Source: Inderes

NYAB's Q3 results beat our expectations on both the top and bottom lines, driven by clearly stronger-than-expected revenue growth in Civil Engineering, particularly in Finland. Order intake reached a record 555 MEUR, and even excluding NYAB's share of the Uppsala tramway, it exceeded our estimate, lifting the underlying Civil Engineering order backlog to a new record. Beneath the headline beat, however, the picture was more mixed. The Swedish Civil Engineering margin fell short of our expectations, Consulting weakened further, and part of the EBIT beat came from unallocated group items, including a revaluation gain on the total return swap.

Civil Engineering continued to drive top-line growth

Revenue grew by 27% year-on-year to 190.2 MEUR, clearly beating our 176 MEUR estimate. The Civil Engineering segment again drove the growth, with revenue increasing by 39% year-on-year to 169.5 MEUR. Swedish revenue rose 12% to 124.1 MEUR (Inderes estimate: 118.1 MEUR), supported by new railway infrastructure projects with high production concentrated in a short period. Finland was the main source of the beat, as revenue increased 126% to 46.8 MEUR (Inderes estimate: 33.4 MEUR), driven by the ramp-up of construction activity at the Mikkeli data center project. The company expects the project to continue supporting revenue in the coming quarters as execution progresses.

In contrast, Consulting revenue declined 25% to 21.1 MEUR (Inderes estimate: 24.9 MEUR), due to continued weak demand for project personnel services in the Norwegian offshore market and more selective order intake. The average number of FTEs fell to 570 (Q3'25: 719). Consulting order intake was 13.4 MEUR (Q3'25: 16.7 MEUR), and the rolling 12-month book-to-bill of 0.7 does, in our view, not point to a turnaround in the near term.

Group order intake reached a record 555.0 MEUR (Q3'25: 118.3 MEUR), of which Civil Engineering accounted for 541.6 MEUR. Order intake included NYAB's ~294 MEUR share of Phase 2 of the Uppsala tramway project (total value 6.5 BSEK, 50/50 joint venture with AZVI), as well as the ~1.6 BSEK (~140 MEUR) Phase 2 contract for Svenska kraftnät's Letsi-Svartbyn power line. Excluding Uppsala, group order intake was ~261 MEUR, above our 241 MEUR estimate. The Civil Engineering order backlog more than doubled year-on-year to 874 MEUR (Q2'26: 502 MEUR). Excluding Uppsala, the backlog was ~580 MEUR, which is still a new record and up ~16% from the previous quarter. As the joint venture is equity-accounted, it contributes through the share of results of associates and joint ventures rather than through revenue and EBIT, so we would caution against reading the headline backlog figure at face value. Nevertheless, we view the underlying backlog as providing strong visibility into 2027.

Headline EBIT beat, but segment margins were mixed

Operating profit (EBIT) increased 33% to 15 MEUR, above our 14 MEUR estimate. The EBIT margin of 7.9% (Q3'25: 7.5%) was in line with our expectations, so the beat was driven by volume. The Civil Engineering segment's EBIT rose 33% to 13.7 MEUR, but its margin declined slightly to 8.1% (8.4%). In Sweden, the margin improved to 8.4% (7.8%) on efficient project execution, but this was below our 9.7% estimate, and EBIT of 10.4 MEUR fell short of our 11.4 MEUR estimate. Finland was the positive surprise, with EBIT of 3.3 MEUR (Inderes estimate: 1.9 MEUR) and a margin of 7.0% (8.3%), above our 5.7% estimate. Consulting profitability weakened further, with the margin falling to 0.6% (4.5%) against our 2.8% estimate, as the cost-efficiency measures in Norway have not yet taken full effect.

While the combined segment EBIT of 14 MEUR was in line with our expectations, the headline beat was explained by unallocated group items of +1.2 MEUR (Q3'25: -0.3 MEUR), supported by a revaluation gain on the total return swap used to secure share deliveries under the long-term incentive plans. As we consider this non-operational, the quality of the beat was weaker than the headline figures suggest. Further down the income statement, positive net financial items (0.3 MEUR vs. -0.6 MEUR) lifted net income to 12.6 MEUR, above our 11.4 MEUR estimate, and EPS increased 49% to 0.018 EUR (0.012 EUR).

Free cash flow was -6.2 MEUR (Q3'25: 9.3 MEUR), as 20.3 MEUR was tied up in working capital, mainly in contract assets. The company attributed this to the timing of a customer payment received shortly after the end of the quarter. Net cash declined to 5.2 MEUR (Q2'26: 12.0 MEUR), and the balance sheet remains strong (net debt/EBITDA -0.12x). Given the explanation provided by management, we expect a stronger-than-usual release of working capital in Q4.

Pipeline conversion progressing

With Uppsala and Letsi-Svartbyn now in execution, the estimated value of potential execution contracts from ongoing early-phase assignments fell to ~200 MEUR, from ~600 MEUR at the end of Q2. The change reflects these projects moving into the order book, as well as new assignments and revised estimates. These potential contracts are not included in order intake or the backlog. New additions during the quarter include an early works agreement with SSAB for a steel coil logistics facility linked to its planned mini-mill in Luleå, where negotiations on subsequent phases are ongoing. The company noted that long-term investment programs in energy, infrastructure and industry continue to support demand across its prioritized markets. Given the clear revenue beat and the record underlying order backlog, we expect to raise our revenue estimates. The earnings picture is less straightforward. Our current estimates imply a Q4'26 EBIT margin of around 9.5%, against 8.2% in Q4'25, which looks somewhat demanding given the softer-than-expected Swedish margin, continued weakness in Consulting, and the limited drop-through at segment level in Q3. The direction of our EBIT estimates will depend primarily on the sustainability of the Finnish margin and on the drivers behind the Swedish margin development.