5% org. sales growth, 7% adj. EBITA growth, neg. cash flow
'24e-'26e adj. EBITA down 5-2%; 7% CAGR '23-'26e
13-10x EBITA '24e-'26e, 5-9% FCF yields
Positive growth held back by soft cash flow
Despite the challenging landscaping market (high competition), Green Landscaping continued to see solid demand (1% backlog growth q-o-q) and maintained its positive organic growth momentum, with organic sales growth of 5% (ABGSCe -3%, FactSet cons. 0%, +8% Q1'24). Although adj. EBITA growth was slightly below our expectations (+7% vs. ABGSCe/cons 11%), organic earnings were resilient at -2% (ABGSCe -4%). We expect Green to maintain its resilient top line into H2'24 and deliver 0-2% organic sales growth, with a similar margin decline y-o-y as in H1'24, which yields 3-4% adj. EBITA growth. Cash flow was soft in Q2 due to the timing of payments, and will likely remain seasonally low in Q3, but we expect a strong Q4 to yield a YE'24 ND/EBITDA of 2.7x. This in turn should support >10% earnings growth potential from 2025.