Net sales and profit

January – June 2024

Group net sales for the first half-year 2024 decreased by seven percent and amounted to SEK 26,373 million (28,446). The decrease is due to the weak demand on the housing market. Even after adjustments for divested units and exchange rate effects, net sales decreased by seven percent. Net sales for the latest rolling 12 month period amounted to SEK 56,748 million compared to SEK 58,821 million for the full year 2023. The portion of public sector customers continued to increase and accounted for 53 percent (46) and private customers for 47 percent (54) of net sales calculated on a rolling 12 month basis.

Net sales in business area Construction decreased by 19 percent compared to the same period last year. The decrease is due to less activity in new housing production which has not been fully compensated for by other types of projects, and has been experienced in all the countries we operate in. Activity in business area Civil Engineering continued to be on a high level during the period and net sales increased by nine percent. Net sales in business area Industry increased by four percent primarily due to higher net sales in paving. Both prefab operations and rental operations have been affected by the weak housing market and reported a lower level of activity compared to the first half of last year. Net sales in business area Project Development decreased by 48 percent due to the weak demand for housing throughout the Nordic region and this has affected net sales in Housing Development.

Operating profit for the first half-year 2024 amounted to SEK 513 million (934) and the operating margin was 1.9 percent (3.3). The comparable period includes a positive effect of SEK 400 million from the outcome of the arbitration decision in the case between Peab and Unibail-Rodamco-Westfield regarding the contract Mall of Scandinavia in Solna (MoS). Excluding the effect of MoS, operating profit for the comparable period amounted to SEK 534 million and the operating margin was 1.9 percent. In the latest rolling 12 month period the operating margin amounted to 2.5 percent compared to 3.2 percent for the entire year of 2023 (2.5 percent excl. MoS).

In business area Construction the operating margin decreased to 1.8 percent (2.0 excl. MoS) while the operating margin in business area Civil Engineering increased to 3.1 percent (2.9). In total the operating margin for construction contract operations amounted to 2.3 percent (2.3 excl. MoS). In business area Industry, which has a significant seasonal pattern primarily in paving operations where the first quarter is characterized by a substantial deficit, operating profit amounted to SEK -30 million (-102) and the operating margin was -0.4 percent (-1.3). Operating profit in paving improved during the period, while both prefab operations and rental operations reported lower operating profit as a result of the weaker housing market. Operating profit in business area Project Development was lower and amounted to SEK 213 million (241). Operating profit included positive effects from capital gains in Property Development of SEK 275 million (8), of which the sale of the shares in the partly owned company Tornet Bostadsproduktion contributed by SEK 220 million. Operating profit in Housing Development was negative and the operating margin was -4.0 percent (6.5). The negative operating profit is due to few production starts of our own housing developments during the period and fewer housing projects in ongoing production.

Depreciation and write-​downs for the first half-year were SEK -704 million (-692).

Elimination and reversal of internal profit in our own projects affected operating profit during the period by net SEK 1 million (-12).

Net financial items amounted to SEK -173 million (276) of which net interest was SEK -211 million (-171 excl. MoS). The comparative period included a positive effect of SEK 390 million as a result of the arbitration in Mall of Scandinavia.

Pre-​tax profit was SEK 340 million (1,210). Profit for the period was SEK 298 million (956).

* Operating margin rolling 12 months excluding effect of MoS was 3.8% as of June 30, 2023, 3.6% as of September 30, 2023, 2.5% as of December 31, 2023 and 2.6% as of March 31, 2024.

Seasonal variations

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