Thank you very much, Evelina, and welcome to our Q3 of 2020 report. As mentioned, my name is Johan Nordström, with me here today is our CFO, Carl-Fredrik Meijer. Then I suggest we dive into the report. Next slide, please. Just a brief information about Green Landscaping. Green Landscaping today is the leading Nordic landscaping service provider, with a presence in Sweden with 24 entities and in Norway with three entities. The way we operate in terms of our structure, it's a highly decentralized structure, meaning that we're close to the customers on a local basis, and we have localized decision-making. We depend heavily on the decentralization idea. We have a very diversified contract portfolio with multi-year contracts, which gives us, I would say, a good visibility in terms of revenue and also profitability moving into the future.
We have an active, I would say, M&A agenda, and we have so far this year completed six acquisitions. I would say that we are growing quite nicely in terms of acquired growth. That in brief is Green Landscaping. Let's move on to next slide, please. That's our key financials for the last 12 months. Right now we are approaching SEK 2 billion in revenue. We have an EBITA of SEK 83 million. That gives us an EBITA margin of 4.2%. They have a very healthy backlog or the backlog close to SEK 4 billion. So far we have had an acquired sales amounting to SEK 420 million. As I mentioned, we have a very active M&A agenda. Then we move on to next slide, please.
That means we are moving into the Q3 highlights, and we are pleased to present a strong development in the quarter as sales is up as well as profitability. We have also, as I mentioned, acquired two more new companies. That means that we had or achieved SEK 551 million in sales for the quarter. We had an EBITA of SEK 40 million, and that gives us a healthy EBITA margin of 7.3%, which we are quite pleased with. The net sales growth were 12.1%, and that is also a healthy development. Organic growth was 0.5%. If we compare the organic growth with comparable entities as we removed one entity, loss-making entity in the beginning of the year.
If we adjust for that one, we had an organic growth of 3.5%, and that is pretty much in line with, I would say, a normal market growth development, excluding any effects of COVID-19. EBITA amounted to SEK 40 million, as I mentioned, compared to SEK 29 million last year, and that gives us a healthy increase of almost 40%. As mentioned, the EBITA margin was 7.3% compared to 5.9% a year ago. Cash flow was a negative SEK 30 million. The reasons why that one was negative are twofold. Firstly, there's a seasonality effect, meaning that we start up new projects in the , and that consumes cash for us. Also we have, during the course of the year, upgraded some of our IT infrastructure systems, and that means that we have had a delay in invoicing going out to the customers.
We are, of course, in the process of remedying that situation. We don't consider that being a major problem. Of course, it needs to be sorted out before the end of the year. Net debt amounted to SEK 7.7 million, and as also mentioned, that we have acquired two companies in the quarter, TH Anlegg and Hadeland, both in Norway, which we welcome to the group and are very happy to have as partners going forward. Next slide, please. Just a few words on the COVID-19 situation, that we are, as everybody, I would say, in the society, impacted by COVID-19 and its effect, and we take it very seriously. In terms of operation, how we manage the situation, I would say it works in a good way. Most of our work is done outdoors.
From that perspective, I think we are in a rather good situation, even though we have several activities inside the company to make sure that we do not spread the COVID-19 as we are trying to be cautious. In terms of customers and revenue, we see that the business is somewhat slow because of the absence of meetings, and that means when we can't meet with the customers, we can't get additional work, and we can't get the contracts done. It's not that it disappears or it's a major difficult to us, but it slows the whole process down when you can't have physical meetings. Everything takes a little bit longer. To some extent, we can see that it affects us, or we have a slight negative impact in terms of revenue and deal-making because of the COVID-19 situation.
We are talking about a couple of percentage here, not more. That's pretty much about the COVID-19 situation. Next slide, please. As we mentioned, we're growing by 12.1%, and we're quite happy with that growth. It's a high-growth company. Primarily, it's driven by acquisition, and that's a central part of our strategy. It works out nicely. 12% growth in this situation is a healthy sign, I would say. The organic, we mentioned that one, on 0.5%. We're still growing organically, but not as much as on the M&A side, where we're very active. Next slide, please.
Coming back to the growth here, not going back too much down in history here, but if we look upon the last 12 months, for the Q4 of year 2017, we were roughly at SEK 800-850 million in yearly revenue and have grown quite steadily ever since. We made one major acquisition in the Q4 of 2018, that was Svensk Markservice, and they had a revenue of about SEK 800 million with, I would say, a very low profitability. The growth ever since, up to the Q4 of 2019, is pretty much that Svensk Markservice came into the business. In the meantime, we have had some development on the profitability, but we spent, I would say, the large part of 2019 on integrating Svensk Markservice and improving the profitability on that company.
That's pretty much what we see in the picture here, that the profitability didn't change that much even though we incorporated SEK 800 million. Having Svensk Markservice as part of the group meant that we became the clear market leader in Sweden, and that's the platform that we built, and that's one of the reasons why we have been successful in Norway. That's because of the platform we were able to build in Sweden. Of course, as I believe everybody knows, we had a very mild winter in the Scandinavian countries in the Q4 of 2019, and in particular, the Q1 of this year. That's why we had some setback in terms of both revenue and, in particular, I would say, in profitability.
Right now we have the Q2 and the Q3 where we show very good progress in terms of both growing the company and, in particular, growing the profitability. We're kind of happy with the trend where we're heading at. I think that concludes this slide. Next slide, please. Okay. Order backlog. As you can see, it's up to almost 4 billion SEK, and it's up 27% compared to Q3 last year. The growth in the backlog is primarily driven by acquisitions, and in specific, it's Hadeland Maskindrift, which has large and long contracts. You can also mention that we do have a very large portfolio of contracts. It's thousands of contracts. Typical contract is three to five years with a few extension years. It's a strong development. Next slide, please.
On page nine, you can see example of one of the recent projects we've worked on. This time, we will mention a project by Tranemo Trädgårdstjänst. It's a quite large construction work. It's a warehouse for Nelly.com in Borås. This is an online retailer. This project is SEK 10 million plus in size, so this is a bit unusual, but it happens. This is to give a flavor of the type of work that TranemoTrädgårdstjänst performs and delivers. We can move on to next slide. On page 10, we show a second example of a recent project, this is our subsidiary, Jacksons Trädvård, launching a sub-brand called Ravenwood. This is created through demand from customers and skilled employees at Jacksons.
This is interesting because we managed to recycle or reuse dead wood and create these furniture, art projects, landmarks, meeting places for all park and forest lovers out there. This is also, you can mention, this is part of a circular business model where we reuse the material and create value. It's quite interesting. We've done a little bit more than five projects so far, and there's a strong interest and demand going forward. Next slide, please. This is the segment slide. We see a healthy performance, a healthy margin in four out of five segments.
As you can see, our biggest segment is Region West, which is 41% of sales in the quarter. Also, we have profitability of between 8% and 11% in four out of five regions, which we are quite happy about. Of course, we see that Region East is not in that league and is a mere 0.8% in profitability. This is, of course, being addressed. We can see progress in, I'd say, five out of six of the units, where one is not out of the woods yet and more actions are needed. You can also point out that Region Mid, of course, has a quite low margin year-to-date, but they were severely impacted by the mild winter during Q1. Moving on to next slide, page 12, financial position.
In terms of leverage, our net debt to EBITDA pro forma is 2.9, which means that there are room for continued acquisitions. In this quarter, we usually tie a lot of working capital. We did so last year, we did it this year, this, of course, impacts the cash flow in the quarter. We expect net debt to come down going forward. Cash flow from operations, as Johan mentioned, was minus SEK 13 million. On year-to-date, the cash flow is positive with SEK 76 million from operations. SEK 76 million. I'd like to mention we did a rights issue of SEK 150 million in the Q2 to be used for acquisitions, we have so far, year-to-date, used SEK 202 million for acquisitions. Next slide, please. Over to you.
Back again. Talking a little bit more about the acquisitions we have done. Far, we have done six acquisitions in this year, and they combined have a revenue of 500 million SEK. I would say it's quite substantial, both in terms of number, but in particular in terms of the revenue they bring with us. The companies that have joined the group, it's GAST Entreprenør who came in the Q1 in Norway. We have Park & Syd in the southern part of Sweden. We have TH Anlegg that came in in the Q2 , and then we have Hadeland who came in in the Q3, and then Bengtssons Trädgårdsanläggningar and Oveland, who came in after the closing of the Q3. Those are the six companies. Talking something about Park & Syd, which is a quality company.
They are based out of Helsingborg down south. It's a consultant company, meaning that they lead projects. They actually do physical work as well. In particular, they are focusing on landscaping architecture, design, and among the Swedish church is one of their big customers. It's not a super big company. They have an annual revenue of SEK 30 million and 13 employees. They have project capacities. They basically do anything from starting point of a project through the cost and the design phases and down into the execution part of it. They are a quality player, so we are happy to have them being a part of Svensk Markservice. At the same time, we acquired GAST Entreprenør in Norway, and they are headed by two gentlemen here, Lars Ola and Pål. We are quite happy with having them coming into the company.
They have, I would say, strongly been part of the success we have had in Norway, as they had a widespread contact network in Norway. They have a solid reputation. It was a good first move into that particular market. It was good to come in the market together with them. In terms of size, they had an annual revenue of SEK 85 million, and they are quite profitable. It was a very good addition having GAST coming into the group. Further on, we had TH Anlegg, a smaller company who worked together with GAST. They were well-known. They had discussions about them making one company, so to say, that was executed down the road. They are nowadays a part of GAST Entreprenør. Moving into the next slide here. We are at Hadeland Maskindrift. At Hadeland Maskindrift, it's a slightly bigger company.
They have an annual revenue of 200 million SEK. They are doing, I would say, street maintenance in the Oslo region. They have several contracts with the city of Oslo and municipalities of Hadeland. They basically do anything from snow removal during wintertime to pavement and refurbishment during the summertime. They are a service provider taking care of the roads in the regions, similar to what other companies do in green, but we do it on the green side. These guys are doing it on the road and maintaining the roads. We're quite happy having this company being part of Green Landscaping Group. Next slide, please. Moving on to the financial targets. We have a financial target of growing 10%. We are on track on the 10%. In the quarter, we are however growing by 6.7%, not a major difference there.
In terms of EBIT, we have a midterm goal of 8%. We are right now at 4.7%. We clearly have some more work to do there, even though for the last two quarters, we have shown that we are moving, I would say, quite rapidly towards our 8% target. The financial leverage, the goal is 2.5 times. We are right now at 2.9. As the company comes in and they are profitable, we expect this number to start to decline for the coming quarters moving into the future. We have a 40% dividend. So far we have not made any dividend as we are growing quite quickly, I would say, through acquisitions. It's a trade-off between the dividend and the growth rate we have. Right now we are focusing on growing the business in Sweden and growing the business in Norway.
Next slide, please. That brings us to the last slide here, that we are presenting a quarter with strong growth and a significant margin improvement and two more acquisitions. That means we are growing by 12%. We lifted the EBIT margin by 1.4 percentage, and in total, we have made six acquisitions year to date. We are quite happy with the performance here in the Q3. I think that concludes the report per se, and then we open up for questions.
Thank you. Ladies and gentlemen, if you do wish to ask a question, please press zero, one on your telephone keypad now. If you wish to withdraw your question, you may do so by pressing zero, two to cancel. That is zero, one to register for a question. We have a question from Dan Johansson from SEB. Please go ahead. Your line is open.
Hi, Johan and Carl-Fredrik Meijer. Dan from SEB. A couple of questions from my side. First question, is it possible to quantify the EBITDA impact from the close down of the unit within Region East, just to get a sense of the underlying margin in segment? Also, have you taken most of the costs now, or will there be a small impact also in the forthcoming quarters? Thanks.
Hi, Dan. Johan here. Can you please rephrase your question? I missed the first one there.
Yeah, sorry. I'll take it again. is it possible to quantify the profit impact from the close down of the underperforming unit within Region East? Just to get a sense of what the underlying margin is in this segment. Will it take some more costs related to this or in the coming quarters?
To start with the last question there. In the previous year, we have worked with adjusted EBITA, meaning that we have, so to say, adjusted for businesses that is not healthy or when we integrated quite heavily from Svensk Markservice. Then we made a decision saying that moving into 2020, we will not report adjusted numbers anymore. That means we will take any cost in conjunction over the result as they appear. We have not disclosed the cost per se. It's taken as a running cost, so to say, over the results. We are not disclosing that type of information.
Okay. Thank you.
Going forward, I think there's, as I mentioned, more work to be done. We see an improvement, but there is more work to be done.
Thank you. The second question, in terms of M&A, four out of your six acquisitions have been in Norway. Is it fair to assume that a majority of acquisitions going forward also will be in Norway? Do you still see good opportunities to do more also in Sweden?
Yes, I would say that that's fair to assume. The reason is really that we started out with GAST, and before we made that acquisition, we made the assumption that there would be the possibility of acquiring a couple of companies in Norway. We were very happy with the inroad we did in Norway, and I would say that we have a healthy list of companies that we are in discussions with in Norway on them being a part of the group. Yeah, there are a few companies we are in contacts with in Norway. Sweden is to some extent, we consider it to be mature in terms of that we have a good market position.
We have an ongoing dialogue with additional companies in Sweden. We assume it is hard to say a number, but I would say something like three, four companies a year going forward in Sweden, while we are in a peak situation where we build up the market in Norway. Eventually that will become a new home market. I believe that the frequency of acquisitions will normalize in Norway. At this point of time, I would say it is a fair assumption saying that yes, it will be a few more companies being acquired in Norway.
Interesting. Thank you. Another question on M&A, the latest acquisition of Oveland Utemiljø. The company is located in the south of Norway. Will you build further on that platform? Will this part of Norway, together with Oslo, be the focus area going forward, or do you see scope to expand to other parts of Norway as well?
Yes. We see that we will have one cluster of companies, if you like, in the Oslo region. If we are successful in adding other companies, which is the plan, in the southern part of Norway, which Oveland is located. Yes, the intention is to add a couple of more companies together with Oveland, so they will make a new cluster in that region south of Oslo.
Okay, thank you. One last question on the order intake. The COVID situation is obviously an obstacle in terms of meeting customers, but at the same time, your organic growth improved compared to Q2 and was 3.5% adjusted for the closure of the unit in Region East, which is, in my view, at least a quite solid number. Is it possible to gain some more flavor on the order intake in the quarter? Did it improve compared to Q2? Are you winning more businesses? What's your feeling about organic growth for the coming quarters?
We don't give forecasts in that perspective. As I said, the COVID situation is like a wet blanket on the business. I shouldn't overemphasize it, but it makes it harder to meet with customers, and typically we have to meet with the customers in order to gain business. As long as we have a situation where it's hard to meet, even though, of course, we meet through Microsoft Teams and other technical medias. There's an ongoing business, and the business is solid. It's a bit slow given that you can't have the physical meetings. We see that we have projects that are being pushed into the following year and so forth. We are not badly impacted by the COVID situation. We see that it's a bit difficult, yes.
The mainstay of our business is ground maintenance and smaller additional works, and that continues to a large extent, and hence the slow growth that we're seeing. I think it's worth to mention that we studied what happened during 2008, 2009, and 2012, where we saw that the growth rate, the market stopped growing. It didn't decline, but it stopped growing. Then the growth kind of started again afterwards. Maybe this is the situation again, we don't know.
Okay. Thank you, Johan and Carl-Fredrik. That was all my questions for now.
Thank you, Dan.
Thank you.
I remind you that if you want to ask a question, please press zero one on your telephone key now. We have a question from Fredrik Moregård from Pareto Securities. Please go ahead. Your line is open.
Thank you, and good morning, everyone. First of all, trying to bridge the EBITDA development in the quarter, is it possible to give some indication of how much acquisitions contributed?
Hi, Fredrik. Johan here. Do we disclose that information? I'm looking at Carl-Fredrik here.
You can see that in terms of profit, Region West is, of course, improving a lot. Of course, some of that is from our acquired businesses during the year. I think it's like we say, it's a mix of the synergies from Svensk Markservice, the kind of organic development in all our existing customers of becoming a little bit better every year, and of course, the acquisitions made. I think it's a mix of those.
It's fair to say that the development of the acquired companies are, on the average, positive. We're happy with the performance from each and one of the acquisitions we've done.
Okay, sure. Positive mix from acquisitions coming through in the margin then. Is it possible for you to quantify the government support that you've received, that you talk about in the report? What sort of impact has that had on your P&L?
It's very limited during the Q3.
Okay. Are we talking?
Do we have a number?
SEK 1 million or SEK 2 million, or even below that?
No. We have it in the range of a few SEK hundred thousands or something like that.
Okay. That's very encouraging. Obviously this far, you said you have had some negative impact from the pandemic with regards to discussions with customers and perhaps some hesitations from customers with regards to spending their budget and so on. Coming into the Q4 , where budgets are usually spent at the end of the year, is it possible that we could see some sort of catch-up effect here in Q4, or have there been, so to speak, mid-year budget cuts from your customers?
Given the discussions I have had with the CEOs for the entities, I would say that there are a few who have reported that there are budget cuts, and of course, that to some extent will have a bad impact on the revenue in the Q4, but it's a limited number. For the remainder, I would say it's more or less business as usual. They have their budgets. They are very tightly linked to the budgets. I would say, on the average, there won't be, to the best of my knowledge today, any significant change in the behavior from our customers. By that, we don't expect any atypical behavior in the Q4 .
Okay, sure.
There's a couple of customers where we know that there are budget cuts, and they are careful with spending the money, but it's a limited few reports we have had so far. Most of the customers we are in contact with are more or less business as usual in terms of the budget.
Okay, lastly from me, obviously you started to see negative impact from the mild winter in Q4 last year, and it got even heavier in Q1. Just thinking about Q4 this year, so far it's starting off quite mild. When do we need to start to see more of a normalized, if I dare use that term, winter in order for you guys to improve your Q4 results from last year?
I believe that we are working very actively on changing our business model. I cannot change the temperature. I wish I could, but we all have to accept that, okay, we have to prepare the company for mild winters going forward. When we plan the work in southern part, for instance, and we talk about budget internally, then we basically say that we don't calculate for any winter whatsoever. How does the company look like if we don't have any winter activities, and what can you do instead? That means that they are focusing on projects, landscaping projects, making sure that they have those orders and the relationship with the customers, that we have the capacity to execute that type of work. I would say that we are, in some cases, changing our business model.
In southern part of Sweden and also in the most western part of Sweden, that's the same type of discussion we have with entities over there. It's more complicated in, I would say, the central Sweden and the east of Sweden, because there we usually have winters. We have the large winter contracts. They are still, to some extent, exposed, even though we are changing. I do not see that there will be a material change for this winter in those entities. Also given the recent companies that have been part of the group, and this is by design that we have by purpose acquired companies who are more into landscaping services, and that means that if they don't have any winter, they actually have a good progress with the customers.
We're looking upon Gast, you look upon Bengtsson down south, and to some extent, actually Hadeland. Those are example of companies who have a good business if you don't have any winter effect whatsoever. It's a kind of a hedging we are doing there that if it comes a very strong winter, then we have contracts that would benefit from it, where we have other entities who will not perform as well. If I have a mild winter, we have new companies who have joined the group, and they will benefit from a mild winter compared to a year ago. Down south in the Gothenburg area and the new companies, those are the changes we have done to the business model.
Okay. It sounds to me like even if there is a very mild winter comparable to the last one, there should be good reason to see some sort of year-over-year improvement, at least.
That's the preparations we have done, and that's my expectation that that should be the case. We should not be as badly impacted this year as we were the previous year, given that we changed our business model and that we have brought a few companies into the group who are not that dependent on the winter.
Okay. Very good. Thank you.
Thank you.
There are no further audio questions registered. I hand back to the speakers.
Okay. We received a few questions here. I think we talked about the most of them. One is, you've acquired six companies this year, SEK 500 revenue, which is above your financial targets. Is this a new pace for the company? Do you want to answer that?
It's very hard saying it's a new pace. If we have good companies and good contacts with the companies who want to join the group, then we make a decision that that's the case we go for. In terms of the goal that we should grow by 10%, that's a goal that we communicated a couple of years ago, and that goal is still very much valid. We did not change that goal. Our target is to grow by 10%, and right now we have grown significantly more. For the last two years, I would say, we are growing higher than 10%.
Yes. Okay, thank you. That was all the questions.
Okay. I think that concludes the Q3 report for year 2020 from Green Landscaping Group. Thank you everyone for listening in, and have a nice day.