Net sales and profit 

January – June 2023

Group net sales for the first half-year 2023 contracted by three percent and amounted to SEK 28,446 million (29,402). After adjustments for acquired and divested units and exchange rate effects net sales decreased by four percent. Of the period’s net sales SEK 7,527 million (7,968) were attributable to sales and production outside Sweden. Net sales during the latest rolling 12 month period were SEK 62,179 million compared to SEK 63,135 million for the full year 2022. The proportion of public sector customers increased in total net sales calculated on a rolling 12 month period and was 46 percent (41) while private customers represented 54 percent (59).

Net sales in business area Construction increased by four percent during the first half year. The portion of homes in net sales has contracted due to the weak demand in housing projects. Net sales in business area Civil Engineering increased by three percent. Net sales in business area Industry decreased by six percent due to lower net sales in Paving and Concrete. In business area Project Development net sales decreased by 23 percent. The weak demand for housing throughout the Nordic region has affected net sales in Housing Development.

A decision in the case between Peab and Unibail Rodamco Westfield regarding the contract for Mall of Scandinavia (MoS) in Solna was handed down on June 30, 2023. The judgement had a positive effect on the operating profit of SEK 400 million in the second quarter. Operating profit for the first half-year 2023 excl. MoS  amounted to SEK 534 million (895) and the operating margin excl. MoS was 1.9 percent (3.0). Operating profit amounted to SEK 934 million and the operating margin was 3.3 percent. In the latest rolling 12 month period the operating margin amounted to 4.5 percent compared to 4.3 percent for the entire year of 2022.

In business area Construction the operating margin excl. MoS was 2.0 percent (2.3). In business area Civil Engineering the operating margin was unchanged at 2.9 percent (2.9). All in all the operating margin for the construction contract businesses amounted to 2.3 percent (2.5). We continue to experience some dilution of the operating margin as a result of the high cost of material and energy in contracts received before the war broke out in Ukraine. Operating profit in business area Industry was lower during the first half-year compared to same period last year. The operating margin in Industry amounted to -1.3 percent (-0.6). Operations in Industry have a very clear seasonal pattern, especially in Paving, where the first quarter is characterized by substantial deficits since the season begins in the second quarter. Operating profit in business area Project Development was lower in both Housing Development and Property Development. The weak demand for housing throughout the Nordic region has led to fewer sold homes and production-started housing projects, which has affected operating profit negatively in Housing Development.

The operating margin in Housing Development was 6.5 percent (11.2). In Property Development, profit contributions from partially owned companies was somewhat lower compared to the same period last year. Capital gains from real estate transactions was SEK 8 million (22).

Depreciation and write-downs for the first half year were SEK -692 million (-648).

Elimination and reversal of internal profit in our own projects have affected operating profit during the period net by SEK -12 million (-23).

Net financial items excl. MoS amounted to SEK -114 million (-6) of which net interest was SEK -171 million (-33). Net financial items include a positive effect of SEK 390 million as a result of the arbitration decision in MoS. Net financial items amounted to SEK 276 million.

Pre-​tax profit excl. MoS was SEK 420 million (889). Pre-​tax profit was SEK 1,210 million.

Profit for the period excl. MoS was SEK 329 million (707). Profit for the period was SEK 956 million.

* Operating margin exclusive effect of MoS was 3.8%

Seasonal variations

Group operations, particularly in Industry and Civil Engineering, are affected by fluctuations that come with the cold weather during the winter half of the year. Normally the first quarter is weaker than the rest of the year.