Business area Civil Engineering is a leading actor in Sweden with operations in Norway and Finland as well. The business area works with landscaping and pipelines, builds and maintains roads, railroads, bridges and other infrastructure as well as 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, foundation work and builds different kinds of facilities. Infrastructure and heavy construction builds roads, railroads, bridges, tunnels and ports. Operation and maintenance handles national and municipal highways and street networks, tends parks and outdoor property as well as operates water and sewage supply networks. The business area collaborates extensively over regional and country borders for joint development and experience exchanges, project management and to create scale advantages in larger and more complex projects.

THE BUSINESS 2019

The market in Sweden and Norway developed well in both infrastructure and the local market during the year. The  level of orders received has been good in the business area and filled order backlog with many projects that have a well balanced risk profile.

Right now the largest project in Civil Engineering’s history, Olskroken, is underway in Gothenburg. It is one of the most important junctions in the West Sweden railroad system. Rebuilding it with railway track overpasses was necessary to increase passability and operational safety for all train traffic to and from Gothenburg. The contract for the second stage was signed with the Swedish Transport Administration in May 2018 and will run until 2025. Two milestones for the project were successfully completed in 2019. In May four bridges were lifted into place over the western trunk line and Gamlestadsvägen. The heaviest  bridge weighed around 100 tons. In November new tracks and switches were connected to part of the railroad.

Several new projects were received in Local market, among them two for SCA – an extension of the sawmill in Bollstabruk and an extension of the paper mill in Obbola in Umeå Municipality. Peab is doing landscaping and groundwork for a new heating plant in Uppsala for Vattenfall AB. When the plant opens it will be able to provide Uppsala residents with fossil free heating. The project, which also includes connecting roads, is expected to be completed in the spring of 2020. In June Peab was commissioned by the City of Stockholm to build new infrastructure around the block Tora in the Bromsten industrial area in Spånga. The project includes water and sewage pipelines, road bridges, pedestrian bridges, streets, green areas and parks.

During the year Civil Engineering received two new contracts for operation and maintenance of public roads for the Swedish Transport Administration in Kalmar and Uppsala for a cumulative order worth of SEK 393 million. The contracts are spread over four years with an option for an extension of one to two years.

Scandinavian Mountains Airport, which is Sälen’s new airport, opened in December. Civil Engineering has built, among other things, the runways, standing surfaces and service areas as well as a terminal with connected garage and infrastructure.

In Norway Peab is building a new flyover on E6 in Moelv, between Hamar and Lillehammer. The new interchange is part of the extension of highway E6 between Kolomoen and Moelv. The project entails building around 1.1 km of new highway including on and off ramps, a 70 meter long highway bridge as well as two roundabouts and commuter parking.

Greater focus on the work environment, quality and the environment

During the year Norwegian operations were certified for quality according to ISO 9001:2015 and work is progressing towards environmental certification according to ISO 14001:2015 and work environment certification according to ISO 45001:2018. The operations in Sweden are expected to be certified for the work environment in the spring of 2020. Sweden is already certified for quality and the environment.

In order to make it easier for our customers to make climate smart product choices Civil Engineering now offers ECO-​Betong™ and ECO-​Asfalt® which business area Industry has developed. For example, ECO-​Betong™ is being used in the Olskroken project. Read more in the section Environment.

NET SALES AND PROFIT

Net sales contracted by three percent during 2019 and amounted to SEK 13,339 million (13,745). Even after adjustments for acquired units net sales decreased by three percent. Local market had slightly higher net sales, while Operation and maintenance and Infrastructure had lower net sales. In 2018 more projects in Infrastructure were in full production.

Operating profit for the year contracted to SEK 368 million (415) and the operating margin was 2.8 percent (3.0). The level of profitability in Operation and maintenance was lower compared to previous years.

ORDERS RECEIVED AND ORDER BACKLOG

Orders received during 2019 amounted to SEK 13,108 million (16,349). Orders received in the comparable year included the extension of the West Sweden railroad system Olskroken in Gothenburg for the Swedish Transport Administration worth SEK 2,900 million, which has a long production time.

Order backlog on December 31, 2019 amounted to SEK 13,446 million (13,620).