Slower markets and tough comparables weigh on growth
For Q4, we expect solid demand for ground maintenance (50%) as well as snow and ice removal (20%), but that this will be offset by lower activity within landscaping (30%). This should mainly affect the Swedish business (-9% y-o-y organically, ~40% of sales), while we expect stable demand in Norway (0%, ~40%) and continued growth in Finland (+5%). All in all, this yields a group organic decline of -4% (0% in Q3) and group sales of SEK 1,430m, +3% y-o-y. The company-specific challenges in Sweden and normalisation in Norway's margins will likely hold back margins in H1'24e. On the positive side, margin-accretive M&A in Finland/Rest of EU should continue to support profitability. This yields adj. EBITA of SEK 163m, -7% y-o-y (we est. -20% org.), for a margin of 9.7% (10.8%). Finally, we expect seasonally strong cash flow (~110% of EBITA) to yield a ND/EBITDA (ex earn-outs) of 2.3x by YE'23e.
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