Targets and strategies
Peab’s external targets as of 2021
Most satisfied customers
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.
>75
SCI always over 75
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.
eNPS
always over benchmark
ZERO vision
serious accidents
Through a continuously contracting trend
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.
>6 %
Operating margin
0.3–0.7
Net debt/equity ratio
>50 % of profit for the year
Dividend
Leader in social responsibility
As the Nordic Community Builder with a local presence we take responsibility through innovations and making demands concerning the climate and environment, order and correctness in the industry and equal opportunity. Active social engagement in the community and focus on young people’s education are part of our fundamental values.
-60 %
Carbon dioxide intensity
Reduction of emissions from our own production by 2030 (Scope 1+2).
-50 %
Carbon dioxide intensity
Reduction of emissions from input goods and purchased services by 2030 (Scope 3).
EQUAL OPPORTUNITY RECRUITMENT
Number of women recruited always over the education market
All the targets relate to our industry. The financial targets in Most profitable company refer to segment reporting. For a more detailed description of each target please see here.
Target fulfilment 2018-2020
Last year ended the business plan period 2018-2020 for Peab. It has been characterized by geographic collaboration and work on our five focus areas; right business, safe business, production strategies, skills recruitment and right costs. Regarding our three strategic targets, we have taken steps during the period and for the most part achieved our targets. We have exceeded our targets for satisfied customers and the number of risk observations, and even the outcome of our financial targets gets a passing grade. The outcome for our target concerning Peab as an employer was slightly lower than the target we set but it’s higher than the average for the industry.
| Target | 2018 | 2019 | 2020 | |
| Most satisfied customers in the industry | NKI >75 | 75 | 78 | 80 |
| Best workplace in the industry | Risk observations (goal) | 18,900 (10,000) | 39,300 (25,000) | 61,200 (45,000) |
| eNPS >20 | 13 | 18 | 18 | |
| Most profitable company in the industry1) | Operating margin,% | 4.92) | 4.7 | 6.2 |
| External financial targets1) | Return on equity >20 % | 19.62) | 17.9 | 23.1 |
| Equity/assets ratio >25 % | 30.42) | 31.7 | 36.2 | |
| Dividend >50 % of profit for the year | 592) | 973) | 674) |
1) According to segment reporting.
2) Not translated according to the changed accounting principles for own housing development projects.
3) For 2019, no cash dividend was distributed. The value of the distribution of Annehem Fastigheter at the time of the distribution in December 2020 was 97 percent of profit for the year 2019.
4) For 2020, the Board’s proposal to the AGM. The proportion is calculated on profit for the year without the effect on profit of SEK 952 million due to the distribution of Annehem Fastigheter.
How we create value
Our business is founded on four business areas. Each of them is independent with its own customer base. But the strength in our business model – and thereby our ability to achieve our targets – is multiplied when they work together in the processing chain. This is the core of our business model and what makes us unique. This is locally produced community building throughout the entire Nordic region.
Operative synergies
Close to customers and local production / Products and technical solutions / Experience exchanges / Large scale advantages / Skills recruitment / Life cycle / Climate responsibility
Financial synergies
Degree of processing / Revenue diversification / Investment opportunities and financial strength / Risk minimizing
Overarching measures to achieve our targets
Ultimately our 15,000 skilled employees will be the moving force behind achieving our targets. We have also identified a number of areas we are particularly focused on in order to reach our financial and non-financial targets.
1. Higher processing ratio
Collaboration between business areas raises the level of processing which has a number of advantages. Highly processed business is where projects and products generate revenue in more than one business area. Having our own expertise and input goods improves steering, efficiency, quality and safety while delivering locally rooted environmentally smart solutions.
2. Operational efficiency
Operational efficiency comprises experience and development, for instance, construction technology solutions and other conceptual initiatives. One example is the concept for pre-designed apartment buildings, NärBo. In this concept Peab has compiled and packaged years of experience and knowledge with its best practice construction methods. The result is an almost finished construction solution where all the steps up to construction start are already prepared and the process of producing turnkey housing has been streamlined. The housing is cost efficient, space efficient, Swan ecolabeled and energy efficient.
3. Passing on knowledge
Peab’s size makes it possible to take advantage of local expertise and can have an impact from a Nordic perspective. We can maintain a reference library or take advantage of and coordinate specialist competence, for example when building swimming facilities. Digitalization enables efficient compilation of information and spreading knowledge.
4. Innovation and making demands
Our ECO-products are examples of innovation. We have developed ECO-Betong by taking a byproduct from another industry, processing it and thereby reducing the cement in our concrete. We have converted most of our asphalt plants to fossil free fuel and developed ECO-Asfalt. We have created new circular raw materials such as recycled mineral aggregates.
In order to progress we also have to work with making demands: on suppliers, carriers, politicians, authorities and customers. We have to strive for regulations that augment recycling and procurements that favor innovative sustainable solutions.
5. Investments within Project Development
Our financial position enables us to further develop our project development business. We have the breadth and will develop the products currently in demand on the market. We have a development rights portfolio both on our own balance sheet and in joint ventures. The business will therefore provide a stable flow of our own housing development projects. We will work with development projects that can be divested on the investment market.