Coor: Cleaning up in a resilient market - ABG
A leading consolidator in a steadily growing, fragmented market
Capital-light growth, margin expansion, >15% M&A growth potential
9% adj. EBITA CAGR '23-'26e, 11-8x EBITA '24-'26e, 6% div. yield
Capital-light model enables high dividend and M&A
Coor is a leading provider of facility management services in the Nordics (~50% of sales from Sweden). ~70% of sales are from subscriptions, while the largest client is ~5% of sales. The market is fragmented (Coor is one of the largest players with ~5% market share) and there are benefits of scale, which the company is capitalising on through M&A. Growth has been solid (7% CAGR '14-'23: 4% organic, 3% M&A) and margins stable (5-6% EBITA margins), although inflationary pressure and company-specific challenges held back earnings in 2023 (adj. EBITA -4%). Price increases and streamlining initiatives should lead to improved profitability in '24e-'25e, however. Furthermore, its asset-light characteristics (1% capex/sales, neg. NWC, >100% ROCE ex GW) facilitate a good cash conversion (~70% of adj. EBITA) and a high payout ratio (>100% of acc. adj. net profit).
Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/coor/Equity-research/2024/4/coor---cleaning-up-in-a-resilient-market/
