<a id="bm-comp-0afd12ff-a6ec-41aa-ad39-3f02cd1465fa" name="bm-comp-0afd12ff-a6ec-41aa-ad39-3f02cd1465fa" class="BMCustomAnchor"></a><table><tr><td bm-component-id="0afd12ff-a6ec-41aa-ad39-3f02cd1465fa" style="vertical-align: top; width:100.000000%;"><ul><li>CMD: Solid M&amp;A runway, improved underlying profitability</li><li>Increased confidence in &gt;15% growth potential</li><li>11-9x EBITA '24e-'26e, 5-10% FCF yields</li></ul></td></tr></table><a id="bm-comp-b0f34d15-cc20-4d63-bea0-4c0837d5cd4e" name="bm-comp-b0f34d15-cc20-4d63-bea0-4c0837d5cd4e" class="BMCustomAnchor"></a><table><tr><td bm-component-id="b0f34d15-cc20-4d63-bea0-4c0837d5cd4e" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Informative on the future M&amp;A runway</h3><p>Green Landscaping held its first CMD yesterday. The event did not include any new financial targets (10% sales growth vs. ABGSCe/cons 7% CAGR '23-'26e, 8% EBITA margin vs. ABGSCe 8.8-9.1%, cons 8.7-9.3% '24e-'26e), where we had hoped for somewhat higher margin ambitions given Green's continued focus on acquiring &gt;10% margin companies in combination with improving profitability in underlying units. We had also hoped for a quantified target on return on capital, considering the group's improving ROCE (13-15%) and cash conversion (FCF ~95% of net profit '19-'24e). Overall, the event was largely informative, where focus was on M&amp;A, and GLG's ambition to become a European leader in 3-5 years. On the German market, GLG continued to see good momentum, even if we assume a normalisation in margins (we have ~14-13% '25e-'26e vs. 23-18% in '23-'24e). In addition, GLG reiterated its ambition of acquiring 8-10 companies p.a., and to accelerate this to &gt;20 per year in the next 2-3 years. Considering management's increased focus on quality, and that multiples remain disciplined, we believe this supports our view that GLG can deliver &gt;15% earnings growth. We currently forecast a 7% EBITA CAGR '23-'26e vs. cons at 9%, excluding unannounced M&amp;A.</p><h3 class="bm-h3">Internal efforts to gradually show in earnings</h3><p>We find two aspects as especially encouraging. First, GLG showed that legacy businesses had continuously improved margins from ~1% in 2018 to ~5% in 2023, which supports our own analysis of the underlying units, and that this should support a continued uplift in group margins and positive organic earnings growth. Second, GLG claimed that IRR on M&amp;A was c. 20% as normalised EV/EBIT multiples remained at 4-6x, which should support a continued improvement from the current group ROCE of 13-15% '24e-'26e to above 15%, even when considering a future high M&amp;A pace. Finally, we also appreciate GLG's added transparency on the performance of acquired units post-acquisition, which we have highlighted in our previous reports. According to GLG, acquired units tend to see an initial margin decline post-acquisition, but deliver solid earnings growth from year 3 and onwards, which should also support an improving organic earnings trend in future years.</p><h3 class="bm-h3">Defensive organic growth, high M&amp;A pace, solid margins</h3><p>To conclude, we find today's CMD as largely informative with fairly little impact on near-term estimates and relatively neutral to the share. However, we find the added information on increased efforts to encourage cross-company collaboration, drive internal improvements, and ROCE-accretive acquisitions as supportive to the investment case. We like GLG's position to grow organically (historically 4-5% p.a.) in steadily growing markets with a high exposure to public customers, with continued upside potential to margins and M&amp;A. For '23-'26e, we expect GLG to deliver growth, margins, ROCE and FCF fairly in line with peers, while the share (11-9x EBITA '24e-'26e, 5-10% FCF yields) is currently trading roughly in line with key peers (FG, INSTAL, NORVA) on '25e-'26e EBITA.</p></td></tr></table><a id="bm-comp-5627a50c-91aa-48a7-b6ad-7bb40a03ba7e" name="bm-comp-5627a50c-91aa-48a7-b6ad-7bb40a03ba7e" class="BMCustomAnchor"></a><a id="bm-comp-f9339d4c-2de9-451d-8b41-0ffd37a6dd26" name="bm-comp-f9339d4c-2de9-451d-8b41-0ffd37a6dd26" class="BMCustomAnchor"></a><table><tr><td bm-component-id="5627a50c-91aa-48a7-b6ad-7bb40a03ba7e" style="vertical-align: top; width:50.000000%;"><table id="bm-img-82228764-6ec8-4ca2-9872-8467f3020cdb" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">Group sales and adj. earnings*</td></tr><tr><td><img bm-img-encrypt="82228764-6ec8-4ca2-9872-8467f3020cdb" bm-img-original-height="471" bm-img-original-width="792" bm-img-svg="image:image_upload/83648_1bd2bf9d-be39-4b83-a2b4-b384890c05f3.svg" bm-img-width-hint="100%" id="bm-id-82228764-6ec8-4ca2-9872-8467f3020cdb" src="https://abgsc.bluematrix.com/images/image_upload/83648_1bd2bf9d-be39-4b83-a2b4-b384890c05f3_733.png" svg="/nas/web/clients/abgsc/images/image_upload/83648_1bd2bf9d-be39-4b83-a2b4-b384890c05f3.svg" width="363" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier, company data, *ABGSCe adj. for acq and IPO cost</td></tr></table></td><td bm-component-id="f9339d4c-2de9-451d-8b41-0ffd37a6dd26" style="vertical-align: top; width:50.000000%;"><table id="bm-img-10dee711-b60a-4f48-8a48-ece8b1141ede" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">Sales split per region</td></tr><tr><td><img bm-img-encrypt="10dee711-b60a-4f48-8a48-ece8b1141ede" bm-img-original-height="640" bm-img-original-width="1065" bm-img-svg="image:image_upload/83648_156c57cc-b55d-4fbe-a3f7-cd23866d4a3d.svg" bm-img-width-hint="100%" id="bm-id-10dee711-b60a-4f48-8a48-ece8b1141ede" src="https://abgsc.bluematrix.com/images/image_upload/83648_156c57cc-b55d-4fbe-a3f7-cd23866d4a3d_733.png" svg="/nas/web/clients/abgsc/images/image_upload/83648_156c57cc-b55d-4fbe-a3f7-cd23866d4a3d.svg" width="363" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier, company data</td></tr></table></td></tr></table><a id="bm-comp-d816f9f8-7c40-42d8-8673-3502f5eef1c2" name="bm-comp-d816f9f8-7c40-42d8-8673-3502f5eef1c2" class="BMCustomAnchor"></a><a id="bm-comp-8fd032b6-e063-462b-aaee-a0aa94cb6c8e" name="bm-comp-8fd032b6-e063-462b-aaee-a0aa94cb6c8e" class="BMCustomAnchor"></a><table><tr><td bm-component-id="d816f9f8-7c40-42d8-8673-3502f5eef1c2" style="vertical-align: top; width:50.000000%;"><table id="bm-img-1831c4ef-2e5e-4833-b2d2-1f12376bfc2d" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">Margin by region</td></tr><tr><td><img bm-img-encrypt="1831c4ef-2e5e-4833-b2d2-1f12376bfc2d" bm-img-original-height="668" bm-img-original-width="1121" bm-img-svg="image:image_upload/83648_a51c0167-4b42-492d-b013-f1d78bfaca4c.svg" bm-img-width-hint="100%" id="bm-id-1831c4ef-2e5e-4833-b2d2-1f12376bfc2d" src="https://abgsc.bluematrix.com/images/image_upload/83648_a51c0167-4b42-492d-b013-f1d78bfaca4c_733.png" svg="/nas/web/clients/abgsc/images/image_upload/83648_a51c0167-4b42-492d-b013-f1d78bfaca4c.svg" width="363" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier, company data</td></tr></table></td><td bm-component-id="8fd032b6-e063-462b-aaee-a0aa94cb6c8e" style="vertical-align: top; width:50.000000%;"><table id="bm-img-6409ca7c-3005-4a6c-a6a0-f88780e0443f" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">Gearing, working capital and ROCE</td></tr><tr><td><img bm-img-encrypt="6409ca7c-3005-4a6c-a6a0-f88780e0443f" bm-img-original-height="472" bm-img-original-width="792" bm-img-svg="image:image_upload/83648_837f7dfc-8d9f-49c5-9b9f-a87f36399abf.svg" bm-img-width-hint="100%" id="bm-id-6409ca7c-3005-4a6c-a6a0-f88780e0443f" src="https://abgsc.bluematrix.com/images/image_upload/83648_837f7dfc-8d9f-49c5-9b9f-a87f36399abf_733.png" svg="/nas/web/clients/abgsc/images/image_upload/83648_837f7dfc-8d9f-49c5-9b9f-a87f36399abf.svg" width="363" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier, company data</td></tr></table></td></tr></table><a id="bm-comp-332e6314-d310-4e5e-92d3-5b73ccb684b1" name="bm-comp-332e6314-d310-4e5e-92d3-5b73ccb684b1" class="BMCustomAnchor"></a><a id="bm-comp-0d6ba6c6-ce6d-496c-83bc-f84301be44b4" name="bm-comp-0d6ba6c6-ce6d-496c-83bc-f84301be44b4" class="BMCustomAnchor"></a><table><tr><td bm-component-id="332e6314-d310-4e5e-92d3-5b73ccb684b1" style="vertical-align: top; width:50.000000%;"><table id="bm-img-d91cac15-a23d-4918-a611-924c0755d8e4" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">ABGSC M&amp;A scenario valuation</td></tr><tr><td><img bm-img-encrypt="d91cac15-a23d-4918-a611-924c0755d8e4" bm-img-original-height="469" bm-img-original-width="814" bm-img-svg="image:image_upload/83648_288ffd13-3757-48c0-8e0c-0b89cd50b3e7.svg" bm-img-width-hint="100%" id="bm-id-d91cac15-a23d-4918-a611-924c0755d8e4" src="https://abgsc.bluematrix.com/images/image_upload/83648_288ffd13-3757-48c0-8e0c-0b89cd50b3e7_733.png" svg="/nas/web/clients/abgsc/images/image_upload/83648_288ffd13-3757-48c0-8e0c-0b89cd50b3e7.svg" width="363" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier, company data</td></tr></table></td><td bm-component-id="0d6ba6c6-ce6d-496c-83bc-f84301be44b4" style="vertical-align: top; width:50.000000%;"><table id="bm-img-b32c7e8e-4fc7-4029-bea6-8bdea6a7566a" class="bm-img-table xslt-img-empty xslt-img-include"><tr><td class="xslt-img-caption">F12m EV/EBITA vs. peers</td></tr><tr><td><img bm-img-encrypt="b32c7e8e-4fc7-4029-bea6-8bdea6a7566a" bm-img-original-height="468" bm-img-original-width="814" bm-img-svg="image:image_upload/83648_f16d8a90-a61a-4ed5-8983-997764f4363c.svg" bm-img-width-hint="100%" id="bm-id-b32c7e8e-4fc7-4029-bea6-8bdea6a7566a" src="https://abgsc.bluematrix.com/images/image_upload/83648_f16d8a90-a61a-4ed5-8983-997764f4363c_733.png" svg="/nas/web/clients/abgsc/images/image_upload/83648_f16d8a90-a61a-4ed5-8983-997764f4363c.svg" width="363" alt="" title="" /></td></tr><tr><td class="xslt-img-source">Source: ABG Sundal Collier, FactSet</td></tr></table></td></tr></table>