Release Date: July 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Green Landscaping Group AB (FRA:2WN, Financial) saw significant improvement in profit margins in their Finnish operations, indicating a positive turnaround.
- The company successfully issued its first bond in the second quarter, diversifying its financing options and providing future flexibility.
- Green Landscaping Group AB (FRA:2WN) made two strategic acquisitions, Wagner and Tesmo, which are expected to contribute positively to the company's growth and profit margins.
- The company's margin expansion activities in Sweden are progressing as planned, with expectations of increased profit margins by the end of the year.
- Despite market headwinds, the company reported a strong cash flow from operating activities, showing a significant improvement over previous quarters.
Negative Points
- The company experienced a weak Q1 due to a lack of winter and snow removal activities, which negatively impacted revenue, profitability, and cash flow.
- Net sales decreased by 3% in the second quarter, with a negative organic growth of 9%, primarily due to weaker-than-expected performance in April.
- EBITA decreased by 8% over the rolling 12 months, with the margin dropping from 8.5% to 7.8%, indicating pressure on profitability.
- The financial leverage increased to 2.9%, slightly higher than the company's financial plan, due to the negative impact of Q1 activities.
- The Norwegian market faced significant headwinds, with a decline in sales and EBITA, largely attributed to the weak winter season.
Q & A Highlights
Q: Could you break out the organic growth that you saw in May and June?
A: We cannot disclose specific data for those months. However, the performance in May and June met our expectations, with the weak performance primarily in April. (Johan Nordstroem, CEO)
Q: Was the acquired contribution to EBITA softer than expected?
A: The acquired companies performed in line with our expectations, so there was no unexpected softness in their contribution. (Johan Nordstroem, CEO)
Q: Why isn't the margin profile in Sweden improving despite exiting unprofitable contracts?
A: We expect to see gradual margin improvements during the second half of the year, particularly in Q4. By early 2026, we should see the full effect of our margin improvement activities. (Johan Nordstroem, CEO)
Q: Is it realistic to add another SEK50 million in EBITA through M&A with leverage at 2.9 times?
A: Yes, it is realistic from our perspective. (Johan Nordstroem, CEO)
Q: Have the improvements in the Finnish operations been due to market conditions or internal measures?
A: The improvements are primarily due to internal measures, including a change in the Region Manager, rather than changes in market conditions. (Johan Nordstroem, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
