NYAB Plc’s half-yearly report and management webcast: Strong growth and development despite macroeconomic headwinds
25.08.23NYAB published its half-yearly report 1 January-30 June 2023 on 25 August 2023. The complete report is available here.
April-June in brief
- Revenue grew 17.2%, amounting to EUR 65.3 (55.7) million
- EBITDA was EUR 5.4 (3.5) million, amounting to 8.3% (6.3%) of revenue
- Operating profit (EBIT) was EUR 4.0 (2.2) million, amounting to 6.2% (3.9%) of revenue
- Free cash flow was EUR 8.4 (-12.8) million
- Net debt/EBITDA was 0.19
- Order backlog amounted to EUR 252.0 million (EUR 305.0 million)
January-June in brief
- Revenue grew 42.7%, amounting to EUR 104.5 (73.2) million
- EBITDA was EUR 4.8 (3.1) million, amounting to 4.6% (4.2%) of revenue
- Operating profit (EBIT) was EUR 2.0 (1.3) million, amounting to 1.9% (1.8%) of revenue
- Free cash flow was EUR 9.3 (-8.3) million
Financial guidance for 2023 (unchanged, updated on 10 August 2023)
- Revenue for the full year is estimated to be EUR 290–315 million
- Operating profit (EBIT) is estimated to be EUR 16–24 million
CEO Johan Larsson’s review
NYAB made significant progress during the first half of 2023 thanks to our skilled and dedicated people who worked tirelessly to move us forward as a company, enabling us to execute on our strategy and achieve yet another half-year of profitable growth. Our reported growth exceeded 42% and comparable growth in constant currencies amounted to 29%. We also improved our EBIT margin and free cash flow in the second quarter as well as in the first half-year.
As a large share of our business operations is concentrated in northern regions, we are subject to seasonality and most of our revenues and profits normally accumulate during the second half of the year. Our focus during last year in achieving a turnaround in Finland has shown good results and we started the year with a relatively high order backlog of good quality that have contributed to our revenue growth and EBIT-margin improvement in the first half-year.
Whilst we have taken large steps forward as a company, macroeconomic challenges have impacted our short-term outlook more than previously expected. Continued inflation and higher interest rates are expected to put pressure on project profitability and have kept some customers waiting for market conditions to stabilize, resulting in delays with investment decisions. This has affected all our business areas, with markedly impact on Finnish energy markets.
Order backlog amounted to EUR 252 (305) million, which shows a positive development from the first quarter but is behind the comparison period. However, the development is mainly a result of exchange rate fluctuations and lack of new renewable energy projects in Finland due to the macroeconomic environment.
New contracts achieved during the first half-year include, among others, contracts with several governmental clients regarding critical infrastructure for both transportation and energy. Our strategy within energy sector has shown good results and it has continued to be our fastest growing business area. After the start of several renewable energy projects last year, we have now increased our share of new power network construction projects. These projects also entail future growth opportunities and are not as heavily subject to macroeconomic fluctuations.
We see no signs of shifting long-term trends as the amount of planned large-scale investments in both Finland and Sweden is growing rapidly, which maintains the positive long-term outlook positive for our operations. To enable future growth, we have during the second quarter continued to develop and optimize our organization and further strengthened our Executive Management.
During the second quarter we have made progress in the evaluation concerning the company’s future listing and domicile and will communicate our conclusions as soon as possible.
To summarize, NYAB is developing, growing and has good earnings. We have set ourselves in a great position to continue our decade-long journey of sustainable profitable growth. We are continuously exposed to markets with high underlying demand, and with low net debt we stand strong to weather adverse market conditions. We recognize the current macroeconomic reality and adjust our business operations to balance risk and possibilities to maintain our strong position and thereby enable future positive development and profitable growth.
Management webcast
NYAB Plc arranged a webcast, where CEO Johan Larsson and CFO Aku Väliaho presented NYAB’s financial information and significant events for the first half of the year. Recording of the webcast is available at https://nyabgroup.videosync.fi/results-q2-2023.
