Annual report 2012 - Peab

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BOARD OF DIRECTORS’ REPORT BOARD OF DIRECTORS’ REPORT million (-682) is also included in the cash flow from current operations. Cash flow from investment activities was SEK 471 million compared to SEK -1,131 million the previous year. The year has been affected positively by divestitures of property and settling interest-bearing receivables in partly owned projects as well as the disposal of the holdings in Brinova and Catena. During the year investments in housing and property development projects and in machines have continued. The redemption of futures for shares in Lemminkäinen Oyj has affected cash flow by the cash paid for shares. The previous year was characterized by broad expansion with investments in all our operations. Cash flow before financing amounted to SEK 974 million compared to SEK -1,071 million last year. ORDERS RECEIVED AND ORDER BACKLOG CONSTRUCTION AND CIVIL ENGINEERING Orders received in 2012 amounted to SEK 38,743 million compared to SEK 37,986 million in 2011. Included in orders received for Construction is Peab’s single largest project ever, the Mall of Scandinavia in Solna, as well as housing connected to Arenastaden and other housing projects located primarily in major Nordic cities. Business area Construction has received new orders for a number of shopping centers, new construction or renovation of hotels in Sweden and several other large projects such as a new stage of MAX IV laboratory in Lund. Some of the orders received in the Orders received and order backlog Orders received Order backlog 2012 2011 31 Dec 31 Dec MSEK 2012 2011 Construction 27,185 27,841 20,132 20,578 Civil Engineering 12,729 11,350 8,610 8,526 Eliminations –1,171 –1,205 –686 –726 Group 38,743 37,986 28,056 28,378 Return on equity 1) % 35 30 25 20 15 10 5 0 2008 2009 2010 2011 1) According to legal accounting 14 PEAB ANNUAL REPORT 2012 Goal >20% 2012 Environmentally classified senior and sheltered housing The demand for secure and comfortable housing is growing as the average age of populations rises. Peab is building senior and sheltered housing in several places in Sweden. One example is Sala where the fourfloor, 80 room building has been environmentally classified as a Miljöbyggnad (Environmental Building) Gold. The concept Miljöbyggnad documents important qualities in a building regarding energy, indoor environment and material. A building can be given one of three rankings and Gold is the highest. Net investments incl. project and development property MSEK 8,000 6,000 4,000 2,000 0 2008* 2009 2010 2011 2012 * Including the effect of the acquisition of Peab Industri business area Civil Engineering were for local industries, new maintenance contracts for roads and extensions of Nordic roads. We also received an order from SSAB for an extension of the deep harbor in Oxelösund and a number of orders from the mining industry. Order backlog yet to be produced at the end of the year amounted to SEK 28,056 million (28,378). Although the number of orders received increased in 2012 compared with 2011, the high rate of production during the year meant that the order backlog was slightly lower at the end of 2012 than at the end of 2011. Of the total order backlog, 30 percent (24) is expected to be produced after 2013. Swedish operations accounted for 87 percent (86) of the order backlog. No orders received or order backlog is given for the business areas property Development and Industry. COMMENTS ON THE BUSINESS AREAS As of 1 January 2012 the Peab Group is presented in four different business areas: Construction, Civil Engineering, Industry and Property Development. The business areas are also operating segments. Comparable figures for the year 2011 have been translated into the new business areas. Construction of our own development projects is presented in segment reporting according to the percentage of Orders received and order backlog Construction and Civil Engineering MSEK MSEK 40,000 30,000 20,000 10,000 Cash flow before financing Mkr 0 1,200 900 600 300 0 -300 -600 -900 -1,200 -1,500 2008 2008* 2009 2009 2010 2010 2011 2011 2012 * Including the effect of the acquisition of Peab Industri 2012 40,000 30,000 20,000 10,000 Order backlog per 31 Dec Order intake 0
completion method. Unrealized internal profits and net sales are eliminated within the Group. When our own housing development projects are divested these effects are returned to the Group and the capital gains from the sales are reported in business area Property Development. Read more about our business areas on pages 16-27. In addition to the business areas, central companies, certain subsidiaries and other holdings are presented. The central companies primarily consist of the parent company Peab AB and Peab Finans AB. Peab AB’s operations consist of executive management and shared Group functions. The internal bank Peab Finans AB handles the Group’s liquidity and debt management as well as financial risk exposure. The company is also a service function for the subsidiaries and works out solutions for loans and investments, project-related financing and currency risk hedging. Operating profit for the year for Group functions was SEK -232 million (-210). Net sales and operating profit per business area Net sales Operating profit Operating margin MSEK 2012 2011 2012 2011 2012 2011 Construction 27,992 27,822 –13 600 0.0% 2.2% Civil Engineering 12,643 11,554 440 390 3.5% 3.4% Industry 10,723 10,404 788 693 7.3% 6.7% Property Development 345 189 51 31 14.8% 16.4% Group functions 109 132 –232 –210 Eliminations –5,815 –6,086 –32 –21 Operative 1) 45,997 44,015 1,002 1,483 2.2% 3.4% Adjustment in housing reporting 2) 843 –476 53 22 Legal 46,840 43,539 1,055 1,505 2.3% 3.5% 1) According to percentage of completion method (IAS 11). 2) Adjustment of the accounting principle for own homes in Sweden and housing in Finland and Norway to the completion method (IAS 18). Industry, 21% (21%) Civil Engineering, 24% (23%) Share of Group operative net sales, 2012 Property Development, 1% (0%) Construction, 54% (56%) STOCKHOLM WATERFRONT Stockholm Share of Group operative operating profit, 2012 Property Development, 4% (2%) Industry, 62% (40%) Construction, –1% (35%) Civil Engineering, 35% (23%) BOARD OF DIRECTORS’ REPORT Property Development, 1% (0%) Industry, 21% (20%) Civil Engineering, 25% (25%) Share of Group employees, 2012 Construction, 53% (55%) PEAB ANNUAL REPORT 2012 15 BOARD OF DIRECTORS’ REPORT
Page 1 and 2: Annual report 2012
Page 3 and 4: A Nordic Community Builder Peab is
Page 5 and 6: Stable volumes but lower profits Or
Page 7 and 8: LASTING While we have to be sensiti
Page 9 and 10: Nordic construction and civil engin
Page 11 and 12: ise again in 2013. Even the policy
Page 13 and 14: A business concept that builds on l
Page 15 and 16: Financial and operative goals The s
Page 17: Board of Directors’ Report NET SA
Page 21 and 22: A year of challenges NET SALES AND
Page 23 and 24: ate jobs there. Two examples of pro
Page 25 and 26: MARKET SEGMENTS Local market: Does
Page 27 and 28: BUSINESS AREA INDUSTRY Business are
Page 29 and 30: The past few years’ strong housin
Page 31 and 32: An active first year NET SALES AND
Page 33 and 34: Sustainability Peab’s vision of b
Page 35 and 36: Profit-sharing Peab has always ende
Page 37 and 38: Participation, security and confide
Page 39 and 40: The AGM 2007 resolved to issue and
Page 41 and 42: Income statement for the Group INCO
Page 43 and 44: MSEK Share capital REPORT ON CHANGE
Page 45 and 46: INCOME STATEMENT AND REPORT ON COMP
Page 47 and 48: MSEK REPORT ON CHANGES IN THE PAREN
Page 49 and 50: CONTENTS NOTES Note 1 Accounting pr
Page 51 and 52: trolling interest is involved, pote
Page 53 and 54: Financial instruments On the assets
Page 55 and 56: where the results of research or ot
Page 57 and 58: Taxes Untaxed reserves including de
Page 59 and 60: Group 2011 MSEK Construction Civil
Page 61 and 62: Salaries and other payments divided
Page 63 and 64: Note 12 Net financial income/expens
Page 65 and 66: Deferred Deferred Changes recognize
Page 67 and 68: Goodwill impairment testing in cash
Page 69 and 70:
Note 19 Participation in joint vent
Page 71 and 72:
Note 28 Construction contracts Reco
Page 73 and 74:
Note 32 Pensions Defined benefit pe
Page 75 and 76:
Note 36 Valuation of financial asse
Page 77 and 78:
Note 37 Financial risks and financi
Page 79 and 80:
Exposure of net assets in foreign c
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Note 41 Related parties Related par
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Company Corp.ID.nr Registered offic
Page 85 and 86:
Note 43 Untaxed reserves Parent com
Page 87 and 88:
The Annual Report has been prepared
Page 89 and 90:
A Nordic Community Builder: Sweden
Page 91 and 92:
Auditors Information Election Share
Page 93 and 94:
Control Policy. This policy establi
Page 95 and 96:
Executive management Jesper Görans
Page 97 and 98:
List of shareholders on 28 February
Page 99 and 100:
Financial definitions Capital emplo
Page 101 and 102:
Financial information Follow Peab q
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Annual report 2012 - Peab

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