Other information

Significant events during the period

Peab has entered agreements for new credit facilities totaling SEK 7.4 billion

Peab has entered agreements for new credit facilities divided into two contracts. One is a three year credit facility for a total of SEK 7.0 billion and the other is an 18 month credit facility of SEK 400 million. The credit facility for SEK 7.0 billion runs until June 15, 2026 with the possibility of an extension for one plus one year. Four banks participate in the transaction: Nordea, Swedbank, SEB and Handelsbanken. The transaction is coordinated by Nordea. Peab has also entered an agreement for a bilateral credit facility with Nordea for SEK 400 million. The contract runs for 18 months and matures on December 15, 2024 with the possibility of an extension for another year. The credit agreements refinance the company’s existing credit facility and are prepared for sustainability linking. The loan contracts make up Peab’s long-term financing foundation and are complemented by capital market financing, other types of short-term financing and project-related credit.

Arbitration decision in the case of Mall of Scandinavia

A decision in the case between Peab and Unibail Rodamco Westfield regarding the contract for Mall of Scandinavia in Solna was handed down in Peab´s favor on June 30, 2023. The judgement entailed a positive effect on Peab’s operating profit by SEK 400 million in the second quarter. The effect on pre-tax profit was SEK 790 million in the second quarter. Cash flow would have been positively affected by approximately SEK 1,400 million in the third quarter, which did not occur.

In August Unibail Rodamco Westfield petitioned the Swedish Court of Appeal to set aside the judgment in its entirety in a so-​called protest action. During the process the judgement is suspended and cannot be enforced and therefore the time of payment has been deferred. Peab continues to have an outstanding receivable of about SEK 1,400 million on Unibail Rodamco Westfield.

Peab’s assessment of the estimated effects on profit has not changed. After a thorough legal trial through arbitration lasting nearly seven years Peab cannot see any grounds whatsoever for a protest action. Peab will counter the protest action in the further process.

Peab received the contract for Mall of Scandinavia in December 2010 and the mall was completed and ready for inauguration November 2015. Peab believed it was entitled to compensation for added expenses generated by extensive changes in the project made during the production phase. The parties could not agree on outstanding claims and transactions and arbitration commenced in 2017.

Sustainability targets linked to existing credit facility

Peab renewed its basic financing in June 2023 when the existing credit facility reached maturity. Now the three year credit facility of SEK 7.0 billion has also been linked to Group sustainability targets, which further intensifies Peab’s focus on sustainability work. The credit facility for SEK 7.0 billion runs until June 2026 with the possibility of an extension for one plus one year. Now it has been linked to Peab’s climate sustainability targets. These targets are to by 2030 reduce greenhouse gas emissions from our own production by 60 percent (scope 1+2, ton CO2e/MSEK) and from input goods and purchased services by 50 percent (scope 3, ton CO2e/MSEK). The interest margin for the credit facility is linked to predetermined levels of annual reductions in emissions. The base year of the targets is 2015.

Acquisition of development rights

On December 22, 2023 Peab signed a contract to acquire Folksam’s shares in Sicklaön Invest AB that partly and wholly owns development rights in Kvarnholmen in Nacka. Peab thereby increases its ownership from 50 to 100 percent. At the same time Peab also signed a contract to divest its 33.3 percent ownership in Tornet Bostadsproduktion to the other owners Folksam and Fastighets AB Balder. Both deals were concluded in January 2024, entailing in total unchanged net debt as well as capital gains of SEK 220 million. Through the two deals Peab divested finished properties that are currently being managed and used the freed capital to invest in development rights for future development.

Peab has developed homes on Kvarnholmen since 2013. Sicklaön Invest AB has more than 270 zoning approved, wholly owned development rights for a gross area of 26,000 m2. In addition, the company owns 50 percent of the shares in Kvarnholmen Utveckling AB that has an ongoing zoning process for more than 120,000 m2 housing development rights. Half of them will be turned over to Peab.

Peab has been a part owner in Tornet Bostadsproduktion since 2009. The company owns and manages around 2,200 rental apartments and has some 650 rental apartments in production in a number of cities in Sweden. In its role as construction contractor Peab has delivered several housing projects to Tornet over the years. Being an owner has been advantageous and value development has been positive, which is why the divestment generated capital gains.

Significant events after the period

No significant events occurred after the end of the reporting period.

Holdings of own shares

At the beginning of 2023 Peab’s own B shareholding was 8,597,984 which corresponds to 2.9 percent of the total number of shares. No changes have taken place during 2023.

Related parties

The character and extent of transactions with related parties is presented in the Annual and Sustainable Report 2022, note 41. For more information about transactions with related parties during the period see business area Project Development. No other new significant transactions have occurred during 2023.

Proposed dividend

The Board has pro­posed a div­i­dend of SEK 1.50 (4.00) per share for 2023. Ex­clud­ing the 8,597,984 shares owned by Peab AB per Feb­ru­ary 2, 2024, which are not en­ti­tled to div­i­dends, the pro­posed div­i­dend is equiv­a­lent to a total div­i­dend dis­tri­b­u­tion of SEK 431 mil­lion (1,150). Cal­cu­lat­ed as a share of the Group’s re­port­ed prof­it for the year after tax ac­cord­ing to seg­ment re­port­ing, the pro­posed div­i­dend amounts to 30 per­cent (56). The pro­posed div­i­dend is equiv­a­lent to a di­rect re­turn of 2.9 per­cent based on the clos­ing price on Feb­ru­ary 1, 2024.

Annual General Meeting

The Annual General Meeting of Peab will be held on May 6, 2024. The form of the Annual General Meeting will be de­cid­ed by the Board at the lat­est in con­nec­tion with the no­tice to at­tend the Annual General Meeting.

Nomination Committee

According to the “Principles for the Nomination Committee’s appointment and instructions for the Nomination Committee”, adopted by the Annual General Meeting on May 4, 2023, the Nomination Committee is appointed by the three largest shareholders of the company per the final banking day in August 2023, i.e. August 31, 2023, that want to appoint a member of the Nomination Committee as well as the Chairman of the Board. If one or more of the three largest shareholders decline to appoint a member of the Nomination Committee the Chairman of the Board will offer the next largest shareholder in terms of votes the opportunity to appoint a member of the Nomination Committee and so on until the Nomination Committee consists of three members as well as the Chairman of the Board.

The two largest shareholders per August 31, 2023, Ekhaga Utveckling AB and AB Axel Granlund, have agreed to appoint a member to Peab’s Nomination Committee. Mats Paulsson and Peab’s Profit-Share Foundation, which were in terms of votes the third and fourth largest shareholders in Peab, have when asked replied that they do not wish to appoint a member to the Nomination Committee for the Annual General Meeting 2024. State Street Bank and Trust Co, W9 State, which at this same point in time was the fifth largest shareholder in Peab in terms of votes, has not replied to the request. The Kamprad Family Foundation, the sixth largest shareholder in Peab in terms of votes, replied that it does not wish to appoint a member to the Nomination Committee. Cicero Funds, which was the next largest shareholder, has agreed to participate in the Nomination Committee.

The Nomination Committee therefore consists of the following members:

  • Anders Sundström, Ekhaga Utveckling AB
  • Ulf Liljedahl, AB Axel Granlund
  • Christer Sterndahlen, Cicero Funds
  • Anders Runevad, Chairman of the Board of Peab AB

The Nomination Committee has appointed Ulf Liljedahl to be Chairman of the Nomination Committee.