Coor Service Management (Buy, TP: SEK96.00) - In good shape
The Q3 results were in line with our forecasts, with still-strong yet moderating organic growth (4.5% YOY) and higher profit margins (+79bp YOY), showing that the interrelation between growth and profit margin works well in Coor’s contract management. High contract retention rates and new signings add to the outlook, with 2020e de-risked, given the level of renewals. We still like the FCF profile, low operational risk, potential for value-enhancing acquisitions and a supportive dividend yield. We reiterate our BUY and SEK96 target price.Coor Service Management Holding AB is a Sweden-based company engaged in the business support services industry. The Company specializes in integrated facility management (IFM), including both soft and hard kinds of services, such as cleaning, reception, catering, post and parcel, strategic consulting and others. The services can be offered as single or package. The Company operates across Sweden, Finland, Norway and Denmark.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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