NYAB Q1’26 flash comment: Record orders outshone soft quarterly results

Source: Inderes 

NYAB's Q1 result fell short of our revenue and earnings estimates, as a higher proportion of early-phase projects in Sweden and continued softness in the Consulting segment weighed on performance. However, order intake surged by 23% year-on-year, driving the book-to-bill ratio to a robust 1.8x and signaling an accelerating growth trajectory for the coming quarters. While the Q1 miss introduces some smaller pressure to our near-term estimate, we believe the 700 MEUR potential value in Phase 1 assignments and the expanding order backlog provide strong visibility, keeping our longer-term investment case firmly intact.

High share of early-phase projects weighed on top-line growth

Revenue decreased by 6% year-on-year to 100 MEUR, clearly missing our 119 MEUR estimate. The Swedish Civil Engineering unit largely drove the shortfall, as a higher proportion of projects currently reside in early engineering and design phases (Phase 1). Revenue recognition in these phases remains characteristically low, but management expects it to accelerate markedly as projects transition into the execution phase. In addition, the Consulting segment continued to face headwinds from a subdued offshore market, which weighed negatively on the top line. The order intake for the Civil Engineering segment increased by an impressive 23%, resulting in a record high order backlog of 473 MEUR (Q1’25: 372 MEUR, Q4’25: 381 MEUR), as well as a significant increase in the book-to-bill ratio, which came in at 1.8x (Q1’25: 1.4x, Q4’25: 0.9x).  We view the absolute backlog level as providing strong visibility for the remainder of the year.

Profitability improved year-on-year but trailed our estimates

Operating profit (EBIT) came in at 1.5 MEUR (Q1'25 adj. EBIT: 2.4 MEUR), translating to a 1.5% margin and falling clearly below our 3.8 MEUR estimate. In Sweden, profitability improved year-on-year on the back of a healthier project portfolio, though the softer revenue base limited Group-level margin expansion. In Finland, project portfolio variations weighed on operating profit, while offshore market weakness further diluted Consulting margins, which contracted to 0.4% from 2.8% in the prior-year period. Despite the miss, we believe the strong order intake and record-high backlog, combined with recent contract wins in structurally higher-margin segments such as rail, point to accelerating revenue and margin improvement over the coming quarters. In light of the year-on-year decline in the revenue base, the cash conversion in Q1 was strong, with free cash flow amounting to 5.5 MEUR (Q1'25 adj.: 6 MEUR).

Strong order intake supports growth outlook

Management reiterated that market conditions remain favorable across NYAB's core markets, with Sweden continuing to show strong tender activity in both power and infrastructure segments. Following the Q1 miss, we expect small downward pressure on our near-term estimates, particularly for Q2'26, as we adjust for the slower start to the year. However, we believe the full-year outlook remains largely intact, supported by the strong order intake/backlog, significant pipeline potential, and project ramp-ups in the seasonally stronger H2 period. As such, we believe the Q1 order intake and the high book-to-bill ratio point to a more backloaded year for both revenue and earnings as projects transition into execution phases