Green Landscaping Group (GREEN) investor relations material

Executive summary

• Q3 net sales rose 11% YoY to SEK 1,788m, with 3% organic growth; adjusted EBITA fell 9% to SEK 123m and margin declined to 6.9%.

• Green Performance launched to improve profitability, cash generation and coordination; a business review generated SEK 79m of non-recurring Q3 costs.

• Order backlog increased 14% YoY to SEK 8,484m; management is prioritizing project execution and working capital while slowing acquisitions.

Financial highlights

• Q3 net sales were SEK 1,788m (SEK 1,605m); adjusted EBITA was SEK 123m (SEK 135m), with a 6.9% margin (8.4%).

• 9M net sales rose 13% to SEK 5,024m; organic growth was 6%, acquired growth 6% and currency impact 1%. 9M adjusted EBITA fell 7% to SEK 280m, with a 5.6% margin (6.8%).

• Q3 reported operating profit was SEK 19m (SEK 87m); net loss was SEK 14m versus SEK 32m profit.

• Q3 operating cash flow was SEK 28m (SEK 47m); 9M operating cash flow rose to SEK 159m from SEK 108m, mainly due to less working capital tied up.

• Rolling 12-month net sales were SEK 6,815m; adjusted EBITA was SEK 430m and margin was 6.3%.

Outlook and guidance

• Priorities are stronger project execution, optimized working capital and improved profitability and cash generation; management expects large working-capital improvements over the next two quarters.

• Group restructuring is expected to generate ~SEK 10m in annual savings, with potential for a further equivalent amount through other organizational changes.

• Financial targets are average annual total growth of 10%, average adjusted EBITA margin of 8% and long-term net debt/adjusted EBITDA not above 2.5x.

• Lithuania activity is expected to improve as delayed contract start-ups progress; Q4 and Q1 are seasonally strongest for cash flow.