Ambea — Interim / Quarterly Report 2017

May 17, 2017

Good growth and profitability in the first quarter

First quarter January – March

• Net sales increased 19 per cent to SEK 1,422 million (1,197)
• Operating profit (EBIT) amounted to SEK 73 million (53)
• EBITA increased by 40 per cent to SEK 86 million (61) corresponding to a margin of 6.1 per cent (5.1)
• Adjusted EBITA, excluding items affecting comparability totalling SEK 24 million (9), increased by 57 per cent to SEK 110 million (70). The adjusted EBITA margin was 7.7 per cent (5.9)
• Profit for the period was SEK 33 million (22)
• Earnings per share amounted to SEK 0.5 (0.3)
• Operating cash flow amounted to SEK 87 million (-6)
• Free cash flow amounted to SEK 24 million (-17)

Significant events during the quarter

• Ambea AB (publ) was listed on Nasdaq Stockholm on 31 March. IPO-related costs of SEK 25 million were charged against profit for the quarter.
• Prior to the listing, the company implemented a share split and a bonus issue, and preference shares were converted to common shares.
• In connection with the market listing, a warrant programme for members of Group Management and Extended Company Management, as well as a share savings programme for certain managers, were launched.

Consolidated key figures

SEK million	2017 Jan–Mar	2016 Jan–Mar	Change %	2016/2017 Rolling 12 months	2016 Jan–Dec	Change %
Net sales	1,422	1,197	19	5,559	5,334	4
EBITA	86	61	40	384	359	7
Operating margin EBITA (%)	6.1%	5.1%		6.9%	6.7%
Adjusted EBITA	110	70	57	496	456	9
Operating margin adjusted EBITA (%)	7.7%	5.9%		8.9%	8.5%
Operating profit EBIT	73	53	36	321	301	6
Operating margin EBIT (%)	5.1%	4.4%		5.8%	5.6%
Profit after tax	33	22	53	140	128	9
Earnings per share, SEK1	0.5	0.3	54	2.1	2.0	9
Operating cash flow	87	-6		395	303	30
Free cash flow	24	-17	–	260	218	19

For definitions of key figures, see Note 6.

1 Converted due to changes in share capital in 2017; see the section "Earnings per share".

This is a translation of the original Swedish interim report. In the event of any differences between the English and Swedish interim report, the Swedish interim report prevails.

Comments from Fredrik Gren, President and CEO

Good growth and profitability during the first quarter

The strategy of focusing on businesses with a high care content and increasing the share of sales under own management through acquisitions and organic growth contributed to the strong sales and EBITA trend seen during the quarter.

Net sales totalled SEK 1,422 million (1,197) and adjusted EBITA, which does not include the quarter's IPO-related items affecting comparability, increased by 57 per cent to SEK 110 million (70).

During the first quarter, growth under own management was strong in all of our segments and the share of sales under own management amounted to 62 per cent (53) in the first quarter. While the improved net sales in Nytida and Norway were driven by acquisitions, the increased occupancy in newly opened units was the main driver in Vardaga.

We are continuing to invest in residential care units under own management, which resulted in two units in Sweden and one unit in Norway being opened during the quarter. In Nytida, one five-bed unit was opened. In Vardaga, one residential elderly care unit with 54 places and one eight-bed unit were opened in Norway. At the end of the quarter, the number of units under construction and number of signed leases totalled 24, covering a total of 595 beds.

Net sales in the Contract Management operations decreased during the quarter, since contracts won during the quarter were not sufficient to cover the contracts terminated during earlier periods. However, the margin trend for Contract Management was positive in both Nytida and Vardaga, given that some of the terminated contracts generated a low margin. In 2017, we have seen an increasing number of contracts on tender in the market, which is positive.

Although our staffing operations continue to grow, particularly in Care Team and Rent a Nurse, profitability decreased during the quarter, primarily due to lower margins in one region. We have now initiated activities designed to gradually focus sales activities in that region on customer contracts generating a better margin.

The Group's adjusted EBITA developed strongly as a result of an increased share of units under own management and an improved occupancy rate as well as customer mix. Seasonal variations and the deferral of the salary review also had a positive effect on the quarter. At the end of the quarter, pending the necessary permits due to new regulatory requirements, we temporarily closed down approximately 60 places, which had a slight impact on results for the quarter.

The focus of our operations is on quality, with the foundation being to offer the best care to every single individual. We continuously follow up our quality work and we implemented a new system for pharmaceutical usage among the elderly in Vardaga during the quarter, with the aim of increasing the quality of life of residents. Our desire to achieve transparency and control in all units has led to an increased number of reported deviations, primarily driven by the newly acquired units now being integrated into our quality system. At the same time, we have

observed a gratifying downward trend in serious deviations. Our report on quality describes how Vardaga's elderly care and Nytida's LSS operations have been quality declared by the Association of Private Care Providers, something we regard as evidence of the high standard of our quality efforts.

In autumn 2016, we also made a concerted effort in relation to our sustainability work, with the aim of integrating responsibility and sustainability issues even more clearly in the operations, and preparing for a follow-up and report on forthcoming legislation governing non-financial accounting. The result of this work is described in our Quality and Sustainability Annual Report for 2016. For us, sustainability is closely linked to quality, which means focusing on the individual, respecting human rights and being a driver of innovation in healthcare and care services.

Finally, of course, Ambea's IPO on 31 March was the highlight of the quarter. We are very proud of Ambea and gratified at the considerable interest shown by institutional investors, Swedish and international, and by the general public in Sweden and employees of the Ambea Group.

For a long time, Ambea has shown healthy growth combined with high quality, and currently has more than 200 Swedish municipalities as customers. There is a considerable and rising need for care, and we want to contribute to solving this societal challenge. Accordingly, we view the step onto the stock exchange, with diversified ownership and distinct transparency requirements, as important for achieving our ambition of contributing to the development of care services in society. All of us in company management and on the Board of Directors are looking forward to our journey as a listed company and to creating value for our shareholders.

Fredrik Gren

Group

First quarter

Net sales

Net sales increased by 19 per cent to SEK 1,422 million (1,197). The effect of the Solhaga acquisition being consolidated in the middle of the corresponding quarter of 2016 was that sales increased SEK 148 million. Excluding the effect of the Solhaga group, net sales totalled SEK 1,274 million (1,197), up 6 per cent, which was primarily attributable to own management growth.

Net sales under own management amounted to SEK 889 million (636), up 40 per cent. The strong growth derived mainly from the Solhaga acquisition and from the smaller units acquired in Sweden and Norway. Higher occupancy rates in residential facilities that were started up during previous periods also contributed positively.

Net sales in Contract Management totalled SEK 452 million (486). The lower sales were due to contract terminations in both elderly care and LSS operations.

Net sales in Staffing amounted to SEK 81 million (75).

Earnings

EBIT increased by 36 per cent to SEK 73 million (53), corresponding to a margin of 5.1 per cent (4.4).

EBITA increased by 40 per cent to SEK 86 million (61). The EBITA margin was 6.1 per cent (5.1).

IPO-related costs of SEK 25 million were charged against EBITA for the quarter. Adjusted EBITA increased by 57 per cent to SEK 110 million (70). The increase was attributable to profit from the Solhaga group, profit from smaller acquired units and a higher share of sales under own management. EBITA was also affected positively by SEK 8 million due to full indexation from 1 January while the year's salary review was deferred two months compared with the year-earlier period. Calendar effects, such as the leap year and Easter, explain a marginal deterioration in earnings, although the negative leap year effect of approximately SEK 11 million was positively offset by the effect of Easter of approximately SEK 7 million.

The adjusted EBITA margin amounted to 7.7 per cent (5.9).

Financial net

Net financial items in the quarter amounted to an expense of SEK -28 million (-24). The higher expense is mainly related to the increased debt due to the Solhaga acquisition in 2016.

Income tax

The tax expense for the period amounted to SEK -11 million (-7), corresponding to a tax rate of 25 (25) per cent.

Net profit for the period

Net profit for the period amounted to SEK 33 million (22), corresponding to earnings per share before and after dilution of SEK 0.5 (0.3).

Net sales per segment Jan–Mar 2017

Net Sales per contract model Jan–Mar 2017

Distribution of net sales

Net sales per segment	2017 Jan–Mar	2016 Jan–Mar	Net sales per contract model	2017 Jan–Mar	2016 Jan–Mar
Vardaga	40%	44%	Own management	62%	53%
Nytida	49%	49%	Contract management	32%	41%
Other: Norway and Staffins Solutions	11%	7%	Staffing	6%	6%
Total	100%	100%	Total	100%	100%

Distribution of net sales

		Vardaga			Nytida			Other: Norway and Staffing Solutions		items	Unallocated		Group
SEK million	2017	2016 Jan–Mar Jan–Mar	Change %	2017 Jan–Mar Jan–Mar	2016	Change %	2017	2016 Jan–Mar Jan–Mar	Change %	2017	2016	2017 Jan–Mar Jan–Mar Jan–Mar Jan–Mar	2016	Change %
Own mana gement	246	203	21	556	422	32	87	10	745	–	–	889	636	40
Contract manage ment	318	326	-3	134	160	-16	–	–	–	–	–	452	486	-7
Staffing	–	–	–	–	–	–	81	75	9	–	–	81	75	9
Total	564	530	6	690	582	19	168	85	98	–	–	1,422	1,197	19

Own management – beds

SEK million	Opening balance Units	Beds	Change Units	Beds	Closing balance Units	Beds
Total in operation	238	3 042	1	30	239	3 072
Under construction	16	263	-1	-55	15	208
Signed	9	330	0	57	9	387

Own management – customer places2

SEK million	Opening balance Units	Places	Change Units	Places	Closing balance Units	Places
Total in operation	49	1154	0	3 -19	49	1,135
Under construction	0	6	0	0	0	6
Signed	0	0	0	0	0	0

Contract management

SEK million	Units	Change in first quarter Beds	Annual income
Won, not started	3	24	12
Renewed confidence	1	20	10
Lost, not completed	1	30	15
Contracts retaken to be run under municipal auspices	2	62	52

Beds relate to elderly, group and service housing, while Nytida customer places refer to non-residential activities.

3 Reduced number of places due to decreased capacity in non-institutional care.

Cash flow

SEK million	2017 Jan–Mar	2016 Jan–Mar	2016/2017 Rolling 12 months	2016 Jan–Dec
Operating activities before changes in net working capital	35	61	292	318
Changes in net working capital	-4	-85	-27	-108
From operating activities	31	-24	265	210
Cash flow from investing activities (excluding acquisitions and investments in financial assets)	-7	7	-6	8
Free cash flow	24	-17	260	218

The year-on-year rise in free cash flow during the quarter was attributable to a reduction in tied-up working capital. Cash flow from operating activities before changes in working capital was lower because of a year-on-year increase in tax payments.

Cash flow from investing activities, excluding acquisitions and divestments, was lower than in the first quarter of 2016, mainly because of lower proceeds from sales of properties of SEK 3 million (22) and higher investments, due to the expansion of own management.

Financial position

SEK million	31 Mar 2017	31 Mar 2016	31 Dec 2016
Net interest-bearing debt	1,999	1,997	2,003
Equity ratio	38.1%	39.1%	38.1%
Net debt/adjusted EBITDA rolling 12 months	3.7	5.8	4.0

For definitions of key figures, see Note 6.

At 31 March 2017, net debt amounted to SEK 1,999 million (1,997), or 3.7 times rolling 12 months adjusted EBITDA. The higher net debt/Adjusted EBITDA in the first quarter of 2016 was due to the Solhaga acquisition, whick was completed on 18 February 2016.

Vardaga

Vardaga offers individual-focused healthcare and care services in special residential nursing homes for the elderly. Vardaga is one of Sweden's largest private providers of elderly care services with approximately 75 nursing homes throughout Sweden, where 7,000 employees work with the focus on safeguarding the quality of life and security of every individual.

Quarter

Vardaga's net sales increased by 6 per cent to SEK 564 million (530). Net sales under own management amounted to SEK 246 million (203), with the increase of 21 per cent primarily attributable to higher occupancy in newly opened units and slightly higher occupancy rates in existing units. Net sales in Contract Management amounted to SEK 318 million (326). The reason for the decline of 3 per cent was that the contracts won did not fully offset terminated contracts.

EBITA rose by 74 per cent to SEK 33 million (19), primarily because of an increased share of contracts under own management and higher occupancy in units that were previously in the start-up phase. EBITA was affected positively in the approximate amount of SEK 5 million due to full indexation as of 1 January while the salary review was delayed by two months compared with the year-earlier period. Calendar effects, such as leap year and Easter, explain a marginal deterioration in earnings, although the negative leap year effect was positively offset by the effect of Easter, compared with the first quarter of 2016.

The EBITA margin amounted to 5.8 per cent (3.6).

Vardaga operating margin (EBITA) RTM %

SEK million	2017 Jan-Mar	2016 Jan-Mar	Change %	2016/2017 Rolling 12 months	2016 Full year	Change %
Net sales	564	530	6	2,198	2,164	2
EBITA	33	19	72	133	120	11
Operating margin, EBITA (%)	5.8%	3.6%	11	6.1%	5.5%

Own management – beds

SEK million	Opening balance Units	Beds	Change Units	Beds	Closing balance Units	Beds
Total in operation	23	1,133	3	119	4 26	1,252
Under construction, building permits received	3	171	-1	-54	2	117
Signed	6	312	1	63	7	375

Contract management

SEK million	Units	Change Beds	Annual revenue
Won, not started	0	0	0
Renewed confidence	1	20	10
Lost, not completed	1	30	15
Contracts retaken to be run under municipal auspices	1	56	48

4 Two units, corresponding to 65 places, were moved to Vardaga from Nytida due to management synergies and similar orientations.

Nytida

Nytida provides children, youth and adults with support and care for satisfying disability and psychosocial problems throughout the clients' lives. We offer residential care, day-care activities and individual, family and school support from approximately 350 units throughout Sweden. Using tried-and-tested models and in-depth knowledge, our 7,000 employees work to strengthen the individual's ability to live an independent life.

Quarter

Net sales rose by 19 per cent to SEK 690 million (582). The effect of the Solhaga acquisition's consolidation in the middle of the quarter was that sales increased by SEK 127⁵ million. Excluding the Solhaga effect, sales declined 3 per cent to SEK 563 million (582), due to lower sales in Contract Management.

Net sales under own management totalled SEK 556 million (422), with the increase of 32 per cent primarily attributable to the Solhaga acquisition. Excluding the Solhaga acquisition, net sales rose 2 per cent to SEK 429 million (422). Although smaller new acquisitions made a positive contribution, occupancy in a number of individual existing units was slightly lower year-on-year, primarily in assisted living facilities which now require a permit from the Health & Social Care Inspectorate, where operations were temporarily shut down pending the receipt of permits.

Net sales in Contract Management amounted to SEK 134 million (160). The lower sales were due to a number of contracts being terminated in 2016.

EBITA rose 49 per cent to SEK 77 million (52), with the increase mainly due to the acquisition of the Solhaga group and to a higher share of units under own management and thus an improved customer mix. The margin for the quarter was negatively affected due to the temporary closure of approximately 60 places within assisted living facilities pending receipt of permits from the Health and Social Care Inspectorate.

EBITA was also positively affected by SEK 3 million due to full indexation as of 1 January while the salary review was postponed two months compared with the year-earlier period. Calendar effects, such as the leap year and Easter, explain a marginal deterioration in earnings, although the negative leap year effect was positively offset by the effect of Easter, compared with the year-earlier period.

The EBITA margin amounted to 11.2 per cent (8.9).

SEK million	2017 Jan-Mar	2016 Jan-Mar	Change %	2016/2017 Rolling 12 months	2016 Full year	Change %
Net sales	690	582	19	2,838	2,730	4
EBITA	77	52	49	325	300	9
Operating margin EBITA (%)	11.2%	8.9%		11.5%	11.0%

Nytida operating margin (EBITA) RTM %

5 Excluding Heimta, which is part of Other: Norway and Staffing Solutions.

Nytida

Own management – beds

SEK million	Opening balance Units	Beds	Change Units	Beds	Closing balance Units	Beds
Total in operation	175	1,805	-3	-97	172	1,708
Under construction	11	77	1	7	12	84
Signed	3	18	-1	-6	2	12

Own management – customer places

SEK million	Opening balance Units	Places	Change Units	Places	Closing balance Units	Places
Total in operation	49	1,154	0	6 -19	49	1,135
Under construction	0	6	0	0	0	6
Signed	0	0	0	0	0	0

Contract management

SEK million	Units	Change Beds	Annual revenue
Won, not started	3	24	12
Renewed confidence	0	0	0
Lost, not completed	0	0	0
Contracts retaken to be run under municipal auspices	1	6	4

6 Reduced number of places due to decreased capacity in non-institutional care.

Other: Norway and staffing solutions

In the business segment Other:

Ambea's staffing operations (Rent a Doctor/Rent a Nurse) are one of Sweden's leading suppliers of staffing services for healthcare and care services. We are a licensed staffing services company and are ISO certified. Based on personal service and long-standing experience of the industry, Ambea assists both public and private contracting authorities by providing superior staffing solutions. We mediate thousands of assignments every year and conduct operations throughout Sweden.

Norway consists of support and residential care services in the fields of disabled care and psychiatric care, provided through the companies Heimta, Vitale and TBO Helse. The operations have about 450 employees and offer residential care, user-guided personal assistance, rehabilitation services, temporary relief for relatives and investigatory services in large parts of Norway.

Quarter

Net sales rose 98 per cent to SEK 168 million (85), mainly because of minor acquisitions and organic growth in Norway. The Staffing Solutions operations performed well with healthy growth in the quarter compared with the year-earlier period, primarily in Rent a Nurse and Care Team.

EBITA amounted to SEK 3 million (2), corresponding to a margin of 1.9 per cent (2.4). The lower margin was due to start-up costs related to newly opened units in Norway, combined with lower profitability in Staffing Solutions operations. The reduced profitability in staffing was due to lower margin contracts within one region.

Following Ambea's takeover of the Vitale group in Norway in November 2016, multiyear contract deviations within a number of Vitale's units became apparent. Due to this, the Norwegian municipality of Baerum has decided to gradually terminate its contracts with Vitale. Ambea takes a serious view of what has happened and has initiated an external review.

As part of Ambea's initiative in Norway, Ambea announced after the end of the quarter that Truls Navestad has been appointed new head of Norwegian operations and will become a member of Group management as of August. Truls Navestad will replace Agneta Lindgren, who will take on another role in Ambea. The strengthening of the Management Group is a feature of Ambea's continued expansion and of efforts to build a strong, joint platform for growth in Norway.

SEK million	2017 Jan-Mar	2016 Jan-Mar	Change %	2016/2017 Rolling 12 months	2016 Full year	Change %
Net sales	168	85	98	523	439	19
EBITA	3	2	59	17	15	8
Operating margin, EBITA (%)	1.9%	2.4%		3.2%	3.5%

Own management – beds

SEK million	Opening balance Units	Beds	Change Units	Beds	Closing balance Units	Beds
Total in operation	40	104	1	8	41	112
Under construction, building permits received	2	15	-1	-8	1	7
Signed	0	0	0	0	0	0

Other events

Market listing

Ambea AB (publ) was listed on Nasdaq Stockholm on 31 March 2017. The offering comprised 26,565,495 shares, including 2,666,667 shares that were issued and offered by the company and 23,898,828 existing shares offered by ACTR Holding AB, which is controlled by Actor SCA, a partnership between funds advised by Triton and KKR (jointly designated the "Principal Owners"). The new issue contributed gross proceeds of SEK 200 million to Ambea. Interest from institutional investors, Swedish and international, was considerable, as was interest from private investors and Ambea employees. The subscription price was SEK 75 per share and the offering and the overallotment option were exercised in full. The Ambea share is traded on the Nasdaq Midcap list under the ticker "AMBEA".

Costs of SEK 25 million attributable to the market listing were charged against profit for the quarter.

Incentive programmes

At the Extraordinary General Meeting held on 16 March 2017, the shareholders resolved to introduce two long-term incentive programmes: (i) a warrant programme targeted at Group Management and members of the extended management and (ii) a share savings programme, targeted at certain other managers in the Ambea Group.

In total, the warrant programme comprised 446,000 warrants, entitling to subscription of the same number of new shares. The participants were offered the opportunity to acquire the warrants at market price. Group Management subscribed for a total of 274,290 warrants, corresponding to a market value of some SEK 1.6 million. Including the warrants subscribed for by executive management, a total of 392,480 warrants were acquired, which corresponds to a market value of approximately SEK 2.3 million and corresponding to about 0.6 per cent of Ambea's total number of shares after full dilution.

A condition for the share savings programme offered to other managers was that the participants used their own funds to acquire Ambea shares, or alternatively allocated already owned shares to the programme, i.e. savings or investment shares. The maximum personal investment was SEK 50,000. The combined number of subscribed shares amounted to 32,114, which means a total of maximum 64,228 shares can be allocated at full allotment, corresponding to approximately 0.1 per cent of the total shares in Ambea after full dilution. The company's undertaking to allot shares to participants in the share savings programme will be secured by means of share buybacks. Costs for the share savings programme are recognised in accordance with IFRS 2 – Share-based Payment.

Ambea's Board of Directors was authorised by the Extraordinary General Meeting of 16 March 2017 to resolve on buybacks of Ambea shares on Nasdaq Stockholm to secure the transfers mentioned above.

More information on the programmes is provided on page 165 in the Prospectus on www.ambea.com.

Shares and share capital

Following the resolution of the Extraordinary General Meeting on 16 March 2017, a number of transactions attributable to the market listing took place and affected the share capital.

• On 17 March, a one-for-four share split was implemented.
• On 31 March, all of the company's preference shares outstanding were converted to common shares, by re-stamping each preference share as a common share. Following the conversion, all of the shares in the company comprise common shares, each carrying one vote and equal rights to the company's assets and profit.
• On 31 March, a bonus issue to certain existing shareholders was also effected to reflect ownership of the company among the existing shareholders, which was based on the financial value represented by the preference shares.

Interim report January – March 2017

			Number of shares after the transaction		Change in number of shares Share capital
Time	Event	Common shares	Preference shares	Common shares	Preference shares	Change	Total
1 Jan 2017	Opening share structure	–	–	10,046,986	12,799	–	1,004,692.59
17 Mar 2017	Split (1:4)	30,140,958	38,397	40,187,944	51,196	–	1,004,692.59
31 Mar 2017	Share conversion	51,196	-51,196	40,239,140	0	–	1,004,692.59
31 Mar 2017	Bonus issue	24,710,749	0	64,949,889	0	616,979.05	1,621,671.64

On the balance sheet date, equity totalled SEK 2,095 million compared with SEK 2,067 million on 31 December 2016.

On 31 March, meaning the first day of trading, the largest shareholders were ACTR Holding AB and Actor Sweden SCA representing 50.2 per cent, employees and the Board of Directors 4.8 per cent, Fidelity International 3.9 per cent, Öresund 3.9 per cent, Carve Capital 3.0 per cent, Didner & Gerge 3.0 per cent and Ram One 2.0 per cent.

Related-party transactions

In addition to conventional salary and bonus amounts paid to senior executives, an incentive programme for senior executives in Group Management and the extended management was implemented during the quarter. For more information on this, refer to the heading "Other events – Incentive programmes".

Events after the end of the quarter

New share issue

Following a resolution passed at the Extraordinary General Meeting on 16 March 2016, and in connection with the market listing, a new issue of 2,666,667 shares was implemented. The new issue generated proceeds of SEK 200 million for Ambea and was registered on 4 April 2017. The share capital was increased by SEK 66,581.46, resulting in dilution of 3.9 per cent.

Financing – new credit facility

The company's new credit facility totals SEK 2,500 million and is a multicurrency revolving credit facility. The new financing has been used to refinance the main parts of the Group's former debt, consisting of loans and similar overdraft facilities, which jointly amounted to SEK 2,202 million.

The credit facility has an original maturity date of three years after the listing, but has an extension option of one year at a time (maximum of two more years) if the lender approves the extension. The credit facility is a revolving facility, which means that repaid amounts may be borrowed again so that the credit facility can be used for ongoing financing of the Group's operations during the term of the credit facility, within the scope of the credit framework.

The agreement contains customary guarantees and obligations in addition to terms and conditions relating to net debt in relation to adjusted EBITDA.

Seasonality

Ambea's results of operations are affected by seasonal variations, weekends and public holidays.

Weekends and public holidays reduce Ambea's profitability due to higher personnel costs based on inconvenient working hours. The first or second quarter is affected by Easter, depending on which quarter the Easter holiday occurs, while the first and fourth quarter are affected by the Christmas and New Year's holidays.

The company's personnel costs are affected in a similar manner, depending on when individual employees take their holiday. For example, the company is most profitable in the third quarter, as employees typically take holiday leave during the months of July and August and therefore receive holiday pay that is accrued continuously throughout the year. Costs during summer months are also generally lower due to a reduced schedule of central activities, such as mandatory training programmes and central initiatives, over this period.

Ambea's profit for the first quarter was positively affected by the fact that Easter occurred after the quarter and will thus affect the second quarter, and negatively by the leap year effect in the corresponding year-earlier period.

Employees

The average number of employees (FTEs) during the quarter was 7,656 (7,146).

Parent company

The Parent Company's result refers to the Board of Directors and owner-related costs. The Parent Company's net sales amounted to SEK 6 M (0). The result for the quarter was a loss of SEK -19 million (-2), with the weaker profit due mainly to costs related to the IPO. Costs related to the IPO recognized in equity amounted to SEK 7 million.

Risks and uncertainties

Ambea's operations and development are impacted by demographic, economic and political factors, as well as by the general development in the market for care services. Changes in these factors could result in reduced demand for Ambea's care services, which could adversely affect the company. Ambea works continuously on following up, analysing and taking actions to mitigate risks. Risk management is based on developed systems, division of responsibilities and procedures that are well secured in the organisation.

Demand for Ambea's care services is impacted to a great extent by legislation and political decisions, since municipalities are customers and the procuring party. Accordingly, Ambea's development depends on the orientation of the various municipalities in terms of the provision of healthcare and care services. Risks associated with freedom of choice can include Ambea being unable to perform the specific service at the set price, or that not enough care recipients choose the company's residences or locations. In connection with public procurement, there is also a risk that the company will not have its existing contracts extended or will not win new contracts.

Restrictions affecting the possibility of providing private care services for profit and stricter rules and regulations as regards permits and supervision could restrict Ambea's business model. Ambea is thus affected by, and must comply with, changes and interpretations of new and current legislation, ordinances, regulations and practices. Infringements or shortcomings in the fulfilment of these could result in the company being subject to fees, fines, penalties or other sanctions. Such factors could also lead to adaptation actions and costs.

The quality of operations is Ambea's principal priority. In addition to rigorous and systematic internal follow-ups of quality, comprehensive follow-ups and quality checks are performed by authorities, and permits are required for conducting operations. Should the company not be able to fulfil the contractual requirements and quality standards, the company could become subject to penalties, damages, contractual penalties, or ultimately lose the customer contracts and/or permits that the company needs to conduct business. Since Ambea's operations are also dependent on permits, the loss of, or delays in receiving, permits could adversely affect Ambea's operations, earnings and financial position.

Ambea is also exposed to financial risks, whereby changes in the credit and capital market could affect Ambea's financial position.

Risks associated with the performance of care services are managed by the management of the various companies at different levels, taking into account the procedures and governance principles applied in the Group. Follow-up of the operations occurs in part in cooperation with contracting authorities and customers and in part in the form of internal quality checks. The design of contracts has a material impact on the risks associated with individual assignments. Financial risks are managed by the finance department.

Other information

This report constitutes the type of information that Ambea AB (publ) is obligated to disclose pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. This information was submitted for publication, through the agency of the contact person set out above, on 17 May 2017.

The company's auditors have not reviewed this report.

Stockholm, 17 May 2017

Fredrik Gren President and CEO

Presentation of first quarter of 2017

Ambea will hold a presentation for the financial market, including the possibility to participate in a teleconference, at 10:00 a.m. CET on Wednesday 17 May 2017. The presentation will be held in English and will also be available as a webcast on ambea.com.

Call-up information

To make sure that the hook-up to the conference call works, please call a few minutes before the conference call starts to register.

Phone numbers:

Sweden:	+46(0)8 5033 6539
UK:	+44(0)20 3427 1908
US:	+1646 254 3388

Contact

Louise Tjeder, Director IR and Strategy, telephone +46 73 143 17 68

Forthcoming report occasions

Q2 interim report 17 August Q3 interim report 17 November

Ambea, which is active in healthcare and care services, has approximately 14,000 employees. We offer services in disabled care, individual and family care and care of the elderly 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. As per 31 December 2016, Ambea had approximately 6,200 places and 1,300 school and daily operation placements at around 460 units in Sweden and Norway. Total income and adjusted EBITA for the 2016 financial year amounted to SEK 5,409 million and SEK 456 million, respectively. The company was founded in 1996, is headquartered in Solna and is listed on Nasdaq Stockholm.

Consolidated income statement in summary

SEK million	2017 Jan–Mar	2016 Jan–Mar	2016/2017 Rolling 12 months	2016 Jan–Dec
OPERATING INCOME
Net sales	1,422	1,197	5,559	5,334
Other operating income	11	8	78	75
Total operating income	1,434	1,205	5,638	5,409
OPERATING EXPENSES
Consumables	-45	-42	-179	-176
Other external costs	-293	-195	-1,106	-1,008
Personnel costs	-997	-895	-3,918	-3,817
Depreciation, amortisation and impairment of tangible and intangible assets	-25	-18	-108	-102
Profit or loss from participations in Group companies	0	0	-1	-1
Other operating expenses	-1	0	-5	-4
Operating expenses	-1,361	-1,152	-5,317	-5,107
OPERATING PROFIT	73	53	321	301
Financial income	1	0	7	6
Financial expenses	-29	-24	-141	-135
Net financial income and expenses	-28	-24	-134	-130
PROFIT AFTER NET FINANCIAL ITEMS	45	29	187	171
PROFIT BEFORE TAX	45	29	187	171
Tax on profit for the period	-11	-7	-47	-44
PROFIT FOR THE PERIOD	33	22	140	128
Profit for the period attributable to:
Shareholders of the Parent Company	33	22	140	128
Non-controlling interests	0	0	0	0
	33	22	140	128
Earnings per share before and after dilution (SEK)7	0.5	0.3	2.1	2.0

7 Converted due to changes in share capital in 2017; see the section "Earnings per share".

Consolidated statement of comprehensive income in summary

SEK million	2017 Jan–Mar	2016 Jan–Mar	2016/2017 Rolling 12 months	2016 Jan–Dec
PROFIT FOR THE PERIOD AFTER TAX	33	22	140	128
OTHER COMPREHENSIVE INCOME, ITEMS THAT CANNOT BE TRANSFERRED TO PROFIT OR LOSS
Remeasurement of defined benefit pension plans	-	-	-2	-2
Tax related to remeasurement of defined benefit pension plans	-	-	0	0
Total items that are not transferable to profit or loss	-	-	-2	-2
OTHER COMPREHENSIVE INCOME, ITEMS TRANSFERABLE TO PROFIT OR LOSS
Translation differences	-2	-	-2	1
Hedging of net investments in foreign operations	3	-	6	3
Tax related to net investments in foreign operations	-1	-	-2	-1
Other	1	-2	4	1
Total items transferable to profit or loss	1	-2	6	4
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	34	20	144	130
Comprehensive income for the period attributable to:
Shareholders of the Parent Company	34	20	144	130
Non-controlling interests	-	0	-	0
	34	20	144	130

Earnings per share

SEK million	2017 Jan–Mar	2016 Jan–Mar	2016/2017 Rolling 12 months	2016 Jan–Dec
Profit for the period attributable to the Parent Company's shareholders, SEK million	33	22	140	128
Average number of shares, thousands	64,950	64,847	64,949	64,923
Earnings per share before and after dilution, SEK	0.5	0.3	2.1	2.0

Earnings per share have been recalculated retroactively because the company implemented a four-for-one share split, a share conversion and a bonus issue during the first quarter of 2017. For more information, see the section "Shares and share capital". The average number of shares in earlier periods has been recalculated to reflect the split, the conversion and the bonus issue. Due to the share conversion, all preference shares were converted to common shares, while the debt to former holders of preference shares was paid off in connection with the bonus issue implemented on 31 March 2017.

Consolidated balance sheet in summary

	31 Mar	31 Mar	31 Dec
SEK million	2017	2016	2016
ASSETS
Fixed assets
Goodwill	3,517	3,303	3,517
Customer contracts and customer relations	423	444	435
Other intangible assets	14	17	14
Tangible fixed assets	173	162	168
Non-current receivables from Group companies	1	1	1
Derivative instruments	1	–	1
Deferred tax assets	94	106	94
Non-current receivables	22	43	21
Total fixed assets	4,245	4,049	4,252
Current assets
Inventories	0	1	0
Accounts receivable	563	499	583
Current receivables from Group companies	4	6	7
Other receivables	22	18	32
Accrued income and prepaid expenses	178	120	145
Cash and cash equivalents	427	208	318
	1,194	851	1,085
Assets held for sale8	77	58	82
Total current assets	1,271	910	1,167
TOTAL ASSETS	5,516	4,986	5,418

8 Refers to properties where a sale and leaseback transaction will be conducted.

Consolidated balance sheet in summary – continuation

	31 Mar	31 Mar	31 Dec
SEK million	2017	2016	2016
EQUITY AND LIABILITIES
Equity
Share capital	2	1	1
Other capital contributions	4,772	4,766	4,772
Reserves	3	-1	3
Retained earnings including profit/loss for the period	-2,675	-2,815	-2,709
Equity attributable to the Parent Company's shareholders	2,101	1,951	2,067
Non-controlling interests	–	1	–
Total equity	2,101	1,952	2,067
Non-current liabilities
Non-current interest-bearing liabilities	2,141	2,191	2,162
Other non-interest-bearing liabilities	71	15	72
Pension provisions	6	19	6
Other provisions	18	1	24
Deferred tax liabilities	109	112	109
Total non-current liabilities	2,345	2,337	2,373
Current liabilities
Current interest-bearing liabilities	286	14	159
Accounts payable	114	129	166
Current liabilities to Group companies	0	0	0
Current tax liabilities	34	10	54
Other non-interest-bearing liabilities	70	61	80
Accrued expenses and deferred income	567	484	519
Total current liabilities	1,070	698	978
TOTAL EQUITY AND LIABILITIES	5,516	4,986	5,418

Consolidated statement of changes in equity in summary

SEK million	2017 Jan–Mar	2016 Jan–Mar	2016 Jan–Dec
Opening balance	2,067	1,933	1,933
TOTAL COMPREHENSIVE INCOME	34	16	130
Transactions wih shareholders
Acquisitions from non-controlling interests	–	–	-2
New share issue		–	6
Bonus issue	1	–	–
Closing balance	2,101	1,949	2,067

Consolidated cash flow statement in summary

SEK million	2017 Jan–Mar	2016 Jan–Mar	2016/2017 Rolling 12 months	2016 Jan–Dec
OPERATING ACTIVITIES
Profit before tax	45	29	187	171
Adjustment for non-cash items	20	32	128	141
	65	62	315	312
Tax paid	-30	-1	-23	6
Cash flow from operating activities before changes in working capital	35	61	292	318
CASH FLOW FROM CHANGES IN WORKING CAPITAL
Increase (–)/Decrease (+) in inventories	0	0	0	0
Increase (–)/Decrease (+) in operating receivables	-3	-47	-75	-120
Increase (+)/Decrease (-) in operating liabilities	-1	-38	48	12
Cash flow from operating activities	31	-24	265	210
INVESTING ACTIVITIES
Investment and disposal in intangible assets and property, plant and equipment	-7	7	-6	8
Free cash flow	24	-17	260	218
Acquisition of subsidiaries	-18	-867	-212	-1,061
Investment in financial assets	-1	–	-1	0
Cash flow from investing activities	-25	-860	-218	-1,052
Cash flow after investing activities	5	-884	47	-842
FINANCING ACTIVITIES
New loans/loans raised	132	1,262	225	1,355
Repayment of loan liabilities	-29	-360	-56	-387
New share issue	-	-	1	1
Cash flow from financing activities	103	902	170	969
CASH FLOW DURING THE PERIOD	109	18	218	127
Cash and cash equivalents on the opening date	318	189	208	189
Exchange rate differences in cash and cash equivalents	1	1	1	2
Cash and cash equivalents on the closing date	427	208	427	318

Parent company income statement in summary

SEK million	2017 Jan–Mar	2016 Jan–Mar	2016/2017 Rolling 12 months	2016 Full year
REVENUE
Net sales	6	–	6	–
	6	–	6	–
OPERATING EXPENSES
Other external costs*	-24	-2	-58	-35
Personnel costs	-1	0	-1	0
Operating expenses	-25	-2	-59	-36
OPERATING PROFIT	-19	-2	-53	-36
Financial items		– –	–	–
LOSS AFTER FINANCIAL ITEMS	-19	-2	-53	-36
Appropriations		– –	36	36
LOSS BEFORE TAX	-19	-2	-17	0
Tax on profit for the period		– –	–	–
LOSS FOR THE PERIOD	-19	-2	-17	0

* Other external costs include remuneration paid to Ambea AB's Board of Directors and IPO-related costs.

Parent company balance sheet in summary

SEK million	31 Mar 2017	31 Mar 2016	31 Dec 2016
ASSETS
Subscribed not paid in capital	200	–	–
Financial non-current assets
Participations in Group companies	1,935	1,930	1,935
Total fixed assets	1,935	1,930	1,935
Current assets
Receivables from Group companies	–	–	2
Tax assets	2	–	–
Other receivables	2	0	0
Cash and bank balances	15	3	0
Total current assets	19	3	3
TOTAL ASSETS	2,154	1,933	1,938
EQUITY AND LIABILITIES
Share capital	2	1	1
Statutory reserve	0	0	0
Total restricted equity	2	1	1
Share premium reserve	198	6	6
Retained earnings	1,929	1,923	1,929
Loss for the period	-19	-2	0
Total non-restricted equity	2,109	1,928	1,935
TOTAL EQUITY	2,111	1,929	1,936
Accounts payable	0	–	–
Liabilities to Group companies	7	2	–
Other liabilities	0	0	0
Accrued expenses	36	2	1
Total current liabilities	43	4	2
TOTAL EQUITY AND LIABILITIES	2,154	1,933	1,938

Key financial figures

SEK million	2017 Jan–Mar	2016 Jan–Mar	Change %	2016/2017 Rolling 12 months	2016 Jan–Dec	Change %
Net sales	1,422	1,197	19	5,559	5,334	4
Growth in net sales (%)	19%	12%		24%	23%
EBITDA	98	72	36	429	403	6
Operating margin EBITDA (%)	6.9%	6.0%		7.7%	7.6%
Adjusted EBITDA	122	80	52	541	500	8
Operating margin Adjusted EBITDA (%)	8.6%	6.7%		9.7%	9.4%
EBITA	86	61	40	384	359	7
Operating margin, EBITA (%)	6.1%	5.1%		6.9%	6.7%
Adjusted EBITA	110	70	57	496	456	9
Operating margin adjusted EBITA (%)	7.7%	5.9%		8.9%	8.5%
Operating profit EBIT	73	53	36	321	301	6
Operating margin EBIT (%)	5.1%	4.4%		5.8%	5.6%
Profit before tax	45	29	53	187	171	9
Profit after tax	33	22	53	140	128	9
Earnings per share, SEK	0.5	0.3	54	2.1	2.0	9
Return on equity (%)	1.6%	1.1%		6.9%	6.4%
Operating cash flow	87	-6		395	303	30
Free cash flow	24	-17		260	218	19
Cash conversion	88.7%	-8.9%		92.2%	75.3%

Noter

Note 1 Accounting policies

This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act, as well as the Swedish Financial Reporting Board's RFR 1, Supplementary Accounting Rules for Groups, and RFR 2 Accounting for Legal Entities. The applied accounting policies comply with the accounting policies used when preparing the latest annual accounts.

Note 2 Key estimates and judgments

For information on key estimates and judgments in the interim report, reference is made to Note K35 in the company's 2016 Annual Report.

Note 3 Segment information

Norwegian operations and staffing operations jointly constitute a small proportion of the Group's operations that falls below the quantitative thresholds according to IFRS 8 p 13 for requiring separate reporting. They are therefore merged under a miscellaneous segment named Other: Norway and Staffing Solutions as of 2016. In previous years, staffing operations were reported as a separate segment.

Vardaga Consists of elderly care.

Nytida Consists of care for people with functional impairments.

Other: Norway and staffing solutions

Consists of staffing solutions and hiring of doctors, nurses and other care professionals, as well as the Norwegian operations. The Norwegian operations mainly comprise psychiatric support in residential care and outpatient care and accommodation for people with life-long disabilities.

Segment

Jan–Mar		Vardaga	Nytida		solutions	Other: Norway and staffing	items9	Unallocated	adjustments	Consolidation	Group
SEK million	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016
OPERATING INCOME
Net sales	564	530	690	582	168	85	0	0	–	0	1,422	1,197
Other operating income	5	4	3	4	7	5	3	0	-7	-5	11	8
Internal transactions	–	–	–	–	-7	-5	–	0	7	5	–	0
Total income from external custo mers	569	534	692	585	168	85	3	0	–	0	1,434	1,205
OPERATING EXPENSES
Consumables	-23	-22	-21	-20	-1	0	-1	0	–	–	-45	-42
Other external costs	-106	-93	-127	-107	-73	-30	11 13	11 35	–	–	-293	-195
Personnel costs	-404	-396	-464	-404	-91	-54	-38	-41	–	–	-997	-895
Other operating expenses	0	0	0	0	–	–	–	–	0	0	0	0
Depreciation and impairment of tangible assets	-4	-3	-4	-3	-1	0	-4	-4	–	–	-12	-10
EBITA	33	19	77	52	3	2	-27	-11	0	0	86	61
EBITA margin %	5.8%	3.6%	11.2%	8.9%	1.9%	2.4%	–	–	–	–	6.1%	5.1%
Adjustments10	–	–	-2	3	–	–	26	6	–	–	24	9
Adjusted EBITA	33	19	75	54	3	2	-1	-5	0	0	110	70
Adjusted EBITA margin %	5.8%	3.6%	10.9%	9.3%	1.9%	2.4%	–	–	–	–	7.7%	5.9%
Amortisation of intangible fixed assets and customer contracts	–	0	0	0	0	0	-13	-8	0	–	-14	-8
Operating profit (EBIT)	33	19	77	52	3	2	-40	-19	–	–	73	53
Financial income Financial expenses											1 -29	0 -23
Net financial income and expenses											-28	-24
Profit/loss after net financial items											45	29
Profit/loss before tax											45	29
Tax on profit for the period											-11	-7
PROFIT/LOSS FOR THE PERIOD											33	22
ASSETS	1,382	1,343	3,101	3,063	506	251	526	329	–	–	5,516	4,986

⁹The column "Unallocated items" consists of centrally approved costs for general central administration,

restructuring measures and acquisitions, as well as costs for preparing the company for the IPO.

10 Adjustments are specified in Note 5.

11 Relates to inovoiced central admin costs to group companies.

Note 4 Fair value of financial instruments in the measurement hierarchy

Ambea applies the following hierarchy for measuring financial instruments at fair value:

• Level 1 Listed prices (unadjusted) on active markets for identical assets or liabilities. This level includes eligible treasury bills, bonds and other interest-bearing securities. Remeasurement is recognised under Financial items.
• Level 2 Observable data for assets or liabilities other than quoted prices included in Level 1, either directly (i.e. as price quotations) or indirectly (i.e. derived from price quotations). This level includes derivative instruments that are recognised under Other net current assets or Other current liabilities.

Level 3 Data for assets or liabilities that are not based on observable market data.

Derivative instruments are measured in accordance with level 2 of the measurement hierarchy. Ambea has hedged 62 per cent of its interest-rate exposure in financing by purchasing interest-rate caps. The interest-rate caps are recognised at fair value and the impact on profit/loss is recognised in net financial items. The hedges were entered into in February 2016 and expire in January 2019. The change in fair value applying to the interest-rate caps is recognised in profit or loss and SEK 0 million was charged against net financial items for the quarter. The value of the derivatives amounted to SEK 1 million as per 31 March 2017. Ambea uses the standard report of issuing banks for the market valuation of purchased interest-rate caps. The valuation is based on the bank's standard pricing model and method. The valuation is based on the bank's average price.

Contingent considerations are measured in accordance with level 3 of the measurement hierarchy. SEK 73 million is booked as a non-current liability for contingent considerations for Vitalegruppen AS (NOK 44 million) and TBO-Helse AS (NOK 25 million). For Vitalegruppen, the full contingent consideration is payable if EBITDA for 2017 is at least NOK 21.4 million; for TBO-Helse AS, the full contingent consideration is payable if EBITDA for 2017 exceeds NOK 5 million

Material non-observable input data consists primarily of forecast sales.

Consolidated assets and liabilities measured at fair value

SEK million	31 Mar 2017	31 Mar 2016	31 Dec 2016
Interest rate derivatives	1	–	1
Contingent consideration	-73	-15	-87

Note 5 Reconciliation to IFRS financial statements

SEK million	2017 Jan–Mar	2016 Jan–Mar	2016/2017 Rolling 12 months	2016 Jan–Dec
Growth/Acquired growth
Net sales growth	19%	12%	24%	23%
Of which, acquired growth	18%	31%	26%	24%
Of which, organic growth	1%	-19%	-1%	-1%
Operating margin (EBIT)
Net sales	1,422	1,197	5,559	5,334
Operating profit (EBIT)	73	53	321	301
Operating margin (EBIT)	5.1%	4.4%	5.8%	5.6%
EBITA and adjusted EBITA
Operating profit (EBIT)	73	53	321	301
Amortisation and impairment of intangible assets	14	8	63	58
EBITA	86	61	384	359
Adjustments	24	9	112	97
Adjusted EBITA	110	70	496	456
Net sales	1,422	1,197	5,559	5,334
EBITA margin	6.1%	5.1%	6.9%	6.6%
Adjusted EBITA margin	7.7%	5.9%	8.9%	8.4%
EBITDA and adjusted EBITDA
Operating profit (EBIT)	73	53	321	301
Depreciation, amortisation and impairment of tangible and intangible assets	25	18	108	102
EBITDA	98	72	429	403
Adjustments	24	9	112	97
Adjusted EBITDA	122	80	541	500
Net sales	1,422	1,197	5,559	5,334
EBITDA margin	6.9%	6.0%	7.7%	7.6%
Adjusted EBITDA margin	8.6%	6.7%	9.7%	9.4%

Note 5 Reconciliation to IFRS financial statements – continuation

SEK million	2017 Jan–Mar	2016 Jan–Mar	2016/2017 Rolling 12 months	2016 Jan–Dec
Adjustments
Reversal of restructuring and acquisition-related costs	1	6	44	49
- of which, costs included in the profit/loss row external costs	1	–	36	35
- of which, costs included in the profit/loss row personnel costs	–	6	7	13
Reversal of income and costs for discontinuation of operations	-2	3	13	17
- of which, income	0	0	-7	-7
- of which, costs included in the profit/loss row external costs	-2	1	14	17
- of which, costs included in the profit/loss row personnel costs	0	1	6	7
- of which, costs included in the profit/loss row depreciation, amortisation and impairment of tangible and intangible assets	0	–	0	–
- of which, costs included in the profit/loss row other operating expenses	0	–	0	–
IPO expenses	25	0	56	31
- of which, costs included in the profit/loss row external costs	25	–	54	29
- of which, costs included in the profit/loss row personnel costs	0	–	2	2
- of which, costs included in the profit/loss row depreciation, amortisation and impairment of tangible and intangible assets	0	–	0	–
Adjustments	24	9	112	97
Operating cash flow
EBITDA	98	72	429	403
Cash flow from investing activities excl. acquisition and sales of subsidiaries	-7	7	-6	8
Operating cash flow before changes in net working capital	91	78	423	411
Change in working capital	-4	-85	-27	-108
Operating cash flow after changes in net working capital	87	-6	395	303
Cash conversion
Operating cash flow	86	-6	395	303
EBITDA	98	72	429	403
Cash conversion (%)	88,7%	-8.9%	92.2%	75.3%

Note 5 Reconciliation to IFRS financial statements – continuation

Net debt, Net debt/adjusted EBITDA RTM
SEK million	31 Mar 2017	31 Mar 2016	31 Dec 2016
Non-current interest-bearing liabilities	2,141	2,191	2,162
Current interest-bearing liabilities	286	14	159
Less cash and cash equivalents	-427	-208	-318
Net debt	1,999	1,997	2,003
Adjusted EBITDA RTM	541	345	500
Net debt/Adjusted EBITDA RTM (times)	3.7	5.8	4.0
Debt/equity ratio
Non-current interest-bearing liabilities	2,141	2,191	2,162
Current interest-bearing liabilities	286	14	159
Total interest-bearing liabilities	2,426	2,205	2,321
Total equity	2,095	1,947	2,066
Debt/equity ratio	1.2	1.1	1.1
Equity/assets ratio
Total equity	2,101	1,951	2,066
Total assets	5,516	4,986	5,418
Equity/assets ratio (%)	38.1%	39.1%	38.1%

Return on equity	2017	2016	2016/2017	2016
SEK million	Jan–Mar	Jan–Mar	Rolling 12 months	Jan–Dec
Opening equity attributable to the Parent Company's shareholders	2,067	1,932	1,947	1,932
Closing equity attributable to the Parent Company's shareholders	2,101	1,951	2,101	2,067
Average equity attributable to the Parent Company's shareholders	2,084	1,941	2,026	2,000
Profit after tax	33	22	140	128
Return on equity (%)	1.6%	1.1%	6.9%	6.4%

Note 6 Definitions and purpose

Key financial figures	Definition & calculation	Purpose
Growth (%)	Growth consists of the increase in sales in relation to the period of comparison	This key figure is used to follow up the compa ny's sales increase
	The period's increase in net sales/Net sales in the period of comparison
Acquired growth (%)	The period's increase in net sales from acqui sitions/Net sales in the period of comparison	This key figure is used to follow up the propor tion of the company's sales increase that was generated through acquisitions
Organic growth (%)	The period's increase in net sales excluding acquisitions/Net sales in the period of com parison	This key figure is used when analysing under lying sales growth driven by comparable units between different periods
Operating profit (EBIT)	Profit for the period before financial items and taxes	This key figure is used to follow up the compa ny's profit generated from operating activi ties. The key figure enables comparisons of
	Total operating income – Operating expenses	profitability between companies/industries
EBITA	Operating profit before amortisation and impairment of intangible assets	This key figure is used to follow up the compa ny's profit generated from operating activi
	Operating profit (EBIT) + Amortisation and impairment of intangible assets	ties. The key figure enables comparisons of profitability between companies/industries
Adjustments	Items related to events in the company's operations that impact comparability with results during other periods. Includes:	The key figure Adjustments of items affec ting comparability is used to achieve a fair comparison of the underlying development of
	- Transaction costs attributable to major acquisitions	business operations
	- Major re-organisations
	- Costs for preparing the company for a futu re stock-exchange listing
Adjusted EBITA	Operating profit before amortisation and impairment of intangible assets adjusted for items from events in the company's opera tions that affect comparisons with results during other periods	The key figure is used to follow up the company's profit generated from operating activities in order to obtain a fair comparison of the underlying development of business operations. The key figure enables compa
	EBITA + Adjustment	risons of profitability between companies/ industries
EBITDA	Operating profit before depreciation/amor tisation and impairment of intangible and tangible assets	The key figure is used to follow up the com pany's profit generated from operating acti vities. The key figure enables comparisons of
	Operating profit (EBIT) + Depreciation/amor tisation and impairment of intangible and tangible assets	profitability between companies/industries
Adjusted EBITDA	Operating profit before depreciation/amor tisation and impairment of intangible and tangible assets adjusted for items from events in the company's operations that affect comparisons with profit during other periods	The key figure is used to follow up the company's profit generated from operating activities with a fair comparison of the un derlying development of the business opera tions. The key figure enables comparisons of profitability between companies/industries
	EBITDA + Adjustments
Operating margin (%)	Operating profit as a percentage of net sales	The key figure is used to follow up the per
	Operating profit (EBIT)/Net sales	centage of net sales from operations that remains to cover interest payments and tax and to generate a profit after the company's costs have been paid

Key financial figures	Definition & calculation	Purpose
Operating cash flow	Total cash flow from operating activities excluding tax, net financial items and items affecting comparability, as well as cash flow from investing activities excluding acquisi tions and divestments of operations	This key figure shows cash flow from the company's operations, excluding company acquisitions, company divestments, funding, tax and items affecting comparability and is used to follow up whether the company is
	Adjusted EBITDA + Changes in working capi tal + Cash flow from investing activities excl. acquisitions and divestments of subsidiaries	able to generate a sufficiently positive cash flow to be able to maintain and expand its operations
Cash conversion (%)	Cash conversion as a percentage is defined as operating cash flow divided by EBITDA	This key figure is used as an efficiency mea sure showing the proportion of a company's
	Operating cash flow/EBITDA	profit that is converted to cash
Net debt	The Group's interest-bearing liabilities exclu ding pension provisions adjusted for cash and cash equivalents	This key figure is a measurement of the com pany's debt/equity ratio and is used by the company to assess opportunities to meet its
	Interest-bearing liabilities - cash and cash equivalents	financial undertakings
Net debt/Adjusted EBITDA	Net debt/Adjusted EBITDA is a measurement of the debt/equity ratio that is defined as the closing balance for net debt in relation to adjusted EBITDA	This key figure is used to monitor the level of the company's indebtedness to ensure that financial covenants are met.
	Net debt/adjusted EBITDA
Debt/equity ratio	Nettoskuld /Justerad EBITDA är ett mått för skuldsättningsgrad som definieras som utgående balans av nettoskulden i relation till justerad EBITDA	The key figure is used to monitor the propor tion of equity and debt that is used to finan ce various parts of a company's operations
	Nettoskuld/Justerad EBITDA
Equity ratio (%)	The debt/equity ratio shows a company's financial capacity.	This key figure shows the proportion of the balance sheet total that is financed by equity
	Interest-bearing liabilities/Shareholders'' equity	and it enables an analysis of the company's long-term financial strength and ability to withstand losses
Return on equity (%)	The equity ratio is used to show the propor tion of assets that is financed by equity	This key figure is used to show the return that is generated on the capital invested by the
	Shareholders' equity/Balance sheet total	shareholders in the company
Return on equity (%)	The return on equity shows the company's return on the capital provided by the owners	Nyckeltalet används för att visa avkastningen som genereras på det kapital som aktie
	Profit for the period/Equity (average equity at the beginning and end of the period)	ägarna har investerat i bolaget

Report on quality in the first quarter of 2017

• Vardaga's elderly care services and Nytida's LSS operations have been quality declared according to the Association of Private Care Providers' concept.
• The projects concerning language and work training, education and employment of newly arrived people continue, now in cooperation with the employment service.
• Nytida presents a new educational framework, which was rolled out during the spring.
• Vardaga introduces MedView to improve the structure for medication of the elderly and increased quality of life for the residents.
• The number of reported deviations increased from 8,027 to 10,122, a clear indication of satisfactory implementation of new operations in the use of the management system.
• Of a total of 10,122 deviations, a degree of seriousness of 3 accounted for 0.88 per cent and a degree of seriousness of 4 accounted for 0.12 per cent.
• Three reports according to Lex Sarah, of which, two in Nytida and one in Vardaga.
• One Lex Maria report, in Vardaga.
• Five individual complaints/reports of care deficiencies reported to the Health and Social Care Inspectorate (IVO), all concerning Vardaga.
• IVO completed 11 supervisions/inspections, all pertaining to Nytida's operations for children and youth.

More information: ambea.se/Om-oss/Kvalitet