Green Landscaping Group AB (publ)

Thank you and welcome to today's earnings call. As mentioned, my name is Johan Holmstrom and I'm joined today by our CFO, Marcus Holmstrom, who is doing his second earnings call, I believe, and he will manage the financial section of this presentation. But before we dive into the presentation, just let me tell you about the start of the year and to put that into the context. We have just left one of the mildest winters for the last 15 years behind us and the lack of snowfall has, of course, impacted our Q1 numbers. And of course, I'm not satisfied with the performance where we are today. Sales were down about 12% and they beat a margin and adapted at 3.2%. Now, being an outdoor company exposed to changing weather conditions, did these situations occur? But I said, of course, we're not satisfied with the performance. We are doing what we can to mitigate the financial impact. And when we are comparing to similar conditions as we had back in 2020, we're actually doing better. So we are not pleased with the performance, but I can see significant signs of improvements. Now, moving away from the weather, we can still that the market conditions and that is particular in Sweden, Finland, Norway and Germany, which are our main markets. Our outlook is basically that the markets are moving sideways. We are starting to see some positive signs, some discussions that is, to some extent, also a slightly decreased competitive situation. But we do not forecast that that would have any material impact in any near time future. Then as for the current economic and political turmoil with tariffs hitting global trade and so forth, our belief today is that we will not be directly impacted again in the near time future. But if we have a recession coming in or something similar, then of course we will be impacted. But at this point of time, we do not forecast any negative impact on what's going on. And then again, in terms of M&A, I confirm our ambition to invest in eight to ten companies during the course of the year, and those plans are progressing. So having that said, let's dive into the Q1 presentation and move on to slide number two. Now, Green Landscaping is the leading company for ground maintenance and landscaping services in Europe. We perform mainly three services, that is landscaping services, the outdoor services, and of course the maintenance side of the business. And then of course, the third item we have are winter services. In terms of the market we serve, it's a very big and very stable market. And we see a steady growth in the market as well as we do like being in the market in particular, as we are an acquiring company, that means we have a lot of companies to choose from in that market. We have during a very long time developed our business model to fit into the market, in particular as we are decentralized, meaning that we have local entities serving local entities. And that means that we are very fast, very nimble, and given the market, given the market, we're quite a profitable company. And then the last item is really about the M&A strategy and we have been investing in other companies for a long time. And we do know what we are looking for and we do know how to take care of and develop the company that join, that chooses to join the group. So that is just short of a short description of Green Landscaping Group. Moving on to the next slide here. So if we look upon the financial performance for the rolling 12 months, we can see that net sales have increased by 4% to slightly shy of 6.2 billion SEK, where the organic growth given the development in the first quarter this year are a negative 4%, while we had acquisitions contributing with 8%. EBITDA decreased by 8% and there we are right now at 477 million SEK. And we also saw that the EBITDA margin had contracted approximately by 1%. So it means we're coming from 8.7 to 7.7. And cash flow from operating activities are right now at 532 million. And that is, of course, a significant improvement during the last two quarters. Moving into the first quarter, as I said, I'm not happy or satisfied with the financial performance. And it was impacted by a very unusual mild winter. And I will come back to that one later on in the presentation. And there we saw that the net sales decreased by 12% to 1.2 billion SEK. And of course, organic growth contracted by 18%. And I assume we're going to get some questions about this, but that is the vast majority of the contraction that is actually not market related. It's just weather related that when you don't have the snowfall, then of course you have a significant impact on the business we are doing during the first quarter. Now EBITDA decreased by 56%. So we can mean that 40 million SEK in EBITDA. And basically the margin went from .5% the previous Q1 quarter to 3.2%. Cash flow can mean pretty much in line with our expectation at 139 million SEK. And of course, the financial leverage also came in as we expected at 2.6. And as I said, I am confirmed with the ambition to invest in other companies, but we have yet to do the first acquisition for this year. So moving on into next slide here. As can be seen, we have been growing and we've been growing for quite a long time, and that is still on plan. And in terms of the focus for the future growth, in particular for the M&A activities, that is in Germany. And then if we look upon the financial performance, the EBITDA, we can see that we have been growing up until the fourth quarter of 2023. And then we have been kind of flat for basically five, six quarters at this point of time. And that is basically because of the market conditions, as we saw in the beginning of 2024, with basically a high interest rate and I would say tough market environment. And that means that there is still a potential to grow and improve in terms of profitability. And we are working heavily on it. But again, we are investing money in growing the profitability, and I still expect us to come back on to a positive growth trend when it comes to the EBITDA performance of the company. But for the last five quarters, it's been kind of flat. Then talking about the winter and in particular, it's on the right hand side, I would like to discuss. And that is the statistics we have based on how much snowfall we have had, based on the cities where we are active. And typically, if it snows less than five centimeters, we do not have any snow activities. So for us to make what we call a snow round or when we actually out in the snow, taking away the snow, you should see a snowfall heavier than five centimeters in a day. The average where we are active is about four times during the season and in the year of 2020 and in the year of 2025, the first quarter of each year, then we can see that we had 1.3 times and we had 1.5 times this year. So when we are comparing the year 2020 to the 2025 in terms of winter conditions, they are pretty much the same and significantly lower than historically and the average. Thank you. The average. They are quite below the average. And that does have a significant negative impact on our activities during the first quarter. So that's why we are comparing the performance in 2020 to 2025. And what can be clearly seen is that in terms of Sweden, that we have improvement in that area, while Norway are the guys who is basically falling short. And we have made a significant improvement in Sweden during the last five years in terms of mitigating the dependency on snowfall, while in Norway we have more work to do in order to be able to make money, even though we don't have the winter services. So that is something that needs to happen inside our company. Now, looking upon segment Sweden again, in terms of the rolling 12 months, we can see that the net sales decreased by 10 percent. And again, the EBITDA decreased by 35 percent to 140 million. That gives us a 4.4 percent margin. Then the Q1, that's the one I'm referring to. We can see that the net sales is actually coming down by 20 percent. So it's a significant decrease in terms of the revenue in the first quarter. Why we are still able to deliver a 6.1 percent margin in that particular quarter. And that is actually a strong, I would say it's not a good number, but it's still a strong performance, given the weather conditions we have with an unusually mild winter. And also there is a high level of activities, I would say, in Sweden and has been so for the last two years in terms of improving the overall financial performance. And that is well on track. And we do expect to see, I won't say significant, but it will be signs during the course of the year that we will continue to improve the financial performance in Sweden. We have good reason for that statement. Now, moving on to Norway, so the next slide, there we can see that organically for the rolling 12 months, we are still growing by 3 percent, even though we have the negative impact of the first quarter. We have an organic growth of 2 percent, and then we have one acquisition, if I remember correctly, that is contributing with 3 percent. And then, of course, the EV-Day, there we can see a decrease by 21 percent. And that means that we are coming from a 10.4 percent profit margin down to an 8 percent profit margin for the rolling 12 months. Now, for the first quarter, again, we can see that the winter or the mild winter effect is negatively impacting the segment in Norway. So that means we are decreasing by 18 percent. And then, of course, we saw a significant decrease on the EBITDA performance by 116 percent. So basically, we went from a margin of 8.8 percent to a negative 1.7 percent in this quarter. And, of course, that is the unusual mild weather and to some extent, the lack of readiness on how to cope with that situation in the companies we have in Norway. And we should also bear in mind that some of the companies we have are focused on pure, like a pure winter service companies. And they have been quite successful for the last two years when we have had winter in Norway. So I do prefer to look upon the performance of those companies in terms of the average for the three years. I'm not excusing numbers. I'm saying that's the way you should look upon that business, because they are quite profitable when it's snowing. And, of course, when you're not snowing, when you don't have the winter, they are not that profitable. So there is a volatility in their number built in. But then there are other companies in Norway that is more similar to the operations we have in Sweden. And those are the companies I actually believe we should see an improved financial performance moving into the future. And then we're talking about other Europe and for the road in 12 months, we can see that we have a heavy growth in that area. And this is where we are focusing the main effort in terms of growth. So we are growing by 66 percent in the road in 12 months. And that means we are now at about one billion SEK. So organically, they're growing by three percent and acquisitions by 64 percent in terms of profitability. That one increased by 60 percent to two hundred and twenty two million. And right now, for a road in 12 months, we are at the margin of 20 percent. That is kind of a healthy margin. But we saw that in Norway as well, that when we are building up the situation, then you are able to have that type of margin. In terms of Q1, we can see that the net sales increased by 87 percent to one hundred ninety five million SEK. And then we have the EBITDA that increased to 23 million, given as a margin of 11.7 percent. And in that number, I believe Marcus would have included the sale of the building.

In Lithuania, yes, 90 million.

So there's a capital gain from a property of 90 million in those numbers. When I look upon the vast majority of the companies we have in Germany, the first quarter is a low activity season for them because you have fewer working days and also you have vacation. And they have a situation where they actually spend more working hours during the summer time frame when they're running the projects. And then they actually work less hours during the first quarter. So naturally, we will see a low activity in the first quarter. It's a low season, basically, with winter conditions and vacations in Germany. I think that concludes my part of the presentation here. As I said, we are heavily impacted by the weather situations and I'm not satisfied with the number per se. But there are things that have gone our way, in particular in Sweden, I like to focus on that one. So there are things that will be done in Norway, in particular, moving into the future. So Marcus,