Nobina Year-End Report 1 March 2020–28 February 2021

Strong earnings in a challenging market

In 2020/21, we reported our highest sales and strongest earnings ever, despite a very challenging situation. Sales, adjusted for currency, for the fourth quarter rose 11.4 percent and adjusted EBT more than tripled to SEK 129 million. Samtrans was responsible for a significant share of the earnings improvement. Additionally, new contracts for extra or replacement traffic, retroactive revenue and continuing efficiency improvements supported profitability in our bus operations. It is with confidence we approach 2021 and an expected gradual return to earlier travel patterns.

The fourth quarter

• Net sales amounted to SEK 2,860 million (2,605), an increase of 9.8 percent compared to the prior-year quarter, of which +10.1 percent was organic growth, –1.6 percent currency effects and +1.3 percent acquisitions.
• EBITA amounted to SEK 171 million (89).
• EBIT amounted to SEK 156 million (64).
• Profit before tax amounted to SEK 114 million (10).
• Profit after tax amounted to SEK 111 million (0), and earnings per share totalled SEK 1.25 (0.02) before dilution.
• Cash flow from operations was SEK 611 million (422).

Full year

• Net sales amounted to SEK 10,787 million (10,645), an increase of 1.3 percent, of which +2.5 percent was organic growth, –1.5 percent currency effects and +0.3 percent acquisitions.
• EBITA amounted to SEK 757 million (662).
• EBIT amounted to SEK 689 million (597).
• Profit before tax amounted to SEK 534 million (399).
• Profit after tax amounted to SEK 445 million (305), and earnings per share totalled SEK 5.03 (3.47) before dilution.
• Cash flow from operations was SEK 2,147 million (1,543).

Significant events during and after the fourth quarter

• New 8-year contract won with Skånetrafiken in Lund worth SEK 1.6 billion.
• Strategic acquisitions of KE Buss and Göteborgs Buss completed in December 2020.
• Renewed confidence in Infosolutions, which, together with Samtrans, won the Public Health Agency of Sweden’s procurement of national large-scale testing of covid-19 for 2021 with four possible extensions of 3 months each.
• New green bond of SEK 200 million at a competitive interest rate of STIBOR 3 months plus 65 basis points.
• The Board proposes a dividend of SEK 3.77 per share, corresponding to 75 percent of net profit or 63 percent if expressed according to our current dividend policy.

Statement from the CEO

In 2020/21, we reported our highest sales and strongest earnings ever, despite a very challenging situation. Sales for the fiscal year, adjusted for currency effects, rose 2.8 percent to SEK 10.8 billion and adjusted EBT amounted to SEK 602 million (464). The performance trend accelerated in the fourth quarter, resulting in an increase in currency-adjusted sales by 11.4 percent and adjusted EBT more than tripled to SEK 129 million (35).

Samtrans accounted for a significant share of the earnings improvement after adjusting their business model in spring 2020 to focus on Covid-19 testing. Today, Samtrans is the leading player in mobile self-testing of Covid-19 in Sweden and at the end of 2020 the contract was extended by the Public Health Agency of Sweden until December 2021 with an option to extend this throughout 2022. Samtrans will also provide logistics for Covid-19 vaccinations.

In contracted public transport, we were also successful in our efforts to compensate for markets that were sometimes in lockdown and for a 50-percent drop in travel in Sweden in 2020. By securing new contracts in extra traffic and replacement traffic, and thanks to negotiations on temporary pandemic adapted incentive contracts and continued streamlining, we could partially offset some of the decline and maintain profitability. There is every reason to expect a return to earlier travel patterns over the next year even if no one can say how quickly this may happen. A substantial share of our passengers perform work that requires them to be at their workplaces and we operate in regions where alternatives to public transport are limited for average wage earners.

It is also beyond all doubt that that the political environmental agenda supports public transport. Travelling by bus is sustainable. 84 percent of our buses operate on green electricity or renewable fuel, and in Sweden this share is 99 percent. Our transition in the other Nordic countries accelerated further during the year and we secured new contracts with predominantly electric buses in both Denmark and Finland. These contracts, together with forthcoming traffic start-ups with electric buses in Piteå and Malmö, will make Nobina the largest electric bus operator in the Nordic region. It will also move us closer to achieving our new climate target to reduce CO2 emissions per driven kilometre by 80 percent by 2030. Our green profile also improves access to financing on competitive terms. In early March 2021, we issued another SEK 200 million within the framework of our green bond at a floating interest rate of STIBOR 3 months + 65 basis points.

Digital developments are also changing the way we travel. Digital travel planners and apps for ticket purchasing are already available, but this journey is only just beginning when seen in the light of future opportunities. We want to offer our passengers the opportunity to travel from door to door, in cooperation with operators of all the available travel alternatives. We are therefore continuing to develop the Travis app’s ecosystem of various mobility solutions, most recently through an agreement with the green car-pooling service Kinto Share. Bicycles, electric scooters and electric taxis are already part of the solution in addition to bus and train services. I see major opportunities in the continued development of the service in many Nordic cities, thereby facilitating travel for millions of people and reducing the need for a car.

Nobina is the Nordic region’s largest operator of publicly tendered public bus transport and, relative to our competitors, highly profitable. We are careful to only secure contracts with the potential for attractive margins, which partially holds back organic growth but ensures high profitability. In parallel, we grow through systematic acquisitions. Since 2018/19, we have completed five acquisitions that have made a strong contribution to our growth in recent years and our earnings during the latest fiscal year. The impact of the pandemic on other operators in the industry will enable us to capitalise further on our size and financial strength should we see the potential for value-generating acquisitions. KE Buss, which we acquired to increase our competitiveness in smaller contracts, and Göteborgs Buss in service traffic, are examples of the type of acquisition we are constantly evaluating.

In light of the opportunities referred to above, and the continued uncertainty surrounding the pandemic, the Board proposes a dividend of SEK 3.77 per share, corresponding to 75 percent of net profit or 63 percent if expressed according to our current dividend policy. I consider this a responsible level given that we have achieved two of our three financial targets this year and improved most sustainability-related key metrics. We are well prepared for sustained profitable growth in a turbulent world.

Finally, I wish to thank our 12,000 employees for their outstanding work during a time that has been challenging for us all. I can now see what this incredible organisation is capable of when market conditions change rapidly. I look forward to working together with all of you all as we continue to develop Nobina and contribute to sustainable travel for everyone.

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 and the Securities Market Act. The information was published, through the agency of the above-mentioned contact person, on 9 April 2021, at 8:00 a.m.