NYAB Q3’25 flash comment: Revenue in line with estimates, but profitability fell short

Source: Inderes

NYAB delivered Q3 revenues in line with our estimate, but reported EBIT came in short. Organic revenue growth was primarily driven by high production activity in Sweden, while volumes in Finland were lower due to timing effects in the project portfolio.  The order backlog remains at a high level, supporting continued strong growth, but the softer order intake in the quarter resulted in a decline in the book-to-bill ratio. The integration of Dovre is progressing well, particularly in terms of margins, while management commentary suggests no significant changes in the market outlook.

Top-line growth in line with expectations

NYAB's revenue grew by 60% (y/y) in Q3 to 150 MEUR (Q3’24: 94 MEUR), which was in line with our estimate. Revenue growth was primarily driven by the integration of Dovre in the financials (~28 MEUR), but also by the realization of the company’s strong order backlog in the Civil Engineering business (Q3’25: 404 MEUR). However, the book-to-bill ratio declined to 0.8x in Q3 (Q2’25: 1.4x, Q3’24: 1.4x), indicating that order intake lagged behind project execution during the quarter.

The Civil Engineering segment grew 32% year-on-year to 122 MEUR, in line with our estimates (122 MEUR), primarily driven by Sweden (+67% y/y), which came in above our estimate, and continues to benefit from favorable market conditions. In Finland, revenue declined by 25% to 21 MEUR, which was well below our estimate of 30 MEUR. Management noted that the lower volumes in the quarter were mainly due to timing effects in the project portfolio, while also reiterating that a cautious market environment remains. The Consulting segment saw flat growth year-on-year on a pro forma basis, as the demand picture across segments remains quite mixed. We expect growth to remain modest also during Q4 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 23% in Q3. 

But the EBIT development trailed our forecasts

The company reported an EBIT of 11.3 MEUR (Q3’24: 8.9 MEUR), which was below our estimates (12.6 MEUR). On a margin level, EBIT came in at 7.5% (Q3’24: 9.5%, Q3’24 pro forma: 8.4%), below our forecast of 8.4%. In addition to the dilutive effect from the consolidation of the lower-margin Consulting segment (Dovre), we believe the year-on-year margin contraction (relative to reported and pro forma figures) continued to reflect NYAB’s front-loaded investments in staff capacity in H1’25, which limited year-on-year margin expansions. That said, the impact from this investment in staff capacity had a greater impact on the near-term margins than we had expected. On the other hand, the margin development in the Consulting segment exceeded our expectations (EBIT margin: 4.5% vs. Inderes estimate: 3.3%), supporting the view that the integration of Dovre is progressing well. Overall, we consider the reported margin level healthy given the seasonal pattern, remaining well above industry norms, although somewhat below our expectations. We continue to expect gradual margin improvement as growth normalizes, and integration synergies continue to materialize.
At the bottom line, net profit was also below our estimates, in line with the EBIT miss, with net financials and taxes being in line with estimates. NYAB’s cash flow was strong, considering the seasonality, with operating cash flow amounting to 10 MEUR (Q3’24: -7.7 MEUR), due to smaller working capital tie-ups, with free cash flow amounting to 9.3 MEUR (Q3’24: -8.9 MEUR). In terms of cash flow, Q4 and Q1 are typically the strongest, driven by a release of working capital accumulated throughout the year, and therefore we expect NYAB to continue to strengthen its cash position in the coming quarters. 

No major changes in the outlook

The company reiterated that the operating environment in core markets continues to develop favorably (Sweden strong, Finland cautious), supporting a positive outlook for the remainder of the year. Management did, however, note that demand from smaller customers in Sweden had eased, while emphasizing its strengthening position in Finland through Class A approval for transmission line projects in Fingrid’s supplier register. In addition, while current investment activity in Norway remains quite high in some areas, management expects this to ease somewhat in 2026.