Peab (PEAB) Q2 2024 earnings summary

Executive summary

• Orders received and order backlog reached record highs above BSEK 50 in Q2 2024, driven by strong civil engineering and paving demand, while the housing market remains weak.

• Net sales for H1 2024 decreased by 7% to SEK 26,373 million due to weak housing demand; operating profit fell to SEK 513 million from SEK 934 million year-over-year.

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

• Improved cash flow and stable performance across most business areas, with profitability growth in civil engineering and paving.

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

Financial highlights

• Group net sales for Q2 2024 were SEK 15,232 million, down from SEK 15,756 million in Q2 2023; H1 net sales were SEK 26,373 million, down 7%.

• Operating profit for Q2 was SEK 619 million (Q2 2023: SEK 1,090 million, including a one-time arbitration gain); H1 operating profit was SEK 513 million (H1 2023: SEK 934 million).

• Operating margin for Q2 2024 was 4.1% (Q2 2023: 6.9%); H1 margin was 1.9% (3.3%).

• Cash flow before financing improved to SEK 1,462 million in Q2 2024; H1 cash flow before financing was SEK -313 million (H1 2023: SEK -3,229 million).

• Net debt reduced to SEK 9,585 million (11,717); net debt/equity ratio improved to 0.6 (0.8).

Outlook and guidance

• Civil engineering, paving, and other building construction markets show good demand; housing investments remain at low levels across the Nordics.

• Stable or increasing investment levels expected in civil engineering and other building construction through 2026, while housing recovery is projected to begin in 2025-2026.

• The business model and diversified operations are expected to provide continued stability.