The mild winter still impacted
Green Landscaping (GLG) delivered a soft Q2 with sales 4% and 8% below ABGSCe/FactSet consensus. Organic sales were -9% (ABGSCe -2%, cons. -1%, Q1'25 -18%), as the mild winter caused low activity in April. Adj. EBITA fell 4% y-o-y, 13% below cons., as Sweden (5.6% margin) had a slow start, but margins held up relatively well y-o-y (-0.1pp), indicating margin expansion is on plan, which management says will have full effect at YE'25. Rest of Europe performed best (19.5%) with Finland as the main positive driver while Norway, like Sweden, had a slow start and a soft market weighing on margins. As the soft market remains, we expect 1-4% org. growth, improving margins and easier comps to drive 13% adj. EBITA growth in Q3, and 13-30% in Q4-Q1e. Cash flow was soft, yielding pro forma gearing of 2.9x. We think GLG's guidance of acquiring SEK 80m-100m in EBITA '25, usually at a ~10% margin, could potentially raise '26e-'27e EBITA by 20-50%.
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