Source: Inderes

NYAB delivered stronger-than-expected Q2 revenues, with EBIT in line with estimates. Organic revenue growth was primarily driven by high production rates across both the Energy and Infrastructure sectors. The order backlog continued to expand, reaching a new record level, supporting a strong growth momentum for the rest of the year. The integration of Dovre is progressing as planned, while management commentary suggests no significant changes in the market outlook.

Top-line growth above expectations…

NYAB's revenue grew by 78% (y/y) in Q2 to 136 MEUR (Q2’24: 76 MEUR), which surpassed our 122 MEUR forecast by 11%. Revenue growth was primarily driven by the integration of Dovre in the financials (~29 MEUR), but also by the realization of the company’s strong order backlog (Q2’25: 425 MEUR). Book-to-bill ratio remained at a high level (Q2’25: 1.4, Q2’24: 1.8), signaling sustained strong demand. Power network projects continued to perform well, while infrastructure activity gained solid momentum.

The Civil Engineering segment grew 43% year-on-year to 107 MEUR, above our estimates (94 MEUR), primarily driven by Sweden (+49% y/y), which continues to benefit from favorable market conditions. Additionally, Finland continued its recovery and grew 32% in the quarter (Inderes est: 13%). While market conditions in Finland remain somewhat soft, there are increasing signs of improved activity, with NYAB managing to grow significantly faster than the broader market. The Consulting segment saw a flat growth (-1% y/y) year-on-year on a pro forma basis, as the demand picture across segments remains quite mixed, with activity in the Energy segment continuing to be at a high level, while renewable energy remains sluggish and infrastructure at a stable level. We expect growth to remain modest throughout the year as NYAB remains focused on improving profitability within the segment in the short term. On a pro forma basis, we estimate that the Group’s organic revenue growth amounted to 29%. 

…while EBIT aligned with estimates

The company reported an EBIT of 5.7 MEUR (Q2’24: 3.8 MEUR), which matched our estimates (5.7 MEUR). On a margin level, EBIT came in at 4.2% (Q2’24: 5%, Q2’24 pro forma: 4.9%), which was slightly lower than our estimated 4.6%. Despite this, we consider the margin level to be healthy given seasonality, and we expect improvements as growth normalizes. Relative to revenue, the cost structure remained fairly similar compared to last year’s quarter, with slightly higher material expenses and lower personnel expenses. The small y/y margin contraction primarily reflects the consolidation of the lower-margin Consulting segment (Dovre). 

At the bottom line, net profit was slightly above our estimates, with net financials being the key deviation, which was below our estimates. Cash flow was at a decent level, given seasonality, with operating cash flow amounting to 7.3 MEUR (Q2’24: 0.6 MEUR) and free cash flow stood at 5.5 MEUR (Q2’24: -0.1 MEUR), supported by working capital favorability and increased profitability.

No major changes in the outlook

The company reiterated that the operating environment in core markets continues to develop favorably (Sweden strong, Finland slowly recovering), supporting a positive outlook for the remainder of the year. The management emphasizes that its cross-border collaborations remain a key strength for the company, enabling efficient allocation of resources and capabilities across markets. With a growing order book and a very high book-to-bill ratio, we believe the pre-requisites for continued high growth are in place. However, the report did not provide a clear position on whether the company experiences any capacity constraints, considering the strong backlog growth and high book-to-bill ratio (especially within the Civil Engineering segment), although we expect to hear more comments on this in the earnings call, which begins at 10 a.m. CEST.

Following the revenue beat (revenue +11% higher than estimated), we see some upward pressure on our revenue estimates.