Goals and strategies
Goals and strategies for locally produced community building
We are the Nordic Community Builder. Peab is the local construction and civil engineering company with the big group resources. Our 14,000 employees are spread over Sweden, Norway and Finland and we are unique in that we are organized in four business areas that collaborate to use wherever possible local resources in the form of our own personnel, input goods and subcontractors. Together with our social engagement in the community and our integrated climate and environmental work this forms the foundation of what we call Locally produced community building.
Peab’s operations contribute to developing society through everything we build, construct and carry out. We create value for our customers, employees, shareholders and other stakeholders based on our core values, business concept, vision and strategic goals. For us everything starts with our own business. We lay the foundation first. Everything we do must be ethically and lastingly sustainable socially, environmentally and economically. It is crucial for us to have good insight into our stakeholders’ and the community’s needs so that we can be as useful as possible. 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 company 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 creating operations
Business plan 2018-2020
During 2019 we were in the middle of an ongoing business plan period characterized by geographic collaboration and a cross-functional work method as well as our five focus areas. Our three strategic goals follow us into 2020, which is the final year of the business plan period.
| Three goal areas | Outcome 2019 | |
 | Most satisfied customers in the industryWe want to have the 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. | In 2019 Peab reached up to 78 (75) for SCI (Satisfied Customer Index) which surpassed our target of 75. The index for the industry was 72. At the same time we continued with frequent customer dialogues so that we are always aware of what our customers prioritize the most. The areas considered most important to our customers continue to be work methods, reliability and timing. We will continue to focus on these areas in 2020 while we also ratchet up our sustainable work a notch, with emphasis on climate and environmental measures. |
 | Best workplace in the industryWe want to achieve the best workplace by attracting, including, developing and keeping competent and motivated employees and offering safe, secure and including workplaces. We measure this goal in many ways, among them by registering risk observations and holding regular personnel and work environment surveys. | During the business plan period 2018-2020 we put extra focus on developing our employees and continued to create safe, including workplaces. The number of serious accidents decreased by 45 percent in 2019, from 44 to 24. We continued to develop a new career map that clearly defines the paths of development in Peab. In 2019 39,300 (19,300) risk observations were registered and more than 1,200 (3,600) employees were educated in equal treatment, leadership and ethics. In the latest personnel survey Peab had an eNPS (recommends Peab) of 18 (13), which is well above the benchmark for the industry in Sweden. |
 | Most profitable company in the industryPeab strives for value creation 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 2019 Peab reported a stable operating margin of 4.8 percent (4.9). Return on equity was 17.9 percent (19.6). Peab started 2020 with an order backlog of SEK 42,5 billion (45.8), 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. This means fair, safe and including workplaces, quality-ensured suppliers as well as high environmental and ethical demands.
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.
Goal>20%
Return on equity of at least 20 percent
The return on equity amounted to 17.9 percent (19.6) in 2019. Return on equity has been close to the goal of 20 percent in recent years due to higher earnings in operations. In 2019 return on equity was slightly lower partly due to a higher 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 2019 it amounted to 31.7 percent (30.4). Excluding additional IFRS 16, Leases the equity/assets ratio amounted to 32.3 percent.
Goal>50%
Dividends should be at least 50 percent of the profit for the year
In February 2020, Peab’s Board proposed an ordinary dividend of SEK 4.20 per share as well as extra distribution of all the shares in Annehem Fastigheter holding Peab’s wholly owned, fully developed commercial properties. As a result of the spread of the coronavirus and its effects on external circumstances and financial markets Peab’s Board decided to withdraw the proposals to the Annual General Meeting. The Board’s ambition is to regularly evaluate dividend capacity and depending on developments be able to make a decision on both the ordinary dividend and the right time to distribute Annehem Fastigheter. For 2018 the dividend amounted to SEK 4.20 per share, which corresponded to 59 percent of profit for the year.
* Not recalculated taking IFRS 15 into account, ** The Board of Directors’ proposes to the AGM that no dividend be distributed for 2019.