Goals and strategies

Our vision is to be the Nordic Community Builder. Already today our daily operations contribute to developing society because everything we build and construct is characterized by responsible entrepreneurship. We create value for our customers, employees, shareholders and other stakeholders based on our core values, business concept, vision and strategic goals. As a large employer with local connections it is crucial for us to have good insight into local community needs and through an active commitment to society be truly useful. This is the foundation of our company culture and our way of working.

Business concept

Peab is a construction and civil engineering company that puts total quality in every step of the construction process first. Through innovation combined with solid professional skills we make the customer’s interest our own and thereby build for the future.

Core values

Down-to-earth, Developing, Personal and Reliable are Peab’s fundamental values that our brand is built on.

Our vision is to be the Nordic Community Builder

We are building the sustainable society of the future through engagement and continuous development.
Three strategic goals will take us there.

Most satisfied customers in the industry

We are a complete community builder that offers comprehensive solutions and develops projects together with customers. We are the local player with the big Group resources.

Best workplace

People are what is most important to Peab. At Peab everyone should find safe, including workplaces with good work conditions and development opportunities. When our employees grow Peab grows.

Most profitable company

We will be profitable by working together with our customers with continuous improvements, quality and cost-efficiency. We know that the best workplace and the most satisfied customers generate profitability.

Value-adding operations

2017 ended the business plan period 2015-2017

The goal for business plan period 2015-2017 was to become the best company in the industry through three identified goal areas. Focus was on increasing customer satisfaction, becoming a more attractive employer and improving profitability. As we leave 2017 behind we can conclude that we have met our goals well but there is still more to do, which is why these three goals will follow with us as strategic goals in our continued work.

Three goal areas Result 2017

Most satisfied customers in the industry

Through long-term customer relations and close collaboration characterized by responsiveness and flexibility. Annual SCI surveys (Satisfied Customer Index) are conducted to find out how well Peab lives up to customers’ expectations. The surveys are sent to both company customers and private housing customers.

The goal for 2017 was a SCI of 75 (73) and this was met.

Best workplace in the industry

By attracting, including, developing and keeping competent and motivated employees. Peab’s personnel survey focuses on Engagement, Leadership and Work Climate.

Our latest personnel survey showed improvements in almost all areas. We have employees who are happy to recommend Peab, leadership is constantly improving and most people like the place where they work. In the latest survey Peab had a eNPS of 22, which is high above the benchmark (8).

Most profitable company in the industry

Value-adding that develops a long-term profitable business and generates value for shareholders. Being the most profitable company in the industry is measured through margin and return goals for the Group in total.

In 2017 Peab continued to move in the right direction and all key ratios have improved.

Business plan 2018-2020

Just as we took the last steps laid out in the business plan 2015-2017 the right conditions were created in 2017 for entering a new business plan period. Among other things, we altered Group functions in order to highlight key competencies and improve our ability to collaborate between business areas and functions.

The three goals in the business plan period 2015-2017; Most satisfied customer, Best workplace and Most profitable company went from being connected to a business plan to being strategical goals since they will always be essential to the company’s profitability and competitiveness.

During the business plan period 2018-2020 five Group strategic focus areas that are not linked to the business cycle will be in force:

Right business – Strive to increase the number of profitable projects, greater internal collaboration and sustainable work methods.

Safe business – Every business deal should be a safe business deal. Safe, good and fair and sustainable every time means; safe, good and fair workplaces, quality-ensured suppliers as well as social, environmental and economic sustainability.

Production strategies – Take the advantage of our four business areas to the next level so that greater value is created both for Peab and our customers.

Skills recruitment – Based on what production needs we will recruit, train and develop for current and future roles.

Right costs – Means that support functions and digital systems should support productivity in our main processes and focus areas now and in the future.

Financial goals

Peab’s executive management steers the business using the guidelines adopted by the Board of Directors based on three financial goals: Return on equity, Equity/assets ratio and Dividends.

Return on equity

Goal>20%

Return on equity should be at least 20 percent

The return on equity improved to 21.1 percent (20.1) in 2017. The contract business in Construction and Civil Engineering has generated stable operating profit while Industry and Project Development reported improved operating profit and margin. Earlier years were characterized by lower profitability and write-downs in the business, which had a negative effect on return on equity.

Equity/assets ratio

Goal>25%

Equity/assets ratio should be at least 25 percent

In recent years the equity/assets ratio has been better than the goal and in 2017 it improved to 32.1 percent (29.7). The improvement is due to higher earnings and more efficient capital utilization.

Dividends
* Board of Directors’ proposal for 2017

Goal>50%

Dividends should be at least 50 percent of the profit for the year

A dividend of SEK 4.00 (3.60) per share is proposed for 2017. Calculated as a share of the Group’s reported profit for the year the proposed dividend is 58 percent (61). The proposed dividend is equivalent to a direct return of 5.7 percent (5.0) calculated on the closing price on 31 December 2017.