NYAB Plc’s financial statement release 2023: Strong growth in cash flow and order backlog

28.02.24

October-December in brief

  • Revenue amounted to EUR 87.8 (89.8) million, representing a change of -2.1%. In constant currencies, revenue growth was 1.3%.
  • EBITDA was EUR 8.6 (20.8) million, amounting to 9.8% (23.1%) of revenue. Comparison period includes sales gain from Skarta Energy transaction of EUR 14.7 million on EBITDA.
  • Operating profit (EBIT) was EUR 6.6 (19.2) million, amounting to 7.5% (21.4%) of revenue
  • Free cash flow was EUR 16.8 (9.5) million
  • Net debt/EBITDA was -0.3
  • NYAB signed a contract with an estimated value of EUR 89 million regarding the construction of Aurora Line and a contract with an estimated value of EUR 69 million to construct a solar farm in Utajärvi, Northern Ostrobothnia
  • Order backlog improved 23.0% and amounted to EUR 294.7 (239.7) million.

January-December in brief

  • Revenue amounted to EUR 280.4 (253.3) million, representing a change of 10.7%. In constant currencies, revenue growth was 16.6%.
  • EBITDA was EUR 21.4 (30.4) million, amounting to 7.6% (12.0%) of revenue. Comparison period includes sales gain from Skarta Energy transaction of EUR 14.7 million on EBITDA.
  • Operating profit (EBIT) was EUR 15.2 (25.7) million, amounting to 5.4% (10.2%) of revenue
  • Free cash flow was EUR 22.3 (3.7) million
  • The Board of Directors proposes a capital repayment of EUR 0.014 (0.007) per share, of which EUR 0.008 per share is ordinary profit distribution and EUR 0.006 is extraordinary profit distribution and which equals approximately EUR 9.9 (4.9) million, to be paid for shareholders.
  • NYAB gives a financial guidance where its revenue and operating profit for 2024 are expected to increase from 2023.

This announcement is a summary of NYAB Plc’s financial statement release January-December 2023. The complete release is available here. The information presented in the financial statement release is based on the audited financial statements for 2023.

CEO Johan Larsson’s review

NYAB accomplished great progress during 2023. We developed both our core business and our support functions, which included preparations for a future as a company listed in Stockholm. With this work, we have built a platform for future profitable growth.

Our reported growth was 10.7 percent and growth in constant currencies amounted to 16.6 percent. We maintained a healthy EBIT-margin of 5.4 percent and achieved a significant improvement in our free cash flow that amounted to EUR 22 million. In addition, we ended the year with a net cash position and the highest year-end order backlog ever, EUR 295 million, which provides a solid foundation going forward.

Our positive development should also be seen in the context that year 2023 was full of macroeconomic headwinds. Our customers were especially affected by inflation and uncertainties regarding interest rates. Hence, investments in our markets were practically frozen during our seasonally highest period between May and October. Several contracts that were expected to be signed during the first half of the year were delayed. It is satisfying to see that, despite these challenges, we stayed committed to our most important supporting pillar, not to grow with increased risk. Therefore, our growth was modest in NYAB measures, and we decided not to complete any M&A’s due to uncertainties in the market.

Stabilization of the macroeconomic environment towards the end of the year restored confidence among our customers, which resulted in a significant order intake during the fourth quarter. We signed our largest contracts ever regarding the construction of Aurora Line, a 400 kV transmission line between Sweden and Finland, and a 102.5 MWp solar farm in the municipality of Utajärvi in Northern Ostrobothnia. Estimated values of these projects are EUR 89 million and EUR 69 million, respectively, and they are good examples of our work to enable green transition in the Nordics.

Since the fourth quarter, we have noticed that all our markets are improving, and we currently see a strong demand in all our sectors. The most relevant global megatrends – green transition, de-globalization, and urbanization – heavily drive investments in the energy sector, where our growth is the fastest, as well as infrastructure and industry sectors.

To summarize, we achieved good growth and cash flow, as well as a strong margin in relation to our industry. Together with an all-time high backlog at the end of the year, we proved the scalability in our business model for the tenth consecutive year. To achieve all this in an extremely challenging environment says a lot about us and our favorable position in the market. We will continue to build value for our customers, employees, and shareholders in accordance with our new strategic plan, thus enabling the progress of society for future generations.

Finally, I want to thank NYAB’s employees who are working diligently to make us a better company every day. I am proud of the accomplishments that have been demonstrated throughout the year through your competence, dedication, and teamwork. Together, as one team, I am confident that we will continue to achieve even more in the coming years.

Future outlook

NYAB sees its record-high year-end order backlog together with its exposure to growing sectors and geographical markets as a basis for a positive outlook. NYAB gives a financial guidance where its revenue and operating profit for 2024 are expected to increase from 2023.

Global megatrends, such as green transition and urbanization, also provide robust demand for NYAB’s business areas. The transition of volumes to 2024 from 2023 due to late year winter conditions, as well as the stabilization of inflation and interest rate development at the end of the year, further support the solid foundation for the 2024 outlook.

Key uncertainties impacting the business and financial performance include the development of inflation, interest rates, and value of the Swedish krona, weather conditions, as well as the functionality of supply chains and other typical project risks.

The long-term outlook is positive for all business areas and NYAB is well positioned to deliver in accordance with its long-term financial targets.

Green transition accelerates the construction of renewable energy and power networks, as fossil fuels are being replaced and demand for energy increases with the electrification of industrial processes. Besides the rapidly growing wind power, an increasing number of industrial-scale solar farm projects is proceeding to the construction phase, and investment plans of main grid companies amount to several billions of euros.

Regarding infrastructure, there are large investment needs in the public sector for both transportation and water treatment, and urbanization increases demand especially in the Stockholm-Mälardalen region. Significant opportunities within industrial clients are expected, among others, in the mining industry that is essential for rapidly growing clean energy technologies especially in NYAB’s key market in Northern Sweden.

Management webcast

NYAB arranged a management webcast after the publishing of the financial statement release. Recording of the webcast, where CEO Johan Larsson and CFO Aku Väliaho presented financial information and significant events for the financial year 2023, is available below.

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