Other information and appropriation of profit

Operations with permit and notification obligations

Operations required to have permits or to notify the authorities according to the Environmental Code are found in the Swedish sub-groups Swerock, Skandinaviska Byggelement, Peab Asfalt, Peab Anläggning and Peab Bostad.

Operations with permits in Sweden are land remediation, intermediate storage and recycling of excavated soil, work in/next to protected areas/objects, water operations/management, extraction of mineral aggregates, transportation of waste and hazardous waste as well as production of polymer modified bitumen (PMB). These operations primarily affect the environment through the extraction of finite resources, future land use, impact on ecosystems, emissions and noise.

Operations required to notify authorities are concrete manufacturing, production of prefabricated concrete elements, permanent and mobile asphalt plants, mobile C&DW crushing plants, actions taken in contaminated areas, intermediate storage of excavated soil and waste, recycling of excavated soil, water operations/management and transportation of waste and hazardous waste.

There are also operations in the other Nordic countries with an environmental impact that must be approved by authorities. They are production of asphalt in Finland, Norway and Denmark as well as extraction of mineral aggregates and concrete manufacturing in Finland and Norway.

Renewal and supplementation of permits as well as submitting notifications is ongoing.

Important events during the year

War in Ukraine

The recent year’s dramatic developments in Ukraine have a key impact on the world around us. In addition to the terrible tragedy for the people the war touches, the situation risks hampering macroeconomic growth in the world. In Sweden this can affect the construction industry through greater uncertainty and cautiousness concerning investments, continued high material and energy prices and material shortages and delivery problems. We follow developments carefully to continually assess any effects on Peab.

Nomination Committee

According to the “Principles for the Nomination Committee’s appointment and instructions for the Nomination Committee”, adopted by the Annual General Meeting on May 5, 2022, the Nomination Committee is appointed by the three largest shareholders in terms of votes per the final banking day in September 2022, i.e. September 30, 2022, that want to appoint a member of the Nomination Committee as well as the Chairman of the Board. If one or more of the three largest shareholders decline to appoint a member of the Nomination Committee the Chairman of the Board will offer the next largest shareholder in terms of votes the opportunity to appoint a member of the Nomination Committee and so on until the Nomination Committee consists of three members as well as the Chairman of the Board.

Mats Paulsson, Peabs Vinstandelsstiftelse and Familjen Kamprads stiftelse, which were per September 30, 2022 in terms of votes the third to fifth largest shareholders in Peab, have when asked replied that they do not wish to participate in the Nomination Committee for the Annual General Meeting 2023. State Street Bank and Trust Co, W9, which at this same point in time was the sixth largest shareholder in Peab in terms of votes has not replied to the request. The seventh largest shareholder in Peab in terms of votes, Handelsbanken Fonder, has agreed to participate in the Nomination Committee.

The Nomination Committee therefore consists of the following members:

• Anders Sundström, Ekhaga Utveckling AB
• Ulf Liljedahl, AB Axel Granlund
• Suzanne Sandler, Handelsbanken Fonder
• Anders Runevad, Chairman of the Board of Peab AB

The Nomination Committee has appointed Ulf Liljedahl to be Chairman of the Nomination Committee.

The Peab share

At the end of 2022 Peab’s share capital amounted to SEK 1,583,866,056 divided among a total of 296,049,730 shares, resulting in a nominal value of SEK 5.35 per share. Of the shares, 34,319,957 are A shares with ten votes per share, and 261,729,773 are B shares with one vote per share. All shares carry equal rights to participation in the company’s assets, profits and dividends. There are no restrictions in the articles of association concerning transferring shares or the disposal of votes at the AGM.

On December 31, 2022 there were approximately 64,000 shareholders in Peab. The Group is subject to considerable influence by Mats Paulsson and Fredrik Paulsson together with families, children and companies. In 2017 the Paulsson families merged the majority of their indirect holdings into a holding company, Ekhaga Utveckling AB, which is controlled by Mats Paulsson’s son Fredrik Paulsson. Ekhaga Utveckling AB has 20.9 percent of the capital and 48.3 percent of the votes. Mats and Fredrik Paulsson together with families have 5.2 percent of capital and 11.0 percent of the votes. In addition, the Mats Paulsson’s foundations have 1.2 percent of the capital and 0.6 percent of the votes at the end of 2022. The company has no knowledge of any agreements between shareholders that can result in restriction of the right to transfer shares.

Peab’s AGM decided on May 5, 2022 to authorize the Board to decide, during the period up to the next AGM, on new issues of B shares with rights for current shareholders to participate in the issue or without preferential rights for current shareholders to participate in the issue in connection with acquisitions. The authorization may be used on one or more occasions and correspond to, at the most, a total of 10 percent of the registered share capital at the time of the authorization. During the year the Board has not decided to issue any new shares.

In 2007 Peab established a profit-sharing foundation. According to the foundation’s placement policy its capital should be placed primarily in Peab shares. On December 31, 2022 the foundation owned 13,628,300 B shares in Peab, corresponding to 4.6 percent of the total number of shares.

Holdings of own shares

At the beginning of 2022 Peab’s own B shareholding was 1,086,984 which corresponds to 0.4 percent of the total number of shares. The Board of Directors of Peab AB has, through the authorization given by the Annual General Meeting on May 5, 2022, decided to repurchase its own shares. The shares can be repurchased, on several occasions, until the AGM 2023. The aim of the repurchasing is to improve the company’s capital structure. The shares are repurchased on Nasdaq Stockholm according to the Nordic Main Market Rulebook for Issuers of Shares – Nasdaq Stockholm (Supplement D) and EU Parliament’s and Council’s EU regulation nr. 596/2014 on market abuse (MAR). The shares may only be repurchased at a price per share within the price interval registered at any given time on Nasdaq Stockholm, meaning the interval between the current highest buy price and the lowest sell price published by Nasdaq Stockholm. According to the Board’s decision shares may be repurchased during the period for a maximum of SEK 500 million and a number of shares so that the company’s holding of its own shares after the repurchasing does not exceed one tenth of all shares in the company. During the period up to December 31, 2022 7,511,000 shares were repurchased for a total of SEK 500 million. After the repurchase Peab holds 8,597,984 own B shares corresponding to 2.9 percent of the total shares.

Corporate governance

For a detailed description of the work of the Board of Directors, corporate governance and systems for internal control see the Corporate governance report.

Remuneration policy for executive management

For information on the latest adopted Remuneration Policy containing guidelines for determining salaries and other compensation to senior officers, see note 9.

Expectations concerning future development

Sweden

It appears Sweden’s economic growth in 2022 will turn out to have been better than expected. The forecast for GNP growth in 2022 points to an increase of 2.7 percent. However, the forecast for 2023 is considerably worse and indicates a reduction in GNP by close to one percent. The total volume of production-​started building construction investments is expected to have contracted by nine percent in 2022 and diminish just as much in 2023. The downturn will probably be across the broad but most likely housing construction will be hit the hardest and contract significantly. For other building construction private industrial and premise construction is expected to decline while construction for the public sector is expected to remain on the same level as in 2022. At the same time industry investments related to the green transition are in the works where several projects have already been launched. In time these will generate the need for homes, premises and infrastructure. Civil engineering investments continue to be on a high level and are believed to have grown in 2022 but are predicted to drop back down in 2023.

Norway

The Norwegian economy slowed at the end of 2022 but GNP is still expected to have grown by three percent thanks to strong private consumption. In 2023 GNP will probably only increase marginally due to diminishing household consumption. Norwegian building construction investments appear to have decreased by three percent in 2022 and the negative trend can grow stronger in 2023. A general slowdown in construction is not expected but housing investments and private construction are most likely to be affected by the downturn in the economy. Investments in public sector construction are expected to remain on the same level as in 2022. Investments in civil engineering are believed to have grown substantially in 2022 and are expected to remain on the same high level in 2023.

Finland

Growth of the Finnish economy developed surprisingly well during the first half-​year of 2022 despite the breakdown in trade with important commercial partners due to the war in Ukraine. However, growth slowed during the autumn and all told, GNP is estimated to have grown by 2.3 percent in 2022. In 2023 GNP is expected to contract by 0.2 percent. The total volume of building construction was probably down around ten percent in 2022 and will most likely diminish by same amount in 2023. A downturn in 2023 is expected in all sectors but particularly in housing and private premise construction. Zero growth is forecast for civil engineering in both 2022 and 2023.

Parent company

The parent company’s business consists of executive management and Group functions. Net sales in 2022 were SEK 304 million (293) and consisted primarily of internal Group services. Operating profit for the year was SEK -215 million (-131). Profit after net financial items amounted to SEK 769 million (-116). Net financial items included dividends from subsidiaries of SEK 1,024 million (–). Of the appropriations, Group contributions were SEK 2,240 million (2,104). Profit for the year amounted to SEK 2,473 million (1,243).