During the past few months, Green acquired TH Anlegg (July), Hadeland Maskindrift (September), and Oveland (October), adding close to SEK 300m in annual revenues. This builds on the expansion journey into Norway, which was initiated in Q1, with the acquisition of GAST. In our view, the entry into Norway is interesting for two reasons, as it both expands the potential universe for add-on acquisitions and is margin accretive, given the generally higher profits in Norway. On 1 October, Green announced another acquisition, Bengtssons, which also looks like a good fit, adding SEK 80m in revenues with an operating margin >20%.
Updated mid-point DCF value of SEK 45 per share
Driven by less extreme weather effects, positive mix from M&A, and synergies from Svensk Markservice, we see scope to lift the EBITA margin from 4.5% in 2019 to 7.6% in 2022, i.e. close to the target of 8%. We have hiked 2020-22E EBITA by 6-12% and derive a new fair value range of SEK 39-51 per share.
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