Business area Industry

Business area Industry is a complete supplier of the products and services needed to carry out a sustainable and cost-​efficient construction and civil engineering project on the Nordic market. Industry offers everything from mineral aggregates, concrete, paving and temporary electricity to prefabricated concrete elements. Business area Industry also assists with crane and machine rental, distribution of binder to the concrete industry, transportation as well as recycles production waste and rubble.

Business area Industry is run in six product areas: Mineral aggregates, Paving, Concrete, Transportation and Machines, Rentals and Construction System. All the product areas operate on the Nordic construction and civil engineering market.

Acquisition of Nordic paving and mineral aggregates operations

On July 4, 2019 Peab signed a contract to acquire YIT’s paving and mineral aggregates operations in the Nordic region. The transaction was conditional on approval from competition authorities as well as the fulfillment of certain contractual conditions. At the end of March 2020 the transaction was approved by the competition authorities and the acquisition was finalized on April 1, 2020.

Through the acquisition Peab expands its presence in Sweden, Norway and Finland and become established in the paving business in Denmark. This gives Peab a unique and market leading position in this business in the Nordic region. The acquisition entails taking over some 2,000 employees, around 200 strategically located quarries along with 63 production asphalt plants in the Nordic region. The operations are primarily integrated into the companies Peab Asfalt and Swerock and for Peab Asfalt it means establishing operations in Finland and Denmark. The acquisition 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 share purchase. The purchase price amounted to SEK 3,184 million for a debt-​free business and is fully financed.

The acquired operations had net sales of SEK 5,878 million with an adjusted EBITDA of SEK 282 million in 2019.

Net sales and profit

October – December 2020

Net sales for the fourth quarter 2020 increased by 37 percent and amounted to SEK 4,929 million (3,592), of which the acquired operations contributed by SEK 1,438 million. Not including the acquired operations net sales contracted by three percent and amounted to SEK 3,491 million. The reduction stems primarily from Transportation and Machines as well as Rentals.

Operating profit for the fourth quarter 2020 amounted to SEK 397 million (363) and the operating margin was 8,1 percent (10.1). Not including the acquired operations, operating profit was SEK 355 million and the operating margin was 10.2 percent. The lower operating profit stems primarily from Rentals.

The acquisition of the paving and mineral aggregates operations was finalized on April 1, 2020, which means the acquisition occurred when the season started. The underlying operations in the acquired companies contributed to operating profit by SEK 72 million in the fourth quarter. Depreciation on surplus values for, among other things, customer contracts in the order backlog taken over and fixed assets amounted to SEK -30 million. Depreciation on surplus values for customer contracts in the order backlog taken over have been high throughout 2020 and will also affect part of 2021. All in all operating profit for the fourth quarter was affected by SEK 42 million related to the acquired operations.

January – December 2020

Net sales for 2020 increased by 40 percent and amounted to SEK 18,720 million (13,339), of which the acquired operations contributed by SEK 5,944 million. Adjusted for the acquired operations, net sales contracted by four percent to SEK 12,776 million. Net sales increased in Mineral Aggregates and Concrete while they decreased in Transportation and Machines, Rentals and Construction System.

Operating profit for the year increased to SEK 1,105 million (937) with an operating margin amounting to 5.9 percent (7.0). Not including the acquired operations, operating profit was SEK 855 million and the operating margin was 6.7 percent. The lower operating margin is due to a lower profit in Rentals and Construction System.

The underlying operations in the acquired companies contributed to operating profit by SEK 494 million. Depreciation on surplus values for, among other things, customer contracts in the order backlog taken over and fixed assets amounted to SEK -189 million. Depreciation on surplus values for customer contracts in the order backlog taken over have been high throughout 2020 and will also affect part of 2021. In addition, acquisition costs and transfer tax in Finland have charged profits in total by SEK -55 million. All in all operating profit for the period was affected by SEK 250 million related to the acquired operations. Because the acquired operations have a very clear seasonal pattern the first quarter is characterized by considerable deficits since the season starts in the second quarter. If the acquisition had taken place on January 1, 2020 profit in the first quarter would have been affected by SEK -297 million and the underlying operations would have had an accumulated operating profit per December 31, 2020 of SEK 197 million.

Capital employed in Industry was at the end of the year SEK 8,822 million compared to SEK 6,799 million at the end of last year. The increase is due to the acquired operations.

Net sales

per product area, rolling 12 months
per geographic market, rolling 12 months

Orders received and order backlog

October – December 2020

Orders received during the fourth quarter 2020 amounted to SEK 2,816 million (1,803), of which orders received from the acquired operations amounted to SEK 1,113 million.

January- December 2020

Orders received during 2020 increased to SEK 9,893 million (6,174), of which orders received from the acquired operations amounted to SEK 4,357 million.

Order backlog on December 31, 2020 amounted to SEK 3,921 million (2,548), of which order backlog related to acquired operations was SEK 1,531 million.

Key ratios

Oct-Dec
2020
Oct-Dec
2019
Jan-Dec
2020
Jan-Dec
2019
Okt-dec
2020
Okt-dec
2019
Jan-dec
2020
Jan-dec
2019
Net sales, MSEK Nettoomsättning, Mkr 4,929 3,592 18,720 13,339
Operating profit, MSEK Rörelseresultat, Mkr 397 363 1,105 937
Operating margin, % Rörelsemarginal, % 8.1 10.1 5.9 7.0
Orders received, MSEK Orderingång, Mkr 2,816 1,803 9,893 6,174
Order backlog, MSEK Orderstock, Mkr 3,921 2,548 3,921 2,548
Capital employed at the end of the period, MSEK
Sysselsatt kapital vid periodens utgång, Mkr
8,822 6,799 8,822 6,799
Number of employees at the end of the period
Antal anställda vid periodens utgång
4,967 3,482 4,967 3,482
Concrete, thousands of m3 1) Betong, tusentals m3 1) 352 365 1,372 1,344
Paving, thousands of tons 1) Beläggning, tusentals ton 1) 2,498 904 8,396 2,718
Mineral Aggregates, thousands of tons 1) Ballast, tusentals ton 1) 9,490 4,815 32,229 15,755
1) Refers to sold volume