Net sales and profit 

January – December 2023

Group net sales for 2023 contracted by seven percent and amounted to SEK 58,821 million (63,135). After adjustments for acquired and divested units and exchange rate effects net sales decreased by eight percent. Of the year’s net sales SEK 16,740 million (18,892) were attributable to sales and production outside Sweden. The proportion of public sector customers increased in total net sales and was 48 percent (43) while private customers represented 52 percent (57).

Net sales in business area Construction decreased by four percent compared to the last year. The lower demand for new housing production has not been fully compensated by other kinds of projects, which is apparent in all the countries we operate in. Activity in business area Civil Engineering has continued to be high during the year and net sales increased somewhat in 2023. Net sales in business area Industry decreased by seven percent mainly due to lower net sales in Paving and Concrete. In business area Project Development net sales decreased by 34 percent 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 amounted to SEK 1,853 million (2,741) and the operating margin to 3.2 percent (4.3). In order to handle the diminished housing market construction production, housing development, rental operations and central support functions are being streamlined. This generates restructuring costs but also lower overhead going forward. In business area Construction we have written down housing projects received before the outbreak of war in Ukraine that have been affected by price hikes and are almost completed as well as a number of projects in Norway. All in all provisions, write-​downs and restructuring costs amounted to SEK 525 million, of which write-​downs of goodwill in Norwegian construction operations amounted to SEK 125 million. Of the total SEK 525 million business area Construction was charged with SEK 465 million and SEK 60 million charged Group Functions. After taking these measures we are well-​equipped to handle both a continued weak housing market and meet a growing market. In business area Construction operating margin excl. MoS was 0.1 percent (2.2). In business area Civil Engineering the operating margin was unchanged at 3.3 percent (3.3). Despite the effect of price hikes on projects received before the outbreak of war in Ukraine Civil Engineering reported a high and stable operating margin. All in all the operating margin for the construction contract businesses amounted to 1.3 percent (2.6). Operating margin in business area Industry was higher during the year and amounted to 4.8 percent (3.5), which is mostly explained by increased earnings in Paving. Operating profit in Rentals declined during the year due to a weaker construction market. Operating profit in business area Project Development was considerably lower due to the weak demand for housing. There were fewer sold homes and production-started housing projects in Housing Development, which has affected operating profit negatively.

The operating margin in Housing Development was 3.8 percent (11.5). In Property Development, profit contributions from partly owned companies were somewhat lower compared to the last year. The drop is mainly due to higher interest costs in the partly owned companies. Capital gains from real estate transactions were SEK 96 million (85).

Depreciation and write-downs for the year were SEK -1,532 million (-1,349). Included in the amount were goodwill write-downs of SEK -125 million.

Elimination and reversal of internal profit in our own projects effected operating profit during the year net by SEK -56 million (-58).

Net financial items amounted to SEK 42 million (-71) of which net interest was SEK -30 million (-120). A higher level of net debt and higher interest rates have had a negative effect on net interest during the year. Net financial items include a positive effect of SEK 390 million as a result of the arbitration decision in Mall of Scandinavia.

Pre-​tax profit was SEK 1,895 million (2,670). Tax for the year was SEK -481 million (-633) and corresponds to a tax of 25 percent (24). The high tax rate is primarily due to non-capitalized deficits.

Profit for the year was SEK 1,414 million (2,037).

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

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.