Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Green Landscaping Group AB (OSTO:GREEN, Financial) achieved an organic growth of 3% in the third quarter, despite challenging market conditions.
- The company's EBITA margin remained strong at 8.4% for both the quarter and the rolling 12 months, exceeding financial targets.
- The company successfully completed three acquisitions in the quarter, contributing to its growth strategy.
- Green Landscaping Group AB (OSTO:GREEN) reported a significant increase in cash flow from operating activities, aligning with its investment strategy.
- The company has a solid order backlog, indicating stability and future growth potential in the market.
Negative Points
- The profit margin in Sweden decreased to 6.1%, which is below the company's expectations and requires improvement.
- There is increased competition in the market, impacting profit margins and necessitating a focus on maintaining profitability.
- The company is experiencing a slight decrease in profit margins due to market competitiveness.
- Financial gearing remains at 2.7%, which is above the company's target level, indicating a need for careful financial management.
- The company has not paid a dividend, which may be a concern for some investors seeking returns.
Q & A Highlights
Q: Can you provide details on the impact of the concluded Swedish contract on Q3 margins and any potential spillover into Q4?
A: Johan Nordstroem, CEO: The concluded contract was a burden, but its impact on overall profitability is not major due to our high revenue in Sweden. We haven't disclosed specific losses from this contract. While there may be some costs associated with closing it, they are not expected to significantly impact Q4 performance.
Q: Could you elaborate on the recent management changes and their timing?
A: Johan Nordstroem, CEO: The company has grown significantly, necessitating changes in management. With the departure of a key member, we are building a new team, promoting from within to enhance operational focus. This evolution reflects the company's size and future needs.
Q: How confident are you about closing more acquisitions this year, particularly in Germany?
A: Johan Nordstroem, CEO: We have a solid pipeline, especially in the German-speaking market, including Germany, Switzerland, and Austria. Our expanded team allows for a more stable acquisition flow, and we are confident in executing more transactions.
Q: Are you seeing positive effects from having a platform in Germany?
A: Johan Nordstroem, CEO: Yes, having a platform in Germany is beneficial. It enhances our market presence and provides more leads, allowing us to execute more transactions effectively.
Q: What is the current financial leverage and its implications?
A: Magnus Larsson, Head of Investor Relations: Our financial leverage remains at 2.7%, with headroom to the covenant. Although slightly above our target, it is manageable, and we are comfortable with this level for a short period.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
