NYAB Q4’24 preview: We expect a strong finish to a strong year

NYAB is set to release its Q4 report on Wednesday. We expect the company’s annual revenue growth to accelerate sequentially to 15% (Q3’24: 6%), as the previous quarter’s lower-than-expected growth was primarily driven by timing factors. Additionally, we expect the operating margin to improve, supported by a favorable project mix and increased volumes. Beyond the financial figures, we will be particularly focused on management’s comments regarding the market outlook, as well as insights into the company’s strategy following the closure of the acquisition of Dovre’s businesses in early January. Further details on integration progress and potential synergies will also be key areas of interest.

We expect NYAB to close the year on a high note

We forecast NYAB's Q4 revenue to increase by 15% year-on-year to 101 MEUR. We expect the growth to be supported by the company’s strong order backlog, which reached a record-high 382 MEUR in Q3’24. We also expect that the previous quarter’s revenue shortfall (compared to our estimates), partly due to timing factors related to e.g. holiday season, to contribute to a re-accelerated growth in Q4. Furthermore, we acknowledge that the relatively mild winter season in the Nordics could potentially have had a positive effect on NYAB’s operations and overall business momentum during Q4.

Moving down the income statement, we estimate EBIT to amount to 9.8 MEUR, reflecting an EBIT margin of 9.7% and a nearly 50% year-on-year, supported by strong revenue growth and sustained cost efficiency, as demonstrated in previous quarters. On the bottom line, we expect losses from associates to remain stable compared to Q3, while financial expenses should further normalize following the completion of the re-domiciliation process earlier in 2024. Given this overall picture, along with our expectation of a somewhat depressed tax rate due to consolidated losses, we estimate net profit to reach 7.8 MEUR, more than doubling from 3.6 MEUR in Q4’23.

Strong order book and positive trends in the macroeconomic environment point to sustained high growth in 2025

For 2024, we estimate NYAB’s revenue to reach 330 MEUR, representing a 17.6% growth year-on-year, with an EBIT margin of 7% (FY2023: 5.4%). This margin improvement is driven by higher volumes and cost efficiencies, as well as a gradual easing of macroeconomic headwinds, such as inflation and elevated interest rates, which weighed on last year’s performance.

For the current year, we expect NYAB to maintain its strong growth trajectory, supported by solid fundamentals and a strong order book. We estimate a total revenue growth of nearly 50%, with 16% organically, while the remainder is fueled by the recent acquisition of Dovre Group’s Norwegian consulting and global Project Personnel Businesses. Within NYAB’s core business, we expect Sweden to remain the primary growth driver in 2025, but Finland to recover after a somewhat sluggish 2024. On the margin front, we estimate the acquisition to be a small drag on the EBIT margin, falling from FY2024e of 7% to 6.6% in 2025e, due to the lower profitability profile within the global project personnel business (4-5% EBIT margin).

In the Q4 report, our key focus will be on management's outlook for 2025, potential guidance, and the company’s strategic direction moving forward. Additionally, we will be looking for insights into NYAB’s integration plans for Dovre Group’s businesses and how the company intends to leverage these acquisitions to drive future growth.