Note 35 Financial risks and Finance policy
Finance and treasury
The Group is exposed to various types of financial risks through its operations. The term financial risk refers to fluctuations in the company’s profit and cash flow resulting from changes in exchange rates, interest rates, refinancing and credit risks. Group finance and treasury is governed by the Finance Policy established by Peab’s Board of Directors. The policy is a framework of guidelines and regulations in the form of a risk mandate and limitations in finance and treasury. The Board has appointed a Finance Committee which is chaired by the Chairman of the Board. It is authorized to make decisions that follow the Finance Policy in between meetings of the Board. The Finance Committee must report any such decisions at the next meeting of the Board. The Group function Finance and Treasury and the Group’s internal bank Peab Finans AB manage coordination of Group finance and treasury. The overall responsibility of the finance function is to provide cost-effective funding and to minimize the negative effects on Group profit/loss from financial risks.
The liquidity risk refers to the risk of Peab having difficulties in meeting its payment obligations as a result of a lack of liquidity or problems in converting or receiving new external loans. To ensure access to liquid funds binding credit facilities are contracted. The Group has a rolling one-month liquidity plan for all the units in the Group. Plans are updated each week. Group forecasts also comprise liquidity planning in the medium term. Liquidity planning is used to handle the liquidity risk and the cost of Group financing.
The objective is for the Group to be able to meet its financial obligations in favorable and unfavorable market conditions without running into significant unforeseen costs. Liquidity risks are managed centrally for the entire Group by the central Finance and Treasury function and the liquidity available at year-end is presented below.
Available liquid funds
Group, MSEK | 2018-12-31 | 2017-12-31 | |
Koncernen, Mkr | 2018-12-31 | 2017-12-31 | |
Liquid funds and bank holdings | Kassa och bankplaceringar | 1,376 | 595 |
Unutilized overdraft facilities | Outnyttjade checkräkningskrediter | 1,000 | 750 |
Other unused credit lines | Övriga outnyttjade kreditlimiter | 4,200 | 4,000 |
Liquidity commitment for outstanding commercial papers | Likviditetsåtagande för utestående företagscertifikat | -730 | -200 |
Total | Summa | 5,846 | 5,145 |
The Finance Policy dictates that Group net debt should mainly be covered by loan commitments that mature between 1 and 5 years. At the end of 2018, the average loan period for utilized credits was 66 months (98), for unutilized credits 18 months (27), and for all granted credits 45 months (58). Peab’s basic financing is a credit facility totaling SEK 3,600 million which matures in September 2020, after extension options have been utilized. This loan facility is supplemented by capital market financing, other kinds of short-term operations financing, project-related credits, financial leasing and installment financing. The loan agreements contain financial covenants in the form of interest coverage ratios and equity/assets ratios that the Group must meet, which is standard for this kind of loan. Peab exceeded the key ratios by a broad margin at the end of 2018.
Peab set up a lending program for commercial papers in 2004. Under the program, Peab can issue commercial papers for a maximum of SEK 3.5 billion. The borrower is Peab Finans AB and the guarantor is Peab AB. At the end of the year, Peab had outstanding commercial papers worth SEK 730 million (200).
Peab set up a MTN program in 2012 with a loan limit of SEK 3 billion. In 2018 new bond loans were issued with a nominal value of SEK 1,700 million (–) under the MTN program while bonds nominally worth SEK 100 million (350) matured during the year. At the end of the year 2018 Peab had outstanding bonds with a nominal value of SEK 2,250 million (650).
Total credit commitments, excluding the unutilized part of the certificate program and the unutilized part of the MTN program, amounted to SEK 12,212 million (8,492) per 31 December 2018. Of the total credit commitments SEK 7,012 million (3,742) was utilized.
Age analysis of financial liabilities, undiscounted cash flow including interest
Group 2018‚ MSEK | Currency | Average interest rate on balance sheet day, % | Nominal value, original currency | Amount SEK | Matures 2019 | Matures 2020 | Matures 2021 | Matures 2022 | Matures 2023 | Matures 2024- | |
Koncernen 2018. Mkr | Valuta | Medelränta på balansdagen, % | Nominellt belopp ursprunglig valuta | Belopp SEK | Förfall 2019 | Förfall 2020 | Förfall 2021 | Förfall 2022 | Förfall 2023 | Förfall 2024- | |
Bank loans | Banklån | SEK | 1.6 | 1,010 | 1,010 | 179 | 500 | 179 | 91 | 54 | 7 |
Bank loans | Banklån | NOK | 3.2 | 735 | 753 | 522 | 220 | 2 | 2 | 5 | 2 |
Bank loans | Banklån | EUR | 1.3 | 174 | 1,788 | 65 | 657 | 8 | 8 | 8 | 1,042 |
Commercial papers | Företagscertifikat | SEK | 0.1 | 730 | 730 | 730 | |||||
Bonds | Obligationslån | SEK | 0.8 | 2,288 | 2,288 | 217 | 764 | 1,005 | 302 | ||
Financial leasing liabilities | Finansiella leasingskulder | SEK | 1.3 | 516 | 516 | 125 | 161 | 197 | 9 | 9 | 15 |
Financial leasing liabilities | Finansiella leasingskulder | NOK | 3.2 | 102 | 104 | 37 | 32 | 19 | 11 | 5 | |
Financial leasing liabilities | Finansiella leasingskulder | EUR | 7.8 | 2 | 19 | 11 | 5 | 3 | |||
Total interest-bearing financial liabilities | Summa räntebärande finansiella skulder | 7,208 | 1,886 | 2,339 | 1,413 | 423 | 81 | 1,066 | |||
Accounts payable | Leverantörsskulder | SEK | 4,206 | 4,206 | 4,206 | ||||||
Accounts payable | Leverantörsskulder | NOK | 698 | 715 | 715 | ||||||
Accounts payable | Leverantörsskulder | EUR | 25 | 256 | 256 | ||||||
Other liabilities | Övriga skulder | SEK | 146 | 146 | 73 | 73 | |||||
Other liabilities | Övriga skulder | NOK | 64 | 66 | 55 | 7 | 4 | ||||
Other liabilities | Övriga skulder | EUR | 3 | 33 | 33 | ||||||
Derivatives | Derivat | SEK | 23 | 12 | 6 | 5 | 0 | ||||
Total non-interest bearing financial liabilities | Summa icke räntebärande finansiella skulder | 5,445 | 5,350 | 86 | 5 | 4 | |||||
Total financial liabilities | Summa finansiella skulder | 12,653 | 7,236 | 2,425 | 1,418 | 427 | 81 | 1,066 |
Group 2017‚ MSEK | Currency | Average interest rate on balance sheet day, % | Nominal value, original currency | Amount SEK | Matures 2018 | Matures 2019 | Matures 2020 | Matures 2021 | Matures 2022 | Matures 2023- | |
Koncernen 2017. Mkr | Valuta | Medelränta på balansdagen, % | Nominellt belopp ursprunglig valuta | Belopp SEK | Förfall 2018 | Förfall 2019 | Förfall 2020 | Förfall 2021 | Förfall 2022 | Förfall 2023- | |
Bank loans | Banklån | SEK | 2.1 | 812 | 812 | 199 | 165 | 139 | 170 | 83 | 56 |
Bank loans | Banklån | NOK | 2.4 | 237 | 237 | 185 | 28 | 8 | 4 | 4 | 8 |
Bank loans | Banklån | EUR | 1.4 | 139 | 1,366 | 365 | 24 | 100 | 8 | 7 | 862 |
Commercial paper | Företagscertifikat | SEK | 0.1 | 200 | 200 | 200 | |||||
Bonds | Obligationslån | SEK | 1.1 | 663 | 663 | 107 | 204 | 352 | |||
Financial leasing liabilities | Finansiella leasingskulder | SEK | 1.3 | 466 | 466 | 113 | 156 | 170 | 10 | 8 | 9 |
Financial leasing liabilities | Finansiella leasingskulder | NOK | 3.1 | 120 | 120 | 41 | 31 | 26 | 14 | 6 | 2 |
Financial leasing liabilities | Finansiella leasingskulder | EUR | 6.8 | 3 | 27 | 15 | 9 | 3 | |||
Total interest-bearing financial liabilities | Summa räntebärande finansiella skulder | 3,891 | 1,225 | 617 | 798 | 206 | 108 | 937 | |||
Accounts payable | Leverantörsskulder | SEK | 4,093 | 4,093 | 4,093 | ||||||
Accounts payable | Leverantörsskulder | NOK | 543 | 544 | 544 | ||||||
Accounts payable | Leverantörsskulder | EUR | 25 | 245 | 245 | ||||||
Other liabilities | Övriga skulder | SEK | 213 | 213 | 83 | 34 | 74 | 22 | |||
Other liabilities | Övriga skulder | NOK | 88 | 88 | 59 | 7 | 19 | 3 | |||
Other liabilities | Övriga skulder | EUR | 2 | 24 | 24 | ||||||
Interest rate swaps | Ränteswappar | SEK | 44 | 29 | 6 | 5 | 4 | 0 | |||
Total non-interest bearing financial liabilities | Summa icke räntebärande finansiella skulder | 5,251 | 5,077 | 40 | 86 | 45 | 3 | ||||
Total financial liabilities | Summa finansiella skulder | 9,142 | 6,302 | 657 | 884 | 251 | 111 | 937 |
Interest rate risk
The interest rate risk is the risk that Peab’s cash flow or the value of financial instruments may vary with changes in market interest rates. The interest rate risk can result in changes in fair values and cash flows. A crucial factor affecting interest rate risk is the fixed interest period. On 31 December 2018, interest-bearing net debt amounted to SEK 3,551 million (1,216). Interest-bearing liabilities amounted to SEK 7,012 million (3,742), of which SEK 1,818 million (1,169) were short-term. The Finance Policy dictates that the average fixed interest period on total borrowing may not exceed 24 months. Peab has chosen short fixed interest periods for outstanding credits. Per 31 December 2018 there was one interest rate swap of SEK 250 million (1,400) with maturity in 3 years at an effective interest rate of 2.4 percent (2.9) according to the table below. Peab pays a fixed annual interest rate and receives floating rates (Stibor 3 months) for the interest rate swap. Since Stibor 3 months was negative at the end of the year Peab will pay the floating rate as well. The swap agreement is recognized at fair value on the balance sheet day. Per 2018-12-31 this fair value was SEK -18 million (-44).
Interest rate derivates
MSEK | Currency | Effective rate % | Amount SEK | Matures 2018 | Matures 2022 | |
Mkr | Valuta | Effektivränta % | Belopp SEK | Förfall 2018 | Förfall 2022 | |
Interest rate swaps 2018-12-31 | Ränteswappar 2018-12-31 | SEK | 2.4 | 250 | 250 | |
Interest rate swaps 2017-12-31 | Ränteswappar 2017-12-31 | SEK | 2.9 | 1,400 | 1,150 | 250 |
As the table below shows, the fixed interest period for SEK 6,337 million (3,278) of the Group’s total interest-bearing liabilities, including derivatives, is less than 1 year. Interest-bearing asset items totaling SEK 1,677 million (1,048) have short fixed interest periods, with the result that the fixed interest period for SEK 4,660 million (2,230) of Group net debt, including derivatives, is less than 1 year, making these liabilities directly susceptible to changes in market interest rates. Since the majority of the financial liabilities have a short maturity most of the interest rate risk is considered a cash flow risk. For further information regarding Peab’s risk sensitivity see the Sensitivity Analysis in the Board of Directors’ report.
Fixed interest rate period on utilized credits, excluding derivates per 31 December 2018
Fixed interest period | Amount, MSEK | Average effective interest rate, percent | Share, percent | |
Räntebindningstid | Belopp, Mkr | Genomsnittlig effektiv ränta procent | Andel, procent | |
2019 | 2019 | 6,587 | 1.3 | 94 |
2020- | 2020- | 425 | 1.4 | 6 |
Total | Summa | 7,012 | 1.3 | 100 |
Fixed interest rate period on utilized credits, including derivates per 31 December 2018
Fixed interest period | Amount, MSEK | Average effective interest rate, percent | Share, percent | |
Räntebindningstid | Belopp, Mkr | Genomsnittlig effektiv ränta procent | Andel, procent | |
2019 | 2019 | 6,337 | 1.3 | 90 |
2020- | 2020- | 675 | 1.8 | 10 |
Total | Summa | 7,012 | 1.4 | 100 |
Currency risks
The currency risk is the risk that fair values and cash flows of financial instruments may fluctuate with changes in the value of foreign currencies.
Financial exposure
Group borrowing is done in local currencies to reduce currency risks in operations. Assets and liabilities in foreign currency are translated at the rate on the balance sheet date. Borrowing in the interest-bearing liabilities per 31 December 2018, including leasing but excluding currency and interest rate derivatives, was allocated as follows:
2018-12-31 | 2017-12-31 | ||||
Local currency in millions | MSEK | Local currency in millions | MSEK | ||
2018-12-31 | 2017-12-31 | ||||
Lokal valuta i miljoner | Mkr | Lokal valuta i miljoner | Mkr | ||
SEK | SEK | 4,439 | 4,439 | 2,061 | 2,061 |
EUR | EUR | 170 | 1,746 | 136 | 1,340 |
NOK | NOK | 807 | 827 | 341 | 341 |
Total | Summa | 7,012 | 3,742 |
Internal loans from Peab Finans AB are used to handle temporary liquidity needs in Peab’s foreign operations. Currency swaps are used to eliminate exchange risks. Currency swaps usually run less than three months. Currency swaps are recognized at fair value when closing the books and value changes are recognized as unrealized exchange rate differences in the income statement and as current receivables and liabilities on the balance sheet. At the end of the year, there were EUR 0 million (22) in outstanding currency swaps relating to financial exposure. Exchange rate differences in net financials items from financial exposure were SEK -35 million (-22) in 2018. Exchange rate differences in operating profit were SEK -4 million (-2).
Exposure of net assets in foreign currency
The translation exposure arising from investments in foreign net assets is primarily hedged through loans in foreign currency or forward exchange contracts. At the end of 2018 hedges in forward exchange contracts in EUR for foreign net assets in Finland were EUR 10 million (10).
Foreign net assets
Local currency in millions | 2018 | Of which hedged | 2017 | Of which hedged | |
Lokal valuta i miljoner | 2018 | Varav säkrat | 2017 | Varav säkrat | |
NOK | NOK | 1,433 | – | 1,360 | – |
EUR | EUR | 72 | 10 | 30 | 10 |
PLN | PLN | 2 | – | 2 | – |
A change in the euro rate as of December 31, 2018 by ten percent would involve a translation effect on equity of SEK 64 million (20). A corresponding change of the Norwegian krone would generate a translation effect on equity of SEK 147 million (136). The translation effects are calculated on that part of foreign net assets which are not hedged. The effects of corresponding exchange rate changes on profit/loss for the year are limited.
Annual translation differences in equity (net assets in foreign subsidiaries) amounted to SEK 86 million (-53).
Commercial exposure
Although international purchases and sales of goods and services in foreign currency are currently limited, they are expected to increase as the competition grows regarding purchasing goods and services. Contracted or forecasted currency flows can be hedged for 12 months from the date of the contract. At the end of 2018, there were exchange rate hedges related to forecasted currency flows of EUR 12 million (10). Peab did not apply hedge accounting for these hedges.
Effect of hedge accounting
The effect of hedge accounting on Group profit/loss and financial position is shown below.
Group, MSEK | 2018-12-31 | January – December 2018 | |||||||||
Nominal amount/volume | Recognized value | Item in report on financial position that contains hedge instruments | Change in value of hedge instruments recognized in other comprehensive income | Amount reclassified from hedge reserve to profit/loss | Items in profit/loss affected by reclassification | ||||||
Assets | Liabilities | ||||||||||
Koncernen, Mkr | 2018-12-31 | Januari – december 2018 | |||||||||
Nominellt belopp/volym | Redovisat värde | Post i rapport över finansiell ställning som innehåller säkringsinstrument | Värdeförändring av säkringsinstrument som redovisas i övrigt totalresultat | Belopp omklassificerade från säkringsreserv till resultatet | Poster i resultatet som påverkas av omklassificeringen | ||||||
Tillgångar | Skulder | ||||||||||
Raw materials risk | Råvarurisk | ||||||||||
Commodity hedging with futures, thousand tons | Råvarusäkring med termin, tusentals ton | 8 | – | 4 | Övriga långfristiga skulder | Other long-term liabilities | -2 | -3 | Kostnader för produktion | Production costs | |
Interest rate risk | Ränterisk | ||||||||||
Interest rate swaps | Ränteswappar | 250 | – | 18 | Övriga långfristiga skulder | Other long-term liabilities | -4 | 29 | Finansiella kostnader | Financial costs |
Credit risk
Credit risk refers to the risk of losing money if a counterparty fails to meet its obligations.
Credit risks in financial instruments
Credit risks in financial instruments are very limited since Peab only deals with counterparties with high credit ratings. Counterparty risks are primarily associated with receivables to banks and other counterparties involved in the purchase of derivatives. The Finance Policy contains special counterparty regulations which specify the maximum credit exposure for various counterparties. The framework agreement of the International Swaps and Derivatives Association (ISDA) is used with all counterparties in derivative transactions. According to the agreement when a counterparty cannot settle its obligations in all transactions the agreement is discontinued and all outstanding dealings are then settled for a net amount. ISDA agreements do not meet the criteria for offsetting on the balance sheet. The information in the table below shows the financial instruments covered by ISDA agreements.
2018 | 2017 | ||||
Group, MSEK | Financial assets | Financial liabilities | Financial assets | Financial liabilities | |
2018 | 2017 | ||||
Koncernen, Mkr | Finansiella tillgångar | Finansiella skulder | Finansiella tillgångar | Finansiella skulder | |
Recognized gross amount | Redovisade bruttobelopp | 1 | 23 | 6 | 46 |
Amount covered by netting agreement | Belopp som omfattas av avtal om nettning | 0 | 0 | -5 | -5 |
Net sum after netting agreement | Nettobelopp efter avtal om nettning | 1 | 23 | 1 | 41 |
Peab did not suffer any financial instrument credit losses in 2018. Total counterparty exposure related to derivative trading calculated as a net receivable per counterparty amounted to SEK 1 million (1) at the end of 2018. The estimated gross exposure to counterparty risks related to liquid funds and current investments amounted to SEK 1,376 million (595). Most of the Group’s liquid funds are placed in banks with the credit rating AA- from Standard & Poors.
Loss reserves for interest-bearing receivables
Group 2018‚ MSEK | Loss reserves for anticipated credit losses according to IFRS 9 | |
Koncernen 2018. Mkr | Reserv för förväntade kreditförluster enligt IFRS 9 | |
Opening balance per 1 January according to IAS 39 | Ingående balans per 1 januari enligt IAS 39 | – |
Adjustments retroactively application of IFRS 9 | Justering retroaktiv tillämpningen av IFRS 9 | 5 |
Adjusted opening balance per 1 January according to IFRS 9 | Justerad ingående balans per 1 januari enligt IFRS 9 | 5 |
Revaluating the loss reserve, net | Omvärdering av förlustreserver, netto | 0 |
Closing balance per 31 December | Utgående balans per 31 december | 5 |
Credit risk in accounts receivable
The risk that Group customers cannot meet their obligations, i.e. payment is not received from customers, is a customer credit risk. Credit losses are relatively rare in the construction and civil engineering business since there are a great number of projects and customers that are invoiced at regular intervals during production. The Group’s customers undergo a credit rating control providing information on customers’ financial positions from various credit rating companies before a project is undertaken. The Group has established a credit policy for handling customer credit. For instance, it specifies where decisions regarding credit limits of various sizes are taken and how uncertain receivables should be handled. Bank guarantees or other collateral are required for customers with low credit ratings or insufficient credit history. The maximum exposure to credit risk is the recognized value on the Group balance sheet. Total bad debts in 2018 amounted to SEK 22 million (11). The credit quality in accounts receivable that are not yet due is considered good. Accounts receivable that are more than 90 days overdue, exclusive loss provisions, amounted to SEK 2,538 million (1,779). Overdue accounts receivable are for the most part unclarities regarding contract terms relating to the customer about the final contract amount. Risks in accounts receivable have been taken into account in project forecasts or been handled as provisions.
The table below shows accounts receivable per customer category.
Group 2018‚ MSEK | Accounts receivable | |
Koncernen 2018. Mkr | Kundfordringar | |
Private customers | Privata kunder | 5,143 |
Public customers | Offentliga kunder | 3,376 |
Swedish tenant-owned associations | Svenska bostadsrättsföreningar | 1,182 |
Joint ventures | Joint venture | 501 |
Accounts receivable, gross | Kundfordringar, brutto | 10,202 |
Loss reserves | Förlustreserv | -36 |
Accounts receivable, net | Kundfordringar, netto | 10,166 |
Age analysis, overdue not written down accounts receivable (information according to previous principles in IAS 39)
Group, MSEK | 2017 | |
Koncernen, Mkr | 2017 | |
Accounts receivable, not mature | Ej förfallna kundfordringar | 6,217 |
Accounts receivable, overdue 0 – 30 days | Förfallna kundfordringar 0 – 30 dgr | 610 |
Accounts receivable, overdue 31 – 90 days | Förfallna kundfordringar 31 – 90 dgr | 149 |
Accounts receivable, overdue 91 – 180 days | Förfallna kundfordringar 91 – 180 dgr | 492 |
Accounts receivable, overdue 181 – 360 days | Förfallna kundfordringar 181 – 360 dgr | 212 |
Accounts receivable, overdue > 360 days | Förfallna kundfordringar > 360 dgr | 1,075 |
Total | Summa | 8,755 |
Accounts receivable written down
Group, MSEK | 2018 | 2017 | |
Koncernen, Mkr | 2018 | 2017 | |
Opening balance per 1 January according to IAS 39 | Ingående balans per 1 januari enligt IAS 39 | 46 | 51 |
Adjustments retroactively application of IFRS 9 | Justeringar retroaktiv tillämpning av IFRS 9 | 5 | – |
Adjusted opening balance per 1 January according to IFRS 9 | Justerad ingående balans per 1 januari enligt IFRS 9 | 51 | 51 |
Reversed write-downs | Återföring av tidigare gjorda nedskrivningar | -21 | -15 |
Write-downs | Nedskrivningar | 5 | 12 |
Reclassifications | Omklassificering | 1 | -2 |
Exchange rate differences | Valutakursdifferens | 0 | 0 |
Balance carried forward | Utgående balans | 36 | 46 |
There are no mature receivables of significant amounts for other receivables.
Capital management
Peab strives to have a good capital structure and financial stability in order to provide a stable basis for continuing business activities, thereby enabling the company to keep existing owners and attract new ones. A good capital structure also promotes the development of good relations with the Group’s creditors in a manner which benefits all parties.
Capital is defined as Equity and refers to equity attributable to shareholders in the parent company.
Equity
Group, MSEK | 2018 | 2017 | |
Koncernen, Mkr | 2018 | 2017 | |
Share capital | Aktiekapital | 1,584 | 1,584 |
Other contributed capital | Övrigt tillskjutet kapital | 2,576 | 2,576 |
Reserves | Reserver | -68 | -167 |
Retained earnings including profit for the year | Balanserade vinstmedel inklusive årets resultat | 7,255 | 6,338 |
Equity attributable to shareholders in parent company | Eget kapital hänförligt till moderbolagets aktieägare | 11,347 | 10,331 |
One of Peab’s financial targets is an equity/assets ratio (equity divided by the balance sheet total) in excess of 25 percent. The Board of Directors believes that this level is well suited to Peab’s construction and civil engineering activities in Sweden, Norway and Finland. The target is a part of the Group’s strategic planning. If the equity/assets ratio is expected to exceed this level on a permanent basis, the capital should be transferred to the shareholders in an appropriate form. The equity/assets ratio at the end of 2018 was 30.4 percent (32.2).
It is the ambition of the Board of Directors to preserve a balance between a high return on equity, which can be done through increased lending, and the security and benefits associated with a higher equity ratio. Therefore, one of Peab’s financial targets is a return on equity (profit for the period attributable to shareholders in the parent company divided by the average equity attributable to shareholders in the parent company) in excess of 20 percent. The return on equity was 19.6 percent (21.3) for 2018. The Board believes the target figure is a relevant level long-term for Peab. In comparison, the Group’s average interest expenses on interest-bearing borrowing, including derivatives, were 1.4 percent (2.6) on 31 December 2018.
Peab´s target for dividends is an annual distribution of at least 50 percent of profit for the year to shareholders. Dividends should be reasonably proportionate to Peab´s profit and consolidation requirements. An ordinary dividend of SEK 4.20 per share (4.00) is proposed for 2018. Excluding the 1,086,984 B shares owned by Peab AB on 31 December 2018, which do not entitle to dividends, the proposed dividend is equivalent to a total dividend distribution of SEK 1,239 million (1,180). Calculated as a share of the Group’s recognized profit for the year, the proposed dividend amounts to 59 percent (57). Besides the ordinary dividend, extra cash dividends may be proposed if the Board of Directors finds there are sufficient funds which are not considered necessary to Group development. Extra dividends may also be made in other forms besides cash.
At the start of 2018, Peab’s holding of own shares amounted to 1,086,984 B shares, corresponding to 0.4 percent of the total number of shares. On 7 May 2018, Peab’s AGM authorized the Board of Directors to acquire shares in Peab AB up to an amount so that after acquisition Peab would hold a maximum of 10 percent of the registered shares in the company. The purpose of the purchase of own shares is to improve the capital structure of the company or to be used in the financing of acquisitions. During 2018 no repurchases or divestitures have taken place.