Nyab AB (publ) ($NYAB)

Hello, everyone, and welcome to Nyab's results presentation for the first quarter of 2026. Nyab has today released its interim report. And with us in this call, we have the Group CEO, Johan Larsson; and the Group CFO, Klas Rewelj. My name is Erik Petersen, and I'm the VP of Corporate Affairs and Head of Investor Relations at Nyab. Participants who wish to ask questions to our management present are welcome to join the teleconference via the link in the invitation -- you may also submit your questions in the chat and you'll find the chat under the presentation window on your screen. And now to get started, I hand over to Johan, who will go through the results.

Thank you, Erik. Yes. Good start of the year. I'm pretty content. The year opened with a strong order intake. We improved our profitability and our EBIT margin improved. This is our seasonally weakest quarter. So most important, I would say, is the order backlog and how we set up for the rest of the year. We have been selective, one been winning a lot of projects that we have prioritized, and we can clearly see that there's a strong demand. Our revenue growing rolling 12. In the quarter, we have a decline of 6%, reflecting a lot of work in Phase 1, where the volumes will come in the second phase, the execution phase. Our earnings and margins increased year-over-year in this small quarter. It sounds terrific with 54% growth. But this quarter isn't about the earnings. So we can just state that we're happy with that. And -- our rolling 12 margin increased to 5.8%. And our order intake, most important in the first quarter, very happy to see that it grows with 23% year-over-year and that rolling 12 is a really good number with EUR 615.2 million. Our order backlog, which always have been very prioritized in our growth journey. Looks good, bigger than ever, and we're happy with the composition of it. Worth mentioning is that in addition to these EUR 472.7 million, we have Phase 2 values of approximately EUR 700 million, where we currently are in an early stage with Phase 1, meaning that we plan and design future projects. So the volume in revenue is in the second phase. A selection of our new projects. We have won a lot of projects in the quarter, a few of them represented here in data center, important step for us, happening a lot on the data center market. I hope that we will win a few more than this. This one is for Compute Nordic in Finland in Italy. And we are currently at the early stage, the design phase. We have won a new railway contract in Bergen, where Trafikverket is our client. The contract value is EUR 22 million. And two important road maintenance contracts, infrastructure maintenance is important for us. It's steady and it has volumes in the weak quarters. The value of these combined are EUR 60 million approx. And after the quarter, we have signed an early works agreement with SSAB for a pump station project in Luleå. And this agreement covers early project phases. Our long-term financial targets important for us, we measure these, and I view them as a promise to our investors and co-owners. A growth exceeding 10%, outcome rolling 12 is 37%, and we have a goal of an EBIT margin exceeding 7.5%. The outcome rolling 12 is 5.8%. Notable here is that we have a dilution as expected for 2025 and 2026 from our acquisition of the Norwegian consulting business, Dovre. So it's been quite clear that we won't reach this goal in 2025 or 2026. But it's a long-term goal, and we expect to be there. If you -- if you cleans it from the acquisition, our rolling 12 EBIT margin is above 7%. Capital structure, we want a net debt in relation to EBITDA that is lower than 1.5x, even though the X is missing here. The outcome is that we have a negative net debt -- so in a strong position. Direct shareholder return, we have a goal of a dividend exceeding 35% and the outcome for 2025, 47%. And with that, I leave the floor to Klas.

Thank you, Johan. I think we can now go through some more financial highlights of our first quarter being, as Johan said, our seasonally smallest. But as such, we will mark some key points in what we find is a positive development as well as start of this year. And we start with the revenue. The Nordic winter was somewhat colder this year compared to last year with negative impact on production and revenue in some of our engagements. The quarterly revenue was EUR 100.1 million, representing a negative growth of 6% compared to last year. The period's decrease in revenue was, as Johan said, primarily attributable to lower production volumes with a higher share of our large project engagement in the early planning phases this year. Lower business volumes from the Consulting segment also contributed to the negative revenue growth in the period. Our last 12 months revenue landed thus on EUR 540.4 million, and this represents a growth rate of 37% from the comparison period, whereof the organic component at this stage was 16% and the acquisitive part thus 21%. Additionally, this 12-month revenue is divided so that the Nyab Civil Engineering business represents 80% and Consulting segment, 20%. Between the market segments, Energy remains the largest with just over 50%, followed by infrastructure just short of 40%. Sweden was the largest geography in that period with 66%, followed by Norway and Finland with equal parts around 15% each. Private sector remained close to 65%. So that was the revenue. And moving on to profitability, where we report increased margin as an important point. The quarter's operating profit was EUR 1.5 million, representing a growth of 54% over the comparison period, but maybe more important as well, an uplift of the operating margin to 1.5%. We have a healthy margin profile in our project portfolio, and that supported -- definitely supported the improved profitability. The negative revenue growth in the period held back quarterly profit and margin expansion. A highlight to note can be that we report a positive net profit during our seasonally weakest quarter without any support from periodic tailwinds nor one-off items, as such somewhat of a milestone profitability-wise for us. Our LTM operating profit demonstrates a growth now of 20% with a margin of 5.8%, as Johan said. Another strong point was our financial position. We conclude another quarter with healthy cash flow generation and further strengthening of the balance sheet. Free cash flow for the quarter was positive EUR 5.5 million, supported by our strong project invoicing at the end of last year. The last 12-month free cash flow, thus EUR 38.8 million, still representing over 100% of reported profit before depreciation called EBITDA. The effect of stable cash flow was a negative debt of EUR 21.3 million balance at the end of the quarter, meaning that we have more cash than liabilities on our hands. The net debt-to-EBITDA ratio, therefore, further improved during the period to a negative 0.56x. Return on capital employed reported to 13.4% and our equity ratio also increased to over 70% -- so that was the summary of the group financials. And we now take a look at the segments and business segments, and we start with our Nyab Civil Engineering business. For Civil Engineering, the market activity, as Johan mentioned, remained very high and order intake also grew with 31% year-on-year. ELTM order intake is up 18% and represents a book-to-bill ratio of 1.2x revenue. The order backlog also increased substantially during this quarter, plus EUR 91 million and is up 27% over last year as a comparison period. The increase in orders comes from new projects in our prioritized niche market segment such as railway and marine works. In addition, we have several engagements in early stages with potential for large-scale impact in subsequent steps. The market activity as well as the early phase work keeps some of our -- and most of our teams very busy right now without necessarily giving the revenue growth in this period. And that leads us to the business segment, Civil Engineering revenue and profit for the quarter on the next slide. For Civil Engineering, the development follows expected seasonal pattern. While the revenue decreased with 5%, the segment's operating margin increased to 2.7% -- during the quarter, we had lower production volumes from large-scale projects with mentioned higher share in planning phases versus previous year. We are pleased with the period's increase in operating margin as well as the profitability in the project portfolio. The Civil Engineering last 12 months revenue shows an increase of 19%, while profit is up 21% and reported operating margin 7.1% for the longer time frame. Now the Consulting segment with Dovre Solutions business. The Consulting Dovre Solutions business is gradually becoming an integrated part of our group, whereas our short-term market exposure for Dovre largely remained unchanged compared to that of last year. The demand from Norwegian offshore market continues to be soft and the number of consultants on assignment reduced during this quarter. Also, the market for new investment projects in renewable energy for this business remained weak. The segment order intake declined and last 12 months book-to-bill ratio for consulting landed on 0.8x revenue. The quarterly revenue decreased with 9% and operating margin was 0.4%. The divestment of Dorm North American operations was completed in the end of February following our Nordic and profitability focus. In Norway, we are integrating the different businesses and are securing a more efficient administration as well. Onetime costs related to this impact the segment's operating profit negatively in the quarter with positive effects expected in periods to come. Under Dovre Solutions, the leadership is focused now on developing an integrated Nordic consulting offering with strong solutions for our market segments. We take end-to-end responsibility for projects, and we expect this work to continue during 2026 and gradually intensify in the coming quarters. So that was the financials and a short summary for the segments, Johan, I think leave it up to you to summarize from our side.

Thank you, Klas. Yes. The summary goes as follows. We have a strong order intake and an improved profitability. Our margins improved year-on-year. We have positive earnings in the seasonally weakest quarter. It's the third year that we have a positive result in Q1. We are very happy with that and even improving it. Our financial position is solid. We have a positive free cash flow and low net debt and our cash conversion is great. We have a selective growth in our prioritized niche segments and our order backlog at its highest level to date. And if you add the great potential we have in the coming execution phases. Our growth journey is ongoing and quite clear.

Thank you, Johan, and thank you, Klas. We will now open up the teleconference for questions.

[Operator Instructions] The next question comes from Christoffer Jennel from Inderes.

I have a couple of questions, and I take them one by one. So starting with the order backlog, which grew 27% and book-to-bill ratio over the last 12 months increased to 1.2. I'm just wondering if you could give some more color on how much of the current backlog that you expect to be recognized in revenue in 2026 and how much is in 2027 and beyond?

Yes. It's quite easy not to go too much into details. But with the current backlog, we first have that and say that approximately 60% will be recognized this year. And that's the best estimate we can give at the moment.

Yes. No. And as we said, I think it gives us a strong position also in the short term. I mean the phasing of the projects will naturally has an impact. But I think we are very happy to have that position with a strong backlog also looking at the revenue generation for 2026.

And then on margins and Swedish civil engineering business, which saw an improvement year-on-year despite the lower revenue. Could you talk more on that improvement? Is it the project mix or better utilization or something else that you can comment on?

No, I would just say that we have stated that our goal and aim is a margin improvement and to move towards our goal with 7.5%, and that's what we are doing.

And then on the full year outlook with rolling 12-month EBIT margin stands at 5.8%, still below the 7.5% target, as you mentioned. Given the Q1 revenue decline and the consulting drag at the moment, what needs to go right in the remainder of 2026 for you to make meaningful progress towards the target as you see it?

Well, I would say that with our current backlog, with our prioritization in niche markets, we expect our margin to move upwards. So it's what to expect.

I agree. In the short term, that's what we do expect that we will see the continued increase in profit from our strong operating -- from our operating profitability in the backlog. So I think that will be the key. Consulting, it's a step-wise game, and that can take some time, but we will get there. And that also comes from scaling up Finland, which is also important for our combined group backlog margin, I mean.

Yes. Okay. And then the last one on the early works agreement with [indiscernible]. Can you give some color on the scope of the subsequent phases and also the time line for this?

Yes. We have agreed with our client that we won't disclose much more than we already have. But what we can say is, of course, for Nyab, it's a significant project. The value monetary is high, and it's of strategic importance as well.

There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Okay. So we still have some time for questions. So we move on to the questions in the chat. First, we have from Johan, investor. How do you view the chances of D Group getting a rebound given the situation in the Middle East and higher oil prices? Norwegian oil services and offshore operations ought to have boom times ahead. What's your take on this?

Yes. Well, we agree that's long term. We think that it will be a European prioritization. So we expect the demand long term to grow. So yes.

Okay. Next question from Michael. Regarding the postponed name market transfer, what specifically needs to happen before management is ready to move forward again? And should investors still expect this to be a medium-term objective?

Yes. It's like we already have stated, there were some changes in NPS platforms that we want to evaluate. So the evaluation is ongoing. And as soon as anything happens, we will tell the market.

Okay. That was all the questions in the chat. NIA will release its interim report for the second quarter of 2026 on August 13. For now, we thank everyone for participating and see you again next time. Thank you.