We improve everyday life where it’s lived

The year 2020 will go down as an exceptional year characterized by the pandemic and its consequences. For Peab the year was both successful and essential to our continued development. We increased our net sales by four percent to SEK 57 billion. Operating profit was SEK 3.5 billion and the operating margin was 6.2 percent. These figures include last year’s two major strategic transactions – the acquisition in paving and mineral aggregates and the distribution of the previously wholly owned subsidiary Annehem Fastigheter.

Stable construction contract business

The proportion of housing in business area Construction’s offer contracted somewhat and business was primarily driven by other building construction for the public sector in 2020. Public needs are also apparent in business area Civil Engineering and 2020 ushered in several exciting infrastructure projects. The level of orders received in these construction contract operations continued to be stable and it’s particularly positive to note that the orders are well spread in both place and product segment, which is exactly the way it should be for the Nordic Community Builder.

Crucial acquisition in paving and mineral aggregates

Crucial to Peab now fully being a Nordic community builder with extensive local presence is the acquisition in paving and mineral aggregates we finalized last spring. Overnight we not only increased net sales in business area Industry and thereby its importance to the Group, we also expanded our presence in Sweden, Norway and Finland and established the company in paving in Denmark. We are now Nordic market leaders in paving and mineral aggregates, which is right in line with our business model with four business areas that collaborate together, complement each other and spread risks.

Development potential in the housing and real estate business

The fourth leg we stand on – business area Project Development – also made impressive progress during the year. Although the housing market slowed considerably in the beginning of the year due to the corona pandemic business rebounded in the summer. Both start-ups and sales of our own housing developments were stable with a good geographic spread in Sweden, Norway and Finland. In addition, Housing Development signed several contracts for the sales of apartment building projects at the end of the year. The effect of the corona pandemic on Peab has been limited and seen mainly in Property Development and operations connected to travel and tourism.

What did contribute highly to profit was the distribution and listing of the previously wholly owned subsidiary Annehem Fastigheter, which is a company we founded in the beginning of the year and which primarily consists of completed commercial property we have built up in recent years.

As did the acquisition of paving and mineral aggregates operations, the distribution of Annehem Fastigheter further defined our core business as a focused and professional builder and developer in the Nordic region with a high level of our own resources and our own employees. Today we have even better opportunities in Project Development to, depending on the market situation, direct our development focus on tenant-owner and rental apartments and commercial and public property.

Updated road ahead

Now we are ready to enter the next phase of Peab’s development. Owing to the fact that we are now fully a Nordic community builder with a somewhat different business mix, extensive local presence and four collaborating business areas, we have as of 2021 updated our targets – everything from our mission, business concept and strategic targets to the more concrete financial and non-​financial targets.

Both internal and external financial and non-​financial targets are categorized under our existing strategic targets of; Most satisfied customers, Best workplace, Most profitable company and the new, fourth target Leader in social responsibility. The new target includes climate and equality issues and internally a number of other goals.

Leader in social responsibility

As a leading Nordic community builder we have a major impact, and a big responsibility that we naturally have to take. This means always striving in our own operations to take the most sustainable route and driving sustainable development in the industry, which our targets linked to social responsibility take particular aim at. For example, in 2045 our goal is to be climate neutral but we also intend to take advantage of all the competence out there in society and make sure that this competence can work in safe and developmental environments.

Our work is based on the UN Global Compact, which we continue to support,and its 17 global goals for sustainable development, along with Peab’s Code of Conduct, core values, business concept, mission and our strategic targets.

Until the end of 2020 our work was based on the material sustainable aspects we had identified in Social, Environment and Economic. Within the framework for them we had determined focus areas and targets for the business plan period 2018-2020 and identified and analyzed the risks in each sustainable aspect. The focus areas and business plan targets have functioned as guidelines in working sustainably so that all our employees could put sustainably into practice in their daily jobs and lives. In addition, our education and training programs in ethics, the environment, purchasing, the work environment and equal opportunity have continued non-stop.

Locally produced community building

What makes us unique is that our operations are local. Through the collaboration of our business areas we take advantage of local resources in the form of our own input goods, employees and local subcontractors to create the most local, and thereby sustainable, projects possible. This entails everything from our ECO-products, – including the new ECO-Prefab, ECO-Stomme and ECO-Ballast – recycling and reuse in local projects, to local social responsibility through Peab Life and the Peab School.

Our industry ought to be safe and sound as well. Our worksites should be safe places for everyone there, both physically and socially. These issues are prioritized and take precedence in our preventive work. Every risk we resolve is one less potential accident. Another vital matter we are on the forefront of is healthy competition in our industry. Through our own work and collaboration in the industry we ensure control at every stage, particularly in the supply chain. We work actively for an open industry with a level playing field and humane work conditions.

The future looks good for Peab

Now that we close the books on 2020 we can conclude that the situation for us as local community builders has never looked better. The long-term external driving forces are advantageous for Peab. Every day our fantastic 15,000 employees advance our business through their engagement and the responsibility they take, especially under the current, extraordinary circumstances. Thanks so much for that!

Naturally I want to take the opportunity to sincerely thank one of our two founders, Mats Paulsson, who has chosen to step down from the Board of Directors. However, Mats won’t be leaving Peab completely. He will become our honorary chairman, which means he can continue to support both the Board and executive management informally. Thank you so much for your invaluable service for over 60 years Mats! I also want to thank our current Chairman of the Board Göran Grosskopf, who is also stepping down after many years of fantastic work for Peab’s best. Thank you so much Göran!

With our strong business model we have everything we need to achieve our strategic targets and create long lasting value for our customers, employees, owners and society in general. I have every confidence in this.