Q2 2026 Nyab AB Earnings Call Transcript
Key Points
- Strong revenue growth of 19% in Q2 2026, with a 25% increase on a rolling 12-month basis, driven by robust order intake and a record-high order backlog exceeding EUR 500 million.
- Improved profitability with operating margin rising to 5.1% in Q2 2026 from 4.2% in the prior year, supported by a favorable project mix and higher production volumes.
- Solid financial position with a net cash position of EUR 12 million, a negative net debt-to-EBITDA ratio of -0.3x, and a high equity ratio of 67%, providing ample room for growth and strategic maneuvers.
- Significant new contract wins, including the SEK 6.5 billion Uppsala Tramway project (NYAB's share: SEK 3.25 billion), the North Bothnia Line railway contract, and the first data center contract, expanding the project pipeline and market presence.
- Strong cash generation with a rolling 12-month free cash flow of EUR 35.6 million and a cash conversion rate of 88% of EBITDA, reflecting the company's asset-light, low-CapEx business model.
- Successful execution of growth strategy with 12 consecutive years of growth, primarily organic, and a strong pipeline of early-phase assignments (EUR 600 million potential) that could further boost future order intake.
- Consulting business (Dovre Solutions) continues to underperform, with a 13% revenue decline in Q2 2026 and a low operating margin of 2.1%, dragging down group profitability and delaying the achievement of the 7.5% EBIT margin target.
- Soft demand in the Norwegian offshore market and weak appetite for renewable energy investments have led to a lower order intake in the consulting segment, with a rolling 12-month book-to-bill ratio of only 0.7x.
- Free cash flow in Q2 2026 was significantly lower at EUR 1.8 million versus EUR 5.5 million a year ago, due to temporary working capital build-up and investments in machinery, which may raise concerns about short-term liquidity.
- The company's long-term financial targets (revenue growth >10% and EBIT margin >7.5%) are not expected to be met in 2025 and 2026, primarily due to the dilutive impact of the consulting acquisition, indicating a delay in achieving strategic goals.
- Seasonal patterns remain a challenge, with Q1 and Q2 being slower periods, and the company's performance is heavily dependent on the second half of the year, which introduces volatility and uncertainty in quarterly results.
- The integration and restructuring of the consulting business, including leadership changes and the establishment of operations in Sweden, are ongoing and may take time to yield the expected margin improvements, with a heavy improvement only anticipated in 2027.
Hello, everyone, and welcome to NYAB's result presentation for the second quarter of 2026. NYAB has today released its interim report. With us in this call, we have the group CEO, Johan Larsson, and the Interim CFO, Peter Franks. My name is Erik Petersen, and I am the VP of Corporate Affairs and Investor Relations at NYAB. Participants who wish to ask questions after the presentation are welcome to join the teleconference via the link in the invitation. You may also submit your questions in the chat, and you will find the chat under the presentation window on your screen. To get started, I hand over to Johan, who will go through the results.
Thank you, Erik. Welcome, everyone. Strong report from our side. As we stated when reporting the first quarter that we had a high underlying growth that comes through now in the second quarter, where we show a strong revenue growth and with a clearly improved profitability. Our civil engineering business, mainly
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