Green Landscaping Group - 4% adj. EBITA miss on lower SE/NO margins - ABG

Sales +4%, adj. EBITA -4% vs. cons, +5% org. sales
Cons to lower '24e adj. EBITA by 2-5% (ex FX)
Share initially down mid single-digits


Q2 details

Solid backlog and sales but lower margins and weak cash flow. Sales came in at SEK 1,657m (+6% vs. ABGSCe, +4% vs. FactSet cons), +11% y-o-y of which +5% organically (ABGSCe -3%, cons 0%, +8% Q1'24), due to solid growth in all regions, but especially Norway. Adj. EBITA grew 7% y-o-y to SEK 150m (-4% vs. ABGSCe, -4% vs. cons), of which -2% organically (ABGSCe -4%), for a margin of 9.1% (ABGSCe 10.0%, cons 9.8%, 9.4% Q2'23), due to lower margins in Sweden, Norway as well as higher corporate cost. FCF was subdued at neg. ~70m (positive ~10m in Q2'23) while pf gearing came up q-o-q to 2.7x (2.4x), and was up q-o-q to 2.8x (2.6x), excl. earn-outs, on a R12m basis. According to the CEO, timing of invoices held back cash flow in Q2 but will be supportive for Q3. On outlook, the CEO states that demand continues to be stable, especially in maintenance, but that competition has increased in landscaping projects.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/green-landscaping-group/Equity-research/2024/8/green-landscaping-group---4-adj.-ebita-miss-on-lower-seno-margins/