• A niched construction company focused on the green transition
• Smart project selection, and a variable cost structure
• Fair value range of SEK 5.5-7.5, implying a 16-20x '25e EV/EBIT

Building the infrastructure for the green transition

NYAB is a specialised contractor of infrastructure and energy projects in Sweden and Finland. It assumed its current form in the spring of 2022 through a reverse takeover of the listed Finnish company Skarta Group. In June 2024, the company moved its headquarters to Luleå and relisted its shares on the First North Premier Growth Market Stockholm after previously being listed in Finland. The group is headed by its founder and major shareholder, CEO Johan Larsson.

Targeting complex projects with asset-light operating model

NYAB stands to benefit from market tailwinds like urbanisation, infrastructure investments, and the green energy transition. In projects, NYAB acts as the main contractor overseeing project management and coordinating subcontractors. This allows it to maintain an asset-light operating model and a variable cost structure. The construction business is all about mitigating risk, which NYAB handles by selecting projects with sufficient complexity, up-selling potential beyond the initial tender scope, and potential for follow-on business with the customer. NYAB has ~450 employees, of which ~70% are white-collar.

Strong EPS growth and limited re-investment need

We estimate '24-'26 revenue growth of 13-10%, in line with company targets. We forecast EPS to grow by 52-22% in '24-'26 and for net debt to remain negative for the remainder of the period. We prefer a combined earnings multiple and discounted cash flow valuation. In light of higher margins and low leverage, we believe NYAB deserves a valuation above legacy construction peers. But due to lower returns on equity, we believe it should not trade at the top of the peer range. We arrive at a fair value of SEK 5.5-7.5, implying a '25e EV/EBIT multiple of 16-20x.