Green Landscaping Group AB (publ)

Welcome to the Green Landscaping Group Q3 presentation 2025. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to the CEO, Johan Nordstrom, and CFO, Markus Holmstrom. Please begin your meeting.

Thank you. And welcome to today's earnings call. And as mentioned, my name is Johan Holmström. I'm the Managing Director for the company. And I'm also joined by our CFO, Markus Holmström, as mentioned. And he will take care of the financial section of this presentation. But always, let me tell you about our most recent performance and putting that into context. So all in all, for the third quarter of 2025, we believe that we delivered reasonably well in the third quarter, in particular given the market headwinds. However, if you look upon the results, they do differ quite a bit between our segments, and in particular Sweden and Norway, who faced the toughest market conditions, they did struggle to meet our expectations. But on the contrary, other Europe, and that is Finland, Lithuania, and Germany, they continue to outperform and deliver a very strong set of results. We have also, in the meantime, invested in two good companies so far this year. And that has taken us halfway to our ambition of acquiring 8,200 million SEK of EBITDA for the full year of 2025. And this ambition remains valid for the remainder of the year. We have also renewed and extended our bank loans during the last few months. And together with the bonds that we issued in May, we have effectively secured our financing for the coming years on, I would say, very good terms. So that's to frame in the performance. So let's dive into the presentation. So let's move on. the slides here and just an overview of the company per se, the Green Landscaping Group. So we are, I would say, the leading landscaping company in Europe for ground maintenance and the landscaping industry. And there are three headlines I would like to go through there. And that is that we are active in a very attractive market. And what do we mean by that? Well, it's a very large market to begin with. enables us to choose what type of services we would like to provide, what type of customers we would like to have and so forth. That is a strength that we are not in a niche. We are in a broad market. And of course, it's a stable market. And even now we are facing market headwinds. There's a great stability. So there are still an attractive market out there, even though it's, I would say, more competitive than usually. And this market is also supported by, I would like to highlight two mega or big market trends, and that is the urbanization and the environmental. And we do seek to be in those part of the market that benefits from those two mega trends. And then in terms of our strategy about applying the right business model, We have learned since many years that being close to the customer is really the way to go forward. And that means that we have a delegated responsibility and that it's when we talk about decentralization, it's about delegating the responsibility and authority to people who are close to the market, close to the customers and close to the people who provides the services. And the upside is, of course, that we are agile. and that we are more profitable than many of our competitors as we can provide a better service to the customer and getting paid for it. And then the last item is about the M&A strategy as we are an active company who choose to invest in other companies and we have been active for a long time, meaning that we have a long experience. We really know what we are looking for and also we know how to take care and improve of the companies And I think that's a critical part on the M&A story. It's not so much about finding the companies, even though that is very important. It's even more important on how you take care of the companies, meaning how do you do the onboarding and how do you develop the company to be even better once they are being part of the group? And also to mention that we do have a solid pipelines of companies that we are in communication with. So I think those were the three headlines we had on who we are. Now, to sum up for the role in 12 months, our revenue is pretty much unchanged. It amounted to 6.2 billion versus 6.35. And organically, we are down by 9%, while acquisitions contributed to 9%. And we have to keep in mind here for the early 12 months, we have the first quarter that was basically a very weak quarter for us, given that we didn't have any winter activities or hardly any winter activities, I would say, in Sweden and in Norway. So we started out the year in, I would say, in a kind of a tough way. And then, of course, we have the market headwinds. And that's why we're basically flat on the net sales side. And then profit wise, we decreased by 12%, 463 million. And that means we have an EBITDA margin right now for the role in 12 months at 7.5% versus 8.4% a year ago. I think that's kind of the telling for the story. If I look upon their revenue, it's kind of a slow development, I would say for this year, while we lost 1% in terms of their profit margin. I think that's kind of a solid performance, even though I'm not happy with the performance. But if I look upon it from a macro perspective, that's where we are. I think that's an okay performance. Cashflow from operating activities amounted to 390 million SEK, slightly down compared to previous year. And of course, for the last 12 months, we have completed five investments in other companies. Now, moving into the third quarter, we can see that net sales increased by 4% to 1.6 billion SEK. While organically, we actually had a negative 3% in the quarter. So from that perspective, I think we're doing okay. While we saw that we were down on EBITDA by 12% to 140 million. And you have to bear in mind here that what we typically don't work with adjusted EBITDA. So we did adjust for a project write-down in Norway to the tune of 21 million SEK. So if I add that one back to 135, that actually put us back on where we should have been under normal circumstances. So from that perspective, Evita was 140 million and that gave us a margin of 7.1%. And then of course we have the cashflow of 47 million, That one came in, I would say, slightly lower than our expectations. The third quarter is a strong quarter from a cash flow perspective. It's basically the fourth and the first quarter that are strong cash flow quarters. But it's on the weak side, I agree, on the cash flow. And that gives us a financial leverage at 3.0 versus 2.7. And as we move forward, we will see a natural deleverage in the fourth quarter. Anything else? And also, as I did mention, we did have the new finance agreement in place in October 2025. And then, of course, we completed one investment in the third quarter, and we confirm our ambition to invest in about 80 to 100 million SEK for the full year effect of 2025. So long-term performance. So we are a high, I would say, a fast-growing company and have been growing quite significantly during the course of the years. And also that we have a resilient in adverse market conditions. If I look on the year 2025, I would say that this is a year where we do not see that high growth. Organically, we are down while we are adding companies to this routine. growth is working while the market headwinds are actually negative contributing. And that's basically why we are flat on the growth side as a company. Coming back to the profit margin that we are at 7.5 versus 8.4. And I would say that given the market conditions that with the Q1 performance without winter and the headwinds in Norway and Sweden, I'm not overly happy with the 7.5%. But on the other hand, it's one unit of a percentage down, so it's still a stable performance. So I think that proves that we are working in a stable environment. So even though we are facing a lot of headwind, I think the performance is, given the circumstances, I would say okay in terms of profitability and cash flow. Looking upon Sweden's moving into that one, Then we see that we are down quite significantly by 40%. There are two reasons for that we are shrinking in Sweden. The number one is, of course, the headwind in the market. But the other way, the other thing is also that we are closing down unprofitable businesses. So those two items together are the ones that is accruing to 14% down on the net sales. And then, of course, the EBITDA is down by 39%, and that is a significant number. And that is also with the conjunction we have with market condition as well as cost for closing down the companies that is not performing. But as a whole for Sweden, when I look upon it, even though the numbers are bad, I agree. But I think we have turned a corner on Sweden. So for the coming, not so much for the fourth quarter, but coming into the year of 2026, we see a significant upside in Sweden and we do expect a significant increase. both recovery and that which actually should succeed or surpass the profit margins level we have shown historically in Sweden. So it's actually looking good that we finally have turned a corner in Sweden, and I'm looking forward to the performance in the coming year to show the numbers in Sweden. So that is actually looking quite good. Moving on to Norway, and we look upon the road in 12 months there. They are, given the conditions again, they are actually keeping it together revenue-wise in a very good way in Norway. So they are keeping up the volume. However, it comes with the price, that is the profit margins. So we are getting the work, but it's a high competitive environment in Norway. So we are keeping the revenue at, I would say, a good level while we are doing this by lowering the prices. And by that, we are sacrificing our profit margins in order to keep up the volume. So the net sales achieved in Norway was 2.467 million SEK, where you had an organic negative contribution of 7%, while we had one acquisition, if I remember correctly, that contributes with 5%. And as I did mention, we have a significant decrease in profitability by 40%. That's quite a big swing. And that's to a large extent, the market conditions that we have in Norway right now. And moving on to the third quarter performance, we saw that we only shrunk by 1%. So again, we are keeping the revenue high while we had a significant drop of 75% on the profit. And that is two reasons for it. It's the challenging market conditions, as I did mention, but also we made one project write down, or actually it was more than one project per se, but it's in one company. So it's an isolated event in one of our bigger entities in Norway, where we, in the beginning of the year, had a change of the managing director, and later on we changed the CFO. And as they started to look into the company, they were not happy with the performance or the way the project were accrued for. And that led us to a project write-down to the tune of 21 million SCK, that we actually went for in the third quarter this year. So it's from that perspective, it's a significant right down here, but it's one off in Norway. Moving on to other Europe. So for the rolling 12 months in other Europe, we have a significant increase of close to 50%. So they were achieved almost 1.3 billion SEK. So they were fast growing. They have an organic growth of 2%, while their acquired growth was 48%. So there's both organic as well as fatigue growth in that market. And then, of course, we had an even higher increase in profitability by 52%. That led us to a margin of 19.8%. So I would say it's a fantastic performance in that region. So that is Finland, Lithuania, and Stipoli. And we can see that Finland is since three quarters, I believe. on a very positive trend, so I'm happy to see that one. Lithuania continues to perform in a very good way, and then we have a stable performance of our entities in Germany. And again, looking upon the third quarter performance, we saw that we had a growth of 35% in the quarter, and we had an EBITDA increase to 96 million. And they actually delivered a stellar performance of 22.7% EBITDA margin in that region. So that is really working for us. And then of course, to the last slide here that we do welcome Tesma and Zon, who is a company that we acquired a while back. They operate in Hannover and it's kind of a classic company in terms of what we are doing. They're offering landscaping, earthwork and drainage services. They have a revenue of about 16 million euros, and they do that with about 45 employees. So we do welcome Testmanzon into the group of green landscaping companies. So by that, I hand over to Marcus to go through in more detail on the financial side. So welcome, Marcus.

Perfect. Thank you, Johan. And I will cover the main financials. Moving into the quarter, we can see that in Q3, we had a net sales of 1.6 billion, concluding our rolling 12 months to 6.2. And as Johan mentioned, our strategic acquisition compensated for the negative organic growth we have had during rolling 12 months. So from that perspective, we've been flat. On an EBITDA margin perspective in the quarter, we delivered 140 million, which was lower than last year. But then we must have in mind that we then absorbed this project write downs of 21 million from one subsidiary in Norway. And adjusting for that, EBITDA would have been 135 million, which is slightly exceeding last year. and doing the same calculation to an adjusted EDITA margin would be roughly in line with last year on that level. I will cover cash flow in more detail in upcoming slides, but we conclude that operating activities contributed with 47 million, which was slightly weaker than we had expected, but we foresee that it will come back to us in Q4. Financial leverage increased sequentially to 3.0 times. The order back low amounted to 7.4 billion, which was lower than last year. And we've seen it for a few quarters now. And the decline was particularly noticeable in Norway and to a lesser extent in Sweden, while other regions were more stable. But it's also as well. always say it's important to note that the water bag fluctuates between quarters, so it should not be viewed as a short-term leading indicator. And looking at our earning per share in Q3, it declined 42% to 0.56 crowns compared to 0.96 last year. And the drivers behind that was the lower profits delivered from operation. But we also had last year a positive net currency effects in our financial items that impacted that year positively. Moving to cash flow in line with the seasonality, our cash flow turned sequentially positive now in Q3, but it was slightly behind what we had expected. And that was mainly due to that the working capital increased by 71 million compared to 25 million during last year. But this will come back to us during Q4. And we have a high focus on this conversion rate. Rolling 12 months cash flow came in slightly below last year at 390 compared to 399. And working capital development and cash flow generation continue as always to be a high focus area for us. And we expect the cash flow to be strengthened in the fourth quarter in line with normal seasonality. Looking at the quarter's cash flow bridge, as mentioned, operating activities contributed with positively 47 million. Then we made one acquisition impacting cash flow negatively of 77 million. We have capex and lease amortization of minus 73. And then the net difference of new loans and debt repaid was plus 50, concluding our cash position negative for the period at 53 million. And looking at financial leverage or financial leverage and financial position, financial net debt increased to 2.5 billion, which was sequentially roughly 100 million higher than in Q2, driven by working capital and investment activities, as we could see in the previous slide. Previous slide, leverage increased sequentially from 2.9 to 3.0, which is temporarily above our financial target. However, we maintain sufficient headroom to meet our financial confidence in our funding agreements. And as we enter Q4, which is usually our strongest cash flow quarter, we have a high focus to deliver upon that seasonality. The loan maturity overview, it has been updated since the last quarter. Following the end of the third quarter, we successfully renewed our bank loans in line with our long-term plan as they were maturing in 2026. Together with the bond issue during the second quarter, we have now secured and broadened our financing base for the coming years. The new loan terms were significantly more favorable than previous ones, which will help us to reduce interest costs going forward. This is not only strengthening our financial position, it's also sending a clear signal that the credit market has a strong confidence in us. And the concluding slide on my end was reviewing our financial targets. We can see, as both Johan mentioned and I mentioned, we have a financial target of 10% of total growth, but in light of the market and when we have faced during this year, we are actually on flat despite us continuing on the strategic acquisitions. The EBITDA margin, we came in at 7.5, rolling 12 months perspective, which for us is, of course, below our financial target. But once again, it's for us a testament of that our business model has the margin resilience we foresee in tough market conditions. And then looking at financial leverage, which is at 3.0 times and temporarily above the financial target. But as expected, we should come down towards the financial target at the end of the year if we follow the normal seasonality. We have a fourth financial target of distributing dividends, but in line with the previous year, the AGM decided that we should not distribute any dividends for the fiscal year of 2024. And with that, I hand back to you, Johan.

Okay. Thank you, Markus. That was quick. So just to sum it up here, I think it has been a challenging year for the 2025. And as Marcus said, I believe we are a resilient company because if you look upon the profit margin, the EBITDA at the 7.4% versus the 8.4% that we compare with, and given the market conditions, I think it's a solid performance, even though I'm not happy with the performance per se. But it's a soft market this year or tough market conditions. happy with the number to sum it up. So I think that's pretty much where we are. And by that, we move over to the front part where we open up for the Q&A session. So we hand it back to the operator to open up questions. Thank you.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad.

Sorry, there was a problem with the AI here. So the first question comes from Jonny Yin from SEB, please.

Yes. Hi, good afternoon, Johan and Markus. A couple of questions from my side. I want to start off to come back a little bit to the project write-down you had in the quarter of 21 million. I think I lost you a little bit there, but could you maybe elaborate what happened there? And maybe more importantly, do you see any more similar project in the books that risk to be written down ahead? That's my first question.

Okay, so thank you for the question. And I was about to say, welcome to the club. I think that's the first time we are in communication here. The project is from one of the bigger companies we have in Norway, who had been on a positive trend profit-wise, so I was kind of happy with that one. And then as we replaced the managing director as well as the CFO in that company, and they started to look upon the project and the valuation of how we have valued that project, and they weren't happy with how that had been done. And that actually goes back into the previous years as well. So then we went into a thorough analysis on that particular company on how it was accrued for profit and so forth. And then we ended up with taking a conservative look upon what's going on there. And that led us to reduce the project profits in the current projects they had. and be more conservative going forward into the future. So that's the reason for it. So it's one company where we had a new management in place who went through the order books and the current project they had and decided there was a need to do that write down. And we also have to keep in mind that we do have our auditors and everybody else involved in this one. So we took a conservative view and did the write down that is needed to the best of our knowledge at this point of time in that particular company.

Okay, so you don't see any more risk that further project will be right down ahead?

No, we did the analysis and of course we have 50 plus companies within the group. So this is one company. I'm not saying there's a risk in other companies. I'm saying that we have a conservative view on it and there is no risk of having a follow or you should have any consequences in other companies as well. This is one company where this occurred to us when we replaced management and then we took the consequences of it and did the write down and then we are moving forward for the next quarter.

Okay. Yeah. Okay, we'll see. So speaking of the order book, how is the general margin quality now, would you say, in the order book? Particularly if we go into Sweden and Norway, as organic growth seems to stabilize there, but the margins continue to decline. So how should we view on the margin going forward?

I think that it's a tough question. But of course, if I look upon the market, and we typically don't disclose too much information about looking into the future there, but it's kind of common knowledge, I would say, that there's a slight optimistic view on the development in Sweden as a general mark or remark. And I think we, given what I hear from our managing directors in Sweden, we concur that they are much more positive to what's going on in the marketplace at this point of time, meaning that there are more projects to bid on. And to some extent, I won't say it's less competition, but of course, if there is more projects, then of course, that would have a positive effect on the quoted margins Then of course, if you have an order book that you have won when the market was competitive, it will take some time before you will see the increased profitability in the new projects coming into place. So from my perspective, when I look for Sweden in the fourth quarter, it might be a slight upside, but of course you have to work through the order book you have until you will actually see, let's say a significant uptake on the profit margin So I foresee Sweden being more or less equal moving into the fourth quarter. It won't be an immediate effect. I have a slightly more conservative view on Norway. I don't see the same market development as I see in Sweden. So from my perspective, when I make my plans or our plans, I would say for the coming year, I don't see any big change in Norway. So there's a tough market conditions and I don't see margins changing. I will see that the margins that we are currently winning at, that we will continue to do that until further on in Norway. So I'm not forecasting any change in Norway at this point in time. And I don't have the signs of anything going on. In terms of Finland, I think that it's actually our performance in Finland that makes us more profitable. So there we are on an improving profit margin. Lithuania continues to outperform and so does Germany. So all in all, I'm slightly positive to Sweden. I'm very positive to the rest of Europe, so to say. And I have a conservative view on Norway.

What is driving the weakness in Norway, would you say? It sounds that it could be

a little bit uh is it a structural shift that you see now or what part if your business is driving this weakness would you say well you have two factors you we had a tough start of the year because in norway we have a snow dependency to begin with in norway so we have to keep that in mind uh and that gave us a very weak start of the year and we're still struggling with with with with with that one because we have companies like hagland machine lift and those companies they are road clearing companies. They remove snow during the winter. That's what they do. And if you don't have winter, it's a tough situation for them. So they started out in a tough marketplace to begin with. And then the market per se in Norway is quite competitive. You have a lot of bankruptcies going on. There's no risk of any of our companies going into bankruptcy. It's very well kept companies. They're a well run company. They are adapting to the market conditions. You can clearly see that they are adapting to the market conditions in terms of keeping the revenue decently stable, while in order to do so, they have to be more aggressive when they submit the quotations. And that hurts the profit margins in Norway. And as soon as the market comes back, and this is basically macroeconomic, to the best of my understanding, we haven't seen any change in interest rate and so forth in Norway. So I think that there's a stability in the market, But it's a very high competitive environment in Norway at this point of time. And now we're on to the first part.

Yeah, sorry. Yeah, no, sorry. I understand. We'll see. But then I have just one final one on the cash flow and maybe tying that to M&A. I think you mentioned in your presentation that cash flow in this quarter came in below your expectations. and that you relate that to working capital. But maybe you could elaborate a little bit more what happened here in the quarter that drove this weakness in the cash flow and then tying that to M&A. I mean, your reported leverage is now at three times EBITDA and that is up sequentially compared to Q2. So do you think that cash flow will be strong enough in Q4 here so that you could acquire this 30 to 50 million in EBITDA this year? So that would be helpful.

Yes, I can take the first part of the question, maybe. Yes, as you say, Jonny, we were on a weaker end of what we had expected on the working capital conversion in the quarter. However, when we compared to last year, last year was standing out from a seasonal perspective in terms of a reference on how much we usually manage to convert. We are addressing it and we feel comfortable with the working capital position that we go into the quarter that we will be able to convert it in line with normal seasonality, everything equal. From that perspective, we're having a high focus on it and pushing for collection out in our subsidiaries and it's basically that simple for us. And then, of course, we are monitoring our leverage position. But in light of our confidence on our operational cash flow, of course, 3.0 times is not the levels we want to be at. But everything equal, we will be leveraged from this point during Q4.

So the way we look upon it is actually that we will be able to both leverage started to have a leverage on the 3.0 and fulfilling our promise on the acquisitions. So we can actually do both items in a thorough way during the fourth quarter.

Okay. Yeah, I understand. That's all from me. Thank you for taking my questions. Thank you. Thank you.

The next question comes from Alexander Silgestrom from Pareto. Please go ahead.

Hi, guys. So a follow-up here on the performance in Norway. Just wondering what has driven the sort of sequential margin decline here in Q3 as compared to Q2, as I would assume that sort of the contract portfolio is quite similar.

From that perspective, Alexander, we feel that the market is tough, and it is a bit tougher from that perspective now in Q3 compared to Q2. Not a significant movement, but we see that as we work through the order book, as we once said, the new contracts going in, we are on another mark, awarded on more price-pressured levels. And that we can see in general in our subsidiaries in light of the performance report. Other than that, it is the project write-down that stands out.

Yeah, I'm sorry. This was excluding the project write-down. And maybe just on that as well, you guide for sort of more depressed margins in Norway going forward and then maybe excluding sort of a Q1. Is it around sort of a 6% level that you see here going forward as well, or what should we sort of account for looking into 2026 for Q3 or Q2 maybe?

Yeah, we don't guide from that perspective in that sense, but we have circumstances this year, which the year began with that we had a normal winter activities, winter demand, and then going into Q2, managed to perform fairly well in light of a tough market. Now what we see is that the tough market impacts us to a more significant extent and what margin levels to expect in next year I guess we will come back to but for sure we're pushing for improvement from these levels we are at.

And sort of the weakness is mainly explained by landscaping and soft pricing on increased competition. Is that correct in terms of Norway? Yes.

Yes, it's as we said, we started out the year with significantly less winter activities. And then, of course, there has been a high price pressure in the marketplace, and I think that's the market we had for 2025 in Norway. And the winter, I would say, was very unusual in Norway, so that gave us a tough start for the year.

Yeah, for sure. And then maybe moving on to Sweden, you seem quite confident on margin improvements heading into 2026, and you mentioned market recovery. I'm just wondering what else, which else drivers you see here for improved margins?

Well, of course, we had an impact again on the winter in Sweden as well as in Norway in the first quarter. And also we have done significant changes in Sweden with the closing down of companies and profitable businesses and so forth. So we have actually made a major turnaround of the Swedish business. So when I look into the 2026, assuming we'll have a somewhat more normal winter activities and that the market is actually slightly improving in Norway, sorry, Sweden, That leads me to believe that, yes, I'm actually quite positive on the development of the margin in Sweden for 2026. And I probably have to eat up my hat because of that remark, but that's how I look upon it. I see that the market is recovering. I assume we will have more normal winter activities and we don't have the burden of the companies who are losing money. I'm positive to what's going to happen in Sweden for next year.

That's encouraging. And then maybe just on Sweden in Q4, again, it seems quite muted. And if I remember correctly, you had sort of one offset weren't disclosed, but I think we're around maybe 20 million in in Sweden in terms of credit losses and write-downs. Don't you see the positive effect on that in Q4? Or do you see sort of an organic drag offsetting that?

I really don't understand the question. Can you clarify it for me?

Yeah, sorry. So in terms of the Q4 performance last year in Sweden, I think you had a some one-offs of maybe 20 million. And then you're guided for a sort of muted performance here in Q4 in Sweden. So just wondering if you see a continued organic drag here in Q4.

Yeah, we had a few one-off items in Q4 last year, Alexander. As you mentioned, it was a credit loss in terms of 5 million and then also product-related right down roughly 5 million. On top of that, we now see that we still will be affected by these activities that we close down these loss-making businesses that we will go clear out from with the the end of this year, so we still have some losses to absorb from those ones. But in terms of that, we see that the organic growth will sequentially improve during Q4 compared to Q3.

Okay. And have you done any sort of major exits here in Sweden during this quarter that will affect Q4 negatively?

not impact negatively from that perspective, as you mentioned it, but of course, these businesses that we decided to close down due to their position and that they were loss-making, we have absorbed that during the year, and that is one of the effects U1 refers to when we look into 2026 that will positively contribute The effect in Q4 will be compared to last year, minor, but then we will have the positive in 2026.

Okay, that's clear. And maybe then a last one from my side, just looking at the order book, I think it was down 7% here. Can you share some color on that? And what's driving that decrease and how should we look upon it?

Yeah, the sequential decrease of the order backlog is mainly related to Norway. So even if we say that we don't use the order backlog as a short-term leading indicator, it confirms that the market descriptions that we tell you here in the call reflects also how the development of the order backlog has been in the quarter. And it's fairly stable in all regions, except that we are minorly down in Sweden, and the residual adjustment is actually in Norway.

Okay, that's very helpful. That's it for me. Thanks. Thank you, Alexander.

The next question comes from Carl Johan Bonnevir from DNB Carnegie. Please go ahead.

Yes, good afternoon, Johan and Magnus. Thank you for all the additional color already given. And just to pick your brain a little, Johan, on the Norwegian development further, you've obviously gone through what I would call a little more of a surgical procedure to get Sweden to becoming a positive outlook into 2026. Do you feel that there's a need for doing something similar in Norway?

Hello, Carl-Johan, and thank you very much for the question to begin with. The starting point of Sweden is, to a large extent, the legacy units of what was Green Landscaping at the time and also Svensk Magistratis. And those two entities had a combined revenue of roughly 1.6, 1.7 billion SEK. And at the time, they were loss-making entities. And we have been spending a long time uh getting those companies into shape and finally we're actually seeing that those companies are starting to perform in a very good way so i think that's that the starting points it's a long history of how those companies were centralized and then became decentralized and then we added companies by acquisitions to it and that was early on and perhaps we did acquire one or two companies that we shouldn't have done in the beginning of our uh let's say, consolidation journey or roll-up journey. Norway is, from that perspective, totally different. Norway was, even though early on in our acquisition strategy, so to say, that we started to buy companies we had actually acquired, I don't know how many, but at least 10 companies or 15 companies before we actually entered into Norway. So we were in a much better shape in terms of what were we looking for, in terms of type of companies, how do we take care of the companies? And I would say that the quality of the companies, now my Swedish colleague's gonna be quite mad, but the quality of the companies that we have in Norway had a totally different starting point. So we have quality companies in Norway, so the deep-rooted difficulties that we have had in Sweden, that we do not have in Norway. So right now, the situation in Norway in the quality of the company or the companies as we have, these are well-run entities with very good entrepreneurs who are actually doing whatever they can to perform in a very tough market situation. So from that perspective, I don't see us having to do that type of work as you are referring to. where we have to be a little more heavy handed. If you understand what we did in Sweden, there's no need of doing that in Norway because we are managing the companies, even though it's a tough market in a good way. And I do expect our entrepreneurs in Norway that as the market returns and become more healthy, we will actually see significant improvements going back to the old performance I had in Norway. So I think the starting points are quite different. So there's no need to do the same type of, let's use the word, heavy-handed as we did in Sweden. We have a much better starting point in Norway than we had in Sweden.

It makes total sense. It makes total sense. And on that subject, I guess that makes you more positive towards the local management teams in Norway, maybe chasing volumes at lower price points to keep market positions at this stage, to basically hard-urbanating until the market recovers. Is that a good way of looking at it?

I think you can look upon it from two ways. What I clearly see in Sweden is that there is, given the history we have, a very high focus on cash flow and profit margin in order to increase that in Sweden. Then I think several of our Swedish entities are focusing on cash flow and profit margins and not so much on the revenue side, while our colleagues in Norway are coming from a position where they have high profit margins and a high revenue. And then, of course, when the market becomes difficult, they are winning contracts at slower margin. Do I think that's a good strategy? I think it's to some extent okay, but there's a danger to it because you're actually adding risk to it as you are lowering the margins. And the key question is that if you have lowered your margins, you have to make quite certain that when the market recovers, that you're actually recovering your margins and not the revenue. So you're not getting used to, if you take a company who has gone from 15 to 7% profit margin in order to win the contracts, and all of a sudden when the market recovers, should they keep the 7% or are they happy at 10? No, we have to move back to the 15 where we're coming from. So I think that would be the challenge in Norway as the market is going to recover. then we have to be quite focused on recovering the margin that we had before in Norway. There's no doubt in my mind that the majority of the entrepreneurs are quite aware of this, and they would execute accordingly. But there will be a lag, that's my experience in a way, that you will see that the market is recovering, you will see that the revenue is recovering, and then you will see that the profit margins will take a little bit longer time before they recover and come back to where they were. So, but we are aware of the situation. We are in communication with them. We have a heavy focus from the operational team in Norway. So they're spending a lot of time with our, they're actually spending more time in Norway these days than they do in Sweden. So from that perspective, we are focusing on that subject. So as soon as the market gonna recover, then of course we're gonna recover the profit margin as well. So that's my take on it.

Sounds logical, sounds logical, and it's going to be an interesting journey to follow. On the back of short-term demand opportunities in Norway, you had a hope earlier in the year that maybe the low snow removal volumes would allow budgets to be replenished maybe in other parts of your business coming up to the end of the year. Have you seen any of those kind of projects, or is that a hope that we shouldn't put much into at this stage? uh sorry to say i would be careful doing that given the market conditions sounds logical and one final from me looking at uh you're keeping the uh the acquisition kind of uh of of uh arranged for 50 to 80 million in contribution and avatar for for the full year i guess that's the speed for the speed of it Looking at what has happened here so far in this year, have you held back on transaction for some reason, maybe out of the cash flow perspective, financial leverage, and getting the new credit lines in order, and maybe even having bigger opportunities in those credit lines to do acquisitions on top of the gearing level you have at this stage? Or have you, say, in the transaction you've been involved in or looked at, been outbid by somebody else or any change in the dynamics on that side?

No, I think that, to be honest here, the major competitors are not in a position to do any acquisitions at this point in time. We are actually one of the few companies who continues to acquire at this point in time. So anything as equal, I would say that we are in a good position on doing it. I'm not happy with the leverage. That is too high. So that one needs to come down. But it will come down organically. But I will also have the capacity to do investments. So we are not holding back. However, given the situation where the market is tough and there's less competition because there is less competition on the acquisition side, we are really not holding back. We have a plan on how much we should acquire and what type of companies we should acquire. And in terms of the quality, I think we are actually increasing the quality of the companies that we choose to invest in. So in anything else, we're becoming more picky in this market situation. And that actually means that we are buying more quality companies, the price situation or the price competitiveness. If I go back three, four years in time, we were outbid by 50 to 100%. And those days are gone. So now, if anything else, I'm not saying you won't see a significant decrease in prices, but the competition in terms of acquiring companies are actually lower today than it was a couple of years ago, or significantly lower, I would like to say. And the quality have gone up and we're paying approximately the same amount of money as we did in those days. So we are managing the depth level quite carefully or the leverage quite carefully. And we have a well developed pipeline. We never have had such a good pipeline of companies as we have today. So we are having a plan and we are actually executing very close to our plan. So that perspective of the business works very well for us.

Sounds very good. You are summing it up very well, Johan. And good luck on executing it out there and all the best.

Perfect.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Okay. So thank you, everybody, for listening in. And thank you for the questions that we did receive during this call. And by that, it concludes the presentation. Thank you. Thank you all.