Net sales and profit

January – September 2024

Group net sales for January-September 2024 decreased by three percent and amounted to SEK 41,912 million (43,182). The decrease is due to the weak demand on the housing market. After adjustments for divested units and exchange rate effects, net sales decreased by two percent. Net sales for the latest rolling 12 month period amounted to SEK 57,551 million compared to SEK 58,821 million for the full year 2023. The portion of public sector customers continued to increase and accounted for 54 percent (47) of net sales calculated on a rolling 12 month basis while private customers represented 46 percent (53).

Net sales in business area Construction decreased by 17 percent compared to the same period last year. The decrease is due to less activity in new housing production that 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 seven percent primarily due to higher net sales in paving. Concrete, rental and prefab operations have been affected by the weak housing market and reported a lower level of activity compared to the same period last year. In business area Project Development net sales decreased by 41 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 period January-September 2024 was SEK 1,508 million (1,720) and the operating margin was 3.6 percent (4.0). The comparable period included 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 1,320 million and the operating margin was 3.1 percent. In the latest rolling 12 month period the operating margin was 2.9 percent compared to 3.2 percent for the entire year of 2023 (2.5 percent excl. MoS).

In business area Construction the operating margin was unchanged at 1.9 percent (1.9 excl. MoS). In business area Civil Engineering the operating margin was 3.1 percent (3.0). All in all the operating margin for construction contract operations was unchanged at 2.3 percent (2.3 excl. MoS). Business area Industry reported a higher operating margin of 5.1 percent (3.3) for the period. The improvement is mainly due to increased earnings in paving, above all in Finland. Both rental and prefab operations reported lower operating profit as a result of the weaker housing market. There were only minor changes in profit for the period in Industry’s other product areas. Operating profit in business area Project Development contracted and amounted to SEK 207 million (287). Operating profit included positive effects from capital gains in Property Development of SEK 271 million (8), of which the sale of the shares in the partly owned company Tornet Bostadsproduktion contributed SEK 220 million. Operating profit in Housing Development was negative and the operating margin was -3.3 percent (5.8). 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 period were SEK -1,066 million (-1,050).

Elimination and reversal of internal profit in our own projects affected operating profit for the period by net SEK 3 million (-33).

Net financial items amounted to SEK -266 million (144) of which net interest was SEK -315 million (-300 excl. MoS). The comparative period included a positive effect of SEK 390 million as a result of the arbitration decision in Mall of Scandinavia.

Pre-​tax profit was SEK 1,242 million (1,864). Profit for the period was SEK 1,043 million (1,486).

* 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.