Net sales and profit 

January – September 2023

Group net sales for the period January-September 2023 contracted by six percent and amounted to SEK 43,182 million (46,087). After adjustments for acquired and divested units and exchange rate effects net sales decreased by eight percent. Of the period’s net sales SEK 12,963 million (13,959) were attributable to sales and production outside Sweden. Net sales during the latest rolling 12 month period were SEK 60,230 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 47 percent (41) while private customers represented 53 percent (59).

Net sales in business area Construction was on par with the corresponding period last year. The portion of housing in net sales has contracted due to the weak demand in housing projects which is noticeable in all countries where Peab operates. Net sales in business area Civil Engineering were slightly higher compared to the corresponding period last year. Net sales in business area Industry decreased by six percent mainly due to lower net sales in Paving and Concrete. In business area Project Development net sales decreased by 36 percent and is primarily due to a lower demand for housing throughout the Nordic region which 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 2023. Operating profit for the period January-September 2023 excl. MoS  amounted to SEK 1,320 million (1,888) and the operating margin excl. MoS was 3.1 percent (4.1). Operating profit amounted to SEK 1,720 million and the operating margin was 4.0 percent. In the latest rolling 12 month period the operating margin amounted to 4.3 percent, which was the same as for the entire year of 2022.

In business area Construction the operating margin excl. MoS was 1.9 percent (2.2). Peab has not been able to fully compensate for the lower demand in new production of homes with other kinds of projects. Business area Construction is in the process of adjusting to the lower demand in housing developments. In business area Civil Engineering the operating margin was unchanged at 3.0 percent (3.0). 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 margin in business area Industry was higher during the period compared to same period last year, which is mostly explained by increased earnings in Paving. The operating margin in Industry improved to 3.3 percent (2.9). Operating profit in business area Project Development was lower, which is related to 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 5.8 percent (10.5). In Property Development, profit contributions from partly owned companies were somewhat lower compared to the same period last year. The drop is mainly due to higher interest costs in the partly owned companies. Capital gains from real estate transactions were SEK 8 million (83).

Depreciation and write-downs for the period were SEK -1,050 million (-984).

Elimination and reversal of internal profit in our own projects have affected operating profit during the period net by SEK -33 million (-31).

Net financial items excl. MoS amounted to SEK -246 million (-36) of which net interest was SEK -300 million (-66). Net financial items include a positive effect of SEK 390 million as a result of the arbitration decision in Mall of Scandinavia. Net financial items amounted to SEK 144 million.

Pre-​tax profit excl. MoS was SEK 1,074 million (1,852). Pre-​tax profit was SEK 1,864 million.

Profit for the period excl. MoS was SEK 859 million (1,495). Profit for the period was SEK 1,486 million.

* Operating margin rolling 12 months excluding effect of MoS was 3.8% as of June 30, 2023 and 3.6% as of 30 September, 2023.

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.