The second quarter was highly affected by the ongoing Coronavirus pandemic. The effects on our operations in Denmark and Norway have been limited and in Sweden it is mainly Vardaga that has been affected. However, as of today are all our nursing homes are free from COVID-19. Our employees worked extremely hard to contain and control the spread of the pandemic and the situation stabilised towards the end of the quarter. The different government support that has been put in place in the three countries have reduced the negative effects in the quarter.

In the second quarter, net sales amounted to SEK 2,776 million (2,877). Compared with the year-earlier quarter, net sales declined SEK 101 million, corresponding to 4 per cent, mainly due to terminated management contracts at Stendi and Vardaga. Organic growth was -3 per cent. In the second quarter, the estimated impact of the coronavirus is SEK -80 million on sales and SEK -25 million on earnings.

Despite the negative effects of the pandemic and start-up costs for many new units, adjusted EBITA of SEK 174 million was in line with the preceding year. The long-term need for nursing home beds remains and during the quarter, Vardaga opened three nursing homes with a total of 217 beds, and Nytida opened four group homes and one day services operation with a total of 70 beds and placements.

We will also be impacted by COVID-19 in the coming quarters and the uncertainty surrounding how long it will take to resume normal levels of occupancy in elderly care remains great. In the third quarter, we are expecting a negative impact of SEK 70-80 million on sales and SEK 50-60 million on earnings.

• Net sales decreased 4 per cent to SEK 2,776 million (2,877)
• Operating profit (EBIT) increased to SEK 136 million (83)
• EBITA increased 39 per cent to SEK 165 million (118), corresponding to a margin of 5.9 per cent (4.1)
• Adjusted EBITA, excluding items affecting comparability decreased 1 per cent to SEK 174 million (175)
• The adjusted EBITA margin was 6.3 per cent (6.1)
• Items affecting comparability in the quarter amounted to SEK -9 million (-57), where the period's items were attributable to the current restructuring program in Stendi
• Profit for the period was SEK 53 million (12)
• Earnings per share amounted to SEK 0.56 (0.16) before and after dilution
• Operating cash flow amounted to SEK 484 million (338)
• Free cash flow totalled SEK 382 million (178)

• Ambea assesses that COVID-19 had a negative impact of about SEK 80 million on net sales and SEK 25 million on EBITA during the quarter. The negative impact includes both a lower rate of occupancy, primarily in elderly care, and higher costs for protective equipment and sick leave, as well as government support received.
• During the quarter, CEO Fredrik Gren announced that he had decided to leave the company. Fredrik Gren will remain in his current position until the end of the year and the recruitment process for his successor is ongoing.
• During the quarter, CEO Fredrik Gren announced that he had decided to leave the company. Fredrik Gren will remain in his current position until the end of the year and the recruitment process for his successor is ongoing.
• The negative impacts of COVID-19 on the company are expected to continue. In the third quarter, the expected negative impact is SEK 70-80 million on sales and SEK 50-60 million on EBITA.

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/7zui82uc

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 2529279.

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