The need for infrastructure is positive for Civil Engineering

Civil Engineering works with landscaping and pipelines, builds and maintains roads, railroads, bridges and other infrastructure as well as does foundation work. Operations are organized in geographic regions and the three 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 wastewater networks. The business area collaborates over regional and country borders to share in the development of core skills and to create scale advantages in larger and more complex projects.

The Business 2020

The markets in Sweden and Norway developed well in both Infrastructure and Local market during the year. The level of orders received has been good in the business area with a well-balanced risk profile. Operations have not been noticeably affected by COVID-19.

Local market

Local market makes up about half of business area Civil Engineering’s net sales and consists of many projects of various size in both Sweden and Norway. During the year a partnership contract was signed with Alingsås Municipality to build the Nolhaga wastewater treatment plant. The project will be carried out in close collaboration with our customer. A new logistics park connected to the Tunadal Port is being built in Sundsvall. The project entails construction of a new combi terminal with establishment surfaces, roads and railroads. The logistic park will be the first to be built according to environmental certification system Ceequal.

The markets in Sweden and Norway developed well in both Infrastructure
and Local market during the year.

We are decontaminating and stabilizing contaminated soil in Norra Djurgård City in Stockholm. To avoid unnecessary transportation the majority of the soil will be decontaminated in place instead of being transported to a landfill. The decontaminated material will then be used as filling and become the foundation for future streets and housing in the area. During the year Returum, which is Kristianstad’s new recycling center and sustainability park, was completed. Now it has a safer traffic flow, high accessibility and the capacity to handle larger volumes and more source-sorted fractions. The facility was paved with ECO-Asfalt.

Operation and maintenance

Peab maintains 24 of 108 national road operation areas run by the Swedish Transport Administration. Contributing to roads that are safe for traffic with good passability is essential to a functioning society. A number of options on contracts for national road maintenance were extended during the year. A few examples of new contracts for municipal road operations are the maintenance of roads and parks in Norrmalm and Södermalm in Stockholm as well as operation and maintenance in Kävlinge and Burlöv municipalities in Skåne.

Infrastructure

There is a substantial need for better infrastructure in the Nordic region. During the year we have received several new road projects from the Swedish Transport Administration, among them construction of ten kilometers of Highway 23 between Huseby and Marklanda in Småland and four kilometers on the existing stretch of E20 between Tollered and Ingared outside Gothenburg. During the year two major road projects were turned over to the Swedish Transport Administration six months ahead of schedule – E20 between Alingsås and Vårgårda and E22 between Sätaröd and Vä outside Kristianstad. Both roads were paved with ECO-Asfalt.

Our Norwegian operations received two major partnership projects during the year. A stretch of around seven kilometers of road south of Trondheim on E6 between Kvål and Melhus is being built with four lanes for Nye Veier and a new main street is under construction in Skårersletta in Lørenskog Municipality outside Oslo.

Civil Engineering’s largest ongoing project is the overpass Olskroken in Gothenburg which will run until 2025. It is one of the most important junctions in the Swedish railroad system. The project is progressing in a complex and planning intensive environment. During the year we have done extensive groundwork, landscaping and bridge work. This is the foundation for next year’s big train stop when several trunk lines, among others the Västa trunk line and the Bohus line, will be rebuilt. In October Swerock delivered ECO-Betong with a completely electric concrete vehicle for the first time .

At the end of the year Peab signed a contract with Trollhättan Municipality for the construction of Stridsberg Bridge. The Bridge spans over Göta River and will be 254 meters long with an openable part in the form of a double folding bridge.

For a number of years Civil Engineering has developed expertise in port and seaside contracts. We have developed methods for stabilizing contaminated sludge, our own technology through Peab Civil Engineering Technology, our own boats and prams through Peab Marine and our own sea measurement unit which was created in 2020. During the year several port projects were launched, for example in Trelleborg, Gothenburg, Norrköping, Karlshamn, Köping and Bergen.

Net sales and profit

Net sales decreased during the year by four percent and amounted to SEK 12,843 million (13,339). Even after adjustments for acquired units net sales decreased by four percent. Net sales increased in Infrastructure during the year while net sales in Local market as well as Operations and maintenance were lower.

Operating profit for the year amounted to SEK 391 million (367) and the operating margin improved to 3.0 percent (2.8). Local market and Infrastructure have improved earnings during the year while Operation and maintenance have continued on a lower level.

Orders received and order backlog

Orders received during the year decreased to SEK 12,752 million (13,108). Order backlog on December 31, 2020 amounted to SEK 13,075 million (13,446).