Set for continued >10% sales growth and >8% EBITA margins
Today, we hosted Green Landscaping's IR Magnus Larsson, at ABGSC's Investor Days. Apart from emphasising the strength of Green Landsscaping's decentralised business model, and the operational improvements achieved since pre-2019 after 1) improving existing operations and 2) acquiring high-margin units, focus was on the M&A opportunities in Germany. In 2018-2023, GLG achieved a 38% sales CAGR (3% organic), but a 54% adj. EBITA CAGR (we estimate 3% organically), as margins expanded from 5.1% to 8.9%. Looking ahead, we forecast 8% adj. EBITA growth in 2024, but we would expect strong cash flow (~140% of EBITA in Q1) and improving M&A headroom (pf ND/EBITDA at 2.4x in Q1) to support continued M&A activity in the next 6-9 months and drive growth above GLG's target of >10% (on sales). In terms of regions, we understand that Germany is the top priority when it comes to acquisitions, even though Mr. Larsson stated that M&A opportunities are still available also in the Nordics.
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