the capital employed is shares in partly owned companies and loans to partly owned companies.
In December 2023 Peab signed a contract to divest its 33.3 percent ownership in Tornet Bostadsproduktion to the two other owners, Folksam and Fastighets AB Balder. Peab has been a part owner in Tornet Bostadsproduktion since 2009. The company owns and manages around 2,200 rental apartments and has some 650 rental apartments in production in a number of cities in Sweden. The deal was closed in January 2024, entailing capital gains of SEK 220 million.
The table below presents current property projects per March 31, 2024. The logistics property in Södertälje has been divested to an external party and is expected to be handed over during the fourth quarter 2024.
Current property projects
| Type of project | Location | Rentable area in m² |
Degree rented, % | Recognized value, MSEK | Adopted investment, MSEK | Completion time point | Completion level, % |
|---|---|---|---|---|---|---|---|
| Office building | Jönköping | 3,200 | 100 | 104 | 106 | Completed | 98 |
| Office building | Gothenburg | 12,900 | 11 | 451 | 557 | Q3-2024 | 81 |
| Logistic facility | Södertälje | 23,900 | - | 157 | 372 | Q4-2024 | 42 |
| Others | 6 | ||||||
| Total | 718 |
Significant joint ventures
Peab's significant joint venture companies Fastighets AB Centur, Fastighets AB ML4, Point Hyllie Holding AB and Skiab Invest AB are developing well and via them Peab has built up considerable indirect holdings in investment property and development property for both commercial and residential purposes. Regular returns are in the form of shares in the profit from joint ventures recognized in operating profit and interest income on lending. Changes in market values that affect booked values in the joint venture companies are not included in Peab's accounts.
Fastighets AB Centur
Own, manage and develop commercial property and housing.
Peab's share: 50 percent
Partner: Balder
Geography: Stockholm, the Mälardalen region, Gothenburg and the Öresund region Recognized value on properties March 31, 2024 1): SEK 8,006 million (7,908) Peab's portion of unrecognized fair value exclusive tax 1): SEK 521 million (629)
Major ongoing projects: Varvsstaden, Malmö, renovation of Snickeriet of around 2,500 m² (tenant Lindahls)
Fastighets AB ML4
Own and manage the research facility Max IV. The facility is rented to Lund University.
Peab's share: 50 percent Partner: Wihlborgs Geography: Lund
Recognized value on properties March 31, 2024: SEK 1,878 million (1,929)
Major ongoing projects: No major ongoing projects
Point Hyllie Holding AB
Develop, own and manage the office property The Point as well as own and manage the hotel property Värdshuset 5 (Operator Ouality Hotel View).
Peab's share: 50 percent
Partner: Volito
Geography: Hyllie, Malmö
Recognized value on properties March 31, 2024: SEK 1,370 million (1,399)
Major ongoing projects: No major ongoing projects
Skiab Invest AB
Develop, own and manage commercial property and housing in the Scandinavian mountains.
Peab's share: 50 percent Partner: SkiStar
Geography: Scandinavian mountains
Recognized value on properties March 31, 2024 $^{1}$ ): SEK 2,154 million (2,491) Peab's portion of unrecognized fair value exclusive tax $^{1}$ ): SEK 46 million (63)
Major ongoing projects: No major ongoing projects
1) Valued at market price in joint venture companies. The point in time when market valuations take place can differ between the companies. Market prices on properties that affect the recognized values in the joint venture companies are not included in Peab's accounts.
Construction market
Sweden
Inflation continued to deflate at the end of 2023 and it is believed that interest levels have peaked. The market is counting on several reductions in interest rates in 2024 and according to Riksbanken the first one may be announced in May or June. Sweden's GNP contracted marginally in 2023, weighed down by shrinking consumption and investments. Growing unemployment, weak demand and continued high prices are having a detrimental effect on the economy in 2024 as well. Housing construction was almost halved in 2023 due to high costs and interest rates and households' diminishing disposable income. This negative development is expected to continue in 2024 although at a considerably slower rate. Premise construction in the private and public sectors was also affected negatively by the higher costs and deteriorated economy in 2023 but the downturn was not as dramatic as the one in housing construction. Industry's building construction investments developed horizontally. A broad decline in building construction investments is expected in 2024 followed by an upturn in 2025. Civil engineering construction is believed to have increased in 2023 due to wide ranging expansion in both the private and public sectors. Growth is expected to level out in 2024 followed by an upturn in 2025.
Norway
Weak domestic demand as well as lower consumption and investments led to marginal growth of about one percent in Norwegian mainland economy in 2023. Norway's exports have been negatively affected by the modest economic growth in many of its trading partners. High interest rates and rising unemployment will most likely limit economic growth in 2024 as well. New production of housing drastically contracted in 2023, primarily in apartment buildings, and housing construction is expected to continue to contract in 2024. Regarding other building construction, industrial building construction investments increased while both private and public premise investments contracted. The total volume in building construction investments indicates zero growth in 2024 and a broad recovery in 2025. Civil engineering construction increased in 2023 and is expected to grow in 2024 but then level out in 2025.
+ Finland
The Finnish GNP contracted by a half percent in 2023 according to calculations. Household consumption diminished due to rising interest rates, continued relatively high inflation and increasing unemployment. The total investment volume shrank and exports dropped. In 2024 GNP is expected to continue to contract slightly as a result of lower consumption and investments. Housing construction of both single homes and apartment buildings decreased dramatically in 2023 and this development is expected to continue in 2024. Developments in other building construction were divergent, with more activity in the industrial and public sectors while office buildings and retail space declined. It looks like there will be a wide spread decline in total building construction volumes in 2024 due to high prices and a lack of economic growth. Weak recovery is expected in 2025. According to calculations there was a slight downturn in civil engineering in 2023 and this is expected to continue in 2024 followed by an upswing in 2025.
Housing
| 2024 | 2025 | 2026 | |
|---|---|---|---|
| Sweden | 7 | 7 | 1 |
| Norway | Z | 7 | 1 |
| Finland | 7 | 7 | 7 |
Forecast for production-started housing investments, new production and renovations Source: Navet
Other building construction
| 2024 | 2025 | 2026 | |
|---|---|---|---|
| Sweden | 7 | → | 7 |
| Norway | $\rightarrow$ | 1 | R |
| Finland | 7 | → | 7 |
For exact for production-started other building construction investments, new production and renovations (Industry, office/retail etc. and public premises)
Source: Navet
Civil engineering
| 2024 | 2025 | 2026 | |
|---|---|---|---|
| Sweden | → | 7 | - |
| Norway | 7 | $\rightarrow$ | - |
| Finland | 7 | 7 | - |
Forecast for civil engineering investments Source: Navet
- Same forecast compared to the previous quarterly report
- Better forecast compared to the previous quarterly report
- Worse forecast compared to the previous quarterly report
Non-financial targets and sustainability
Every day Peab contributes to sustainable social development and works to improve everyday life for people in their local communities. We do this by building everything from homes, schools and hospitals to bridges, roads and other infrastructure. Working sustainably is a strategic matter for Peab that primarily takes place locally, connected to everyday life based on our core values, business concept, mission, strategic targets and Code of Conduct.
We monitor our business based on nine external targets – both financial and nonfinancial – that also identify our material sustainable aspects. These are found in the strategic targets Best workplace and Leader in social responsibility. We report the targets quarterly, semi-annually or annually. Our two financial targets regarding the operating margin and net debt ratio are presented in this report together with the target for the outcome of serious accidents.
Most satisfied customers
It is imperative for a long-term, sustainable relationship that Peab deliver on its obligations to customers. A satisfied customer is a customer that comes back and is vital to marketing our company. This is why our annual customer survey is an important measure of how well we are meeting our customers' expectations while also indicating where there is room for improvement. Our latest Customer Satisfaction Index (CSI) score for 2023 remained at 80 (80), which is a continued good result and higher than our target of 75. Customers' perception of Peab's price worthiness and planning ability were the areas where scores increased the most. Regarding our business areas, Construction and Civil Engineering increased their CSI scores.
The next target update will take place after the fourth quarter in connection with the presentation of the year-end report 2024.
Best workplace
Peab's business is founded on a strong corporate culture. We are located in large and small towns all over the Nordic region. Employees can make a difference by building the local community in the places where they live and work. Every employee has a great deal of personal responsibility, and should be met by both good working conditions and development opportunities as well as safe and inclusive workplaces.
Serious accidents
A safe work environment is the foundation of our business. Everyone at our work-places should be able to be there under safe and secure conditions, despite the fact that there are risks involved in the work we do. Peab therefore has a vision of zero workplace accidents. To prevent accidents and incidents at our workplaces, we develop quality-assured work methods and train our employees. The focus is on preventive work and remediation of reported incidents and risk observations. This involves planning and risk assessment in the projects, learning from reported risk observations and from investigations of incidents and accidents.
In order to approach our vision of zero workplace accidents, we have a target of a decreasing trend in serious accidents* that includes everyone at our workplaces. During the first quarter of the year there were 13 serious accidents, of which 8 involved our own employees and 5 involved subcontractors. Calculated on a rolling 12 month basis, the number was 43 per March 31, 2024 (48 per December 31, 2023), of which 24 pertained to own personnel and 19 to subcontractors. It is positive that the level of accidents is decreasing and we continue to focus unabated on preventive work environment work to ensure that the trend continues.
We also monitor the number of workplace accidents with more than four days absence, excluding the day of injury (LTI4), and workplace accidents according to the same definition per one million hours worked (LTIF4) for our own employees. During the first quarter of the year the number of LTI4 was 32 (39 fourth quarter 2023) and the LTIF4 frequency rate on a rolling 12 month basis was 5.4 (5.9 after the fourth quarter 2023), which is also an improvement.
Attractive employers (eNPS)
We should be the best workplace in the industry and thereby the obvious choice of employer. Twice a year we hold our personnel survey The Handshake so that we can continuously develop and improve as co-workers and teams. The questions in The Handshake mainly concern productivity, the team's sustainability and if employees are willing to recommend Peab as an employer to friends and acquaintances (eNPS). The latter is also one of our nine external targets that we report twice a year and should be above the benchmark for the industry (industry and manufacturing). In the autumn survey the eNPS score fell slightly from 27 to 26 but the results are about the same as in the spring survey 2023, despite a
tougher market situation. The Nordic benchmark has dropped from 21 to 19. Notable in the survey was that satisfaction among female skilled workers rose considerably as in business area Civil Engineering which has not been hit as hard by the current difficult market situation. Participation in the autumn survey was 87.3 percent, which is the highest ever.
The next target update will take place after the second quarter in connection with the presentation of the half-year report 2024.
The total number of employees per March 31, 2024 was 13,902 (15,134). The average number of employees on a rolling 12 month basis amounted to 13,472 compared to 13,808 for the full year 2023. The calculation of average number of employees has changed as of January 1, 2023 and is based on the sum of hours worked.*
* For a definition see section Alternative performance measures and definitions.
Leader in social responsibility
Climate target for carbon dioxide intensity
As the Nordic Community Builder we have a big responsibility for reducing the considerable climate impact of the construction and civil engineering industry at the rate required by the Paris Agreement. Peab impacts the environment and the climate through our own operations and the impact our suppliers and customers have. Operations primarily cause emissions of greenhouse gases by using various materials in production like concrete, steel and asphalt. Two other major sources of carbon emissions in production are energy consumption and transportation. Therefore our prioritized, emission reduction activities can be found within the framework of these areas. As community builders we also have a comprehensive perspective on our climate work and strive to contribute to a sustainable society on the whole by building, for example, solar power plants and railroads or by building in such a way that people can live more sustainably. We have a life cycle perspective in our operations and take responsibility for both making and meeting demands in our value chain. We have an advantage in that we can supply our construction contract operations and the projects we develop ourselves with input goods and raw material through business area Industry, which augments our ability to actively steer towards lower carbon emissions.
In 2045 Peab will be climate neutral. Our targets by 2030 are to reduce carbon dioxide intensity by at least 60 percent in our own operations (Scope 1 and 2) and for input goods and purchased services (Scope 3) by at least 50 percent compared to base year 2015. The outcome after 2023 revealed that developments are going in the right direction although to different degrees. Carbon dioxide intensity in our own production has gone down by 49 percent compared to base year 2015 and by 9 percent for input goods and purchased services. This means that we are well on the road to converting the production we ourselves have control over but the greater challenge is when we are dependent on other parties for a reduction in our carbon footprint. It is therefore vital that we continue to make explicit and stringent demands as well as point out choices that are better for the climate in order to reduce emissions. We work actively to increase the completeness of our measurements of carbon dioxide intensity, which is particularly demanding in Scope 3 reporting.
The next target update will take place after the fourth quarter in connection with the presentation of the year-end report 2024.
Equal opportunity
Only about five percent of those that graduate with, for Peab, degrees in relevant, practical education are women. This means that the construction and civil engineering industry has a major role to play in taking advantage of all the competence society has to offer. As one of the largest Nordic community builders we have a responsibility to nudge the entire industry forward. Our target initially is therefore to strive for the percentage of women recruited to Peab for our core skills to always be higher than the percentage of women who have graduated with, for us, relevant degrees on the education markets. We are focused on core skills in production (skilled workers) as well as in production management and production support (white-collar workers). At the end of 2023 the percentage of women in new recruitments was 14.2 percent in production and processing compared to our target of more than 5.0 percent. For 2024 we have raised our target to 6.0 percent. New recruitment in production management and production support dropped to 18.8 percent whereas our target is at least 30.0 percent. The reason behind the reduction was the few recruitments during the year because of the current market situation.
The next target update will take place after the fourth quarter in connection with the presentation of the year-end report 2024.
Activities during the first quarter
- ECO-Betong (ECO-Concrete) is now the standard concrete in Peab's Swedish
operations. This is a substantial contribution to the environment by
reducing carbon emissions by at least ten percent compared to traditional
concrete. Every gram that can be replaced with alternative binders like
Merit makes a difference. - Peab has signed an agreement with Benders to open a new terminal in
Uddevalla to store the alternative binder Merit that reduces concrete's
carbon footprint. Peab ordered 2,500 tons of rebar from Spain that have a
climate impact of a mere 182 kg CO2e per ton, which is the lowest on the
European market. The European average is almost four times higher for the
same type of rebar. The substantial reduction in CO2e comes from the fact - that the steel has been produced entirely with solar power. In addition, the rebar was shipped to Sweden on a vessel powered by biofuel.
- Peab is the first company in Sweden to meet the Nordic Swan Ecolabel requirements for renovating an existing house. It is an apartment building in Ronneby from the 1950s that was originally going to be demolished but has now been preserved with an environmental certification.
- A new cohort of female trainees will soon start practicing at Peab's
construction and civil engineering projects in Sweden when the second
round of the Construction Year starts. The application process began during
the quarter and is now in full swing. The program is an initiative that strives
to create greater equality in the construction industry.
Summary external targets
In order to further promote value creation Peab updated its targets as of 2021 – everything from our mission, business concept and strategic target areas to internal and external financial and non-financial targets. We report the performance of our business by monitoring nine external targets, of which three are financial and based on segment reporting and six are non-financial targets. We consider the external targets particularly important and they are a subset of our internal targets and action plans. At the beginning of 2024, Peab communicated that all nine targets will remain unchanged for the period 2024 – 2026.
Both the internal and external financial and non-financial targets are categorized under the strategic targets: Most satisfied customers, Best workplace, Most profitable company and Leader in social responsibility. All targets relate to the industry. For a more detailed description of each target please see www.peab.com/targets.
Most satisfied customers
We are close to our customers and meet their needs with sustainable offers. Quality permeates our work methods and end results. The right expertise in the right place is key to success.
75CSI always over 79
Best workplace
We are a safe, secure and inclusive workplace rooted in a strong company culture. Leadership takes responsibility and is close to operations. Employees have value-creating and developing work assignments that they complete together.
eNPS always over benchmark
Zero Vision serious accidents Through a contracting trend
Most profitable company
We take on the right projects and have the right business mix. Employees work according to quality-ensured work methods that are efficient in every aspect. Through our own resources and internal collaboration we maintain a high degree of value creation. We take advantage of our size and experience.
6% Operating margin
0.3-0.7 Net debt/equity ratio
Dividend >50% of profit for the year
Leader in social responsibility
As the Nordic Community Builder we drive developments in our industry in matters concerning the climate and environment, ethics, and equal opportunity and inclusion. We work well together with stakeholders in the world around us and stride every day towards a sustainable value chain. With our extensive local presence we are also an important actor in the local community.
-60% Carbon dioxide intensity
Reduction of emissions from our own production by 2030 (Scope 1+2).
-50% Carbon dioxide intensity
Reduction of emissions from input goods and purchased services by 2030 (Scope 3).
Equal opportunity recruitment
Share of women recruited always over the education market
Target and target fulfilment
Most profitable company
Operating margin
Target: >6% according to segment reporting (reported quarterly)
* Years 2016-2018 not translated according to changed accounting principles for own housing development projects. **Operating margin 4.5% excl. the effect of the distribution of Annehem Fastigheter (SEK 952 million). *** Operating margin 2.5% excl. Mall of Scandinavia (SEK 400 million). *** Year 2024 calculated on rolling 12 months per March 31, 2024. Operating margin 2.6% excl. Mall of Scandinavia.
Best workplace
Serious accidents
Target: Zero fatal accidents and contracting trend, rolling 12 months, serious accidents classification 4 (reported quarterly)
Leader in social responsibility
Carbon dioxide intensity: Climate targets for our own production
Target: Reduced emissions of GHG Scope 1+2* (tons CO2e/MSEK) by 60% until 2030 (reported annually)
* Direct and indirect emissions as a result of using fuel and energy in our own production.
Most profitable company
Net debt/equity ratio
Target: 0.3-0.7 according to segment reporting (reported quarterly)
* Years 2016-2018 not translated according to changed accounting principles for own housing development projects.** Per March 31, 2024
Best workplace
eNPS
Target: > over benchmark (reported semiannually)
eNPS stands for employee Net Promoter Score and measures employee engagement. The score can vary between -100 and 100
Leader in social responsibility
Carbon dioxide intensity: Climate targets for input goods and purchased services
Target: Reduced emissions of GHG Scope 3* (tons CO2e/MSEK) by 50% until 2030 (reported annually)
* Includes concrete/cement, asphalt/bitumen, transportation and machine services, steel, waste and business trips.
Most profitable company
Dividend
Target: >50% of profit for the year according to segment reporting (reported annually)
* Years 2016-2018 not translated according to changed accounting principles. * * For 2019, no cash dividend has been paid. The value of the distribution of Annehem Fastigheter at the time of the distribution in December 2020 amounted to 97 percent of the profit for the year 2019. * * * The proportion is calulated without the effect of SEK 952 million on profit due to the distribution of Annehem Fastigheter. * * * * Board of Directors' proposal to the AGM.
Most satisfied customer:
Customer Satisfaction Index (CSI)
Target: > 75 (reported annually)
CSI stands for Customer Satisfaction Index and measures how satisfied Peab's customers are. CSI is a weighted measurement between 0 and 100.
Leader in social responsibility
Equal opportunity recruitment
Target: Share of women recruited > the education market (reported annually)
Production management and production support (white-collar workers), %
— Actual -- Target
Risks and uncertainty factors
Peab's business is exposed both to operative and financial risks as well as compliance risks and external and market risks. How much risks affect Peab's profits and position depends on how well the company handles daily operations. External and market risks are events that are out of Peab's control but which affect the business environment. These are, for example, developments in the economy, customer behavior, climate impact and political decisions.
Managing operative risks is a continuous process considering the large number of projects the Group is always starting up, carrying out and completing. Operative risks are managed in the line organization in the business areas through established procedures, processes and control systems. Peab's business is largely project-related. There are a number of different contract forms where risk levels vary depending on the type of contract. However, with any type of contract ambiguities can arise concerning the terms, which can lead to delimitation issues that create a dispute with the customer.
A decision in the case between Peab and Unibail Rodamco Westfield regarding the contract for Mall of Scandinavia in Solna was handed down in Peab's favor on June 30, 2023. In August Unibail Rodamco Westfield petitioned the Swedish Court of Appeal to set aside the judgment in its entirety in a so-called protest action. After a thorough legal trial through arbitration lasting nearly seven years Peab cannot see any grounds for a protest action. In the further process Peab will counter the protest action. During the process the arbitration judgement is suspended and thereby unenforceable, which defers the time of payment. For details see the Annual and Sustainability Report 2023.
Financial risks are primarily associated with the company's need for capital, tied-up capital and access to financing. Financial risks are managed on Group level.
In recent years there has been a significant rise in the price of materials and energy. However, during the past year we have noticed that material prices have stagnated and there has even been a slight decline in prices, mainly regarding energy. We follow developments carefully and continually work to adapt and streamline production all the while expecting continued high construction costs. High construction costs and interest rates make it harder for calculations to come out ahead, which dampens demand on the construction market throughout the Nordic region.
Interest rates have continued to rise and central banks have raised policy interest rates several times during the last year. Higher interest rates are expected to stymy investment appetite and diminish demand.
Since Russia invaded Ukraine in February 2022 the global situation has changed dramatically. In addition to the terrible tragedy for the people the war touches, the situation risks further hampering macroeconomic growth in the world. The construction industry is affected through greater uncertainty and cautiousness concerning investments and continued high material and energy prices. Peab is not directly exposed to Russia, Ukraine or Belarus but may be indirectly affected through material suppliers. We follow developments carefully to continually assess any effects on Peab.
For further information about risks and uncertainty factors, see the Annual and Sustainability Report 2023.
Other information
Significant events during the period
Peab reiterated its external targets at Capital Markets Day
In connection with Peab's Capital Markets Day in February 2024 Peab communicated that the nine external targets adopted in 2021 are still relevant and therefore remain unchanged. The targets are both financial and non-financial and are categorized under the strategic targets; Most satisfied customers in the industry, Most profitable company in the industry, Best workplace in the industry and Leader in social responsibility in the industry. Peab's President and CEO Jesper Göransson and the rest of Peab's executive management presented an update on Peab's business situation and strategic focus going forward. At the same time Peab also reported a potential level of orders received of about SEK 19 billion in total over the next two years due to more preliminary agreements, so-called phase 1 contracts, in construction contract operations.
Significant events after the period
No significant events occurred after the end of the reporting period.
Holdings of own shares
At the beginning of 2024 Peab's holding of its own shares was 8,597,984 B shares which corresponds to 2.9 percent of the total number of shares. No changes have occurred during the first quarter 2024.
Related parties
The character and extent of transactions with related parties is presented in the Annual and Sustainable Report 2023, note 41. For more information about transactions with related parties during the period see business area Project Development. No other new significant transactions have occurred during the first quarter 2024.
Report on the Group income statement, IFRS
Group net sales according to IFRS amounted during the first quarter 2024 to SEK 11,450 million (12,978). After adjustments for divested units and exchange rate effects net sales decreased by eleven percent. The adjustment of our own housing development projects to the completion method affected net sales by SEK 309 million (288).
Operating profit according to IFRS for the first quarter 2024 amounted to SEK -12 million (7) and the operating margin was -0.1 percent (0.1). The adjustment of our own housing development projects to the completion method affected operating profit by SEK 85 million (153).
| MSEK | Jan-Mar 2024 |
Jan-Mar 2023 |
Apr 2023- Mar 2024 |
Jan-Dec 2023 |
|---|---|---|---|---|
| Net sales | 11,450 | 12,978 | 60,072 | 61,600 |
| Production costs | -11,008 | -12,138 | -55,053 | -56,183 |
| Gross profit | 442 | 840 | 5,019 | 5,417 |
| Sales and administrative expenses | -759 | -854 | -3,069 | -3,164 |
| Other operating income | 329 | 42 | 644 | 357 |
| Other operating costs | -24 | -21 | -27 | -24 |
| Operating profit | -12 | 7 | 2,567 | 2,586 |
| Financial income | 68 | 36 | 616 | 584 |
| Financial expenses | -155 | -88 | -651 | -584 |
| Net finance | -87 | -52 | -35 | 0 |
| Pre-tax profit | -99 | -45 | 2,532 | 2,586 |
| Тах | 43 | 10 | -565 | -598 |
| Profit for the period | -56 | -35 | 1,967 | 1,988 |
| Profit for the period, attributable to: | ||||
| Shareholders in parent company | -57 | -35 | 1,966 | 1,988 |
| Non-controlling interests | 1 | 0 | 1 | 0 |
| Profit for the period | -56 | -35 | 1,967 | 1,988 |
| Key ratios, IFRS | ||||
| Earnings per share before and after dilution, SEK | -0.20 | -0.12 | 6.84 | 6.92 |
| Average number of outstanding shares, million | 287.5 | 287.5 | 287.5 | 287.5 |
| Return on capital employed, $\%^{1)}$ | 9.2 | 8.2 | 9.2 | 9.1 |
| Return on equity, % 1) | 13.8 | 13.7 | 13.8 | 14.1 |
1) Calculated on rolling 12 months
Report on the Group income statement and other comprehensive income in summary, IFRS
| MSEK | Jan-Mar 2024 |
Jan-Mar 2023 |
Apr 2023- Mar 2024 |
Jan-Dec 2023 |
|---|---|---|---|---|
| Profit for the period | -56 | -35 | 1,967 | 1,988 |
| Other comprehensive income | ||||
| Items that can be reclassified or have been reclassified to profit for the period | ||||
| Translation differences for the period from translation of foreign operations | 54 | -98 | 7 | -145 |
| Changes in fair value of cash flow hedges for the period | 13 | -3 | 34 | 18 |
| Shares in joint ventures' other comprehensive income | 0 | 2 | -6 | -4 |
| Tax referring to items that can be reclassified or have been reclassified to profit for the period | -3 | 0 | -7 | -4 |
| Other comprehensive income for the period | 64 | -99 | 28 | -135 |
| Total comprehensive income for the period | 8 | -134 | 1,995 | 1,853 |
| Total comprehensive income for the period, attributable to: | ||||
| Shareholders in parent company | 7 | -133 | 1,994 | 1,854 |
| Non-controlling interests | 1 | -1 | 1 | -1 |
| Total comprehensive income for the period | 8 | -134 | 1,995 | 1,853 |
Report on financial position for the Group in summary, IFRS
Total assets on March 31, 2024 were SEK 48,890 million (49,782). Equity amounted to SEK 14,481 million (13,652), which generated an equity/assets ratio of 29.6 percent (27,4).
| MSEK | Mar 31 2024 |
Mar 31 2023 |
Dec 31 2023 |
|---|---|---|---|
| Assets | |||
| Intangible assets | 3,830 | 3,968 | 3,789 |
| Tangible assets | 8,266 | 8,271 | 8,333 |
| Investment property | 59 | 59 | 61 |
| Interest-bearing long-term receivables | 1,457 | 1,226 | 1,293 |
| Other financial fixed assets | 2,272 | 2,532 | 2,857 |
| Deferred tax recoverables | 95 | 189 | 97 |
| Total fixed assets | 15,979 | 16,245 | 16,430 |
| Project and development properties | 19,087 | 19,217 | 18,061 |
| Inventories | 2,227 | 2,009 | 1,705 |
| Interest-bearing current receivables | 1,126 | 306 | 1,345 |
| Other current receivables | 9,448 | 10,298 | 10,392 |
| Liquid funds | 1,023 | 1,707 | 1,243 |
| Total current assets | 32,911 | 33,537 | 32,746 |
| Total assets | 48,890 | 49,782 | 49,176 |
| Equity and liabilities Equity | 14,481 | 13,652 | 14,470 |
| Liabilities | |||
| Interest-bearing long-term liabilities | 6,738 | 7,505 | 7,046 |
| Interest-bearing long-term liabilities, project financing | 170 | 27 | 193 |
| Deferred tax liabilities | 618 | 485 | 623 |
| Other long-term liabilities | 1,704 | 1,377 | 2,005 |
| Total long-term liabilities | 9,230 | 9,394 | 9,867 |
| Interest-bearing current liabilities | 4,816 | 2,696 | 4,246 |
| Interest-bearing current liabilities, project financing | 6,811 | 9,951 | 6,933 |
| Other current liabilities | 13,552 | 14,089 | 13,660 |
| Total current liabilities | 25,179 | 26,736 | 24,839 |
| Total liabilities | 34,409 | 36,130 | 34,706 |
| Total equity and liabilities | 48,890 | 49,782 | 49,176 |
| Key ratios, IFRS Capital employed | 33,016 | 33,831 | 32,888 |
| Equity/assets ratio, % | 29.6 | 27.4 | 29.4 |
| Net debt | 14,929 | 16,940 | 14,537 |
| Equity per share, SEK | 50.31 | 47.43 | 50.28 |
| Number of outstanding shares at the end of the period, million | 287.5 | 287.5 | 287.5 |
<-- PDF CHUNK SEPARATOR -->
Report on changes in Group equity in summary, IFRS
| MSEK | Mar 31 2024 |
Mar 31 2023 |
Dec 31 2023 |
|---|---|---|---|
| Equity attributable to shareholders in parent company | |||
| Opening equity on January 1 | 14,453 | 13,768 | 13,768 |
| Profit for the period | -57 | -35 | 1,988 |
| Other comprehensive income for the period | 64 | -98 | -134 |
| Total comprehensive income for the period | 7 | -133 | 1,854 |
| Cash flow hedge transferred to cost of inventory | 1 | - | -24 |
| Tax on cash flow hedge | - | - | 5 |
| Cash dividend | - | - | -1,150 |
| Closing equity | 14,461 | 13,635 | 14,453 |
| Non-controlling interests | |||
| Opening equity on January 1 | 17 | 18 | 18 |
| Comprehensive income for the period | 1 | -1 | -1 |
| Shareholder contribution | 2 | _ | - |
| Closing equity | 20 | 17 | 17 |
| Total closing equity | 14,481 | 13,652 | 14,470 |
Report on Group cash flow in summary, IFRS
| MSEK | Jan-Mar 2024 |
Jan-Mar 2023 |
Apr 2023- Mar 2024 |
Jan-Dec 2023 |
|---|---|---|---|---|
| Cash flow from current operations before changes in working capital | -318 | 85 | 2,882 | 3,285 |
| Increase (-) / Decrease (+) of project and development properties | -758 | -174 | 278 | 862 |
| Increase (-) / Decrease (+) of inventories | -468 | -472 | -148 | -152 |
| Increase (-) / Decrease (+) of current receivables / current liabilities | 869 | 589 | 201 | -79 |
| Cash flow from changes in working capital | -357 | -57 | 331 | 631 |
| Cash flow from current operations | -675 | 28 | 3,213 | 3,916 |
| Sale of subsidiaries / businesses, net effect on liquid funds | 28 | - | 78 | 50 |
| Acquisition of fixed assets | -331 | -356 | -1,695 | -1,720 |
| Sale of fixed assets | 959 | 149 | 1,219 | 409 |
| Cash flow from investment operations | 656 | -207 | -398 | -1,261 |
| Cash flow before financing | -19 | -179 | 2,815 | 2,655 |
| Shareholder contribution non-controlling interests | 2 | - | 2 | - |
| Increase (+) / Decrease (-) of interest-bearing liabilities | -38 | 625 | 675 | 1,338 |
| Increase (+) / Decrease (-) of interest-bearing liabilities, project financing | -166 | -243 | -3,032 | -3,109 |
| Cash dividend | - | - | -1,150 | -1,150 |
| Cash flow from financing operations | -202 | 382 | -3,505 | -2,921 |
| Cash flow for the period | -221 | 203 | -690 | -266 |
| Cash at the beginning of the period | 1,243 | 1,506 | 1,707 | 1,506 |
| Exchange rate differences in cash | 1 | -2 | 6 | 3 |
| Cash at the end of the period | 1,023 | 1,707 | 1,023 | 1,243 |
Parent company
The parent company Peab AB's net sales for the first quarter 2024 amounted to SEK 179 million (72) and mainly consisted of internal Group services. Profit for the period amounted to SEK -5 million (-59).
The parent company's assets mainly consist of participations in Group companies amounting to SEK 10,433 million (11,749). The assets have been financed from equity of SEK 11,804 million (8,693). In the previous year there were long-term liabilities to Group companies amounting to SEK 1,500 million.
As of February 1, 2024 Peab's Swedish support functions are run in Peab AB. The change has been implemented through a so-called business transition, which means that all employees in Peab Support AB (Shared Service Centre) and Peab Utveckling AB have been offered a transfer of employment to Peab AB.
The parent company is indirectly affected by the risks described in the section Risks and uncertainty factors.
Report on the parent company income statement in summary
| MSEK | Jan-Mar 2024 |
Jan-Mar 2023 |
Apr 2023- Mar 2024 |
Jan-Dec 2023 |
|---|---|---|---|---|
| Net sales | 179 | 72 | 374 | 267 |
| Administrative expenses | -229 | -129 | -594 | -494 |
| Other operating income | 1 | 1 | 3 | 3 |
| Operating profit | -49 | -56 | -217 | -224 |
| Result from financial investments | ||||
| Profit from participation in Group companies | - | - | 3,310 | 3,310 |
| Other financial items | 43 | -19 | 85 | 23 |
| Result after financial items | -6 | -75 | 3,178 | 3,109 |
| Appropriations | - | - | 1,367 | 1,367 |
| Pre-tax profit | -6 | -75 | 4,545 | 4,476 |
| Тах | 1 | 16 | -284 | -269 |
| Profit for the period 1) | -5 | -59 | 4,261 | 4,207 |
1) Profit/loss for the period corresponds to comprehensive profit/loss for the period and therefore only one income statement is presented and no separate one for comprehensive profit/loss
Report on financial position for the parent company in summary
| MSEK | Mar 31 2024 |
Mar 31 2023 |
Dec 31 2023 |
|---|---|---|---|
| Assets | |||
| Fixed assets | |||
| Intangible assets | 351 | 3 | 2 |
| Tangible assets | 36 | 2 | 2 |
| Financial assets | |||
| Participation in Group companies | 10,433 | 11,749 | 10,433 |
| Deferred tax recoverables | 85 | 95 | 83 |
| Total financial assets | 10,518 | 11,844 | 10,516 |
| Total fixed assets | 10,905 | 11,849 | 10,520 |
| Current assets | |||
| Current receivables | |||
| Accounts receivables | 0 | 0 | 0 |
| Receivables from Group companies | 3,846 | 1,722 | 4,940 |
| Current tax assets | - | 17 | - |
| Other receivables | 117 | 33 | 57 |
| Prepaid expenses and accrued income | 102 | 12 | 13 |
| Total current receivables | 4,065 | 1,784 | 5,010 |
| Cash and bank | 0 | 0 | 0 |
| Total current assets | 4,065 | 1,784 | 5,010 |
| Total assets | 15,530 | ||
| Total assets | 14,970 | 13,633 | 15,530 |
| Equity and liabilities | |||
| Equity | |||
| Restricted equity | 1,884 | 1,884 | 1,884 |
| Non-restricted equity | 9,920 | 6,809 | 9,925 |
| Total equity | 11,804 | 8,693 | 11,809 |
| Untaxed reserves | 2,919 | 3,292 | 2,919 |
| Provisions | |||
| Other provisions | 44 | 44 | 43 |
| Total provisions | 44 | 44 | 43 |
| Long-term liabilities | |||
| Liabilities to Group companies | 1,500 | ||
| Total long-term liabilities | - | 1,500 | |
| Current liabilities | |||
| 45 | 15 | 10 | |
| Accounts payable | 45 | 15 | 19 |
| Liabilities to Group companies Current tax liabilities | 8 | 16 | 645 |
| Other liabilities | 26 | - 8 | 21 |
| Accrued expenses and deferred income | 124 | 8 65 |
|
| Total current liabilities | 203 | 104 | 759 |
| Total liabilities | 203 | 1,604 | 759 |
| Total equity and liabilities | 14,970 | 13,633 | 15,530 |
| rotat equity and dabilities | 14,970 | 13,033 | 15,530 |
Note 1 - Accounting principles
The quarterly report has been prepared according to the IFRS standards that have been adopted by EU as well as the interpretations of the valid standards adopted by EU, IFRICs. This report for the Group has been prepared according to IAS 34, Interim financial reporting as well as applicable regulations in the Annual Accounts Act. The parent company quarterly report has been prepared according to chapter 9 in the Annual Accounts Act, Quarterly reports and RFR 2, Accounting rules for legal entities. The Group and parent company have applied the same accounting principles and conditions as in the latest Annual and Sustainability Report.
In addition to the financial reports and their accompanying notes further information according to IAS 34.16A can be found in other sections of the quarterly report.
Differences in segment reporting and reporting according to IFRS
The Group is reported in the four business areas Construction, Civil Engineering, Industry and Project Development. The business areas are also operating segments. Segment reporting is the model Peab believes best describes Peab's business regarding both internal steering and risk profile, and it is also how the Board and executive management monitor operations.
For Peab's construction contract businesses, Construction and Civil Engineering, revenue and profit are recognized over time in both segment reporting according to IFRS. For business area Industry revenue and profit are recognized both over time and at a certain point in time, and reporting is the same in both segment reporting and reporting according to IFRS. For business area Project Development in segment reporting within the unit Housing Development revenue and expenses are recognized over time as the projects are successively completed. This applies to Swedish tenant-owner associations and own single homes, Norwegian condominiums and share housing and Finnish residential limited companies. In reporting according to IFRS, housing projects are recognized when the final homebuyers take possession of their apartments. In business area Project Development and the unit Property Development revenue and profit are recognized at a certain point in time in both segment reporting and reporting according to IFRS.
Group functions are reported in addition to the business areas and consist of central companies, certain subsidiaries and other holdings. Central companies consist primarily of the parent company Peab AB and Peab Finans AB. There is no difference in segment reporting and reporting according to IFRS regarding Group functions.
In segment reporting leasing fees for the lessee are recognized linearly over the leasing period for leasing contracts that by the counterparty (lessor) are classified as operational leasing contracts. IFRS 16 Leases is applied in the consolidated accounts according to IFRS which entails that the lessee recognizes depreciation and interest attributable to leasing assets respectively leasing liabilities. Leasing contracts that by the counterparty (lessor) are classified as financial leasing contracts are recognized in Peab's segment accounting according to the principles that correspond with those for the lessee according to IFRS 16.
Reporting on internal projects between business areas Construction and Project Development
Business area Construction recognizes revenue and profit referring to the construction contract part of our own housing developments, rental project developments and other property development projects for business area Project Development. Recognition takes place over time as the projects are completed. Business area Project Development recognizes revenue for both the construction contract and developer part of our own housing development projects. Recognized profit consists of the profit in the developer part over time. Internal net sales between business area Construction and business area Project Development regarding the construction cost of our own housing development projects are eliminated in consolidated reporting. Internal profit is returned when the project is divested.
Reporting on property projects on our own balance sheet
The underlying sales value of property projects on our own balance sheet, recognized as project and development property, that are sold in the form of a company via shares, is recognized as revenue and the book value on the balance sheet is recognized as an expense. When property projects recognized as operations property or investment property are divested the net effect on profit is recognized as other operating income or other operating cost. Recognition of property projects is the same in both segment reporting and reporting according to IFRS.
Financial key ratios in segment reporting
Financial key ratios such as capital employed, total assets, equity, equity/assets ratio, net debt, net debt/equity ratio, cashflow before financing and earnings per share are presented in segment reporting with consideration taken to the above prerequisites. Net debt in segment reporting includes project financing for the unsold portion of ongoing own housing development projects. This is because Peab has an obligation to acquire unsold homes six months after completion.
Note 2 - Revenue allocation
| _ | _ | Differences in | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Group Jan-Mar 2024 MSEK |
Construction | Civil Engineering |
Industry | Project Development |
Group functions |
Eliminations | Group Segment |
accounting principles 1) |
Group IFRS |
| Allocation per external/internal |
|||||||||
| External sales | 5,087 | 3,340 | 1,650 | 1,049 | 15 | 11,141 | 309 | 11,450 | |
| Internal sales | 701 | 218 | 761 | 6 | 314 | -2,000 | - | - | |
| Total | 5,788 | 3,558 | 2,411 | 1,055 | 329 | -2,000 | 11,141 | 309 | 11,450 |
| Allocation per country | |||||||||
| Sweden | 4,580 | 3,217 | 1,921 | 739 | 266 | -1,806 | 8,917 | -19 | 8,898 |
| Norway | 686 | 341 | 102 | 106 | 30 | -127 | 1,138 | 315 | 1,453 |
| Finland | 522 | 249 | 210 | 33 | -67 | 947 | 13 | 960 | |
| Denmark | 137 | 137 | 137 | ||||||
| Other | 2 | 2 | 2 | ||||||
| Total | 5,788 | 3,558 | 2,411 | 1,055 | 329 | -2,000 | 11,141 | 309 | 11,450 |
| Allocation per type of customer | |||||||||
| Public sector | 2,858 | 2,579 | 257 | 3 | 12 | 5,709 | -2 | 5,707 | |
| Private customers | 2,229 | 761 | 1,393 | 1,046 | 3 | 5,432 | 311 | 5,743 | |
| Internal customers | 701 | 218 | 761 | 6 | 314 | -2,000 | - | - | |
| Total | 5,788 | 3,558 | 2,411 | 1,055 | 329 | -2,000 | 11,141 | 309 | 11,450 |
| Allocation per point in time | |||||||||
| At one point in time | 17 | 5 | 1,179 | 513 | 14 | -239 | 1,489 | 890 | 2,379 |
| Over time | 5,767 | 3,549 | 724 | 513 | 257 | -1,362 | 9,448 | -581 | 8,867 |
| Rent revenue 2) | 4 | 4 | 508 | 29 | 58 | -399 | 204 | 204 | |
| Total | 5,788 | 3,558 | 2,411 | 1,055 | 329 | -2,000 | 11,141 | 309 | 11,450 |
| Allocation per type of revenue | |||||||||
| Construction contracts | 5,767 | 3,549 | 724 | 513 | 10 | -1,115 | 9,448 | -581 | 8,867 |
| Sales of goods | 896 | -169 | 727 | 727 | |||||
| Sales of property projects | 510 | 510 | 890 | 1,400 | |||||
| Transportation services | 249 | -61 | 188 | 188 | |||||
| Administrative services | 247 | -247 | - | - | |||||
| Rent revenue 2) | 4 | 4 | 508 | 29 | 58 | -399 | 204 | 204 | |
| Other | 17 | 5 | 34 | 3 | 14 | -9 | 64 | 64 | |
| Total | 5,788 | 3,558 | 2,411 | 1,055 | 329 | -2,000 | 11,141 | 309 | 11,450 |
1) Refers to differences in accounting principles regarding our own housing development projects. In segment reporting revenue is recognized over time while in reporting according to IFRS it is at the time of possession.
2) Rent revenue is recognized according to IFRS 16.
| Group Jan-Mar 2023 | Civil | Project | Group | Group | Differences in accounting | ||||
|---|---|---|---|---|---|---|---|---|---|
| MSEK | Construction | Engineering | Industry | Development | functions | Eliminations | Segment | principles 1) | Group IFRS |
| Allocation per external/internal |
|||||||||
| External sales | 5,956 | 3,022 | 1,864 | 1,835 | 13 | 12,690 | 288 | 12,978 | |
| Internal sales | 1,466 | 306 | 915 | 6 | 364 | -3,057 | - | - | |
| Total | 7,422 | 3,328 | 2,779 | 1,841 | 377 | -3,057 | 12,690 | 288 | 12,978 |
| Allocation per country | |||||||||
| Sweden | 5,146 | 3,005 | 2,218 | 1,365 | 290 | -2,490 | 9,534 | -158 | 9,376 |
| Norway | 1,239 | 322 | 106 | 139 | 44 | -178 | 1,672 | -133 | 1,539 |
| Finland | 1,037 | 1 | 319 | 337 | 43 | -388 | 1,349 | 579 | 1,928 |
| Denmark | 135 | -1 | 134 | 134 | |||||
| Other | 1 | 1 | 1 | ||||||
| Total | 7,422 | 3,328 | 2,779 | 1,841 | 377 | -3,057 | 12,690 | 288 | 12,978 |
| Allocation per type of customer | |||||||||
| Public sector | 2,679 | 2,372 | 236 | 13 | 10 | 5,310 | -11 | 5,299 | |
| Private customers | 3,277 | 650 | 1,628 | 1,822 | 3 | 7,380 | 299 | 7,679 | |
| Internal customers | 1,466 | 306 | 915 | 6 | 364 | -3,057 | - | _ | |
| Total | 7,422 | 3,328 | 2,779 | 1,841 | 377 | -3,057 | 12,690 | 288 | 12,978 |
| Allocation per point in time | |||||||||
| At one point in time | 1 | 3 | 1,376 | 403 | 18 | -290 | 1,511 | 1,687 | 3,198 |
| Over time | 7,419 | 3,322 | 830 | 1,410 | 308 | -2,329 | 10,960 | -1,399 | 9,561 |
| Rent revenue 2) | 2 | 3 | 573 | 28 | 51 | -438 | 219 | 219 | |
| Total | 7,422 | 3,328 | 2,779 | 1,841 | 377 | -3,057 | 12,690 | 288 | 12,978 |
| Allocation per type of revenue | |||||||||
| Construction contracts | 7,419 | 3,322 | 830 | 1,410 | 21 | -2,043 | 10,959 | -1,399 | 9,560 |
| Sales of goods | 1,058 | -213 | 845 | 845 | |||||
| Sales of property projects | 400 | 400 | 1,687 | 2,087 | |||||
| Transportation services | 274 | -65 | 209 | 209 | |||||
| Administrative services | 286 | -286 | - | - | |||||
| Rent revenue 2) | 2 | 3 | 573 | 28 | 51 | -438 | 219 | 219 | |
| Other | 1 | 3 | 44 | 3 | 19 | -12 | 58 | 58 | |
| Total | 7,422 | 3,328 | 2,779 | 1,841 | 377 | -3,057 | 12,690 | 288 | 12,978 |
1) Refers to differences in accounting principles regarding our own housing development projects. In segment reporting revenue is recognized over time while in reporting according to IFRS it is at the time of possession.
2) Rent revenue is recognized according to IFRS 16.
| Group Jan-Dec 2023 | Civil | Project | Group | Group | Differences in accounting | ||||
|---|---|---|---|---|---|---|---|---|---|
| MSEK | Construction | Engineering | Industry | Development | functions | Eliminations | Segment | principles 1) | Group IFRS |
| Allocation per external/internal |
|||||||||
| External sales | 23,195 | 13,786 | 16,086 | 5,695 | 59 | 58,821 | 2,779 | 61,600 | |
| Internal sales | 4,585 | 1,378 | 3,876 | 27 | 1,428 | -11,294 | - | - | |
| Total | 27,780 | 15,164 | 19,962 | 5,722 | 1,487 | -11,294 | 58,821 | 2,779 | 61,600 |
| Allocation per country | |||||||||
| Sweden | 20,250 | 13,692 | 12,272 | 4,331 | 1,169 | -9,633 | 42,081 | 857 | 42,938 |
| Norway | 4,236 | 1,472 | 1,588 | 357 | 159 | -749 | 7,063 | 261 | 7,324 |
| Finland | 3,294 | 4,934 | 1,034 | 158 | -910 | 8,510 | 1,661 | 10,171 | |
| Denmark | 1,145 | 1 | -2 | 1,144 | 1,144 | ||||
| Other | 23 | 23 | 23 | ||||||
| Total | 27,780 | 15,164 | 19,962 | 5,722 | 1,487 | -11,294 | 58,821 | 2,779 | 61,600 |
| Allocation per type of customer | |||||||||
| Public sector | 12,047 | 10,847 | 5,475 | 47 | 47 | 28,463 | -32 | 28,431 | |
| Private customers | 11,148 | 2,939 | 10,611 | 5,648 | 12 | 30,358 | 2,811 | 33,169 | |
| Internal customers | 4,585 | 1,378 | 3,876 | 27 | 1,428 | -11,294 | - | - | |
| Total | 27,780 | 15,164 | 19,962 | 5,722 | 1,487 | -11,294 | 58,821 | 2,779 | 61,600 |
| Allocation per point in time | |||||||||
| At one point in time | 51 | 20 | 6,387 | 1,785 | 84 | -1,129 | 7,198 | 6,807 | 14,005 |
| Overtime | 27,717 | 15,131 | 11,392 | 3,820 | 1,193 | -8,490 | 50,763 | -4,028 | 46,735 |
| Rent revenue 2) | 12 | 13 | 2,183 | 117 | 210 | -1,675 | 860 | 860 | |
| Total | 27,780 | 15,164 | 19,962 | 5,722 | 1,487 | -11,294 | 58,821 | 2,779 | 61,600 |
| Allocation per type of revenue | |||||||||
| Construction contracts | 27,717 | 15,131 | 11,392 | 3,820 | 77 | -7,374 | 50,763 | -4,028 | 46,735 |
| Sales of goods | 5,036 | -790 | 4,246 | 4,246 | |||||
| Sales of property projects | 1,743 | 1,743 | 6,807 | 8,550 | |||||
| Transportation services | 1,205 | -273 | 932 | 932 | |||||
| Administrative services | 1,116 | -1,116 | - | - | |||||
| Rent revenue 2) | 12 | 13 | 2,183 | 117 | 210 | -1,675 | 860 | 860 | |
| Other | 51 | 20 | 146 | 42 | 84 | -66 | 277 | 277 | |
| Total | 27,780 | 15,164 | 19,962 | 5,722 | 1,487 | -11,294 | 58,821 | 2,779 | 61,600 |
1) Refers to differences in accounting principles regarding our own housing development projects. In segment reporting revenue is recognized over time while in reporting according to IFRS it is at the time of possession.
2) Rent revenue is recognized according to IFRS 16.
Note 3 – Operating segment and reconciliation between segment reporting and reporting according to IFRS
| Group Jan-Mar 2024 | Civil | Project | Group | Group | Differences in accounting | Group | |||
|---|---|---|---|---|---|---|---|---|---|
| MSEK | Construction | Engineering | Industry | Development | functions | Eliminations | Segment | principles 1) | IFRS |
| External sales | 5,087 | 3,340 | 1,650 | 1,049 | 15 | 11,141 | 309 | 11,450 | |
| Internal sales | 701 | 218 | 761 | 6 | 314 | -2,000 | - | - | |
| Total revenue | 5,788 | 3,558 | 2,411 | 1,055 | 329 | -2,000 | 11,141 | 309 | 11,450 |
| Operating profit | 101 | 77 | -479 | 246 | -58 | 7 | -106 | 94 | -12 |
| Operating margin, % | 1.7 | 2.2 | -19.9 | 23.3 | -1.0 | -0.1 | |||
| Financial income | 68 | 68 | |||||||
| Financial expenses | -145 | -10 2) | -155 | ||||||
| Net finance | -77 | -10 | -87 | ||||||
| Pre-tax profit | -182 | 83 | -99 | ||||||
| Tax | 53 | -10 | 43 | ||||||
| Profit for the period | -129 | 73 | -56 | ||||||
| Capital employed (closing balance) | -986 | -394 | 10,806 | 18,334 | -39 3) | 27,721 | 5,295 | 33,016 | |
| Total assets | 43,949 | 4,941 4) | 48,890 | ||||||
| Equity | 14,976 | -495 | 14,481 | ||||||
| Equity/assets ratio, % | 34.1 | 29.6 | |||||||
| Net debt | 9,139 | 5,790 | 14,929 | ||||||
| Cashflow before financing | 162 5) | 299 5) | -536 5) | 151 5) | -294 6) | -218 | 199 | -19 |
$^{1)}$ For more information about the allocation of revenue and profit items see note 2 and the section Overview business areas.
6) Unallocated cash flow
| al II | _ | _ | Differences in | _ | |||||
|---|---|---|---|---|---|---|---|---|---|
| Group Jan-Mar 2023 MSEK |
Construction | Civil Engineering |
Industry | Project Development |
Group functions |
Eliminations | Group Segment |
accounting principles 1) |
Group IFRS |
| External sales | 5,956 | 3,022 | 1,864 | 1,835 | 13 | 12,690 | 288 | 12,978 | |
| Internal sales | 1,466 | 306 | 915 | 6 | 364 | -3,057 | - | - | |
| Total revenue | 7,422 | 3,328 | 2,779 | 1,841 | 377 | -3,057 | 12,690 | 288 | 12,978 |
| Operating profit | 162 | 59 | -435 | 127 | -73 | 4 | -156 | 163 | 7 |
| Operating margin, % | 2.2 | 1.8 | -15.7 | 6.9 | -1.2 | 0.1 | |||
| Financial income | 36 | 36 | |||||||
| Financial expenses | -76 | -12 2) | -88 | ||||||
| Net finance | -40 | -12 | -52 | ||||||
| Pre-tax profit | -196 | 151 | -45 | ||||||
| Tax | 42 | -32 | 10 | ||||||
| Profit for the period | -154 | 119 | -35 | ||||||
| Capital employed (closing balance) | -1,820 | -56 | 10,762 | 16,226 | 798 3) | 25,910 | 7,921 | 33,831 | |
| Total assets | 42,713 | 7,069 4) | 49,782 | ||||||
| Equity | 14,687 | -1,035 | 13,652 | ||||||
| Equity/assets ratio, % | 34.4 | 27.4 | |||||||
| Net debt | 7,984 | 8,956 | 16,940 | ||||||
| Cashflow before financing | 225 5) | 140 5) | -390 5) | -508 5) | -375 6) | -908 | 729 | -179 |
$^{1)}$ For more information about the allocation of revenue and profit items see note 2 and the section Overview business areas.
<sup>2) Refers to IFRS 16, additional leases SEK -10 million.
3) Unallocated capital employed.
<sup>4) Divided between IFRS 16, additional leases SEK 1,424 million and housing projects SEK 3,517 million.
<sup>5) Refers to operating cash flow. For definition, see section Alternative performance measures and definitions.
<sup>2) Refers to IFRS 16, additional leases SEK -12 million.
3) Unallocated capital employed.
<sup>4) Divided between IFRS 16, additional leases SEK 1,559 million and housing projects SEK 5,510 million.
<sup>5) Refers to operating cash flow. For definition, see section Alternative performance measures and defintions.
6) Unallocated cash flow.
| Differences in | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Group Jan-Dec 2023 MSEK |
Construction | Civil Engineering |
Industry | Project Development |
Group functions |
Eliminations | Group Segment |
accounting principles 1) |
Group IFRS |
| External sales | 23,195 | 13,786 | 16,086 | 5,695 | 59 | 58,821 | 2,779 | 61,600 | |
| · | · | • | · | 30,021 | 2,119 | 01,000 | |||
| Internal sales | 4,585 | 1,378 | 3,876 | 27 | 1,428 | -11,294 | |||
| Total revenue | 27,780 | 15,164 | 19,962 | 5,722 | 1,487 | -11,294 | 58,821 | 2,779 | 61,600 |
| Operating profit | 441 | 501 | 962 | 304 | -299 | -56 | 1,853 | 733 | 2,586 |
| Operating margin, % | 1.6 | 3.3 | 4.8 | 5.3 | 3.2 | 4.2 | |||
| Financial income | 584 | 584 | |||||||
| Financial expenses | -542 | -42 2) | -584 | ||||||
| Net finance | 42 | -42 | 0 | ||||||
| Pre-tax profit | 1,895 | 691 | 2,586 | ||||||
| Tax | -481 | -117 | -598 | ||||||
| Profit for the year | 1,414 | 574 | 1,988 | ||||||
| Capital employed (closing balance) | -985 | -173 | 10,699 | 18,093 | 5 3) | 27,639 | 5,249 | 32,888 | |
| Total assets | 44,295 | 4,881 4) | 49,176 | ||||||
| Equity | 15,082 | -612 | 14,470 | ||||||
| Equity/assets ratio, % | 34.0 | 29.4 | |||||||
| Net debt | 8,676 | 5,861 | 14,537 | ||||||
| Cash flow before financing | 146 5) | 698 5) | 1,012 5) | -2,254 5) | -919 6) | -1,317 | 3,972 | 2,655 |
1) For more information about the allocation of revenue and profit items see note 2 and the section Overview business areas.
2) Refers to IFRS 16, additional leases SEK -46 million.
3) Unallocated capital employed.
4) Divided between IFRS 16, additional leases SEK 1,719 million and housing projects SEK 6,072 million.
5) Refers to operating cash flow. For definition, see section Alternative performance measures and definitions.
<sup>6) Unallocated cash flow.
Note 4 - Financial assets and liabilities valued at fair value
The table below shows the allocated level for financial assets and financial liabilities recognized at fair value in the Group's balance sheet. Measurement of fair value is based on a three level hierarchy;
- Level 1: prices that reflect quoted prices on an active market for identical assets.
- Level 2: based on direct or indirect inputs observable to the market not included in level 1.
- Level 3: based on inputs unobservable to the market.
For a description of how fair value has been calculated see the Annual and Sustainability Report 2023, note 35. The fair value of financial assets and liabilities recognized as their amortized cost is estimated to be, in principle, the same as their recognized values.
| Group | M | Mar 31, 2024 | lar 31, 2023 | Dec 31, 2023 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| MSEK | Level 2 | Level 3 | Total | Level 2 | Level 3 | Total | Level 2 | Level 3 | Total | |
| Financial assets | ||||||||||
| Securities held as fixed assets | 45 | 45 | 57 | 57 | 46 | 46 | ||||
| Of which unlisted funds | 4 | 4 | 16 | 16 | 5 | 5 | ||||
| Of which unlisted shareholdings and participations | 41 | 41 | 41 | 41 | 41 | 41 | ||||
| Other current receivables | 18 | 18 | 17 | 17 | 10 | 10 | ||||
| Of which commodity hedging with futures | 16 | 16 | 9 | 9 | 9 | 9 | ||||
| Of which currency derivatives | 2 | 2 | 8 | 8 | 1 | 1 | ||||
| Total financial assets | 18 | 45 | 63 | 17 | 57 | 74 | 10 | 46 | 56 | |
| Financial liabilities | ||||||||||
| Other long-term liabilities | - | 18 | 18 | - | ||||||
| Of which contingent consideration | - | 18 | 18 | - | ||||||
| Other current liabilities | 40 | 40 | 30 | 1 | 31 | 16 | 6 | 22 | ||
| Of which currency derivatives | 1 | 1 | 1 | 1 | 3 | 3 | ||||
| Of which commodity hedging with futures | 39 | 39 | 29 | 29 | 13 | 13 | ||||
| Of which contingent consideration | - | 1 | 1 | 6 | 6 | |||||
| Total financial liabilities | 40 | - | 40 | 30 | 19 | 49 | 16 | 6 | 22 |
The tables below are a reconciliation between the opening and closing balance for assets and liabilities included in level 3.
| Unlisted funds | Unlisted shares and participations | ||||||
|---|---|---|---|---|---|---|---|
| MSEK | Mar 31, 2024 | Mar 31, 2023 | Dec 31, 2023 | Mar 31, 2024 | Mar 31, 2023 | Dec 31, 2023 | |
| Opening balance | 5 | 26 | 26 | 41 | 41 | 41 | |
| Investments | 2 | 5 | |||||
| Sales | -1 | ||||||
| Dividends received | -1 | ||||||
| Reported in profit/loss for the period | |||||||
| Other operating costs (+)/other operating income (-) | 1 | ||||||
| Net finance | -12 | -26 | |||||
| Closing balance | 4 | 16 | 5 | 41 | 41 | 41 |
| Group | Contingent considerat | |||||
|---|---|---|---|---|---|---|
| MSEK | Mar 31, 2024 | Mar 31, 2023 | Dec 31, 2023 | |||
| Opening balance | 6 | 20 | 20 | |||
| Payments during the period | -6 | |||||
| Reported in profit/loss for the period | ||||||
| Other operating costs (+)/other operating income (-) | -13 | |||||
| Reported in other comprehensive income | -1 | -1 | ||||
| Closing balance | - | 19 | 6 |
Future financial information
• Interim report January – June 2024
July 16, 2024
• Interim report January - September 2024
October 25, 2024
• Year-end report January – December 2024
February 6, 2025
• Annual and Sustainability Report 2024
April, 2025
Förslöv, May 6, 2024
Jesper Göransson CEO and President
The information in this interim report has not been reviewed separately by the company's auditors.
Presentation of the interim report
This interim report will be presented digitally and on a phone conference Monday, May 6, 2024 at 2:00 p.m. by the President and CEO Jesper Göransson and CFO Niclas Winkvist. The presentation will be held in Swedish and is available via https://www.peab.com/financial-info/.
Click on one of the links to participate in the presentation.
Participate in the web broadcast:
https://ir.financialhearings.com/peab-q1-report-2024
Participate via telephone conference:
https://conference.financialhearings.com/teleconference/?id=50048728
For further information, please contact:
Jesper Göransson, President and CEO of Peab, is reached through Juha Hartomaa, Head of Investor Relations Peab, $+46\,725\,33\,31\,45$
This information is information that Peab AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at May 6, 2024, 1:00 p.m. CET.
Quarterly data
Group, IFRS
| MSEK | Jan-Mar 2024 |
Oct-Dec 2023 |
Jul-Sep 2023 |
Apr-Jun 2023 |
Jan-Mar 2023 |
Oct-Dec 2022 |
Jul-Sep 2022 |
Apr-Jun 2022 |
Jan-Mar 2022 |
|---|---|---|---|---|---|---|---|---|---|
| Net sales | 11,450 | 17,365 | 15,159 | 16,098 | 12,978 | 17,141 | 16,197 | 16,458 | 12,137 |
| Production costs | -11,008 | -16,139 | -13,765 | -14,141 | -12,138 | -15,466 | -14,730 | -14,845 | -11,304 |
| Gross profit | 442 | 1,226 | 1,394 | 1,957 | 840 | 1,675 | 1,467 | 1,613 | 833 |
| Sales and administrative expenses | -759 | -843 | -600 | -867 | -854 | -851 | -640 | -929 | -866 |
| Other operating income | 329 | 91 | 100 | 124 | 42 | 72 | 81 | 94 | 32 |
| Other operating costs | -24 | -3 | 17 | -17 | -21 | -10 | 8 | -3 | -19 |
| Operating profit | -12 | 471 | 911 | 1,197 | 7 | 886 | 916 | 775 | -20 |
| Financial income | 68 | 61 | 56 | 431 | 36 | 39 | 18 | 22 | 24 |
| Financial expenses | -155 | -173 | -198 | -125 | -88 | -85 | -60 | -36 | -39 |
| Net finance | -87 | -112 | -142 | 306 | -52 | -46 | -42 | -14 | -15 |
| Pre-tax profit | -99 | 359 | 769 | 1,503 | -45 | 840 | 874 | 761 | -35 |
| Tax | 43 | -148 | -145 | -315 | 10 | -282 | -163 | -171 | 7 |
| Profit for the period | -56 | 211 | 624 | 1,188 | -35 | 558 | 711 | 590 | -28 |
| Profit for the period, attributable to: | |||||||||
| Shareholders in parent company | -57 | 211 | 623 | 1,189 | -35 | 559 | 711 | 590 | -28 |
| Non-controlling interests | 1 | 0 | 1 | -1 | 0 | -1 | 0 | 0 | 0 |
| Profit for the period | -56 | 211 | 624 | 1,188 | -35 | 558 | 711 | 590 | -28 |
| Key ratios, IFRS | |||||||||
| Earnings per share, SEK | -0.20 | 0.74 | 2.17 | 4.13 | -0.12 | 1.93 | 2.43 | 2.01 | -0.10 |
| Average number of outstanding shares, million | 287.5 | 287.5 | 287.5 | 287.5 | 287.5 | 288.0 | 291.3 | 294.4 | 295.0 |
| Capital employed (closing balance) | 33,016 | 32,888 | 35,805 | 36,442 | 33,831 | 33,590 | 32,230 | 31,232 | 29,765 |
| Equity (closing balance) | 14,481 | 14,470 | 14,405 | 13,780 | 13,652 | 13,786 | 13,250 | 12,736 | 13,792 |
| Business areas | Jan-Mar | Oct-Dec | Jul-Sep | Apr-Jun | Jan-Mar | Oct-Dec | Jul-Sep | Apr-Jun | Jan-Mar |
|---|---|---|---|---|---|---|---|---|---|
| MSEK | 2024 | 2023 | 2023 | 2023 | 2023 | 2022 | 2022 | 2022 | 2022 |
| Net sales | |||||||||
| Construction | 5,788 | 7,029 | 5,789 | 7,540 | 7,422 | 8,330 | 6,306 | 7,628 | 6,735 |
| Civil Engineering | 3,558 | 4,454 | 3,491 | 3,891 | 3,328 | 4,405 | 3,584 | 3,893 | 3,083 |
| Industry | 2,411 | 5,056 | 6,780 | 5,347 | 2,779 | 5,658 | 7,096 | 6,108 | 2,571 |
| Project Development | 1,055 | 1,456 | 856 | 1,569 | 1,841 | 1,986 | 2,234 | 1,977 | 2,464 |
| – of which Property Development | 23 | 453 | 7 | 65 | 9 | 11 | 304 | 120 | 59 |
| – of which Housing Development | 1,032 | 1,003 | 849 | 1,504 | 1,832 | 1,975 | 1,930 | 1,857 | 2,405 |
| Group functions | 329 | 377 | 343 | 390 | 377 | 409 | 380 | 385 | 358 |
| Eliminations | -2,000 | -2,733 | -2,523 | -2,981 | -3,057 | -3,740 | -2,915 | -3,133 | -2,667 |
| Group, segment reporting | 11,141 | 15,639 | 14,736 | 15,756 | 12,690 | 17,048 | 16,685 | 16,858 | 12,544 |
| Adjustment of housing to IFRS | 309 | 1,726 | 423 | 342 | 288 | 93 | -488 | -400 | -407 |
| IFRS 16, additional leases | |||||||||
| Group, IFRS | 11,450 | 17,365 | 15,159 | 16,098 | 12,978 | 17,141 | 16,197 | 16,458 | 12,137 |
| Operating profit | |||||||||
| Construction | 101 | -358 | 96 | 141 | 162 | 166 | 126 | 177 | 160 |
| Civil Engineering | 77 | 180 | 110 | 152 | 59 | 175 | 118 | 148 | 53 |
| Industry | -479 | 476 | 588 | 333 | -435 | 283 | 519 | 341 | -396 |
| Project Development | 246 | 17 | 46 | 114 | 127 | 309 | 265 | 264 | 289 |
| - of which Property Development | 261 | 63 | 21 | 29 | -6 | 19 | 91 | 43 | 34 |
| – of which Housing Development | -15 | -46 | 25 | 85 | 133 | 290 | 174 | 221 | 255 |
| Group functions | -58 | -159 | -33 | -34 | -73 | -53 | -27 | -47 | -71 |
| Eliminations | 7 | -23 | -21 | -16 | 4 | -27 | -8 | 2 | -25 |
| Group, segment reporting excl. MoS | -106 | 133 | 786 | 690 | -156 | 853 | 993 | 885 | 10 |
| Construction – effect MoS | 400 | ||||||||
| Group, segment reporting | -106 | 133 | 786 | 1,090 | -156 | 853 | 993 | 885 | 10 |
| Adjustment of housing to IFRS | 85 | 330 | 115 | 98 | 153 | 25 | -86 | -119 | -39 |
| IFRS 16, additional leases | 9 | 8 | 10 | 9 | 10 | 8 | 9 | 9 | 9 |
| Group, IFRS | -12 | 471 | 911 | 1,197 | 7 | 886 | 916 | 775 | -20 |
| Operating margin, % | |||||||||
| Construction | 1.7 | -5.1 | 1.7 | 1.9 | 2.2 | 2.0 | 2.0 | 2.3 | 2.4 |
| Civil Engineering | 2.2 | 4.0 | 3.2 | 3.9 | 1.8 | 4.0 | 3.3 | 3.8 | 1.7 |
| Industry | -19.9 | 9.4 | 8.7 | 6.2 | -15.7 | 5.0 | 7.3 | 5.6 | -15.4 |
| Project Development | 23.3 | 1.2 | 5.4 | 7.3 | 6.9 | 15.6 | 11.9 | 13.4 | 11.7 |
| – of which Property Development | 1,134.8 | 13.9 | 300.0 | 44.6 | -66.7 | 172.7 | 29.9 | 35.8 | 57.6 |
| – of which Housing Development | -1.5 | -4.6 | 2.9 | 5.7 | 7.3 | 14.7 | 9.0 | 11.9 | 10.6 |
| Group functions | |||||||||
| Eliminations | |||||||||
| Group, segment reporting excl. MoS | -1.0 | 0.9 | 5.3 | 4.4 | -1.2 | 5.0 | 6.0 | 5.2 | 0.1 |
| Group, segment reporting | -1.0 | 0.9 | 5.3 | 6.9 | -1.2 | 5.0 | 6.0 | 5.2 | 0.1 |
| Adjustment of housing to IFRS | |||||||||
| IFRS 16, additional leases | |||||||||
| Group, IFRS | -0.1 | 2.7 | 6.0 | 7.4 | 0.1 | 5.2 | 5.7 | 4.7 | -0.2 |
| Key ratios, segment reporting, MSEK | |||||||||
| Earnings per share excl. MoS, SEK | -0.45 | -0.25 | 1.85 | 1.68 | -0.54 | 1.89 | 2.69 | 2.36 | 0.04 |
| Earnings per share, SEK | -0.45 | -0.25 | 1.85 | 3.86 | -0.54 | 1.89 | 2.69 | 2.36 | 0.04 |
| Capital employed (closing balance) | 27,721 | 27,639 | 29,072 | 29,406 | 25,910 | 25,000 | 23,546 | 22,828 | 22,117 |
| Equity (closing balance) | 14,976 | 15,082 | 15,239 | 14,770 | 14,687 | 14,978 | 14,469 | 13,868 | 14,812 |
| Orders received | 17,889 | 10,527 | 11,034 | 12,505 | 11,042 | 10,455 | 13,095 | 14,334 | 15,375 |
| Order backlog at the end of the period | 47,808 | 39,060 | 41,669 | 43,638 | 44,595 | 44,389 | 48,762 | 49,899 | 49,968 |
Alternative performance measures and definitions
Alternative performance measures are used to describe the development of operations and to enhance comparability between periods. These are not defined under IFRS but correspond to the methods applied by executive management and Board of Directors to measure the company's financial performance. Alternative performance measures should not be viewed as a substitute for financial information presented in accordance with IFRS but rather as a complement.
The difference between segment reporting and reporting according to IFRS is described in more detail in note 1. The difference primarily consists of differences in accounting principles for our own housing development projects where revenue and profit are recognized over time in segment reporting and at one point in
time, when homebuyers take over their homes, in reporting according to IFRS. In segment reporting leasing fees for the lessee are recognized linearly over the leasing period for leases that are classified by the counterparty (the lessor) as operational leases. IFRS 16 Leases is applied in Group reporting according to IFRS, which entails that lessees recognize depreciation and interest attributable to leasing assets and liabilities. As a result the difference between segment reporting and reporting according to IFRS even affects the items on the balance sheet, including net debt. Nonetheless, in the key ratios below the method of calculation is the same for both segment reporting and reporting according to IFRS. For more information and calculations, see Peab's website
Financial definitions
Available liquidity
Liquid funds and short-term investments along with unutilized credit facilities, excluding unutilized credit facilities for project financing. Shows the Group's available liquidity.
Capital employed for the business areas
Total assets in the business area at the end of the period reduced by deferred tax recoverables and internal receivables from the internal bank Peab Finans with deductions for non-interest-bearing liabilities and deferred tax liabilities. The measurement is used to measure capital utilization and its effectiveness for the business areas, and is only presented as a net amount per business area.
Capital employed for the Group
Total assets at the end of the period less non-interest-bearing operating liabilities and provisions. The measurement is used to measure capital utilization and its effectiveness.
Earnings per share/Earnings per share excl. MoS
Profit for the period attributable to shareholders in parent company divided by the average number of outstanding shares during the period. Shows earnings per share. Earnings per share excl. MoS are calculated excluding the effect of arbitration decision concerning Mall of Scandinavia. For details, see Annual and Sustainability Report 2023.
Equity/assets ratio
Equity as a percentage of total assets at the end of the period. Shows financial position.
Equity per share
Equity attributable to shareholders in parent company divided by the number of outstanding shares at the end of the period. Shows equity per share.
Net debt
Interest-bearing liabilities including provisions for pensions less liquid funds and interest-bearing assets. Shows financial position.
Net debt, segment reporting
Interest-bearing liabilities including provisions for pensions less liquid funds and interest-bearing assets. As of January 1, 2019 liabilities concerning unsold part of ongoing own housing development projects is included in net debt. Shows financial position for segment.
Net debt/equity ratio
www.peab.com/alternative-keyratios.
Interest-bearing net debt in relation to equity. Shows financial position.
Net investments
The change in the period of the recognized value of current assets (CB-OB) plus depreciation and write-downs. Shows the size of net investments made.
Operating margin/Operating margin excl. MoS
Operating profit as a percentage of net sales. Shows profitability in the business. Operating margin excl. MoS is calculated excluding the effect of arbitration decision concerning Mall of Scandinavia. For details, see Annual and Sustainability Report 2023.
Operative cash flow
Cash flow before financing according to segment reporting. The cash flow does not include received internal Group interest, paid interest and paid tax that is not allocated to the business areas but only reported for the Group. Investments via leasing charge cash flow from investment operations in the business areas. Operative cash flow is only calculated for the business areas. Shows the cash flow generated per business area.
Order backlog
The value at the end of the period of the remaining income in ongoing production plus orders received yet to be produced. Order backlog is based on segment reporting. Shows how much will be produced in the future.
Orders received
The sum of orders received during the period. Measures how new orders replace produced work. Regarding our own housing development projects, tenantowner associations and housing companies are considered external customers.
Return on capital employed
Pre-tax profit for the rolling 12 month period with the addition of financial expenses in percent of the average (last four quarters) capital employed. The measurement is used to measure capital efficiency and to allocate capital for new investments and shows the Group's earning capacity independent of financing.
Return on equity
Profit for the rolling 12 month period attributable to shareholders in the parent company divided by the average (last four quarters) equity attributable to shareholders in the parent company. The measurement is used to create efficient business and a rational capital structure and show how the Group has multiplied shareholders' equity.
Non-financial definitions
Average number of employees
The sum of the number of hours Peab has paid for, divided by the annual working time.
CSI
CSI stands for Customer Satisfaction Index and measures how satisfied Peab's customers are. CSI is a weighted measurement between 0 and 100 and is based on three questions: 1) Total satisfaction, 2) In relation to expectations 3) In relation to ideal supplier.
eNPS
eNPS stands for employee Net Promoter Score and measures employee engagement. The score can vary between -100 and 100 and is based on the question to employees: "How probable is it that you would recommend your employer to a friend or acquaintance?"
LTI4 and LTIF4
LTI4 refers to the number of workplace accidents with more than four days absence, excluding the day of injury, and LTIF4 refers to the frequency rate per one million hours worked according to the same definition. LTI stands for Lost Time Injury.
Project and development property
Holdings of undeveloped land and decontamination property for future development, property with buildings for project development, processing and thereafter divestiture within Peab's normal business cycle.
Risk observations
A risk observation means at a workplace noticing behavior, risks or shortcomings that could lead to an incident or accident.
Serious accidents
Peab uses the Swedish Work Environment Authority's definition of a serious accident as an accident where one or more persons are injured at a workplace or a place they have visited for work. Serious accidents can be injuries such as bone fractures, effusive bleeding or nerve, muscle or tendon damage, injuries to inner organs or second or third degree burns. Serious accidents that occur in our other Nordic countries are categorized by the same definition.
The Nordic Community Builder
Local and close to our customers
Peab works locally where our customers are and where people live their lives. Every day our employees contribute through four collaborating business areas to community building in Sweden, Norway, Finland and Denmark. Together we build homes, schools, retirement homes, hospitals, swimming pool facilities, museums, offices, airports and ports. We build and maintain roads, railroads, bridges, parks and much, much more.
Peab has contributed to locally produced community building for more than 60 years. Now the journey continues. Long-lastingly and responsibly we are forging ahead, and improving everyday life where
Net sales, appr.
SEK 57 billion
Employees, appr.
14,000
Business area Construction
Business area Civil Engineering
Business area Industry
Business area Project
Development
Peab is the Nordic Community Builder with some 14,000 employees and net sales of approximately SEK 57 billion. The Group has strategically located offices in Sweden, Norway, Finland and Denmark. Group headquarters are in Förslöv on the Bjäre Peninsula in Skåne. The share is listed on Nasdaq Stockholm.
Contact
Peab AB (publ)
Margretetorpsvägen 84
SE-269 73 Förslöv
Phone +46 431-890 00
peab.com