STABLE FINANCIAL RESULTS IN A CHALLENGING PERIOD

Despite a challenging period, Peab reports stable financial results for 2022. A very satisfactory order book and a strong financial position, in combination with the company’s broad business model, enable Peab to meet varying conditions in different segments and geographical areas.

Peab AB (publ) offers locally produced community building in Sweden, Norway, Finland and Denmark. The company, which has a strong local presence and integrated climate and environmental management comprises four collaborating business areas – Construction, Civil Engineering, Industry and Project Development. Peab has 16 000 employees and net sales of approximately SEK 63 billion. Volito has a long-term engagement in Peab and is one of the company’s major owners.

Peab is listed on Nasdaq Stockholm. After a volatile stock market year in 2022, the Peab share price was SEK 59.10 per share at year-end.

In 2022, Peab’s net sales increased by 5% to SEK 61 933 million (58 923). The increase can be mainly attributed to high costs for materials and energy. The operating profit amounted to SEK 2 557 million (2 975). The operating margin, affected by the higher costs, was 4.1% (5.0). Investments and an increase in tied-up working capital burdened the cash flow before financing, which amounted to SEK -3 159 million (1 052).

Business area Construction increased net sales by 7.5%, whereas the operating margin decreased to 2.2% (2.6), due to the effect of cost increases. Business area Civil Engineering increased net sales by 5.5% related to Infrastructure and Operation and Maintenance, with an unchanged operating margin of 3.3% (3.3). Business area Industry increased net sales by 14.1% with an operating margin of 3.5% (5.0). Within the business area, Paving and Mineral Aggregates’ operations were most hit by the adverse effect of high energy and fuel costs, whereas other units report improved profitability. Business area Project Development reports a net sales reduction of 8.8% (mainly attributable to Housing Development), while the operating margin for the business area remained unchanged at 13.0% (13.0). Demand for housing fell in all countries, which has contributed to a slower rate of sales and fewer production starts.

Order inflow for 2022 amounted to SEK 53 259 million (55 848). The order book at year-end was SEK 44.4 billion (45.3), which is at a maintained high level. Of the total order book, 35% (34) is to be produced after 2023 (2022).

Peab deems that high inflation and higher interest rates will lead to a less active housing market, whereas more stable demand is expected in public sector house construction, civil engineering and investments related to the green transition. Peab is focusing on the continued efficiency enhancement of operations and to adapt the organisation to demand. The company’s financial strength provides the potential to take advantage of opportunities that may arise in a weaker market.