New financial targets and new reporting structure

New financial targets and new reporting structure

As a result of the proposed distribution of shares in Peab Industri, in future
Peab's activities will consist of construction and civil engineering operations.
This are resulted in a review of the financial targets and of the external
reporting structure.
Financial targets

Peab has established new financial targets in order to clearly state the group's
objectives and potential as a dedicated construction and civil engineering
company. These targets are:
Return on equity of at least 20 percent (up from the previous 15 per cent) 
Equity/assets ratio of at least 25 per cent (unchanged) 
Dividend of at least 50 percent of profit after tax (unchanged)
The earlier targets for return on capital employed and cash flow have been
discontinued.
The new targets have been elaborated based on Peab's approach as a dedicated
construction and civil engineering company with activities in Sweden, Norway and
Finland. The distribution of Peab Industri will free Peab of this capital
intensive business, thus reducing the company's needs for investment and working
capital and the withdrawal of the capital employed target. 
Peab intends to develop its own project development, and therefore the board of
directors has decided to expand the framework for possession of Project and
Development Properties from the previous maximum commitment of some SEK 2,000
million to a future maximum commitment of approx. SEK 3,000 million. Peab's
requirements for the proportion of apartments subscribed for in advance and
sales of commercial projects prior to project start remain unchanged. 

The group's targets will then be divided proportionately between the business
areas relative to individual profitability, cash flow and operating margin
targets. 

Where there are major changes in Peab's structure or external conditions, for
example on the financial markets or through political decisions, Peab will
modify the financial objectives as necessary.


New reporting structure

As a result of the proposed distribution of shares in Peab Industri, in future
Peab's activities will consist of construction and civil engineering operations.
Peab operates in Sweden, Norway and Finland.
From the first quarter of 2007 onwards the new business areas in external
reporting will be:
•	Construction Sweden
•	Construction Abroad
•	Civil Engineering
•	Trust/Management
This division is assessed to describe opportunities and risks for the dedicated
construction and civil engineering company, which will remain after the
distribution of Peab Industri.

Peab will report Peab Industri as an own business area until the decision of
distribution. Given adoption of the decision to distribute the shares in Peab
Industri by the annual general meeting, this business area will thereafter be
withdrawn. 

The below table shows the revised business areas based on the new reporting
structure. 

When establishing Peab Industri AB on 31 December 2006, there were certain minor
company handovers between the Industry, Construction and Civil Engineering
business areas, which means that historical values for Industry business area in
Peab's report, will diverge from historical values in the future economic
information of Peab Industry. Figures have not been translated at historical
values because of these handovers. 
“Our financial targets are there so that parties interested in investing in the
Peab share can gain an impression of the company's possibilities and potential.
The high return on equity requirement in the remaining dedicated construction
and civil engineering business reflects our belief in a continued good building
market climate. The new reporting structure will result in easy and clear
analysis of the company in the future too, " says Peab's MD Mats Paulsson in a
commentary.

For further information:
Mats Leifland, CFO Peab +46 37 10 06                                            
            Gösta Sjöström, information manager Peab +46 37 10 10
Previous press releases are available at peab.com

Peab is one of the leading construction and civil engineering companies in the
Nordic countries with a net sale exceeding SEK 30 billion and approximately
12,000 employees. The Group's subsidiaries have strategically located offices in
Sweden, Norway and Finland. The share is listed on the Nordic Exchange. The
registered office of the Group is at Förslöv, Skåne in south of Sweden.