This article first appeared on GuruFocus .
Release Date: November 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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NYAB AB ( OSTO:NYAB ) achieved strong revenue growth of 27% year-over-year, reaching EUR 190.2 million, with civil engineering revenue up 39%.
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Operating profit increased 33% to EUR 15 million, with operating margin improving to 7.9% from 7.5%.
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Record order intake of EUR 555 million, with civil engineering order backlog more than doubling year-over-year to EUR 873.8 million.
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Finland showed record high growth of 126% in revenue, with a decent margin of 7% despite ramp-up costs, improving seasonality.
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Net cash position of EUR 5.2 million and a strong equity ratio of 64.8%, providing financial flexibility.
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Early phase assignments valued at approximately EUR 200 million, indicating potential future contracts.
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Marine division has grown approximately 10 times revenue since acquisition and is improving margins.
Negative Points
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Consulting segment had a weak quarter with revenue down 25% to EUR 21.1 million and operating margin at 0.6%, down from 4.5%.
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Free cash flow was negative EUR 6.2 million due to timing of a EUR 31 million customer payment, impacting cash conversion.
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Civil engineering operating margin contracted slightly to 8.1% from 8.4% due to ramp-up costs and project mix.
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Finland's operating margin fell to 7% from 8.3% due to ramp-up costs and lower-margin renewable projects.
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Order intake in consulting fell to EUR 13.4 million from EUR 16.7 million, with rolling 12-month book-to-bill at 0.7.
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Working capital buildup for a strategic project with extended payment terms, expected to reduce in Q4.
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Company does not expect to reach its 7.5% EBIT margin target in 2025 and 2026 due to dilution from consulting and PP business.
Q & A Highlights
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Q: On the civil engineering margin, which fell to 8.1% from 8.4% despite very strong growth, could you give extra color on the year-on-year drop? A: CEO Johan Larsson attributed the decline primarily to the rapid expansion, pointing to Finland's 126% growth and hefty growth in Sweden as the main reasons. He noted that you cannot grow at that pace without incurring costs ahead of revenue.
Q: On Finland's lower profitability, how much is due to ramp-up costs versus lower project margins, and is it fair to assume margins improve next year? A: CEO Johan Larsson confirmed it is fair to assume, citing ramp-up costs as the main factor alongside some tighter-margin renewable projects being finalized. He highlighted that delivering a 7% EBIT margin on 126% growth is strong, and that higher volumes position Finland for significantly better full-year margins, addressing the historically weak H1 caused by low volumes against fixed costs.
Q: Are the legacy projects with tighter margins now completed, or is finalization ongoing? A: CEO Johan Larsson said they are quite close to finalized and will largely not be traceable in the numbers after Q4. He added that Q4 will not carry the same ramp-up costs seen in Q3, with one variable working in the company's favor and one against it on short-term margins.
Q: On consulting, which remains at a low level, are you seeing any change in momentum, and should margins stay low into next year? A: CEO Johan Larsson explained consulting comprises two models: traditional consulting, which has strong synergies with civil engineering, and project personnel (PP), a low-margin broker business. The entire 25% revenue decline came from PP due to the soft Norwegian offshore market. CFO Peter Franks added that the company is building a consulting footprint in Sweden, is comfortable with growth in Finland, and sees a good market opportunity in Norway.
Q: On cash flow, is the negative free cash flow mainly due to timing, or are you also tying up working capital due to high growth? A: CFO Peter Franks said tying up working capital is a natural part of growth, but the main reason was a EUR 31 million customer payment arriving just after quarter-end, which would have produced free cash flow of around EUR 25 million. He also cited a strategic project with extended payment terms that is expected to release working capital in Q4. CEO Johan Larsson noted historical cash conversion of around 90% and said underlying performance is not much different, with the gap being timing effects.
Q: With strong infrastructure demand in the Nordics, has your ability to sign subcontractors on good terms changed? A: CEO Johan Larsson said the business model remains intact since the overall market does not grow as fast as NYAB, though the company monitors niche subcontractor capacity closely. He flagged global uncertainties such as energy prices and interest rates as areas of close attention, noting clients and subcontractors can absorb some risk. CFO Peter Franks added that early works agreements let the company secure subcontractor pricing and availability before signing customer contracts.
Q: Are you seeing any margin impact from higher material or labor costs? A: CEO Johan Larsson said the company does not see an effect on margins at present.
Q: Are you seeing more bidders than a year ago, is pricing holding, and has your win rate changed? A: CEO Johan Larsson said there is less competition for a vast volume of potential revenue because few competitors have NYAB's early-phase planning and design capacity, which lowers competition and risk and rewards the company for client value. In general execution-only contracting, competition is largely unchanged.
Q: What share of the Mikkeli data center contract is now in the backlog, versus roughly 10% mentioned in Q2? A: CFO Peter Franks said the share is slightly higher than before, now around the 15% to 20% mark.
Q: What are the main aspects of your business model that people don't appreciate enough? A: CEO Johan Larsson described NYAB as a hybrid between a traditional consulting company and an infrastructure company, focused on planning, design, and project management with strong contract and construction law skills. Less than 10% of production is done in-house, with subcontractors carrying the rest, giving a low fixed-cost, low-CapEx, scalable model that enables sustainable margins and growth.
Q: Can you tell us about the marine division and how it is developing? A: CEO Johan Larsson said NYAB Marine stems from a small acquisition a few years ago, based mainly in the Malardalen area. Revenue is now approximately 10 times the level at acquisition, margins are improving, and it is one of the niches the company is targeting given rising demand in the water market.
Q: Are share buybacks in the plans, and if so, what would you do with the shares? A: CEO Johan Larsson said a formal mandate to buy back shares has not yet been obtained, but expected changes taking effect December 5 open possibilities. He said shares would not be given to key persons but could form part of a long-term incentive program tied to strong performance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
