Peab Ab Class B · OMXSTO:PEAB_B
Peab Ab Class B — Investor Day (February 2021)
75 slides from Peab Ab Class B's investor day presentation, Feb 10, 2021
Slide 1: Capital Market Day
Welcome! Capital Market Day February 10, 2021 GÅRDA VESTA Gothenburg 1
Slide 2: Agenda for the Day
Capital Market Day Agenda for the Day February 10, 2021 09:00 – 09:05 Welcome 09:05 – 09:20 Road to today • Our history • Update after 2020 09:20 – 09:30 Peab and external circumstances 09:30 – 09:45 Peab today 09:45 – 10:00 Pause 10:00 – 10:25 Where we’re going • Financial targets • Non-financial t
Slide 3: Road to today: Our history
Road to today Our history 3
Slide 4: More than 60 years of community building
More than 60 years of community building 1959 1960 1970 1980 1990 2000 2010 2020 Strong growth, both organically and through acquisitions Peab starts Peab starts Stock market Peab up in On the road Four up in civil listing, Industri The Peab construction to our vision business areas engineering nati
Slide 5: More than 25 years of profitable growth
More than 25 years of profitable growth SEK billion MSEK 60,000 4,000 3,500 50,000 3,000 40,000 2,500 30,000 2,000 1,500 20,000 1,000 10,000 0,500 0,000 0,000 1996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020 Net sales Operating profit 5
Slide 6: The business for the past ten years
The business for the past ten years 2013 2015 2017 Stabilization of contract construction sections Investments in Industry Investments in Project Development Action New Focus plan Strategic areas targets 6
Slide 7: Distribution of Annehem Fastigheter
2020 Distribution of Annehem Fastigheter 7
Slide 8: Acquisition in paving and mineral aggregates
Acquisition in paving and mineral aggregates 2020 From to 85 20 asphalt plants 363 163 quarries 14,000 16,000 employees 8
Slide 9: Local presence in the Nordic region
Local presence in the Nordic region 2020 9
Slide 10: Road to today: Update after 2020
Road to today Update after 2020 10
Slide 11: Stable market prospects
MARKNAD PROSPECTS Stable market prospects Total building construction and civil engineering investments, new construction and rebuilding 2020 2021 2022 Sweden → → ↗ 2020 2021 2022 Norway ↗ → → 2020 2021 2022 Finland → → ↗ Source: Navet Analytics AB 11
Slide 12: Effect on profit from the distribution
GROUP Effect on profit from the distribution MSEK 2020 2019 Net sales 57,417 55,349 Operating profit 3,541 2,610 Operating margin, % 6.2* 4.7 Segment reporting *The fourth quarter 2020 included the effect of the distribution of Annehem Fastigheter by SEK 952 million. Excluding the effect of the dist
Slide 13: Strong development sums up Peab in 2020
GROUP Strong development sums up Peab in 2020 Stable Strong Two order financial strategic backlog position deals 13
Slide 14: Our financial targets and target achievement until the end of 2020
GROUP Our financial targets and target achievement until the end of 2020 Equity/debt ratio, % Return on equity, % Dividend, % 40 36,2 25 23,1 33,0 21,3 28,2 28,8 30,1 30,4 32,5 19,6 19,6 17,9 200 178 30 25,4 24,9 24,1 20 150 15 12,1 13,1 96 97 20 100 9,2 9,9 66 65 65 61 58 59 67 10 50 10 3,8 5 0 0 0
Slide 15: Local presence in the Nordic region
12% 71% 16% NOR SWE FIN THE NORDIC COMMUNITY BUILDER Local presence in the Nordic region 1% 15 DEN
Slide 16: Driving forces: External circumstances
Driving forces External circumstances 16
Slide 17: External and market developments are going our way
External and market developments are going our way Macro- Demography economics Sustainability Digitalization 17
Slide 18: Population drives continued demand
DEMOGRAPHY Population drives continued demand Population growth 2000-2025 Age distribution, Sweden 125 95+ år 85-94 år 75-84 år 120 65-74 år 55-64 år 115 45-54 år 35-44 år 110 25-34 år 15-24 år 105 5-14 år 0-4 år 100 0 200000 400000 600000 800000 1000000 1200000 1400000 1600000 2019 1999 Sweden Norw
Slide 19: Low interest rates drive investments in community building
MACROECONOMICS Low interest rates drive investments in community building GDP growth Policy rate¹ 6% 1,5% 4% 1,0% 2% 0,5% 0% 0,0% -2% -0,5% -4% -1,0% -6% 2015A 2016A 2017A 2018A 2019A 2020E 2021E 2022E 2015A 2016A 2017A 2018A 2019A 2020E 2021E 2022E Sweden Finland Norway Sweden Finland Norway ¹Avera
Slide 20: Growing (climate) demands steer towards sustainable investments
SUSTAINABILITY Growing (climate) demands steer towards sustainable investments 20
Slide 21: Social transformation and efficiency
DIGITALIZATION Social transformation and efficiency Digitalization Digital tools creates the need streamline operations for changes in society 21
Slide 22: Advantages for Peab
EXTERNAL DRIVING FORCES Advantages for Peab Our community We are well Digitalization Our operations creates building delivers positioned for deliver locally changes in society homes, schools, growing where growth occurs and drives hospitals, roads sustainable etc. investments our efficiency 22
Slide 23: Peab today
Peab today NORRLANDS UNIVERSITETSSJUKHUS Umeå 23
Slide 24: Peab 2021-
Peab 2021- Greater Different mix of More focused New targets and geographic operations business model governance spread 24
Slide 25: The Peab Spirit
Our guiding light Culture & core values The Peab Spirit Down-to-earth Developing Personal Reliable Culture & core values
Slide 26: Code of Conduct & policies
26 Our guiding lights Code of Conduct & policies Adopted by executive management and the Board Code of Conduct & policies Culture & core values 26
Slide 27: Strategic targets
27 Our guiding lights Strategic targets Most satisfied customers Best workplace Strategic targets Most profitable company Leader in social responsibility Code of Conduct & policies Culture & core values Målen avser vår bransch 27
Slide 28: Business concept
28 Our guiding lights Business concept Peab is the Nordic Community Business concept Builder with a local presence. Focusing on our own resources Strategic targets and local partners we develop, do Code of Conduct & policies the groundwork and build everyday life where it’s lived. Culture & core val
Slide 29: Positions
29 Our guiding lights Positions Positions Locally produced community builder Business concept The Nordic Community Builder Strategic targets Code of Conduct & policies Culture & core values 29
Slide 30: We improve everyday life where it's lived
30 Our guiding lights Mission Mission Positions We improve Business concept everyday life Strategic targets where it’s lived Code of Conduct & policies Culture & core values 30
Slide 31: Four collaborating business models
OUR BUSINESS MODEL Four collaborating business models Project Industry Civil Engineering Construction Development 31
Slide 32: Business area Construction
2020 Business Net sales: area SEK 27 billion Construction 14% 72% 14% • New production of homes • Schools, hospitals, assisted living, sports facilities • Public and commercial premises • Renovations • Rebuilding and extensions • Construction maintenance services 32
Slide 33: Business area Civil Engineering
2020 Business area Civil Net sales: Engineering SEK 13 billion 8% 91% 1% • Infrastructure: Roads, railroads, ports, airports, bridges • Local market: Industrial buildings and areas • Operations and maintenance: Streets, parks • Foundation work 33
Slide 34: Business area Industry
2020 Business area Net sales: Industry SEK 19 billion Total supplier of products and services for construction and civil 10% 64% 23% engineering projects: • Mineral aggregates, concrete, paving, prefabricated concrete elements • Rental of cranes, machines, transportation, temporary electricity 3% •
Slide 35: The acquisition increases seasonal variations
BUSINESS AREA INDUSTRY The acquisition increases seasonal variations Greater seasonal variations with a negative impact on the first quarter • Greater portion of operations are less sensitive to the business cycle • BA Industry becomes more important for Peab 0 • Group more widespread geographically
Slide 36: Our main brands in Industry
BUSINESS AREA INDUSTRY Our main brands in Industry 36
Slide 37: Business area Project Development
2020 Business area Net sales: Project Development SEK 8 billion 14% 59% 27% Creates sustainable and vibrant city environments • Housing Development: From acquiring the land to sales • Property Development : Commercial property, from acquiring the land to completed project Net sales portion per land
Slide 38: Tied-up capital from three perspectives
BUSINESS AREA PROJECT DEVELOPMENT Tied-up capital from three perspectives Development Development Joint venture rights portfolio business companies 38
Slide 39: Peab has over 33,000 housing development rights
BUSINESS AREA PROJECT DEVELOPMENT Peab has over 33,000 housing development rights Number of housing development rights Development rights per ownership form, on December 31, 2020 30,000 26,700 25,000 6,500 20,000 9,700 4,000 15,000 18,900 4,400 10,000 16,200 400 5,000 4,500 400 2,800 1,800 Developme
Slide 40: Development of our own developed homes
BUSINESS AREA PROJECT DEVELOPMENT Development of our own developed homes Number of production-started homes 3500 140 3000 Number of 184 718 apartment projects: 2500 2000 1500 3,048 36 7 2,651 during the fourth 2,363 2,213 2,291 1000 2,067 quarter 2020 for SEK 1,599* 500 billion 0 2015 2016 2017 2018
Slide 41: Price development of apartments for rent and tenant-owner homes
BUSINESS AREA PROJECT DEVELOPMENT Example: Price development of apartments for rent Regional and tenant-owner homes city in Sweden KSEK Price development of tenant-owner homes (incl. loan) in Västerås and apartments for rent 60 50 40 30 20 10 0 2015 2016 2017 2018 2019 2020 Tenant-owner home (incl.
Slide 42: Our pipeline in Property Development
BUSINESS AREA PROJECT DEVELOPMENT Our pipeline in Property Development Ädellövskogen (Alingsås) Varvsstaden (Malmö) The Nest (Solna) Acquisition Zoning plan Concept idea Development Sales Balder Arena (Sundsvall) The Corner (Malmö) Ultimes Business Garden (Helsinki) 42
Slide 43: Access to further investment and development property
BUSINESS AREA PROJECT DEVELOPMENT Access to further investment and development property Significant joint venture Advantages of partnership: companies: • Attractive offers • Centur (Balder) • Unique expertise • Tornet (Folksam and • Access to capital Balder) • Local networks • ML4 (Wihlborgs) • Coor
Slide 44: Agenda for the Day
Capital Market Day Agenda for the Day February 10, 2021 09:00 – 09:05 Welcome 09:05 – 09:20 Road to today • Our history • Update after 2020 09:20 – 09:30 Peab and external circumstances 09:30 – 09:45 Peab today 09:45 – 10:00 Pause 10:00 – 10:25 Where we’re going • Financial targets • Non-financial t
Slide 45: Where we're going: Our strategic targets
Where we’re going Our strategic targets ALTA OMSORGSENTER Alta 45
Slide 46: Revised and new strategic targets
FINANCIAL AND NON- FINANCIAL TARGETS Revised and new strategic targets Mission Positions Business concept Strategic targets Code of Conduct & policies Culture & core values 46
Slide 47: Our strategic targets
47 Our strategic targets Most satisfied customers Best workplace Most profitable company Leader in social responsibility 47
Slide 48: Driving forces
Driving forces Most satisfied customers Best workplace • Quality in our delivery • First choice for jobseekers • Engaged employees • Value-creating and developmental work • Zero vision for workplace accidents • Inclusive workplaces Most profitable company Leader in social responsibility • Efficiency
Slide 49: Our external targets
Our external targets eNPS SCI Most satisfied Best workplace customers always over benchmark always over 75 Zero vision Serious accidents Through a continuously contracting trend Most profitable Operating margin Leader in social Carbon dioxid intensity Carbon dioxid intensity >6 % Own production Inpu
Slide 50: Financial targets
Financial targets 50
Slide 51: Revised financial targets
MOST PROFITABLE COMPANY Revised financial targets Outcome Outcome Financial targets Target 2020 2019 Operating margin, % >6 4.5* 4.7 Net debt/equity ratio, times 0.3-0.7 0.3 0.6 Dividend, % >50 671 972 *Excluding the effect of the distribution of Annehem Fastigheter. Including the effect of Annehem
Slide 52: Operative operating margin over six percent
PROFITABILITY TARGET Operative operating margin over six percent . Operating margin, Group 7 6.2 6 4.8 4.9 4.7 Target: 6 % 5 4.4 4.5* 4 3 2.3 2 1 0 2015 2016 2017 2018 2019 2020 *Operating margin exclusive effect of distribution of Annehem Fastigheter. Years 2011-2018 are not translated according t
Slide 53: The capital intensive business areas represent 40 percent of net sales
CONDITIONS The capital intensive business areas represent 40 percent of net sales Net sales 2020 Operating profit 2020* 40% 37% 60% 63% * Exklusive effekt från utdelningen av Annehem Fastigheter Industri + Projektutveckling Bygg + Anläggning 53
Slide 54: Targets for different kinds of business
CONDITIONS Targets for different kinds of business Construction Industry Housing Property and Civil Development Development Engineering 7% Annual 10 % exit profit 3.5 % (varies per company) (taking into consideration tied up capital) 54
Slide 55: Net debt/equity ratio within interval 0.3-0.7
STRATEGIC TARGET Net debt/equity ratio within interval 0.3-0.7 Net debt/equity ratio, Group 1,0 0,8 0,6 Target: 0,4 0.3-0.7 0,2 0,0 2015 2016 2017 2018 2019 2020 Years 2011-2018 are not translated according to the changed accounting principles for our own developed housing projects. 55
Slide 56: Net debt construction
GROUP Net debt construction MSEK Dec 31 2020 Dec 31 2019 Bank loans (incl. financial leasing debts) 2,769 2,443 Market borrowing 2,359 3,607 Project financing, unsold part of ongoing 1,055 3,088 housing projects Net debt 3.9 Interest-bearing receivables -1,342 -1,230 Liquid funds -968 -373 SEK billi
Slide 57: Dividend more than 50 percent of profit for the year
STRATEGIC TARGET Dividend more than 50 percent of profit for the year Dividend, % of profit for the year Dividend, SEK 200 178 180 160 8,00 7.00 140 7,00 120 6,00 96 97 100 5,00 4.50 4.00 4.20 80 3.60 60 66 65 65 61 58 59 67 Target: >50% 4,00 2.60 3,00 40 2,00 20 1,00 0 2011 2012 2013 2014 2015 2016
Slide 58: Non-financial targets
Non-financial targets 58
Slide 59: Focus on quality in our delivery
MOST SATISFIED CUSTOMERS Focus on quality in our delivery Satisfied customer index (SCI) 82 80 80 78 78 76 75 75 Target: >75% 74 73 73 72 70 68 2015 2016 2017 2018 2019 2020 59
Slide 60: First choice for jobseekers
BEST WORKPLACE First choice for jobseekers eNPS, Group 20 18 18 18 16 Target: 14 13 Over 12 benchmark 10 8 6 4 2 0 2015 2016 2017 2018 2019 2020 60
Slide 61: Zero vision for workplace accidents
BEST WORKPLACE Zero vision for workplace accidents Serious accidents, rolling 12 months 45 39 Target: 40 34 37 36 36 37 Continuously 35 31 32 29 31 30 contracting trend 30 27 25 18 18 18 19 18 18 18 19 20 16 16 14 14 19 20 15 18 18 18 18 15 15 16 10 13 14 5 9 0 Jan Feb Mar Apr Maj Jun Jul Aug Sep Ok
Slide 62: Climate targets for our own production
LEADER IN SOCIAL RESPONSIBILITY Climate targets for our own production Carbon dioxide intensity, own production (Scope 1 + 2) 120 100 Current level: 80 -17 % 60 40 Target: -60 % 20 0 62 * Direct and indirect emissions as a result of using fuel and energy in our own production
Slide 63: Climate targets for input goods and purchased services
LEADER IN SOCIAL RESPONSIBILITY Climate targets for input goods and purchased services Carbon dioxide intensity, input goods and purchased services (Scope 3) 120 100 80 60 Target: -50 % 40 20 0 63 * Includes concrete/cement, asphalt/bitumen, transportation/fuel, steel, waste and business trips
Slide 64: Working for an equal opportunity industry
LEADER IN SOCIAL RESPONSIBILITY Working for an equal opportunity industry Target for equal opportunity recruitment: Number of women recruited will always exceed education market Number of Number of women women Number of women who employed Core skills employed have relevant degrees in Peab today < ag
Slide 65: How we get there
How we get there 65
Slide 66: Overarching measures to achieve our targets
66 Overarching measures to achieve our targets 1. Higher processing ratio 2. Operational efficiency 3. Passing on knowledge 4. Innovation and requirements 5. Investments within Project Development 66
Slide 67: The individual business
1. HIGHER PROCESSING RATIO The individual business Project Industry Civil Engineering Construction Development 67
Slide 68: We increase value creation by having the entire business
1. HIGHER PROCESSING RATIO We increase value creation by having the entire business Most satisfied customers Construction Acquire Develop Groundwork Build Maintenence Civil Engineering Best workplace Operative synergies Financial synergies • Local presence and local • Processing ratio production • R
Slide 69: Construction technology solutions and other conceptual initiatives
2. OPERATIONAL EFFICIENCY Construction technology solutions and other conceptual initiatives NärBo Architectual steering Products & technical solutions Processing Meeting targets 69
Slide 70: Our size promotes best practice and scale advantages
3. PASSING ON KNOWLEDGE Our size promotes best practice and scale advantages Local knowledge Nordic perspective Special skills Pool facilitie s Ports Digitalization as enabler 70
Slide 71: Meeting targets through responsibility on more levels
4. INNOVATION AND REQUIREMENTS Meeting targets through responsibility on more levels Innovation/ Our own Kundnöjdhet Products & technical solutions Meeting targets Product development resources 71
Slide 72: Adjusting our business to suit the market
5. INVESTMENTS WITHIN PROJECT DEVELOPMENT Adjusting our business to suit the market Tenant-owner Commercial Community Apartments for rent projects property buildings 72
Slide 73: Peab
Peab 1. 2. 3. Community builder with Four strategic targets Largest Nordic local presence that lead us forward Exposure to the Nordic – close to customers Most satisfied customers construction and civil Highest percentage of own employees engineering markets – skills bank Best workplace Greatest cap
Slide 74: Q&A
Q&A 74
Slide 75: Thank you!
Thank you! =PEAB=