{"segments": [{"speakerId": "spk1", "sentences": [{"start": 1, "end": 4, "text": "Hello and welcome to our results presentation."}, {"start": 4, "end": 7, "text": "For the first quarter of 2024."}, {"start": 8, "end": 17, "text": "NYAB has published its interim report this morning, introducing the significant events and financial information for the first quarter."}, {"start": 17, "end": 26, "text": "We welcome new CEO Johan Larsson and CFO Aku Väliaho, and I am the new Director of Investor Relations."}, {"start": 26, "end": 36, "text": "Mark, build on it. If you have any questions for our management, please write them in the chat during the presentation, and we will answer them at the end."}, {"start": 37, "end": 39, "text": "And now, without further introduction."}, {"start": 40, "end": 44, "text": "I hand over to Johan, who will start by describing our start for the year."}]}, {"speakerId": "spk2", "sentences": [{"start": 47, "end": 49, "text": "Hi, everyone, and welcome."}, {"start": 50, "end": 53, "text": "Uh, this is someone speaking."}, {"start": 53, "end": 71, "text": "Uh, so for Q1, we ended up with a revenue exceeding €59 million, which represents growth of 51.1% in relation to the comparison period."}, {"start": 73, "end": 86, "text": "EBIT on the positive side improved with €2.5 million and in percent, it's 5.9% units."}, {"start": 87, "end": 90, "text": "Uh, and the cash flow."}, {"start": 92, "end": 95, "text": "Grew significantly."}, {"start": 95, "end": 106, "text": "€39.5 million. This gives us an overall free cash flow of close to €35 million."}, {"start": 107, "end": 113, "text": "And our order backlog amounted to €296.3 million."}, {"start": 115, "end": 121, "text": "Uh, and that's an improvement of close to 22% in relation to the comparison period."}]}, {"speakerId": "spk3", "sentences": [{"start": 127, "end": 128, "text": "So."}]}, {"speakerId": "spk2", "sentences": [{"start": 131, "end": 134, "text": "Revenue for the first time."}, {"start": 134, "end": 146, "text": "Even though it was low season, our strong growth in revenue that doesn't have too much effect on the full year makes us surpass the €300 million mark for the first time."}, {"start": 146, "end": 152, "text": "Hopefully, we will keep ourselves north of €300 million going forward."}, {"start": 155, "end": 163, "text": "Uh, our EBIT for Q1, as an improvement, as well as EBIT margin."}, {"start": 165, "end": 170, "text": "The EBIT margin improved by 0.5%."}, {"start": 172, "end": 175, "text": "And the free cash flow was mentioned."}, {"start": 175, "end": 180, "text": "That's a 56.4% improvement from Q4 2023."}, {"start": 181, "end": 184, "text": "And our order backlog."}, {"start": 185, "end": 190, "text": "Uh only decreased by 2.9%, which is quite strong."}, {"start": 193, "end": 217, "text": "If you take seasonality into consideration in Q1, we always have a lot of activities in tenders and bids that seldom materialize into contracts during the first quarter, and having this high level of revenue and order backlog only decreasing by 2.9% in Q1 is really strong."}, {"start": 218, "end": 220, "text": "We are more than pleased with that."}, {"start": 223, "end": 225, "text": "Uh, the bigger picture."}, {"start": 227, "end": 233, "text": "We aim to build a better and stronger company."}, {"start": 234, "end": 241, "text": "Ongoing efforts continue. Some important steps for the future have been taken."}, {"start": 243, "end": 251, "text": "The cross-border conversion plan was approved by the Extraordinary General Meeting on April 29th."}, {"start": 252, "end": 257, "text": "Meaning that we transferred our registered office to Luleå, Sweden."}, {"start": 260, "end": 264, "text": "Uh, and related to that, a listing transfer."}, {"start": 265, "end": 270, "text": "We also signed a letter of intent with Duroc Rail."}, {"start": 270, "end": 277, "text": "Who is a marine construction company."}, {"start": 279, "end": 287, "text": "Who works in a niche that we see a lot of growth potential."}, {"start": 287, "end": 297, "text": "Uh, so we expect to close that acquisition within the coming weeks."}, {"start": 298, "end": 300, "text": "And the strategy execution."}, {"start": 302, "end": 303, "text": "Continues according to plan."}, {"start": 304, "end": 312, "text": "And we have clearly improved our work processes further."}, {"start": 318, "end": 320, "text": "Selection of new projects."}, {"start": 323, "end": 344, "text": "A few of them signed during Q1 include traffic projects in a long series of up to 2.0. Uh, we signed a new contract with Trafikverket for Obiena, which is on Third Mainland."}, {"start": 345, "end": 363, "text": "We agreed on a contract with LKAB for the renovation of previously moved heritage buildings, as they are referred to in their context."}, {"start": 364, "end": 370, "text": "Transformation of mining society, which enables future mining in Yellow Water."}, {"start": 373, "end": 382, "text": "And in Luleå, we are pleased that LKAB chose us to construct a new industrial building."}, {"start": 382, "end": 392, "text": "Uh, the construction site is in a real hotspot, Luleå Industrial Park, where loads of green transition investments are taking place and are expected to continue."}, {"start": 393, "end": 398, "text": "Investments are taking place and are expected to continue."}, {"start": 400, "end": 407, "text": "And with Trafikverket, we signed a contract for the replacement of railway tracks in Katrinaholm."}, {"start": 416, "end": 420, "text": "So the underlying market growth."}, {"start": 421, "end": 424, "text": "Is expected to remain at high levels."}, {"start": 425, "end": 429, "text": "Uh, not much has happened since Q4."}, {"start": 430, "end": 435, "text": "Uh, what has happened has moved slightly in a positive direction."}, {"start": 436, "end": 448, "text": "And the three megatrends that drive investments in our addressable markets are green transition, globalization, and urbanization."}, {"start": 450, "end": 465, "text": "And to break it down in our addressable markets, if we exclude housing, we have seen soft growth in our markets in Sweden overall."}, {"start": 465, "end": 468, "text": "But then we have significant growth."}, {"start": 470, "end": 473, "text": "Uh, and Finland is moving sideways."}, {"start": 474, "end": 479, "text": "Uh, here we are, of course, very happy to have strong clients."}, {"start": 479, "end": 484, "text": "Both in the public and private sectors."}, {"start": 485, "end": 489, "text": "Uh, and we have a really favorable position."}, {"start": 490, "end": 504, "text": "Key in this matter going forward is, of course, having inflation under control and ensuring that interest rates remain at a stable level."}, {"start": 504, "end": 514, "text": "The Swedish Riksbank announced today that they lowered their interest rates for the first time in close to a decade."}, {"start": 514, "end": 521, "text": "That is, of course, very positive given our strong financial position."}, {"start": 521, "end": 539, "text": "The positivity, of course, comes from how it benefits our clients making investments, and it's favorable for many of our subcontractors as well, meaning that higher interest rates, to some extent, put pressure on us."}, {"start": 541, "end": 544, "text": "Pushed from both directions."}, {"start": 545, "end": 549, "text": "So, that's really, really positive news."}, {"start": 550, "end": 554, "text": "It makes an optimistic CEO even more optimistic."}, {"start": 559, "end": 562, "text": "So here I'll hand over to Aku."}]}, {"speakerId": "spk4", "sentences": [{"start": 564, "end": 570, "text": "Thanks, Johan, and good day to all listeners from me as well."}, {"start": 570, "end": 579, "text": "My name is Aku Väliaho, and let's take a deeper dive into our Q1 financials."}, {"start": 579, "end": 587, "text": "As stated already earlier, our revenue grew by over 51%."}, {"start": 588, "end": 596, "text": "Good progress in energy projects was the main contributor to Q1 revenue growth."}, {"start": 597, "end": 607, "text": "Our revenue from Sweden amounted to 75% and revenue from the public sector amounted to 59% in Q1."}, {"start": 607, "end": 616, "text": "These figures represent a small uptick from the rolling figures, which we are pleased with."}, {"start": 616, "end": 625, "text": "We have a good, balanced, and strong set of clients, both in the public and private sectors."}, {"start": 626, "end": 630, "text": "Then, continuing on the country level."}, {"start": 630, "end": 637, "text": "Sweden grew notably by over 83% year over year."}, {"start": 638, "end": 651, "text": "That's, of course, an indication of improving local market conditions, which is good for our position in Sweden."}, {"start": 652, "end": 668, "text": "Good to note, though, that the cold winter conditions in northern Sweden caused some delays in progress in some of the projects, so take that into consideration as well."}, {"start": 668, "end": 674, "text": "We can be pleased with our revenue development during Q1."}, {"start": 680, "end": 689, "text": "Even though Q1 is seasonally our weakest quarter, we still managed to produce black figures."}, {"start": 690, "end": 703, "text": "So EBIT landed at approximately €400,000, illustrating a 0.7 percent margin where there is an improvement of 5.9 percentage points."}, {"start": 705, "end": 725, "text": "Higher volumes with a favorable project mix enabled the good performance; operational leverage is visible in the PNL, as the share of fixed costs from total costs decreased during the quarter."}, {"start": 726, "end": 729, "text": "And for the rolling 12 months."}, {"start": 729, "end": 741, "text": "Even though this is a small volume quarter, we managed to make an uptick in the EBIT percentage so that it was 5.9%."}, {"start": 741, "end": 749, "text": "So we are moving toward better conditions and normalized market conditions."}, {"start": 753, "end": 758, "text": "Order backlog grew by almost 22% year over year."}, {"start": 760, "end": 769, "text": "We have seen that volumes that were postponed last year have started to materialize, especially in Sweden."}, {"start": 770, "end": 775, "text": "We are pleased with the order book composition, composition."}, {"start": 775, "end": 780, "text": "It is well balanced between countries, customer groups, and maturities."}, {"start": 781, "end": 796, "text": "And what creates confidence for the short-term future is also the fact that the level of projects at the tendering stages is currently higher than in the comparison period."}, {"start": 803, "end": 807, "text": "And we continued our strong cash flow generation."}, {"start": 808, "end": 820, "text": "So Q1 free cash flow was over €13 million, which was impacted by a €2.4 million investment in our joint ventures."}, {"start": 822, "end": 835, "text": "In partnership, financing rounds were conducted during Q1, which diluted our current ownership from 40% to 34%."}, {"start": 835, "end": 851, "text": "We ended the quarter in a strong cash position, so net cash was almost €20 million when in the comparison period we had a €10 million net debt position."}, {"start": 853, "end": 857, "text": "This, of course, means that we have a strong balance sheet."}, {"start": 857, "end": 866, "text": "Net debt to EBITDA was minus 0.8, and the equity ratio was over 74%."}, {"start": 866, "end": 876, "text": "And our return on capital employed continued to improve and was now at 8%."}, {"start": 878, "end": 883, "text": "So now I hand back over to you."}, {"start": 884, "end": 884, "text": "Thank you."}]}, {"speakerId": "spk2", "sentences": [{"start": 885, "end": 888, "text": "Thank you. Uh, yes."}, {"start": 889, "end": 892, "text": "If you see here, first, down to the right."}, {"start": 893, "end": 904, "text": "The importance of this slide, where we're trying to position ourselves as favorably as possible, building a better and stronger company."}, {"start": 905, "end": 907, "text": "Constant ongoing work."}, {"start": 907, "end": 909, "text": "To achieve another decade."}, {"start": 910, "end": 912, "text": "With rising staples."}, {"start": 913, "end": 921, "text": "To narrow it down to how we perform against our long-term financial targets."}, {"start": 923, "end": 926, "text": "Annual revenue growth."}, {"start": 926, "end": 930, "text": "We have the target to exceed 10% on an annual basis."}, {"start": 931, "end": 939, "text": "With the outcome of this Q1, which is the seasonally weakest quarter."}, {"start": 939, "end": 941, "text": "We must say that it's remarkable."}, {"start": 942, "end": 947, "text": "A remarkable growth that we indeed achieved."}, {"start": 947, "end": 953, "text": "With the comparison period, the earlier or announced targets."}, {"start": 954, "end": 964, "text": "It is remarkable to almost reach the annual revenue growth target in this quarter."}, {"start": 967, "end": 969, "text": "Our EBIT margin."}, {"start": 970, "end": 975, "text": "Improved by 0.5 percentage points."}, {"start": 976, "end": 978, "text": "Also remarkable."}, {"start": 980, "end": 984, "text": "Taking into consideration our strong seasonality."}, {"start": 987, "end": 989, "text": "Our net debt is negative."}, {"start": 989, "end": 994, "text": "So we are on a very steady level there."}, {"start": 994, "end": 1004, "text": "Of course, the dividend can't be measured for now, but it is promising."}, {"start": 1005, "end": 1008, "text": "Hello, and note our strong cash conversion."}, {"start": 1009, "end": 1015, "text": "That, of course, stems from the performance of our company."}, {"start": 1017, "end": 1022, "text": "We feel quite confident that we will be able to reach our target."}, {"start": 1026, "end": 1029, "text": "So, not much to add on that."}, {"start": 1031, "end": 1037, "text": "Q1 is in alignment with our long-term targets."}, {"start": 1040, "end": 1048, "text": "If we try to summarize this, it’s more or less obvious."}, {"start": 1049, "end": 1056, "text": "It feels good that we've proven and utilized our favorable position."}, {"start": 1057, "end": 1068, "text": "It’s also of great importance, now and in the future, that we are able to smooth out the seasonality of our operations that particularly stem from that."}, {"start": 1068, "end": 1072, "text": "We have such a high presence in the north."}, {"start": 1072, "end": 1079, "text": "Of course, the North is a very attractive market with significant industrial investments upcoming."}, {"start": 1080, "end": 1083, "text": "Including defense investments, etc."}, {"start": 1083, "end": 1092, "text": "But it’s still of great value that we see the outcome we have achieved over a couple of years."}, {"start": 1092, "end": 1096, "text": "We’ve been working very hard to smooth out seasonality."}, {"start": 1096, "end": 1099, "text": "Thus, we are very much on the right track."}, {"start": 1101, "end": 1105, "text": "Our operations are developing in line with our strategic plan."}, {"start": 1105, "end": 1112, "text": "I'm very happy to see that strategy is one thing; execution is another."}, {"start": 1112, "end": 1117, "text": "Thanks to our skilled employees and great managers."}, {"start": 1119, "end": 1123, "text": "The execution is really good in both Sweden and Finland."}, {"start": 1123, "end": 1125, "text": "I don’t feel that there is a glitch."}, {"start": 1125, "end": 1133, "text": "Thus, we have implemented and are executing on our strategic plan to a very satisfying level."}, {"start": 1135, "end": 1138, "text": "With the transition to a Swedish company."}, {"start": 1138, "end": 1140, "text": "This supports our position."}, {"start": 1140, "end": 1143, "text": "Of course, in my role as a CEO."}, {"start": 1143, "end": 1146, "text": "I think mainly from an operational perspective."}, {"start": 1147, "end": 1151, "text": "And I knew it would be favorable in many ways."}, {"start": 1153, "end": 1160, "text": "So, I'm very happy with the decision that was made in April at our General Meeting."}, {"start": 1163, "end": 1170, "text": "And of course, all of this positions us well to both reach and exceed last year's outcomes."}, {"start": 1171, "end": 1177, "text": "And execute on all our long-term financial targets."}, {"start": 1180, "end": 1184, "text": "That's it. Thank you."}]}, {"speakerId": "spk1", "sentences": [{"start": 1188, "end": 1189, "text": "Thank you, Johan and Aku."}, {"start": 1190, "end": 1194, "text": "Let's move on to the questions we have received."}, {"start": 1195, "end": 1210, "text": "First question: for a very strong start to the year, considering the seasonality in our business, how much growth was supported by the postponement of projects from last year to the current year?"}]}, {"speakerId": "spk2", "sentences": [{"start": 1211, "end": 1214, "text": "Yes, that is quite straightforward."}, {"start": 1215, "end": 1238, "text": "Slim to none. Because when you postpone projects due to cold weather, we had extremely early winter conditions where we lost about six weeks of higher production."}, {"start": 1239, "end": 1241, "text": "The thing is that in Q1,"}, {"start": 1242, "end": 1244, "text": "you have even more winter."}, {"start": 1245, "end": 1253, "text": "So the postponements of those projects will materialize starting from May to August."}, {"start": 1253, "end": 1254, "text": "September."}]}, {"speakerId": "spk1", "sentences": [{"start": 1259, "end": 1266, "text": "Okay. Then, the order backlog also grew 22% compared to the comparison period."}, {"start": 1267, "end": 1276, "text": "Can you disclose roughly what the structure of the current order backlog is, and how much of it you are expecting to be produced this year?"}]}, {"speakerId": "spk5", "sentences": [{"start": 1279, "end": 1280, "text": "Um."}]}, {"speakerId": "spk6", "sentences": [{"start": 1281, "end": 1282, "text": "Yes."}]}, {"speakerId": "spk2", "sentences": [{"start": 1283, "end": 1296, "text": "I would say that the structure we are very selective, trying to cherry-pick our projects that are suitable for us."}, {"start": 1297, "end": 1304, "text": "And what we see is, although we have this order backlog, we have room for a lot more."}, {"start": 1304, "end": 1307, "text": "That is of quite significant importance."}, {"start": 1307, "end": 1318, "text": "Since the markets are developing, there are expected investments related to NATO, defense-related investments, and so on."}, {"start": 1319, "end": 1322, "text": "But of course,"}, {"start": 1322, "end": 1333, "text": "we see that if we have a revenue growth of 51% in Q1,"}, {"start": 1334, "end": 1341, "text": "and with the order backlog that we have, which is at a level that is 22% higher,"}, {"start": 1341, "end": 1349, "text": "the amount that is executed during this year is pretty much the same as the previous year."}, {"start": 1351, "end": 1354, "text": "From this point, I hope that was"}, {"start": 1355, "end": 1356, "text": "clarifying."}]}, {"speakerId": "spk1", "sentences": [{"start": 1362, "end": 1365, "text": "Okay, now it looks like we have addressed"}, {"start": 1365, "end": 1369, "text": "all questions that have been asked during the presentation."}, {"start": 1371, "end": 1375, "text": "So we thank everyone for participating."}, {"start": 1376, "end": 1377, "text": "And see you next time."}]}, {"speakerId": "spk4", "sentences": [{"start": 1381, "end": 1381, "text": "Thank you."}]}, {"speakerId": "spk2", "sentences": [{"start": 1382, "end": 1383, "text": "Thank you."}]}], "speakers": [{"speakerId": "spk1", "name": "Unknown 1"}, {"speakerId": "spk2", "name": "Johan Larsson"}, {"speakerId": "spk3", "name": "Unknown 2"}, {"speakerId": "spk4", "name": "Aku Väliaho"}, {"speakerId": "spk5", "name": "Unknown 3"}, {"speakerId": "spk6", "name": "Unknown 4"}], "id": "66439cefb3885761ba492815", "createdAt": "2024-05-14T17:18:39.320Z", "updatedAt": "2024-05-14T17:18:39.320Z", "langCode": "en", "transcriptType": "ENHANCED", "amberscriptJobId": null, "speechmaticsJobId": null, "eventId": "6630d29e8cbc71a3da0b59c3"}