Ambea : interim report Q1 2023

Continued positive trend in Norway, orga­ nic growth and, as always, full focus on our care receivers

Several divisions showed good profitability in the first quarter of the year. During the period, demand for our elderly care services in Sweden continued to grow and occupancy increased again in Vardaga. Demand was stable in social care and Nytida opened three new units. The positive trend for Stendi also continued, which contributed to earnings. The Norwegian operations are now standing on firmer ground, creating conditions for long-term planning and growth. Alti- den delivered a weak performance and the strategic transition will continue.

Increased sales and organic growth

In the first quarter, net sales rose 5 per cent to SEK 3,235 million. EBITA rose 11 per cent to SEK 216 million.

Vardaga posted a strong quarter with improved profitability, while income rose 10 per cent. Our systematic efforts with start-ups and marketing our newly opened units have genera­ ted results in the form of increased occupancy. During the quarter, sick leave was slightly higher than pre-pandemic levels, while no government support for sick leave expenses was received during the quarter.

In Nytida, we opened new LSS group homes in Sollentuna, Nyköping and Flen, with a total of 18 places. In addition to opening new homes, we are continuously evaluating compatible acquisitions for Nytida's operations.

Stendi performed favourably during the quarter with impro­ ved profitability due to the capacity adjustments, commercial initiatives and organisational improvements we implemented in the operations. Quarterly earnings totalled SEK 37 mil- lion, up SEK 25 million year-on-year. Stendi also signed a new national agreement in child protection services, which guarantees capacity and provides more balanced commercial conditions. We are thereby continuing to take responsibility and support our clients with specialised services for the most vulnerable children and young people in society. Stendi will also continue to focus on social care and is terminating its contracts in elderly care where we only have one large management contract remaining, and that will expire in the first quarter of 2024. On that date, all of our obligations in elderly care in Norway will end, as communicated in the third quarter of 2021.

In Altiden, we are still not satisfied with the results. Des­ pite some operational improvements during the quarter, it will take a few more quarters before the transition has a clear effect on earnings.

"Stendi performed favourably

during the quarter, with improved profitability due to the initiatives and improvements we implemented in the operations."

Training and skills supply

During the quarter, Klara phased out doctor staffing services completely and made a greater contribution to consolidated earnings with its new service mix. Demand for Klara's ser­ vices remained stable during the period and Klara's order book is favourable in the lead up to summer.

As part of our updated strategy, Ambea is now focused even more clearly on competence development and skills supply in the care sector. As of this quarter, will we therefore report both Klara and Lära together under the Klara division in our financial statements. Lära is our training organisation and a unique asset for Ambea. In 2022, about 13,000 people received supervision or participated in one of Lära's training courses, and 7,000 of these people were Ambea's own employees. By equating Lära with our other service deliveries, we want to clarify our role as the competency -based company in the care sector.

COMMENTS FROM MARK JENSEN, PRESIDENT AND CEO

Clearer conditions

Despite the fundamentally favourable demand for our ser- vices, food and energy prices continued to have a negative impact on us during the quarter. We review our costs on a regular basis, optimise staffing levels and achieve economies of scale through effective purchasing and improving the energy efficiency of our premises. Salary negotiations and the collective bargaining agreements that affect us should be finalised in the second quarter of the year, which will also increase predictability.

The prices in our revenue contracts are adjusted upwards every year. Due to the large number of services we provide in more than 400 municipalities, the adjustment mechanisms vary. As the situation becomes clearer, our assessment is that we can offset most of the year's cost increases with upward price adjustments, efficiencies and higher occupancy rates.

player, we also want to promote positive social development­ in several areas. Vardaga and Nytida have entered into a new collaboration with Norrmejerier as part of our efforts to systematically phase out suppliers with ties to Russia, and to reduce our share of GHG emissions associated with purchased dairy products. Climate-smart and ethical purchasing is part of our approach to sustainability, and we are working continuously to develop these processes.

Commitment and knowledge

Finally, I would like to thank all of our employees for their daily contributions to high-quality and personalised care. We are 31,000 colleagues who are always striving to fulfil our vision - We make the world a better place, one person at a time.

Ambea is one of the leading care providers in Scandinavia. We work with the elderly, and people with disabilities or a need for psychosocial support. Our mission is to ensure quality of life for every person in Ambea's 950 units. Seeing and hearing them is the heart of our company.

But we also look up and see the world through the eyes of our clients - municipalities. Will they have enough resources­ in the years ahead? As care needs grow sharply, financial pressures intensify and the care worker shortage deepens, smart solutions, partnerships and innovative solutions will be crucial. Ambea has a key role to play here.

We are a company that dares to test new ideas, strives for continuous improvement and continuously develops our units and our employees. We are big enough to make a difference and want to be a role model that works together with municipalities to create as much safe and secure care as possible from every valuable tax krona.

Always in the best interests of our care receivers. Always guided by our vision: We make the world a better place, one person at a time.

New Nytida home in Flen. Hagagatan in Flen is one of three new residential facilities that Nytida opened during the quarter. It is a group home for people with acquired brain injury or Huntington's disease. The unit has six apartments and a large communal area where care receivers can receive support and assistance according to their needs.

Our brands

Our services

• Elderly care
• Disability care
• Psychosocial support
• Training, competence and staffing solutions for social care

Robert Kroon, meal manager at Ambea is happy with the new collaboration with Norrmejerier.

During the spring, Ambea and Norrmejerier launched a new collaboration that will stimulate the appetite of just over 8,000 care receivers in Sweden, and contribute to lower GHG emissions and an ethical supply chain.

Since Russia's invasion of Ukraine in February 2022, Ambea has been working actively to phase out suppliers who have chosen to maintain ties with Russia.

"We see this as a way to clarify our position in support of the Ukrainian people and to follow our ethical purchasing guidelines, which are an established element of our approach to sustainability," says Mark Jensen, CEO of Ambea.

The war in Ukraine is not the only reason why Ambea is replacing its suppli- er. Dairy products have been in focus during a period of rising prices. So prices are a second reason, and GHG emissions a third.

"The choice of Norrmejerier is based on a carefully considered sustainability concept (the Norrlogic concept), but also attractive commercial conditions," says Joakim Fagerudd, Head of Procurement at Ambea.

Norrmejerier is one of Ambea's thirteen supplier replacements due to the phase-out of suppliers with ties to Russia.

Vardaga involved in the World's Greenest Care Home

As a member of the Nordic Center for Sustainable Healthcare (NCSH) net- work, Vardaga was involved in the launch of the launch of Grønnrökulta, the World's Greenest Care Home project, in February. NCSH is a network and digital platform that organises a wide range of players who are all working with sustainable healthcare solutions.

SWEDEN

IVO inspections: The IVO performed ten inspections in the first quarter. All inspections took place in Nytida and decisions have been issued for two of these inspections, one with remarks.

During the quarter, the IVO issued decisions on 19 of its inspec­ tions in 2022, all in Nytida. Four were closed without any remarks, and 15 with remarks. The IVO mainly issues remarks related to the use of restrictive interventions, and to compliance with the reporting obligation under Lex Sarah.

Lex Sarah cases: Nine Lex Sarah cases were lodged - seven by Nytida and two by Vardaga. Decisions have been issued for sev­ en of the cases and closed without any need for further action, while decisions are pending for two of the cases. During the quarter, the IVO also issued decisions on four cases reported in 2022. All were closed without any need for further action.

Lex Maria cases: Two Lex Maria cases were lodged, one by Var­ daga and one by Nytida, and decisions are pending for both cases. During the quarter, the IVO did not issue any decisions on cases reported in 2022.

Individual complaints: In the first quarter, the IVO investigated three individual complaints related to Vardaga. Decisions are pending.

NORWAY

Regulatory inspections based on quality management: 46 inspections of Stendi's units were carried out, 42 of children's units and four of care services. Four of the inspections resulted in demands for remedial action, all in children's units.

DENMARK

Regulatory inspections based on quality management: There were six regulatory inspections of Altiden. Two of elderly care units and four of care services. The inspections of elderly care units were closed with satisfactory results. The inspections of care ser­ vices resulted in demands for remedial action for two units, while all others were closed without any demands for remedial action.

IMY/SWEDISH AUTHORITY FOR PRIVACY PROTECTION

Sweden: Two data breaches were reported to the IMY. Decisions have been issued and the IMY closed both cases without any demands for action.

Norway: No data breaches were reported by the Data Protec­ tion Officer.

Denmark: No data breaches were reported by the Data Protec­ tion Officer.