Green Landscaping Group: The cold never bothered them anyway - ABG

Snow removal supports strong Q1 (7% EBITA growth)
'24e-'26e adj. EBITA up 2-1%; 6% CAGR '23-'26e
11-9x EBITA '24e-'25e, 9-10% FCF yields


Snow has its advantages

Green Landscaping delivered a strong first quarter, mainly due to its seasonal snow & ice removal business (~20%) in the Nordic regions, as sales grew 8% organically (ABGSCe/FactSet cons. -4%, -6% Q4'23), which combined with margin-accretive M&A and good organic EBITA (+9% vs. ABGSCe -22%) drove 7% earnings growth. We have not fully extrapolated this performance, but we do expect operations to continue to gradually improve throughout the year, and we forecast a 2-1% organic sales decline Q2-Q3 (3-2% organic EBITA decline) before turning positive in Q4 (+2%/+1%). In addition, GLG's M&A pace has remained high in Germany, and we would expect more activity to take place during the year, which considering the balance sheet at 2.3x ND/EBITDA YE'24e could support >10% earnings growth for FY'24.

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