Ambea’s interim report January-March 2020

CEO comment:

The fight against COVID-19 marked the latter part of the first quarter and the whole organisation has made a tremendous contribution to contain the spread. A challenging time, but Ambea was able to capitalise on the overall competence of our Scandinavian organisation. In our activities related to COVID-19, we have strived to stay one step ahead and used preventive measures to keep the virus out of our facilities and to limit its spread. The early introduction of visiting restrictions, support in routines and intensive work to ensure the supply of PPE were all important initiatives. But I would like to highlight the untiring commitment and skills of all of our employees who have been our greatest resource in combating this pandemic.

The financial impact of COVID-19 was limited during the quarter. Profitability was stronger year-on-year and we continue to prioritise measures to strengthen margins in the operations that were previously Aleris Omsorg and the opening of new Vardaga residential facilities.

We are carefully monitoring the status of COVID-19 and will continue to take measures to protect our care receivers and employees. Our assessment is that COVID-19 will have an adverse impact on sales in the second quarter of about 3 per cent and on earnings of approximately SEK 40–60 million. If we look beyond the next few quarters, our assessment is that demand for our services remains favourable.

Finally, I would like to thank all of our employees for the incredible work being carried out in this difficult situation. Together, we are performing a duty that is more important than ever – to offer people who need our support the best life possible.

Highlights of the first quarter 2020:

  • Net sales rose 12 per cent to SEK 2,811 million (2,516)
  • Operating profit (EBIT) increased to SEK 144 million (62)
  • EBITA increased 92 per cent to SEK 173 million (90), corresponding to a margin of 6.2 per cent (3.6)
  • Adjusted EBITA, excluding items affecting comparability increased 28 per cent to SEK 187 million (147)
  • The adjusted EBITA margin was 6.7 per cent (5.8)
  • Items affecting comparability in the quarter amounted to SEK -14 million (-57), where the period’s items were attributable to the current restructuring program in Stendi
  • Profit for the period was SEK 62 million (9)
  • Earnings per share amounted to SEK 0.65 (0.12) before and after dilution
  • Operating cash flow amounted to SEK 298 million (214)
  • Free cash flow totalled SEK 148 million (34)

Significant events in and after the first quarter

  • Ambea assesses that net sales and EBITA were impacted to a limited extent by COVID-19 during the quarter. During the second quarter, COVID-19 is expected to have a greater impact due to higher costs for personal protective equipment (PPE) and higher sickness absence rate. Combined with the lower rate of occupancy in elderly care in particular, COVID-19 is expected to have an adverse impact on sales of about 3 per cent and on earnings of approximately SEK 40–60 million during the second quarter
  • In view of the growing uncertainty caused by the spread of COVID-19 and the subsequent economic impact, the Board of Ambea has decided to withdraw its proposal to the AGM for a dividend payment
  • During the quarter, a restructuring programme was initiated in Norway. The expected savings effect on a full-year basis is SEK 30 million, gradually increasing from the second quarter of 2020. Items affecting comparability of SEK 14 million were charged to the quarter.

Telephone conference:

Ambea will host a presentation with the possibility to attend through a telephone conference at 10:00 (CET) today. The presentation will be held in English and will also be available as webcast on:

https://edge.media-server.com/mmc/p/8cosstir

Dial-in information:

To ensure that you are connected to the conference call, please dial in at least five minutes before the conference call starts to register your attendance and enter participation code 1190474.

Sweden:                             +46 (0)8 506 921 80

UK:                                       +44 (0)20 71 92 80 00

US:                                       +1 631 510 7495

The interim report, presentation and other material are available on www.ambea.com

For more information, contact:

Jacob Persson, Head of Group Business Control & Investor Relations 
Telephone: +46 (0)708 64 07 52
E-mail: ir@ambea.se

Ambea press contact
Telephone: +46 (0)10 33 00 501
E-mail: press@ambea.se

This is information that Ambea AB (publ.) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, on May 13, 2020 at 07:00 CET.

Ambea is the market leading care provider in Sweden, Norway and Denmark respectively, with over 900 care units and around 26,000 employees. We offer services in disabled care, individual and family care, and elderly care with a focus on residential care and own management. We aim to be the quality leader in all that we do and our vision is to make the world a better place, one person at a time. The company was founded in 1996 and its head office is located in Solna, Sweden. Ambea is listed on Nasdaq Stockholm.