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Analytikerkommentar

NYAB transitioned to IFRS reporting and updated its long-term financial targets

Af Tommi SaarinenAnalytiker
30.06.2023, 09.08
NYAB

Translation: Original comment published in Finnish on 6/30/2023 at 7:08 am.

NYAB transitioned to IFRS reporting, formulated its guidance for 2023 to comply with IFRS accounting, and raised its long-term revenue growth target reflecting the favorable long-term outlook in the business environment. However, the change in accounting or the update of financial targets does not have a direct impact on our view of the company. We will update our estimates to correspond with IFRS accounting in the coming weeks.

The change in the accounting standard particularly affects balance sheet figures

NYAB announced yesterday that the company transitions from Finnish Accounting Standards (FAS) to the International Financial Reporting Standards (IFRS). NYAB published IFRS financial statements for 2022, which includes the detailed impact of the transition on the reported figures for financial years 2021 and 2022. In addition, the company published corresponding unaudited figures for Q1’23 and the comparison period.

The change in accounting standards has an impact on the figures in NYAB’s balance sheet and income statement. The biggest changes in the balance sheet are related to goodwill, which will decrease clearly by EUR 85 million. On the other side of the balance sheet, the decrease in goodwill reduces the company's equity by EUR 82 million. The significant changes in goodwill and equity relate to the earlier merger between Skarta Group and NYAB, which is treated very differently by the accounting regulations (in IFRS, the Skarta-NYAB business merger is treated as a reverse acquisition). In the income statement, EBIT strengthens as goodwill amortization that weaken EBIT are not carried out in IFRS accounting, and the company does not have significant lease liabilities that would increase the amount of depreciation.

The guidance for the current year was formulated to correspond with the new accounting practice

Nya B300623 Pic1

In terms of revenue, the guidance remains unchanged and is estimated to be EUR 315-340 million for 2023. In terms of profitability, the company follows operating profit (EBIT) instead of EBITA as no goodwill amortization is carried out in IFRS accounting. The company estimates that EBIT for 2023 will be EUR 21-29 million. The EBIT range is EUR 4 million lower than the previous EBITA guidance. This is due to other accounting reasons that the company explained in greater detail here.

Long-term revenue growth targets were raised

The company updated its long-term financial targets to comply with IFRS accounting and clearly raised its revenue growth target.

Nya B300623 Pic2

We find the increase in the revenue target significant and believe it is relatively ambitious in the long term, although NYAB has reached the target level in the past in Sweden and the demand outlook for its target markets is strong. In our current estimates, growth will decline to 7% by 2026, so our estimates are well below the company's updated long-term revenue target level. The company justified raising the long-term revenue target with the favorable outlook in its operating environment. We have discussed our current longer-term estimates and market outlook in more detail in our extensive report published in the spring. Our preliminary estimate is that as a result of the raised revenue target, our revenue estimate is subject to upward pressure rather than downward pressure.

We estimate that the target levels for profitability and balance sheet structure did not change materially and the minor changes reflect the lower equity and the end of goodwill depreciation (incl. certain other smaller changes) due to accounting changes. In terms of profitability, the target is still quite challenging at Group level in our opinion, since achieving this would require a sustainable level adjustment in the profitability of the Finnish operations closer to the level of the Swedish businesses.

We will update our estimates to reflect IFRS accounting in the coming weeks. However, the change in accounting practice does not affect our view of the company.

NYAB

8,66SEK29.06.2023, 18.00
7,937SEKKursmål
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Anbefaling opdateret:14.05.2023

NYAB provides services of engineering, construction and maintenance with a focus on sustainable infrastructure and renewable energy. Offering includes, among others, roads, railways, bridges, airports, wind and solar power, as well as power networks. In addition, NYAB provides various types of facilities for industrial clients. NYAB operates in Sweden and Finland within both private and public sector.

Read more on company page

Key Estimate Figures14.05.2023

202223e24e
202223e24e
Omsætning247,7330,1377,9
vækst-%494,8 %33,2 %14,5 %
EBIT (adj.)30,529,831,9
EBIT-% (adj.)12,3 %9,0 %8,4 %
EPS (adj.)0,430,390,44
Udbytte0,080,110,14
Udbytte %8,9 %20,3 %24,3 %
P/E (adj.)2,11,41,3
EV/EBITDA1,80,4neg.
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