Hi, and welcome back to ABG Investor Days. My name is Julia Sundvall, and I'm an analyst here at ABG. With me here today, I have Marcus Holmström, CFO of Green Landscaping Group. We will start with a short presentation, followed by a Q&A. Please go ahead. Thank you, Julia. Warm welcome, everyone in the room and also online today, to this presentation. Before I jump in to present what Green Landscaping is all about, a brief introduction: who I am. I've been the CFO of Green Landscaping Group since December last year. I started my professional career as an auditor at Ernst & Young, where I focused on global and publicly traded companies. Following my tenure at EY, I joined AFRY, an engineering consultancy company, where I've held several leading finance positions over the past 10 years, latest as Head of Corporate Control and Investor Relations. I also served as divisional CFO, overseeing a division with SEK 7 billion in sales and 4,000 employees. I'm here today to present Green Landscaping, as said, where I'm CFO and have been having that privilege since December last year. What is Green Landscaping all about? It's a home of entrepreneurs. We are a company that provides landscaping services in our cities. An example of services that we provide are snow removal, tree pruning, empty bins in the cities are an example of what we do. We also design, plan, and execute public areas in our cities, such as playgrounds, market squares, and also parks. In other words, we are dedicated to support our local communities in making the cities better, greener, and more livable. Today, we're very pleased that we have a group with SEK 7 billion in sales, and we have industry-leading profitability, and we are just getting started. An investment in green, then. What does that mean? That means that you would invest in a well-managed company that operates in a very attractive market. We have built it based on a fit-for-purpose business model, and we boost our growth and value creation through a proven M&A strategy. Let me talk more about these three different areas. Our business model is that we operate in a decentralized world. Being an entrepreneur is a central concept for us at Green Landscaping Group. We have about 56 different entities inside the group operating in six different countries: Sweden, Norway, Finland, Lithuania, Germany, and Switzerland. Almost all of these operate under their own local brands. Just imagine having 56 very well-educated, knowledgeable, and motivated entrepreneurs working hard five, six, seven days a week, providing the end result for our customers. That is the situation we are in, and we are very proud of it. With this mindset, the company also—we can act agile, make quick decisions, and stay flexible to secure the profitability level that we're operating on today. We are a decentralized organization, but we're also taking the benefits of the knowledge we possess within the group. We have the best entrepreneurs, the best companies in our industry. As always, we strive to become better. As you can see on the slide here, we transparently show the profitability level and size of all our subsidiaries within the group. The vast majority of them exceeds the industry average profitability. We know that we can continue to improve all of these ones to even get better. We launched the project back in 2023 in order for us to really take benefit of the competence that we possess in the group, where we have investigated and looked into the building blocks of our company so we can share knowledge in a much better manner than we've done in the past. This knowledge sharing will drive improved profitability for us going forward, and it's not only focusing on daily efficient measures, it's also about the strategy going forward. Our ability to rapidly improve companies is a crucial part of what we do within the group. You will, in the later slides, see how the profitability has improved over the years. M&A is a central task we do at the group. As said, we use it in order to accelerate our growth and value creation for our shareholders. We have today 56 groups. We did our latest acquisition last week in Germany. We are aiming to complete around 10 acquisitions each year. As we grow bigger, this target will also increase over time. Since we are operating in six different regions, we have a very big pool to choose out from. When sourcing new companies, we have a list of roughly 50 criteria that we go through in order to look at the company's performance. The most crucial one for us is the financial performance. Why is that so important? That's because we are looking for companies that are stable, that do not deliver too high organic growth, that have a stability in their profitability, or actually improving profitability at a steady pace. We like stability in the company. The sweet spot company we're looking for is around SEK 100 million in sales and 10% EBITDA. It is not only about the financial performance. Since we are a group, as said, of 56 entrepreneurs, we are also looking a lot into the culture and who is leading the company that we are looking into. Because this leader will be part of clusters within our group, and they need to coexist on the same market. Having great people inside the company is a true asset for us. From a transactional point of view, when we do our acquisition, we stick to this disciplined approach, and we pay around five-six times EBITDA level for the targets. As said, the goal for each year is roughly around 8-10 transactions per year, while considering our capacity constraints. When we refer to capacity constraints, it's not only what our cash flow allows, but we are also looking into our ability to onboard these companies to our structure, as well as making sure that we have capacity to do the M&A deals. The market that we're operating in is a very large market. When we look at it from the six geographies I referred to previously, we assess it to be SEK 350 billion in annual sales, and it has steadily been growing with 4% over the last years, over a long period of time. Around 65% of our sales come from government and municipality contracts, which gives us strong predictability and financial stability. Our business is low in cyclicality, so we're not heavily affected by economic down and up turns. We are working with long-term contracts, and typically they run for four years or with an option to extend for two additional years. As a base, we benefit from megatrends with urbanization as a key driver. As more people are moving to the cities, the demand for our services increases, but we are also assisting our customers in coping with effects of climate change, where we are part of the solution. The slide I referred to previously in the presentation, our financial performance over time. The group was established back in 2009, and we have grown through strategic acquisitions since. Early on the journey, we were struggling with the profitability. Our current CEO, Johan Nordström, joined back in 2015, and since then we have tenfolded in sales and improved our margin at the same time. We have actually, for the past three years, exceeded our financial target of 8% EBITDA level. The improvement in our margin is, of course, a result of our hard work, but built on the decentralized organization and disciplined M&A agenda. Not only looking at top line and bottom line, we have a very stable cash flow generation. It has grown over time as our profitability has grown, but we are, in general, a light asset business, and we are tying very limited capital to the business we do. We have strong predictability in the operating cash flow, which allows us to be flexible when it comes to M&A, and it is easy for us to maneuver our leverage position, which is one of our financial targets that we monitor. Going to the financial target, financial leverage, we are currently at 2.6, and we have, as you see on the graph, been on this level stable over time. That is the level we deem to be healthy to create the maximum shareholder value. It gives us also good headroom in our financial covenant, in our debt loan agreements with the banks. If steady state would mean that we would deliver from these levels through operating cash flow. Before I conclude the presentation, I will focus a bit on the Q1 performance as we just released it a few weeks back. In Q1, we faced mild winter conditions, the mildest winter conditions we have seen over the past 15 years. Snowfall impacts when we have a limited amount of snowfalls in Q1, that impacts our financial performance. Sales were down 12%, and margins were cut roughly in half, ending up at 3.2%. Being an outdoor company, of course, we're affected by the weather, but that's specifically tied to Q1 performance. With the condition we faced this year, we're of course not pleased with the result that we delivered, but zooming out and comparing it to the conditions that were similar to these ones back in 2020, then the group made losses and today we generated profit, but I will come back to that as well. We're pleased to see that the cash flow generation continues to be stable with a rolling 12-month cash flow at SEK 532 million. Digging a bit into the snowfall and just making it a bit clear what I refer to when we say we're happy that we're doing better back than 2020, but not saying that we're pleased with the outcome of Q1. Back in 2020, how our business works, of course, we're dependent on how much the total amount of snowfall comes. We tend to earn our most profitable contracts when we have a great amount of snowfall. We're looking at when we have days with snowfall exceeding 5 centimeters, then we are in a good position in Q1. This year, we were significantly below the previous years, and we are on average similar to 2020. As I said, at that point, we made losses of SEK 90 million, and today we did a profit of SEK 40 million in the quarter. The group has grown, but it's significantly due to improvements we can see in segment Sweden that were action that was put into force back in 2020. Sorry. Of course, I want also to emphasize that in light of climate change, we see that these conditions will be more common going forward. From a standpoint of view of Green Landscaping Group, that's beneficial for us because that will extend the season for traditional landscaping and ground maintenance services, which are very profitable for us in the traditional season. The winter becomes shorter is not really something that is negative for us in the long run, even if it's not good for the climate. Concluding slide from my end, our financial targets. We have a target to deliver 10% growth each year. We fell short on it last year. We had 9% in total growth adjusted for currency fix. We were at 10%. It was a result of that we put a bit on the M&A agenda on breaks back in 2023 when the inflation raised and so did the interest rates. We were more cautious towards M&A at that point. When we felt that we got the signals that we could keep the profitability level on the levels that we saw, we continued to execute the M&A agenda. We started to execute on M&As back in the end of 2023 and continue throughout 2024. We expect that this should continue to be above financial targets going forward. On a margin perspective, we're very pleased to see that we achieved our financial target for the third consecutive year. We're of course not in relative terms seeing the margin decline compared to 2023 as a positive thing, but have in mind that we faced larger market headwinds back in 2024 than in 2023. We're getting signals about the market being a bit as we saw in 2024, and hopefully it will shift at the end of year and going into 2026. From a capital allocation point of view, we have maneuvered our leverage being around 2.5 over time, which we, as said, deem to be the level we should be at in order to create the best shareholder value. All in all, as I said, we are a well-managed company operating in a very attractive market. We have 56 really good entrepreneurs doing the work every day, and we are growing with industry-leading profitability. We are on a good path to realize our vision to become The European Leader. With that said, I will open up for questions. T hank you. I would like to start on the M&A. You announced your first acquisition of the year last week. Going forward, how does the pipeline look? Good question, and we were very pleased to tick off the first acquisition this year last week, the Wagner in Berlin. We stick to the target that we set out in the beginning of the year, and that reflects in the pipeline that we should be able to achieve 8-10 acquisitions this year. From a focus point of view, us entering in the German market two years back, that is where we see that we are putting most focus on currently. Yeah, perfect. The market, one of your strengths is that you have a very stable market with around 4% CAGR. How do you see the market evolving in the coming five to seven years? I really like that question because when we see it, we see that it will continue as is. Stability is something that we value in this situation that we, despite everything going on and with geopolitical turmoil and so on, we do not see any direct effect on us. Of course, there are indirect effects. The capital allocation to our customers seems to not be impacted by it. If we stand here, I see the market to continue on the path it is growing with 4%. Yeah, perfect. Do you see any changes in customer behavior? You have a large part of public customers. Do you see any changes in if it's maintenance or landscaping or what do you see? We don't see any major shift to the customer's behavior. We have ever seen, and we have seen since the middle of 2023, an increased competition in the landscaping market. I think that's a result of the construction market being weak as it's been. We have had for a time increased competition for players in that segment, but we don't see them to be long-term in our industry. When their own market picks up, that situation will improve. Yeah. The order book was flat Q1 to Q4. Do you see any trend or difference between countries or any segments? The order book itself has been quite stable when we're looking at all the regions. Of course, it tends to fluctuate between quarters. We also highlight that when we disclose it, you should not draw any short-term conclusion based on the fluctuation sequentially. Over time, it should be stable and growing. Of course, it was a bit down in Q4 and was stable in Q1. Yeah, it is good. Perfect. Talk a little bit about the competition. How is the competition? How has it developed? Do you see any trends that have become permanent? No trends that have become permanent, but we still see the players I referred to that they are still bidding for the bids we are bidding. Of course, we have learned to live with it. It is not that we see any significant change in our ability to win projects, but they are there and impacting the competition. We still deem it to be short-term. Yeah, perfect. As you said, you recently released your Q1 report, highlighted a stable market overall, some challenges in Norway, good performance in Sweden, and good activity in the rest of Europe. In Sweden, there has been a couple of challenging years, partly due to a project that is now terminated and a tough market. You have made some changes here. What changes have you made and what kind of effect does it have? Yes, also a good question. We saw already back in last year that we did not get the effect that we wanted after that contract was terminated, and it was specifically visible in Q4. Actions were thereby addressed, and examples of those are that we changed the leadership in some of the subsidiaries, but we also put in actions into force of looking at what type of projects are they addressing, how can we drive efficiency measuring their daily execution based on the knowledge that we share within the group. We have also made the tough decision of discontinuing a few of the operations that we do not deem we will get back to the levels that we expect. That will be visible during this year. We see that now the Q1 was affected by the winter, but the underlying performance, we see that we followed the plan we set out, and we should see incremental improvement during the year. Yeah. On Norway, as you say, it was a weak quarter, but you have both snow removal businesses in both Sweden and Norway. Both of them lost about 20% organic growth, but Sweden had much more stable margins. How is the difference? Yeah, that's also a good question. To frame it, the portfolio of companies is a bit different in Norway than you compare to Sweden. We have very profitable snow removal contracts in Norway. If we zoom out over time, we want to keep them in a few of the subsidiaries. We were not at all happy with the general outcome of Norway. We should have been able, specifically in the other companies, drawing the advantage of the mild winter conditions. We are addressing the cost base similar to what we did in Sweden, making it more flexible, but also looking in how can we plan better for this type of condition. We expect to see improvements with these conditions when it occurs next time. Perfect. Looking forward this year, does the early spring, does it affect the rest of the year? They are somehow interlinked a bit that depending on how our customers spend their budgets. If the mild winter, then our customer tends to save in their budgets. Traditionally, we have seen that they tend to spend this in the end of the year. We expect and we should be first on those money at the end of the year when they wrap up their budgets. When it comes to spring, of course, we come in some regions, we start the landscaping activities earlier than we've done before. In general, that should be positive. Great. A strong Q2 and Q4 then. Thank you for being here today. Thank you.