Ambea : interim report Q1 2024

R

January-March 2024

Interim report

Ambea AB (publ) Corp. Reg. No. 556468-4354

Introduction

Strong start to the year

Introduction

Quality and sustainability

Reporting

Consolidated key figures

First quarter January-March

• Net sales rose 8 per cent to SEK 3,484 million (3,235). Organic growth was 8 per cent.
• EBITA was SEK 279 million (216), representing a margin of 8.0 per cent (6.7).
• Operating profit (EBIT) totalled SEK 256 million (191), representing a margin of 7.3 per cent (5.9).
• Profit for the period totalled SEK 111 million (70).
• Earnings per share were SEK 1.25 (0.77) before and after dilution.
• Cash conversion was 97.8 per cent (72.9).
• Free cash flow totalled SEK 414 million (244).

Significant events

• Ambea launched a share repurchase programme for a maximum of 3 million shares. At 31 March 2024, 1,954,118 shares had been repurchased.

Events after the balance-sheet date

• Nytida acquired Alpklyftan, a company that runs HVB facilities for children and young people. Control of the company was transferred on 2 May 2024. Read more on page 10.

	2024	2023			2023
SEK million	Jan-Mar	Jan-Mar	∆%	R12	Jan-Dec
Net sales	3,484	3,235	8	13,561	13,312
EBITA*	279	216	29	1,139	1,076
Operating margin, EBITA (%)*	8.0	6.7		8.4	8.1
Operating profit, EBIT	256	191	34	1,046	981
Operating margin, EBIT (%)*	7.3	5.9		7.7	7.4
Profit for the period	111	70	59	496	455
Earnings per share before dilution, SEK	1.25	0.77	62	5.55	5.07
Earnings per share after dilution, SEK	1.25	0.77	62	5.55	5.07
Cash conversion (%)*	97.8	72.9		100.3	94.9
Free cash flow*	414	244	70	1,801	1,631

*Alternative performance measures. For reconciliation of financial statements to IFRS, see Note 6. For purpose and definition, see ambea.com/investor-relations/reports-and-presentations/

Contents
Introduction	2
Quality and sustainability	4
Reporting	8
Group	8
Nytida	10
Vardaga	11

Ambea's interim report is designed for accessibility.

Ambea AB (publ) Corp. Reg. No. 556468-4354

Stendi	12
Altiden	13
Klara and Lära	14
Group financial statements	17
Parent Company financial statements	21
Notes	23

Interim report Q1 2024 | 2

Introduction

Quality and sustainability

Reporting

CEO statement: Strong start to the year

During the first months of the year, occupancy was favourable and we had good control over opera-

tions, which led to improved earnings and stronger cash flow.

Stendi's earnings increased clearly year-on-year, supported by increased occupancy, price increases and operational improvements. It is gratifying to see how the positive trend in Norway has continued. During the quarter, Stendi signed a rental contract for a new care home with 11 places for children and young people in Oslo that will open by as early as 2025. The home is in line with the new recommendations issued by authorities regarding increased size and design of residential care facilities for children and young people in Norway. This is one example of how we, as a private provider, can act fast and help our clients solve the shortage of places.

More new care places

The positive trend has also continued for Vardaga. The earnings growth is due to several factors, including increased occupancy and lower start-up costs for new facilities year-on-year. We also expanded the number of places under construction when Vardaga signed an agreement to open an additional nursing home in Gävle, Villa Hagaström, with 80 beds. The home will open in autumn 2026.

Nytida also expanded its pipeline with five new units with a total of 65 places, and demand remained stable during the period. After the end of the quarter, Nytida acquired Alpklyftan, a company in Gothenburg that runs HVB facilities for children and young people. Alpklyftan generated revenue of SEK 25 million in 2023, and is a good complement to Nytida's existing operations. I

would like to welcome all care receivers and employees to Ambea. Now that we see increased activity in the M&A market, we will actively be seeking high-quality and compatible acquisitions.

In Denmark, efforts to strengthen the operations continue and during the period, Altiden migrated to Ambea's IT platform, which will offer new opportunities for employees, increase IT security and lower the opera- tion's IT costs. Altiden's earnings strengthened marginally year-on-year and we are expecting profitability improvements during the year.

Organic growth and strong cash flow

Net sales rose 8 per cent to SEK 3,484 million (3,235). Organic growth was 8 per cent and free cash flow rose 70 per cent to SEK 414 million.

Quality Award for spreading knowledge

In March, we presented our annual Quality Award with the aim of recognising the units that work systematically with their quality assurance process and in accordance with our values. The Award is also designed to spread knowledge and innovation within the Group. I would like to congratulate Vardaga Kvarnbacken in Linköping and Nytida Öppenvård in Örebro (Sweden), Altiden Socialkonsulenter in Slagelse (Denmark) and Stendi Child Welfare department (Norway) who all received our Award this time.

Freedom of choice for the elderly

The Association of Private Care Providers in Sweden recently conducted a survey and have now published a report on how the elderly view freedom of choice. This

In March, we presented our annual Quality Award with the aim of recognising the units that work systematically with their quality assurance process and in accordance with our values.

is a target group that is often excluded from surveys of public opinion. In collaboration with Verian (formerly Kantar Sifo), people between the ages of 85-109 were asked to express their views on freedom of choice in elderly care. The results speak for themselves - nine of ten respondents want to be able to choose their own home care or nursing home. That is not how it really works, however. According to the report, nearly 80 per cent of our elderly are unable to choose a nursing home. This is because many municipalities have no freedom of choice system, which is a prerequisite for the establishment of private and non-profit providers. This is problematic and will make the necessary expansion of elderly care more difficult. The risk of not having access to high-quality care when one's health is failing is worrying for both care receivers and their loved ones. Nearly three of four survey respondents were positive to the idea of introducing a care home guarantee. This guarantee is one of several proposals that Vardaga has presented

to develop and strengthen elderly care. With a growing and ageing population, the pace of construction for new

nursing homes must be accelerated, and I am gratified to see such strong support from our elderly for freedom of choice and private providers. This sends a strong signal to our politicians, when the policies they pursue are out of step with the wishes of the elderly.

Making the world a better place, one person at a time.

During the first quarter of the year, I visited many units across our three countries and was delighted to see the strong sense of commitment to our care receivers. Finally, I would like to thank all of our employees who are creating value for our care receivers and their loved ones every day.

Mark Jensen, President and CEO Ambea

Ambea AB (publ) Corp. Reg. No. 556468-4354

Interim report Q1 2024 | 3

Quality and sustainability

Quality and sustainability that create quality of life

Introduction

Quality and sustainability

Reporting

Our mission is to create enough safe and sustainable care for everyone. To achieve this, we have established a robust quality management system that permeates all areas of our operations. Our approach to quality management is based on our vision, our values and the skills of our employees. We also have clear systems and procedures to support this approach. The aim is that it should be easy for employees to do the right thing, and to spend their time on the right things - care that creates quality of life and value. We use a Quality Index to monitor our units on a monthly basis. The index consists of eight selected quality and HR metrics that show us the status of each unit, and allow us to monitor our units systematically.

Sustainable care

In the area of sustainability, we work with Environmental, Social and Governance (ESG) factors, an established framework in the business world that encompasses all sustainability issues.

EWe are working actively to achieve climate-smart care. This means that we are working to reduce the

carbon footprint of our food, consumables, premises and transportation. We have adopted an ambitious target to halve our emissions by 2025, compared with 2019. Between 2019 and 2023, we reduced our emissions by 38 per cent.*

SSocial sustainability is engrained in our DNA. In this area, we are focused on quality, leadership, health

and safety, diversity and inclusion, and on spreading knowledge and developing the competence of our own and the sector's employees.

GOur operations are characterised by robust control, transparency and trust, based on compliance with

internal and external regulations and procedures. We participate in public debate with our knowledge and use our size to influence society and our sector.

By working actively with quality and sustainability, we are contributing to social development and helping to future-proof care.

We have made progress with our environmental management and are on track to achieving our ambitious target to halve our emissions by 2025. We have begun the final part of that journey this year and we know what it takes to reach our goal.

*Tonnes of CO₂e per unit of revenue, excluding employee commuting.

Ambea AB (publ) Corp. Reg. No. 556468-4354

Interim report Q1 2024 | 4

Introduction

Quality and sustainability

Reporting

The winners of Ambea's 2023 Quality Award

During the quarter, four units recieved Ambea's Quality Award. Every year, the award is presented to one unit in each division that has delivered an excellent quality performance in accordance with Ambea's set of values and joint working methods.

"I am proud of how the entire organisation is working to ensure quality every day. An important point to remember when we speak about quality is that we follow our procedures and working methods, and that our actions are always guided by our values with our care receivers in focus," says Mark Jensen, CEO Ambea.

The units that received Ambea's 2023 Quality Award are Vardaga Kvarnbacken in Linköping and Nytida Öppenvård­ in Örebro (Sweden), Altiden Socialkonsu­ lenter (Denmark) and Stendi Child Welfare department (Norway).

"Quality means that we maintain a high level over a long period of time. We can never become complacent," says Simon Zeitelberg, Care Manager på Vardaga's Kvarnbacken­ nursing home in Linköping, which has made considerable progress in a range of areas and improved an already high Quality Index score by maintaining a strong focus on continuous improvement.

The Quality Award is our internal prize to recognise and highlight units that have taken a holistic approach to quality and developed their operations. The award has been presented every year since 2015. In addition to the winners, two honorary winners are also selected in each division.

Gertrud Öjetoft (Regional Manager), Simon Zeitelberg (Care Manager), Ronja Gerling and Pernilla Roos at Vardaga Kvarnbacken.

Employee feedback improves leadership

Twice per year, in March and October, we ask all employees questions about our 'close leadership.' The purpose is to provide line managers with feedback, discuss leadership in the workplace and to aim for improvements. The questions include how leaders engage and motivate, their approach to feedback and coaching employees and how well work is organised. The responses are compiled in a Leadership Index for Ambea, where the target is a score of 80 out of 100.

In March, the Leadership Index score was 78. We continue to motivate and urge our leaders to discuss the questions with their employees and develop their leadership.

78LEADERSHIP INDEX

Scale of 1-100

Ambea AB (publ) Corp. Reg. No. 556468-4354

Interim report Q4 2023 | 5

Introduction

Quality and sustainability

Reporting

Good results for Ambea's sustainability performance

New digital workplace launched in Nytida and Stendi

Ambea has a loan agreement that is strate­ gically­ linked to three selected sustainability KPIs - higher employee engagement, lower GHG emissions and improved care receiver satisfaction. The results show that we have achieved our targets for 2023 for two of the three selected sustainability KPIs.

The first KPI is that we are an attractive workplace. In addition to engagement, it is also important that our employees would be likely to recommend us as

an employer. We use eNPS (employee Net Promoter Score) to measure employee engagement. The target was >+19. The results for 2023 were +21 for the Ambea Group. The eNPS scores range from -100 to +100.

The second sustainability KPI is our main target to halve our emissions by 2025 compared with 2019. The KPIs comprise the Group's initiatives to reduce greenhouse gas (GHG) emissions in Scopes 1, 2 and

3. The target was 1.22 tCO2e/SEK million and the result was 1.20 tCO2e/SEK million (tonnes of CO₂ equivalents per unit of revenue, excluding employee commuting)

The third sustainability KPI measures care receiver

satisfaction. We did not achieve our ambitious target for 2023 here, despite the strong results in our divisions. "By meeting two of our three sustainability KPIs

for the year, we achieved a marginal reduction of the interest rate on our bank loan, which is helping to increase shareholder value. Our sustainability- linked loan is further motivating us to deliver on our important targets, which are contributing to a better world," says Christian Horne, Head of HR and Sustainability at Ambea.

The loan agreement was signed with a Nordic bank consortium and means that we have added a sustainability link to our revolving credit facility (RCF).

During the quarter, we launched a new digital workplace in our Nytida and Stendi divisions. The aim of the digital workplace/intranet, which we call Ambea Inside, is primarily to simplify and reduce the workload for managers and employees, and to enable skill sharing and collaboration across countries and divisions.

Ambea Inside will be rolled out in all divisions in the first half of 2024. The rollout has been accelerated by efficient project work and positive initial results.

Ambea AB (publ) Corp. Reg. No. 556468-4354

Interim report Q1 2024 | 6

Introduction

Quality and sustainability

Reporting

Ambea's KPIs for quality and social sustainability

			Outcome Q1
		Target	2024	Comments
	Ambea's Quality Index	>7.50	7.58	The QHR score increased to 7.58 compared with the year-on-year quarter (7.51). All divi-
	An aggregated index of six quality and HR KPIs for the entire Group.			sions achieved a slight increase in their QHR score except for Altiden, whose score fell
	Scale of 1-10			slightly. The results are measured on a monthly basis.
Partial report of Ambea's Quality Index
1	Perceived care	>87%	89%	The measurement shows the results of the customer survey. Only Vardaga measu­
	Care receivers' view of our care and service.			red results during the period in the form of an internal survey. The results remained
	Scale of 1-100			unchanged for all other divisions. Surveys are carried out continuously during the year in
				the form of own surveys, and at national level in Sweden.
2	Employee satisfaction	>75	73	All divisions identify structured objectives and focus areas at both central and local
	Employee satisfaction surveys are carried out on a regular basis during the			levels,­ alongside of active and continuous improvements in each individual unit. The
	year to measure satisfaction and engagement.			survey is carried out six times per year, the most recent survey was conducted in March
	Scale of 0-100			2024.
3	Leadership Index	>80	78	The biannual survey takes the form of an in-depth questionnaire where employees
	The employees' view of leadership at Ambea.			evaluate their line manager based on Ambea's prioritised leadership qualities. The result
	Scale of 0-100			is the average of all individual responses to all leadership questions. The most recent sur-
				vey was conducted in March 2024. The next survey will take place in Q4.
4	Recommendation of Ambea	>+19	+22*	The survey is carried out twice annually. The most recent survey was conducted in Q4
	Whether the employee would recommend Ambea as an employer.			2023. The next survey will take place in Q2.
	eNPS scale -100 - +100
5	Internal control	>1.85	1.86*	There was no survey in Q1. The survey is carried out twice annually and the next survey
	Control and follow-up of a unit's compliance with the quality management			will take place in Q2.
	system.
	Scale of 0-2
6	Improvement Index	>7.50	7.61	The Improvement Index score remained stable compared with Q1 2023 (7.65).
	Improvements implemented and documented in the units.
	Scale of 0-10

* Outcome is unchanged compared with the preceding quarter, since no new survey was carried out during the quarter.

Ambea AB (publ) Corp. Reg. No. 556468-4354

Interim report Q1 2024 | 7

Reporting

Group

First quarter

Net sales

Net sales rose 8 per cent to SEK 3,484 million (3,235). Organic growth was 8 per cent.

All of the contract models below were positively impacted, to varying degrees, by the leap day.

Net sales in Own Management amounted to SEK 2,701 million (2,511). The year-on-year sales growth was attributable to increased occupancy in Vardaga and Stendi, and higher prices.

Net sales in Contract Management amounted to SEK 721 million (653). The sales growth was due to the start-up of several management contracts that were recently won by Vardaga and Nytida.

Net sales in competence and staffing solutions decreased 13 per cent to SEK 62 million (71). The decline in sales was due to weaker demand for staffing services.

Earnings

EBITA rose 29 per cent to SEK 279 million (216). The result was driven by strong occupancy growth in Stendi and Vardaga, and a higher price level. The leap day also had a positive impact on earnings but was somewhat offset by increased costs for inconvenient working hours over the Easter weekend compared with the preceding year.

The EBITA margin was 8.0 per cent (6.7).

EBIT rose 34 per cent to SEK 256 million (191), representing a margin of 7.3 per cent (5.9).

Net financial items

Net financial expense was SEK -116 million (-102) for the quarter. Of this amount, SEK -78 million (-74) pertained to interest on a lease liability, SEK -34 million (-29) to interest and financial expenses/income, and SEK -4 million (1) to exchange rate fluctuations.

Income tax

Tax expense for the period was SEK -29 million (-19), corresponding­ to an effective tax rate of 21 per cent (21).

Profit for the period

Profit for the period totalled SEK 111 million (70), corresponding to earnings per share of SEK 1.25 (0.77) before and after dilution.

Cash flow

Free cash flow for the quarter was SEK 414 million (244). The increase in free cash flow was largely attributable to improved operating profit and a positive change in working capital.

Introduction

Quality and sustainability

Reporting

Ambea AB (publ) Corp. Reg. No. 556468-4354

Interim report Q1 2024 | 8

Cash flow

	2024	2023		2023
SEK million	Jan-Mar	Jan-Mar	R12	Jan-Dec
EBITDA	593	510	2,361	2,278
Adjustment for non-cash items	-19	-9	26	36
Change in working capital	20	-107	45	-82
Cash flow from investments in fixed assets*	-15	-22	-76	-83
Operating cash flow, including investments to increase capacity	579	372	2,356	2,149
Net interest paid	-126	-96	-445	-415
Tax paid	-39	-32	-110	-103
Free cash flow	414	244	1,801	1,631
Acquisition/disposal of shares and participations	-	-	-10	-10
Cash flow from financing activities	-394	-477	-1,797	-1,880
Cash flow for the period	20	-233	-6	-259
* of which sales of fixed assets	10	1	16	7
Operating cash flow, excl. IFRS 16 effects	232	45	1,020	833
Free cash flow, excl. IFRS 16 effects	146	-9	767	612

Introduction

Quality and sustainability

Reporting

Net sales by segment

January-March 2024

E

1. 2%
   9%

A

30%

C

24%

A Nytida

B Vardaga

C Stendi

1. D Altiden

35%	E Klara

Net sales per contract model

Financial position

	Excl. IFRS 16 effects
	2024	2023	2023
SEK million	31 Mar	31 Mar	31 Dec
Net interest-bearing debt*	2,139	2,653	2,156
Rolling 12 months EBITDA*	1,022	887	961
Net debt/Rolling 12 months adjusted EBITDA	2.1	3.0	2.2

Incl. IFRS 16 effects

2024	2023	2023
31 Mar	31 Mar	31 Dec
11,063	11,440	10,739
2,361	2,103	2,278
4.7	5.4	4.7

January-March 2024

C

2%

B

21%

A

77%

1. Own management
2. Contract management
3. Stang

*Alternative performance measures. For reconciliation of financial statements to IFRS, purpose and definition see ambea.com/investor-relations/reports/key-financial-figures-definitions/

Ambea AB (publ) Corp. Reg. No. 556468-4354

Interim report Q1 2024 | 9

Nytida - stable growth

Nytida provides support and care for children, young people and adults with lifelong disabilities and psychosocial problems. We offer residential care, day services, support for individuals and families, and schools in approximately 450 units across Sweden. Using proven models and in-depth knowledge, our 9,000 employees help to strengthen the ability of individuals to live an independent life.

Introduction

Quality and sustainability

Reporting

54

Number of beds and places opened under own management (RTM)

EBITA margin RTM %

The quarter

Nytida showed stable growth during the quarter and expanded its pipeline with five new units and a total of 65 new places. Daily activities in Gothen- burg were expanded by 30 places.

Net sales rose 5 per cent year-on-year to SEK 1,041 million (991).

Net sales in Own Management amounted to SEK 834 million (798). The increase was due to better prices in existing units and start-up units.

Net sales in Contract Management amounted to SEK 207 million (193). The increase was due to higher prices, and a positive net effect of the start-up of management contracts won and lost.

EBITA rose 5 per cent to SEK 125 million (119). The increase was due to more placements and higher prices.

The EBITA margin was 12.0 per cent (12.0).

After the end of the quarter, Nytida acquired Alpklyftan, a company that runs HVB facilities for children and young people in Gothenburg and generated revenue of SEK 25 million. Control of the company was transferred on 2 May 2024.

18
16
	14,2	13,8	13,5			13,5		13,7	13,6
14		13,0		13,4
		12,9
12
10
8	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1
		2022			2023		2024

	2024	2023			2023
SEK million	Jan-Mar	Jan-Mar	∆%	R12	Full-year
Net sales	1,041	991	5	4,081	4,031
EBITA*	125	119	5	557	551
Operating margin, EBITA (%)*	12.0	12.0		13.6	13.7

* Alternative performance measures.

Ambea AB (publ) Corp. Reg. No. 556468-4354

Interim report Q1 2024 | 10