Green Landscaping reported a light Q1, with mild weather adversely affecting demand for snow removal services. The top line was c7% shy of consensus, while EBITA was c22% below. The main bright spot was the Swedish margin, coming in above consensus, and showing positive momentum QOQ after several tough quarters in 2024. We reiterate our BUY but have lowered our target price to SEK93 (95).
We expect the seasonally low Q1 to have been tough, with continued adverse weather trends (little snowfall). Although we believe Q1 is unlikely to be the turning point for the margin in Sweden, we remain confident in management’s ability to turn this around from Q2. We continue to like the case, with no direct tariff exposure, a high share of public customers, and a multi-year M&A runway in Germany. We reiterate our BUY, but have lowered our target price to SEK95 (99).
Driven by ongoing issues in the Swedish operation, the Q4 results fell shy of our forecasts, with sales 4% below consensus and EBITA 11% below. Mild weather explained some of the shortfall, while company-specific issues affected the Swedish operation, outweighing otherwise solid performances in Norway and Other Europe as well as group FCF generation. We reiterate our BUY, but on lower margin estimates, we have cut our target price to SEK99 (102).
We expect mild weather and less snowfall in Sweden and Norway to weigh on Q4 results, while Rest of Europe is probably continuing its strong momentum. We have cut our top line for Q4e by c3%, and updated our estimates for the latest acquisitions. We still like the M&A opportunity in the DACH region and reiterate our BUY and SEK102 target price.
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