Goals and strategies

We are the Nordic Community Builder. 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 first in every step of the construction process. 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.

Strategic goals

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 matter the most to Peab. At Peab everyone should feel they have 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

Business plan 2018-2020

We launched a new business plan period in 2018 based on our five focus areas and characterized by geographic collaboration and a cross-functional work method. Our three strategic goals are part and parcel of it, framing our prioritized investments for 2018-2020.

Three goal areas Outcome 2018

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.

Under 2018 Peab achieved our target of 75 (75) for SCI (Satisfied Customer Index) and continued with frequent customer dialogues so that we always understand what our customers prioritize the most. The index for the industry was 72. The areas considered most important to our customers are work methods, reliability and time schedule. We will continue to focus on these areas in 2019.

Best workplace in the industry

By attracting, including, developing and keeping competent and motivated employees and offering safe, including workplaces. We measure this goal in many ways, among them by registering risk observations and holding regular personnel surveys.

During the business plan period 2018-2020 we will put extra focus on developing our employees and continuing to create safe, including workplaces. In 2018 a new career map was produced that clearly defines the paths of development in Peab, 19,300 risk observations were registered and more than 3,600 employees were educated in equal treatment, leadership and ethics. In the latest personnel survey Peab had a eNPS (promotes Peab) of 13 (22), which is well above the benchmark for the industry in Sweden.

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.

Peab delivered record profit in 2018 with an operating margin of 4.9 percent (4.8). Return on equity was 19.6 percent (21.1). Peab started 2019 with an order backlog of SEK 45.8 billion (40,2), well spread geographically and with good product diversity.

Focus areas in the business plan
2018-2020

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 recruiting, training and developing for current and future roles.

Right costs

Means that support functions and digital systems 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 of at least 20 percent

The return on equity amounted to 19.6 percent (21.3) in 2018. Return on equity has been close to the goal of 20 percent in recent years due to higher earnings in operations.

Equity/assets ratio

Goal>25%

Equity/assets ratio of at least 25 percent

In recent years the equity/assets ratio has been better than the goal and in 2018 it amounted to 30.4 percent (32.2). The lower equity/assets ratio is due to a higher balance sheet total as the result of more tied up working capital and investments in property in business area Project Development as well as investments in business area Industry.

Dividends

Goal>50%

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

A dividend of SEK 4.20 (4.00) per share is proposed for 2018. Calculated as a share of the Group’s recognized profit for the year the proposed dividend is 59 percent (58). The proposed dividend is equivalent to a direct return of 5.8 percent (5.7) calculated on the closing price on 31 December 2018.

* Not recalculated taking IFRS 15 into account, ** Board of Directors’ proposal for 2018