The CEO has the floor


NYAB is leaving the start-up phase.

NYAB has grown and developed on most levels. The most concrete and easiest to measure and also demonstrate is sales and the profit margin, which in 2018 amounted to just under SEK 900 million and 10%, respectively.

This means that from a relatively high level we have achieved a volume increase of approximately 85%, when in 2017 we had sales of SEK 480 million. We also do this with a clearly improved profit margin from an already high level. The improved profit margin for 2018 is according to plan. This is because we are now in the middle of a development and growth journey that began in 2017, and which extends until 2021. Then we will be able to answer customers' demand for our services to such an extent that the sales volume lands at approximately SEK 2 billion. This in itself means that a lot of costs, or rather the largest costs in relation to sales volume, are initially taken when a growth journey begins. In this case after the year of consolidation

To develop a group with SEK 330 million in sales volume to the next level of SEK 2 billion, we have now set the necessary structures, framework agreements, competencies and together with the culture and good profitability, we have the platform ready. It is of course a constant "work in progress", but we are more than in phase and estimate that we will pass 1.5 MDR already in 2020. This year we can say with certainty that we will have a turnover volume clearly exceeding SEK 1 MDR, and we intends to reduce the growth rate from approximately 85% 2018, to approximately 35% this year. With our existing order backlog, we can be selective and choose long-term customers and suitable projects carefully. NYAB should thus this year achieve a turnover of up to SEK 1.2 billion. The reasonable assumption that we handle projects and business risks as well this year as in the last five years is that we reach a clearly higher operating margin compared with 2017 and on a par with the just completed 2018.

All business areas are expected to grow in 2019, with the strongest growth expected in “Infrastructure”, which is NYAB's mischievous 1-year-old. From approximately SEK 160 million in sales volume during its first full year 2018, we aim for a doubled volume. A higher growth rate than that is not healthy to ensure continued impressively good quality and profitability in all ongoing and completed projects.

The more developed and mature business areas "Construction" and "Construction", which have at least a few years on their necks, will to a greater extent work across business area boundaries, towards ONE NYAB and "manage the pound" and have a growth that is in the modest range for NYAB 5- 25%.

The "Special" business area, which works in narrower and more niche segments such as relocation, demolition, decontamination, fencing, fiber and opto, will continue to be a leader in our established establishment in the metropolitan regions, where "Infrastructure" has already made its entrance. This without dropping existing
market in northern Sweden. Here, we assess that we are able to handle growth in the range 35-70%. The underlying market is judged to be stable and growing, although each segment is narrow, the overall market conditions are very good in the coming years.

The market demands and enables our growth. As the Kingdom of Sweden now has a government, the clouds of unrest that remain are the weak krona and the housing market. Roughly speaking, the krona has lost value against the dollar and the euro by 10 and 5 %, respectively, in the past year.

Further weakening of the krona will overall have negative effects on the Swedish economy, but hopefully the bottom has been reached and some recovery is taking place. NYAB has its largest volume in countercyclical segments and a large share in markets that are considered stable and expected to grow. The state is now increasing its investments to meet future needs. A large part of the road network will be upgraded in terms of bearing capacity, the road network will be rebuilt to shorten travel times, and a higher proportion of complex road constructions will be introduced, which entails an increased need for maintenance.

The Swedish Transport Administration forecasts that their need for Investment and Operation and Maintenance for railways will increase annually by 5.1%. Over the next 10 years, investments are budgeted at approximately SEK 623 billion.

Our construction business is not exposed to housing construction. We mainly build for industry as well as commercial buildings such as fire stations, schools, hospitals and arenas. In addition, we have extensive construction service operations for mainly public customers in northern Sweden.

The mining industry, which is so important for northern Sweden, is doing relatively well at the moment, and Boliden, LKAB and Kaunis Iron are investing in their core business and are all among our customers. The societal transformations in the ore fields generate at least another ten years of high activity.

So if both influential and uncontrollable factors are to be summed up, the market and the future look good for NYAB.

We are just over 130 employees. Who performs in a way that few can measure up to. We troubleshoot through self-examination. We identify mistakes, shortcomings, learn from mistakes and each other and improve. We do it together. This creates a force and a development that means that I can say with certainty that NYAB will be better at the turn of the year 2019/2020 than we are today.

We also have many challenges ahead of us. We have just entered the year when we leave the start-up phase, which lasted just over five years. This year, NYAB passes SEK 1 billion in sales and we humbly accept the challenge of reaching SEK 2 billion. This should be achieved with joy, increased quality and increased customer satisfaction.

- Johan Larsson, CEO NYAB

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