Working together to meet targets

The strength of the Peab business model – and thereby our ability to reach our targets – grows when our four business areas collaborate with each other and when we as a Group work together with customers, suppliers and other prioritized stakeholder groups.

As of 2021 Peab reports the performance of our business by monitoring nine external targets, of which three are financial and are based on segment reporting, and six are non-​financial. The non-​financial targets comprise our sustainable targets. We particularly want to highlight the external targets and they are subset of all our targets and action plans. Both the external and internal financial and non-​financial targets are categorized under the strategic targets; most satisfied customers, best workplace, most profitable company and leader in social responsibility. All the targets are measured compared to the construction and civil engineering industry.

Most satisfied customers

We are close to our customers and meet their needs with sustainable offers. Quality permeates our work methods and end results. The right expertise in the right place is key to success.

Best workplace

We are a safe, secure and inclusive workplace rooted in a strong company culture. Leadership takes responsibility and is close to operations. Employees have value-creating and developing work assignments that they complete together.

Most profitable company

We take on the right projects and have the right business mix. Employees work according to quality-ensured work methods that are efficient in every aspect. Through our own resources and internal collaboration we maintain a high degree of value creation. We take advantage of our size and experience.

Leader in social responsibility

As the Nordic Com­mu­ni­ty Builder we drive developments in our industry in matters con­cern­ing the cli­mate and en­vi­ron­ment, ethics, and equal op­por­tu­ni­ty and inclusion. We work well together with stakeholders in the world around us and stride every day towards a sustainable value chain. With our extensive local pres­ence we are also an important actor in the local com­mu­ni­ty.

How we achieve our targets

Through the work and efforts of our em­ploy­ees we cre­ate value for our cus­tomers, so­ci­ety and our other stake­hold­ers. Our employees are there­by the premise for us to be able to achieve our tar­gets. To­geth­er we focus on a num­ber of Group strate­gic areas aimed at de­vel­oping our busi­ness in line with our busi­ness plan and strate­gies – everything  in order to reach all our targets.

The year 2023 was the last in the business plan period 2021-2023. Several global events had a significant impact on the period and our business, in particular the COVID pandemic, Russia’s invasion of Ukraine and breakdowns in supplier chains as well as rising inflation and higher interest rate levels. At the same time, for Peab these three years have entailed further collaboration between business areas, geographic cooperation and transitioning operations to be more sustainable – environmentally and socially. We have made significant progress in all four of our strategic targets during the period, even if not all targets have been met. We have more than achieved our target regarding satisfied customers along with employees’ satisfaction and their willingness to recommend us as employers. We have also reached our target of fewer serious accidents even though the level is still too high. The outcome of our financial targets was acceptable during the first half of the business plan period, but above all higher interest rates entailed drastically reduced demand on the housing market.

There has been a great deal of uncertainty about the economy and the market situation cannot be considered normal. This has particularly affected business area Project Development and Construction which have not been able to continue their previous path to reaching their margin targets, and has even had some impact on our debt/equity target. As a result the Board proposes a dividend of SEK 1.50 per share, which corresponds to 30 percent of profit for the year. The target is at least 50 percent.

New business plan period

While we have evaluated the past three years we have also made a thorough analysis of our targets and strategies for the new business plan period 2024-2026. We have concluded that all the targets and target levels continue to be relevant and have therefore decided to keep them for the next period as well. We still have a ways to go to reach, for example, our climate targets for 2030 and 2045 and the Group’s target of an operating margin of six percent. Nonetheless we are convinced that our business model and strategy are spot on and that we have the right foundation, when the market improves and is normalized, to advance towards the targets Peab has set. At the same time the challenging market situation has required that we both intensify efforts to streamline our business and position the company so that we are ready when the market turns.

Therefore the primary areas in the Peab Group’s business plan for 2024-2026 are customer focus, sustainability and sustainable offers and efficiency. Collaboration in our geographies is key to success in all these areas. We have also established two Group-wise development programs that aid these advances: “Climate Road Map and strategic inputs goods” intended to ensure we reach our climate and environmental targets and safeguard access to critical input goods and “Quality-ensured and traceable value chain”  which both supports the first program and contributes to our structured work and Peab’s responsibility in our value chains.

Target 2021 2022 2023
Most satisfied customers CSI >75 81 80 80
Best workplace Serious accidents <49 28 49 48
eNPS >22 24 29 26
Most profitable company1)
 Operating margin <6% 5.2% 4.3% 3.2%
Net debt/equity ratio 0.3-0.7 0.2 0.5 0.6
Dividends >50% 59% 56% 30%2)
Leader in social responsibility
 Carbon dioxide intensity  for our own production -60% -40% -43% -49%
Carbon dioxide intensity for input goods and purchased services -50% -3% -2% -9%
Equal opportunity >5.0% (SW) 6.8% 7.9% 14.2%
Equal opportunity >30.0% (WCW) 34.9% 45.3% 18.8%

1) Based on segment reporting. 2) Calculated on number of outstanding shares.

Greater value creation

Col­lab­o­ra­tion be­tween busi­ness areas increases value creation in our pro­duc­tion. Busi­ness with a high­ level of value creation entails projects, services and prod­ucts that gen­er­ate rev­enue in sev­er­al busi­ness areas. A high degree of our own talent and input goods im­proves steer­ing, ef­fi­cien­cy, qual­i­ty and safe­ty as well as other sus­tain­abil­i­ty-re­lat­ed per­for­mance.

Examples of progress in 2023:

  • High degree of internal collaboration in our local geographic markets.
  • Gathered the operative steering of our civil engineering, paving and mineral aggregates operations under one business area manager to increase synergies between civil engineering projects and input goods like asphalt, gravel and concrete.

Operational efficiency

Op­er­a­tion­al ef­fi­cien­cy com­pris­es ex­pe­ri­ence, continuous improvement and development, for in­stance our best prac­tice con­struc­tion meth­ods, con­struc­tion tech­nol­o­gy so­lu­tions and other con­cep­tu­al ini­tia­tives. We take ad­van­tage of our years of ex­pe­ri­ence and ex­ten­sive knowl­edge to pro­mote ef­fi­cien­cy in op­er­a­tions.

Examples of progress in 2023:

  • Intensified the ongoing work to streamline various functions in the Group.
  • Developed our service offer and continued work on NärBo, our predesigned building type concept, and our concept for preschools.
  • Continued work on digitalizing and harmonizing our Nordic processes.

Knowledge exchange

Peab’s size makes it pos­si­ble to take ad­van­tage of local ex­per­tise and can have an im­pact from a Nordic per­spec­tive. For in­stance, we can main­tain a ref­er­ence li­brary or take ad­van­tage of, and co­or­di­nate, spe­cial­ist com­pe­tence like when build­ing swim­ming pool fa­cil­i­ties. Dig­i­tal­iza­tion en­ables ef­fi­cient com­pi­la­tion of in­for­ma­tion and spread­ing knowl­edge.

Examples of progress in 2023:

  • Intensified work in cross-functional teams for various product segments such as ports and water, infrastructure, wood buildings, swimming pool facilities and wind power.
  • Developed our ability to analyze and distribute data and information from our enterprise data warehouse (EDW) that compiles data from our different source systems.
  • Produced a cohesive climate road map with concrete, scheduled activities for the entire Group.

Innovation and demands

Our ECO-​prod­ucts are ex­am­ples of in­no­va­tion. We have de­vel­oped ECO-​Be­tong (ECO-​Concrete) 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. We have cre­at­ed cir­cu­lar raw ma­te­ri­als such as re­cy­cled min­er­al ag­gre­gates.

For further progress we have to mak­e de­mands on sup­pli­ers, car­ri­ers, poli­ti­cians, au­thor­i­ties and cus­tomers. We have to strive for reg­u­la­tions that aug­ment re­cy­cling and pro­cure­ments that pro­mote in­no­v­a­tive sus­tain­able so­lu­tions.

Examples of progress in 2023:

  • Greater use of ECO-Betong (ECO-Concrete) in business areas Construction and Civil Engineering.
  • Invested in automated production of concrete elements (ECO-Prefab) and cut the use of cement in prefab operations in half.
  • Produced a detailed climate road map with climate reduction strategies per input good to enable net zero emissions by 2045.
  • Started cross-functional teams focused on our largest emission areas, such as concrete and binders, in order to reduce our climate impact through innovation and development – from input goods and prefab products to application and production choice.

Investments in Project Development

Our fi­nan­cial po­si­tion en­ables us to fur­ther de­vel­op our project de­vel­op­ment busi­ness. We have the range and de­vel­op the prod­ucts that are cur­rent­ly in de­mand on the mar­ket. We have a de­vel­op­ment rights port­fo­lio both on our own bal­ance sheet and in joint ven­tures. These operations should there­fore pro­vide a sta­ble flow of our own hous­ing de­vel­op­ment projects. We work with de­vel­op­ment projects that can be di­vest­ed on the in­vest­ment mar­ket.

Examples of progress in 2023:

  • Acquired property and development rights with exploitation possibilities.
  • Sold and started new building projects.