Peab Ab Class B · OMXSTO:PEAB_B
Peab Ab Class B — Investor Day (February 2024)
76 slides from Peab Ab Class B's investor day presentation, Feb 13, 2024
Slide 1: Capital Markets Day
Capital Markets Day Welcome! February 13, 2024 First group in the trainee program The Construction Year Capital Markets Day 2024
Slide 2: Peab’s executive management
Peab’s executive management Jesper Göransson Niclas Winkvist Johan Dagertun Camila Buzaglo President and CEO CFO CSO CCO Roger Linnér Stefan Danielsson Lotta Brändström Göran Linder COO and in charge Business Area Manager Business Area Manager Business Area Manager of part of BA Construction Civil E
Slide 3: Agenda
Agenda 13:00 – 13:05 Welcome 13:05 – 13:45 Current situation and strategic focus 13:45 – 14:10 BA Industry: Foundation of the value chain and sustainability work 14:10 – 14:25 Construction contract operations: Flexible organization and early customer dialogues 14:25 – 14:45 Pause 14:45 – 14:55 Susta
Slide 4: Current situation and strategic focus
Current situation and strategic focus Jesper Göransson, President and CEO Niclas Winkvist, CFO Capital Markets Day 2024
Slide 5: External circumstance and market
External circumstance and market Macro- Demography Geopolitics economy Climate Market Digitalization Sustainability change Capital Markets Day 2024
Slide 6: Population growth drives continued demand
DEMOGRAPHY Population growth drives continued demand Population growth 2000 - 2050 Age structure, Sweden 14 000 000 95 yrs - 12 000 000 85-94 yrs 10 000 000 75-84 yrs 65-74 yrs 8 000 000 55-64 yrs 6 000 000 45-54 yrs 4 000 000 35-44 yrs 25-34 yrs 2 000 000 15-24 yrs 0 5-14 yrs 2000 2003 2006 2009 20
Slide 7: Geopolitics set the tone for our market
GEOPOLITICS Geopolitics set the tone for our market Capital Markets Day 2024
Slide 8: Growth up in 2024, inflation and interest rates down
MACROECONOMY Growth up in 2024, inflationen and interest rates down % 2023 2024 2025 GNP -0.7 +0.6 +2,5 CPI, annual average +8.7 +3.4 +1,6 Policy rate in December 3.8 3.4 2,6 GNP +1.4 +1.1 +1,8 CPI, annual average +5.8 +3.3 +3,0 Policy rate in December 4.3 3.8 3,3 GNP -0.2 +0.5 +1,7 CPI, annual aver
Slide 9: Peab’s housing project start-ups from top year 2021
MARKET Peab’s housing project start-ups from top year 2021 Building type 2021 2022 2023 Tenant-owner (advance sales) 3,020 1,810 121* % 100% -40% -96% Rental apartments (own balance 676 526 606 sheet) % 100% -22% -10% Housing, external 3,519 2,387 1,524 % 100% -32% -57% Total 7,215 4,723 2,251 % 100
Slide 10: Lower investment level on the Nordic market
MARKET Lower investment level on the Nordic market Total building construction and civil engineering investments, new construction and renovations 2023 2024 2025 Sweden ↓ 2023 2024 2025 Norway → → → 2023 2024 2025 Finland Source: Navet Analytics Capital Markets Day 2024
Slide 11: Societal transition with opportunities and risks
DIGITALIZATION Societal transition with opportunities and risks Capital Markets Day 2024
Slide 12: Extensive sustainability demands generate potential business
SUSTAINABILITY Extensive sustainability demands generate potential business Capital Markets Day 2024
Slide 13: Climate challenges are providing us with projects
CLIMATE CHANGE Climate challenges are providing us with projects Capital Markets Day 2024
Slide 14: Peab’s strategic strengths
Peab’s strategic strengths 1 Four competitive 2 Business areas in 3 Strategic assets 4 Sustainable offers business areas collaboration and local presence • Acquire • Develop • Groundwork • Build • Divest • Maintain 5 Good customer mix 6 14,000 highly skilled 7 Unique company culture 8 Long-term owne
Slide 15: 1) Four competitive business areas
1) Four competitive business areas Project Development Industry Civil Engineering Construction Capital Markets Day 2024
Slide 16: 2) We increase value creation through collaboration
2) We increase value creation through collaboration Most satisfied customers Construction Acquire Develop Groundwork Build Maintain Civil Engineering Best workplace Project Development Most profitable company Synergies Industry Leader in social responsibility Own input goods, skills, products and se
Slide 17: 3) Strategic assets and local presence
3) Strategic assets and local presence • In the Nordic region • 150+ permanent workplaces • 53 concrete factories • 78 asphalt plants • 279 active quarries • 4 prefab factories • 44 rental depos • 34,000 housing development rights Capital Markets Day 2024
Slide 18: 4) Sustainable offers
4) Sustainable offers Capital Markets Day 2024
Slide 19: 5) Good customer mix
5) Good customer mix 52% 48% Private sector customers Public customers Capital Markets Day 2024
Slide 20: 6) 14,000 highly skilled employees
6) 14,000 highly skilled employees Nordic perspective Local knowledge Special expertise, for example… NärBo Swimm ing pools Ports Security Capital Markets Day 2024
Slide 21: 7) Unique culture 8) Long-term owner
7) Unique culture 8) Long-term owner Peab’s core values make us Long-term and stable major owner special gives us room to achieve our targets Capital Markets Day 2024
Slide 22: Positive results over time
Positive results over time MSEK MSEK 70 000 4 000 60 000 3 500 3 000 50 000 2 500 40 000 2 000 30 000 1 500 20 000 1 000 10 000 500 0 0 Turnover Operating profit Capital Markets Day 2024
Slide 23: Our focus in the current market
Our focus in the current market Take advantage of our Take advantage of our Strengthen our unique market position sustainable offer operational efficiency Capital Markets Day 2024
Slide 24: Our targets remain the same
Our targets remain the same SCI eNPS Most satisfied Best workplace customers always always over over benchmark 75 Zero vision Serious accidents Through a constantly contracting trend Operating Carbon dioxide intensityCarbon dioxide intensity Most profitable margin Leader in social Own production Inp
Slide 25: Financial targets
Financial targets Capital Markets Day 2024
Slide 26: Segment reporting
GROUP Segment reporting MSEK 2023 2022 Net sales 58,821 63,135 Operating profit 1,853 2,741 Operating margin, % 3.2 4.3 Net debt 8,676 6,899 Net debt/equity ratio 0.6 0.5 Capital Markets Day 2024
Slide 27: The capital intensive business areas represent just under 40 percent of net sales
PREREQUISITES The capital intensive business areas represent just under 40 percent of net sales Net sales 2023 Operating profit 2023 37% 30% 63% 70% Construction + Civil Engineering Industry + Project Development Capital Markets Day 2024
Slide 28: Operating margin over 6 percent
MOST PROFITABLE COMPANY Operating margin over 6 percent Operating margin, Group 7 6,2 Target: 6% 6 5,2 4,8 4,9 4,7 5 4,4 4,3 4 3,2 3 2 1 0 2016 2017 2018 2019 2020 2021 2022 2023 Refers to segment reporting. Years 2016-2018 not translated according to changes in accounting principles for our own hou
Slide 29: Benchmarks for different types of business
PREREQUISITES Benchmarks for different types of business Construction & Industry Housing Property 7% Civil Engineering Development Development 3.5% 10% Annual (varies per exit profit company) (accounting for tied up capital) Capital Markets Day 2024
Slide 30: Prerequisites for achieving the operating margin target
Prerequisites for achieving the operating margin target Favorable Capital intensive market for the Achieve operations at least entire benchmarks 40% business of net sales Capital Markets Day 2024
Slide 31: Net debt/equity ratio within the interval 0.3–0.7
MOST PROFITABLE COMPANY Net debt/equity ratio within the interval 0.3–0.7 Net debt/equity ratio, Group 1,0 0,8 0.6 0,6 0.6 0.5 Target: 0.3-0.7 0,4 0.3 0.3 0,2 0,2 0.2 0.1 0,0 2016 2017 2018 2019 2020 2021 2022 2023 Years 2016-2018 not translated according to changes in accounting principles for our
Slide 32: Net debt structure
GROUP Net debt structure Dec 31, Dec 31, MSEK 2023 2022 Bank loans (incl. financial leasing debt) 6,217 4,837 Net debt 8.7 Market loans 3,655 2,976 Project financing, unsold part of ongoing housing projects 2,685 2,209 BSEK (6.9) Interest-bearing receivables -2,638 -1,617 Cash -1,243 -1,506 Net debt
Slide 33: Dividend more than 50 percent of profit for the year
MOST PROFITABLE COMPANY Dividend more than 50 percent of profit for the year Dividend, % of profit for the year Dividend, SEK 120 97 8,00 100 7,00 7,00 80 6,00 61 67 Target: 5,00 58 59 59 58 5,00 4,50 60 >50% 4,00 3,60 4,00 4,20 4,00 40 30 3,00 2,00 1,50 20 1,00 0 0,00 2016 2017 2018 2019* 2020 2021
Slide 34: Non-financial targets
Non-financial targets Capital Markets Day 2024
Slide 35: Focus on quality in our delivery
MOST SATISFIED CUSTOMERS Focus on quality in our delivery Customer Satisfaction Index (CSI) 82 81 80 80 80 80 78 78 76 75 75 Target: >75 74 73 73 72 70 68 2015 2016 2017 2018 2019 2020 2021 2022 2023 Capital Markets Day 2024
Slide 36: Attractive employer
BEST WORKPLACE Attractive employer eNPS, recommend Peab Target: Over industry 35 benchmark 29 30 28 27 26 24 25 22 21 20 19 19 19 20 18 18 15 eNPS 15 13 Benchmark 10 10 10 8 8 8 5 0 2018 2019 2019 2020 2021 2021 2022 2022 2023 2023 Q4 Q2 Q4 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Capital Markets Day 2024
Slide 37: Zero vision workplace accidents
BEST WORKPLACE Zero vision workplace accidents Target: Serious accidents - rolling 12 months, category 4 Contracting trend 60 54 48 48 49 48 50 43 39 40 40 36 34 32 32 33 30 30 30 30 30 30 28 27 27 25 26 20 19 18 20 20 18 16 18 18 16 23 21 21 18 19 19 18 10 16 10 14 14 14 14 14 14 11 0 JanMar Jun Se
Slide 38: Climate targets for own production
LEADER IN SOCIAL RESPONSIBILITY Climate targets for own production Carbon dioxide intensity, own production* (Scope 1 + 2) 120 100 80 60 Target 2030: -60% 40 Outcome 2023: -49% 20 0 * Direct and indirect emissions as a result of fuel and energy consumption in our own production Capital Markets Day 2
Slide 39: 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 Outcome 2023: -9 % 100 80 60 Target 2030: -50% 40 20 0 * Includes concrete/cement, asphalt/bitumen, transportation and work machine servi
Slide 40: Equal recruitment: Share of women always greater than education market
LEADER IN SOCIAL RESPONSIBILITY Equal recruitment: Share of women always greater than education market Production management and support* (WCW), % 50% 45,0% 45,3% 40% 34,9% 30% Target 2023: >30% 20% 18,8% Target 2024: >30% 10% 0% 2020 2021 2022 2023 *27 years old or younger Production and processing
Slide 41: BA Industry: Foundation of value chain and sustainability
BA Industry: Foundation of value chain and sustainability Marknadsläget work och prognoser Jesper Göransson Lotta Brändström, BA Manager Civil Engineering, Head of Peab Asfalt and Swerock Roger Linnér, COO, Head of prefab and rental operations Capital Markets Day 2024
Slide 42: Industry
BUSINESS AREA Industry 2023 Net sales: BSEK 20 Operating profit: MSEK 962 Operating margin: 4.8 % Order backlog: MSEK 3,954 8% 61% 25% 6% Capital Markets Day 2024
Slide 43: Business area important for the other business areas’ capacity
Business area important for the other business areas’ capacity 1/5 4/5 To internal customers To external customers Refers to the business area’s net sales 2023 Capital Markets Day 2024
Slide 44: BA Industry ensures input goods critical to the Group – with lower climate footprint
BA Industry ensures input goods critical to the Group – with lower climate footprint Up to 50% lower Total emission Up to 50% lower • Made of recycled raw 65% lower materials emissions reduction for all emissions emissions • Replaces or • Replaces at least 30% included • Alternative binders • Renewa
Slide 45: BA Industry: Swerock and Peab Asfalt
BA Industry: Swerock and Peab Asfalt Beläggning Concrete, mineral aggregates and Paving transportation 2023 2023 Net sales BSEK 10.3 Net sales BSEK 6.6 Employees 2,000 Employees 1,100 Capital Markets Day 2024
Slide 46: Market position in concrete, mineral aggregates and asphalt
Market position in concrete, mineral aggregates and asphalt Sweden Finland Norway Denmark 72 Market position asphalt plants #1 Top 3 - - concrete Market position #1 Top 3 Top 3 - Mineral aggregates Market position 279 asphalt Top 3 #1 Top 3 Top 3 active quarries 1.1 24.8 5.5 56 million m3 concrete 2
Slide 47: Good progress in paving and mineral aggregates operations
Good progress in paving and mineral aggregates operations Investments Synergies Best (purchasing) practice Capital Markets Day 2024
Slide 48: BA Industry: Services and rentals
BA Industry: Services and rentals Services and rentals 2023 Market position: - Nr. 1 in Nordic region: Tower cranes - Sweden’s broadast product offer Net sales: BSEK 2.1 Employees: 750 Capital Markets Day 2024
Slide 49: BA Industry: Prefab operations
BA Industry: Prefab operations Concrete elements, frame contracts and construction systems 2023 Market position: - Top 3 in Sweden - Best climate offer in the Nordic region Net sales: BSEK 1.4 Employees: 380 Capital Markets Day 2024
Slide 50: Advantages of the investment
Advantages of the investment Automation + Lowest climate impact + Broad offer = Net sales and market shares Capital Markets Day 2024
Slide 51: Flexible organization and early customer dialogues in construction contract operations
Flexible organization and early customer dialogues in construction contract operations Stefan Danielsson, BA Manager Construction Capital Markets Day 2024
Slide 52: Construction
BUSINESS AREA Construction 2023 Net sales: BSEK 27.8 Operating profit*: MSEK 41 Operating margin*: 0.1 % Order backlog: MSEK 24,469 15% 73% 12% *excl. effect of Mall of Scandinavia Capital Markets Day 2024
Slide 53: Civil Engineering
BUSINESS AREA Civil Engineering 2023 Net sales: BSEK 15.2 Operating profit: MSEK 501 Operating margin*: 3.3 % Order backlog: MSEK 13,905 10% 90% Capital Markets Day 2024
Slide 54: Flexible construction operations
Flexible construction operations Orders received • Other building construction % Housing Total construction • Public sector customers 100 -26% • Skills exchange 80 • In early on 60 -78% • Production expertise and experience 40 • Peab stable partner 20 0 2021 2023 2021 2023 Capital Markets Day 2024
Slide 55: Adapting construction portfolio to market circumstances
Adapting construction portfolio to market circumstances Order backlog December 31, 2021 Order backlog December 31, 2023 Housing 5% Housing 10% 6% Construction maintenance Construction maintenance Sports facilities 9% Sports facilities 15% 34% Industrial Industrial Offices Offices 51% 12% 2% Logistic
Slide 56: How we ensure successful construction contract projects
How we ensure successful construction contract projects Right Right Right project skills material & resourses Right risk Right Early (contract) customer customer mix dialogue Capital Markets Day 2024
Slide 57: Early customer dialogue: Skelleftehamn
Early customer dialogue: Skelleftehamn “After extensive preparatory work we’re looking forward to starting construction of the project. Together with Peab we’ll work actively to reduce climate impact in production and prepare the dock for fossil free operations” Thérese Bäckström Zidoli, Function He
Slide 58: Advantages of early customer dialogue
Advantages of early customer dialogue • Best solution for customers • Time and cost efficient • Sustainable work methods and products • Climate steering • Peab’s entire offer • Risk elimination • Profitability Capital Markets Day 2024
Slide 59: Example of larger ongoing phase 1 contracts
Example of larger ongoing phase 1 contracts Business area Civil Engineering: Business area Construction: Kiruna moving houses Boden roads and railroad New train station Gothenburg Campus ACE Skellefteå Trollhättan Water Treatment Plant New Bodø Airport Västervång School Burlöv Women’s Clinic Lund Ko
Slide 60: Potential future orders in construction contract operations
Potential future orders in construction contract operations Around BSEK 19 in potential orders from ongoing phase 1 contracts over the next two years Capital Markets Day 2024
Slide 61: Pause
Pause Capital Markets Day 2024
Slide 62: Sustainability as a competitive edge
Sustainability as a competitive edge Johan Dagertun, CSO Capital Markets Day 2024
Slide 63: 1.1 million tons carbon dioxide will be 0 in 2045
1.1 million tons carbon dioxide will be 0 in 2045 Capital Markets Day 2024
Slide 64: How we drive our own and customers’ emission reductions
How we drive our own and customers’ emission reductions Proactive work on climate reducing measures in our production: Innovation/ Own resourses Products & tech solutions and/or demands on Implementation Product development suppliers • Electrified vehicles and machines • Peab Construction Maintenanc
Slide 65: Concrete climate measures with Wihlborgs
Concrete climate measures with Wihlborgs Office Building Kvartetten: Beläggning • Zero CO2 • Miljöbyggnad Gold • WELL Logistics building Tomaten: • ECO-Betong (ECO-Concrete) • First building in the world built with • Reused timber fossil free steel (HYBRIT) • Solar panels on the roof Capital Markets
Slide 66: Project Development builds for the future
Project Development builds for the future Göran Linder, Head of BA Project Development Capital Markets Day 2024
Slide 67: Project Development
BUSINESS AREA Project Development 2023 Capital employed, Net sales: BSEK 5.7 (8.7) MSEK Operating profit: MSEK 304 (1,127) Operating margin: 5.3 % (13.0) 5,034 13,059 6% 76% 18% Housing development Property development Capital Markets Day 2024
Slide 68: The need for new housing is great in the Nordics
The need for new housing is great in the Nordics Sweden Norway Finland 67,300 28,000 35,000 Homes per year Homes per year Homes per year up to 2030 up to 2033 up to 2040 Source: Boverket Source : SSB Source : VTT Capital Markets Day 2024
Slide 69: Started-up housing in Sweden 1990–2030
Started-up housing in Sweden 1990–2030 80000 70000 60000 50000 40000 Single homes Apartment buildings Need for new housing 30000 20000 10000 0 2023p 2024p 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 70: Tied-up capital from three perspectives
Tied-up capital from three perspectives Development rights Ongoing and completed Engagement in portfolio projects joint ventures BSEK 8.9 BSEK 5.7 BSEK 4.3 Capital Markets Day 2024
Slide 71: Peab possesses around 34,000 development rights
Peab possesses around 34,000 development rights Number of development rights Development rights per ownership form, 30,000 27,900 per December 31, 2023 25,000 20,000 7,400 15,000 10,000 4,700 22,000 5,000 4,300 1,900 0,000 Sverige Finland Norge Development rights via options etc. Development rights
Slide 72: Adapting our business to the market situation
Adapting our business to the market situation Tenant-owner Rentals Commercial Community projects • Start certain Property buildings • Start certain projects • Use DR portfolio for • Focus on leasing projects the public sector, • Diversify portfolio, e.g. • Prepare for future like nursing homes logis
Slide 73: Tied-up capital from three perspectives
Tied-up capital from three perspectives Development rights Ongoing and completed Engagement in portfolio projects joint ventures BSEK 8.9 BSEK 5.7 BSEK 4.3 Capital Markets Day 2024
Slide 74: Q&A
Q&A Capital Markets Day 2024
Slide 75: Conclusion
Marknadsläget och prognoser Conclusion Jesper Göransson Capital Markets Day 2024
Slide 76: Conclusion
Conclusion Driving forces over time Peab’s values Demography Strategic assets in Industry Geopolitics Development rights portfolio in Project Development Macro/Market Locally rooted construction contract work Sustainability/Climate change Know-how for major projects Digitalization Integrated operati