Nobina Interim Report 1 September 2021–30 November 2021

Strong earnings and stable core business

Nobina continues to deliver a strong performance. During the third quarter of the fiscal year, net sales rose 20 percent to SEK 3,427 million and EBITA increased to SEK 410 million, marking the highest result ever for a single quarter. This result include a positive lump-sum payment of SEK 97 million from Afa Försäkring and an impairment related to shortened depreciation of SEK 124 million for the portion of the bus fleet made up of biogas buses. Adjusted for these nonrecurring items, earnings were just over 40 percent higher than in the prior-year quarter.

The third quarter

• Net sales amounted to SEK 3,427 million (2,854), an increase of 20.0 percent compared with the prior-year quarter, of which +13.6 percent was organic growth, +6.3 percent acquisitions and +0.1 percent currency effects.
• EBITA amounted to SEK 410 million (307).
• EBIT amounted to SEK 387 million (288).
• Profit after tax amounted to SEK 272 million (199), and earnings per share totalled SEK 3.15 (2.25) before dilution.
• Cash flow from operations was SEK 841 million (485).

The nine-month period

• Net sales amounted to SEK 9,741 million (7,927), an increase of 22.9 percent, of which +18.9 percent was organic growth, +4.3 percent acquisitions and –0.3 percent currency effects.
• EBITA amounted to SEK 998 million (586).
• EBIT amounted to SEK 930 million (533).
• Profit after tax amounted to SEK 637 million (334), and earnings per share totalled SEK 7.38 (3.78) before dilution.
• Cash flow from operations was SEK 1,968 million (1,536).

Significant events during and after the quarter

• A ten-year agreement with Movia in Copenhagen was renewed and expanded, valued at approximately DKK 570 million.
• Two new ten-year contracts were awarded by SL in Huddinge– Botkyrka–Söderort and Nacka–Värmdö, valued at approximately SEK 12.7 billion and involving 530 scheduled buses.
• A lump-sum payment from Afa Försäkring had a positive impact of approximately SEK 97 million on the Group’s earnings in the third quarter of 2021/2022.
• At the company’s Capital Markets Day, Nobina announced a refined strategic framework, new business areas and revised financial targets of annual net sales growth of 7 percent, an EBITA margin of 6.5 percent, a net leverage ratio of 3–4 times EBITDA and a dividend policy of at least 60 percent of net profit.
• After careful consideration, the Board of Directors of Nobina AB (publ) unanimously concluded to recommend shareholders to accept the public offer from Basalt, via Ride BidCo, of SEK 108 in cash which was presented to the Board on Friday, December 10.

Statement from the CEO

Nobina continues to deliver a strong performance. During the third quarter of the fiscal year, currency-adjusted net sales rose 20 percent to SEK 3,427 million (2,854) and EBITA increased to SEK 410 million (307), marking the highest result ever for a single quarter. This result included a positive lump-sum payment of SEK 97 million from Afa Försäkring and an impairment related to shortened depreciation of SEK 124 million for the portion of the bus fleet made up of biogas buses (read more on page 4). Adjusted for these nonrecurring items, earnings were just over 40 percent higher than in the prior-year quarter.

It is particularly gratifying to note that our core business, namely our contract business with our 4,000 buses, continued to note stable development and contributed to our positive performance in the quarter. Despite the fact that passenger volumes were approximately 20 percent lower than in the corresponding quarter in 2019, meaning before the Covid-19 pandemic, we have succeeded in strengthening our services and profitability through an improved contract mix, extra traffic and efficiency enhancements. As the Nordic region’s largest operator, we are able to leverage economies of scale and at the same time offer our clients additional services that create added value for our passengers. The results of this work were particularly clear in our operations in Sweden and Norway during the quarter.

In the quarter we also received further confirmation that we have a strong offering in the form of a number of important contract wins. We defended and expanded our services with Movia in North Zealand in Denmark, expanded our contract with Länstrafiken i Norrbotten, secured a contract for bus-for-rail services for Västtrafik and, in a highly anticipated announcement, won two major contracts in Stockholm, thereby expanding our bus services in rapidly growing areas. All of the buses included in these contracts meet the highest environmental requirements and will run on 100-percent fossil-free fuel or green electricity. The contracts in Stockholm include a large number of electric buses, which will be the first time this type of vehicle will be introduced on a broader scale in the Stockholm region. We are a leader in electric buses in the Nordic region and will continue to drive this development to respond to future challenges in the cities in the region.

We explained our view of these challenges and how we plan to address them at our Capital Markets Day on 24 November. Underlying market factors such as climate change, demographic trends and urbanisation are among the top priorities that must be addressed by society. Public transport plays a central role in this regard. As the largest and most experienced public transport operator in the Nordic region, we naturally see favourable opportunities for continued profitable growth in this environment. At the Capital Markets Day, we announced revised financial targets, launched a refined strategic framework and presented new business areas – Nobina Bus, Nobina Care and Nobina Mobility. We have a stable and sustainable business and a financial position that will enable us to continue pursuing an acquisition agenda focused on both geographies and segments.

Our new Nobina Care business area has been built up through acquisitions. Samtrans, which we acquired in 2018, constitutes the core of these operations and is currently a leading player in service traffic. The operations have subsequently been expanded geographically through the acquisitions of Telepass, Göteborgs Buss and Örslev. Service traffic is an exciting market that is becoming increasingly important to society, not least given the needs that have arisen during the pandemic. Our Covid-19 testing activities have also contributed to the Group’s earnings and continued to do so during the third quarter. As a result of increased transmission and demand for testing in December, we see a continued high rate of activity in the area in the fourth quarter of the fiscal year.

An important aspect of improving the passenger experience is offering smart digital solutions that make it easier for passengers to plan and purchase trips – from door to door – with various modes of transport. Our Nobina Mobility business area offers a complete solution for this type of mobility in the Travis app. Travis has been available for passengers in Stockholm for just over two years and is highly appreciated. The number of active users has doubled in a short period of time, partly because SL’s new 10/30 ticket – which allows passengers to choose ten travel days during a 30-day period – can only be purchased in our app. During the third quarter, we also added a new partner to Travis, TIER Mobility, broadening our electric scooter offering.

The Covid-19 pandemic has had a major impact on our business but not only negatively as many had expected. On the contrary, by broadening our operations and applying new business models we have been able to capitalise on, for example, the enormous need for mobile testing operations. At the same time, we have also gradually strengthened the conditions for our core operations in a temporarily challenging environment with fewer passengers. With three strong and future-oriented business areas in place, it is therefore easy to be optimistic – about both the short and the long term. It was also especially gratifying to announce early in December that we had strengthened the management team in preparation for this work. We are pleased to welcome Henrik Dagnäs, Petra Axelsson and Martin Pagrotsky to their new roles and the next stage of our journey. With yet another strong quarter of high growth and profitability behind us, we are now continuing our work to create profitable and sustainable growth over time while at the same time maximising our positive impact on the environment, travellers and society.

On 13 December, Basalt, through Ride BidCo AB announced a recommended public offer of SEK 108 in cash per share to the shareholders of Nobina. Nobina’s Board of Directors has unanimously recommended that the shareholders accept the bid, and the process is expected to be ongoing until around 14 January. Basalt is an independent investor that takes a long-term and sustainable approach to investment in companies and infrastructure, including solar cells, broadband and marine vessels, as well as light rail in Madrid. It currently has approximately USD 5 billion under management on behalf of pension funds, state investment funds, banks and insurance companies.

The offer in itself is confirmation that Nobina stands for quality and is developing its operations in the right direction. But for all of us at Nobina, our clients, partners, employees and management, if the offer is accepted by shareholders, it will essentially entail very little change to our operations – we will maintain the same strong values and focus on our passengers, delivery, performance and our clients, regardless of who our owner is.

To conclude, I would like to thank our more than 12,000 employees, clients and passengers for all their efforts during an eventful year and wish you all a Merry Christmas!

Magnus Rosén,

President and CEO

This information is such that Nobina AB (publ) is obligated to publish in accordance with the EU Market Abuse Regulation. The information was published, through the agency of the below-mentioned contact persons, on 22 December 2021, at 8:00 a.m.

For further information, please contact:

Mattias Gelinder, Group Treasurer & Head of IR
mattias.gelinder@nobina.com   +46 72 967 02 61

David Erixon, Head of Communications
david.erixon@nobina.se   +46 72 967 02 84