Green Landscaping : Year-end-report January-December 2020

“Improved earnings and strong growth”

October-December 2020

  • Sales for the quarter rose by 29.4 percent to 656.1 (507.0) million SEK, of which organic growth was -0.5 percent.1)
  • EBITA amounted to SEK 33.3 (15.1) million, an increase of 120.4 percent.
  • The EBITA margin was 5.1 (3.0) percent SEK.
  • The cash flow from operating activities amounted to SEK 100.5 (21.9) million.
  • Net debt was SEK 796.5 (690.3) million.
  • Earnings per share were SEK 0.41 (0.05). The diluted earnings per share were SEK 0.40 (0.05).
  • The COVID-19 pandemic has had a negative impact on both sales and earnings.
  • Three acquisitions were made during the quarter: Oveland Utemiljø AS in Norway and Bengtssons Trädgårdsanläggningar AB and Thormans Entreprenad AB in Sweden.

1) Sales growth between comparable units was 1.0 percent, adjusted for the discontinued operations of Svensk Markservice.

CEO Johan Nordström comments on the quarter:

Sales increased 29 percent to SEK 656 (507) million in the fourth quarter. EBITA amounted to 33.3 (15.1) million SEK, with a corresponding margin improvement of 5.1 (3.0) percent. The results are strong and show that our strategy is working. We acquire successful companies that contribute to both higher sales and higher profitability. In the fourth quarter alone, we exceeded our long-term growth target of 10 percent and improved profitability by 2.1 percentage points. The weather was mild during the quarter, which was beneficial for our landscape projects, but there was essentially no snow and ice removal activity.

Positive results from synergies and streamlining

Most of our existing subsidiaries and companies that were acquired during the year have performed well in the last quarter and are delivering expectations. Profitability will continue to improve in areas of the business that have been underperforming. For some of them, the results have already improved, and our efforts continue to increase the profitability of those who are still struggling.

COVID-19

The ongoing pandemic continues to have a negative impact on business. For example, there were fewer meetings with clients and customers, which resulted in fewer orders and delays on some of our projects.

On the operational side, we have adapted to the situation to create a safer working environment and things are working smoothly.

Growing in Norway

In February 2020 we made our first acquisition in Norway, which is in line with our strategy to consolidate the outdoor environment market in the Nordic region. Two more companies in Norway were acquired in the third quarter. In July, TH Anlegg AS made a net asset acquisition. The company has 14 employees and sales of NOK 30 million in 2019. Hadeland Maskindrift AS was acquired in September. The company has 95 employees and sales of NOK 209 million in 2019. Each of these companies (TH Anlegg and Hadeland Maskindrift) serve the Oslo region together with GAST Entreprenør. Oveland Utemiljø AS became part of the group in October. It has an annual turnover of around NOK 65 million and serves Sørlandet (southern Norway). These acquisitions provide us with an excellent basis for further expansion in Norway. On an annual basis, our turnover in Norway now exceeds NOK 400 million.

There are still many interesting opportunities in Sweden

Since its inception in 2009, Green Landscaping has had a steady stream of interesting acquisition candidates and has grown into the group by adding well-managed companies that work with outdoor environments. Three companies in Sweden were acquired in 2020, most recently in the fourth quarter. In October, Bengtssons Trädgårdsanläggningar AB in Malmö was added to the group and then Thormans Entreprenad AB in Linköping. Their annual turnover is 85 million SEK or a little more than 100 million SEK.

Independent, entrepreneurial company

The starting point for Green Landscaping’s acquisition strategy is a decentralized organizational structure that aims to maintain and promote the entrepreneurial spirit of the companies we have acquired. As part of the Green Landscaping Group, acquired companies get access to new colleagues, knowledge sharing, collaboration and cross-selling opportunities.

We have focused on the following areas where we want to improve expertise: purchasing, lean corporate governance and sustainability. Our centralized purchasing function enables us to negotiate lower purchase prices. We offer training and support on the lean business model so that our acquired companies Q4 2020 – Green Landscaping Group AB (publ) 3

Better control costs and identify areas where streamlining is possible, but always based on local management requirements and needs. In companies that work with outdoor environments, expertise in terms of environmental and social responsibility is usually already high. However, when an acquired company joins the Green Landscaping Group, it benefits from the structure and established routines that we offer. Examples are our social exclusion employment program and our Supplier and Subcontractor Code of Conduct.

Positioned for further growth

At the beginning of 2021, when conditions are favorable in all regions, our order backlog is around SEK 4.4 billion.

A key component of our strategy is the consolidation of the Nordic market for outdoor maintenance and landscaping. As mentioned in our previous interim report, Green Landscaping carried out a rights issue for around SEK 150 million in the second quarter in order to be able to implement our strategy more quickly. We are very pleased that we have added seven new companies to the group so far this year, four of them in Norway and three in Sweden. Overall, they have a turnover of around SEK 650 million with good profitability margins.

Our strategy is working and we are well positioned to continue our successful consolidation of the Nordic floor care market.

Presentation of the report

Johan Nordström, CEO of Green Landscaping, and Carl-Fredrik Meijer, CFO, will present the report in a conference call / audiocast on February 17th at 10.30 a.m. CET. The presentation will be in English.

Phone: +46 8 566 426 51
PIN code: 24058480 #
Webcast: https://edge.media-server.com/mmc/p/iqoymo4sAn

The information was submitted via the following contact persons for publication on February 17, 2020 at 7:00 a.m. CET.

For more informations:

Johan Nordström, CEO, +46 70 8385812, [email protected] Meijer, CFO, +46 70 1087019, [email protected]

The Green Landscaping Group is the leading provider of soil maintenance and landscaping for outdoor environments in Sweden. Our business concept is to improve the customer’s external environment through services that are geared towards high customer benefit, long-term sustainability and quality. The company employs around 1,300 people and has a turnover of around SEK 2 billion. The company’s shares are listed on Nasdaq Stockholm with the ticker GREEN. More information is available at www.greenlandscapinggroup.se.

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