Larger volumes in paving contributed positively

Business area Industry offers everything from mineral aggregates, concrete, paving and temporary electricity to prefabricated concrete elements and frame assembly. The business area also assists with crane, barrack and machine rental, distribution of binder to the concrete industry, transportation and recycles surpluses from the construction and civil engineering industry as well. The business area is run in six product areas: mineral aggregates, paving, concrete, transportation and machines, rentals and construction system.

Business area Industry contains a number of brands such as Swerock, Peab Asfalt, Lambertsson, Byggelement and Smidmek.

The Business 2024

Developments in the Nordic construction and civil engineering market impact operations in business area Industry. The strong demand on the civil engineering market resulted in larger volumes during the year in paving and mineral aggregates while the weaker housing market led to smaller volumes in, primarily, concrete and crane rental.

Peab’s ECO-products are essential to our efforts to reduce greenhouse gases. ECO-Asfalt, ECO-Betong (ECO-Concrete), ECO-Prefab and ECO-Stomme (ECO-Frame) are examples of products that are gaining terrain on the Nordic market. During the year Peab decided to make ECO-Betong the standard in our Swedish construction and civil engineering operations. This means that carbon emissions will be reduced in every project by at least ten percent compared to traditional concrete where the sole binder is cement. The ongoing transition to more electric vehicles and machines is also a vital part of Peab’s contribution to sustainable construction.

Larger volumes in paving

Peab has a strong position in paving on the Nordic markets. Volumes increased as a result of higher public budgets for building and maintaining roads, particularly in Finland and Denmark. In Norway we received our largest paving commission so far for the stretch of road between Nordland and Troms. This is a three year project that starts in 2025 and comprises around 180,000 tons asphalt in total.

A growing number of projects are using ECO-Asfalt which is available throughout the Nordic region. In our production we use a large portion of reclaimed asphalt where our Danish operations used the highest amount of reclaimed asphalt pavement at 34 (35) percent in 2024, with Sweden and Finland close behind.

Supported by the Swedish Construction Industry’s Development Fund (SBUF) Peab Asfalt is leading a three-year project focused on increasing the use of the natural binder in wood, lignin, in asphalt. During the year we carried out new lignin tests with good results in both Sweden and Finland.

Mineral aggregates important resource for infrastructure

The high activity in paving operations and the ongoing infrastructure investments are even positive for mineral aggregates operations, which also delivered increased volumes last year. In mineral aggreages we continously work to ensure availability of raw materials. We have our own quarries strategically placed throughout the Nordic region and C&D Recycling Wash Plants that recycle surplus material from construction and civil engineering projects. The C&D Recycling Wash Plants contribute to Peab’s climate work and sustainable building by preventing waste creation and promoting circular flows. With ECO-Ballast (ECO-Mineral aggregates), which has both an environmental and health declaration, we offer products with properties equivalent to virgin mineral aggregates.

ECO-Betong (ECO-Concrete) as standard concrete

Peab through Swerock is one of Sweden’s largest concrete supplier and we also operates in Finland. As a result of the weaker construction market volumes continued to contract during the year.

Nonetheless, customers’ demand for ECO-Betong, which has been on the market for five years, continues to grow. In ECO-Betong, which is now standard in our Swedish construction and civil engineering operations, part of the cement, which is negative for the climate, is replaced with slag. This reduces carbon emissions by up to 50 percent. Peab produces slag under the brand Merit and manufactured more than 202,000 (162,000) tons in 2024. Each ton Merit reduces carbon emissions by 600-800 kilos depending on the kind of replaced cement. This makes us less dependent on cement which aids both the environment and reliable deliveries.

Increased production capacity of prefab products

Construction System’s climate improved ECO-Prefab and ECO-Stomme (ECO-Frame) are firmly rooted on the market. Peab’s investment of around SEK 500 million to automate the manufacture of concrete elements and halve the need for cement in the plants in Ucklum and Hallstahammar was completed at the beginning of 2024.  The investment doubled production capacity and everything is produced with at least 50 percent alternative binder. This significantly reduces our climate footprint compared to standard products and the automated production also improves the working environment for employees.

Rental operations in transition

The number of rentals in Peab’s rental operations declined during the year, especially crane rentals. Transition is progressing by renting out more electric machines and increasing digital services for more resource and energy efficiency. Electric machines and low energy construction barracks are part of Peab’s ECO-construction site offer of a construction site with less climate impact.

More electric vehicles in transportation and machines

Part of our climate responsibility is to reduce carbon emissions generated by our vehicles and machines. During the year we invested in more electric vehicles in production, including two new electric trucks, and we tested different hybrid and electric machines. In addition to lowering carbon emissions this improves the environment for both drivers and the surroundings.

Net sales

Net sales during 2024 increased by eight percent and amounted to SEK 21,548 million (19,962). The increase is primarily due to paving, above all in Finland. Concrete, construction system and rental operations have been affected by the weak housing market and reported a lower level of activity compared to the last year.

Profit

Operating profit increased during the year and amounted to SEK 1,415 million (962). The operating margin improved to 6.6 percent (4.8), which is primarily due to higher earnings in paving, above all in Finland linked to the Finnish government’s extra funds for road maintenance in 2024. Concrete, construction system and rental operations reported lower operating profit as a result of the weaker housing market. There were minor changes in profit in the business area’s other product areas during the year.

Capital employed at the end of the year decreased and was SEK 9,920 million compared to SEK 10,699 million at the end of last year. The decrease is due to a lower investment rate and an improvement in working capital.

Orders received and order backlog

The level of orders received during 2024 increased and amounted to SEK 13,763 million (11,186). The increase is mainly related to paving contracts, particularly in Finland. Order backlog per December 31, 2024 was SEK 4,282 million (3,954).