Clear intent to step up M&A in 2024
Green Landscaping (GLG) continued to benefit from its exposure to public customers (60-70%) and ground maintenance (50%), while landscaping (~30%) was subdued due to a weaker market. This led to a 6% organic sales decline (ABGSCe/FactSet cons -4%, 0% in Q3), where Sweden was roughly stable (-2%). We expect the market headwinds to remain in 2024, but that Q4'23 should have been the trough, and we forecast a 4-2% organic decline in H1'24. Group profitability was solid (adj. EBITA 10.0%, ABGSCe/cons 9.7%), but was largely due to accretive M&A as the adj. EBITA decline of 6% (ABGSCe/cons -7%) was from a 22% organic EBITA decline. We expect organic earnings to remain under pressure in H1 (down 22-1%), before turning positive from Q3, but adj. EBITA should return to growth from Q2 (-9% in Q1, +7% in Q2). Also, cash flow should improve materially from Q1'24 due to the timing of payments, and yield a ND/EBITDA of 2.1x by YE'24e.
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