Ambea AB (publ)

Welcome to Umbia third quarter 2025 presentation. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 11 on your telephone. You'll then hear an automatic message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to turn the call over to the first speaker today, Mr. Mark Jensen, CEO and President. Thank you. Please go ahead.

Thank you so much. Good morning and welcome to Ambea's presentation for the third quarter of 2025. I'm Mark Jensen, CEO of Ambea, and with me today is our CFO, Benno Eliasson. Together, we will take you through our performance this quarter, highlight key operational and financial developments, and discuss how we can continue to strengthen our position as the leading care provider in the Nordics. After that, I will summarize the quarter and compare Ambea's performance to our financial targets before we open for questions. Ambea is today the leading competency-based care provider in the Nordics. We operate across six brands, Nytida, Vårdaga, Stendi, Validia, Altiden and Klar, delivering high-quality care services for the elderly and for people with disabilities and psychosocial needs. In total, Ambea's 38,000 employees provide care services to more than 16,000 care receivers in over 1,000 physical facilities. The third quarter has been another strong one for Ambea, with solid growth, strong earnings, and continued momentum in both acquisitions and organic development. Our rolling 12-month net sales is close to 15.5 billion SEC and adjusted EBITDA just above 1.5 billion SEC, corresponding to an adjusted EBITDA margin of 9.9% on group level, which is somewhat above our financial target. Please note, in the rolling 12 numbers, the financial data for Validia pertains to two quarters only. The strong performance reflects our scalable Nordic platform and diversified care service offering, which allows us to grow both organically and through targeted acquisition. Let's go straight to some of the important achievements within quality and sustainability. As we continue to grow, it remains just as important that we deliver safe, high-quality care every single day. We follow a systemic approach to quality and sustainability with monthly follow-ups across all our care units. This quarter, I want to start by highlighting 25 of our Ukrainian colleagues who recently graduated as assistant nurses in Sweden, a milestone in our long-term partnership with Beretskapslyftet. We have now launched a new class of 30 participants from Ukraine, continuing to help people establish themselves in Sweden while strengthening our care teams. Vårdag has once again received strong feedback in the annual care receiver survey from Sweden's National Board of Health and Welfare. A large majority of residents expressed satisfaction with their care, confirming our focus on quality, engagement, and meaningful everyday life across our elderly care homes. Overall satisfaction landed at 79.6%, which is above the national average of private and public care providers. In transparency, and as the only operator, we published the unit-level results that can be found on Vodoga's website. And finally, our climate targets have now been validated by the Science-Based Targets Initiative, aligning Ambea's path with the 1.5-degree goal from the Paris Agreement. We have worked for many years on our climate transition and now have scientific confirmation of our new targets. The targets cover the entire group and all the markets where Ambea operates, Sweden, Norway, Denmark and Finland. The approval comes timely as our current greenhouse gas reduction target expires at the end of this year. You can read more about our quality and sustainability work in the quarterly report. And now I'd like to highlight Ampea's future growth opportunities. Looking ahead, we continue to expand our own management pipeline to meet society's increasing care needs. It is the largest pipeline increase ever in a single quarter, strengthening the growth plan going forward. In the quarter, Vårdokker signed four new contracts for nursing homes in the Stockholm area, adding a total of 320 new care places. New Theda added three new assisted living facilities and one unit expansion, providing 34 new care places, while Stendi signed two contracts, adding 11 new care places. Over the next 12 months, our plan includes opening up four new nursing homes and one expansion within Vardaga, six care units and three expansions within New Theda, and seven care units in Stendi, representing more than 420 new care places in total. This is by far the strongest organic growth path in the Nordic care sector. We will now have a look at acquired growth, which is an important part of Ambea's growth agenda. Alongside organic growth, we continue to strengthen Ambea through acquisitions. During and after the quarter, we maintained a strong M&A momentum, particularly in Finland. After the quarter ended, Valida expanded further through an acquisition within child and welfare and family care services. The transaction was completed on October 31st, 2025. So far, 2025 has been an active year with strong M&A momentum. Our total acquired annual net sales now amount to over 1.6 billion SEK in 2025. We continue to focus on high-quality bolt-on acquisitions that complement our existing operations, ensuring that growth is both strategic and sustainable. Let's have a closer look at our recent finished acquisition on the next slide. From the outset, our ambition has been to make Validia a platform for growth, both within its existing segments and by expanding into new ones. We follow the plan with the acquisition of Atendo's child and family care operations in Finland, which adds a new and important service segment to Validia. Child and family care services are already part of Ambea's core offering, well-established through Stendi in Norway, Nutin in Sweden, and Altin in Denmark. So this is a field we know well, and to enter the segment in Finland is a natural step for us and close to our vision of making the world a better place, one person at a time. The acquisition strengthens our position in the Finnish market by entering the child welfare segment estimated at a size around 13 billion SEK. It also further diversifies our operation and customer base, fully in line with Ambea's strategy to balance growth and risk across geographies. 2024 revenue for the acquired business was approximately 90 million SEK, and we expect the acquisition to have a positive impact on earnings from 2026. We continue to look for opportunities to grow in Finland, both organically and through further acquisitions, and expect to announce new organic expansion and acquisitions in the coming quarters. Let's look at total revenue growth. This quarter acquired growth was still significantly higher at 13.2% due to the acquisition of Validia. The organic growth illustrated in the purple bars continues to show good pace. The organic growth in this quarter was 3.5%. We saw negative currency effects of minus 1%, which affected overall growth. And the overall growth landed at 15.7%. So summing up the highlights of the third quarter. In conclusion, the third quarter of 2025 has been another successful quarter for Ambea, marked by a consistent high quality in care services, continued growth, improved occupancy and strengthened earnings performance. Net sales increased by 16%, driven by a 13% acquired growth and 4% organic growth. The future pipeline for Vodok and Nytida shows a significant growth. Groovy beta increased by 19%, reaching a margin of 13.9%. Validia and Finland performed very well with high occupancy and a strong EBITDA margin. Altiden Denmark continues to deliver growth in net sales, resulting from high occupancy and significantly higher earnings. Now I will hand over the presentation to Benno, who will provide a financial overview of our performance this quarter.

Thank you, Mark. Net sales were driven primarily by the acquisition of Validia, but we also saw solid contributions from Nytida, Vardaga and Altiden. Validia added 388 million SEK to net sales. The good growth we have seen in recent quarters continued driven by acquisitions and startup units in Nytida and Vardaga, as well as increased occupancy in our care units in Vardaga and Alltiden. Stendi had a negative growth in SEK. However, in local currency, net sales growth was slightly positive. Then turning to the EBITDA. This slide shows how the different business areas have contributed to the adjusted EBITDA of the group. Adjusted EBITDA increases across most business areas and Altiden showed particularly strong margin improvement with its adjusted EBITDA margin up 3.6 percentage points. Valeria had another very strong quarter and we also saw strong EBITDA and margin improvement in Nytida and in Vardaga. Stendi delivered its second best quarter ever, but still 21 million lower than last year's exceptionally strong result. We are especially pleased with the fact that Nytida increased both EBITDA and EBITDA margin after a time of weak margin development, and that the strong pace of profitability improvements in Altium continued this quarter as well. Adjusted EBITDA in total increased by 19%, and the margin increased by 0.5 percentage points to 13.9%. Operating cash flow continued to increase during the quarter supported by the strong profitability and good working capital management. Our operating cash flow increased by 30% and amounted to 686 million in the quarter and cash conversion is now again over 91% rolling 12. Again, this quarter had a negative effect from the settlement of a legal dispute in Norway accrued since 2021. That means that the underlying cash flow is even stronger than reported. This slide shows the way from the EBITDA excluding IFRS 16 down to the free cash flow post-tax of 696 million SEK. On a rolling 12-month basis, free cash flow excluding IFRS 16 remains very high. The free cash flow is negatively affected by some one-offs in 2025. The settlement of the mentioned Norwegian dispute is already accrued in 2021, affected by 72 million, and one of connected to the Velydia acquisition with around 56 million. So the solid cash conversion gives us both flexibility and strength to continue investing in quality and growth. Now to the utilization. So here we can see how we have used the generated 696 million SEK in free cash flow. 185 was distributed to our shareholders as dividend. 1,338,000,000 SEK was spent on the three acquisitions and 219,000,000 was spent on the share buyback programs. Net debt had increased by 1,033,000,000 SEK compared to the same quarter last year, driven by the strategic acquisition of Alibia, which was mainly financed by a bridge loan. And now to the different business area. We start as usual with Nytida. Net sales increased by 9%, driven by acquisitions and startup units. EBITDA rose by 15% to 194 million SEK, compared to 168 million last year, thanks to the continued good performance in previous completed acquisitions, together with improved occupancy for startup units. Adjustments made to meet the new Swedish Social Service Act have started to yield results, improving both profitability and efficiency. We have continued adapting our service offering in favor of those services with expected high demand going forward, as well as adjusting capacity to meet the changing demand. During the quarter, a new facility with six care places was opened, and that will, of course, support continued growth. Nyttida is now well positioned for further margin improvement as occupancy stabilizes on expected somewhat higher levels than this. And then turning to Vardaga and Swedish Elderly Care. Vardaga continues to deliver good profitability and growth through operational excellence and efficient startup of new units. Net sales increased by 7%, driven by higher occupancy in both new and existing facilities, and by the Avasta acquisition. Sales in own management grew by 8%, reaching 952 million SEK due to the higher occupancy, and net sales in contract management also increased. EBITDA increased by 10% to 177 million SEK compared to 161 last year, driven by increased occupancy. During the quarter, we opened one new nursing home in Norrköping with 72 care places, further expanding our capacity in that region. On the next slide, we turn to Norway and look at Stendi. In Stendi, net sales decreased by 3%, but in local currency, sales were slightly higher than previous year. EBITDA amounted to 100 million SEK compared to 121 million SEK last year, and the margin declined to 12.2% from 14.4%. The decline in earnings were primarily driven by lower and more fluctuating occupancy than in the strong comparative year, which could not fully be offset by optimizing staffing costs in the short term. And on top of that, the FX effect was a minus 4 million SEC. Despite this, Stanley delivered its second best quarter ever in terms of earnings, although still below last year's exceptionally strong results. Two new facilities were opened during the quarter, adding five new care places. Stendi also adjusted local capacity to reflect the changing demand. So if we take a look at Validia, our newest business area. Validia is reported as a new business area from last quarter and has been consolidated in Abea's account from April 1st. And Validia delivered another very strong quarter. Net sales amounted to 288 million SEK and EBITDA reached 59 million, corresponding to a margin of 15.2%. Integration activities is progressing ahead of plan and the business continues to perform above expectations. After the quarter ended, Validia expanded further through acquisition of child welfare and family care services, a segment where we have extensive experience from other Nordic countries. Net sales for 2024 was 90 million SEK and acquisition expected to have a positive impact on earnings from 2026. The outlook for Validia remains positive with stable earnings and strong market potential. And we will continue to create growth in Finland through new establishments, both on acquisitions and further development of the existing operations. And then take a look at Altiden. Altiden continued its positive development this quarter. Net sales increased by 7% in SEC and by 10% in local currency, driven by higher occupancy in both elderly and social care. EBITDA increased significantly to 39 million SEC from 25 million last year and ultimately reached a record high EBITDA margin of 11.4% up from 7.8% last year. The strong earnings improvement was due to higher occupancy together with operational improvements. And thanks to the strong occupancy and improved earnings, we are now ready to take on next step and accelerate growth in Denmark. The new national elderly care legislation effective from July 1st this year enables expansion of all managed nursing homes. And we are evaluating several opportunities to sign contracts for new nursing homes. Finally, Clara. Net sales decreased by 9% to 86 million SEK, mainly due to lower demand in several of Clara's services. EBITDA amounted to 9 million SEK compared to 10 million last year, with a margin of 10.5%. The historically strong supply of nurses has led to some customers to employ their own staff instead of purchasing external services from companies like Clara. And Clara has adjusted its cost base to reflect the lower demand, helping to maintain stable profitability. But the business remains well positioned to benefit when market demands normalize again. And with that, back to you, Mark.