NYAB Q2'24 preview: We expect continued rapid growth

Translation: Original comment published in Finnish on 8/12/2024 at 7:18 am EEST.

NYAB will publish its Q2 report on Wednesday. We expect the company's revenue growth to have continued at a rapid pace during the quarter. We also forecast an increase in its operating result, adjusted for the settlement received in the comparison period. In addition to the figures, we are particularly interested in comments on the market outlook in the report. 

We expect revenue to have continued on its upward trajectory

We forecast NYAB's Q2 revenue to increase by 20% year-on-year to 78.4 MEUR. We expect the growth to be supported by a strong order book, especially in Q1'24 (286 MEUR vs. Q1’23: 235 MEUR), although there is some uncertainty about the exact order backlog.

We expect the company's reported EBIT to land at 3.5 MEUR, corresponding to an EBIT margin of 4.4%. We expect the company's profitability to have increased year-on-year, as it is worth noting that the company's EBIT was supported by a settlement of 3.3 MEUR in the comparison period (contributing a total of 3.6 MEUR to the result). At the bottom of the P&L, however, we forecast that the result will be depressed by losses in associates and still slightly higher financing costs due to the re-domiciliation costs. In turn, we expect taxes to have been at a moderate level and, reflecting this overall picture, we expect the reported net result to have been 2.1 MEUR.

We expect guidance to be raised further later this year

For the current year, NYAB has guided for an increase in both revenue (2023: 280 MEUR) and EBIT (2023: 15.2 MEUR) compared to last year. Prior to the report, we expect the company's revenue to grow by as much as 23% this year and EBIT to rise to 23.7 MEUR. In light of this, we currently expect the company to raise its guidance during this year, although there is uncertainty about the more precise guidance range. However, we believe it is possible that the company will repeat its previous guidance in the Q2 report.

We believe this is due to the fact that the company's busiest sales season of the current year is still partially underway and therefore there is still some uncertainty about the outlook for the rest of the year. With this in mind, we will continue to follow the comments on demand and backlog development with interest. Since the Q1 report, the company has announced several orders of different sizes from the Swedish side (some of which will be included in the orders received only in Q3), and we therefore expect that the demand situation in its larger market in Sweden has continued to improve. Similarly, on the Finnish side, we expect the outlook to remain subdued, reflecting the general economic development and, in particular, the postponement of wind power investments.