Green Landscaping Group: Grass turns greener with M&A - ABG
This is a third party research report and does not necessarily reflect our views or values
Q2 report Friday, 18 July at 12:00 CET
'25e-'27e adj. EBITA up 0-3%; 6% CAGR in '24-'27e
10-8x EBITA in '25e-'27e, 9-16% FCF yields
2025's M&A story begins
We expect a stable second quarter. Sweden should start to see brighter quarters ahead as a result of a sizeable loss-making contract being out of the picture, as well as internal efficiency improvements. Conversely, we expect lower volumes in Norway due to increased competition alongside tougher comparables. However, this is offset by the year's first acquisition. In terms of organic growth, we expect -2% (+5% in Q2'24). Previously announced M&A adds 7%, with -3% from FX, leading to sales of SEK 1,680m in Q2e, +1% y-o-y. We forecast adj. EBITA of SEK 162m, +8% y-o-y, for a margin of 9.6% (9.1% in Q2'24), with a ~7% margin in Sweden, ~10% in Norway and 20% in Rest of Europe. Finally, Q1'25 ND/EBITDA at 3.1x, solid cash flow (40-70% of EBITA in '25e-'27e) and higher earnings support GLG's guidance of 8–10 acquisitions per year, usually at a ~10% margin, which could potentially increase '26e-'27e EBITA by 25-50%.
'25e-'27e adj. EBITA up 0-3%; 6% CAGR in '24-'27e
10-8x EBITA in '25e-'27e, 9-16% FCF yields
2025's M&A story begins
We expect a stable second quarter. Sweden should start to see brighter quarters ahead as a result of a sizeable loss-making contract being out of the picture, as well as internal efficiency improvements. Conversely, we expect lower volumes in Norway due to increased competition alongside tougher comparables. However, this is offset by the year's first acquisition. In terms of organic growth, we expect -2% (+5% in Q2'24). Previously announced M&A adds 7%, with -3% from FX, leading to sales of SEK 1,680m in Q2e, +1% y-o-y. We forecast adj. EBITA of SEK 162m, +8% y-o-y, for a margin of 9.6% (9.1% in Q2'24), with a ~7% margin in Sweden, ~10% in Norway and 20% in Rest of Europe. Finally, Q1'25 ND/EBITDA at 3.1x, solid cash flow (40-70% of EBITA in '25e-'27e) and higher earnings support GLG's guidance of 8–10 acquisitions per year, usually at a ~10% margin, which could potentially increase '26e-'27e EBITA by 25-50%.