Net sales and profit

January – December 2024

Group net sales for 2024 amounted to SEK 58,697 million (58,821). The portion of profit for the year represented by the public sector continued to grow and accounted for 56 percent (48) of net sales while private customers represented 44 percent (52).

Net sales in business area Construction decreased by 14 percent compared to the last year. The decrease is due to less activity in new housing production which 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 high during the year and net sales increased by nine percent. Net sales in business area Industry increased by eight percent primarily due to higher net sales in paving, above all in Finland. Greater government investments in infrastructure have had a positive effect in both business area Civil Engineering and business area Industry during the year. Concrete, prefab and rental operations have been affected by the weak housing market and reported less activity compared to the last year. In business area Project Development net sales decreased by 25 percent due to the weak demand for housing throughout the Nordic region which affected net sales in Housing Development.

Operating profit for 2024 was SEK 2,763 million (1,853) and the operating margin was 4.7 percent (3.2). During the year business area Project Development carried out two major transactions that contributed a total of SEK 620 million to the Group. The fourth quarter last year was charged with provisions, write-downs and restructuring costs totaling SEK 525 million, of which goodwill write-downs were SEK 125 million. Of the total amount of SEK 525 million, SEK 465 million was charged to business area Construction and SEK 60 million to Group functions. Last year included a positive effect of SEK 400 million resulting from arbitration in the case between Peab and Unibail-Rodamco-Westfield regarding the construction contract for Mall of Scandinavia (MoS). Excluding the effect of (MoS), operating profit in 2023 amounted to SEK 1,453 million and the operating margin was 2.5 percent.

In business area Construction the operating margin was 1.7 percent (0.1 excl. MoS). In business area Civil Engineering the operating margin was 3.0 percent (3.3). All in all the operating margin for construction contract operations was 2.3 percent (1.3 excl. MoS). Business area Industry reported a higher operating margin amounting to 6.6 percent (4.8) for the year. The improvement is due to better earnings in paving, above all in Finland linked to the Finnish government’s extra funds for road maintenance in 2024. Operating profit in concrete, rental and prefab operations contracted due to the weaker housing market. There were only minor changes in profit for the year in Industry’s other product areas. Operating profit in business area Project Development was higher and amounted to SEK 728 million (304). Operating profit included positive effects from capital gains in Property Development of SEK 440 million (96), of which the divestiture of the shares in the joint venture company Tornet Bostadsproduktion contributed SEK 220 million. During the fourth quarter a division of assets was carried out in the joint venture company Fastighets AB Centur, where Peab and the other owner, Fastighets AB Balder, acquired the majority of the property portfolio. The transactions had a positive effect on operating profit of SEK 367 million and were recognized in Property Development as profit from joint venture companies.

Operating profit in Housing Development was negative and the operating margin was -2.7 percent (3.8). The negative operating profit is explained by just a few production starts of our own housing developments during the year and fewer housing projects in ongoing production.

Depreciation and write-​downs for the year were SEK -1,499 million (-1,532).

Elimination and reversal of internal profit in our own development projects affected operating profit for the year by net SEK 46 million (-56), of which SEK 33 million was related to transactions in Fastighets AB Centur.

Net financial items amounted to SEK -338 million (42) of which net interest was SEK -402 million (-420 excl. MoS). The comparative period included a positive effect of SEK 390 million as a result of the arbitration in Mall of Scandinavia.

Pre-​tax profit improved and was SEK 2,425 million (1,895). Tax for the year was SEK -345 million (-481) and corresponds to a tax of 14 percent (25). The low tax rate is primarily due to capital gains that are not taxable and profit from joint venture companies in business area Project Development .

Profit for the year was SEK 2,080 million (1,414).

* 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.