NYAB Q2’25 preview: Strong momentum set to continue, with strong growth and stable margins

NYAB will release its Q2 report on Wednesday. The company has started 2025 on a strong note with robust revenue growth, and we expect this momentum to continue in Q2. Key drivers include favorable market conditions in Sweden, a gradually improving outlook in Finland, and M&A effects from the Dovre acquisition. We expect operating margins to remain fairly stable, with the Dovre consolidation expected to weigh slightly on Group profitability. Beyond the headline figures, we see management’s commentary on market outlook, Dovre integration, and strategic direction as key focus areas.

Source: Inderes

Strong order book, favorable market conditions in Sweden, and M&A effects point to sustained high growth in Q2

We forecast NYAB's Q2 revenue to increase by 61% year-on-year to 122 MEUR (Q2’24: 76 MEUR), with the Dovre acquisition contributing by 29 MEUR. Civil Engineering is estimated to grow by 23%, mainly driven by Sweden (27% y/y), where market conditions remain favorable. Power network projects are expected to continue to be the key growth driver, with infrastructure activity also picking up following strong Q1 order intake. In Finland, the Civil Engineering segment is expected to grow 13% as market conditions gradually recover, while the Consulting segment is expected to show flat growth (-1%) amid mixed market dynamics and NYAB’s focus on margin improvement. On a pro forma basis, we estimate organic revenue growth of 17% in Q2. Year-to-date, NYAB has announced orders totaling ~1.5 BNSEK (~131 MEUR), which we believe supports our positive revenue outlook for 2025-2026.

Margins to remain healthy despite M&A dilution

Moving down the income statement, we estimate EBIT to amount to 5.7 MEUR (Q2’24: 3.8 MEUR), translating to an EBIT margin of 4.6% (4.9%).  The slight margin contraction reflects the consolidation of the lower-margin Consulting segment (Dovre). In Civil Engineering, we forecast a stable operating margin (5.1%) relative to the comparison period (5.0%) as we expect strong top-line growth to make margin optimization more challenging in the near term. Despite this, we consider the estimated margin healthy given seasonality and expect improvement as growth normalizes. On the bottom line, we expect losses from associates to remain stable with the previous quarter, while we expect higher financial expenses when adjusting for one-offs* in the comparison period, due to increased leverage following the Dovre acquisition. Given this overall picture and after taxes, we estimate net profit to reach 3.9 MEUR (Q2’24: 1.4 MEUR).

NYAB remains largely protected amid the current global turmoil

For FY2025, we forecast revenue of 524 MEUR (+52% y/y) with an adjusted EBIT margin of 6.5%** (FY2024: 7.6%, pro forma 2024: 6.1%). On a pro forma basis, we estimate 15% revenue growth (Civil Engineering +19%, Consulting +1%), with margin pressure driven by the lower-margin Project Personnel business in Consulting.

We continue to believe that NYAB is largely insulated from the current global trade and geopolitical turmoil due to its Nordic focus (~90% of revenue in 2024) and that sourcing of materials, products, and services used for its operations primarily comes from Sweden and Europe, with a smaller part outside Europe (mostly Asia). That said, the global economy has so far demonstrated a degree of resilience. In addition, the company’s focus on less cyclical and counter-cyclical infrastructure markets should also mitigate demand risks. Even so, we don’t believe that the company is completely immune to a weakening economy and/or tightening fiscal policy, if that materializes. As such, we expect a weaker business cycle to at least tighten the competition somewhat for projects within the company's markets. Lastly, management’s comments on the 2025 outlook, strategic priorities, and Dovre integration progress will be key areas of interest in the Q2 report.

* Tied to re-domiciliation

** Excluding the impact of one-off costs in Q1’25