Peab (PEAB) Q2 2024 earnings summary

Executive summary

• Order intake and backlog reached record highs, surpassing SEK 50 billion for the first time, driven by strong civil engineering and industry segments.

• Net sales and operating profit declined due to weak housing demand, but diversified business model and local presence supported resilience.

• Civil Engineering and Industry segments showed strong growth, offsetting declines in Construction and Project Development.

• SEK 1,500 million in green bonds issued to finance sustainable investments.

• Financial and non-financial targets maintained, emphasizing stability and sustainability.

Financial highlights

• Q2 net sales: SEK 15,232 million (down from SEK 15,756 million in Q2 2023); H1 net sales: SEK 26,373 million (down 7%).

• Q2 operating profit: SEK 619 million (Q2 2023: SEK 1,090 million, including SEK 400 million arbitration gain); H1 operating profit: SEK 513 million (H1 2023: SEK 934 million).

• Operating margin for Q2: 4.1% (6.9% in Q2 2023; 4.4% excluding one-time gain); H1 margin: 1.9% (3.3%).

• Net debt reduced to SEK 9.6 billion, net debt/equity ratio improved to 0.6.

• Cash flow before financing improved to SEK 1,462 million in Q2; H1 cash flow before financing: SEK -313 million (H1 2023: SEK -3,229 million).

Outlook and guidance

• Civil engineering, paving, and non-residential construction markets show good demand, while residential investments remain weak across the Nordics.

• Peab is preparing projects for future recovery, leveraging a strong development rights portfolio.

• Diversified operations and business model expected to provide continued stability.

• Total construction and civil engineering investments expected to remain stable in the Nordic region.