Other information

Risks and uncertainty factors

Peab’s business is exposed to operational and financial risks. The impact of these risks on Peab’s result and position depends on how well the day-to-day business is handled in the company. In addition, Peab faces circumstantial risks such as developments in the economy and altered conditions like changes in laws and regulations and other political decisions.

Handling operational risks is a constant ongoing process since there are always a large number of projects that are beginning, up and running and ending. Operational risks are taken care of in the line organization in each business area. Peab’s business is to a large extent project related. Grey areas concerning contract terms can lead to borderline issues followed by negotiations with customers.

The financial risks are connected to tying up capital and the need for capital, primarily in the form of interest rate risk and refinancing risk. Financial risks are dealt with on Group level. For further information on risks and uncertainty factors, see the 2018 Annual and Sustainability Report.

Holdings of own shares

At the beginning of 2019 Peab’s own B shareholding was 1,086,984 which corresponds to 0.4 percent of the total number of shares. No changes have taken place during the first half-year 2019.

The Peab share

Peab’s B share is listed on the Nasdaq Stockholm, Large Cap list. As of July 18, 2019, the price of the Peab share was SEK 84.00, an increase of 16 percent during 2019. During the same period, the Swedish stock market also increased by 16 percent according to the general index in the business magazine “Affärsvärlden”. During 2019 the Peab share has been quoted at a maximum of SEK 89.70 and a minimum of SEK 71.00.

Important events after the report period

Peab has signed an agreement to acquire YIT’s Nordic paving and mineral aggregates business. Through the acquisition Peab will expand its presence in Sweden, Norway and Finland and become established in the paving business in Denmark and this will give Peab a unique and market leading position in this business in the Nordic region. The deal will also increase the importance of industrial operations for the Group as well as reduce sensitivity to fluctuations in the business cycle.

Peab is currently a leading player in manufacturing and paving of asphalt as well as in mineral aggregates operations in Sweden and Norway. Now Peab is expanding its operations through the acquisition of YIT’s corresponding operations in Sweden, Norway, Finland and Denmark. The acquisition entails taking over some 200 strategically located quarries along with 63 production asphalt plants in the Nordic region. The acquisition also entails taking over some 1,700 employees. After the acquisition Peab will have a unique and market leading position in the Nordic region in these areas. Greater geographic proliferation in businesses that are normally less sensitive to the business cycle increases stability in the Group. It also provides conditions for further expansion and development in other operations such as Recycling and Concrete.

The transaction is a combination of an asset deal and a share purchase. The purchase price is expected to amount to SEK 2,966 million for a debt-free business and is fully financed.

The acquired business had net sales of SEK 6,005 million with an adjusted EBITDA of SEK 240 million in 2018.

The transaction is conditional on approval from competition authorities as well as the fulfillment of certain contractual conditions. The takeover is expected to occur on January 1, 2020.