PEAB ANNUAL REPORT 1999 C O N T E N T S

PEAB ANNUAL REPORT 1999 c o n t e n t s

Managing Director’s comments 4

Business concept, factors for success, objectives and strategy 8

Group overview/ 10 Business sectors

Construction and Civil Engineering 12

Industry 22

Trust/Management 26

Operations under Termination 27

Personnel 32

The environment 33

Peab’s everyday work 34

Share information 46

Financial overview 49

Five-year review 51

Directors’ report 52

Income statements and balance sheets 55

Notes 60

Definitions 73

Board of Directors 74

Executive Management 75

2 The year in brief

In order to more clearly describe operations and profit, the Group’s reporting has been divided into four business sectors: Construction and Civil Engineering, Peab’s market encompasses Industry, Trust/Management and Operations under Termination. Sweden, Norway and Swedish construction and civil engineering operations have been co-ordinated in one company, Peab the Baltic region. The company is Sverige AB. The Group’s profit after financial items for 1999 was listed on the OM Stockholm SEK 162 million. The outcome of disputes and losses in the Exchange’s OTC list, and its Norwegian underground operation adversely affected head office is in Förslöv profit by SEK -358 million. Peab’s Board of Directors proposes a dividend of in north-west Skåne. SEK 0.80 (0.60) per share. The profit forecast for 2000 is approximately SEK Sales amount to SEK 14 billion 400 million after financial items. and the number of Key ratios 1999 1998 1997 employees is 9,000. Net sales, MSEK 13,841 12,616 10,679 Profit after financial items, MSEK 162 211 105 Earnings per share, SEK 3.40 2.10 1.50 Adjusted equity/share, SEK 22.00 19.50 17.70 Equity/assets ratio, percent 23.1 20.4 22.1

NOTICE OF ANNUAL GENERAL MEETING

Annual General Meeting later than Friday, April 28, 2000. Annual General Meeting grants The Annual General Meeting of Shareholders whose shares have the Board authorisation to decide the shareholders in Peab AB been registered with a trustee, on a buy-back of all outstanding (publ) will be held on must therefore arrange to have warrants, equivalent to Wednesday, May 10, 2000, at 3 them temporarily re-registered in subscription rights of 9,060,000 p.m. in Grevieparken, Grevie. their own names by this date. Re- new class B-shares. registration should be requested a Notification couple of days in advance from Opportunity to buy-back company Shareholders wishing to those who manage the shares. shares participate in the Meeting must Peab’s Board has also resolved notify the company by 2 p.m. on Dividend that the Annual General Meeting Thursday, May 4, 2000. They may The Board of Directors proposes puts forward a proposal to give do so by telephone: +46 (0)431 to the Annual General Meeting a the Board a mandate to decide on 890 00; by mail to Peab AB, dividend for 1999 of SEK 0.80 per a buy-back of a maximum of Information, S-260 92 Förslöv, share. The proposed record date 6,900,000 company shares. Such a Sweden, or via Internet at the is Monday, May 15, 2000. If the mandate would mean that until address: http://peab.se/stamma AGM approves the proposal, the the next Annual General Meeting, dividend payments are expected the Board would be given the To be entitled to participate, to be sent out from VPC on option – if it is found appropriate shareholders must be recorded in Thursday, May 18, 2000. – to decide on a buy-back of the the register of shareholders company’s shares. maintained by Värdepappers- Opportunity to buy-back centralen, VPC AB (the Swedish outstanding warrants Securities Register Centre) no Peab’s Board proposes that the

3 MATS PAULSSON, MD: Peab has laid the foundation for improved profitability

Looking back on the past year, it competitive market, and it is with can be seen that there have been great pleasure that I can point to many highly satisfactory aspects increased market shares and for Peab, and a few disappoint- improved profitability. ments. Fortunately, the gratifying We shall also work on building aspects predominate. I am both the Group’s brands and have optimistic and full of expectations clear commitments to clients for the coming year. regarding prices, guarantees, etc. By always listening to our JUSTIFIED OPTIMISM clients, we pick up important Among the most positive events information. Last winter we was the reorganisation of our carried out market research that Swedish construction and civil probed the views of both our engineering operations into the clients and our staff, with the aim newly-formed Peab Sverige. The of further strengthening and company comprises of the five clarifying the Peab brand. previous contracting companies, Opinion about Peab is which have now been brought unanimous and expressed in together in one unit. This will terms such as “personal” and allow an increased focus on “down-to-earth”, and that we production and enable improved “adapt resources according to and simplified administration. requirements.” We will safeguard Accumulating resources and and develop these aspects. competence in one joint company A sure sign that we are on the increases efficiency, flexibility and right track is that Peab was award- cost-consciousness. ed two of the four first-prizes in Utilisation of capacity is raised the Construction Awards of the considerably, and we can therefore Year for 1999 arranged by increase our competitiveness, Sweden’s Construction Industry which benefits both Peab and its Association. clients. Sunderby Hospital won the Quite simply, it brings us “Building of the Year” category closer to our objective: lower final and Kvarteret Spiiken in Sundby- costs with maintained quality for berg was named “Housing of the the client and improved profit- Year”. Both projects were ability for Peab. We have already complete contracts in which seen a definite indication of what Peab, in collaboration with the this means in practice, as the client, found the best solutions. operating margin in 1999 was double that of the previous year. NEW FINANCIAL OBJECTIVES Peab’s industrial companies Peab’s Board of Directors has are stronger than ever in a highly established the Group’s business

4 plan and financial objectives for • the dividend shall amount to was established in 1996 under the next few years. This means 35–45 percent of profit after conditions prevalent at that time. that: tax Peab’s strategic objective is to • return on capital employed • cash flow shall be positive continue the refining process shall exceed 12 percent and rising towards construction and civil • return on equity shall exceed These financial objectives have engineering-related operations. 15 percent replaced our previous target, that Consequently, we will focus even • the equity/assets ratio shall by 2000 at the latest, profit before more on the development and exceed 30 percent tax should be five percent, which efficiency-enhancement of

5 Due to the previously mentioned cases and expectations that demand for infrastructure will fall, Peab had consolidated the Norwegian operation and will in future focus on construction operations, project development and regional civil engineering work.

DEVELOPMENTS ABROAD Peab has been established in the Polish market for the past five years. Operations up to now have mainly been oriented towards projects connected with Swedish clients. In the future, we will broaden our business by construction and construction NORWAY increasing project development in processes. Events in Norway dampened housing and industry. In future, Peab will report its the feelgood factor somewhat. Through the acquisition of operations divided into four The outcome of arbitration Rakennus OY Leo Heinänen in sectors: Construction and Civil proceedings announced in May 1999, Peab has established a Engineering, Industry, Trust/ 1999 meant that Peab’s remuner- foothold in the Finnish market. Management and Operations ation for work on the Romeriks- Finland is going through an under Termination. With this porten railway tunnel, carried out interesting development phase structure, both external analysts between 1994-1998, was SEK 260 with an extensive supply of and our internal organisation can million lower than expected. The building investment and good follow the various business 14-kilometre-long tunnel is part of demand expected to persist for sectors’ development and profit. the link between central Oslo and the next few years. Rakennus OY Peab will prioritise areas and the new Gardermoen Airport. Leo Heinänen’s principal market projects with high added value to Arbitration concerned significant is Helsinki. Our entry into the an even greater degree. With deviations from conditions in the Finnish market has gone Sweden as a base, we shall original fixed-price contract that according to plan and we are continue a controlled expansion applied until October 8,1997, when now concentrating on continued in Norway and the Baltic region. the contract was renegotiated. expansion. With this approach, we will create From October 8, 1997, Peab Peab also runs a construction added value for clients, owners, received full remuneration for business in Latvia, but this is still employees and suppliers. work carried out. The contract was in an early phase of development. Through our own project executed by the Peab subsidiary, When building up operations development, we create good Scandinavian Rock Group (SRG). abroad, it is important to get to conditions for increased profit- Another verdict in Norway know the new markets and to ability and higher quality. In dragged down Peab’s profit by advance at the optimum speed. these cases, we get involved in a SEK 62 million. The dispute project at the earliest possible concerned work on the terminal BELIEF IN THE FUTURE stage and consequently gain building at Gardermoen Airport Peab is now in a favourable overall cost control right at the that Peab’s subsidiary Scandin- situation in Sweden. There are beginning. We offer a five-year avian Airport Group (SAG) many signs that demand for new guarantee on Peab-developed carried out in 1995 and 1996. housing is rising at last, and it is projects and projects where we SRG is in the process of being important to have resources work in collaboration with the sold, and operations in SAG were available to deal with possible client from the start. terminated in 1996. resource shortages.

6 One factor that could be viewed as negative, namely that the increase in orders received has diminished, is actually something we are partially responsible for. We are in the enviable position of being able to say no to contracts that do not provide the right conditions for the profitability that Peab’s shareholders expect. Our Swedish civil engineering operations are now fully co-ordinated in one division. This creates the best conditions for optimum utilisation of production resources, and the civil engineering division is responsible for development, both in Sweden and abroad. Our earning power will improve in line with the increasing percentage of complete contracts and Peab’s own project development. In 1999, Peab was hit by substantial losses in Norway, something that will not be repeated in the coming year. The favourable conditions in the construction industry and increasingly efficient production are contributing factors in our assessment that profit after financial items will amount to around SEK 400 million, excluding surplus funds from SPP. With our new business plan, our new financial objectives and co-ordination of the Swedish construction and civil engineering operations, we are now well- equipped to realise our vision of expansion in the markets and product segments where we see the best opportunities to achieve good and stable profitability.

Mats Paulsson Managing Director

7 OUR BUSINESS CONCEPT FINANCIAL OBJECTIVES

Peab is a construction and civil engineering The financial objectives from 2000 business in construction-related company whose guiding principle is total are as follows: industry. With different operations in quality in all stages of the construction the same Group, the return object- process. Through a combination of Return on capital employed shall ives are appropriate as they show innovative thinking and solid professional exceed 12 percent. In 1999, the yields with consideration taken for skills, we make our clients’ interests our own return was 8.3 percent differences in tied-up capital. and thereby always build for the future. The Group’s targets are Return on equity shall exceed 15 reallocated within each business FACTORS FOR SUCCESS percent. The return in 1999 was sector as individual targets for 10.1 percent returns and operating margins. Peab shall: Cash flow before financing shall • work in close co-operation with clients The equity/assets ratio shall in the be positive and rising. Cash flow and thereby contribute to improved long-term exceed 30 percent. On shall be reinvested in operations or business opportunities for both parties December 31, 1999, the equity/ distributed to shareholders. Stra- • in a systematic way, ensure the assets ratio was 23.1 percent. tegic new investments can mean competence development of its staff temporary negative cash flows, but • have quality and environmental systems The dividend to shareholders shall in time there will be an increase in that generate high quality throughout the amount to 35-45 percent of profit the cash flow and the company’s production process after tax. In 1998, the dividend value. • always utilise production resources amounted to 29 percent. In 1999, Our previous financial objective flexibly, optimally and cost-effectively the proposed dividend is SEK 55.3 was that a profit before tax of 5 • expand in the markets and product million, which corresponds to 24 percent would be achieved by the segments that provide good and stable percent of profit after tax. financial year 2000, at the latest. profitability. In 1999, profit amounted to 1.2 Cash flow shall be positive and percent. rising. Cash flow in 1999 amounted If there are major changes in the to SEK 169 million. world at large, due to factors such as the financial markets or political The objectives have been formulated decisions, Peab will, if necessary, considering Peab’s rising shares of adjust the financial objectives.

Return on capital

Business concept, factors for success, objectives and strategy employed Return on equity % 20 % 20

15 15

10 10

5 5

0 0 1997 1998 1999 Target 1997 1998 1999 Target

Dividend/profit Equity/assets ratio after tax % 35 % 50 30 40 25 30 20

15 20 10 10 5 0 0 1997 1998 1999 Target 1997 1998 1999 Target

8 STRATEGY

The Group’s overall strategy is to continue to expand in Norway able resources in the most continue the refining process and the Baltic region. efficient way possible, which towards a construction and civil Quality-related work will be requires both personnel and plant engineering-related business. intensified. We will work actively to be highly mobile. By focusing We will prioritise growth in towards making clear commit- on construction and civil parts of the Group where added ments to our clients in terms of engineering-related operations, value is highest. price, guarantees, etc. Through Peab, as a real estate owner, will In construction and civil the Group’s knowledge, avoid competing with its clients. engineering, we intend to experience, co-ordinated It is also important that Peab is increase the percentage of project purchasing and decentralised perceived as a modern and development and complete decision-making, we shall ensure change-inclined company. contracts. In industry, the plan- quality and cost-effectiveness in Building our brand will be ned focus is on projects with a all stages of production. Our prioritised. Peab shall be higher proportion of system ambition is to create added value perceived by all interested parties solutions. for clients, owners, employees as a committed company that is Peab, from its base in the and suppliers. personal, down-to-earth, reliable Swedish domestic market, will Peab shall always utilise avail- and developing.

9 Construction and Civil VerksamheterOperations Bygg och anläggning IndustryIndustri Trust/ManagementFörvaltning Engineering underunder Termination avveckling

BUSINESS SECTORS

Group Overview Group

The Group reports in four business sectors:

Construction and Civil Engineering – construction and civil engineering operations in Sweden and abroad.

Industry – companies in construction-related industry.

Trust/Management – companies with Group-wide functions, associated companies and other holdings.

Operations under Termination – operations and holdings outside Peab’s strategic orientation that will be terminated.

BUSINESS SECTORS: PROFIT/LOSS

Sales Profit after financial items MSEK 1999 1998 MSEK 1999 1998

Construction and Civil Engineering 11,397 10,798 Construction and Civil Engineering 259 142 Industry 2,656 1,256 Industry 201 80 Trust/Management 65 122 Trust/Management 199 –14 Operations under Termination 553 821 Operations under Termination – 497 3 Eliminations –830 –381 Total 162 211 Total 13,841 12,616

Operating profit Key ratios MSEK 1999 1998 Group 1999 1998

Construction and Civil Engineering 252 114 Profit after tax, MSEK 233 145 Industry 229 87 Capital employed, MSEK 3,712 3,592 Trust/Management 213 54 Return on capital employed, % 8.3 10.8 Operations under Termination – 448 25 Return on equity, % 10.1 11.6 Total 246 280

Construction and Civil Engineering Industry Trust/Management Operations under Termination

Sales by business sector

10 GEOGRAPHIC MARKETS

With Sweden as a base, Peab will Heinänen, and expansion in the continue its controlled expansion Finnish market will continue. in Norway and the Baltic region. Operations in Poland and Sweden In Norway, we will in future Latvia are at the start of the Norway Finland focus on three sectors – construc- development phase. We intend to Poland tion, project development and gradually increase the percentage Latvia regional civil engineering opera- of project development and in tions. time strengthen our foothold, Sales by geographic In Finland, we have strength- both through organic growth markets ened our position through the and the acquisition of local acquisition of Rakennus OY Leo contractors.

11 Profit/loss Construction and Bygg och MSEK 1999 1998 Civilanläggning Engineering Sales 11,397 10,798 Operating profit 252 114 Sweden Abroad Profit after financial items 259 142 Capital employed 915 789

Other key ratios 1999 1998

Orders received, MSEK 12,111 12,721 Order backlog, MSEK 7,188 6,855 Return on capital employed, % 35.0 20.5 Cash flow 1), MSEK 288 135 Gross investments, MSEK 212 126 Number of employees 7,573 7,480

1) Operating profit plus depreciation

Order backlog to produce MSEK Dec 31, 1999 Dec 31, 1998

Coming financial year 5,886 5,394 Next financial year 1,271 1,101 Thereafter 31 360

Construction and Civil Engineering Total 7,188 6,855

STRATEGY construction and civil engineer- Group’s resources are utilised The construction and civil ing operations into a single legal more effectively. engineering business in Sweden entity, Peab Sverige AB. The Our foreign markets are shall focus on profitable growth. advantages of this change include described in the Abroad section. We shall achieve this by increasing increased capacity utilisation, Each country shall have the the percentage of contracts with better cost-effectiveness and competences to handle construc- high added value, i.e. projects that greater opportunities for tion, building services and project are Peab-developed plus a higher co-ordination. development. Foreign develop- proportion of complete contracts. A co-ordinated business also ment will advance in continual Our operations abroad will allows for a more efficient project co-operation with the Swedish become a more important and organisation that can handle both operation in order to ensure more integrated part of Peab. The major projects and more special- competence and efficiency on aim of overseas operations is to ised assignments – wherever major construction and civil create profitable growth and these may be sited. A joint engineering projects. achieve a better utilisation of the company can more easily direct Group’s resources as well as an resources to the sites where they MARKET 1999 equalisation of profit over are needed, which means that the The business was marked by business cycles. Expansion around the Baltic is proceeding at an unhurried pace, principally through acquisitions of local companies with appropri- ately oriented operations. A basic condition is that these companies are well-established and among the market leaders. All development abroad is carried out with clear and absolute requirements for profitability.

NEW ORGANISATION Peab has restructured its Swedish

12 continued good utilisation of In Finland, the construction acquisition means we have capacity, a greater percentage of market experienced a high level improved our building services complete contracts and an increase of activity and considerable operation and are now better in Peab-managed projects and interest in investment across the prepared for the region’s development of special projects. whole construction sector. There expected increase in demand. Total investment in construc- are no evident signs that this Peab also acquired Stockholm tion, excluding maintenance, trend is flagging. Entreprenad, which is mainly increased by five percent to SEK In Poland, there was a involved in the operation and 110 billion in 1999. This outcome considerable and continuing need maintenance of municipal is in line with expectations, for housing, commercial property infrastructure, asphalt paving, despite a sometimes erratic and infrastructure. The building bridge repairs and building market, in which fluctuations can investment curve is heading services in the Stockholm area. have an abrupt impact on the sharply upwards. The company has sales of SEK 400 industry’s various sectors. The Latvian construction million and employs 400 people. Business conditions for the market thus far has shown Peab acquired the Finnish construction sector are looking relatively low demand. company, Rakennus OY Leo brighter. Above all, there is a Heinänen, which has 140 predicted increased in demand ACQUISITIONS employees, sales of SEK 200 for housing in and around cities. In 1999, Peab acquired Producta million and focuses on repairs, Demand for building services, Ombyggnads AB in Stockholm rebuilding/extentions, building maintenance and road services is with 80 employees and sales services and facade renovation in also expected to increase in urban amounting to SEK 200 million. Helsinki. Through the acquisi- areas. Producta’s main business is tion, Peab has established a good The acquisitions of Producta rebuilding commercial property platform in the expansive Finnish and Stockholm Entreprenad have in the Stockholm area. This construction market. occurred against this positive background. Due to companies in Construction investment in the Industry business sector, we Sweden 1997–2001 MSEK have also secured access to 200 gravel, ballast, concrete, plant and transport. 150 Maintenance work Demand for new housing VRoads and civil engineering Industry construction in Norway was 100 ÖNon-residential buildings slightly better than expected and, Housing in contrast to Sweden, it was 50 more evenly spread across the country. Housing construction in 0 2000 is expected to be at the same 1997 1998 19991) 20001) 20011) 1) Forecast level as 1999. Source: The Swedish Construction Association

13 Peab’s sales by product in Sweden Regional differences in demand 1999, compared with total market Sweden are becoming more distinct. For % 50 instance, there were no building 40 starts for new apartments in eight Profit/loss 1999 1998 30 of Sweden’s provinces in 1999. One of the reasons why new Sales, MSEK 10,498 10,024 20 Operating profit, MSEK 226 113 production is not increasing Operating margin, % 2.2 1.1 10 faster is that it is still often more

0 economical to renovate

HousingNon- Industry Roads and rebuild residential and civil buildings engineering The profit improvement in the Peab Total Market, forecast Swedish business is mainly due to more efficient production, the increased percentage of complete for joint Group business contracts and a clear focus on projects, development of project development. business, markets and strategy, and co-ordination of NEW ORGANISATION major construction and civil Construction and Civil Engineering Construction and Civil Engineering On September 1, 1999, Peab’s five engineering projects. These Swedish contracting companies groups will utilise joint were merged to form one entity, competence and create a high Peab Sverige AB. The company is level of flexibility. divided into five regional construction divisions (South, MARKETS West, East, Stockholm and North) Housing. Signs of the long- and a nationwide civil engineer- anticipated increase in demand ing division. Local competence for new housing began to emerge and personal client contact is in 1999. Despite the considerable ensured through some 30 need, this rise was lower than regional offices. expected. And, although market Co-ordination groups have demand was high, development been created with responsibility in the Stockholm region was slowed due to an insufficient supply of housing projects.

14 PERCENTAGE OF THE GROUP’S SALES SALES BY PRODUCT existing housing, than to build new, a phenomenon that is now also apparent in counties border- Housing ing major cities. However, a Peab Sverige Industry Rest of the Group Roads and civil engineering Non-residential buildings

SALES BY TYPE OF SALES BY CUSTOMER OPERATION

New construction Public Rebuilding Private Building services Other Operation and maintenance Other

further increase in total housing expected to remain high in the construction is expected in 2000. next few years.

Industry. Construction in industry Public sector. Construction in the has fluctuated considerably in the public sector has remained at a

very low level since the financial 1990s. Investment peaked at crisis of the early 1990s. Public the highest level ever in finances are now improving, and 1996. Subsequently that state and local authority-funded level was halved and in construction will increase in 2000. recent years investment has been relatively stable. Roads and civil engineering. There Business-related has been only a modest increase construction – shops, offices, in road construction and civil etc – has developed very engineering projects in Sweden in favourably in recent years. The recent years. From an inter- level of investment in 1999 was national perspective, Sweden the highest ever, and demand is spends less on roads than other

15 countries, despite deteriorating prioritised in the next few years. road standards. In addition, In collaboration with the client, willingness to invest varies we shall create products with considerably across the country, good profitability by taking as the counties account for most overall responsibility from of the production. concept to finished product. Our Many of the public works and presence throughout the process public sector civil engineering also means that quality and projects planned for 1999 under environmental work becomes the auspices of the Swedish state more effective. road and rail authorities have Peab’s project development been deferred. In 1999, a political work includes the creation of a decision was made new IT function that on the reallocation of will act as a investment from competence bank, development of housing for the new roads to the where data from all elderly. The agreement means operation and projects will be that Peab will build sheltered maintenance of the collected and made apartments and assisted living

Construction and Civil Engineering existing road and available for use in accommodation, and take rail network. other projects. Below responsibilty for operation and are some examples of maintenance of the housing, OPERATIONS 1999 major assignments in which will initially be offered to Project development Göte Brännvall, project development. SEB Trygg Liv’s customers. Bure MD Peab Sverige Project development Several of them are will be responsible for services is an area that will be described in more and provision of care. The busi- detail in the “Peab’s everyday ness is expected to start up in and work” section. around the major cities in 2000.

Peab has converted Gamla Central- The steam power station area in skolan, a school in Sundbyberg Västerås with its old steam power outside Stockholm into apart- plant has been falling into dis- ments. Work was carried out to repair since the 1960s. It is now the highest standards of going to be revamped and become environmental harmonisation. the centre of a new museum area. Peab and the client, Riksbyggen, Peab will restore the 40,000 square started project work in 1996 metre building and add 10,000 during a recession. Construction square metres of new premises. work started in December 1997 with completion in 1999. The The 113-apartment Kanaltorget project is a good example of a housing project in Trollhätten has well-functioning complete been developed by Peab in direct contract. Kvarteret Spiiken as the collaboration with the end users. block has been called, won the Housing category at the 1999 Public projects Swedish Construction Awards. Peab is converting the old Tretorn The project was also awarded factory premises in Helsingborg SBAB’s quality award for 1999. into a new university. When the autumn term starts in 2000, the Collaboration on housing for the University Campus will be ready elderly. Peab has signed an to welcome 3,000 students. agreement with SEB Trygg Liv In 1999, Peab began construc- and Bure Vård & Omsorg on the tion work on two new schools in

The Spiiken block in Sundbyberg won the “Housing of the Year” category at the 16 Swedish construction industry’s own “Oscar” awards, arranged by Sveriges Bygg- industrier, the industry’s trade association. The Vallsund Bridge over Storsjön in the Jämtland region of Sweden. the Stockholm region. In addi- Peab won many new contracts in Hospital, was officially opened by tion, rebuilding and extension of the health care and elderly care Queen Silvia. The opening mark- some 12 schools in the area is sectors. Notable among these ed the end of Peab’s four-year- being carried out. were the extensions to the long contract. Sunderby Hospital Peab was contracted in 1999 to hospitals in Danderyd and won first prize in its category in build a library on Gotland and Karlskrona, as well as a new the Construction Awards for 1999. execute part of the rebuilding health care centre in Arvidsjaur. work on the university. Peab will Peab is also involved on projects Housing projects also carry out the extension of old for a new health centre in Ström- During the year, Peab was workshop premises in Visby, involved in many new residential which are to be converted into an projects in Stockholm: 60 apart- art school. ments in Åkersberga, 58 Another project is apartments in semi-detached extensive rebuilding and houses in Danderyd, 41 extension work on the apartments in Fryshuset cultural centre Hökarängen and in Gothenburg. The renovation of 166 project was a collabor- apartments in ative project between Södermalm. In Peab and Klippan Gothenburg, 72 Kulturfastigheter. co-operative and InfraCity AB rented apartments contracted Peab to were completed. extend the Scandic In addition, Peab Hotel InfraCity has been contracted to between Stockholm and build a total of 192 Arlanda Airport into one new apartments in of Sweden’s largest and Jönköping, 35 new most complete hotel, co-operative apartments in congress and conference Halmstad, 36 co-operative centres. The extension covers apartments in Eskilstuna and 72 5,000 square metres. apartments will be adapted for Another public project is the sund, new housing for the elderly modern group living in Karlstad. extension of Slagsta Centrum, a in Sala, and the rebuilding and Brf Kapellmästaren in Malmö shopping and hotel complex extension of the Rosenlund Care was the result of the purchasing of between Södertälje and Stock- Centre in Jönköping. residential blocks by the Byggkost- holm. The contract is worth SEK On September 1, 1999, Europe’s nads delegation. Here, Peab has 135 million. most modern hospital, Sunderby built new housing of a good

17 standard and quality at a cost that Industry projects is affordable for most people. Contracting for AstraZeneca in Södertälje continues. A new Airport projects pharmaceutical factory will be Arlanda Airport is expanding, and completed in May 2000. Peab is notable among Peab’s new projects also building a new analysis are a new air traffic control tower laboratory, which is specially and one of the taxying paths to the adapted for research and analysis new runway. The tower will be 83 relating to the drug, Losec. The metres high and will also house combined contracts are worth administration premises. SEK 145 million. SSAB in Oxelö- At Kallax airport in Luleå, sund has signed three contracts Peab has carried out an extension worth a total of SEK 90 million. of the runway, and at Sturup Airport outside Malmö, Peab has Civil engineering projects completed a new multi-storey car During the year, Peab won the

Construction and Civil Engineering

The Scandic Hotel InfraCity between Stockholm and Arlanda Airport – extended by Peab.

park for 400 cars. At the closed- contract to build the new Trane- down airforce base in Ljungby- berg Bridge in Stockholm along hed, Klippan’s council and Peab, with associated links and in co-operation with private rebuilding work. The project, interests, have transformed the which will be completed in 2004, closed barracks into a creative includes a new arch bridge with environment for company a180-metre span and approach the motorway, the project – Peab’s development. bridges on both sides. biggest ever in Sweden – includes Flygstaden in Söderhamn has Work on the Swedish land 21 bridges and connections to the also stimulated a lot of interest approaches to the Öresund Fixed City Tunnel under Malmö. among the business community. Link in Malmö is proceeding on Peab has started the first stage Peab and the local authority took schedule. The 10 kilometre-long of a major contract for Kvaerner over the area and subsequently road and rail corridor will be Pulping in Grums. Another developed Flygstaden AB, an completed to coincide with the project in the Värmland region industrial community with more opening of the Öresund Fixed was the building of the roadside than 700 workplaces. Link in the summer. In addition to rest area Ilanda, north of Karlstad.

18 Peab has also signed an agreement for Södra Länken in Stockholm. or partners using a workforce with the Swedish National Road The contract was carried out as a paid in “black” money. This Administration (Vägverket) collaborative project between measure means that Peab signs regarding the operation and several companies in the Group. an agreement with all its sub- maintenance of 1,000 kilometres of contractors that a workforce paid public roads in Hälsingland. The Action against the black economy in “black” money will not be agreement is for three years with Peab is the first Swedish used either directly or via another an option for a further two. In construction company to have company. Failure to adhere to this 1999, Peab was also contracted to taken a definite initiative to agreement leads unconditionally produce and fit ceiling decoration prevent any of its subcontractors to penalties for non-compliance.

19 Abroad

Profit/loss 1999 1998

Sales, MSEK 899 774 Abroad Operating profit, MSEK 26 1 Rest of the Group Operating margin, % 2.9 0.1

Percentage of the Group’s sales

NORWAY takes total responsibility. From There was good demand for a supplier’s viewpoint, it is Rakennus OY Leo Heinänen has been involved in the renovation of housing in Norway in 1999, and positive to get involved in the Sveaborg Fortress outside Helsinki.

Construction and Civil Engineering this is expected to continue in process at an early stage, work on The Swedish flag flew here until 1808. 2000. Investments in infrastruc- overall solutions and focus on the ture, however, are expected to total cost. In 1999, Peab AS entered a partnering agreement with the industrial group, Ticon. The contract, worth SEK 100 million, concerns the construction of a residential and service centre in Drammen. Another of Peab’s important agreements is the right to extend the Lodalen industrial area in Oslo. In total, construction investment in the area is estim- Roland Svensson, MD Peab AS ated at SEK 1 billion. In 1999, Peab AS moved its offices to Lodalen. diminish. In view of this, the During the year, Peab also won subsidiary Peab AS will focus on the contract to carry out construction, project develop- rebuilding of Leif Tronstads Plass ment and regional civil engineer- in Sandvika, southwest of Oslo. ing work. Underground opera- The project, a complete contract, tions and major civil engineering encompasses construction of work will be terminated. office and shop premises as well Geographically, operations will as an underground car park. focus on the Oslo and Sörland Peab was the principal regions. contractor for a road project Complete projects account for worth SEK 170 million concern- 60–65 percent of Peab’s ing “Ring Road 3” in Oslo. construction operation. This And Peab was also the solution has benefits for the client contractor for new construction at company, which gains close co- Aker Hospital and the National operation with a contractor that Hospital in Oslo.

20 FINLAND During the year, Rakennus OY the extension of the Forum Construction in Finland has Leo Heinänen has been one of the shopping centre in Helsinki. grown by 10 percent in recent contractors in the rebuilding of years. Demand is expected to Hotel Kämp in Helsinki. The POLAND remain high, particularly in the project, worth SEK 370 million, The Polish market is at present Helsinki area, but also in Åbo, was over a three-year period. one of the most interesting in Tammerfors and Uleåborg. Other current projects include the Europe. Poland is experiencing a Through the acquisition of the renovation of Berhäll Church and period of strong growth and has construction company, Rakennus a considerable need for both OY Leo Heinänen, which has construction and civil engineer- sales of SEK 200 million, Peab has ing investment. Peab had run secured a stable foothold in the operations in Poland since 1994. Finnish market. The business has been largely

Juha Salomäki, built up through contracts for MD Rakennus OY Leo Heinänen Swedish companies such as

Miroslaw Grzybowski, MD Peab Sp.z.o.o

Munksjö, Ericsson and Gullfiber. More recently, Peab-managed housing construction has started in Warsaw. Peab Sp.z.o.o, with 60 employees, is established principally in Warsaw and Kostzyn, and has a solid base for further expansion.

LATVIA Due to the economic situation, demand for building services in the Baltic States has been quite modest up to now. However, the economic climate in these countries is expected to improve in time. Peab, through its subsidiary, SIA J.O.Z Peab Group, which has 70 employees in Latvia, has a stable foundation in readiness for more favourable business conditions.

21 Profit/loss Bygg och Industry MSEK 1999 1998 anläggning Sales 2,656 1,256

Industry Swerock/ Plant/ Operating profit 229 87 Asphalt Cranes Profit after financial items 201 80 Capital employed 1,006 996

Other key ratios 1999 1998

Return on capital employed, % 23.4 9.1 Cash flow1), MSEK 341 159 Gross investments, MSEK 226 191 Number of employees 1,262 1,207

1) Operating profit plus depreciation

INDUSTRY important materials, plant, trans- programmes and increased Peab’s Industry operations consist port and services. External demand have contributed to a of a number of strong and inde- invoicing accounts for 70 per cent positive profit trend. pendent companies with well- of the business sector’s sales. Increased capacity utilisation known brands and good market Both Swerock, with its in Plant/Cranes is an important positions. Due to its Industry subsidiary Cliffton, and Peab factor in the profit improvement. business sector, Peab’s construction Asfalt are strong players in their The international expansion of and civil engineering operation has respective markets. Well- Lambertssons Kran is expected to secured access to strategically implemented rationalisation continue.

22 Swerock/Asphalt

Profit/loss Mats O. Paulsson, 1999 1998 MD Swerock AB

Sales, MSEK 2,145 817 Swerock/Asphalt Operating profit, MSEK 151 27 Rest of the Group Operating margin, % 7.0 3.3

Percentage of the Group’s sales

SWEROCK Swerock AB is one of Sweden’s largest suppliers of ready-mixed concrete, concrete products, gravel and rock. The company has a strong brand and a good market position, mainly in the larger cities, where satisfactory growth is expected to continue in 2000. In 1999, Swerock won market shares in most of its production segments. The company’s biggest competitors are Ballast, Scancem and Sydsten. The head office has been moved from Uppsala to Helsing- borg to improve positioning in the rapidly growing market in southern Sweden. During the year, the company established itself as a supplier of concrete goods and flooring products in Concrete paving stones and slabs are used in the creation of modern environments. Norway and Denmark. Swerock will be refined further with Swerock’s subsidiary, Cliffton AB, well as 30 modern truck mixers measures that include the ter- is a leading player in transport, for concrete transport. In 1999, mination of operations in light heavy plant hire, and sales and work started on gaining quality clinker, dry mix and floor-level production of concrete and and environmental certification equalisation. ballast in Southern Sweden. The in compliance with ISO 9001 and Swerock runs active quality company offers a comprehensive ISO 14001. and working environment plant, materials and transport The market situation is routines and is ISO 9001 concept. positive, and strong demand is certificated. The company is Cliffton is one of Sweden’s expected to continue. Among the working towards environmental leading players in transporting year’s notable major projects was certification in compliance with and pumping concrete. The work on the Swedish land ISO 14001. company has eight concrete connections for the Öresund factories in southern Sweden as Fixed Link.

23 Industry

Research and development to create new asphalt surfaces is a continual process. Malte Åkerström, MD Peab Asfalt AB ASPHALT Peab Asfalt AB is Sweden’s third- Tranemo and Malmö are certified In 1999, Peab Asfalt carried out largest company in the manufac- in accordance with ISO 9002. extensive work on the motorway ture and paving of hot, medium- Work is continuing towards section of the Öresund Fixed hot and cold asphalt. As with quality certification of the entire Link. Other major projects were other divisions in the Group, company. In 1999, some 120,000 Kolbäck Bridge in Umeå, the E6 profitability is a higher priority tons of excavated asphalt mater- road in Uddevalla and STORA than volume, which is why ial was processed in Peab’s Baseport in Gothenburg. efficiency-enhancement efforts are recycling plants. ongoing to improve margins. The company’s biggest competitors are Skanska and NCC. Peab Asfalt invests in the development of new products and resource- efficient solutions. In addition to the thin- layer surfacing Swemix, it has also developed JFR45, an asphalt paving that can withstand corrosive jet fuel. This future- oriented product is already in use at Ängelholm Airport. Peab Asfalt operates 10 fixed asphalt factories and three mobile asphalt-recycling plants. Of these, the facilities in

24 Porträttbild Asfalt-VD Plant/Cranes

PLANT rental companies. There are also Lambertsson Sverige AB runs a subsidiaries in Norway and plant hire operation and rents out Finland. Around 70 percent of the temporary electricity generating company’s sales are external. equipment. The company’s The crane rental company, business operates from 20 depots, Nosturiasennus Virtanen OY, which are evenly spread through- based in Jyväskylä, Finland, was out Sweden. The greater part of acquired in 1999, and is expected sales are internal to Peab Sverige, to expand in its domestic market Thomas Nilsson, but the percentage of external and eventually in the Baltic MD Lambertsson Sverige AB sales is gradually increasing. The region. company’s operations in Norr- Lambertssons Kran AB has land were sold in February 2000. been ISO 9002 certificated since 1997, and one of its subsidiaries, CRANES WBM Hyrkranar AB was Lambertssons Kran AB, with five certified in 1999. In 2000, Europa- subsidiaries and operations in kranar Svenska AB will also gain Stockholm, Gothenburg, Malmö certification. and Skellefteå, is one of Europe’s leading crane and aerial platform

Christer Klemets, Profit/loss MD Lambertssons Kran AB 1999 1998 Plant/Cranes Sales, MSEK 511 439 Rest of the Group Operating profit, MSEK 78 60 Operating margin, % 15.3 13.7

Percentage of the Group’s sales

25 Profit/loss MSEK 1999 1998

Sales 65 122 Operating profit 213 54 Profit after financial items 199 –14 Capital employed 569 380

Trust/Management

TRUST/MANAGEMENT Maintech Peab’s holding is 15 percent (—). The Trust/Management business Maintech Industripartner AB was The holding is posted as SEK 100 sector accounts for central formed in 1998 through a merger million (—). In addition, Peab has companies, certain associated of several companies from Peab a long-term promissory note companies and depreciation of and BPA. Maintech develops receivable amounting to SEK 200 Group-related surplus values operation and maintenance million. relating to shares in subsidiaries, services for industry. Net sales for as well as other Group 1999 amounted to SEK 372 Miljöservice i Sverige adjustments. million (421) and the loss after As part of Group restructuring, financial items was SEK –5 Peab had decided to reduce its CENTRAL COMPANIES million (–11). Peab’s holding is 50 interest in Miljöservice i Sverige Peab AB percent (50) and this is posted as AB, and has therefore signed a The Parent Company, Peab AB, SEK 30 million (35). contract with the French com- has central Group functions such pany SITA, which presently owns as Finance, Accounting, Informa- Fastighets AB Skeppsdockan 50 percent. The agreement means tion, IT Development, Personnel Fastighets AB Skeppsdockan in that Peab remains a 50 percent and Legal Matters. Malmö (formerly Skåne Utveck- owner, but SITA obtains the right ling AB) develops the Krane area to increase its holding to 100 Peab Finans of Malmö harbour. Peab owns 50 percent within two years, and The Group’s internal bank, Peab percent (50). The rest of the that the relative voting rights and Finans AB, handles liquidity and shares are owned by Bergaliden shares in the company’s profit are liability management as well as AB. Peab’s holding is posted as changed accordingly during that financial risk exposure. The SEK 27 million (31). time. The agreement provides a company also has a service capital gain of SEK 61 million. function for subsidiaries and Ecuro Miljöservice is one of Sweden’s works out solutions concerning Ecuro Sverige AB offers real leading environmental services internal loans and investments, estate owners management of companies in waste collection hedging, etc. residential and commercial and treatment, and has sales of properties. Net sales in 1999 SEK 200 million. ASSOCIATED COMPANIES amounted to SEK 425 million The shares are posted as SEK 3 Birsta (293) and the loss after financial million. An option agreement has Birsta Fastigheter AB owns 8 items was SEK –38 million (–3). been reached with the principal properties in Southern Sweden, Peab’s holding is 50 percent (50) shareholder, the French company, where ASG is the principal and this is posted as SEK 4 SITA, on the acquisition of Peab’s tenant. Net sales in 1999 million (13). holding for SEK 3 million by amounted to SEK 47 million (45) December 31, 2001, at the latest. and profit after financial items OTHER HOLDINGS was SEK 25 million (12). Peab’s Investeringssällskapet 1999 holding is 50 percent (33). The Investeringssällskapet 1999 AB shareholding is posted as SEK 53 owns BPA AB, Scandinavia’s million (26). leading installation company.

26 Operations under T

Profit/loss MSEK 1999 1998

Sales 553 821 Operating profit –448 25 Profit after financial items –497 3 Capital employed 1,222 1,427

OPERATIONS UNDER

TERMINATION ermination

Peab is working towards the clari- for achieving good profitability. operations means the termination fication of its structure as a means Concentration on construction of a number of operations outside of creating favourable conditions and civil engineering-related Peab’s strategic orientation.

SUBSIDIARIES

SRG –358 million, which breaks down SAG In 1999, the wholly-owned as SEK –260 million from the Operations in the Scandinavian subsidiary Scandinavian Rock Romeriksporten project and SEK Airport Group (SAG) were Group (SRG) was involved in –98 million from other projects. terminated with the completion projects that included the Negotiations are proceeding of contracts at Gardermoen construction of the Oslo Fjord with several interested parties on Airport, Norway, in 1996. A court link and tunnels in Norway. The the disposal of SRG. An agreement verdict in February 2000 underground operation with is expected to be finalised in the adversely affected profit for 1999 associated civil engineering work first half of 2000. by SEK –62 million. adversely affected profit by SEK

ASSOCIATED COMPANIES

OSKARSBORG Oskarsborg amounted on operation’s two most significant Oskarsborg AB is the parent December 31, 1999 to SEK 986 regional holdings are run by the company of the real estate group million divided as follows: subsidiaries, Hallström & Nisses formed in 1995 by the present Fastighets AB and Fastighets AB owners, BPA AB and Peab AB. Skånehus. In addition to this, the The aim was to clarify the owner Involvement business is divided into five companies’ respective operations MSEK Dec 31, 1999 Dec 31, 1998 geographic regions and concerns as well as bring together the Shares 441 470 undeveloped land, real estate for companies’ real estate Loans 365 239 resale and managed properties. Issued guarantee competence in a single organisa- commitments 180 273 Abroad, Oskarsborg has one tion. Peab’s holding on December property in Germany, another in Total 986 982 31, 1999, amounted to 46 percent Denmark, and joint property (40) and BPA’s, 54 percent (46). holdings in Belgium. Peab reports shares in Oskars- borg’s profit with a delay of one Real estate Strategy quarter based on the reporting Since 1995, Oskarsborg has Oskarsborg shall be disposed of period’s accounts. The year’s gradually refined and clarified its at a rate that provides the owners share of profit/loss amounted to holdings of undeveloped land with maximum value protection SEK –28 million (0). and management and develop- for their assets. It is currently Peab’s total involvement in ment property. Today, the estimated that the disposal will

27 be implemented by year-end other holdings in Sweden are Property Consultants. The 2000. managed by Ecuro Sverige AB company’s central resources are and Fastighets AB Skånehus in therefore used with maximum Financing Southern Sweden. The foreign efficiency. The head office is in

ermination Oskarsborg is striving for a good holdings are managed by Catella Helsingborg. spread of risk on its loan portfolio. Fastighets AB Skånehus has gradually established a 10-year The Group

loan portfolio, which means that No. of Area, Book value, Net sales, Rental value, September 30, 1999 properties K sq. m. MSEK MSEK MSEK around 10 percent of the portfolio Hallström & Nisses 172 477 2,252 190 256 is renegotiated each year. Hall- Skånehus 70 258 996 96 107 ström & Nisses Fastighets AB is Undeveloped land 67 — 128 —— striving for a five-year term for Abroad 2 24 377 23 25 Other management the group’s total borrowings. and development 51 118 985 48 50 Total 362 877 4,738 357 438

Operations under T Organisation The management of property Business and financial ratios

holdings in the two regional MSEK September 30, 1999 1998 1997 companies is mainly performed Net sales 357 454 372 by company personnel, whereas Operating net 211 251 216 Profit before tax –851 Total assets 5,365 5,465 5,086 Shareholders’ equity 943 990 988 Equity/assets ratio, percent 18 18 19 Cash flow before investments 29 52 39

Below is a brief report on Oskarsborg’s most important assets:

HALLSTRÖM & NISSES Property holdings partly-owned subsidiaries. These on September 30, 1999 FASTIGHETS AB run similar operations to the

Hallström & Nisses Fastighets AB No. of management properties 172 parent company. In 1999, the was formed in 1997 by Oskars- Lettable area, K sq. m. 477 group had 14 employees, all at borg AB and Mandamus Fastig- Rental income, MSEK 190 the parent company. Operating net, MSEK 115 heter AB. The company, which is Book value, MSEK 2,252 The following functions are registered in Sundsvall, is one of Yield from properties, percent 6.8 based at the head office in Norrland’s largest property Sundsvall: corporate manage- companies. The business consists Organisation ment, marketing, accounting and of owning, managing and Hallström & Nisses Fastighets AB finance. Each district is developing properties in Norr- is the parent company in a group represented by a well-established land and Dalarna. with a large number of wholly or district manager, who is assisted

28 by a number of company- Skånehus’s largest holdings by town of Bad Godesberg. The employed property technicians. area are in Malmö, Helsingborg property contains 75 apartments, The majority of operation and and Halmstad. 25 shops, 4 restaurants, a bank maintenance services are and a shopping centre. There are purchased from well-reputed UNDEVELOPED LAND also two floors of offices and a property management companies. Oskarsborg’s holdings of bowling centre. Below the The organisation is sub-divided undeveloped land are mainly complex, there are 750 parking into seven districts: Sundsvall, planned for and there are spaces. Luleå, Skellefteå, Umeå, Gävle, discussions taking place Dalarna and Östersund. regarding future development. OTHER MANAGEMENT AND DEVELOPMENT PROPERTIES FASTIGHETS AB SKÅNEHUS Property holdings Oskarsborg holds a number of on September 30, 1999 Fastighets AB Skånehus was management and development formed in December 1997, and is Number of properties 67 properties that require further registered in Helsingborg. Total area, K sq. m. 2,074 improvement in order to attain Skånehus owns residential and Book value, MSEK 128 long-term profitability. The Assessed value, MSEK 28 commercial properties in Skåne properties are in five regions of and southern Halland. Sweden, the most important Several properties were sold being the West and South regions. Property holdings during the year. The rate of sales Among these properties are on September 30, 1999 increased in the last quarter of three condominiums situated in 1999. Vaxholm, Öregrund and No. of management properties 70 Lettable area, K sq. m. 258 Björklinge. Rental income, MSEK 96 ABROAD Operating net, MSEK 60 Oskarsborg’s foreign holdings Property holdings Book value, MSEK 996 on September 30, 1999 Yield from properties, percent 7.7 include a wholly-owned property in Germany and a smaller No. of management properties 51 Organisation industrial property in Denmark. Lettable area, K sq. m. 118 Oskarsborg’s Belgian holdings Rental income, MSEK 48 Fastighets AB Skånehus is the Operating net, MSEK 28 parent company in a group with are reported under partly-owned Book value, MSEK 985 a number of wholly-owned companies. Yield from properties, percent 2.6 subsidiaries. These run similar Property holdings, Germany operations to the parent com- on September 30, 1999 Oskarsborg’s property holdings pany. Apart from the office in in this category are managed by Helsingborg, the company has a No. of management properties 1 Fastighets AB Skånehus in the management office in Malmö. Lettable area, K sq. m. 21 South region, and in the Rental income, MSEK 23 Skånehus had 25 employees in Operating net, MSEK 10 remaining regions by Ecuro 1999. Book value, MSEK 359 Sverige AB. Skånehus also manages the Yield from properties, percent 3.8 A number of properties have property holdings of Oskarsborg been sold during the year. The Sydfastigheter and sells services The property was built in 1981 rate of sales increased in the last relating to Oskarsborg’s central and lies at the foot of the Godes- quarter of 1999 and the first administration. berg Castle, in the centre of the quarter of 2000.

29 PARTLY-OWNED COMPANIES present with potential tenants/ 333 million (310). BPA AB signed Oskarsborg is a partner in a interested parties regarding the a value guarantee with Oskars- number of associated companies vacant property. Apart from this, borg for these promissory note with a book value of participations there are two industry and office receivables, and from January 1,

ermination that totals SEK 25 million (25). hotels that are in principle fully 2000 has also signed a direct Among the larger remaining renovated. profit guarantee for profits in AB commitments are properties in The property in Antwerp has Kärnvirket and subsidiaries. Belgium and Solvädersbyn in in recent years undergone the last Gothenburg, which are briefly phase of an extensive renovation Solvädersbyn described below. and rebuilding programme in its Oskarsborg owns 33 percent of retailing section. During the year, KB Solvädersbyn. The company Belgium there have been a number of new runs property management Oskarsborg owns 50 percent of lettings of office space. through the letting of permanent AB Kärnvirket, which has four Rental income amounted to residences in Biskopsgården, wholly-owned properties in SEK 38 million (42). Oskarsborg’s Gothenburg. The property

Operations under T Belgium. Three of these profit/loss participation holding consists of 124 small properties are located in Brussels, amounted to SEK –6 million (–5). houses. and the fourth in Antwerp. Oskarsborg holds long-term Solvädersbyn’s rental income One of the properties in central interest-bearing promissory note amounted to SEK 7 million (6) Brussels is completely vacant and receivables in AB Kärnvirket and Oskarsborg’s profit participation discussions are going on at subsidiaries amounting to SEK amounted to SEK 0 million (–1).

OTHER HOLDINGS

WIHLBORGS FASTIGHETER percent of votes. The shares were shares in Folkebolagen AB Peab decided in 1999 to sell off its sold in March 2000, and this had affected profit adversely by SEK shareholding in Wihlborgs no effect on profit. –30 million. The shares’ book value Fastigheter AB. The holding thereafter amounted to SEK 38 consisted of 4,500,000 Class A- FOLKEBOLAGEN million. Peab’s holding amounts shares and 13,370,000 Class B- It has been decided that the to 996,976 Class B-shares, which shares, which correspond to 5.7 shareholding in Folkebolagen AB corresponds to 29.9 percent of percent of capital and 14.6 will be sold. Depreciation of capital and 18.6 percent of votes.

30 Competitor analysis

The tables below summarise the The year-end reports are often companies. It has not been most essential items from the condensed and some data is possible to take this into full income statements of the largest lacking in a number of cases. consideration. Swedish construction companies. Assumptions have therefore been The figures have been taken necessary to some extent. from the 1999 year-end reports of Accounting and valuation these companies. principles may vary between

Net sales, Sweden

MSEK 1999 1998 MSEK 25,000 Peab 12,222 10,766 Skanska 22,800 20,500 NCC 21,100 20,282 20,000 JM 4,500 3,500 15,000

10,000

5,000

0 Peab Skanska NCC JM

1998 1999

Contracting operations, total Peab Skanska NCC JM MSEK 1999 1998 1999 1998 1999 1998 1999 1998 Net sales 13,841 12,616 73,239 56,871 35,523 31,921 5,085 3,966 Operating profit 246 280 1,943 1,071 1,025 723 330 185 Operating margin, percent 1.8 2.2 2.7 1.9 2.9 2.3 6.5 4.7 Orders received 12,111 12,721 90,252 71,530 36,160 33,124 5,780 4,355 Order backlog 7,188 6,855 93,089 67,102 18,894 18,460 3,819 2,950

Net sales Operating margin Orders received MSEK % MSEK 80,000 7 100,000 90,000 70,000 6 80,000 60,000 5 70,000 50,000 60,000 4 40,000 50,000 3 30,000 40,000 2 30,000 20,000 20,000 10,000 1 10,000 0 0 0 Peab Skanska NCC JM Peab Skanska NCC JM Peab Skanska NCC JM

1998 1999 1998 1999 1998 1999

31 Personnel

The aim, according to our of responsibility combined personnel policy, is to be an with altered forms of pay. industry-leader in terms of • New wage systems with recruiting, developing and increased opportunities for retaining qualified personnel. key data reporting and staff This means that we shall offer an development. attractive workplace for both • A trainee programme linked matters. The cornerstones of existing and prospective to civil engineering education. personnel-related work shall be employees. We encourage • Keep-fit schemes to safeguard co-ordination, consistency and competence-enhancement and the health of employees. competence. commitment in A number of action plans have order to give A new, improved personnel been formulated, with themes both the com- function has been created in that include: pany and its connection with the forming of • Short and long-term employees the Peab Sverige AB in order to personnel support with an highest possible further strengthen the line emphasis on succession and value from their organisation in regional development. employment. personnel • Personnel development with Construction an emphasis on improved in the future induction programmes. will require • Workplace organisation, inter- continual new learning, which is personal relations at work and why all staff at Peab shall be forms of pay. offered opportunities to develop. • Internal information for Committed and competent increased participation, personnel is the key to success. responsibility and With a high percentage of commitment. craftsmen on its staff, Peab can focus on long-term competence development, which leads to increased quality, raised cost- consciousness, kept deadlines, the selection of environmentally- sound solutions, and the minimisation of errors. In the past year, we have carried out several activities, including: • Training, comprising of everything from basic training to top management development. • Trials of new types of organisation with new demarcations

32 Environmental key ratios Continual % 1999 1998 1997 Basic environmental training Extent of basic training of environmental total no. of employees 78 72 33 Residual products not consigned to landfill work Amount of residual products that are in some way recycled as percentage of total amount of residual products 64 50 –

In Peab’s strategy there is an both sensitivity and flexibility. successful in purchasing on a emphasis on high quality Peab, however, has greater number of projects where the standards. This applies not least ambitions than that. With our client has set exacting environ- for our active environmental work, experience and solid expertise, we mental standards. The develop- which is a long-term, continual shall drive change-related work ment of sustainable solutions is process in the Group. Peab shall in the direction of sustainability. best accomplished on projects work towards ecologically where Peab, in close consultation sustainable development in all NEW MANAGEMENT SYSTEM with the client, can develop the parts of its operations. Through co-ordination of the By ecologically sustainable Swedish construction and development, we mean that we civil engineering operation in reduce our part in exposing Peab Sverige AB, we have nature to: created an organisation that provides both local flexibility • Systematic concentration and central strength, not least increases of substances from in the environmental field. We bedrock. have now initiated work on • Systematic concentration building a joint, fully- increases of substances integrated operation manage- produced by society. ment system in Sweden. The future of construction. With • Systematic displacement system shall ensure that the experience and knowledge from caused by over-extraction or Group’s high environmental and these projects, the business is manipulation. quality standards are followed developed in a sustainable throughout the construction direction. We will also: process, and that Peab’s way of • increase our capability to working continues to spearhead THE ENVIRONMENT MANUAL provide benefits and value to development. Peab was one of the founders of customers, personnel, owners the Environmental Institute for the and society in general. MAJOR ENVIRONMENTAL Construction Industry, formed to STUDY encourage the sector to choose We have been involved in many In 1999, Peab carried out an environmentally-sound solutions. advanced projects and gained extensive environmental study in The institute has produced the valuable insights into the ecolo- which important environmental Environment Manual, a computer- gically sustainable construction aspects and legal requirements that based tool containing expert of the future. Our ambition is that affect the company’s operations information on the environmental Peab will continue to be the were identified. Work is now being aspects of the various stages of the contractor that is chosen for done to develop instructions and construction process, which makes innovative construction and civil routines in order to meet require- it an important source of engineering projects. ments for ISO 14001 and EMAS. knowledge when Peab builds for We know that building the future. More information materials and our way of building ENVIRONMENTAL about the Environment Manual is will change continually. We DEVELOPMENT WITH THE available on the Internet at continue therefore to develop the CLIENT www.miljomanualen.org capability to face changes with During the year, Peab has been

33 Sunningesundsleden – safer motoring and shorter journey times

One of Sweden’s most accident- character. For example, all those plagued stretches of road is the E6 involved in the project were just outside Uddevalla. The need given special training in environ- Peab’s Everyday Work Peab’s for measures became more mental consideration. Barrels for pressing, and in 1995 a decision waste sorting and specially made was made to carry out rebuilding double-bottomed containers for work. The project commenced two storage of waste oil, oil filters and years later, starting with dredging other environmentally-hazardous and groundwork. Work proceeded waste were set out at the simultaneously on the Uddevalla worksites. All plant on site was Bridge and the Sunningesunds- required to have catalytic leden stretch of road. As a result, converters or comply with EU the E6 was shortened by 13 requirements on exhaust emis-

kilometres and passing traffic is sion control. In addition, spared from a long detour with machines were equipped with an many traffic light-regulated environmental emergency bag in crossings. Road safety was also case of unforeseen incidents. considerably improved. Leaking hydroaulic oil was Peab’s part in the extensive dealt with by using specially project was the road known as treated peat that binds the oil. Sunningesundsleden between The emergency bags also Lerbo and Sund – three contained special cloths for kilometres of motorway with five absorbing and cleaning up, as road bridges over ravines and well as a special-purpose vessel extremely muddy ground for setting under a dripping conditions. In Sunningesund, engine. It also contained special there are vital feeding grounds material for collecting oil if it for many fish species, and a should leak out into one of the number of ancient monuments many nearby streams. were near the planned route. The The project was carried out project required an exceptional with great consideration for those commitment to the environment. living nearby, which meant that Consequently, the worksites noisy and dusty work was only took on a slightly different carried out at certain times.

34 These are no ordinary piston One immediate problem was that Daros – a rings, sizes can vary from 20 the relatively dirty and noisy centimetres to 2 metres, and there casting operation had to fit in traditional are exacting standards for the with the clean and tidy business material’s composition and park. The factory building was durability. constructed at the right angle to industry A piston ring in a large diesel follow the terrain. With this engine on a modern cargo vessel layout, raw material goes in at in a new can be exposed to pressures of up one end and finished piston rings to 500 tons and be heated up to come out at the other. The factory environment 400°C. It has a service life of was built with a reinforced almost 300,000 kilometres. These concrete framework to minimise piston rings are made with high noise. precision and exact metallurgy. A special system was installed The process itself consists of for recycling heat from the The Gothenburg-based company, nearly 50 different stages, and smelter furnaces. The heat is Daros, has a history stretching Daros developed a whole science distributed via various heat back to the late 18th century, around casting, methods and exchangers and piping under all when the Scot, David Robertson, surface treatments at its old the floors. Using this technique, started a small smithy on Stamp- factory in Partille. The premises, the Daros premises have attained gatan. A century later, when all furnaces and interiors, built in the heating self-sufficiency. the world’s ships were driven by 1940s, were in great need of steam engines, Daros started to renovation. manufacture piston rings for In January 1998, after intensive shipbuilders. Steam was project development work, Peab superseded by oil, but piston won the contract to build a new rings are still needed, and Daros factory for Daros in the business is a world-leading manufacturer. park, Mölnlycke Företagspark.

35 The bridge over the Traneberg Sound in Stockholm was originally built because Gustav III wanted a smooth passage into the city from Drottningholm Castle. Today, the Traneberg Bridge is the main link between central Stockholm and the western suburbs. Peab won the contract to carry out a thorough renovation of the bridge – work that had to be carried out in the middle of constant heavy traffic on one of Stockholm’s busiest approach routes. In 1778, the Traneberg Bridge was a boating bridge. A hundred years later this was replaced by a pontoon bridge, which stood until The Traneberg Bridge the start of the 20th century. Today’s Traneberg Bridge dates – King Gustav III’s from between the wars. It is sited at the sound’s narrowest point and is supported by two huge concrete bridge arches with a 181-metre span. The high arch provides 26-metre

Peab is continually improving its purchasing processes in terms of Örtagården – the choice of natural materials, recycling and environmental autonomous housing thinking. This applies especially to a recent development: the estate construction of self-sufficient, closed-loop-based housing estates. handled by two separate systems: Peab is now building Örta- one for bath, shower and gården in Västerås. On the washing water, and another for surface, it looks like any other toilet wastewater. new housing estate. Excavation All water, except wastewater, has proceeded carefully, and the is treated via an infiltration wooden houses are beautifully system using a ground bed. embedded in the natural Afterwards, water is returned to surroundings. The aim is that the environment. Wastewater is Örtagården shall be as independ- mixed with household waste, ent as possible from the Västerås ground down in a mill and through a special evaporation local authority in terms of transported to a special treatment process that evaporates off all the electricity and refuse collection. plant. There, the mass is water. A water catchment 500m from separated into solid and liquid Underground-heat pumps and the estate means that Örtagården parts. The solid part becomes waterborne floor heating are has its own well. Sewerage is compost and the liquid part goes installed in all of Örtagården’s

36 clearance for boats in the sound. ground railway will be transferred consisting of four concrete caissons The bridge has been maintained onto it, while the present railway on the sides of the waterway, will over the years, but both the main bridge will be demolished down to be built in the sound. This enables beams and pillars are now the arch in the same way. Similarly, a steel framework to guide vessels corroded and cracked. In 1997, a new bridge will be built on the into the channel where the arch is heavy traffic was banned from the old arch and the underground will highest. This will prevent boats bridge, and it was decided that the be moved from Traneberg Bridge could not meet back again. colliding modern traffic requirements and When with the needed extensive renovation. everything bridge’s Work on the bridge will take is complete, arches. In five years and entails extensive traffic this way, rerouting of traffic in several bound for accidents stages on a constantly busy the western such as the approach that must be in use suburbs one at throughout the project. will drive Tjörn The project will begin with on the renovated bridge, and Bridge in 1980 will be avoided. construction of a new bridge traffic coming into the city will The project, a partnership alongside the existing one, to be drive on the new one. between Stockholm’s local traffic completed in 2001. Traffic will be Apart from bridge construction, authority and the Swedish redirected onto the new bridge the work encompasses renovation National Road Administration, is while the old one is demolished of road bridges on both sides of being loan financed by Stockholm down to the arch. A new bridge the Traneberg Bridge as well as City Council. Peab’s share of the will be built on the old arch, and walls, supports and noise project amounts to SEK 460 when it is complete the under- protection. A piled fendering, million.

houses. This solution means that solutions including oak parquet standard layouts ranging from 85- Örtagården only needs to buy 30 floors and fully-tiled bathroom 175 square metres, and available percent of the electricity for facilities. The room layouts are financing offers very reasonable heating required by a traditional new with exceptionally well- housing costs. The first stage housing estate. equipped kitchens and consists of 30 houses. The housing estate offers lavish bathrooms. There are 19 different

37 Unique sheltered housing

How are we going to take care of the elderly? And how can security, services and care be combined with ordinary housing? These are important questions that affect all of us. The political and media debate on the problem of elderly care is intensive. Today, many of the initiatives being taken are private solutions. Peab’s project developer has started a partnership with SEB Trygg Liv and Bure Vård & Omsorg. The aim is to create better housing for the elderly. The keyword is security – the security of living in a way that makes you “feel at home”, in close proximity to others, but with access to the help and care you need in the later stages of life. The apartments in the block are adapted in different ways, depending on who is to live there. There will be both sheltered housing adapted for the elderly, and assisted living accommodation operated via a general agreement with local authorities. Sheltered housing also includes various services including security. In short, this is elderly housing on the elderly’s terms. And elderly housing that can be adapted according to the resident’s situation and changing needs. customers of SEB Trygg Liv with comprising of 100 apartments are The partnership is divided up long-term insurance savings. The planned for Stockholm, Gothen- as follows: Peab builds the aim is to create comfortable burg and Malmö. It is envisaged housing and is responsible for elderly housing with individually- that one-third of these will be in operation and maintenance, Bure tailored services and care. the form of assisted-living Vård & Omsorg provides services The first residences will be built accommodation. The operation and care, and the apartments are in and around the major cities. In will be run as a company, and is offered in the first instance to stage one, reference facilities expected to start up in 2000.

38 The Children’s Centre in Lund

Discussions on a new children’s Lund is one of two centres for hospital in Lund began in the children’s heart surgery in early 1990s. The University Sweden. The hospital is also a

are built according to patients’ needs and the specialists have to move accordingly. One of the aims of the Child- ren’s Centre in Lund is that the environment should be more like a home. That means natural materials and warm colours throughout. The area around the Hospital needed new premises leader in care and research relating Children’s Centre has also been and more resources. It was not to child rheumatism. The aim is to given special consideration, and clear how these would be create a unified medical centre of preparations are being made for a provided, and the debate was high quality that provides con- pleasant little park. lively and long-drawn-out. The siderable parallel opportunities for To increase flexibility, there are project has therefore been subject training and research. provisions to build additional to many delays and difficulties The health care sector is facing floors onto the existing building in of a political nature. major changes. Hospitals are not the future, if required. As with Now, however, the work is in the large, hierarchical systems Sunderby Hospital, a special full swing and the Children’s they once were. Previously, project office has been set up on Centre will be handed over to the hospitals were built for specialists, site. Experiences from this have client, Region Skåne, in the and each medical speciality had been very good, as it provides an autumn of 2001. its own building. Now hospitals excellent overview and short decision-making channels for those involved. The project team and site management adds up to 22 people, of which 15 are from Peab.

39 Naddö – renovating a part of Swedish history

“Now, I sit here on my headland surrounded by surging Vättern, with

the Vadstena monastery and castle

on one side of the bay, and far away

to the west, the distant blue heights

of Tivedshöjderna. To the north, no

land can be seen, and to the south

lies the Östgöta plain like a 20-

kilometre floor running right down

to Omberg.” – Verner von Heidenstam

Renovating old historic buildings perhaps his most productive. In the project ended in bankruptcy is a job that calls for special 1916, he was awarded the Nobel some years later. When a couple, consideration and knowledge. Prize for Literature. the Fritzes, bought Naddö in Close to Vadstena, on a Naddö was demolished in 1997, maintenance had been headland in Lake Vättern lies 1918, only to be rebuilt in an old neglected and the mansion Naddö, a beautiful needed to be mansion in historic renovated from grounds. The first the ground up. reference to the Peab won the mansion was in complete 1414, when it was contract. Skilled called Nådläge. The craftsmen were house was owned hand-picked for by Birger Nilsson the job. Restoring Grip in the 16th an old mansion century, after which to its original the mansion had a condition series of noble requires respect owners such as and special Banér, Bonde, Natt expertise. and Dag. Between 1902 and 1918, style. In the mid-1990s, it changed Naddö was renovated from Naddö was owned by the poet, hands and the new owners top to bottom. And when an old Verner von Heidenstam. The planned to convert it into a mansion after renovation looks period when he lived there was training centre and restaurant, but and feels like the authentic

40 original, the project has been a floorboards from the clothes an ugly hole cut in the kitchen success. The job involved cupboards replaced the heavily- parquet, intended for a floor returning a property to its worn floor in the corridors. The drain. As Kersti Fritz is an artist, original state, while also destroyed floor surfacing in the Peab’s site manager asked her if discreetly introducing modern pantry passages was replaced by she could design something to techniques. At Naddö, all the an old parquet floor from a school replace the hole in the floor. The timbers were replaced and most in Linköping – a parquet made of result was a beautiful ‘N’, as in of the wood floors were relaid fine old oaks that had been Naddö – a change in tune with and sanded. allowed to grow for decades. the mansion’s history. Restoring large areas of The previous owner’s catering parquet floor required great ambitions could be seen from the craftsmanship. It needed both restaurant kitchen that had been mending and patching. The installed. There was, for instance,

41 the contractor for the future’s lights are installed in order to Green closed-loop-oriented utilise daylight more efficiently construction. The majority of and save on electricity. A solar Zone Peab’s staff has completed special panel has been installed on the training as well as a programme car hall, and all the buildings are Green Zone is a unique closed- on how accumulated experiences heated and cooled using an loop project that began in Umeå can be spread throughout the underground-heating system, in the summer of 1999. The Group. which is complemen- roadside service facilities that will The closed- ted with conduits for come into operation in April 2000 loop approach surplus heat between include a garage, petrol station, permeates the the buildings. cash dispenser and fast-food whole project. Tropical plants purify company. Green Zone combines Sewerage water the air and enrich it advanced environmentally-sound is not connected with oxygen to technology with a long-term to the local authority sewerage reduce the need for mechanical economic perspective and a system, but is instead treated ventilation. The energy consump- marked systemic approach. This locally and reused. Due to water- tion of Green Zone is estimated to project is the only one of its kind efficient solutions and tanks that be 60 percent lower than for in the world. enable surface water to be used traditional facilities. The Green Zone project creates for watering and as process On the ground, reinforced opportunities for Peab to water, consumption of water has grass has replaced asphalt in reinforce its leading position as been cut by 90%. The windows most places, and all material is are highly insulated. All bolted or screwed in place so it insulation is done with cellulose can be reused or recycled. fibre. Lantern lights and plasma Green Zone has gained the environmental certificate ISO 14001, and all personnel working at the area will receive environmental training.

42 Asphalt modified bitumen with exceptionally high resistance that with- properties. In 1998, Peab commenced a partnership with the Danish stands specialist company, Pankas. After a year of tests, a type of bitumen corrosive that could withstand extreme stresses was successfully fuel developed. A test project began in conjunction with the Swedish Clearly, asphalt paving should be Fortifications Administration and able to withstand most the Air Force at F10 stresses, but at an outside Ängelholm. airport the The results were conditions are unambiguous. The particularly new asphalt extreme. De-icing fulfilled the chemicals, jet fuel requirements of and wheel track the Fortifications marks set tough Administration by a requirements for wide margin. The airport asphalt. Therefore, resistance was more than Peab has developed a new double that of conventional asphalt paving using a polymer- paving and wheel track marks

diminished by 65 percent. Successful tests were also carried out on resistance to de-icing chemicals.

43 Sunderby Hospital

– the right product, at the right time and the right price, won the prize

It is Europe’s most modern taken four years to design and hospital, it cost SEK 1.1 billion complete the general hospital for and took four years to build. Norrbotten county council. In September 1999, Queen Planning started in 1994 and Silvia of Sweden officially opened construction began in January Sunderby Hospital – an ultra- 1995. The final inspection com- modern medical palace devoted menced in February 1999, and in to efficient and high-tech health May the hospital was handed over care with a focus centred on the to the client. The whole contract patients. amounted to over SEK 1 billion. Sunderby Hospital has been one Peab, together with the installation time, but even so the work has of the country’s single largest companies, was responsible for all proceeded rapidly in view of the construction projects, and it has co-ordination. Five years is a long project’s complexity. At most, 360 people have been working on site at the same time. The construction was planned with great care in accordance with the seasons, and work did not stand still for a single day, despite five winters in the far north of Sweden. The assignment was a complete contract comprising of a combination of fixed price and current account work with an incentive agreement. This meant that Peab worked continually in close co- operation with the client. In the planning stage, a lot of time was spent on studying how patients, staff and materials moved

44 In the Construction Awards of the Year for 1999, Sunderby Hospital won first prize in the category “Building of the Year” in Sweden. between the various parts of the close to hand for everyone. sewerage installations have been hospital. From a staff perspective, Foresight has been a central executed using a special kind of it was important to minimise the theme throughout the project. piping that is sound-absorbing distance between different duties. and more environmentally- For patients, the proximity friendly. Electric cables are between the various departments contained in a totally new type of is important. Long transfers can plastic pipe that is lined with be critical procedures in urgent aluminium sheeting and situations. Therefore, at Sunderby effectively insulates the entire Hospital the intensive care ward hospital. Techniques for control and operating theatres are located and regulation required ultra- immediately adjacent to the modern solutions, in which casualty department. The everything from fire alarms to maternity ward is positioned close medical databases and electronic to the operating theatres to reduce This is apparent both in the choice systems function together. The risks in cases such as emergency of building materials and result is a virtually paperless, Caesarean sections. The x-ray technical solutions. All the clinically clean hospital where department and laboratories are materials used have declared computers and screens control situated in the middle of the constituents, and are documented much of the work, and technology hospital – centrally sited and and allergy-tested. The water and is used in everyday health care.

45 Share information

Share capital Share data 1999 1998 The share capital comprises 69,141,409 shares with a Earnings after standard tax rate, SEK 2.00 2.20 nominal value of SEK 10 distributed by Class A- and Class Earnings after actual tax, SEK 3.40 2.10 B-shares as follows: Adjusted shareholders’ equity, SEK 22.00 19.50 Class of Voting Share of Share of voting 18.10 shares Number rights capital, percent rights, percent Share price at year-end, SEK 17.50 Share price/adjusted equity, percent 82 90 A 9,805,702 10 14.2 62.3 Dividend, SEK1) 0.80 0.60 B 59,335,707 1 85.8 37.7 Yield, percent 4.40 3.40 Price/earnings ratio, standard tax rate 9 8 69,141,409 100.0 100.0 Price/earnings ratio, actual tax 5 8

1) Board of Directors’ proposal to the Annual General Meeting of the shareholders.

Distribution of shareholdings on December 31, 1999

Number of Number of Together Share of Number of shares shareholders shareholders, percent own capital, percent 1– 500 5,195 41.3 1,238,534 1.8 501– 1,000 2,603 20.8 2,149,833 3.1 1,001– 2,000 2,192 17.5 3,370,846 4.9 2,001– 5,000 1,526 12.2 5,111,684 7.4 5,001– 10,000 598 4.8 4,439,221 6.4 10,001– 20,000 233 1.9 3,388,084 4.9 20,001– 50,000 111 0.9 3,524,117 5.1 50,001–100,000 27 0.2 1,867,789 2.7 100,001– 52 0.4 44,051,301 63.7

12,537 100.0 69,141,409 100.0

Share of capital, Share of voting rights, percent percent Share of institutional investors 11.8 5.2 Share of foreign investors 29.1 12.8

Institutional investors include, among others, banks, insurance companies, mutual funds and pension funds.

List of shareholders on March 20, 2000

Share of Share of Total number capital, Voting voting rights, Shareholders A-shares B-shares of shares percent rights percent Erik Paulsson with family and companies 3,487,890 1,703,944 5,191,834 7.5 36,582,844 23.2 Mats Paulsson with family and companies 2,753,244 2,050,403 4,803,647 6.9 29,582,843 18.8 International Construction Management Consultants — 16,026,771 16,026,771 23.2 16,026,771 10.2 Fredrik Paulsson with companies 987,340 701,659 1,688,999 2.4 10,575,059 6.7 Stefan Paulsson with companies 987,340 694,975 1,682,315 2.4 10,568,375 6.7 Sara Karlsson with companies 640,890 645,241 1,286,131 1.9 7,054,141 4.5 Svante Paulsson with companies 640,890 518,554 1,159,444 1.7 6,927,454 4.4 LKAB — 1,522,040 1,522,040 2.2 1,522,040 1.0 Other 308,108 35,472,120 35,780,228 51.8 38,553,200 24.5

9,805,702 59,335,707 69,141,409 100.0 157,392,727 100.0

Shareholding agreement As far as the Board of Directors is aware, there is no shareholding agreement between shareholders in Peab AB.

46 Share information

Changes in share capital during the period 1974–1999

Change of Share Year share capital, SEK capital, SEK 1974 100,000 1978 Bonus issue 9:1 900,000 1,000,000 1983 Bonus issue 7:1 7,000,000 8,000,000 1986 Split 10:1 — 8,000,000 1986 Bonus issue 1:4 2,000,000 10,000,000 1987 New share issue 1:2 5,000,000 15,000,000 1989 Bonus issue 2:1 30,000,000 45,000,000 1992 Directed new share issue 62,964,250 107,964,250 1993 Directed new share issue 25,000,000 132,964,250 1994 New share issue 3:1 398,892,750 531,857,000 1997 New share issue 3:10 159,557,090 691,414,090

Outstanding warrants Outstanding call options Warrant 1997/2002: in 1992 a subordinated debenture Call option 2000: The 1996/2000 subordinated convertible loan of a nominal SEK 25 million was issued. This was debenture is associated with 15,220,588 convertible redeemed in1997. The subordinated debenture loan was promissory notes. In connection to the 1997 new issue, the issued with 1,500,000 separable warrants, which after holders at that time of 10.7 million of the convertible adjusting for the cash issues in 1994 and 1997, carry the promissory notes committed to issuing call options to those right to subscribe for 2.04 new class B-shares per warrant shareholders who participated in the new issue. during the period May 1, 1997 to April 30, 2002, at an issue Each call option carries the right to the purchase of a price of SEK 22.10. The 1997/2002 warrant is not quoted. convertible promissory note with a nominal value of SEK 17, which according to the conditions of the offer carries the Warrant 2000: in 1996 a subordinated debenture loan was right to be converted to one new class B-share. The call issued with a nominal value of SEK 86 million. The option may be exercised during the period from October 16, subordinated debenture loan was issued with 6,000,000 2000 to November 1,2000, at a price of SEK 22.50. Call separable warrants which carry the right to subscribe for 2000 is listed on the Stockholm Stock Exchange since one new class B-share per warrant during the period from January 24, 1997. July 1, 2000 to December 15, 2000, at an issue price of SEK 22.50. Warrant 2000 is quoted on the Stockholm Dividend policy Stock Exchange since January 15, 1998. In accordance with the Board of Director’s stipulated financial objectives, dividends as from the financial year Outstanding subordinated convertible debenture loans 2000 shall correspond to 35-45 percent of profit after tax. Subordinated convertible debenture loan 1996/2000: A dividend of SEK 0.60 per share was granted for the In 1996 a subordinated convertible debenture loan was issued 1998 financial year. The Board of Directors proposes to with a nominal value of SEK 259 million. The subordinated grant a dividend of SEK 0.80 per share for the 1999 convertible debenture loan was issued with 15,220,588 financial year, which corresponds to 24 percent of profit convertible promissory notes, which carry the right to be after tax, or a total dividend payment of SEK 55.3 million. converted to one new class B-share in Peab per convertible promissory note during the period from January 1, 1997 to December 15, 2000, at a conversion rate of SEK 17. The 1996/2000 subordinated convertible debenture is not market listed.

Changes in the number of shares

A-shares B-shares Accumulated number Number of shares on December 31, 1999 9,805,702 59,335,707 69,141,409 Convertible subordinated debentures 1996/2000 — 15,220,588 84,361,997 Warrant 1997/2002 — 3,060,000 87,421,997 Warrant 2000 — 6,000,000 93,421,997

9,805,702 83,616,295 93,421,997

Relates to the changes after subscription of outstanding warrants and conversion of subordinated convertible debenture loan.

47 Share information

Changes in adjusted shareholders’ equity and the equity/assets ratio

Adjusted shareholders’ Equity/assets MSEK Change equity cumulative ratio, percent Financial accounts December 31, 1999 1,520 23 Convertible subordinated debenture loan 1996/2000 15,220,588 Peab B á 17.00 SEK 259 1,779 27 Warrant 1997/2002 3,060,000 Peab B á 22.10 SEK 68 1,847 28 Warrant 2000 6,000,000 Peab B á 22.50 SEK 135 1,982 30

Relates to the changes after subscription of outstanding warrants and conversion of the convertible subordinated debenture loan. The calculation is based on the balance sheet as per December 31, 1999.

Peab Class B-share performance

Adjusted equity Earnings per share Dividend per share per share SEK SEK SEK 3.5 1.00 25

3.0 0.80 20 2.5

2.0 0.60 15

1.5 0.40 10 1.0 0.20 5 0.5

0.0 0 0 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999

48 Financial overview

Financial management well as the increasing competition regarding the purchase of The financial administration of the Group is governed in goods and services. Contracted or budgeted currency flows accordance with valid financial instructions, which are may be hedged for the immediate six months. Exchange determined by Peab’s Board of Directors. Peab’s financial rate differences from this type of hedging are reported as administration is centralised. A centralised financial adminis- operating profit in the Income Statement. tration ensures good control over, and efficient management of, the Group’s financial risk exposure and monetary flow. The Group’s competence within the financial field is concentrated Interest-bearing liabilities by currency, at a level in the company which, through an active role in the December 31, 1999 capital markets, creates interfaces as well as optimises the Local currency (millions) MSEK Group’s terms. The Finans Group function and the Group’s internal bank, Peab Finans AB, are responsible for the co- Swedish kronor 1,732 1,732 ordination of the Peab Group’s financial operations. Norwegian kroner 323 344 The Finans Group function manages overall issues Euro 13 111 concerning financing within the business such as cash Polish zloty 2 5 management and investments. The function also has a co- Total 2,192 ordinating responsibility to create competitive and customer- adapted financing solutions in connection with contracts. The internal bank Peab Finans AB deals with the Group’s liquidity and liability management as well as the handling of Interest risk the Group’s financial risk exposure. The company also acts The level of the net loan debt on December 31, 1999 was as a service function for subsidiaries and prepares solutions SEK 1,107 million (1,493). Interest-bearing liabilities totalled regarding internal loans and investments, hedging, etc. SEK 2,192 million (2,247), of which current liabilities were SEK 144 million (151). Financial risks According to financial policy, the average fixed interest The Peab Group is exposed to a number of different term on total loans should be a maximum of 24 months. At financial risks such as currency risk, interest risk, financing year-end, the average fixed interest term on utilised loan risk and credit risk. According to Peab’s financial policy, the facilities was 6 months (11), unutilised loan facilities 0 Group shall minimise all financial risks. Risk management months (0), and on the total granted loan facilities, 4 concerning currency risk, interest risk, financing risk as well months (9). as financial credit risk is handled by Peab Finans AB, Peab uses various types of financial instrument, such as whereas credit risk concerning current operations is interest forward transactions and interest swaps, to control assessed and managed by the respective subsidiaries. fixed interest terms and interest levels on outstanding liabilities. At year-end, the Group’s outstanding interest Currency risk instruments amounted to SEK 0 million. Financial exposure As illustrated by the table summary below, SEK 2,051 The Group’s operating loans are raised in local currency to million of the Group’s total interest-bearing liabilites have a reduce currency risks in operations. Of the interest-bearing fixed interest term of less than 1 year. All interest-bearing long-term liabilities on December 31, 1999, operating loans asset items, totalling SEK 1,085 million, have a short fixed in Norway accounted for SEK 142 million (477) and interest term, which entails that SEK 966 million of the operating loans in Sweden, SEK 1,848 (1,583). Assets and Group’s net borrowings has a fixed interest term that is less liabilities in foreign currencies are translated at balance than 1 year and is therefore affected relatively rapidly by a sheet date rates. Remaining exposure is eliminated through change in market rates. (see Sensitivity analysis) loans/investments or currency futures. Exchange rate differences that arise in translation of receivables and liabilities, and hedging thereof, are reported as a part of Fixed interest on utilised loan facilities, profit from financial investments in the Income Statement. December 31,1999

The loss from financial exposure in 1999 totalled SEK –2 Amount, Average interest Share, million (4). Fixed interest term MSEK rate, percent percent 2000 2,051 4.6 94 Equity exposure 2001 — — — The currency exposure arising through investments in 2002 91 8.0 4 foreign net assets is hedged through raising loans in foreign 2003 50 8.9 2 currencies or through forward exchange transactions. Of 2004– — — — the total long-term liabilities on December 31, 1999, liabilities attributable to hedging of foreign net assets Total 2,192 4.9 100 amounted to SEK 202 million (187). Exchange rate differences arising from hedging are eliminated in the Group against exchange rate differences on foreign subsidiaries’ net assets (translation differences). Translation differences The weighted average interest rate on utilised loan facilities after eliminations on December 31,1999 amounted to SEK amounted at year-end to 4.9% (6). The debt/equity ratio at 0 million (0). year-end was 1.4% (1.7)

Commercial exposure Financing risk International purchases and sales of goods and services in According to financial policy, the Group’s granted borrowing foreign currencies are limited in their extent, but can be commitments shall primarily be medium-term, that is expected to increase in line with the Group’s expansion, as between 12–60 months. This is because the construction

49 Financial overview

and civil engineering business ties up relatively little capital, other assets of the same type. The financial charges whereas the Group’s financial asset items are considerable. (interest) are divided over the agreement term so that each Certain financial asset items are reported in the business reporting period is charged with an interest that sector Operations under Termination and shall be divested corresponds to interest costs on the respective period’s according to decisions made. At year-end, the average reported liabilities. Interest expenses on activated leasing fixed interest term on utilised loan facilities was 36 months contracts in 1999 amounted to SEK 6 million (5). Leasing (38), unutilised loan facilities 21 months (37) and on total fees reduce, after deductions for interest, the reported loans granted, 31 months (38). liability. During the year, loans maturing in 2001 for SEK 365 million have been extended to mature in 2003. Total granted The euro loan commitments on December 31,1999 amounted to SEK Peab’s domestic market is Sweden and Norway. Sweden is 3,108 million (3,456) excluding leasing agreements. one of the countries that has decided to adopt a “wait and In order to fend off seasonal variations, meet unexpected see” approach to entry into currency co-operation in the changes in cash flow and maintain good payment readiness European Union. Norway is not a member of the European for possible acquisitions, Peab has a policy to make Union and does not co-operate with the EU on currency available unappropriated liquidity including unutilised loan policy. facilities amounting to an average of SEK 1,000 million in a The euro is traded on currency markets and used as a financial year. The Group’s unappropriated liquid funds on transaction currency. Peab handles transactions and December 31, 1999 amounted to SEK 1,004 million (1,232) tenders in euros in the same way as for other currencies. excluding unutilised leasing agreements. In view of its geographic market coverage, Peab has decided to defer final adjustments of business systems. A Maturity of utilised loan facilities, project group is carefully monitoring developments, both of December 31, 1999 customers’ adjustments to the euro and the political trends Amount, Share, affecting an eventual linking of the Swedish and Norwegian Maturity MSEK percent krona to currency co-operation. The group’s task is to 2000 341 16 secure a smooth and cost-effective changeover to the euro 2001 — — as Peab’s principal currency, if and when Sweden estab- 2002 77 4 lishes a plan for how the linking of the krona to currency 2003 1,654 75 co-operation in the European Union shall be implemented. 2004– 120 5 Sensitivity analysis Total 2,192 100 The sensitivity analysis table below illustrates how Peab’s profit is affected by changes in some of the Group’s important variables. Credit risk Credit risk is defined as the risk of losing money because Sensitivity analysis, December 31, 1999 the opposite party cannot fulfil their obligations. In the Effect contracting business, credit losses are small due to the MSEK Calculation basis Change on profit large number of projects, and amounted to SEK 2 million for Construction and Civil Engineering the year. The credit risk in financial operations is very small Volume (operating as Peab only deals with opposite parties that have the margin constant) 11,400 +/– 10% 25 highest credit ratings. In 1999, Peab was not affected by any financial credit losses. Operating margin (volume constant) 2.2% +/– 1% 114 Investments Net investments in fixed assets during the year amounted to Material and SEK 117 million (977), of which SEK 340 million (819) sub-contracts 8,700 +/– 1% 87 related to goodwill and plant, and SEK –223 million (158) related to shares and participation rights. During the year, Industry net acquisitions of real estate held for resale amounted to Volume (operating SEK 39 million (net disposals 44). margin constant) 2,700 +/– 10% 23

Leasing Operating margin In total, the Group arranged leasing agreements amounting (volume constant) 8.6% +/– 1% 27 to SEK 405 million. The utilisation of leasing agreements amounted to SEK 255 million on December 31, 1999. Finance Of outstanding leasing contracts on December 31,1999, Net borrowings SEK 101 million (95) has been balanced in accordance with (interest rate constant) 1,100 +/– 10% 5 the Swedish Financial Accounting Standards Council’s recommendation No. 6 (Accounting of leasing agreements). Interest1) In accordance with this recommendation, the objects held (net borrowings constant) 4.9% +/– 1% 10 according to financial leasing contracts taken up after January 1, 1997 are reported as fixed assets in the Balance 1) The calculations are based on the assumption that SEK Sheet, and corresponding obligations to pay leasing fees in 950 million of net borrowings has a fixed interest term that the future, as interest-bearing liabilities. The objects are is shorter than 1 year, and is therefore affected relatively written off according to the same principles that apply for rapidly by a change in market rates.

50 Five-year review

Group

MSEK 1999 1998 1997 1996 19951) Income statement items Net sales 13,841 12,616 10,679 10,580 9,992 Operating profit 246 280 172 145 147 Profit after financial items 162 211 105 68 63 Net profit for the year 233 145 105 47 62

Balance sheet items Fixed assets 3,145 2,873 2,061 1,756 1,799 Current assets 3,430 3,719 3,490 3,112 2,689

Total assets 6,575 6,592 5,551 4,868 4,488

Shareholders’ equity 1,514 1,322 1,205 1,124 792 Minority interests 6 23 20 18 18 Provisions 173 248 141 106 62 Long-term liabilities 2,048 1,990 1,142 1,048 843 Current liabilities 2,834 3,009 3,043 2,572 2,773

Total shareholders’ equity and liabilities 6,575 6,592 5,551 4,868 4,488

Key ratios Operating margin, percent 1.8 2.2 1.6 1.4 1.5 Profit margin, percent 2.2 2.8 2.2 2.0 2.0 Adjusted equity 1,520 1,345 1,225 1,142 810 Equity/assets ratio, percent 23.1 20.4 22.1 23.5 18.0 Risk-bearing capital 1,914 1,737 1,615 1,530 810 Share of risk-bearing capital, percent 29.1 26.3 29.1 31.4 18.0 Capital employed 3,712 3,592 2,922 2,363 1,923 Return on equity, percent 10.1 11.6 7.5 4.8 5.9 Return on capital employed, percent 8.3 10.8 9.0 9.2 10.8 Debt/equity ratio, multiple 1.4 1.7 1.4 1.1 1.4 Interest coverage ratio, multiple 2.1 2.6 2.0 1.5 1.5 Net borrowings 1,107 1,493 896 807 826

Capital expenditures Goodwill 49 162 20 – 8 30 Buildings and land –2 222 4 34 – 33 Machinery and equipment 293 435 48 25 107 Shares and participations –223 158 193 207 114 Real estate held for resale 39 – 44 48 97 – 276

Depreciation 216 152 101 103 109

Orders: Construction and Civil Engineering2) Orders received 12,111 12,721 12,017 9,539 9,990 Order backlog 7,188 6,855 6,191 5,021 5,390

Personnel Average number of employees 9,153 8,048 7,966 7,535 7,484

Share data Earnings after actual tax,SEK 3.40 2.10 1.50 0.90 1.20 – after completed subscription and conversion 2.50 1.60 1.10 0.80 1.10 Adjusted equity, SEK 22.00 19.50 17.70 16.50 15.20 – after completed subscription and conversion 21.20 19.30 18.10 17.20 15.70 Share price at year-end,SEK 18.10 17.50 18.40 21.50 13.30 Dividend,SEK3) 0.80 0.60 0.40 0.30 – Number of shares at year-end, millions 69.1 69.1 69.1 69.1 53.2 – after completed subscription and conversion 93.4 93.4 93.4 93.4 56.0 Average number of outstanding shares, millions 69.1 69.1 69.1 53.8 53.2 – after completed subscription and conversion 93.4 93.4 93.4 57.5 56.0

1) In the review, ongoing projects for the years 1996,1997,1998 and 1999 are accounted for according to the percentage-of-completion-method, whereas for 1995 the completed contract method has been applied. 2) For 1998 and 1999, the Construction and Civil Engineering business sector. For other years, the Group. 3) For 1999, Board of Directors’ proposal to the AGM

51 Directors’ report

Peab AB (publ) Company registration number: 556061-4330

The Board of Directors and Managing Director of Peab The loss from financial investments was SEK –84 million herewith submit the following annual report for the financial (–69), of which SEK -30 million is due to write-downs of year 1999. shares in Folkebolagen AB. Net interest income was SEK –57 million (–69), an improvement mainly due to reduced Operations net borrowings. Peab’s operations during the year have been marked by Profit after financial items was SEK 162 million, continued good utilisation of capacity, a rising percentage of compared with SEK 211 million for 1998. complete projects, growth in property resale activities, and the development of special projects. Profit after Sales financial items The Group’s net sales for 1999 increased by 10 percent to MSEK 250 SEK 13,841 million (12,616).

Of net sales, SEK 434 million related to acquisitions. 200 Adjusted for these acquisitions, as well as Swerock AB and Cliffton AB, which were only a part of the Group for one 150 quarter of the previous year, sales fell by 3 percent. This decrease is attributable to operations outside Sweden. For 100 comparable Swedish units, net sales were at the same level 50 as 1998. Of the year’s net sales, SEK 1,620 million (1,850) relates 0 to production outside Sweden, of which production in 1995 1996 1997 1998 1999 Norway amounted to SEK 1,280 million (1,754), and in Finland to SEK 215 million (–). Return on equity was 10.1 percent against 11.6 percent for the previous year. Net sales Taxes paid amounted to SEK –21 million (–11). Tax on MSEK profits of associated companies was SEK –14 million (–17). 15,000 Net deferred tax was SEK 78 (–36), of which SEK 80 million

12,000 is related to reported losses during the year. The Group’s fiscal deficit to carry over was SEK 550 million (270) at year- 9,000 end. Deferred tax receivables are reported only to the extent that they can probably be utilised in the foreseeable future. 6,000 Net borrowings amounted to SEK 1,107 million

3,000 compared with SEK 1,493 million on the corresponding date in 1998. The reduction is principally attributable to 0 sales of participations in associated companies. 1995 1996 1997 1998 1999 The Group’s unappropriated liquid funds at year-end amounted to SEK 1,004 million compared with SEK 1,232 million at year-end 1998. Profit and financial position The equity/assets ratio was 23.1 percent compared with Operating profit fell by 12 percent from SEK 280 million in 20.4 percent on December 31, 1998. 1998 to SEK 246 million. Profit was adversely affected by a Risk-bearing capital amounted to SEK 1,914 million SEK 260 million loss relating to the Romeriksporten tunnel against the previous year’s SEK 1,737 million, project, and a SEK 62 million loss attributable to construc- corresponding to 29.1 percent (26.3) of total assets. tion work on the terminal building at Gardermoen Airport. These items, amounting to SEK –322 million (–) are reported Investments under the heading “items affecting comparability” in the Net investments in fixed assets during the year amounted to gross profit figures SEK 117 million (977), of which net disposals of shares and Shares in associated companies’ profits are reported in participation rights amounted to SEK 223 million (net invest- accordance with the equity method and with a delay of one ments 158). During the period net acquisitions of real estate quarter. The year’s shares in associated companies’ profits for resale amounted to SEK 39 million (net disposals 44). before tax amounted to SEK 1 million (57). This profit reduction was mainly due to losses in Oskarsborg AB of Surplus funds from SPP SEK –28 million (0), Ecuro SEK –14 million (–1) and Peab has been allocated SEK 215 million in company- Maintech SEK –4 million (–4). Profit from sold holdings in related funds from SPP. Pending a final decision on the form associated companies was SEK 179 million (8). Of this and timing of payment, and in compliance with a pro- amount, SEK 120 million was attributable to the selling of nouncement by Sweden’s Financial Accounting Standards BPA, and SEK 61 million to the disposal of Miljöservice Council, no part of the claim has been taken up as income.

52 Directors’ report

Profit after Sales Operating profit financial items MSEK 1999 1998 1999 1998 1999 1998 Construction and Civil Engineering 11,397 10,798 252 114 259 142 Industry 2,656 1,256 229 87 201 80 Trust/Management 65 122 213 54 199 –14 Operations under Termination 553 821 –448 25 –497 3 Eliminations –830 –381 Total 13,841 12,616 246 280 162 211

Business sectors a total loss of SEK 420 million. This loss includes the In order to better explain and clarify Peab’s various outcome of the arbitration proceedings relating to the operations, these will be reported in four different business Romeriksporten tunnel project, the verdict on the final sectors: Construction and Civil Engineering, Industry, Trust/ settlement of SAG’s construction work on the terminal Management and Operations under Termination. building at Gardermoen Airport amounting to SEK -322 million, and other project losses of SEK -98 million. Construction and Civil Engineering Operations in the associated company, Oskarsborg AB, Peab restructured its Swedish construction and civil in which Peab has a 46 percent holding, will be gradually engineering operation in 1999. The five separate production sold off. Work on the disposal has intensified during the divisions in Sweden were brought together in one legal autumn and winter and an outcome is expected during the entity, Peab Sverige AB. financial year, 2000. Peab’s Norwegian subsidiary Peab AS will now focus its As part of its structural refining process, Peab sold its operations on three sectors; construction, project shares in Wihlborgs Fastigheter AB in March 2000. The development and regional civil engineering projects. shares had a book value of SEK 223 million. The disposal The profit improvement of the Swedish operation is had no effect on profit. mainly due to more efficient production, the increased It has also been decided that the holding in Folke- percentage of complete projects and the clear focus on bolagen AB shall be sold. Depreciation of shares in Folke- project development. bolagen AB affected profits adversely by SEK -30 million.

Order backlog to produce: Construction and Civil Engineering Highlights of the reporting period The Group sold 14,200,000 A-shares and 800,000 warrants MSEK Dec 31, 1999 Dec 31,1998 in BPA AB to Investeringssällskapet 1999 AB. This disposal Coming financial year 5,886 5,394 consisted of Peab’s total holding in BPA, corresponding to Next financial year 1,271 1,101 35.6 percent of votes and 21.7 percent of capital. Of the Thereafter 31 360 purchase price, SEK 300 million was reinvested in Total 7,188 6,855 Investeringssällskapet 1999 AB. The Finnish construction company, Rakennus OY Leo Heinänen, was acquired in April. The acquired company has The order backlog to produce at year-end increased by 5 sales of SEK 200 million and employs 150 people. Its percent to SEK 7,188 million (6,855) There was a higher business is mainly focused on repairs, rebuilding and percentage of construction projects and a lower percentage extensions, building services and facade renovation. of civil engineering projects compared with the previous Helsinki is the company’s principal field of operation. year. At the start of 2000, the Stockholm Entreprenad opera- During the year, orders received fell by 5 percent to SEK tion was taken over from Stockholm’s municipal council. 12,111 million (12,721). This reduction is largely attributable The business, which has 400 employees and sales of SEK to the civil engineering operation – a number of large 400 million, is mainly involved in the operation and mainten- contracts were signed in the period January-June 1998 – as ance of local authority infrastructure, asphalt paving, bridge well as an intensified focus on enhanced profitability. repairs and building services in the Stockholm region. Peab acquired all the shares in Producta Ombyggnads Industry AB in Stockholm. The company’s main area of operations is Swerock, its subsidiary Cliffton, and Peab Asfalt, are strong the rebuilding of commercial properties in greater Stock- and stable players in their respective markets. Well- holm. The company has 80 employees and annual sales of implemented rationalisation programmes and increasing SEK 200 million. demand have contributed to a positive profit trend. An agreement was reached on modification of the Increased capacity utilisation in the Plant and Cranes ownership situation for the associated company AB segment is an important factor in the improved Miljöservice in Sweden, which is 50-50 owned by Peab and performance. Lambertssons Kran’s expansion the French company, SITA. The agreement means that Peab internationally is expected to continue. remains a 50 percent owner, but SITA obtains the right to increase its ownership to 100 percent within two years, and Trust/Management the relative voting rights and shares in the company’s profit Of the year’s operating profit of SEK 213 million, SEK 179 will change accordingly during that time. The agreement million stems from the disposal of associated companies. provided a capital gain of SEK 61 million. A co-operation agreement has also been signed between Peab and SITA Operations under Termination relating to continued collaboration in Scandinavia. The Norwegian underground operation with associated civil Peab has sold all its shares in Platzer Fastigheter AB, engineering work in the Scandinavian Rock Group (SRG) consisting of 360,000 A-shares and 300,000 B-shares. This and Scandinavian Airport Group (SAG) burdened profit with disposal of shares, corresponding to 7.2 percent of the

53 Directors’ report

number of votes and 1.5 percent of capital, had no effect as well as three employee representatives, with one deputy. on profit. Among those members elected at the Annual General Meeting are people connected with Peab’s biggest Highlights after year-end 1999 shareholder, and some people who are independent of this Peab and Samschakt have reached an agreement in shareholder. Salaried employees of the company participate principle that Peab shall buy the contracting business that at Board meetings either in a reporting or administrative operates via the companies Samschakt Mark AB, Sam- role. schakt Maskin AB and Bromac AB. During the financial year 1999, the Board held five Cramo has acquired Lambertssons’ plant division in scheduled meetings and two extraordinary meetings. Sweden’s northern region. The agreement means that The work of the Board adheres to an agenda adapted to Cramo takes over Lambertssons’ plant division in the north the Board’s information needs, and is formulated in of Sweden, comprising of around 30 employees, as well as accordance with the special rules of procedure determined plant and equipment. The business has sales of SEK 55 by the Board concerning the division of work between the million. Board and Managing Director. The high court in Norway reached a verdict on February The company has a remuneration committee that, under 4, 2000, in the dispute between Peab’s subsidiary Scandi- the leadership of the Board’s Chairman, deals with issues navian Airport Group (SAG) and Oslo Lufthavn AS. This regarding salary and conditions of employment for the dispute concerned SAG’s construction work on the terminal Managing Director as well as formulating guidelines for building at Gardermoen Airport in 1995 and 1996. The those executives at the level directly under him. verdict and associated costs resulted in a negative impact The company’s auditor reports personally to the Board on profit of SEK 62 million, which has burdened financial on his observations from auditing and his assessment of results for 1999. internal controls, methods and standards. All shares in Wihlborgs Fastigheter AB, comprising of 4,500,000 A-shares and 13,370,000 B-shares were sold on Outlook March 13, 2000. The holding was equivalent to 5.7 percent The Group’s profit after financial items for 2000 is expected of capital and 14.6 percent of votes. The disposal entailed to be approximately SEK 400 million, excluding any surplus no effect on profit for Peab. funds from SPP.

Turn of the millennium Parent Company Peab was not hit by infrastructure problems, such as The Parent Company’s operations consist of shared Group disruption of electricity or communications networks, at the functions. turn of the millennium. Tests have been carried out both on IT platforms and business-critical applications. All the signs Proposed allocation of profit are that Peab’s preparations for the turn of the millennium According to the Consolidated Balance Sheet, the Group’s were sufficient, and that strategic systems have made the unrestricted equity amounts to SEK 520 million. No transition to 2000 without problem. allocation to restricted reserves is required. The following funds are at the disposal of the Annual Environmental impact General Meeting. The Group runs operations that have authorisation and notification requirements according to environmental Profit brought forward 763,997,983 protection legislation, principally in three Swedish Net profit for the year 734,946,475 subsidiaries: Swerock AB, Cliffton AB and Peab Asfalt AB. SEK 1,498,944,458 Operations requiring authorisation refers to gravel and rock extraction, transport of waste and hazardous waste, The Board of Directors and Managing Director propose that and asphalt plants. These operations affect the environment unappropriated earnings be disposed of as follows: mainly through the extraction of finite land resources, but also affect future land use and generate emissions to air Paid to the shareholders, and water, as well as waste. Operations with authorisation a dividend of SEK 0.80 per share 55,313,127 requirements represent 25 percent of Swerock’s sales, 20 Carried forward 1,443,631,331 percent of Cliffton’s and half the volume handled by Peab Asfalt. Renewal and completion of licences is a continual SEK 1,498,944,458 process at Swerock and Cliffton. Peab Asfalt will submit a complete environmental impact report in 2000. Other allocations of profit Operations with notification requirements are Swerock’s Peab’s Board proposes that the AGM gives the Board a and Cliffton’s concrete and concrete product factories. mandate to decide on a buy-back of all outstanding These operations represent 75 percent and 5 percent of warrants representing subscription rights to 9,060,000 new sales for Swerock and Cliffton, respectively. shares. Another Board proposal is that the AGM gives the Board Changes in Peab’s Board and Group Management a mandate to decide on the acquisition of a maximum Erik Paulsson left his position as a member of Peab’s Board 6,900,000 shares in the company, corresponding to a on November 11, 1999. At the Board meeting on February maximum 10 per cent of the number of shares, of which the 9, 2000 it was decided to expand Group Management by full number of shares refers to class B or class A shares, or appointing Göte Brännvall and Mats O Paulsson as Deputy a combination of these. An eventual buy-back may be Managing Directors of Peab AB. implemented through the stock exchange or via an offer to shareholders. The Board’s mandate is also proposed to The work of the Board include the possibility to transfer shares within the frame- The Board of Directors up until November 11, 1999 work allowed by new legislation. consisted of seven persons, and thereafter of six persons Both these proposals are confined to shareholders’ elected by the Annual General Meeting of the shareholders, equity.

54 Income statements

Group Parent company MSEK Note 1999 1998 1999 1998 Net sales 2 13,841 12,616 64 64 Production and management expenses – 12,493 – 11,555 — — Items affecting comparability 3 – 322 — — — Gross profit 1,026 1,061 64 64

Selling and administrative expenses – 960 – 846 – 110 – 144 Share of profit before tax of associated companies 1 57 — — Result from participations in associated companies sold 179 8 — — Operating profit 4,5,6 246 280 – 46 – 80

Result from financial investments Result from shares and participations in Group companies 7 — — 619 490 Result from shares and participations in associated companies 8 — — 242 15 Result from securities and receivables classified as fixed assets 9 14 35 5 31 Other interest income and similar profit/loss items 10 47 42 4 — Interest expenses and similar profit/loss items 11 – 145 – 146 – 88 – 114 Profit after financial items 12 162 211 736 342

Appropriations 13 — — — 1 Tax on profit for the year 14 43 – 64 – 1 0 Minority interest in profit for the year 28 – 2 — —

Net profit for the year 233 145 735 343

55 Balance sheets

ASSETS Group Parent company MSEK Note Dec 31, 1999 Dec 31, 1998 Dec 31, 1999 Dec 31, 1998 Fixed assets

Intangible assets Goodwill 15 229 217 — — Other intangible fixed assets 16 7 2 — — 236 219 — — Tangible assets Buildings and land 17 345 365 — — Machinery and equipment 18 642 517 3 4 987 882 3 4 Financial assets Shares and participations in Group companies 19 — — 2,774 1,305 Shares and participations in associated companies 20 626 919 588 780 Other long-term securities holdings 21 390 320 376 306 Interest bearing long-term receivables 22 744 457 983 364 Other long-term receivables 23 162 76 1 1 1,922 1,772 4,722 2,756 Total fixed assets 3,145 2,873 4,725 2,760

Current assets

Real estate held for resale 24 183 144 1 1 Inventories 183 191 — — Accounts receivable 2,252 2,371 1 0 Interest-bearing current receivables 25 242 247 64 49 Other current receivables 26 279 234 6 21 Prepaid expenses and accrued income 27 192 482 55 493 Cash and bank balances 99 50 17 17 Total current assets 3,430 3,719 144 581 Total assets 6,575 6,592 4,869 3,341

56 Balance sheets

SHAREHOLDERS’ EQUITY AND LIABILITIES Group Parent company MSEK Note Dec 31, 1999 Dec 31, 1998 Dec 31, 1999 Dec 31, 1998 Shareholders’ equity 28

Restricted equity Share capital 692 692 692 692 Restricted reserves 302 228 138 108

Non-restricted equity Non-restricted reserves 287 257 764 64 Net profit for the year 233 145 735 343 Total shareholders’ equity 1,514 1,322 2,329 1,207

Untaxed reserves 29 — — 11 11

Minority interests 6 23 — —

Provisions Provisions for pensions and similar commitments — 106 — 8 Provisions for taxes 30 84 88 — — Other provisions 31 89 54 — — Total provisions 173 248 — 8

Long-term liabilities 32 Interest-bearing long-term liabilities 33 1,741 1,599 2,079 1,646 Debenture loans 34 50 135 50 135 Convertible debenture loans 35 257 256 257 256 Total long-term liabilities 2,048 1,990 2,386 2,037

Current liabilities Accounts payable 1,570 1,402 8 7 Interest-bearing current liabilities 36 144 151 86 — Tax liabilities 5 16 1 — Invoiced income not yet recognised 37 73 275 — — Other current liabilities 38 320 512 6 46 Accrued expenses and deferred income 39 722 653 42 25 Total current liabilities 2,834 3,009 143 78 Total shareholders’ equity and liabilities 6,575 6,592 4,869 3,341

Assets pledged 40 540 583 — — Contingent liabilities 41 655 675 4,293 3,927

57 Cash flow statements

Group Parent company MSEK 1999 1998 1999 1998 Current operations Profit after financial items 162 211 736 342 Adjustments for items not included in cash flow –29 101 –653 –6 133 312 83 336 Taxes paid –58 –9 1 0 Cash flow from current operations before changes in working capital 75 303 84 336

Cash flow from changes in working capital Increase(–)/Decrease(+) real estate for resale –39 44 0 0 Increase(–)/Decrease(+) inventories 5 –6 — — Increase(–)/Decrease(+) current receivables 620 140 463 –433 Increase(+)/Decrease(–) current liabilities –181 –208 –19 12 Cash flow from current operations 480 273 528 –85

Investment operations Acquisition of subsidiaries –42 –190 — — Sales of subsidiaries 8 2 — — Acquisition of intangible fixed assets –7 – 3 — — Acquisition of tangible fixed assets –269 –139 –1 –2 Sales of tangible fixed assets 68 4 — — Acquisition of financial assets –315 –290 –36 –105 Sales of financial assets 246 33 240 223 Cash flow from investment operations –311 –583 203 116

Cash flow before financing 169 –310 731 31

Financing operations Loans raised — 72 — — Amortization of borrowings –79 — –690 –6 Dividend paid –41 –28 –41 –28 Cash flow from financing operations –120 44 –731 –34

Cash flow for the year 49 –266 0 –3 Liquid funds at start of year 50 316 17 20 Liquid funds at year-end 99 50 17 17

58 Cash flow statements

ADDITIONAL INFORMATION ON CASH FLOW STATEMENTS Group Parent company MSEK 1999 1998 1999 1998 Interest paid and dividends received Dividends received 21 17 678 18 Interest received 72 67 23 15 Interest paid 142 140 88 113

Transactions involving no payments Acquisition of assets through financial leasing 32 112 — —

Acquisitions of subsidiaries Fixed assets 91 499 Current assets 76 598 Liquid funds 24 16 Minority interests –5 — Allocations –59 –80 Long-term liabilities –3 –355 Current liabilities –58 –472 Purchase prices paid 66 206 Deduct: Liquid funds in acquired companies –24 –16 Effect on liquid funds 42 190

Disposal of subsidiaries Fixed assets 7 1 Inventories 2 — Current receivables 46 1 Liquid funds 17 — Minority interests –1 — Long-term liabilities –3 — Current liabilities –36 — 32 2

Sale prices 62 2 Deduct: Sale promissory notes –37 — Purchase prices received 25 2 Deduct: Liquid funds in sold companies –17 — Effect on liquid funds 8 2

59 Notes

Note 1. Accounting and valuation principles Partnerships and limited partnerships Peab AB’s accounting and valuation principles conform to Profits from partnerships and limited partnerships are the recommendations and pronouncements of the Swedish included in the income statement based on the company’s Financial Accounting Standards Council. share of their profits.

Consolidated accounts Fixed assets The consolidated accounts have been prepared in accor- Tangible and intangible assets are depreciated systematically dance with the recommendations of the Swedish Financial over their estimated economic life. Annual depreciation/ Accounting Standards Council and comprise those compa- amortisation rates are as follows: nies in which the Parent Company directly or indirectly owns more than 50 percent of the voting rights or otherwise has a Goodwill 10% decisive influence according to the Annual Accounts Act 1:4. Buildings 1–4% The consolidated financial statements are prepared Land improvements 2–4% according to the purchase accounting method. This means Vehicles and contracting machinery 16–20% that the subsidiaries’ equity at the time of acquisition, Personal computers 20–33% determined as the difference between the fair value of their Other machinery and equipment 10–20% assets and liabilities, is eliminated in its entirety. Accordingly, Group equity includes only the portion of subsidiaries’ Financial leasing equity that arose after their acquisition. The Group applies the recommendations of the Swedish Companies acquired during the year are included in the Financial Accounting Standards Council with regard to consolidated accounts for the period following their accounting for leasing agreements. Substantial assets held acquisition. Profits from companies sold during the year according to financial leasing agreements are accounted for have been included in the consolidated income statement as fixed assets in the balance sheet. Depreciation according for the period until the time they were sold. to plan over the estimated economic life. Future leasing The financial statements of foreign subsidiaries have charges are accounted for as liabilities. Leasing charges are been translated to Swedish kronor (SEK) according to the distributed as amortisation of liabilities and interest current rate method. This means that the subsidiaries’ expenses. balance sheets are translated at the year-end exchange rate and their income statements at the average exchange rate Real Estate for the year. Translation differences that arise are reported Real estate holdings are reported after being divided into: directly in the shareholders’ equity. • Buildings and land – among tangible assets When the Parent Company or other Group company • Real estate held for resale – among current assets uses hedges to balance and protect against exchange rate differences on a net investment in an independent Properties used in the Group’s own operations, i.e. office subsidiary, the exchange rate difference on the hedging buildings and warehouses, are reported under tangible instrument is transferred directly to equity to the extent that assets. it corresponds to a translation difference for the subsidiary Direct and indirect holdings of undeveloped land and applied against equity during the year. redevelopment tracts for future development are reported under current assets. Adjusted acquisition analysis The acquisition analysis relating to the subsidiary Swerock, Receivables acquired in 1998, has been established following a final Receivables are reported at the amount that is expected to review. As a result, the acquisition value of machinery be paid, based on an individual assessment. (concrete stations) and accrued costs increased, whereas land (gravel pits) and inventories decreased. Receivables and liabilities in foreign currency Receivables and liabilities in foreign currency are translated Associated company accounting at the year-end exchange rate. Where hedging measures Associated companies are regarded as companies which have been used – e.g. forward covers, the forward rate is are not subsidiaries but in which the Parent Company used. directly or indirectly holds at least 20 percent of the voting rights. Participations in associated companies are reported Inventories according to the equity method. Inventories are valued at the lower of acquisition value and The equity method means that consolidation is primarily fair value on the closing day. made on separate lines in the consolidated income statement and the consolidated balance sheet. Profit shares are Work in progress consolidated in the accounts after a delay of one quarter, Work in progress is recognised in profit according to its based on the associated company’s reported financial percentage of completion. This accounting method means statements for the period. that profit is reported on actual construction outcomes, i.e. profit from work in progress is recognised in relation to a Consortia project’s degree of completion. Companies and other forms of consortia that are formed in order to implement specific contracting projects together Group contribution and shareholders’ contribution with other construction companies are consolidated in In the Parent Company, the Group contribution is accordance with the so-called proportional method. This accounted directly against non-restricted equity. The means that consortia are included in the financial state- shareholders’ contribution is accounted for as an increase ments in relation to the company’s share of each in shares and participation rights in Group companies, to consortium’s share of the assets, provisions, liabilities, the extent that write-downs are not required. income and expenses.

60 Notes

Note 2. Net sales by geographic market Wages, salaries and other remuneration distributed by

Group Parent Company country and between the Board of Directors, etc. and MSEK 1999 1998 1999 1998 other employees: Sweden 12,221 10,766 61 64 Board of Directors and Managing Director Other Norway 1,280 1,754 3 — (of which bonuses, etc) employees Finland 215 — — — MSEK 1999 1998 1999 1998 Poland 81 93 — — Parent company 5 5 12 13 Latvia 30 — — — (0) (0) Other countries 14 3 — — Subsidiaries Total 13,841 12,616 64 64 in Sweden 18 16 1,910 1,706 (2) (2) Subsidiaries outside Sweden Note 3. Items affecting comparability Norway 4 3 261 339 Group Parent Company (—) (—) MSEK 1999 1998 1999 1998 Finland 2 — 29 — Arbitration settlement, (1) — Romeriksporten tunnel project 260 — — — Other countries 0 0 8 7 Verdict, Gardermoen (—) (—) Airport terminal construction 62 — — — Total in Total 322 — — — subsidiaries 24 19 2,208 2,052 (3) (2) Group total 29 24 2,220 2,065 (3) (2) Note 4. Wages, salaries, other remuneration and In accordance with the decision of the Annual General social security expenses Meeting, directors fees totalling SEK 600,000 (350,000) Social security were paid out in 1999. Of this amount, the Chairman Wages, salaries and expenses (of which other remuneration pension expenses) received SEK 200,000 (150,000) in accordance with the MSEK 1999 1998 1999 1998 decision of the Board. Remuneration is not paid to those Parent company 17 18 8 11 directors who are employed full-time by the Group. Neither (2) (4) the Chairman nor the other directors, with the exception of the Managing Director, have agreements on future Subsidiaries 2,232 2,071 831 751 pensions, severance pay or other benefits. (121) (120) In 1999 the Managing Director received a salary and other remuneration, including benefits, totalling SEK Group 2,184,000 (1,609,000). total 2,249 2,089 839 762 Pension benefits consist primarily of a general pension (123) (124) plan. The Managing Director and certain other executives have commitments entitling them to retire at 60 to 65 years Of the Parent Company’s pension expenses, SEK 1 million of age with a pension amounting to 75% of their salary. (2) relates to the Board of Directors and Managing Director. Early retirement benefits are earned over time and are paid The corresponding amount for the Group is SEK 6 million in full if these individuals remain employed until their (6). There are no related outstanding pension commitments. contracted pension age. If terminated by the company, the Managing Director has the right to severance pay corresponding to two annual salaries less any salary he receives from new employment. Other senior executives would receive a maximum of two annual salaries less any salary they receive from new employment.

Note 5. Fees and cost remuneration to auditors

Group Parent Company MSEK 1999 1998 1999 1998 KPMG Auditing assignments 5 3 1 1 Other assignments 4 1 2 0 Total 9 4 3 1 PricewaterhouseCoopers Auditing assignments — 1 — — Other assignments — 0 — — Total — 1 — —

61 Notes

Note 6. Depreciation/amortization and writedowns Note 11. Interest expenses and similar Depreciation/amortization and writedowns of intangible and profit/loss items tangible assets amounted to SEK 216 million (152) for the Group Parent Company Group and SEK 1 million (1) for the Parent Company. MSEK 1999 1998 1999 1998 Interest expenses, external 143 135 24 34 Interest expenses, Group — — 64 78 Exchange rate differences 2 4 0 2 Other items — 7 — 0 Note 7. Result from shares and participations Total 145 146 88 114 in Group companies

Parent Company MSEK 1999 1998 Dividends 173 490 Capital gain on sale 446 — Note 12. Writedown of financial assets and Total 619 490 short-term investments The sum of writedowns and reversals of writedowns of financial assets and short-term investments amounted to SEK 31 million (2) for the Group and SEK 30 million (-) for the Parent Company.

Note 8. Result from shares and participations in associated companies

Parent Company Note 13. Appropriations MSEK 1999 1998 Parent Company Dividends 10 7 MSEK 1999 1998 Capital gain on sale 232 8 Foreign exchange reserve — 1 Total 242 15 Total — 1

Note 9. Result from other securities and receivables classified as fixed assets Note 14. Tax on profit for the year Group Parent Company MSEK 1999 1998 1999 1998 Group Parent Company MSEK 1999 1998 1999 1998 Dividends 6 6 5 11 Paid –21 –11 –1 0 Interest, external 40 27 30 15 Deferred 78 –36 — — Interest, Group — — 1 0 On share of associated Exchange rate differences — 5 — 5 companies’ profit –14 –17 — — Capital gain on sale –1 –3 –1 0 Writedown –31 — –30 — Total 43 –64 –1 0 Total 14 35 5 31 The Group has been subject to a co-ordinated tax audit referring primarily to the financial year 1997 (year of assessment 1998). The audit is almost complete. Memoran- dums and/or decisions have been received. Provisions for additional taxes and fees have been accounted for with Note 10. Other interest income and amounts that are estimated to arise when the various tax similar profit/loss items processes have been completed. The provisions fall below the requests of the tax authorities. Group Parent Company Net deferred tax amounted to SEK 78 million (–36) of MSEK 1999 1998 1999 1998 which SEK 80 million is attributable to losses reported Interest, external 43 39 4 — during the year. Latent tax receivables are reported only to Exchange rate differences — 3 — — the extent that they could possibly be utilised in the Other items 4 — — — foreseeable future. Total 47 42 4 —

62 Notes

Note 15. Goodwill Note 17. Buildings and land

Group Parent Company Group Parent Company MSEK 1999 1998 1999 1998 MSEK 1999 1998 1999 1998 Acquisition values Acquisition values brought forward 306 115 brought forward 473 170 Purchases 49 192 Purchases 49 324 Sales/disposals –9 –1 Sales/disposals –10 – 21 Reclassifications –51 — Accumulated aquisition values carried forward 346 306 — — Accumulated aquisition values carried forward 461 473 — — Amortization brought forward –89 –41 Accumulated depreciation Depreciation brought forward –107 – 19 in acquired companies 0 –31 Accumulated depreciation Sales/disposals 3 0 in acquired companies — – 86 Amortization for the year –31 –17 Sales/disposals 10 5 Depreciation for the year –13 – 7 Accumulated amortization carried forward –117 –89 — — Accumulated depreciation carried forward –110 – 107 — — Residual value according to plan carried forward 229 217 — — Writedowns brought forward –1 – 1 Writedowns for the year –5 — Accumulated writedowns carried forward –6 – 1 — —

Note 16. Other intangible fixed assets Residual value according to plan carried forward 345 365 — — Group Parent Company MSEK 1999 1998 1999 1998 Residual value according to Acquisition values plan of properties in Sweden 313 349 brought forward 4 — Tax assessment value of Purchases 6 4 properties in Sweden 268 245 Accumulated acquisition values carried forward 10 4 — —

Amortization brought forward –2 — Accumulated depreciation Note 18. Machinery and equipment in acquired companies — –2 Group Parent Company Amortization for the year –1 — MSEK 1999 1998 1999 1998 Accumulated amortization Acquisition values carried forward –3 –2 — — brought forward 1,356 628 9 7 Residual value according Purchases 250 782 0 2 –56 0 to plan carried forward 7 2 — — Sales/disposals – 54 0 Reclassifications 67 — — — Accumulated acquisition values carried forward 1,617 1,356 9 9

Depreciation brought forward –838 – 417 –5 – 4 Accumulated depreciation in acquired companies –8 – 321 — Sales/disposals 37 28 0 0 Depreciation for the year –166 – 128 –1 – 1 Accumulated depreciation carried forward –975 – 838 –6 – 5 Writedowns brought forward –1 – 1 — — Sales/disposals 1 — — — Accumulated writedowns carried forward 0 –1 — — Residual value according to plan carried forward 642 517 3 4

63 Notes

Note 19. Shares and participations in Group companies

Parent Company MSEK 1999 1998 Acquisition values brought forward 1,376 1,659 Purchases 636 140 Shareholders’ contribution 1,318 2 Sales –650 – 1 Repayment reduction of the share capital — – 424 Accumulated acquisition values carried forward 2,680 1,376 Revaluations brought forward 197 197 Sales –80 — Accumulated revaluations carried forward 117 197 Writedowns brought forward –268 – 268 Sales 245 — Accumulated writedowns carried forward –23 – 268 Book value carried forward 2,774 1,305

Specification of shares and participations in Group companies

Registered % of % of No. of Book value Company Corp. ID no. office capital voting rights participations MSEK Peab Sverige AB 556099-9202 Båstad 100.0 100.0 1,000,000 1,405 Peab Finans AB 556552-1324 Båstad 100.0 100.0 1,000,000 108 Peab AS 981 032 411 Oslo 100.0 100.0 502,290 158 Peab Asfalt AB 556098-8122 Båstad 100.0 100.0 6,000 61 Br Paulsson Peab AB 556113-4114 Båstad 99.9 99.9 7,654,215 157 Lambertsson Maskin AB 556145-7531 Mölndal 100.0 100.0 50,000 12 Lambertssons Kran AB 556132-9813 Mölndal 100.0 100.0 1,000 17 Peab Transport & Miljö AB 556240-2742 Ängelholm 100.0 100.0 100,000 45 Peab Byggkonstruktion AB 556059-0910 Stockholm 100.0 100.0 1,000 298 Peab Utvecklings AB 556511-5408 Båstad 100.0 100.0 6,150,000 165 Peab International AB 556568-6721 Båstad 100.0 100.0 2,900,000 348 Peab Betong AB 556565-2947 Båstad 100.0 100.0 1,000 0 KB Brinova 969612-8926 Båstad 100.0 100.0 1 0 Total 2,774

A complete list of the Group’s total holdings of shares and participation rights in group companies is sent to PRV (Patent and Registration office) and is also available from the company.

Information on the Group’s acquisitions of subsidiaries during the year

Subsidiaries Date of acquisition Business Europarts AB January 1999 Premises rental KB Terminalen 5 January 1999 Premises rental Kalmar Byggsystem AB January 1999 Resting Peab Betong AB February 1999 Resting AB Faresta Grus February 1999 Ballast Bygg Peab Finland AB/Suomen Rakennus Peab Oy April 1999 Contracting Peab International AB April 1999 Management Peab International BV August 1999 Management Producta Ombyggnads AB October 1999 Contracting Nosturiasennus Virtanen Oy October 1999 Crane rental Stockholms Entreprenad AB December 1999 Contracting

Acquired subsidiaries are consolidated according to the purchase accounting method.

64 Notes

Note 20. Shares and participations in associated companies

Group Parent Company MSEK 1999 1998 1999 1998 Acquisition values brought forward 914 828 780 693 Purchases 44 151 29 94 Sales –297 –10 –221 –7 Profit from participations after tax –35 28 — — Reclassifications — –83 — — Accumulated acquisition values carried forward 626 914 588 780

Revaluations brought forward 5 6 — — Sales –5 –1 — — Accumulated revaluations carried forward 0 5 — — Book value carried forward 626 919 588 780

Specification of the Group’s and Parent Company’s holdings of shares and participations in associated companies

Registered % of % of No. of Book value, Corp. ID no. office capital voting rights participations MSEK Group Oskarsborg AB 556471-9143 Stockholm 46.0 46.0 633 441 Birsta Fastigheter AB 556190-3765 Helsingborg 50.0 50.0 240,300 53 Maintech Industripartner AB 556114-9773 Helsingborg 50.0 50.0 25,000 30 Fastighets AB Skeppsdockan 556563-0711 Ängelholm 50.0 50.0 15,000 27 Fastighets AB Blåmannen 556482-7169 Stockholm 25.0 25.0 250 14 Byggbetong i Norrland AB 556072-7868 Umeå 27.3 27.3 21,860 12 AB Vendels Grustag & Co KB 917600-5636 Uppsala 49.0 49.0 9 AB-Vendels Grustag 556025-8383 Uppsala 50.0 50.0 600 7 F5 Ljungbyhed AB 556545-4294 Klippan 35.0 35.0 1,050 5 SB Betong AB 556089-1805 Umeå 50.0 50.0 10,000 5 Ecuro Sverige AB 556468-9742 Stockholm 50.0 50.0 10,000 4 Svenska Fräs & Asfaltåtervinning AB 556214-7354 Markaryd 30.0 30.0 2,063 4 Göteborgs Kross AB & Co KB 957202-2052 Göteborg 33.3 33.3 3 Essbetong KB 969617-2247 Malmö 45.5 45.5 2 HB Solna Betong 916612-2607 Stockholm 50.0 50.0 2 I Tolv AB 556513-2478 Eksjö 35.0 35.0 4,375 1 Scanballast AB 556267-7905 Umeå 35.0 35.0 438 1 Swepump AB 556059-8921 Järfälla 20.0 20.0 1,800 1 Gottåsa Fastighets AB 556499-2948 Alvesta 50.0 50.0 500 1 AB Alvesta Betongstation 556134-7005 Alvesta 50.0 50.0 500 1 HB Gladökrossen 969615-7917 Uppsala 50.0 50.0 1 Other non-specified holdings 2 Total 626

The difference between the book value in the Group and the Group’s participations in the associated companies’ equity amounts to SEK 28 million (58).

Registered % of % of No. of Book value, Corp. ID no. office capital voting rights participations MSEK Parent Company Oskarsborg AB 556471-9143 Stockholm 46.0 46.0 633 468 Birsta Fastigheter AB 556190-3765 Helsingborg 50.0 50.0 240,300 47 Maintech Industripartner AB 556114-9773 Helsingborg 50.0 50.0 25,000 38 Ecuro Sverige AB 556468-9742 Stockholm 50.0 50.0 10,000 19 Fastighets AB Skeppsdockan 556563-0711 Ängelholm 50.0 50.0 15,000 16 Total 588

65 Notes

Note 21. Other long-term securities holdings

Group Parent Company MSEK 1999 1998 1999 1998 Acquisition values brought forward 327 254 306 234 Assets added 117 110 111 100 Assets removed –16 – 37 –11 – 28 Accumulated acquisition values carried forward 428 327 406 306 Writedowns brought forward –7 – 7 — — Writedowns for the year –31 — –30 — Accumulated writedowns carried forward –38 – 7 –30 — Book value carried forward 390 320 376 306

Specification of the Group’s and Parent Company’s holdings of long-term securities

Registered % of % of No. of Book value, Market value, Corp. ID no. office capital voting participations MSEK MSEK Group Wihlborgs Fastigheter AB 556049-1523 Malmö 5.7 14.6 17,870,000 223 170 Investeringssällskapet 1999 AB 556566-7879 Stockholm 15.0 15.0 100,236 100 Folkebolagen AB 556144-0149 Borlänge 29.9 18.6 996,976 38 25 Skandrenting AB 556089-8305 Stockholm 4.9 5.6 105,000 12 Other privately traded securities holdings 17 Total 390

Parent Company Wihlborgs Fastigheter AB 556049-1523 Malmö 5.7 14.6 17,870,000 223 170 Investeringssällskapet 1999 AB 556566-7879 Stockholm 15.0 15.0 100,236 100 Folkebolagen AB 556144-0149 Borlänge 29.9 18.6 996,976 38 25 Skandrenting AB 556089-8305 Stockholm 4.9 5.6 105,000 12 Other privately traded securities holdings 3 Total 376

66 Notes

Note 22. Interest bearing long-term receivables Other long-term receivables Group Parent Company Acquisition values MSEK 1999 1998 1999 1998 brought forward 8 302 1 1 Receivables from Added receivables 6 2 — — Group companies — — 353 122 Settled receivables — –296 — — Receivables from Accumulated acquisition associated companies 476 267 430 239 values carried forward 14 8 1 1 Other interest-bearing long-term receivables 268 190 200 3 Writedowns brought forward –4 –2 — — Writedowns for the year — –2 — — Total 744 457 983 364 Accumulated writedowns Receivables from Group companies carried forward –4 –4 — — Acquisition values brought forward 122 171 Book values carried forward 10 4 1 1 Added receivables 351 122 Settled receivables –120 –171 The Group’s fiscal deficit to utilise was SEK 550 million Book values carried forward 353 122 (270) at year-end 1999. Raised deferred tax receivables amounted to SEK 149 Receivables from associated companies million (69) and it is assessed that these will be utilised in the foreseeable future. Acquisition values brought forward 267 143 239 143 Added receivables 221 128 191 96 Settled receivables –32 –7 — — Reclassifications 20 3 — — Note 24. Real estate held for resale Book values carried forward 476 267 430 239 Group Parent Company MSEK 1999 1998 1999 1998 Other interest bearing long-term receivables Directly owned real estate Acquisition values held for resale 155 127 1 1 brought forward 190 32 3 — Participations in real estate Added receivables 304 166 200 3 management companies 28 17 — — Settled receivables –76 –5 — — Total 183 144 1 1 Reclassifications –150 –3 –3 — Book values carried forward 268 190 200 3

Of receivables from associated companies, SEK 365 million (239) relates to Oskarsborg AB. Of the other interest- bearing long-term receivables, SEK 200 million (–) relates to Note 25. Interest-bearing current receivables Investeringssällskapet 1999 AB. Group Parent Company MSEK 1999 1998 1999 1998 Note 23. Other long-term receivables Receivables from associated Group Parent Company companies 45 53 32 26 MSEK 1999 1998 1999 1998 Other receivables 197 194 32 23 Receivables from associated companies 3 3 — — Total 242 247 64 49 Deferred tax receivables 149 69 — — Other long-term receivables 10 4 1 1 Total 162 76 1 1

Receivables from associated companies Note 26. Other current receivables

Acquisition values Group Parent Company brought forward 3 2 — — MSEK 1999 1998 1999 1998 Added receivables — 3 — — Receivables from Reclassifications — – 2 — — Group companies — — 2 7 Book values carried forward 3 3 — — Receivables from associated companies 27 55 3 0 Deferred tax receivables Tax receivables 34 15 — 1 Other receivables 218 164 1 13 Acquisition values brought forward 69 69 — — Total 279 234 6 21 Added receivables 80 — — — Book values carried forward 149 69 — —

67 Notes

Note 27. Prepaid expenses and accrued income The distribution by class of share is as follows:

Group Parent Company Class of share Number MSEK 1999 1998 1999 1998 A-shares 9,805,702 Accrued operating income 15 402 — — B-shares 59,335,707 Accrued interest income 19 8 12 0 Accrued bonus from Total 69,141,409 suppliers 43 5 30 — Class A-shares each carry 10 votes and Class B-shares Prepaid rents 13 13 1 — 1 vote. Prepaid leasing fees 5 4 — — Prepaid overhead expenses 53 1 — — Anticipated dividend — — — 490 Other 44 49 12 3 Note 29. Untaxed reserves

Total 192 482 55 493 Parent Company MSEK 1999 1998 The accrued operating income item for 1998 includes a Tax allocation reserve 11 11 compensation claim made by a Norwegian client that was the subject of arbitration proceedings and legal conside- Total 11 11 ration. Of the total of untaxed reserves SEK 3 million is deferred Note 28. Changes in shareholders’ equity tax.

Non- Share Restricted restricted MSEK capital reserves reserves Group Note 30. Provisions for taxes

Balance brought forward 692 228 402 Group Parent Company Transfers between restricted MSEK 1999 1998 1999 1998 and non-restricted equity 74 –74 Deferred tax in Translation difference untaxed reserves 66 75 — — for the year 0 Deferred tax in Group items 18 6 — — Dividend –41 Provision for income tax Net profit for the year 233 dependent on tax disputes — 7 — — Balance carried forward 692 302 520 Total 84 88 — —

Restricted reserves include equity reserves of SEK 27 million (61).

Disclosure of accumulated translation differences in foreign Note 31. Other provisions operations is applied in accordance with the transition rule in Appendix 1 of the Swedish Financial Accounting Standards Group Parent Company Council’s recommendation, RR8, from the start of 1999. An MSEK 1999 1998 1999 1998 earlier starting point for accumulation can hardly be imple- Guarantee risk reserve 38 26 — — mented without entailing costs that are not considered to be Close-down costs 6 7 — — in reasonable proportion to the value of the information. Restructuring reserve 33 10 — — Specification of the translation difference for the year Re-establishment expenses 12 11 — — in equity: Total 89 54 — — Translation difference for the year in foreign subsidiaries 2 Effect for the year of hedging and net investments in foreign subsidiaries –2 Total translation difference for the year 0 Note 32. Long-term liabilities

Share Shown below is the portion of long-term liabilities that falls Share Premium Statutory Retained due for payment more than five years after the closing day. capital reserve reserve earnings Group Parent Company Parent Company MSEK 1999 1998 1999 1998 Balance brought forward 692 55 53 407 Interest bearing long-term Allocation to statutory 30 –30 liabilities 11 13 — — Dividend –41 Group contribution 428 Total 11 13 — — Net profit for the year 735 Balance carried forward 692 55 83 1,499 The share capital is distributed among 69,141,409 shares with a par value of SEK 10 per share.

68 Notes

Note 33. Interest-bearing long-term liabilities Note 37. Invoiced income not yet recognised

Group Parent Company Group Parent Company MSEK 1999 1998 1999 1998 MSEK 1999 1998 1999 1998 Liabilities to Group companies — — 2,076 1,646 Invoiced sales on Overdraft facilities 202 323 — — uncompleted contracting Other liabilities to projects 16,729 13,452 — — credit institutions 1,459 1,202 — — Recognised income on Other liabilities 80 74 3 — uncompleted contracting projects –16,656 –13,177 — — Total 1,741 1,599 2,079 1,646 Total 73 275 — — Overdraft facilities granted 714 798 — —

Note 38. Other current liabilities

Group Parent Company MSEK 1999 1998 1999 1998 Note 34. Debenture loans Liabilities to Interest mkr Amount rate, % Maturity Group companies — — 3 1 Liabilities to associated Debenture loan 1993/2002 50 10.00 Sept. 15, 2002 companies 13 51 1 — Total 50 Other liabilities 307 461 2 45 Total 320 512 6 46

Note 35. Convertible debenture loan Note 39. Accrued expenses and deferred income The convertible debenture loan 1996/2000 of SEK 259 million in nominal value and a nominal interest rate of 4.75 Group Parent Company percent matures on December 15, 2000. The loan is tied to MSEK 1999 1998 1999 1998 15,220,588 convertible promissory notes. One promissory Accrued payroll expenses 347 309 3 3 note can be converted to one new Class B-share during the Accrued social security period January 1, 1997 and December 15, 2000 at a expenses 203 174 2 2 conversion rate of SEK 17. Accrued production The convertible debenture loan is reported at a value of expenses 52 23 — — SEK 257 million in the Balance Sheet and the interest rate is Accrued interest expenses 38 37 18 18 estimated at 5.25 percent in accordance with the Accrued overhead expenses 47 99 1 1 recommendation (RR3) of the Swedish Financial Accounting Other items 35 11 18 1 Standards Council. Total 722 653 42 25

Note 36. Interest-bearing current liabilities

Group Parent Company MSEK 1999 1998 1999 1998 Debenture loan 86 — 86 — Liabilities to credit institutions 29 112 — — Other liabilities 29 39 — — Total 144 151 86 —

Interest MSEK Amount rate, % Maturity Debenture loan 1996/2000 86 5.25 Dec. 15, 2000 Total 86

The debenture loan 1996/2000 of SEK 86 million in nominal value and a nominal interest rate of 4.75 percent is reported at a value of SEK 86 million in the Balance Sheet and with an estimated interest rate of 5.25 percent in accordance with the recommendation (RR 3) of the Swedish Financial Accounting Standards Council.

69 Notes

Note 40. Assets pledged

Group Parent Company MSEK 1999 1998 1999 1998 For own liabilities and provisions Related to provisions for pensions and similar commitments: Floating charges — 39 — — Related to liabilities to credit institutions: Real estate mortgages 102 114 — — Floating charges 358 366 — — Related to other long-term liabilities: Other long-term receivables 3 — — — Related to current liabilities to credit institutions: Restricted bank balances — 7 — — Total related to own liabilities and provisions 463 526 — —

For own contingent liabilities and guarantees Real estate mortgages 2 — — — Floating charges 13 — — — Restricted bank balances 7 21 — — Total for own contingent liabilities and guarantees 22 21 — —

Other Other 55 36 — — Total, other 55 36 — —

Total assets pledged 540 583 — —

Note 41. Contingent liabilities

Group Parent Company MSEK 1999 1998 1999 1998 Shared obligations as part-owner in limited partnerships 43 3 — — Obligations in consortia for other part-owners’ liabilities 39 21 — 7 Guarantees and contracting guarantees for Group companies — — 3,958 3,539 Other guarantees and contingent liabilities 573 651 335 381 Total 655 675 4,293 3,927

Note 42. Purchases and sales between Group companies

Of the Parent Company’s total purchases and sales measured in SEK, 24 percent (16) of purchases and 96 percent (74) of sales relate to other companies in the Peab Group.

70 Notes

Note 43. Average number of employees

No. of of whom men No. of of whom men employees 1999 1999, % employees 1998 1998, % Parent Company

Sweden 30 73 36 75

Subsidiaries

Sweden 8,201 95 7,117 95 Norway 641 90 775 90 Finland 164 96 —— Poland 67 87 69 97 Latvia 50 84 51 76 Total in subsidiaries 9,123 95 8,012 95 Group total 9,153 95 8,048 94

Förslöv March 14, 2000

Kjell Nilsson CHAIRMAN

Lennart Ahlgren Ulf H Jansson Jan Segerberg Håkan Sundin

Kent Ericsson Jan Erik Ljungberg Rolf Åslin

Mats Paulsson Managing Director

71 Audit report

To the General Meeting of the shareholders of Peab AB (publ) (Corporate identity number 556061-4330)

I have audited the annual accounts, the consolidated and circumstances of the company in order to be able to accounts, the accounting records and the administration of determine the liability, if any, to the company of any board the board of directors and the managing director of Peab member or the managing director. I also examined whether AB for the year 1999. These accounts and the administra- any board member or the managing director has, in any tion of the company are the responsibility of the board of other way, acted in contravention of the Companies Act, the directors and the managing director. My responsibility is to Annual Accounts Act or the Articles of Association. I believe express an opinion on the annual accounts, the consolidated that my audit provides a reasonable basis for my opinion set accounts and the administration based on my audit. out below. I conducted my audit in accordance with generally The annual accounts and the consolidated accounts accepted auditing standards in Sweden. Those standards have been prepared in accordance with the Annual require that I plan and perform the audit to obtain Accounts Act and, thereby, give a true and fair view of the reasonable assurance that the annual accounts and the company’s and the group’s financial position and results of consolidated accounts are free of material misstatement. An operations in accordance with generally accepted audit includes examining, on a test basis, evidence suppor- accounting principles in Sweden. ting the amounts and disclosures in the accounts. An audit I recommend to the general meeting of shareholders that also includes assessing the accounting principles used and the income statements and balance sheets of the parent their application by the board of directors and the managing company and the group be adopted, that the profit of the director, as well as evaluating the overall presentation of parent company be dealt with in accordance with the information in the annual accounts and the consolidated proposal in the administration report and that the members accounts. As a basis for my opinion concerning discharge of the board of directors and the managing director be from liability, I examined significant decisions, actions taken discharged from liability for the financial year.

Förslöv March 20, 2000

Thomas Thiel Authorised Public Accountant

72 Definitions

Adjusted equity Order backlog Shareholders’ equity plus minority interests Orders waiting for construction

Adjusted equity per share Orders received Adjusted equity divided by the number of shares at year- The sum of orders received during the year end

P/E ratio after actual tax Capital employed Share price at year-end divided by earnings per share after Total assets at year-end less non-interest-bearing operating actual tax liabilities and deferred tax liabilities

P/E ratio after standard tax Cash flow Share price at year-end divided by earnings per share after Cash flow before financing is calculated as the sum of the 28 percent standard tax cash flow from current operations and cash flow from investment activities. Profit margin Profit after financial items plus financial expenses as a Debt/equity ratio percentage of net sales Interest-bearing liabilities in relation to adjusted equity

Return on capital employed Earnings per share after standard tax Profit after financial items plus financial expenses as a Profit after financial items adjusted for minority interests in percentage of average capital employed earnings less 28 percent standard tax divided by the average number of outstanding shares during the year Return on equity Profit after financial items less 28 percent standard tax and Earnings per share after actual tax adjusted for minority interests in net profit as a percentage Net profit for the year divided by the average number of of average adjusted equity outstanding shares during the year

Risk-bearing capital Equity/assets ratio Shareholders’ equity plus minority interests, the deferred tax Adjusted equity as a percentage of total assets at year-end liability, debenture loans and convertible debenture loans

Interest coverage ratio Share of risk-bearing capital Profit after financial items plus interest expenses in relation Shareholders’ equity plus minority interests, the deferred tax to interest expenses liability, debenture loans and convertible debenture loans as a percentage of total assets at year-end

Net borrowings Interest-bearing liabilities including the pension liability less Yield liquid and interest-bearing assets Dividend as a percentage of the share price at year-end

Operating margin Operating profit as a percentage of net sales

73 Board of Directors and auditors

The Board

Kjell Nilsson, b.1948. Ulf H Jansson, b.1947. Elected 1992. Director. Elected 1996. MD of ABV Chairman of the Board of Rock Group KB. Peab AB and Folkebolagen Holding: AB. 200,000 Class B-shares Board member of Munksjö AB. Holding: 810,000 Class B-shares

Håkan Sundin, b.1945. Mats Paulsson, b.1944. Elected 1984. Deputy MD, Elected 1992. MD of Peab Financial Director of AB. Board member of Sälen LKAB. Board member of Stjärnan AB. FöreningsSparbanken Holding: Finans AB. 2,753,244 Class A-shares Holding: 2,050,403 Class B-shares 29,835 Class B-shares 936,283 call options 4,590 call options 750,000 warrants 1997/2002

Jan Segerberg, b.1947. Lennart Ahlgren, b.1941. Rolf Åslin, b.1942. Elected 1994. Vice Chairman Elected 1999. Doctor of Elected 1993. of Addtek International Oy Engineering and Honorary Carpenter, Peab Sverige AB. Chairman of BK-Holding Doctor of Engineering. AB. A/S, Nordic Painting Group Chairman of Trämekanik- Employee representative. AB and Plymovent AB. Board programmet (SSF), Nord- Holding: member of Arcono AB, pointer AB and VIS-able AB. None. Bosvik AS, Dynamed AB and Board member of Wihlborgs the German-Swedish Fastigheter AB, Pronyx AB, Chamber of Commerce. IKEA International A/S, Holding: Center for Process Control 2,000 Class B-shares and Design (SSF) and Paper.x.com. Member of the Engineering Science Academy and the Royal Kent Ericsson, b.1949. Jan-Erik Ljungberg, b.1943. Forestry and Agricultural Elected 1998. Project Manager, Elected 1997. Construction Academy. Peab Sverige AB. worker, Peab Sverige AB. Holding: Employee representative. Employee representative. 5,000 Class B-shares Holding: Holding: 500 Class B-shares 600 Class B-shares 200 call options

Gert Berlin, b.1942. Auditors Elected 1994. Carpenter, Peab Sverige AB. Employee representative Thomas Thiel, b.1947. (Deputy). Authorised Public Accountant, KPMG. Auditor for Peab since 1992. Holding: 130 Class B-shares Alf Svensson, b.1949. 20 call options Authorised Public Accountant, KPMG. Deputy Auditor for Peab since 1998.

74 Executive Management

Group Management

Mats Paulsson, b.1944. Göte Brännvall, b.1946. MD of Peab AB since 1996. MD of Peab Sverige AB. Employed since 1959. Deputy MD of Peab AB Holding: since 2000. 2,753,244 Class A-shares Employed since 1970. 2,050,403 Class B-shares Holding: 936,283 call options 29,484 Class A-shares 750,000 warrants 216,282 Class B-shares 1997/2002 32,724 call options 20,000 warrants

Peder Strömqvist, b.1959. Deputy MD, Business Development, of Peab AB since 1996. Employed since 1994. Holding: 173,500 Class B-shares 19,000 call options 123,000 warrants

Mats O Paulsson, b.1958. Mats Leifland, b.1957. MD of Swerock AB. Deputy Deputy MD, Accounting, MD of Peab AB since 2000. Finance and IT, of Peab AB Employed since 1999. since 1996. Holding: Employed since 1995. 20,000 Class B-shares Holding: 160,000 Class B-shares 15,032 call options 107,000 warrants

Other officers

Jan Edlund, Manager Division West, Peab Sverige AB Karin Malmgren, Company Lawyer, Peab AB Per Sjöstrand, Manager Division North, Peab Sverige AB Gunnar Wannehag, Personnel Manager, Peab AB Jan Johansson, Manager Division South, Peab Sverige AB Gösta Sjöström, Information Manager, Peab AB Per Ununger, Manager Division East, Peab Sverige AB Jesper Göransson, Corporate Treasurer, Peab AB Anders Pettersson, Manager Civil Eng. Div., Peab Sverige AB Jan Andersson, IT Manager, Peab AB Roland Svensson, MD, Peab AS Jimmy Larsson, Environment, Peab Sverige AB Malte Åkerström, MD, Peab Asfalt AB Anders Johnsson, Quality, Peab Sverige AB Thomas Nilsson, MD, Lambertsson Sverige AB Christer Klemets, MD, Lambertssons Kran AB

Reported holdings apply to March 1, 2000, and include spouses’, minors’ and private companies’ holdings. Reported warrants refer to Warrant 2000, unless otherwise stated.

75 PEAB ANNUAL REPOR

T 1999

Financial information Peab will issue the following information concerning the financial year 2000: Interim Report: May 10 Half-yearly Report: August 23 Interim Report: November 8 Year-end Report: February 8, 2001

Peab Journalen Peab’s magazine for shareholders, clients and employees is published quarterly in February, May, September and December.

Internet Current information about Peab is available at http://peab.se

Ordering information Financial information and Peab Journalen can be ordered from: Peab Information, S-260 92 Förslöv, Sweden. Telephone: +46 431 890 00. Fax: +46 431 45 19 75. E-Mail: [email protected]

Peab AB, S-260 92 Förslöv, Sweden. Tel +46 431 890 00. Fax +46 431 45 19 75.

RHR Reklambyrå AB, Malmö 2000-04 / www.onpaper.se