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Peab Interim / Quarterly Report 2022
2954_10-q_2022-10-28_42b7e5c9-33ba-415f-bade-79441b050da0.pdf
Interim / Quarterly Report
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Quarterly report
JANUARY – SEPTEMBER 2022
PEAB
THE NORDIC COMMUNITY BUILDER
Continued high net sales with stable profit
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
July – September 2022
- Net sales SEK 16,685 million (16,121)
- Operating profit SEK 993 million (1,101)
- Operating margin 6.0 percent (6.8)
- Pre-tax profit SEK 963 million (1,095)
- Earnings per share SEK 2.69 (2.89)
- Orders received SEK 13,095 million (13,865)
- Cash flow before financing SEK 805 million (781)
January – September 2022
- Net sales SEK 46,087 million (42,506)
- Operating profit SEK 1,888 million (1,852)
- Operating margin 4.1 percent (4.4)
- Pre-tax profit SEK 1,852 million (1,836)
- Earnings per share SEK 5.09 (4.88)
- Orders received SEK 42,804 million (41,405)
- Order backlog SEK 48,762 million (46,280)
- Cash flow before financing SEK -1,058 million (576)
- Net debt SEK 5,886 million (4,461)
- Net debt/equity ratio 0.4 (0.3)
Group
| MSEK | Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Segment reporting | ||||||
| Net sales | 16,685 | 16,121 | 46,087 | 42,506 | 63,607 | 60,026 |
| Operating profit | 993 | 1,101 | 1,888 | 1,852 | 3,134 | 3,098 |
| Operating margin, % | 6.0 | 6.8 | 4.1 | 4.4 | 4.9 | 5.2 |
| Pre-tax profit | 963 | 1,095 | 1,852 | 1,836 | 3,092 | 3,076 |
| Profit for the period | 788 | 854 | 1,495 | 1,440 | 2,562 | 2,507 |
| Earnings per share, SEK | 2.69 | 2.89 | 5.09 | 4.88 | 8.71 | 8.50 |
| Return on equity, % 1) | 17.7 | 23.4 | 17.7 | 23.4 | 17.7 | 18.5 |
| Return on capital employed, % 1) | 14.3 | 19.0 | 14.3 | 19.0 | 14.3 | 15.6 |
| Net debt | 5,886 | 4,461 | 5,886 | 4,461 | 5,886 | 2,404 |
| Net debt/equity ratio, multiple | 0.4 | 0.3 | 0.4 | 0.3 | 0.4 | 0.2 |
| Equity/assets ratio, % | 33.5 | 34.4 | 33.5 | 34.4 | 33.5 | 36.3 |
| Cash flow before financing | 805 | 781 | -1,058 | 576 | 1,407 | 3,041 |
| Number of employees 1) | 15,519 | 15,543 | 15,519 | 15,543 | 15,519 | 15,454 |
| Reporting according to IFRS | ||||||
| Net sales, IFRS | 16,197 | 15,488 | 44,792 | 41,419 | 62,296 | 58,923 |
| Operating profit, IFRS | 916 | 1,025 | 1,671 | 1,666 | 2,980 | 2,975 |
| Pre-tax profit, IFRS | 874 | 1,006 | 1,600 | 1,611 | 2,891 | 2,902 |
| Profit for the period, IFRS | 711 | 780 | 1,273 | 1,256 | 2,394 | 2,377 |
| Earnings per share, IFRS, SEK | 2.43 | 2.65 | 4.34 | 4.26 | 8.14 | 8.06 |
| Net debt, IFRS | 15,789 | 11,666 | 15,789 | 11,666 | 15,789 | 10,515 |
| Equity/assets ratio, IFRS, % | 25.9 | 27.2 | 25.9 | 27.2 | 25.9 | 29.0 |
| Cash flow before financing, IFRS | 520 | 577 | -2,655 | -567 | -1,036 | 1,052 |
1) Calculated on rolling 12 months
Net sales
Operating profit
Orders received
Comments from the CEO
Peab reported continued growth in net sales after the first nine months of the year. We continue to handle cost increases well although they have not been fully compensated. The level of orders was relatively stable although homes were a smaller portion.
Group development
Group net sales increased by eight percent during the first nine months of the year and amounted to SEK 46,087 million (42,506). High material and energy costs are behind most of the increase in net sales. Operating profit for the period was SEK 1,888 million (1,852) and the operating margin was 4.1 percent (4.4). The higher costs continued to impact the operating margin during the third quarter. Cash flow before financing amounted to SEK -1,058 million (576) and the decrease mainly refers to more tied-up working capital and investments.
Business area development
Net sales in business area Construction increased by ten percent during the first nine months of the year, primarily related to Swedish and Norwegian operations. The operating margin contracted to 2.2 percent (2.7) as a result of not being able to fully compensate for cost increases in projects received before the outbreak of war in Ukraine. Net sales in business area Civil Engineering grew by four percent and the operating margin was unchanged at 3.0 percent (3.0). The combined operating margin for both construction contract businesses for the nine month period amounted to 2.5 percent (2.8).
Net sales in business area Industry, where paving operations were in full swing during the quarter, increased by 16 percent for the first nine months of the year. The operating margin was 2.9 percent (3.8). Higher costs for energy and fuel had a negative effect primarily on paving operations while the other segments of the business area reported unchanged or improved profitability.
In business area Project Development net sales increased by five percent attributable to property divestments in Property Development. Profitability is stable in the business area but the rate of home sales, particularly in Sweden, is dwindling. The operating margin in Housing Development was 10.5 percent (10.9). In Property Development property divestments and profit contributions from our partially owned companies have contributed to higher profitability.
Production-starts of our own housing developments and sales were considerably lower compared to the corresponding quarter last year. Interest rate developments in the Nordic countries have led to a more wary housing market. The dwindling rate of home sales has a negative impact on the conditions for production-starts going forward. The sales rate per September 30, 2022 was 72 percent (77) in ongoing projects.
> "Over time there is a great need for our products and services on the markets we deliver to."
Order situation
The level of orders received was relatively stable in the third quarter, amounting to SEK 13.1 billion (13.9), and is well spread geographically and in product area although the portion of orders for homes diminished. Order backlog yet to be produced at the end of the period increased and was SEK 48.8 billion (46.3). Of the total order backlog 77 percent (74) will be produced after 2022 (2021).
Three targets updated
In this quarter we present the outcome for three of our nine external targets: serious accidents, operating margin and net debt/equity ratio.
The serious accidents has unfortunately remained on a high level in the third quarter and there were 48 per a rolling twelve month period (48 after half the year). In order to heighten our safety culture and turn the tide we have intensified our preventive work on the work environment.
Our target is to over time have an operating margin that surpasses 6 percent and in the latest rolling 12 month period the operating margin was 4.9 percent. The net debt/equity ratio was 0.4, which is in the middle of the target interval 0.3-0.7.
Market and prospects for the future
Long-term interest rates have continued to rise and in Sweden The Riksbank raised the policy interest rate further during the quarter, by 1 point in September. Inflation has tightened its grip on the global economy and several central banks indicate further hikes in interest rates.
Our market assessments are based on Navet's Nordic market forecasts that show Nordic market prospects in construction and civil engineering have been adjusted down slightly for 2022, mainly due to a downward adjustment in civil engineering in Sweden. The collective market prospects for 2023 are declining, decreasing in both housing and other building construction while the forecast for civil engineering is an upturn.
How the market will develop is difficult to predict with so much uncertainty about the cost of energy, input goods and interest rates. Our organization continues to handle these challenges well, although we have seen some impact on the operating margin. We continually adjust and streamline our operations to curb rising construction costs. We deal with possible prices hikes within existing contracts and in new bids we tender systematically, based on operational and contractual circumstances in order to handle each unique project and situation. This requires a close dialogue with our subcontractors, suppliers and customers.
Regarding Cementa's permit process for Slite we are following developments closely. We continue to work on our own binder alternatives and securing the supply of cement by importing it ourselves. The continued uncertainty about long-term access to cement in Sweden can, however, make the market even more unstable.
Peab is a stable and financially strong, well consolidated company. We have a solid business model with four collaborating business areas – and thereby a broad offer – which makes us less vulnerable in the current market situation. Over time there is a great need for our products and services on the markets we deliver to. With our engaged employees and their expertise we are well-equipped for today and tomorrow.
Jesper Gäransson
President and CEO
Net sales and profit
July – September 2022
Group net sales during the third quarter 2022 increased by three percent and amounted to SEK 16,685 million (16,121). Most of the increase is explained by higher material and energy costs which have affected pricing to customers.
Net sales in business area Construction increased by five percent and the increase refers to all countries. Net sales in business area Civil Engineering increased by nine percent due to greater activity in Infrastructure and Operation and maintenance. Net sales in business area Industry increased by 14 percent. The increase is primarily related to Paving, Concrete, Transport & Machines and Construction System. Net sales in business area Project Development decreased. Net sales declined in Housing Development as a result of fewer production starts and a lower rate of homes sold while net sales in Property Development rose due to property divestitures.
Operating profit for the third quarter 2022 amounted to SEK 993 million (1,101) and the operating margin was 6.0 percent (6.8). Higher construction costs and price hikes for energy and certain raw materials have had some negative impact on the operating margin.
In business area Construction the operating margin decreased to 2.0 percent (2.7), while business area Civil Engineering had an unchanged operating margin of 3.3 percent (3.3). All in all the operating margin for construction contract operations amounted to 2.5 percent (2.9). Business area Industry reported a lower operating margin of 7.3 percent (9.3) which was largely related to Paving where hikes in energy and fuel prices had a negative effect. The operating margin in Project Development was unchanged at 11.9 percent compared to the third quarter 2021. In Housing Development the operating margin was 9.0 percent (9.5). The number of production-started homes was lower compared to the corresponding quarter 2021. During the third quarter the market has become more wary with fewer homes sold, particularly in Sweden. Operating profit in Property Development was higher since profit contributions from partially owned companies were better. Property transactions had a positive effect of SEK 61 million (41).
Depreciation and write-downs for the third quarter were SEK -336 million (-360).
Elimination and reversal of internal profit in our own projects have affected operating profit during the quarter net by SEK -8 million (-10).
Net financial items amounted to SEK -30 million (-6) of which net interest was SEK -33 million (-16).
Pre-tax profit was SEK 963 million (1,095). Profit for the period was SEK 788 million (854).
Operating profit and operating margin, per quarter
January – September 2022
Group net sales for the period January-September 2022 increased by eight percent and amounted to SEK 46,087 million (42,506). After adjustments for acquired and divested units and exchange rate effects net sales increased by seven percent. A large part of the increase is explained by higher material and energy costs which have affected pricing to customers. Of the period's net sales SEK 13,959 million (12,852) were attributable to sales and production outside Sweden. Net sales during the latest rolling 12 month period were SEK 63,607 million compared to SEK 60,026 million for the full year 2021. The proportion of public sector customers was 41 percent (46) while private customers represented 59 percent (54) of total net sales.
Net sales in business area Construction increased by ten percent and the increase was related to the Swedish and Norwegian operations. Net sales in business area Civil Engineering increased by four percent with increases in Infrastructure and Operation and maintenance. Net sales in business area Industry increased by 16 percent with the increase primarily related to Paving, Concrete and Construction System. In business area Project Development net sales increased by five percent where the increase was generated in Property Development due to a positive impact from property sales. In Housing Development net sales decreased slightly, declining in Finland and Norway while increasing somewhat in Sweden.
Operating profit for the period January-September 2022 amounted to SEK 1,888 million (1,852) and the operating margin was 4.1 percent (4.4). In the latest rolling 12 month period the operating margin amounted to 4.9 percent compared to 5.2 percent for the entire year of 2021. During 2021 and 2022 prices for material and energy have risen dramatically. We have for the most part handled price hikes and delivery disruptions through adjustments and streamlining but since we have not been able to fully compensate for cost increases they have had negative impact on the operating margin.
In business area Construction the operating margin was 2.2 percent (2.7) where the effect of rising costs was apparent in all countries. In business area Civil Engineering the operating margin was unchanged at 3.0 percent (3.0). All in all the operating margin for construction contract operations amounted to 2.5 percent (2.8). Operating margin in business area Industry was 2.9 percent (3.8). The operating profit in Paving was lower as a result of higher energy and fuel costs that have not been fully recompensed through higher prices to customers, particularly in Norway, Finland and Denmark. Other product areas in business area Industry reported more or less unchanged or improved profitability. The operating profit in Project Development improved during the period where the increase refers to Property Development and is largely due to higher contributions from partially owned companies. Capital gains from property transactions amounted to SEK 83 million (67).
The operating margin in Housing Development was 10.5 percent (10.9). A greater number of homes in production has had a positive effect during the period even though the number of production-starts has been lower. During the third quarter the market has become more wary, especially in Sweden.
Depreciation and write-downs for the period were SEK -984 million (-1,000).
Elimination and reversal of internal profit in our own projects have affected operating profit during the period net by SEK -31 million (-25).
Net financial items amounted to SEK -36 million (-16) of which net interest was SEK -66 million (-44). In net financial items exchange rate differences had an effect of SEK -4 million (9).
Pre-tax profit was SEK 1,852 million (1,836). Profit for the period was SEK 1,495 million (1,440).
Operating profit and operating margin, rolling 12 months
Seasonal variations
Group operations, particularly in Industry and Civil Engineering, are affected by fluctuations that come with the cold weather during the winter half of the year. Normally the first quarter is weaker than the rest of the year. The seasonal pattern has now become even stronger due to the acquisition in April 2020 of the paving and mineral aggregates operations in business area Industry.
Financial position and cash flow
Financial position
Total assets per September 30, 2022 were SEK 43,191 million (39,358). Equity amounted to SEK 14,469 million (13,556) which means the equity/assets ratio was 33.5 percent compared to 34.4 percent at the end of the corresponding period last year.
Interest-bearing net debt at the end of September 2022 amounted to SEK 5,886 million (4,461). Net debt includes project financing for the unsold part of our own housing development projects as long as they are in production. The unsold part was SEK 1,768 million (947) and the increase is explained by more housing projects in production compared to the same period last year. The net debt has also been affected by the repurchase of own shares with SEK 418 million (-). The average interest rate in the loan portfolio, including derivatives, was 2.4 percent (1.4) on September 30, 2022.
Group liquid funds according to IFRS, including unutilized credit facilities but excluding project financing, were SEK 8,164 million at the end of the period compared to SEK 8,203 million on September 30, 2021.
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 2,749 million at the end of the period compared to SEK 3,229 million on December 31, 2021. Surety for credit lines in tenant-owner associations regarding the unsold part after deconsolidation made up SEK 80 million of contingent liabilities compared to SEK 19 million on December 31, 2021.
Investments and divestments
During the quarter tangible and intangible fixed assets were net invested for SEK 505 million (551). The investments refer primarily to investments in machines. During the period January-September 2022 tangible and intangible fixed assets were net invested for SEK 1,322 million (1,159). The investments refer primarily to investments in machines.
Net investments in project and development properties, which are recognized as inventory items, totaled SEK 156 million (net divestments by SEK 300 million) during the quarter. Net investments in project and development properties totaled SEK 845 million (net divestments by SEK 111 million) during the period January-September 2022. Project and development properties include the unsold part of our own ongoing housing development projects.
Net debt
| MSEK | Sep 30 2022 | Sep 30 2021 | Dec 31 2021 |
|---|---|---|---|
| Bank loans | 3,498 | 1,347 | 1,285 |
| Commercial papers | 284 | 1,403 | 1,206 |
| Bonds | 2,747 | 2,748 | 2,746 |
| Financial leasing liabilities | 713 | 690 | 699 |
| Project financing, unsold part of housing projects | 1,768 | 947 | 958 |
| Other interest-bearing liabilities | 67 | - | 11 |
| Interest-bearing receivables | -1,407 | -1,873 | -1,550 |
| Liquid funds | -1,784 | -801 | -2,951 |
| Net debt, segment reporting | 5,886 | 4,461 | 2,404 |
| Additional leasing liabilities according to IFRS 16 | 1,591 | 1,774 | 1,720 |
| Project financing, sold part of housing projects | 8,312 | 5,431 | 6,391 |
| Net debt, IFRS | 15,789 | 11,666 | 10,515 |
Net debt and net debt/equity ratio
7
Cash flow
July – September 2022
Cash flow from current operations was SEK 1,188 million (2,115), of which cash flow from changes in working capital was SEK 140 million (831). In the quarter, the lower cash flow is mainly attributable to Project Development.
Cash flow from investment activities was SEK -383 million (-1,334). Investments during the quarter consisted mainly of machines and vehicles in business area Industry. Last year included, in addition to machine investments in Industry, business combinations in Civil Engineering as well as increased engagement in joint ventures in Project Development.
Cash flow before financing was SEK 805 million (781).
Cash flow from financing operations amounted to SEK -338 million (-323), of which repurchase of own shares was SEK -293 million (-).
January – September 2022
Cash flow from current operations amounted to SEK -331 million (2,355), of which cash flow from changes in working capital was SEK -2,295 million (95). The negative cash flow from changes in working capital refers to business areas Construction, Civil Engineering and Industry while cash flow in business area Project Development was relatively unchanged. Cash flow from current operations included dividends from partially owned companies of SEK 20 million (111).
Cash flow from investment activities was SEK -727 million (-1,779). Investments during the period consisted of machines and vehicles in business area Industry. Cash flow was affected positively by repayment of loan receivables in business area Project Development. Last year included, in addition to machine investments in Industry, business combinations in Civil Engineering as well as increased engagement in joint ventures in Project Development.
Cash flow before financing was SEK -1,058 million (576).
Cash flow from financing operations amounted to SEK -120 million (-764), of which paid dividends were SEK -1,475 million (-1,327) and repurchase of own shares was SEK -418 million (-).
Cash flow before financing
Order situation
July – September 2022
The level of orders received in the third quarter 2022 amounted to SEK 13,095 million compared to SEK 13,865 million for the same quarter last year.
Orders received were higher in business areas Construction and Industry compared to the third quarter 2021. Orders in business area Construction included the renovation and rebuilding of the southern part of Sperlingens Backe neighborhood at Stureplan in central Stockholm worth around SEK 2 billion. Orders received were lower in business area Project Development as a result of fewer production starts of our own housing developments.
January – September 2022
The level of orders received in the period January-September 2022 amounted to SEK 42,804 million compared to SEK 41,405 million for the same period last year.
Orders received in business area Civil Engineering and Industry increased while orders received in business area Project Development contracted due to fewer production started housing projects. The level of orders received in business area Construction was relatively unchanged compared to the corresponding period in 2021.
Order backlog yet to be produced at the end of the period amounted to SEK 48,762 million compared to SEK 46,280 million at the end of the same period last year. Of the total order backlog, 77 percent (74) is expected to be produced after 2022 (2021). Swedish operations accounted for 78 percent (77) of the order backlog.
Orders received
| MSEK | Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Construction | 8,490 | 8,225 | 21,411 | 21,342 | 30,972 | 30,903 |
| Civil Engineering | 2,618 | 3,583 | 11,973 | 11,803 | 14,989 | 14,819 |
| Industry | 2,212 | 2,012 | 9,661 | 8,313 | 11,916 | 10,568 |
| Project Development | 1,541 | 1,893 | 5,566 | 6,896 | 8,651 | 9,981 |
| Eliminations | -1,766 | -1,848 | -5,807 | -6,949 | -9,281 | -10,423 |
| Group | 13,095 | 13,865 | 42,804 | 41,405 | 57,247 | 55,848 |
Order backlog
| MSEK | 30 Sep 2022 | 30 Sep 2021 | Dec 31 2021 |
|---|---|---|---|
| Construction | 31,052 | 28,697 | 30,142 |
| Civil Engineering | 15,485 | 15,066 | 13,955 |
| Industry | 4,325 | 4,427 | 3,886 |
| Project Development | 6,505 | 6,045 | 6,555 |
| Eliminations | -8,605 | -7,955 | -9,220 |
| Group | 48,762 | 46,280 | 45,318 |
Project size of order backlog, September 30, 2022
Order backlog allocated over time
9
We received a number of major construction projects and contracts in the third quarter, including:
- Renovation of rental apartments for Helsingin kaupungin asunnot Oy (HEKA) in Pihlajisto in Helsinki. The contract is worth EUR 13 million.
- Renovation and rebuilding the southern part of Sperlingens Backe neighborhood at Stureplan in central Stockholm. The customer is Sturegallerian AB. The contract amounts to approximately SEK 2 billion.
- Construction of a long stay hotel with 15 floors in Espoo. The customer is NREP. The contract is worth EUR 46 million.
- Construction of Haganäs School in Åstorp northeast of Helsingborg. The customer is Björnekulla Fastighets AB. The contract is worth SEK 251 million.
- Construction of a new elementary school in Meistervik in Balsfjord in Norway. The customer is Balsfjord Municipality. The contract is worth NOK 139 million.
- Construction of a new swimming pool facility in Malung. The customer is Malung-Sälen Municipality. The contract is worth SEK 216 million.
- Construction of an office building on Östra Piren in Karlshamn. The customer is Karlshamnsfastigheter AB. The contract is worth SEK 239 million.
- Rebuilding of Särla School in Borås into a modern school with room for some 500 students. The customer is Borås City. The contract is worth SEK 240 million.
- Construction of infrastructure for the new housing tract Näsby in Linköping. The customer is Linköping Municipality and Tekniska verken. The contract is worth SEK 104 million.
- Construction of 78 apartments in Limhamn in Malmö. The customer is HSB Projekt i Malmö HB. The contract is worth SEK 194 million.
- Construction of a production plant for pharmaceuticals in Lund. The customer is Wihlborgs Fastigheter AB. The contract is worth SEK 125 million.
- Commission to take responsibility for construction and concrete work at Vinnelys substation in Nordreisa Municipality. The customer is Statnett SF. The contract is worth NOK 169 million.
A number of our own housing development projects were production-started in the third quarter, including:
- Brf Parkstråket in Västerås comprising 45 apartments. The property will be certified according to the Swan environmental certification and residents will have electric car chargers in the garage and a car pool will be available. The project is expected to be completed in September 2024.
- Brf Östra Citygården in Partille comprising 106 apartments. The property will be built in direct connection to mass transit and certified according to the Swan environmental certification. The project is expected to be completed in December 2024.
- Brf Celcius in Eriksberg comprising 91 apartments. The property will be certified according to the Swan environmental certification and offer space for co-working to reduce traveling. The project is expected to be completed in December 2024.
- Brf Disponenten in Nacka comprising 91 apartments. The property will be certified according to the Swan environmental certification and offer a bicycle center and car pool. The project is expected to be completed in December 2026.
- Turun Station East in Turku comprising 65 apartments. The project is expected to be completed in April 2024.
We received a number of federal and regional paving contracts in the third quarter, including:
- One-year regional contract in Nord-Troms worth NOK 41 million. The asphalt volume is in total 16,000 tons.
- One-year federal contract in southern Österbotten worth EUR 4.2 million. The asphalt volume is in total 38,000 tons.
- One-year federal contract in Southeast Finland worth EUR 3.6 million. The asphalt volume is in total 36,000 tons.
- One-year federal contract in southeast Finland worth EUR 1.8 million. The asphalt volume is in total 16,000 tons.
- One-year federal contract in central Finland worth EUR 1 million. The asphalt volume is in total 5,000 tons.
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.
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, Peab Finans AB, Peab Support (Shared Service Center) and Peab Utveckling AB.
For more information regarding the differences between segment reporting and reporting according to IFRS, see note 1 and note 3.
Net sales and operating profit per business area
| MSEK | Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 | Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Construction | 6,306 | 5,989 | 20,669 | 18,833 | 28,816 | 26,980 | 126 | 164 | 463 | 502 | 672 | 711 |
| Civil Engineering | 3,584 | 3,285 | 10,560 | 10,118 | 14,622 | 14,180 | 118 | 109 | 319 | 307 | 483 | 471 |
| Industry | 7,096 | 6,198 | 15,775 | 13,649 | 20,913 | 18,787 | 519 | 576 | 464 | 518 | 884 | 938 |
| Project Development | 2,234 | 2,741 | 6,675 | 6,380 | 9,792 | 9,497 | 265 | 326 | 818 | 791 | 1,264 | 1,237 |
| - of which Property Development | 304 | 33 | 483 | 96 | 908 | 521 | 91 | 70 | 168 | 109 | 290 | 231 |
| - of which Housing Development | 1,930 | 2,708 | 6,192 | 6,284 | 8,884 | 8,976 | 174 | 256 | 650 | 682 | 974 | 1,006 |
| Group functions | 380 | 318 | 1,123 | 946 | 1,491 | 1,314 | -27 | -64 | -145 | -241 | -132 | -228 |
| Eliminations | -2,915 | -2,410 | -8,715 | -7,420 | -12,027 | -10,732 | -8 | -10 | -31 | -25 | -37 | -31 |
| Group, segment reporting | 16,685 | 16,121 | 46,087 | 42,506 | 63,607 | 60,026 | 993 | 1,101 | 1,888 | 1,852 | 3,134 | 3,098 |
| Adjustment housing to IFRS | -488 | -633 | -1,295 | -1,087 | -1,311 | -1,103 | -86 | -86 | -244 | -204 | -192 | -152 |
| IFRS 16, additional leases | - | - | - | - | - | - | 9 | 10 | 27 | 18 | 38 | 29 |
| Group, IFRS | 16,197 | 15,488 | 44,792 | 41,419 | 62,296 | 58,923 | 916 | 1,025 | 1,671 | 1,666 | 2,980 | 2,975 |
| Of which construction contract businesses according to segment reporting (Construction and Civil Engineering) | 9,890 | 9,274 | 31,229 | 28,951 | 43,438 | 41,160 | 244 | 273 | 782 | 809 | 1,155 | 1,182 |
| Percent | Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 | ||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||
| Construction | 2.0 | 2.7 | 2.2 | 2.7 | 2.3 | 2.6 | ||||||
| Civil Engineering | 3.3 | 3.3 | 3.0 | 3.0 | 3.3 | 3.3 | ||||||
| Industry | 7.3 | 9.3 | 2.9 | 3.8 | 4.2 | 5.0 | ||||||
| Project Development | 11.9 | 11.9 | 12.3 | 12.4 | 12.9 | 13.0 | ||||||
| - of which Property Development | 29.9 | 212.1 | 34.8 | 113.5 | 31.9 | 44.3 | ||||||
| - of which Housing Development | 9.0 | 9.5 | 10.5 | 10.9 | 11.0 | 11.2 | ||||||
| Group functions | ||||||||||||
| Eliminations | ||||||||||||
| Group, segment reporting | 6.0 | 6.8 | 4.1 | 4.4 | 4.9 | 5.2 | ||||||
| Adjustment housing to IFRS | ||||||||||||
| IFRS 16, additional leases | ||||||||||||
| Group, IFRS | 5.7 | 6.6 | 3.7 | 4.0 | 4.8 | 5.0 | ||||||
| Of which construction contract businesses according to segment reporting (Construction and Civil Engineering) | 2.5 | 2.9 | 2.5 | 2.8 | 2.7 | 2.9 |
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 area, organized in twelve 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 operations are run in a nationwide region in Sweden focused on the big city areas. Other regions are responsible for all types of construction projects in their geographic area.
Net sales and profit
July – September 2022
Net sales for the third quarter 2022 increased by five percent and amounted to SEK 6,306 million (5,989). The increase was generated in all countries and is mainly explained by higher costs for material and energy, which has affected prices to customers.
Operating profit for the third quarter decreased to SEK 126 million (164) and the operating margin shrunk to 2.0 percent (2.7). Higher costs for material and energy have for the most part been managed by raising customer prices as well as making adjustments and streamlining but since we have not been able to completely compensate cost increases they have had a negative impact on the operating margin.
January – September 2022
Net sales for the period January-September 2022 increased by ten percent and amounted to SEK 20,669 million (18,833).
The increase is attributable to Swedish and Norwegian operations and is mainly explained by higher costs for material and energy, which has affected prices to customers.
Operating profit for the period January-September amounted to SEK 463 million (502) and the operating margin was 2.2 percent (2.7). The operating margin was down in both Sweden and Finland. For the latest rolling 12 month period the operating margin was 2.3 percent compared to 2.6 percent for the entire year of 2021. During 2021 and 2022 there have been significant price hikes for material and energy as well as delivery disturbances. Higher costs for material and energy have for the most part been managed by raising customer prices as well as making adjustments and streamlining but since we have not been able to completely compensate cost increases they have had a negative impact on the operating margin.
Orders received and order backlog
July – September 2022
Orders received during the third quarter increased and amounted to SEK 8,490 million (8,225). Orders received are well spread among products and geography although the percentage of housing is lower. During the quarter Peab has been commissioned to renovate and rebuild the southern part of Sperlingens Backe neighborhood at Stureplan in central Stockholm. The customer is Sturegallerian AB and the contract is worth around SEK 2 billion.
January – September 2022
Orders received during the period January-September 2022 were SEK 21,411 million (21,342). Order backlog on September 30, 2022 increased and amounted to SEK 31,052 million compared to SEK 28,697 million at the end of September 2021.
Net sales
per product area, rolling 12 months
- Housing, 42% (38)
- Construction maintenance, 7% (7)
- Sports facilities, 4% (5)
- Industrial, 5% (5)
- Offices, 11% (15)
- Logistics, 2% (1)
- Service and retail, 3% (5)
- Schools and education, 11% (10)
- Health and social care, 6% (9)
- Other building construction, 9% (5)
per geographic market, rolling 12 months
- Sweden, 73% (71)
- Norway, 15% (15)
- Finland, 12% (14)
Order backlog, September 30, 2022
per product area
- Housing, 46% (44)
- Construction maintenance, 2% (2)
- Sports facilities, 5% (7)
- Industrial, 3% (5)
- Offices, 12% (11)
- Logistics, 1% (2)
- Service and retail, 3% (2)
- Schools and education, 12% (15)
- Health and social care, 7% (5)
- Other building construction, 9% (7)
per project size
Key ratios
| Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 | |
|---|---|---|---|---|---|---|
| Net sales, MSEK | 6,306 | 5,989 | 20,669 | 18,833 | 28,816 | 26,980 |
| Operating profit, MSEK | 126 | 164 | 463 | 502 | 672 | 711 |
| Operating margin, % | 2.0 | 2.7 | 2.2 | 2.7 | 2.3 | 2.6 |
| Orders received, MSEK | 8,490 | 8,225 | 21,411 | 21,342 | 30,972 | 30,903 |
| Order backlog, MSEK | 31,052 | 28,697 | 31,052 | 28,697 | 31,052 | 30,142 |
| Operating cash flow, MSEK | 102 | 184 | -65 | 985 | 604 | 1,654 |
| Number of employees 1) | 5,859 | 5,841 | 5,859 | 5,841 | 5,859 | 5,796 |
1) Calculated on rolling 12 months
Business area Civil Engineering
Business area Civil Engineering is a leading player in Sweden and has operations 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 geographic regions and the specialized product areas Local market, Infrastructure and heavy construction and Operation and maintenance.
Local market works with landscaping and pipelines, does foundation work and builds different kinds of facilities as well as offers services in power and electricity distribution. Infrastructure and heavy construction builds roads, railroads, bridges, tunnels and ports. Operation and maintenance maintains federal and municipal road and street networks, tends parks and outdoor property as well as maintains water and wastewater networks.
Net sales and profit
July – September 2022
Net sales for the third quarter 2022 increased by nine percent to SEK 3,584 million (3,285). The increase is explained by greater activity in Infrastructure and Operation and maintenance. Operating profit amounted to SEK 118 million (109) and the operating margin was 3.3 percent (3.3). Higher construction and energy costs have in general been compensated by charging higher prices to customers but have had a negative effect on the operating margin.
January – September 2022
Net sales during the period January-September 2022 increased by four percent and amounted to SEK 10,560 million (10,118).
After adjustments for acquired units and exchange rate effects net sales increased by three percent. Net sales are well spread among different product areas.
Operating profit for the period was SEK 319 million (307) and the operating margin was unchanged at 3.0 percent compared to the same period last year. The operating margin for the latest 12 month period was 3.3 percent, which was unchanged compared to the full year 2021. During 2021 and 2022 prices for material and energy rose considerably. We have handled the price hikes as well as delivery disturbances through adjusting and streamlining operations, but since we have not been able to completely compensate cost increases they have had a negative impact on the operating margin.
Orders received and order backlog
July – September 2022
The level of orders received during the third quarter 2022 amounted to SEK 2,618 million (3,583). In orders received there is a good spread in product areas and geography.
January – September 2022
Orders received during the period January-September 2022 increased to SEK 11,973 million (11,803). Order backlog on September 30, 2022 amounted to SEK 15,485 million (15,066). Roads and other infrastructure generated the largest portion of order backlog with 40 percent (37). Orders received included rebuilding the lock canal in Södertälje of SEK 1.5 billion for The Swedish Transport Administration.
Net sales
per product area, rolling 12 months
- Operation and maintenance, 17% (17)
- Energy, 7% (8)
- Streets and groundwork, 35% (28)
- Ports and sea, 7% (8)
- Industrial, 6% (9)
- Roads and other infrastructure, 28% (30)
per geographic market, rolling 12 months
- Sweden, 89% (91)
- Norway, 11% (9)
Order backlog, September 30, 2022
per product area
- Operation and maintenance, 23% (23)
- Energy, 8% (10)
- Streets and groundwork, 21% (20)
- Ports and sea, 3% (4)
- Industrial, 5% (6)
- Roads and other infrastructure, 40% (37)
per project size
Key ratios
| Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 | |
|---|---|---|---|---|---|---|
| Net sales, MSEK | 3,584 | 3,285 | 10,560 | 10,118 | 14,622 | 14,180 |
| Operating profit, MSEK | 118 | 109 | 319 | 307 | 483 | 471 |
| Operating margin, % | 3.3 | 3.3 | 3.0 | 3.0 | 3.3 | 3.3 |
| Orders received, MSEK | 2,618 | 3,583 | 11,973 | 11,803 | 14,989 | 14,819 |
| Order backlog, MSEK | 15,485 | 15,066 | 15,485 | 15,066 | 15,485 | 13,955 |
| Operating cash flow, MSEK | 241 | 289 | 97 | 701 | 317 | 921 |
| Number of employees 1) | 3,573 | 3,658 | 3,573 | 3,658 | 3,573 | 3,634 |
1) Calculated on rolling 12 months
Business area Industry
Business area Industry provides the products and services needed to carry out sustainable and cost-efficient construction and civil engineering projects on the Nordic market. With local roots we take on jobs big and small.
Industry offers everything from mineral aggregates, concrete, paving and temporary electricity to prefabricated concrete elements. Business area Industry also assists with crane and machine rental, distribution of binder to the concrete industry, transportation as well as recycles production waste and excavated soil. The business area is run in six product areas: Mineral Aggregates, Paving, Concrete, Transportation and Machines, Rentals and Construction System.
Net sales and profit
July – September 2022
Net sales for the third quarter 2022 increased by 14 percent and amounted to SEK 7,096 million (6,198). The increase was primarily related to Paving, Concrete, Transportation and Machines and Construction system. The higher price for bitumen in Paving as well as higher material and energy costs in other product areas have affected prices to customers. Operating profit was SEK 519 million (576) and the operating margin amounted to 7.3 percent (9.3). The lower operating margin is largely due to Paving where higher energy and fuel costs have had a negative effect.
January – September 2022
Net sales for the period increased by 16 percent and amounted to SEK 15,775 million (13,649). Adjusted for acquired and divested units and exchange rate effects, net sales increased by 14 percent. The increase was primarily related to Paving, Concrete and Construction system. The higher price for bitumen in Paving as well as higher material and energy costs in other product areas have affected prices to customers.
Operating profit amounted to SEK 464 million (518) and the operating margin was 2.9 percent (3.8). The operating profit in Paving was lower as a result of higher energy and fuel costs that have not been fully recompensed through higher prices to customers, particularly in Norway, Finland and Denmark. Other product areas in business area Industry reported more or less unchanged or improved profitability.
The operating margin in the latest rolling 12 month period was 4.2 percent compared to 5.0 percent for the entire year 2021.
Capital employed at the end of the period was SEK 10,957 million compared to SEK 9,764 million at the end of the corresponding period last year. The increase is mainly explained by the increase in working capital and machine investments.
Orders received and order backlog
July – September 2022
Orders received during the third quarter 2022 increased and amounted to SEK 2,212 million (2,012).
January – September 2022
Orders received during the period increased and amounted to SEK 9,661 million (8,313). Order backlog on September 30, 2022 was SEK 4,325 million (4,427).
Acquisition of Asfaltti-System Oy
On July 1, 2022 Peab acquired Asfaltti-System Oy, a company in Kouvola in southern Finland that works with manufacturing components and maintenance in the asphalt and concrete industry. The acquisition strengthens Peab Industry's maintenance and service operations. Net sales in the acquired company were EUR 4.4 million in the fiscal year 2021/2022 and the company has 35 employees. Asfaltti-System Oy will provide services to Peab's Nordic operations in both asphalt and factory concrete.
Byggelement doubles production capacity of concrete elements
Byggelement, one of Sweden's leading suppliers of complete frame systems in concrete and prefab concrete elements, invests in close a half billion Swedish kronas to increase production in its plants in Ucklum and Hallstahammar. The factories will thereby become complete suppliers of highly industrialized products and will be able to produce concrete elements with at least 50 percent alternative binder as standard. The expansion in Ucklum is expected to be finished in the fall of 2023 and in Hallstahammar at the end of 2023 – beginning of 2024.
Net sales
per product area, rolling 12 months
- Paving, 49% (48)
- Concrete, 13% (12)
- Mineral Aggregates, 13% (14)
- Transportation and Machines, 8% (9)
- Rentals, 10% (11)
- Construction System, 7% (6)
per geographic market, rolling 12 months
- Sweden, 61% (62)
- Norway, 11% (10)
- Finland, 23% (24)
- Denmark, 5% (4)
Key ratios
| Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 | |
|---|---|---|---|---|---|---|
| Net sales, MSEK | 7,096 | 6,198 | 15,775 | 13,649 | 20,913 | 18,787 |
| Operating profit, MSEK | 519 | 576 | 464 | 518 | 884 | 938 |
| Operating margin, % | 7.3 | 9.3 | 2.9 | 3.8 | 4.2 | 5.0 |
| Orders received, MSEK | 2,212 | 2,012 | 9,661 | 8,313 | 11,916 | 10,568 |
| Order backlog, MSEK | 4,325 | 4,427 | 4,325 | 4,427 | 4,325 | 3,886 |
| Capital employed at the end of the period, MSEK | 10,957 | 9,764 | 10,957 | 9,764 | 10,957 | 9,266 |
| Operating cash flow, MSEK | 452 | 299 | -1,016 | -438 | -71 | 507 |
| Number of employees 1) | 5,101 | 5,141 | 5,101 | 5,141 | 5,101 | 5,110 |
| Concrete, thousands of m³ 2) | 385 | 351 | 1,008 | 994 | 1,393 | 1,379 |
| Paving, thousands of tons 2) | 3,283 | 3,039 | 5,598 | 5,384 | 7,645 | 7,431 |
| Mineral Aggregates, thousands of tons 2) | 7,416 | 8,877 | 21,452 | 23,472 | 29,742 | 31,762 |
1) Calculated on rolling 12 months
2) Refers to sold volume
Business area Project Development
Business area Project Development, which comprises Housing Development and Property Development, creates 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. Peab's primary ambition is to work with development projects on our own balance sheet. Collaboration with other partners via joint ventures may take place from time to time during a project. The goal is to create capital efficient developments with partners that boost the business and thereby profitability.
Housing Development develops all kinds of homes on the Nordic market such as apartment buildings in tenancy ownership, ownership and rental form as well as single homes.
Property Development processes and 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
July – September 2022
Net sales for the third quarter 2022 in Project Development amounted to SEK 2,234 million (2,741). The decrease is related to Housing Development. Operating profit amounted to SEK 265 million (326).
January – September 2022
Net sales for the period January-September 2022 increased by five percent to SEK 6,675 million (6,380). The increase is attributable to Property Development. Operating profit improved to SEK 818 million (791) and the operating margin was 12.3 percent (12.4).
Capital employed in Project Development at the end of the period amounted to SEK 14,173 million (13,685). The increase primarily refers to higher investments in project and development property.
Capital employed
| MSEK | 30 Sep 2022 | 30 Sep 2021 | Dec 31 2021 |
|---|---|---|---|
| Operations property | 55 | 65 | 52 |
| Investment property | 36 | 48 | 36 |
| Project and development property | 11,545 | 9,513 | 10,628 |
| of which housing development rights | 6,669 | 5,251 | 6,629 |
| of which commercial development rights | 710 | 586 | 613 |
| of which unsold part of ongoing housing projects | 1,971 | 1,660 | 1,549 |
| of which ongoing rental projects | 1,246 | 628 | 727 |
| of which ongoing commercial projects | 447 | 533 | 483 |
| of which completed property | 129 | 307 | 123 |
| of which other | 373 | 548 | 504 |
| Participation in joint ventures | 2,581 | 2,401 | 2,371 |
| Loans to joint ventures | 1,285 | 1,197 | 1,177 |
| Working capital and other | -1,329 | 461 | -741 |
| Total | 14,173 | 13,685 | 13,523 |
| of which Property Development | 4,415 | 4,261 | 4,265 |
| of which Housing Development | 9,758 | 9,424 | 9,258 |
Key ratios
| Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 | |
|---|---|---|---|---|---|---|
| Net sales, MSEK | 2,234 | 2,741 | 6,675 | 6,380 | 9,792 | 9,497 |
| of which Property Development | 304 | 33 | 483 | 96 | 908 | 521 |
| of which Housing Development | 1,930 | 2,708 | 6,192 | 6,284 | 8,884 | 8,976 |
| Operating profit, MSEK | 265 | 326 | 818 | 791 | 1,264 | 1,237 |
| of which Property Development | 91 | 70 | 168 | 109 | 290 | 231 |
| of which Housing Development | 174 | 256 | 650 | 682 | 974 | 1,006 |
| Operating margin, % | 11.9 | 11.9 | 12.3 | 12.4 | 12.9 | 13.0 |
| of which Property Development | 29.9 | 212.1 | 34.8 | 113.5 | 31.9 | 44.3 |
| of which Housing Development | 9.0 | 9.5 | 10.5 | 10.9 | 11.0 | 11.2 |
| Capital employed at the end of the period, MSEK | 14,173 | 13,685 | 14,173 | 13,685 | 14,173 | 13,523 |
| Orders received, MSEK | 1,541 | 1,893 | 5,566 | 6,896 | 8,651 | 9,981 |
| Order backlog, MSEK | 6,505 | 6,045 | 6,505 | 6,045 | 6,505 | 6,555 |
| Operating cash flow, MSEK | 55 | -202 | 397 | -479 | 1,125 | 249 |
| Number of employees 1) | 250 | 243 | 250 | 243 | 250 | 242 |
1) Calculated on rolling 12 months
Housing Development
July - September 2022
Net sales for the third quarter 2022 amounted to SEK 1,930 million (2,708). Net sales have decreased in all countries. Operating profit amounted to SEK 174 million (256) and the operating margin was 9.0 percent (9.5).
The number of start-ups of our own developed homes during the third quarter were lower and amounted to 428 units (678), of which 56 (75) have been converted from rentals. The production starts are well spread geographically. The number of sold homes was 257 (747), of which approximately half were in Finland. During the third quarter the market has become more wary and fewer homes were sold, particularly in Sweden. In the third quarter production started on 42 (-) homes in rental apartment projects in Sweden.
January - September 2022
Net sales amounted to SEK 6,192 million (6,284). Net sales increased in Sweden but contracted in Norway and Finland. More ongoing housing projects along with a high level of homes sold during the periods has had a positive effect on net sales in Sweden. Operating profit amounted to SEK 650 million (682) and the operating margin was 10.5 percent (10.9). In the latest rolling 12 month period the operating margin amounted to 11.0 percent compared to 11.2 percent for the entire year of 2021.
The number of start-ups of our own developed homes amounted to 1,680 units (2,125), of which 203 (337) have been converted from rentals. The number of sold homes was 1,502 (2,201). At the beginning of the year sales were relatively good in all three countries but during the second and third quarters the market has become more wary and fewer homes were sold, particularly in Sweden. The number of own developed homes in production at the end of the period was 5,046 (4,487). The level of sold homes in production was 72 percent (77). The number of repurchased homes per September 30, 2022 was 103 (170) and most of them were in Finland. Production started on 342 homes (388) in rental apartment projects on our own balance sheet during the period. No homes in rental apartment projects have been sold and settled during the period (91). The number of homes in rental apartment projects in production was 1,061 (723) at the end of the period. Of these 932 are under contract to be sold upon completion.
The underlying need for housing is still considered good but higher construction costs and hikes in interest rates make it difficult to assess future developments. The dwindling rate of homes being sold is having a negative impact on the conditions for production-starts.
Capital employed has increased slightly at the end of the period and amounted to SEK 9,758 million (9,424).
Joint venture established for housing properties in Finland
Peab has established a joint venture with Slättö to develop and manage newly produced green housing developments in Finland. The partners share an ambition to develop the portfolio focusing on big cities in Finland. The initial acquisition consists of two housing projects in Vantaa and Turku with a total of 178 apartments and $705\mathrm{m}^2$ commercial space in locations with good communications. All the properties will be environmentally certified. Peab will build the properties on its own balance sheet until completion at the end of 2023 when they will be divested to the joint venture.
Net sales
per geographic market, rolling 12 months
Sweden, $69\%$ (55)
Norway, $9\%$ (13)
Finland, $22\%$ (32)
Development rights for housing
| Number, approx. | Sep 30 2022 | Sep 30 2021 | Dec 31 2021 |
|---|---|---|---|
| Development rights on our own balance sheet | 21,400 | 19,600 | 19,500 |
| Development rights via joint ventures | 4,500 | 4,800 | 4,600 |
| Development rights via options etc. | 9,000 | 9,800 | 10,500 |
| Total | 34,900 | 34,200 | 34,600 |
Own housing development construction
| Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 | |
|---|---|---|---|---|---|---|
| Tenant-owner associations, ownership and residential limited companies | ||||||
| Number of production-started homes during the period | 4281) | 6781) | 1,6802) | 2,1252) | 2,575 | 3,020 |
| Number of sold homes during the period | 257 | 747 | 1,502 | 2,201 | 2,348 | 3,047 |
| Total number of homes under production, at the end of the period | 5,046 | 4,487 | 5,046 | 4,487 | 5,046 | 4,702 |
| Portion of sold homes under production, at the end of the period | 72% | 77% | 72% | 77% | 72% | 76% |
| Number of repurchased homes on our balance sheet, at the end of the period | 103 | 170 | 103 | 170 | 103 | 144 |
| Rentals | ||||||
| Number of production-started homes during the period | 42 | - | 342 | 388 | 630 | 676 |
| Number of sold homes during the period | - | - | - | 91 | - | 91 |
| Number converted to tenant-owner associations during the period | 56 | 75 | 203 | 337 | 292 | 426 |
| Total number of homes in production, at the end of the period | 1,061 | 723 | 1,0613) | 7233) | 1,061 | 922 |
1) Includes 56 (75) homes that have been converted from rentals
2) Includes 203 (337) homes that have been converted from rentals
3) Of which 932 (528), respectively 88 percent (73), are under contract to be sold upon completion
Time of completion of our own ongoing housing development projects 1)
1) Refers to Swedish tenant-owner associations and single homes, Norwegian condominiums and share housing and Finnish residential limited companies
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.
July – September 2022
During the third quarter 2022 net sales were SEK 304 million (33) and operating profit was SEK 91 million (70). Capital gains from property divestitures amounted to SEK 61 million (41). Profit contributions from partially owned companies amounted to SEK 38 million during the quarter compared to SEK 30 million in the same quarter last year.
January – September 2022
During the period January-September 2022 net sales were SEK 483 million (96) and operating profit was SEK 168 million (109). Capital gains from property divestitures amounted to SEK 83 million (67). The period included divestment of a logistic facility in Södertälje to Annehem Fastigheter and a sports arena was sold to Balder. Profit contributions from partially owned companies amounted to SEK 109 million compared to SEK 61 million in the same period last year.
Capital employed in Property Development was SEK 4,415 million (4,261) at the end of the third quarter 2022. A large part of the capital employed is shares in partially owned companies and loans to partially owned companies.
The table below presents the ongoing property projects per September 30, 2022. The property in Trollhättan is under contract to be sold to an external party during the fourth quarter 2022. During the period Peab made the decision to invest SEK 101 million in a new office in Jönköping. The project is expected to be completed during the fourth quarter 2023.
Ongoing property projects
| Type of project | Location | Rentable area in m² | Degree rented, % | Recognized value, MSEK | Total investment at completion, MSEK | Timepoint of completion | Level of completion, % |
|---|---|---|---|---|---|---|---|
| Warehouse building | Trollhättan | 3,900 | 100 | 47 | 51 | Q4-2022 | 92 |
| Office building | Malmö | 7,100 | 43 | 187 | 313 | Q1-2023 | 60 |
| Office building | Jönköping | 3,200 | 100 | 10 | 101 | Q4-2023 | 10 |
| Office building | Gothenburg | 13,100 | 0 | 185 | 533 | Q3-2024 | 35 |
| Other ongoing projects | 18 | ||||||
| Total | 447 |
17
Significant joint ventures
Peab's significant joint venture companies Fastighets AB Centur, Fastighets AB ML4, Point Hyllie Holding AB, Skiab Invest AB and Tornet Bostadsproduktion 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
Location: Stockholm, the Mälardalen region, Gothenburg and the Öresund region
Recognized value on properties September 30, 2022 ¹): SEK 7,866 million (7,343)
Peab's portion of unrecognized fair value exclusive tax ¹): SEK 656 million (474)
Major ongoing projects: Varvsstaden, Malmö, renovation of Gjuteriet of around 4,600 m² (tenant Oatly) and 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
Location: Lund
Recognized value on properties September 30, 2022: SEK 1,952 million (1,979)
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 Quality Hotel View).
Peab's share: 50 percent
Partner: Volito
Location: Hyllie, Malmö
Recognized value on properties September 30, 2022: SEK 1,397 million (1,369)
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
Location: Scandinavian mountains
Recognized value on properties September 30, 2022 ¹): SEK 2,494 million (2,028)
Peab's portion of unrecognized fair value exclusive tax ¹): SEK 50 million (12)
Major ongoing projects: Sadelbyn 7 with 42 tenant-owner apartments in Åre and 20 tenant-owner apartments in Timmerbyn, Lindvallen in Sälen
Tornet Bostadsproduktion AB
Develop, own and manage attractive and environmentally friendly rentals in larger cities in Sweden.
Peab's share: 33 percent
Partner: Folksam and Balder
Location: Stockholm, the Mälardalen region, Gothenburg and the Öresund region
Recognized value on properties September 30, 2022 ¹): SEK 6,142 million (5,358)
Peab's portion of unrecognized fair value exclusive tax ¹): SEK 432 million (375)
Major ongoing projects: LP Parken, Gothenburg 11,200 m² rentable area, Tallbohov, Järfälla 10,500 m² rentable area, Tamarinden, Örebro 11,000 m² rentable area and other apartment building projects in Helsingborg, Lund and Umeå
¹) Valued at market price in joint venture companies. The market prices on properties that affect the recognized values in the joint venture companies are not included in Peab's accounts.
Construction market
The market forecasts below have been prepared by Navet. Considering the particularly uncertain market and geopolitical situation the forecasts are based on the following assumptions:
- Although the war in Ukraine is contained geographically it affects the market through significantly higher prices for energy and construction material, weaker growth and a cooler investment climate, cautious households and falling housing prices.
- Heavy inflation in 2022 that will diminish in 2023, which drives up interest rates during the period.
- The supply of cement in Sweden will be manageable during the forecast period but the market may be guarded in 2023.
Sweden
The war in Ukraine has led to broad and high inflation in the Swedish economy. Riksbanken has therefore dramatically raised the policy rate and made upward adjustments in the interest rate path. Rising prices and interest rates squeeze household purchasing power and increase costs for companies all the while demand is dwindling. The forecast for GNP growth in 2022 has been adjusted down to 2.4 percent and will approach zero in 2023. The total volume of production-started building construction investments is expected to contract by four percent in 2022. The downturn is primarily in apartment and industrial building construction investments while investments in offices, retail space and hotels are still growing. Both housing investments and other building construction are expected to decline in 2023. Civil engineering investments are predicted to remain on the same level in 2022 as in 2021 and then grow in 2023, partly because major investments are needed in green infrastructure and required to safeguard energy supplies.
Norway
The Norwegian economy recovered during the first half-year from the pandemic but now growth is slowing. This is because private consumption is expected to decrease due to rising prices for energy, food and goods. On top of that Norges Bank has raised the policy rate to 2.25 percent with more increases to come. Norwegian building construction investments developed well during the first half-year and are expected to be stable throughout 2022. Industrial construction investments are predicted to grow substantially while investments in single homes are expected to diminish by eight percent. All in all other building construction is expected to grow in 2022 and then contract in 2023. For 2023 a downturn is expected in both housing and other building construction. Investments in civil engineering are predicted to grow in 2022 and then level out and remain on the same level in coming years.
Finland
Growth of the Finnish economy has been impacted by the breakdown in trade with Russia, rising inflation and the unruly economic development in the world. Despite these challenges GDP is expected to grow by 2.1 percent in 2022 followed by zero growth in 2023. Household consumption is expected to decline and export companies need to find new markets to replace exports no longer going to Russia. The total volume of production-started building construction investments is predicted to fall by seven percent in 2022 with a downturn in both housing and other building construction. The exceptions are offices, retail space and hotels where an upturn is expected after the decline last year and the low level of investments during the pandemic. In 2023 investment levels are expected to stabilize. It is possible that civil engineering will remain on the same level as in 2021 during the next two years.
Housing
| 2022 | 2023 | 2024 | |
|---|---|---|---|
| Sweden | ↓ | ↓ | → |
| Norway | → | ↓ | → |
| Finland | ↓ | → | ↑ |
Forecast for production-started housing investments, new production and renovations
Source: Navet
Other building construction
| 2022 | 2023 | 2024 | |
|---|---|---|---|
| Sweden | → | ↓ | ↑ |
| Norway | ↑ | ↓ | → |
| Finland | ↓ | → | ↑ |
Forecast for production-started other building construction investments, new production and renovations (Industry, office/retail etc. and public premises)
Source: Navet
Civil engineering
| 2022 | 2023 | 2024 | |
|---|---|---|---|
| Sweden | → | ↑ | → |
| Norway | ↑ | → | → |
| Finland | → | → | → |
Forecast for civil engineering investments
Source: Navet
- Worse forecast compared to the previous quarterly report
- Better forecast compared to the previous quarterly report
- Same forecast compared to the previous quarterly report
Non-financial targets and sustainability
For more than 60 years Peab has contributed to sustainable social development and worked to improve everyday life for people in the local community. 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 always 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 non-financial targets – that also identify our prioritized sustainable aspects (Best workplace and Leader in social responsibility). We monitor our targets quarterly, semiannually or annually. In connection with the year-end report we present the outcome of all nine targets.
Most satisfied customers
It is imperative for a long-term, sustainable relationship that Peab deliver on its obligations. A satisfied customer is a customer that comes back and is fundamental to us. This is why our annual customer survey is a 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), carried out in 2021, added up to 81 (80), which is a continued good result and higher than our target of 75. Customers' perception of Peab as priceworthy has developed in a particularly positive direction and regarding our business areas Project Development stands out for its strong development. At the beginning of 2022 we received yet another accolade in Prognoscentret's customer survey which showed Peab Bostad had the most satisfied homebuyers in Sweden. Peab Bostad particularly raised its ranking in the areas personnel and reliability. At the same time it was announced that our project Hamnutsikten (View of the Harbor) on Hammarö had the most satisfied customers of any single project in Sweden in 2021. The next target update will be provided after the fourth quarter in connection with the presentation of the year-end report 2022.
Best workplace
Serious accidents
A safe work environment is the foundation of our business. Everyone at our workplaces should be able to be there under safe and secure conditions, despite the fact that there are risks involved in the work we do. In order to prevent incidents and accidents at our workplaces we develop quality-ensured work methods and train our employees. Our focus is on planning and risk assessment in projects as well as learning from reported risk observations, incidents and accidents.
Our target of a contracting trend in serious accidents* comprises everyone at our workplaces. After a downward trend in 2021 the trend turned in March and serious accidents rose. During the third quarter there were twelve. The accidents occurred primarily in construction contract operations in Sweden and were mostly accidents from falling or connected to handling machines. Calculated for a rolling twelve month period there were 48 per September 30, 2022 (30 per September 30, 2021). Of these, 27 referred to our own employees and 21 referred to subcontractors.
It's regrettable that the trend in accidents is developing in the wrong direction, showing how important it is to continuously work on our safety culture so as not to lose focus on the risks in our work. In order to turn the tide we have intensified our preventive work concerning the work environment. We have identified regions in need of special support and operations managers and site managers on all our construction projects have together studied the work environment. In addition, we are convinced that the investment in the construction industry's safety park in Sweden will create long-term competence in, among other things, safety culture. We are also continuing to provide our information series to all our employees where we share good examples, advice concerning the work environment and safety as well as information on the latest in the industry.
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. In the third quarter this year there were 28 (39 second quarter 2022) and the LTIF4 frequency rate for a rolling twelve month period was 6.2 (6.5 after the second quarter 2022).
Every remedied risk is one less potential accident, which is why we are highly focused on reporting and remedying risk observations*. During the first nine months of the year the organization reported around 43,000 risk observations. Peab has implemented a new system for reporting and managing risk observations, incidents and accidents in Swedish operations. The system has a number of advantages such as an even greater focus on seeing that planned measures are carried out. Operations in our other countries will implement the system during 2023.
- For a definition see section Alternative performance measures and definitions.
Attractive employers (eNPS)
We will be the obvious choice for anyone who wants to work in the industry. Everyone will be part of safe and including workplaces with good work conditions and opportunities to develop at Peab. Twice a year we hold our personnel survey The Handshake so that we can continuously develop and improve as coworkers 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.
The response frequency in the spring survey was 84 percent (84) in the Group, accompanied by many suggestions for improvement. This shows the great interest our employees have in contributing to developing their own teams and all operations.
Within the strategic target Best workplace the eNPS (recommend Peab) score should be above the benchmark for the industry (industry and manufacturing). The eNPS score for the Group rose in the spring survey by four points and was 28 compared to 24 in the previous survey. This is clearly above the Nordic benchmark which is 20 compared to 15 in the previous survey. In principle all areas are "pointing upwards" and our employees continue to be satisfied at work. Worth noting is that the eNPS score is on the rise among women in general at Peab, where the number of female Peab employees that are satisfied at work is increasing at a faster rate than the industry benchmark. The next update will take place after the fourth quarter in connection with the year-end report 2022.
Leader in social responsibility
Climate target for carbon dioxide intensity
In recent years Peab's climate and environmental work has increased in scope and we have honed our targets and metrics. 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's operations primarily cause emissions through production of the material we use, the use of fossil fuel in our machines and vehicles and the use of the products we deliver such as buildings. We are working on a number of initiatives for climate improvement that reduce emissions and get us closer to our climate targets. 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 aim for 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 2021 reveals that carbon dioxide intensity is developing in the right direction although to different degrees. Carbon dioxide intensity in our own production has gone down by 40 percent compared to base year 2015 and by three 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. The next target update will be provided after the fourth quarter in connection with the presentation of the year-end report 2022.
Equal opportunity
Only about five percent of those that apply to Peab for relevant, practical training 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 want to challenge ourselves and thereby 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). After the end of 2021 the percentage of women in new recruitments was 6.8 percent in production and processing compared to our target of more than 5.0 percent and 34.9 percent in production management and production support whereas our target was more than 28.5 percent. Our target for 2022 regarding equal opportunity in production and processing is continuing to surpass 5.0 percent while our target for production management and production support has been raised to surpass an outcome of 30.0 percent. The next target update will be provided after the fourth quarter in connection with the presentation of the year-end report 2022.
19
Activities during the third quarter
- Peab ended its half-time reconciliation of the business plan 2021-2023 through five leadership conferences held in Gothenburg, Stockholm, Malmö, Oslo and Helsinki. The leadership conferences are vital to Peab's regional collaboration and work on our company culture.
- This year's work environment week was in August and focus was on social and organizational factors for health and safety at our workplaces and the mental and physical strain work can sometimes create. One of the many activities carried out was a pilot project in Arvika which worked with Behavior Based Safety that focuses on how to identify and reinforce safe behavior in everyday work.
- Peab participated in the Maintain Zero safety push in September, which is a manifestation for safe and injury free workplaces. Maintain Zero is an organization with over 80 members from the construction and real estate industries that has produced work environment standards and guides and a general contractor course.
- Byggelement made the decision to invest close to half a billion Swedish kronas to double its production capacity. The investment comprises a technological leap from manual labor to automation through robotics and smart machines as well as production of concrete elements with at least 50 percent alternative binder as standard to increase climate improved prefab production.
-
Byggelement continues to develop its range of ECO-Prefab and during the quarter launched the product solid wall with 50 percent alternative binder. Just as with all other ECO-products a third party audited EPD is provided that declares the product's environmental impact.
-
Swerock changed the definition of ECO-Ballast (ECO-Mineral Aggregates) to mineral aggregates products made of 100 percent circular raw material from the previous definition of "at least 50 percent". After nearly two years of production we have come to the point where completely circular end products meet all technical and environmental requirements.
- Work on test paving lignin-based asphalt has continued, this time through collaboration between Peab Asfalt and Stora Enso, where the whole area for the Sunila Mill in Finnish Kotka have now been paved with lignin-based asphalt.
- Peab works continuously in various industry forums to drive sustainable issues that are vital to us. In the third quarter for instance, together with Sweden Green Building Council, a member-owned organization for sustainable community building, we organized a membership meeting in Gothenburg to spread the word about ECO-Betong (ECO-Concrete). In the same spirit we participated in the annual seminar Construction Forum to contribute to our industry's cooperation on EU Taxonomy.
- Our local organization in Växjö participated in one of Peab's community building projects for youths, Peab Life, together with the municipal real estate company and the foundation Friends to make children's school environment safer. We accomplished this through several different activities working together with students and faculty in connection with the newly constructed school in Dädesjö outside Växjö where focus was on designing restrooms for higher safety.
Summary external targets
In order to further promote value creation we have updated everything from our mission, business concept and strategic target areas to internal and external financial and non-financial targets. As of 2021 Peab externally reports the performance of our business by monitoring nine 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.
Both the internal and external financial and non-financial targets are categorized under the strategic targets; Most satisfied customers, Best workplace, Most profitable company as well as the new, fourth strategic target, Leader in social responsibility. All targets relate to the industry. For a more detailed description of each target please see www.peab.com/targets.
Target and target fulfilment
Most profitable company
Operating margin
Target: >6% according to segment reporting (reported quarterly)
- Years 2015-2018 not translated according to changed accounting principles for own housing development projects. **Operating margin excluding the effect of the distribution of Annehem Fastigheter (SEK 952 million) *** Calculated on a rolling 12 months per September 30, 2022.
Most profitable company
Net debt/equity ratio
Target: 0.3-0.7 according to segment reporting (reported quarterly)
- Years 2015-2018 not translated according to changed accounting principles for own housing development projects.** Per September 30, 2022.
Most profitable company
Dividend
Target: >50% of profit for the year according to segment reporting (reported annually)
- Years 2015-2018 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 calculated without the effect of SEK 952 million on profit due to the distribution of Annehem Fastigheter.
Best workplace
Serious accidents
Target: Zero fatal accidents and contracting trend, rolling 12 months, serious accidents classification 4 (reported quarterly)
Refers to the period January 2020 - September 2022
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.
Most satisfied customers
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
Carbon dioxide intensity: Climate targets for our own production
Target: Reduced emissions of GHG Scope 1+2* (tons CO₂e/MSEK) by 60% (reported annually)
- Direct and indirect emissions as a result of using fuel and energy in our own production.
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% (reported annually)
- Includes concrete/cement, asphalt/bitumen, transportation and machine services, steel, waste and business trips.
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), %
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.
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. For further information about risks and uncertainty factors, see the Annual and Sustainability Report 2021.
In the beginning of 2020 the coronavirus spread out over the world and the pandemic has raged ever since, although a stage was reached in the beginning of 2022 where countries and companies more or less opened up. During the pandemic governments and central banks introduced different forms of crisis packages to reduce its financial effects. The effects of the corona pandemic on Peab's operations have been limited but we continue to follow developments to assess any further effects.
An uncertainty that can still upset the market is access to cement. In 2021 the Supreme Land and Environment Court dismissed Cementa's application for a renewed permit to continue to quarry limestone in Slite on Gotland. The government granted Cementa a time-limited license until December 31, 2022 but this
has been appealed to the Supreme Administrative Court and the issue of a long-term solution remains unresolved. On April 18, 2022 Cementa submitted a new application to quarry limestone for four more years in Slite. A substantial shortage of cement would impact the entire construction and civil engineering market in Sweden. As a significant actor Peab would therefore also be affected by the situation. Peab has already begun working with our own alternative binder and certain degree of cement importation to handle the risk of lower or no cement deliveries.
There has been a significant rise in the price of materials and energy during 2021 and 2022. We have handled cost increases along with supply chain disturbances through adjusting and streamlining operations as well as in pricing to customers although the cost increases have not been fully compensated, which has affected the operating margin. We continually work to streamline production all the while expecting a gradual increase in construction costs if the trend in material and energy prices does not turn.
Long-term interest rates have continued to rise and in Sweden The Riksbank raised the policy interest rate further during the quarter, by 1 percentage point in September. Inflation has tightened its grip on the global economy and several central banks indicate further hikes in interest rates. Higher interest rates are expected to stymy investment appetite and diminish demand.
The recent dramatic developments in Ukraine have a key impact on the world around us. In addition to the terrible tragedy for the people the war touches, the situation risks hampering macroeconomic growth in the world. For Peab this can affect the construction industry through greater uncertainty and cautiousness concerning investments, continued high material and energy prices and material shortages and delivery problems. We are not ourselves 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.
Other information
Important events during the period
The recent dramatic developments in Ukraine have a key impact on the world around us. In addition to the terrible tragedy for the people the war touches, the situation risks hampering macroeconomic growth in the world. In Sweden this can affect the construction industry through greater uncertainty and cautiousness concerning investments, continued high material and energy prices and material shortages and delivery problems. We follow developments carefully to continually assess any effects on Peab.
Important events after the period
No significant events occurred after the end of the reporting period.
Holdings and repurchase of own shares
At the beginning of 2022 Peab's own B shareholding was 1,086,984 which corresponds to 0.4 percent of the total number of shares. The Board of Directors of Peab AB has, through the authorization given by the Annual General Meeting on May 5, 2022, decided to repurchase its own shares. The shares will be repurchased, on several occasions, until the AGM 2023. The aim of the repurchasing is to improve the company's capital structure. The shares will be repurchased on
Nasdaq Stockholm according to the Nordic Main Market Rulebook for Issuers of Shares – Nasdaq Stockholm (Supplement D) and EU Parliament's and Council's EU regulation nr. 596/2014 on market abuse (MAR). According to the Board's decision shares may be repurchased during the period for a maximum of SEK 500 million and a number of shares so that the company's holding of its own shares after the repurchasing does not exceed one tenth of all shares in the company. The shares may only be repurchased at a price per share within the price interval registered at any given time on Nasdaq Stockholm, meaning the interval between the current highest buy price and the lowest sell price published by Nasdaq Stockholm. During the period up to September 30, 2022 6,150,170 shares were repurchased for a total of SEK 418 million. After the repurchase Peab holds 7,237,154 own B shares corresponding to 2.4 percent of the total shares.
Related parties
The character and extent of transactions with related parties is presented in the Annual and Sustainable Report 2021, note 40. For more information about transactions with related parties during the period see business area Project Development, section Property Development. No other new significant transactions have occurred during the period January-September 2022.
Report on the Group income statement, IFRS
Group net sales according to IFRS increased by eight percent and amounted during January-September 2022 to SEK 44,792 million (41,419). After adjusted for acquired and divested units and exchange rate effects net sales increased by six percent. The adjustment of our own housing development projects to the completion method affected net sales by SEK -1,295 million (-1,087).
Operating profit according to IFRS for the period January-September 2022 amounted to SEK 1,671 million (1,666) and the operating margin was 3.7 percent (4.0). The adjustment of our own housing development projects to the completion method affected operating profit by SEK -244 million (-204).
| MSEK | Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Net sales | 16,197 | 15,488 | 44,792 | 41,419 | 62,296 | 58,923 |
| Production costs | -14,730 | -13,868 | -40,879 | -37,527 | -56,374 | -53,022 |
| Gross profit | 1,467 | 1,620 | 3,913 | 3,892 | 5,922 | 5,901 |
| Sales and administrative expenses | -640 | -673 | -2,435 | -2,377 | -3,358 | -3,300 |
| Other operating income | 81 | 67 | 207 | 156 | 442 | 391 |
| Other operating costs | 8 | 11 | -14 | -5 | -26 | -17 |
| Operating profit | 916 | 1,025 | 1,671 | 1,666 | 2,980 | 2,975 |
| Financial income | 18 | 29 | 64 | 74 | 84 | 94 |
| Financial expenses | -60 | -48 | -135 | -129 | -173 | -167 |
| Net finance | -42 | -19 | -71 | -55 | -89 | -73 |
| Pre-tax profit | 874 | 1,006 | 1,600 | 1,611 | 2,891 | 2,902 |
| Tax | -163 | -226 | -327 | -355 | -497 | -525 |
| Profit for the period | 711 | 780 | 1,273 | 1,256 | 2,394 | 2,377 |
| Profit for the period, attributable to: | ||||||
| Shareholders in parent company | 711 | 780 | 1,273 | 1,256 | 2,394 | 2,377 |
| Non-controlling interests | 0 | 0 | 0 | 0 | 0 | 0 |
| Profit for the period | 711 | 780 | 1,273 | 1,256 | 2,394 | 2,377 |
| Key ratios, IFRS | ||||||
| Earnings per share before and after dilution, SEK | 2.43 | 2.65 | 4.34 | 4.26 | 8.14 | 8.06 |
| Average number of outstanding shares, million | 291.3 | 295.0 | 293.5 | 295.0 | 293.9 | 295.0 |
| Return on capital employed, % 1) | 10.1 | 14.5 | 10.1 | 14.5 | 10.1 | 11.5 |
| Return on equity, % 1) | 17.9 | 24.3 | 17.9 | 24.3 | 17.9 | 18.9 |
1) Calculated on rolling 12 months
Report on the Group income statement and other comprehensive income in summary, IFRS
| MSEK | Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Profit for the period | 711 | 780 | 1,273 | 1,256 | 2,394 | 2,377 |
| 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 | 69 | 25 | 160 | 124 | 220 | 184 |
| Changes in fair value of cash flow hedges for the period | - | 1 | 2 | 5 | 3 | 6 |
| Shares in joint ventures' other comprehensive income | 18 | - | 18 | - | 18 | - |
| Tax referring to items that can be reclassified or have been reclassified to profit for the period | - | 0 | -1 | -1 | -1 | -1 |
| Other comprehensive income for the period | 87 | 26 | 179 | 128 | 240 | 189 |
| Total comprehensive income for the period | 798 | 806 | 1,452 | 1,384 | 2,634 | 2,566 |
| Total comprehensive income for the period, attributable to: | ||||||
| Shareholders in parent company | 798 | 806 | 1,452 | 1,384 | 2,634 | 2,566 |
| Non-controlling interests | 0 | 0 | 0 | 0 | 0 | 0 |
| Total comprehensive income for the period | 798 | 806 | 1,452 | 1,384 | 2,634 | 2,566 |
26
Report on financial position for the Group in summary, IFRS
Total assets on September 30, 2022 was SEK 51,186 million (45,919). Equity amounted to SEK 13,250 million (12,500), which generated an equity/assets ratio of 25.9 percent (27.2). During 2022, a dividend of SEK 1,475 million (1,327) was paid to shareholders and repurchases of own shares have been made by SEK 418 million (-).
| MSEK | Sep 30 2022 | Sep 30 2021 | Dec 31 2021 |
|---|---|---|---|
| Assets | |||
| Intangible assets | 3,863 | 3,768 | 3,769 |
| Tangible assets | 7,788 | 7,666 | 7,674 |
| Investment property | 56 | 67 | 55 |
| Interest-bearing long-term receivables | 1,268 | 1,221 | 1,208 |
| Other financial fixed assets | 2,646 | 2,473 | 2,491 |
| Deferred tax recoverables | 243 | 183 | 174 |
| Total fixed assets | 15,864 | 15,378 | 15,371 |
| Project and development properties | 18,240 | 14,941 | 16,258 |
| Inventories | 1,591 | 1,380 | 1,318 |
| Interest-bearing current receivables | 139 | 652 | 342 |
| Other current receivables | 13,568 | 12,767 | 10,930 |
| Liquid funds | 1,784 | 801 | 2,951 |
| Total current assets | 35,322 | 30,541 | 31,799 |
| Total assets | 51,186 | 45,919 | 47,170 |
| Equity and liabilities | |||
| Equity | 13,250 | 12,500 | 13,682 |
| Liabilities | |||
| Interest-bearing long-term liabilities | 6,754 | 5,313 | 5,281 |
| Interest-bearing long-term liabilities, project financing | 537 | 183 | 346 |
| Deferred tax liabilities | 317 | 177 | 321 |
| Other long-term liabilities | 1,553 | 1,403 | 1,585 |
| Total long-term liabilities | 9,161 | 7,076 | 7,533 |
| Interest-bearing current liabilities | 2,146 | 2,649 | 2,386 |
| Interest-bearing current liabilities, project financing | 9,543 | 6,195 | 7,003 |
| Other current liabilities | 17,086 | 17,499 | 16,566 |
| Total current liabilities | 28,775 | 26,343 | 25,955 |
| Total liabilities | 37,936 | 33,419 | 33,488 |
| Total equity and liabilities | 51,186 | 45,919 | 47,170 |
| Key ratios, IFRS | |||
| Capital employed | 32,230 | 26,840 | 28,698 |
| Equity/assets ratio, % | 25.9 | 27.2 | 29.0 |
| Net debt | 15,789 | 11,666 | 10,515 |
| Equity per share, SEK | 45.84 | 42.37 | 46.38 |
| Number of outstanding shares at the end of the period, million | 288.8 | 295.0 | 295.0 |
Report on changes in Group equity in summary, IFRS
| MSEK | Sep 30
2022 | Sep 30
2021 | Dec 31
2021 |
| --- | --- | --- | --- |
| Equity attributable to shareholders in parent company | | | |
| Opening equity on January 1 | 13,681 | 12,442 | 12,442 |
| Profit for the period | 1,273 | 1,256 | 2,377 |
| Other comprehensive income for the period | 179 | 128 | 189 |
| Total comprehensive income for the period | 1,452 | 1,384 | 2,566 |
| Cash dividend | -1,475 | -1,327 | -1,327 |
| Repurchase of own shares | -418 | - | - |
| Closing equity | 13,240 | 12,499 | 13,681 |
| Non-controlling interests | | | |
| Opening equity on January 1 | 1 | 1 | 1 |
| Comprehensive income for the period | 0 | 0 | 0 |
| Acquisition of partially owned companies, non-controlling interests as previously | 9 | - | - |
| Closing equity | 10 | 1 | 1 |
| Total closing equity | 13,250 | 12,500 | 13,682 |
28
Report on Group cash flow in summary, IFRS
| MSEK | Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Cash flow from current operations before changes in working capital | 1,065 | 1,247 | 2,035 | 2,319 | 3,809 | 4,093 |
| Increase (-) / Decrease (+) of project and development properties | -374 | 32 | -1,717 | -706 | -2,729 | -1,718 |
| Increase (-) / Decrease (+) of inventories | 188 | 71 | -226 | -55 | -158 | 13 |
| Increase (-) / Decrease (+) of current receivables / current liabilities | 24 | 561 | -2,020 | -346 | -1,244 | 430 |
| Cash flow from changes in working capital | -162 | 664 | -3,963 | -1,107 | -4,131 | -1,275 |
| Cash flow from current operations | 903 | 1,911 | -1,928 | 1,212 | -322 | 2,818 |
| Acquisition of subsidiaries / businesses, net effect on liquid funds | -30 | -125 | -30 | -201 | -31 | -202 |
| Sale of subsidiaries / businesses, net effect on liquid funds | - | - | 43 | - | 43 | - |
| Acquisition of fixed assets | -441 | -1,680 | -1,214 | -2,350 | -1,832 | -2,968 |
| Sale of fixed assets | 88 | 471 | 474 | 772 | 1,106 | 1,404 |
| Cash flow from investment operations | -383 | -1,334 | -727 | -1,779 | -714 | -1,766 |
| Cash flow before financing | 520 | 577 | -2,655 | -567 | -1,036 | 1,052 |
| Increase (+) / Decrease (-) of interest-bearing liabilities | -178 | -367 | 740 | 435 | 315 | 10 |
| Increase (+) / Decrease (-) of interest-bearing liabilities, project financing | 418 | 248 | 2,630 | 1,271 | 3,583 | 2,224 |
| Cash dividend | - | - | -1,475 | -1,327 | -1,475 | -1,327 |
| Repurchase of own shares | -293 | - | -418 | - | -418 | - |
| Cash flow from financing operations | -53 | -119 | 1,477 | 379 | 2,005 | 907 |
| Cash flow for the period | 467 | 458 | -1,178 | -188 | 969 | 1,959 |
| Cash at the beginning of the period | 1,319 | 336 | 2,951 | 968 | 801 | 968 |
| Exchange rate differences in cash | -2 | 7 | 11 | 21 | 14 | 24 |
| Cash at the end of the period | 1,784 | 801 | 1,784 | 801 | 1,784 | 2,951 |
29
Parent company
The parent company Peab AB's net sales for the period January-September 2022 amounted to SEK 227 million (210) and mainly consisted of internal Group services. Profit for the period amounted to SEK 890 million (-26). Profit for the period included dividends from subsidiaries of SEK 1,024 million (-).
The parent company's assets mainly consist of participations in Group companies amounting to SEK 11,728 million (11,623). The assets have been financed from equity of SEK 7,251 million (6,985) and long-term liabilities to Group companies amounting to SEK 1,500 million (2,160). During 2022, a dividend of SEK 1,475 million (1,327) was paid to shareholders and repurchases of own shares have been made by SEK 418 million (-).
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 | Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 | Oct-Sep 2021/2022 | Jan-Dec 2021 |
|---|---|---|---|---|---|---|
| Net sales | 75 | 66 | 227 | 210 | 310 | 293 |
| Administrative expenses | -104 | -77 | -371 | -288 | -508 | -425 |
| Other operating income | 0 | 0 | 1 | 1 | 1 | 1 |
| Operating profit | -29 | -11 | -143 | -77 | -197 | -131 |
| Result from financial investments | ||||||
| Profit from participation in Group companies | - | - | 1,024 | 63 | 1,024 | 63 |
| Other financial items | -9 | -14 | -25 | -35 | -38 | -48 |
| Result after financial items | -38 | -25 | 856 | -49 | 789 | -116 |
| Appropriations | - | - | - | - | 1,638 | 1,638 |
| Pre-tax profit | -38 | -25 | 856 | -49 | 2,427 | 1,522 |
| Tax | 8 | 6 | 34 | 23 | -268 | -279 |
| Profit for the period 1) | -30 | -19 | 890 | -26 | 2,159 | 1,243 |
1) Profit/loss for the period corresponds to comprehensive profit/loss for the period and therefore only one income statement is presented without a separate one for comprehensive profit/loss
Report on financial position for the parent company in summary
| MSEK | Sep 30 2022 | Sep 30 2021 | Dec 31 2021 |
|---|---|---|---|
| Assets | |||
| Fixed assets | |||
| Intangible assets | 4 | 5 | 4 |
| Tangible assets | 1 | 1 | 1 |
| Financial assets | |||
| Participation in Group companies | 11,728 | 11,623 | 11,728 |
| Deferred tax recoverables | 134 | 117 | 140 |
| Total financial assets | 11,862 | 11,740 | 11,868 |
| Total fixed assets | 11,867 | 11,746 | 11,873 |
| Current assets | |||
| Current receivables | |||
| Accounts receivables | 0 | 0 | 0 |
| Receivables from Group companies | 0 | 0 | 2,271 |
| Current tax assets | 288 | 273 | 12 |
| Other receivables | 1 | 0 | 2 |
| Prepaid expenses and accrued income | 8 | 7 | 9 |
| Total current receivables | 297 | 280 | 2,294 |
| Cash and bank | 0 | 0 | 0 |
| Total current assets | 297 | 280 | 2,294 |
| Total assets | 12,164 | 12,026 | 14,167 |
| Equity and liabilities | |||
| Equity | |||
| Restricted equity | 1,884 | 1,884 | 1,884 |
| Non-restricted equity | 5,367 | 5,101 | 6,370 |
| Total equity | 7,251 | 6,985 | 8,254 |
| Untaxed reserves | 3,190 | 2,724 | 3,190 |
| Provisions | |||
| Other provisions | 55 | 57 | 45 |
| Total provisions | 55 | 57 | 45 |
| Long-term liabilities | |||
| Liabilities to Group companies | 1,500 | 2,160 | 2,281 |
| Total long-term liabilities | 1,500 | 2,160 | 2,281 |
| Current liabilities | |||
| Accounts payable | 15 | 10 | 20 |
| Liabilities to Group companies | 66 | 1 | 269 |
| Other liabilities | 18 | 24 | 9 |
| Accrued expenses and deferred income | 69 | 65 | 99 |
| Total current liabilities | 168 | 100 | 397 |
| Total liabilities | 1,668 | 2,260 | 2,678 |
| Total equity and liabilities | 12,164 | 12,026 | 14,167 |
31
32
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 Report.
As of January 1, 2022 changes in IAS 37 Provisions, contingent liabilities, and contingent assets are applied regarding valuation of loss contracts. The changes are described in the Annual and Sustainability Report 2021 and have not had any material impact on the Group.
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 follow operations.
For Peab's construction contract businesses, Construction and Civil Engineering, revenue and profit are recognized over time in both segment reporting and 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, Peab Finans AB, Peab Support (Shared Service Center) and Peab Utveckling 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
| Group Jan-Sep 2022 MSEK | Construction | Civil Engineering | Industry | Project Development | Group functions | Eliminations | Group Segment | Differences in accounting principles 1) | Group IFRS |
|---|---|---|---|---|---|---|---|---|---|
| Allocation per external/internal | |||||||||
| External sales | 16,784 | 9,578 | 13,020 | 6,658 | 47 | 46,087 | -1,295 | 44,792 | |
| Internal sales | 3,885 | 982 | 2,755 | 17 | 1,076 | -8,715 | - | - | |
| Total | 20,669 | 10,560 | 15,775 | 6,675 | 1,123 | -8,715 | 46,087 | -1,295 | 44,792 |
| Allocation per country | |||||||||
| Sweden | 14,936 | 9,371 | 9,412 | 4,493 | 883 | -6,967 | 32,128 | -1,595 | 30,533 |
| Norway | 3,238 | 1,189 | 1,737 | 562 | 123 | -592 | 6,257 | 491 | 6,748 |
| Finland | 2,495 | 3,881 | 1,620 | 116 | -1,155 | 6,957 | -191 | 6,766 | |
| Denmark | 732 | 1 | -1 | 732 | 732 | ||||
| Other | 13 | 13 | 13 | ||||||
| Total | 20,669 | 10,560 | 15,775 | 6,675 | 1,123 | -8,715 | 46,087 | -1,295 | 44,792 |
| Allocation per type of customer | |||||||||
| Public sector | 7,140 | 7,243 | 4,564 | 4 | 33 | 18,984 | 18,984 | ||
| Private customers | 9,644 | 2,335 | 8,456 | 6,654 | 14 | 27,103 | -1,295 | 25,808 | |
| Internal customers | 3,885 | 982 | 2,755 | 17 | 1,076 | -8,715 | - | - | |
| Total | 20,669 | 10,560 | 15,775 | 6,675 | 1,123 | -8,715 | 46,087 | -1,295 | 44,792 |
| Allocation per point in time | |||||||||
| At one point in time | 17 | 8 | 4,989 | 985 | 49 | -847 | 5,201 | 4,126 | 9,327 |
| Over time | 20,640 | 10,546 | 9,230 | 5,622 | 936 | -6,695 | 40,279 | -5,421 | 34,858 |
| Rent revenue 2) | 12 | 6 | 1,556 | 68 | 138 | -1,173 | 607 | 607 | |
| Total | 20,669 | 10,560 | 15,775 | 6,675 | 1,123 | -8,715 | 46,087 | -1,295 | 44,792 |
| Allocation per type of revenue | |||||||||
| Construction contracts | 20,640 | 10,546 | 9,230 | 5,622 | 66 | -5,825 | 40,279 | -5,421 | 34,858 |
| Sales of goods | 3,873 | -596 | 3,277 | 3,277 | |||||
| Sales of property projects | 5 | 969 | 974 | 4,126 | 5,100 | ||||
| Transportation services | 967 | -204 | 763 | 763 | |||||
| Administrative services | 870 | -870 | - | - | |||||
| Rent revenue 2) | 12 | 6 | 1,556 | 68 | 138 | -1,173 | 607 | 607 | |
| Other | 12 | 8 | 149 | 16 | 49 | -47 | 187 | 187 | |
| Total | 20,669 | 10,560 | 15,775 | 6,675 | 1,123 | -8,715 | 46,087 | -1,295 | 44,792 |
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-Sep 2021 MSEK | Construction | Civil Engineering | Industry | Project Development | Group functions | Eliminations | Group Segment | Differences in accounting principles 2) | Group IFRS |
|---|---|---|---|---|---|---|---|---|---|
| Allocation per external/internal | |||||||||
| External sales | 15,767 | 9,226 | 11,107 | 6,360 | 46 | 42,506 | -1,087 | 41,419 | |
| Internal sales | 3,066 | 892 | 2,542 | 20 | 900 | -7,420 | - | - | |
| Total | 18,833 | 10,118 | 13,649 | 6,380 | 946 | -7,420 | 42,506 | -1,087 | 41,419 |
| Allocation per country | |||||||||
| Sweden | 13,471 | 9,082 | 8,298 | 3,830 | 758 | -5,785 | 29,654 | -703 | 28,951 |
| Norway | 2,774 | 1,022 | 1,379 | 712 | 108 | -662 | 5,333 | -62 | 5,271 |
| Finland | 2,588 | 14 | 3,387 | 1,838 | 79 | -971 | 6,935 | -322 | 6,613 |
| Denmark | 570 | 1 | -2 | 569 | 569 | ||||
| Other | 15 | 15 | 15 | ||||||
| Total | 18,833 | 10,118 | 13,649 | 6,380 | 946 | -7,420 | 42,506 | -1,087 | 41,419 |
| Allocation per type of customer | |||||||||
| Public sector | 7,469 | 6,610 | 3,846 | 4 | 33 | 17,962 | 17,962 | ||
| Private customers | 8,298 | 2,616 | 7,261 | 6,356 | 13 | 24,544 | -1,087 | 23,457 | |
| Internal customers | 3,066 | 892 | 2,542 | 20 | 900 | -7,420 | - | - | |
| Total | 18,833 | 10,118 | 13,649 | 6,380 | 946 | -7,420 | 42,506 | -1,087 | 41,419 |
| Allocation per point in time | |||||||||
| At one point in time | 11 | 6 | 4,645 | 140 | 38 | -896 | 3,944 | 3,013 | 6,957 |
| Over time | 18,814 | 10,106 | 7,613 | 6,174 | 777 | -5,459 | 38,025 | -4,100 | 33,925 |
| Rent revenue 2) | 8 | 6 | 1,391 | 66 | 131 | -1,065 | 537 | 537 | |
| Total | 18,833 | 10,118 | 13,649 | 6,380 | 946 | -7,420 | 42,506 | -1,087 | 41,419 |
| Allocation per type of revenue | |||||||||
| Construction contracts | 18,814 | 10,106 | 7,613 | 6,174 | 45 | -4,730 | 38,022 | -4,100 | 33,922 |
| Sales of goods | 3,624 | -648 | 2,976 | 2,976 | |||||
| Sales of property projects | 130 | 130 | 3,013 | 3,143 | |||||
| Transportation services | 885 | -210 | 675 | 675 | |||||
| Administrative services | 732 | -729 | 3 | 3 | |||||
| Rent revenue 2) | 8 | 6 | 1,391 | 66 | 131 | -1,065 | 537 | 537 | |
| Other | 11 | 6 | 136 | 10 | 38 | -38 | 163 | 163 | |
| Total | 18,833 | 10,118 | 13,649 | 6,380 | 946 | -7,420 | 42,506 | -1,087 | 41,419 |
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 2021 MSEK | Construction | Civil Engineering | Industry | Project Development | Group functions | Eliminations | Group Segment | Differences in accounting principles 2) | Group IFRS |
|---|---|---|---|---|---|---|---|---|---|
| Allocation per external/internal | |||||||||
| External sales | 22,555 | 12,866 | 15,075 | 9,471 | 59 | 60,026 | -1,103 | 58,923 | |
| Internal sales | 4,425 | 1,314 | 3,712 | 26 | 1,255 | -10,732 | - | - | |
| Total | 26,980 | 14,180 | 18,787 | 9,497 | 1,314 | -10,732 | 60,026 | -1,103 | 58,923 |
| Allocation per country | |||||||||
| Sweden | 19,513 | 12,664 | 11,704 | 6,262 | 1,070 | -8,485 | 42,728 | -1,270 | 41,458 |
| Norway | 3,963 | 1,501 | 1,905 | 913 | 142 | -926 | 7,498 | 100 | 7,598 |
| Finland | 3,504 | 15 | 4,364 | 2,322 | 101 | -1,318 | 8,988 | 67 | 9,055 |
| Denmark | 792 | 1 | -3 | 790 | 790 | ||||
| Other | 22 | 22 | 22 | ||||||
| Total | 26,980 | 14,180 | 18,787 | 9,497 | 1,314 | -10,732 | 60,026 | -1,103 | 58,923 |
| Allocation per type of customer | |||||||||
| Public sector | 10,480 | 9,604 | 5,123 | 8 | 45 | 25,260 | 25,260 | ||
| Private customers | 12,075 | 3,262 | 9,952 | 9,463 | 14 | 34,766 | -1,103 | 33,663 | |
| Internal customers | 4,425 | 1,314 | 3,712 | 26 | 1,255 | -10,732 | - | - | |
| Total | 26,980 | 14,180 | 18,787 | 9,497 | 1,314 | -10,732 | 60,026 | -1,103 | 58,923 |
| Allocation per point in time | |||||||||
| At one point in time | 11 | 6 | 6,404 | 1,814 | 56 | -1,319 | 6,972 | 5,759 | 12,731 |
| Over time | 26,959 | 14,166 | 10,448 | 7,602 | 1,083 | -7,930 | 52,328 | -6,862 | 45,466 |
| Rent revenue 2) | 10 | 8 | 1,935 | 81 | 175 | -1,483 | 726 | 726 | |
| Total | 26,980 | 14,180 | 18,787 | 9,497 | 1,314 | -10,732 | 60,026 | -1,103 | 58,923 |
| Allocation per type of revenue | |||||||||
| Construction contracts | 26,959 | 14,166 | 10,448 | 7,602 | 68 | -6,919 | 52,324 | -6,862 | 45,462 |
| Sales of goods | 1 | 4,975 | -902 | 4,074 | 4,074 | ||||
| Sales of property projects | 1,750 | -16 | 1,734 | 5,759 | 7,493 | ||||
| Transportation services | 1,241 | -308 | 933 | 933 | |||||
| Administrative services | 1,015 | -1,011 | 4 | 4 | |||||
| Rent revenue 2) | 10 | 8 | 1,935 | 81 | 175 | -1,483 | 726 | 726 | |
| Other | 11 | 5 | 188 | 64 | 56 | -93 | 231 | 231 | |
| Total | 26,980 | 14,180 | 18,787 | 9,497 | 1,314 | -10,732 | 60,026 | -1,103 | 58,923 |
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-Sep 2022
MSEK | Construction | Civil
Engineering | Industry | Project
Development | Group
functions | Eliminations | Group
Segment | Differences in
accounting
principles 2) | Group
IFRS |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| External sales | 16,784 | 9,578 | 13,020 | 6,658 | 47 | | 46,087 | -1,295 | 44,792 |
| Internal sales | 3,885 | 982 | 2,755 | 17 | 1,076 | -8,715 | - | | - |
| Total revenue | 20,669 | 10,560 | 15,775 | 6,675 | 1,123 | -8,715 | 46,087 | -1,295 | 44,792 |
| Operating profit | 463 | 319 | 464 | 818 | -145 | -31 | 1,888 | -217 | 1,671 |
| Operating margin, % | 2.2 | 3.0 | 2.9 | 12.3 | | | 4.1 | | 3.7 |
| Financial income | | | | | | | 64 | | 64 |
| Financial expenses | | | | | | | -100 | -35 2) | -135 |
| Net finance | | | | | | | -36 | -35 | -71 |
| Pre-tax profit | | | | | | | 1,852 | -252 | 1,600 |
| Tax | | | | | | | -357 | 30 | -327 |
| Profit for the period | | | | | | | 1,495 | -222 | 1,273 |
| Capital employed
(closing balance) | -1,891 | -420 | 10,957 | 14,173 | | 727 3) | 23,546 | 8,684 | 32,230 |
| Total assets | | | | | | | 43,191 | 7,995 4) | 51,186 |
| Equity | | | | | | | 14,469 | -1,219 | 13,250 |
| Equity/assets ratio, % | | | | | | | 33.5 | | 25.9 |
| Net debt | | | | | | | 5,886 | 9,903 | 15,789 |
| Cashflow before
financing | -65 5) | 97 5) | -1,016 5) | 397 5) | | -471 6) | -1,058 | -1,597 | -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 -35 million.
3) Unallocated capital employed.
4) Divided between IFRS 16, additional leases SEK 1,563 million and housing projects SEK 6,432 million.
5) Refers to operating cash flow. For definition, see section Alternative performance measures and definitions.
6) Unallocated cash flow.
| Group Jan-Sep 2021
MSEK | Construction | Civil
Engineering | Industry | Project
Development | Group
functions | Eliminations | Group
Segment | Differences in
accounting
principles 2) | Group
IFRS |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| External sales | 15,767 | 9,226 | 11,107 | 6,360 | 46 | | 42,506 | -1,087 | 41,419 |
| Internal sales | 3,066 | 892 | 2,542 | 20 | 900 | -7,420 | - | | - |
| Total revenue | 18,833 | 10,118 | 13,649 | 6,380 | 946 | -7,420 | 42,506 | -1,087 | 41,419 |
| Operating profit | 502 | 307 | 518 | 791 | -241 | -25 | 1,852 | -186 | 1,666 |
| Operating margin, % | 2.7 | 3.0 | 3.8 | 12.4 | | | 4.4 | | 4.0 |
| Financial income | | | | | | | 74 | | 74 |
| Financial expenses | | | | | | | -90 | -39 2) | -129 |
| Net finance | | | | | | | -16 | -39 | -55 |
| Pre-tax profit | | | | | | | 1,836 | -225 | 1,611 |
| Tax | | | | | | | -396 | 41 | -355 |
| Profit for the period | | | | | | | 1,440 | -184 | 1,256 |
| Capital employed
(closing balance) | -1,948 | -556 | 9,764 | 13,685 | | -254 3) | 20,691 | 6,149 | 26,840 |
| Total assets | | | | | | | 39,358 | 6,561 4) | 45,919 |
| Equity | | | | | | | 13,556 | -1,056 | 12,500 |
| Equity/assets ratio, % | | | | | | | 34.4 | | 27.2 |
| Net debt | | | | | | | 4,461 | 7,205 | 11,666 |
| Cashflow before
financing | 985 5) | 701 5) | -438 5) | -479 5) | | -193 6) | 576 | -1,143 | -567 |
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 -39 million.
3) Unallocated capital employed.
4) Divided between IFRS 16, additional leases SEK 1,754 million and housing projects SEK 4,807 million.
5) Refers to operating cash flow. For definition, see section Alternative performance measures and definitions.
6) Unallocated cash flow.
| Group Jan-Dec 2021 MSEK | Construction | Civil Engineering | Industry | Project Development | Group functions | Eliminations | Group Segment | Differences in accounting principles 1) | Group IFRS |
|---|---|---|---|---|---|---|---|---|---|
| External sales | 22,555 | 12,866 | 15,075 | 9,471 | 59 | 60,026 | -1,103 | 58,923 | |
| Internal sales | 4,425 | 1,314 | 3,712 | 26 | 1,255 | -10,732 | - | - | |
| Total revenue | 26,980 | 14,180 | 18,787 | 9,497 | 1,314 | -10,732 | 60,026 | -1,103 | 58,923 |
| Operating profit | 711 | 471 | 938 | 1,237 | -228 | -31 | 3,098 | -123 | 2,975 |
| Operating margin, % | 2.6 | 3.3 | 5.0 | 13.0 | 5.2 | 5.0 | |||
| Financial income | 94 | 94 | |||||||
| Financial expenses | -116 | -51 2) | -167 | ||||||
| Net finance | -22 | -51 | -73 | ||||||
| Pre-tax profit | 3,076 | -174 | 2,902 | ||||||
| Tax | -569 | 44 | -525 | ||||||
| Profit for the year | 2,507 | -130 | 2,377 | ||||||
| Capital employed (closing balance) | -2,463 | -615 | 9,266 | 13,523 | 1,850 3) | 21,561 | 7,137 | 28,698 | |
| Total assets | 40,330 | 6,840 4) | 47,170 | ||||||
| Equity | 14,656 | -974 | 13,682 | ||||||
| Equity/assets ratio, % | 36.3 | 29.0 | |||||||
| Net debt | 2,404 | 8,111 | 10,515 | ||||||
| Cashflow before financing | 1,654 5) | 921 5) | 507 5) | 249 5) | -290 6) | 3,041 | -1,989 | 1,052 |
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 -51 million.
3) Unallocated capital employed.
4) Divided between IFRS 16, additional leases SEK 1,699 million and housing projects SEK 5,141 million.
5) Refers to operating cash flow. For definition, see section Alternative performance measures and definitions.
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 2021, note 34. 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 | Sep 30, 2022 | Sep 30, 2021 | Dec 31, 2021 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| MSEK | Level 2 | Level 3 | Total | Level 2 | Level 3 | Total | Level 2 | Level 3 | Total |
| Financial assets | |||||||||
| Securities held as fixed assets | 76 | 76 | 55 | 55 | 55 | 55 | |||
| Of which unlisted funds | 35 | 35 | 32 | 32 | 32 | 32 | |||
| Of which unlisted shareholdings and participations | 41 | 41 | 23 | 23 | 23 | 23 | |||
| Other long-term receivables | 1 | 1 | - | - | |||||
| Of which commodity hedging with futures | 1 | 1 | - | - | |||||
| Other current receivables | 12 | 12 | 10 | 10 | 8 | 8 | |||
| Of which commodity hedging with futures | 7 | 7 | 9 | 9 | 7 | 7 | |||
| Of which currency swaps | 5 | 5 | 1 | 1 | 1 | 1 | |||
| Total financial assets | 13 | 76 | 89 | 10 | 55 | 65 | 8 | 55 | 63 |
| Financial liabilities | |||||||||
| Other long-term liabilities | - | 3 | 3 | - | |||||
| Of which interest rate swaps | - | 3 | 3 | - | |||||
| Other current liabilities | 16 | 16 | 4 | 4 | 6 | 6 | |||
| Of which interest rate swaps | - | - | 2 | 2 | |||||
| Of which currency swaps | 1 | 1 | 2 | 2 | 1 | 1 | |||
| Of which commodity hedging with futures | 14 | 14 | - | 1 | 1 | ||||
| Of which contingent consideration | 1 | 1 | 2 | 2 | 2 | 2 | |||
| Total financial liabilities | 16 | - | 16 | 7 | - | 7 | 6 | - | 6 |
The tables below are a reconciliation between the opening and closing balance for assets and liabilities included in level 3.
| Group | Securities held as fixed asset | |||||
|---|---|---|---|---|---|---|
| Unlisted funds | Unlisted shares and participations | |||||
| MSEK | Sep 30, 2022 | Sep 30, 2021 | Dec 31, 2021 | Sep 30, 2022 | Sep 30, 2021 | Dec 31, 2021 |
| Opening balance | 32 | 37 | 37 | 23 | 23 | 23 |
| Investments | 2 | 4 | 4 | 18 | ||
| Dividends received | -12 | -12 | ||||
| Reported in profit/loss for the period | ||||||
| Net finance | 1 | 3 | 3 | |||
| Closing balance | 35 | 32 | 32 | 41 | 23 | 23 |
| Group | Contingent consideration | |||||
| --- | --- | --- | --- | --- | ||
| MSEK | Sep 30, 2022 | Sep 30, 2021 | Dec 31, 2021 | |||
| Opening balance | 2 | - | - | |||
| Aquisitions during the period | 2 | 2 | ||||
| Payments during the period | -1 | |||||
| Closing balance | 1 | 2 | 2 |
The contingent consideration will amount from SEK 0 million to maximum of SEK 1 million.
Future financial information
- Year-end report January – December 2022
February 3, 2023 - Annual and Sustainability report 2022
April, 2023 - Quarterly report January – March 2023 and Annual General Meeting
May 4, 2023 - Quarterly report January – June 2023
July 14, 2023 - Quarterly report January – September 2023
October 27, 2023
Förslöv, October 28, 2022
Jesper Göransson
CEO and President
Presentation of the quarterly report
This quarterly report will be presented digitally and on a phone conference Friday October 28, 2022 at 09:00 a.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/.
Call one of the following telephone numbers to participate:
- From Sweden: +46 8 5055 83 75
- From Great Britain: +44 3333 00 92 65
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 October 28, 2022, 08:00 a.m. CET.
Review report
We have reviewed the condensed interim financial information (interim report) for Peab AB (publ) as of September 30, 2022 and for the nine month period which ended on this date. The Board of Directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Statements Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing standards in Sweden.
The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group, and in accordance with the Swedish Annual Accounts Act regarding the Parent Company.
Förslöv, October 28, 2022
Ernst & Young AB
Jonas Svensson
Authorized Public Accountant
39
Quarterly data
Group, IFRS
| MSEK | Jul-Sep 2022 | Apr-Jun 2022 | Jan-Mar 2022 | Oct-Dec 2021 | Jul-Sep 2021 | Apr-Jun 2021 | Jan-Mar 2021 | Oct-Dec 2020 | Jul-Sep 2020 |
|---|---|---|---|---|---|---|---|---|---|
| Net sales | 16,197 | 16,458 | 12,137 | 17,504 | 15,488 | 14,807 | 11,124 | 15,989 | 16,204 |
| Production costs | -14,730 | -14,845 | -11,304 | -15,495 | -13,868 | -13,219 | -10,440 | -14,159 | -14,463 |
| Gross profit | 1,467 | 1,613 | 833 | 2,009 | 1,620 | 1,588 | 684 | 1,830 | 1,741 |
| Sales and administrative expenses | -640 | -929 | -866 | -923 | -673 | -884 | -820 | -914 | -717 |
| Distribution of Annehem Fastigheter | - | - | - | - | - | - | - | 952 | - |
| Other operating income | 81 | 94 | 32 | 235 | 67 | 51 | 38 | 84 | 72 |
| Other operating costs | 8 | -3 | -19 | -12 | 11 | 0 | -16 | -10 | -9 |
| Operating profit | 916 | 775 | -20 | 1,309 | 1,025 | 755 | -114 | 1,942 | 1,087 |
| Financial income | 18 | 22 | 24 | 20 | 29 | 15 | 30 | 23 | 18 |
| Financial expenses | -60 | -36 | -39 | -38 | -48 | -43 | -38 | -55 | -55 |
| Net finance | -42 | -14 | -15 | -18 | -19 | -28 | -8 | -32 | -37 |
| Pre-tax profit | 874 | 761 | -35 | 1,291 | 1,006 | 727 | -122 | 1,910 | 1,050 |
| Tax | -163 | -171 | 7 | -170 | -226 | -152 | 23 | -181 | -210 |
| Profit for the period | 711 | 590 | -28 | 1,121 | 780 | 575 | -99 | 1,729 | 840 |
| Profit for the period, attributable to: | |||||||||
| Shareholders in parent company | 711 | 590 | -28 | 1,121 | 780 | 575 | -99 | 1,730 | 840 |
| Non-controlling interests | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -1 | 0 |
| Profit for the period | 711 | 590 | -28 | 1,121 | 780 | 575 | -99 | 1,729 | 840 |
| Key ratios, IFRS | |||||||||
| Earnings per share, SEK | 2.43 | 2.01 | -0.10 | 3.80 | 2.65 | 1.95 | -0.34 | 5.87 | 2.85 |
| Average number of outstanding shares, million | 291.3 | 294.4 | 295.0 | 295.0 | 295.0 | 295.0 | 295.0 | 295.0 | 295.0 |
| Capital employed (closing balance) | 32,230 | 31,232 | 29,765 | 28,698 | 26,840 | 25,849 | 25,019 | 24,435 | 27,729 |
| Equity (closing balance) | 13,250 | 12,736 | 13,792 | 13,682 | 12,500 | 11,694 | 12,517 | 12,443 | 12,874 |
40
Business areas
| MSEK | Jul-Sep 2022 | Apr-Jun 2022 | Jan-Mar 2022 | Oct-Dec 2021 | Jul-Sep 2021 | Apr-Jun 2021 | Jan-Mar 2021 | Oct-Dec 2020 | Jul-Sep 2020 |
|---|---|---|---|---|---|---|---|---|---|
| Net sales | |||||||||
| Construction | 6,306 | 7,628 | 6,735 | 8,147 | 5,989 | 6,648 | 6,196 | 7,448 | 5,798 |
| Civil Engineering | 3,584 | 3,893 | 3,083 | 4,062 | 3,285 | 3,743 | 3,090 | 3,600 | 3,041 |
| Industry | 7,096 | 6,108 | 2,571 | 5,138 | 6,198 | 5,247 | 2,204 | 4,929 | 6,233 |
| Project Development | 2,234 | 1,977 | 2,464 | 3,117 | 2,741 | 1,929 | 1,710 | 1,804 | 1,750 |
| - of which Property Development | 304 | 120 | 59 | 425 | 33 | 33 | 30 | 71 | 71 |
| - of which Housing Development | 1,930 | 1,857 | 2,405 | 2,692 | 2,708 | 1,896 | 1,680 | 1,733 | 1,679 |
| Group functions | 380 | 385 | 358 | 368 | 318 | 327 | 301 | 317 | 298 |
| Eliminations | -2,915 | -3,133 | -2,667 | -3,312 | -2,410 | -2,725 | -2,285 | -2,674 | -2,283 |
| Group, segment reporting | 16,685 | 16,858 | 12,544 | 17,520 | 16,121 | 15,169 | 11,216 | 15,424 | 14,837 |
| Adjustment of housing to IFRS | -488 | -400 | -407 | -16 | -633 | -362 | -92 | 560 | 1,384 |
| IFRS 16, additional leases | |||||||||
| Annehem Fastigheter | 36 1) | 47 | |||||||
| Eliminations | -31 | -64 | |||||||
| Group, IFRS | 16,197 | 16,458 | 12,137 | 17,504 | 15,488 | 14,807 | 11,124 | 15,989 | 16,204 |
| Operating profit | |||||||||
| Construction | 126 | 177 | 160 | 209 | 164 | 187 | 151 | 197 | 137 |
| Civil Engineering | 118 | 148 | 53 | 164 | 109 | 146 | 52 | 131 | 92 |
| Industry | 519 | 341 | -396 | 420 | 576 | 339 | -397 | 397 | 471 |
| Project Development | 265 | 264 | 289 | 446 | 326 | 252 | 213 | 1,195 | 162 |
| - of which Property Development | 91 | 43 | 34 | 122 | 70 | 29 | 10 | 961 | 13 |
| - of which Housing Development | 174 | 221 | 255 | 324 | 256 | 223 | 203 | 234 | 149 |
| Group functions | -27 | -47 | -71 | 13 | -64 | -95 | -82 | -132 | -14 |
| Eliminations | -8 | 2 | -25 | -6 | -10 | -5 | -10 | 37 | -4 |
| Group, segment reporting | 993 | 885 | 10 | 1,246 | 1,101 | 824 | -73 | 1,825 | 844 |
| Adjustment of housing to IFRS | -86 | -119 | -39 | 52 | -86 | -69 | -49 | 95 | 226 |
| IFRS 16, additional leases | 9 | 9 | 9 | 11 | 10 | 0 | 8 | 12 | 12 |
| Annehem Fastigheter | 13 1) | 5 | |||||||
| Eliminations | -3 | 0 | |||||||
| Group, IFRS | 916 | 775 | -20 | 1,309 | 1,025 | 755 | -114 | 1,942 | 1,087 |
| Operating margin, % | |||||||||
| Construction | 2.0 | 2.3 | 2.4 | 2.6 | 2.7 | 2.8 | 2.4 | 2.6 | 2.4 |
| Civil Engineering | 3.3 | 3.8 | 1.7 | 4.0 | 3.3 | 3.9 | 1.7 | 3.6 | 3.0 |
| Industry | 7.3 | 5.6 | -15.4 | 8.2 | 9.3 | 6.5 | -18.0 | 8.1 | 7.6 |
| Project Development | 11.9 | 13.4 | 11.7 | 14.3 | 11.9 | 13.1 | 12.5 | 66.2 | 9.3 |
| - of which Property Development | 29.9 | 35.8 | 57.6 | 28.7 | 212.1 | 87.9 | 33.3 | 1,353.5 | 18.3 |
| - of which Housing Development | 9.0 | 11.9 | 10.6 | 12.0 | 9.5 | 11.8 | 12.1 | 13.5 | 8.9 |
| Group functions | |||||||||
| Eliminations | |||||||||
| Group, segment reporting | 6.0 | 5.2 | 0.1 | 7.1 | 6.8 | 5.4 | -0.7 | 11.8 | 5.7 |
| Adjustment of housing to IFRS | |||||||||
| IFRS 16, additional leases | |||||||||
| Annehem Fastigheter | 36.1 1) | 10.6 | |||||||
| Eliminations | |||||||||
| Group, IFRS | 5.7 | 4.7 | -0.2 | 7.5 | 6.6 | 5.1 | -1.0 | 12.1 | 6.7 |
| Key ratios, segment reporting, MSEK | |||||||||
| Earnings per share, SEK | 2.69 | 2.36 | 0.04 | 3.62 | 2.89 | 2.18 | -0.19 | 5.62 | 2.25 |
| Capital employed (closing balance) | 23,546 | 22,828 | 22,117 | 21,561 | 20,691 | 19,867 | 19,659 | 19,434 | 21,086 |
| Equity (closing balance) | 14,469 | 13,868 | 14,812 | 14,656 | 13,556 | 12,654 | 13,408 | 13,251 | 12,637 |
| Orders received | 13,095 | 14,334 | 15,375 | 14,443 | 13,865 | 13,094 | 14,446 | 12,189 | 11,718 |
| Order backlog at the end of the period | 48,762 | 49,899 | 49,968 | 45,318 | 46,280 | 46,684 | 47,286 | 42,709 | 44,722 |
1) Refers to October-November 2020
42
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 www.peab.com/alternative-keyratios.
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
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.
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 unsold part of ongoing own housing development projects is included in net debt. Shows financial position for segment.
Non-financial definitions
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.
Net debt/equity ratio
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 profit as a percentage of net sales. Shows profitability in the business.
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, tenant-owner 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.
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.
PEAB
Peab is The Nordic Community Builder
About Peab
Peab works locally where our customers are and where people live their lives. Every day our 16,000 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-lasting and responsibly we are forging ahead, and improving everyday life where it's lived.
Net sales, appr.
SEK 64 billion
Employees, appr.
16,000
Business model
Value through collaborating business areas
Our business is founded on four business areas Construction, Civil Engineering, Industry and Project Development. Each of them is independent with its own customer base. But the strength in our business model – and thereby our ability to achieve our targets – is multiplied when they work together in the processing chain. This is the core of our business model and what makes us unique. This is locally produced community building throughout the entire Nordic region.
Strategic targets
- Most satisfied customers
- Best workplace
- Most profitable company
- Leader in social responsibility
Each of these four targets are important on their own but they are linked together as a unit too. "Leader in social responsibility" is new as of 2021. All the targets refer to our industry.
Local and close to our customers
Our 16,000 employees work close to our customers in the community and use wherever possible local resources in the form of our own personnel, input goods and subcontractors. Together with our social engagement in the community and integrated climate and environmental work this forms the foundation of what we call locally produced community building.
Photographers: Andreas Hylthén, Björn Forsberg, Johan Marklund, Markus Esselmark, Mats Bakken, Peter Steen, P-O Möller, Studio Kuivo, Ulf Celander and Ørjan Marakatt Bertelsen.
Peab takes work environment matters very seriously and works systematically to create safe workplaces. The kind of safety equipment used varies depending on national regulations and the type of operations. A risk analysis is always performed for each workplace before any exception is made. The people pictured in this publication are wearing personal safety equipment required by regulations valid for the operations and country they are in.