A non-cyclical serial acquirer capitalizing on a fragmented green market

In this equity report, analysts Alexander Hammarvid and Abdiaziz Musse take a deep-dive into Green Landscaping, a leading Nordic full-service provider in landscaping and maintenance of outdoor environments. The company has, through an aggressive acquisition strategy, consolidated the fragmented Swedish SEK 20.6bn market and outgrown the market growth rate of 4.7%. Our analysts, estimated future top-line growth of 12.0% alongside an EBITDA-margin expansion of 19% p.a until 2022E with a share upside of 55,6% until 2020E.

Investment highlights:

  • A declining Net Debt / EBITDA estimated to reach 2.6x by 2021E and a current cash conversation rate of 4.4 indicates room for further acquisitions in the historical EV / EBITDA range of 2.5 – 5x
  • Streamlining of its operations and synergies from prior acquisitions has driven their incremental growth, at a RONIC of 8.3% during 2019 which is bound to increase as profitability improves
  • The company is furthering their presence in the remaining SEK 30-36bn Nordic market with two new acquisitions announced in February, which is similarly to the Swedish market characterized by fragmentation and growing by 4.0% annually

The get the full elaborate view on the case, please see the PDF below: