Coor Service Management (Buy, TP: SEK75.00) - Strong FCF generation continues
Coor’s Q4 showed an acceleration in organic growth to 9.2% YOY, slowing the margin expansion short-term, with a strong working capital release setting up an exceptionally strong FCF in the quarter and a higher dividend payout than forecast (direct yield 6.0%). We still like Coor’s FCF profile, low operational risk and potential for further value-enhancing acquisitions. We reiterate our BUY and SEK75 target price, with the valuation benefitting from strong yield support.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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