Continued earnings growth with measures in Norway having an impact

Second quarter April–June

Net sales rose 90 per cent to SEK 2,877 million (1,518). Acquired growth was 88 per cent and organic growth was 1 per cent
Operating profit (EBIT) declined to SEK 83 million (95)
EBITA increased 4 per cent to SEK 118 million (114), corresponding to a margin of 4.1 per cent (7.5)
Adjusted EBITA, excluding items affecting comparability, rose 54 per cent to SEK 175 million (114). The adjusted EBI-TA margin was 6.1 per cent (7.5)
During the quarter, items affecting comparability amounted to SEK -57 million (0), attributable to integration costs and synergy realisation in connection with the acquisition of Aleris Omsorg
Profit for the period totalled SEK 12 million (75)
Earnings per share were SEK 0.16 (1.00) before and SEK 0.16 (1.00) after dilution
Operating cash flow was SEK 338 million (248)
Free cash flow totalled SEK 178 million (236)

First six months January–June

Net sales rose 81 per cent to SEK 5,393 million (2,985). Acquired growth was 79 per cent and organic growth was 2 per cent
Operating profit (EBIT) declined to SEK 144 million (181)
EBITA fell 5 per cent to SEK 209 million (218), corresponding to a margin of 3.9 per cent (7.3)
Adjusted EBITA, excluding items affecting comparability, increased 45 per cent to SEK 323 million (222). The adjusted EBITA margin was 6.0 per cent (7.4)
Items affecting comparability amounted to SEK -114 million (-4), attributable to integration costs and synergy realisation in connection with the acquisition of Aleris Omsorg
Profit for the period totalled SEK 22 million (135)
Earnings per share were SEK 0.29 (1.80) before and SEK 0.29 (1.80) after dilution
Operating cash flow was SEK 550 million (366)
Free cash flow totalled SEK 212 million (302)

Significant events during the quarter

During the quarter, Ambea conducted a rights issue as announced earlier. Ambea received approximately SEK 1,200 million through the issue, which was over-subscribed by 118 per cent. In conjunction with this, the bridge loan raised for the acquisition of Aleris Omsorg was repaid
The Annual General Meeting on 16 May adopted a warrants programme for Group management and a matching share plan for certain other managers
In June 2019, an agreement was reached with the seller regarding the final purchase consideration for Aleris Omsorg, with Ambea receiving SEK 5.6 million plus interest.

Consolidated key figures

	2019 Apr–Jun	2019 Apr–Jun1	2018 Apr–Jun	∆2 %	2019 Jan–Jun	2018 Jan–Jun	∆2 %	2018/2019 Rolling	2018 Jan–Dec	∆ %
SEK million		excl IFRS 16						12 months
Net sales	2,877	2,877	1,518	90	5,393	2,985	81	8,485	6,076	40
EBITA	118	94	114	4	209	218	-5	499	508	-2
Operating margin, EBITA (%)	4.1	3.3	7.5		3.9	7.3		5.9	8.4
Adjusted EBITA	175	151	114	54	323	222	45	648	547	18
Operating margin, adjusted EBITA (%)	6.1	5.3	7.5		6.0	7.4		7.6	9.0
Operating profit/loss, EBIT	83	59	95	-13	144	181	-20	393	429	-8
Operating margin, EBIT (%)	2.9	2.1	6.3		2.7	6.1		4.6	7.1
Profit after tax	12	23	75	-84	22	135	-84	183	295	-38
Earnings/loss per share before dilution, SEK	0.16	0.29	1.00	-84	0.29	1.80	-84	2.40	3.95	-39
Earnings/loss per share after dilution, SEK	0.16	0.29	1.00	-84	0.29	1.80	-84	2.40	3.94	-39
Operating cash flow	338	168	248	36	550	366	50	831	648	28
Free cash flow	178	46	236	-25	212	302	-30	414	506	-18

For definitions of key figures, see Note 9

1 Alternative performance measures.

2 Related to the change between Apr-Jun 2018 and Apr-Jun 2019 with account for IFRS 16.

Comments from Fredrik Gren, President and CEO

Continued earnings growth with measures in Norway having an impact

As we look back on the second quarter, we can see that the intensive restructuring work that commenced in Stendi in March has begun to generate results, at the same time as several steps in the integration of Aleris Omsorg were completed. We have accelerated the pace of opening new units and can see that start-ups are proceeding according to plan regarding both occupancy and a pipeline of competency.

Net sales for the second quarter amounted to SEK 2,877 million (1,518). Own Management accounted for 73 per cent (68) of net sales. Adjusted EBITA rose 54 per cent year-on-year to SEK 175 million (114). Adjusted for the effect of IFRS 16, adjusted EBITA rose 32 per cent to SEK 151 million.

During the quarter, net sales rose SEK 1,359 million, corresponding to 90 per cent, mainly attributable to the acquisition of Aleris Omsorg. Organic net sales increased by 1.4 per cent. In Own Management, net sales rose from SEK 1,034 million to SEK 2,091 million, positively impacted by the Aleris acquisition and start-ups of new units.

Adjusted EBITA rose 54 per cent to SEK 175 million, mainly attributable to high rates of occupancy in existing units, a changed contract mix and acquisitions. IFRS 16 had a positive impact of SEK 24 million on earnings. Vardaga's earnings were strengthened by continued high occupancy of existing units, but were reduced at the same time by the accelerated pace of new openings. Nytida displayed a favourable trend in LSS and an improvement in social care for children and young people. The programme to optimise overlapping capacity in Nytida after the acquisition of Aleris has begun to generate results. For Altiden, the quarter was negatively impacted by higher costs of building up a separate organisation and strengthening it for future growth. Klara's profitability was strengthened as a result of the continued restructuring to accommodate subscription services and the enhanced efficiency of administrative functions.

The restructuring programme that commenced in Stendi in March began to generate results during the quarter. We are now introducing the operating model that we have developed in Sweden.

During the quarter, several major steps in the integration of Aleris Omsorg were completed and we can confirm the plan announced earlier to achieve synergies at an annual rate of SEK 90 million towards the end of the year. Our focus is now on narrowing the margin gap between the Aleris units acquired compared with corresponding existing Ambea units in each sector.

During the quarter, Vardaga, opened three nursing homes with a total of 174 beds and Nytida opened a group home with six beds and a extension of the existing school operations by 21 places. Altiden opened a residential facility with five beds and Stendi opened a residential facility with three beds. The interest from jobseekers has far exceeded the recruitment requirements

of our newly started residential facilities, which demonstrates Ambea's strength in pipeline of competency and its position as an attractive employer. During the past year, Ambea has digitised its recruitment process to secure new employees for our operations. Our pipeline of new units remains high and forms the foundation for future organic growth. At the end of the quarter, the number of beds in the pipeline was 2,167, representing 26 per cent of the number of beds under Own Management.

After the end of the quarter, the first bolt-on acquisition was made since the announcement of the Aleris acquisition and we welcome Pusselbiten School to Ambea Group. Pusselbiten School strengthens Nytida's offering in special needs schools and after-school in Skåne.

During the quarter, we defended several key management contracts, corresponding to total annual sales of SEK 87 million and were able to secure a continued high share of profit in, particularly, quality procurement processes. In addition, we won procurements totalling SEK 9 million in annual sales during the second quarter.

Our focus on quality again displayed favourable results during the quarter, with a survey showing that more than 97 per cent of residents in Altiden's nursing homes would recommend Altiden to others.

The second quarter can be summarised by improved earnings, while taken measures in Norway started to have an impact and we began our journey towards closing the margin gap in acquired Aleris units.

Fredrik Gren

Group

Second quarter

Net sales

Net sales rose 90 per cent to SEK 2,877 million (1,518). Organic sales growth was 1.4 per cent year-on-year.

Net sales in Own Management amounted to SEK 2,091 million (1,034), up 102 per cent compared with the year-earlier period, due to the acquisition of Aleris Omsorg and start-up units.

Net sales in Contract Management amounted to SEK 710 million (401). The year-onyear increase in sales was due to the acquisition of Aleris Omsorg, but was offset by contracts terminated in 2018. Excluding the acquisition, sales in Contract Management declined SEK 21 million compared with the year-earlier period. Municipalities in Norway took back unprofitable contracts within elderly care of 144 MSEK in total annual sales during the quarter.

Net sales in Staffing declined 8 per cent to SEK 76 million (83).

Earnings

EBIT fell 13 per cent to SEK 83 million (95), corresponding to a margin of 2.9 per cent (6.3).

EBITA rose 4 per cent to SEK 118 million (114). The EBITA margin was 4.1 per cent (7.5). EBITA for the quarter was impacted by items affecting comparability of SEK -57 million (0), attributable to integration and synergy-realisation costs for the acquisition of Aleris Omsorg.

Adjusted EBITA for the quarter rose 54 per cent to SEK 175 million (114). Acquisitions completed earlier and start-up units had a positive impact on earnings. The adjusted EBITA margin was 6.1 per cent (7.5). Excluding the effects of IFRS 16, the adjusted EBITA margin was 5.3 per cent. IFRS 16 had a positive impact on EBITA of SEK 24 million for the quarter.

Net financial items

During the quarter, net financial items amounted to SEK -67 million (-3). The change was due to the effects of IFRS 16 of SEK 38 million and increased interest expense associated with financing the acquisition of Aleris Omsorg.

Income tax

Tax expense for the period was SEK 4 million (17), corresponding to an effective tax rate of 22 per cent (22).

Profit for the period

Profit for the period was SEK 12 million (75), corresponding to earnings per share of SEK 0.29 (1.00) before dilution and SEK 0.29 (1.00) after dilution.

Net sales by segment April – June 2019

Net sales by contract model April – June 2019

Distribution of net sales

Net sales by segment	2019 Apr–Jun	2018 Apr–Jun
Vardaga	30%	37%
Nytida	33%	49%
Stendi	30%	9%
Altiden	4%	–
Klara	3%	5%
Total	100%	100%

Net sales by contract model	2019 Apr–Jun	2018 Apr–Jun
Own management	73%	68%
Contract Management	24%	26%
Staffing	3%	6%
Total	100%	100%

Distribution of net sales

	Own Management			Contract Management			Staffing			Total
SEK million	2019 Apr–Jun	2018 Apr–Jun	%	2019 Apr–Jun	2018 Apr–Jun	%	2019 Apr–Jun	2018 Apr–Jun	%	2019 Apr–Jun	2018 Apr–Jun	%
Vardaga	517	280	84	362	276	31	–	–	–	879	556	58
Nytida	818	622	32	122	125	2	–	–	–	940	747	26
Stendi	742	131	466	111	–	–	–	–	–	853	131	551
Altiden	14	–		115	–	–	–	–	–	129	–	–
Klara	–	–		–	–	–	76	83	-8	76	83	-8
Group	2,091	1,034	102	710	401	79	76	83	-8	2,877	1,518	90

Own Management – total in operation, including acquisitions

	OB		Change		CB
SEK million	Units	Beds/ Placements	Units	Beds/ Placements	Units	Beds/ Placements
Vardaga – beds	41	2,139	3	174	44	2,313
Vardaga – home-care customers	–	2,305	–	7	–	2,312
Nytida – beds	222	2,465	–	-211	222	2,444
Nytida – placements	91	2,705	–	21	91	2,726
Stendi – beds	430	881	4	42	434	923
Stendi – home-care customers	–	18	–	1	–	19
Altiden – beds	2	30	1	5	3	35
Altiden – home-care customers	–	1,9382	–	31	–	1,969
Total beds and placements	786	8,220	8	221	794	8,441
Total home-care customers	–	4,261	–	39	–	4,300

Own Management – pipeline

	Quarterly change
SEK million	OB	Opened during the quarter	New during the quarter3	CB
Vardaga	1,964	174	120	1,910
Nytida – beds	1794	16	17	180
Nytida – placements	21	21	–	–
Stendi	3	3	–	–
Altiden	77	5	5	77
Total	2,244	219	142	2,167

Contract Management – pipeline

		Allocation decisions during the quarter5	Started-up/terminated
SEK million	Units	Beds	Annual revenue	during the quarter Annual revenue6
Won	1	6	9	8
Renewed confidence	13	106	87	–
Lost	–	–	–	77
Handed back to municipal management	1	56	4	144

1 The net change in the number of units and beds in Nytida includes the closure of two residential treatment centres for substance abuse as part of the programme announced earlier to optimise overlapping capacity.

2 Opening balance adjusted by 743 customers.

3 New refers to the total sum of signed contracts and units under construction. For more information about expected opening dates, refer to Own Management – Pipeline under ambea.com/investor-relations/

4 Opening balance adjusted by 10 beds.

5 Allocation decisions during the quarter mean that Ambea has received decisions during the quarter about contracts that are to be handed back or started up. The period of time between allocation and handback/start-up ranges

from a couple of months to one year. About 9–12 months for Vardaga, and 6–9 months for Nytida.

6 Shows the contracts started up or handed back during the quarter and their annual revenue.

7 Sales of SEK 3 million pertain to units from the acquisition of Aleris Omsorg for the period from the transfer date.

Group

January – June

Net sales

Net sales rose 81 per cent to SEK 5,393 million (2,985). Organic sales growth was 1.6 per cent year-on-year.

Net sales in Own Management amounted to SEK 3,895 million (2,020), up 92 per cent compared with the year-earlier period, due to the acquisition of Aleris Omsorg and start-up units.

Net sales under Contract Management amounted to SEK 1,339 million (804), an increase of 67 per cent. The year-on-year increase in sales was due to the acquisition of Aleris Omsorg, but was offset by contracts terminated in 2018.

Net sales in Staffing declined 3 per cent to SEK 155 million (161).

Earnings

EBIT fell 20 per cent to SEK 144 million (181), corresponding to a margin of 2.7 per cent (6.1).

EBITA declined 5 per cent to SEK 209 million (218). The EBITA margin was 3.9 per cent (7.3). EBITA for the period was impacted by items affecting comparability of SEK -114 million (-4), attributable to integration and synergy-realisation costs for the acquisition of Aleris Omsorg.

Adjusted EBITA for the period rose 45 per cent to SEK 323 million (222). Acquisitions completed earlier and start-up units had a positive impact on earnings. The adjusted EBITA margin was 6.0 per cent (7.4). Excluding IFRS 16, the adjusted EBITA margin was 5.2 per cent. IFRS 16 effected EBITA positively by 42 MSEK in the period.

Net financial items

During the quarter, net financial items amounted to SEK -116 million (-12). The change was due to the effects of IFRS 16 of SEK 74 million and increased interest expense associated with financing the acquisition of Aleris Omsorg.

Income tax

Tax expense for the period was SEK 6 million (34), corresponding to a tax rate of 22 per cent (22).

Profit for the period

Profit for the period amounted to SEK 22 million (135), corresponding to earnings per share before dilution of SEK 0.29 (1.80) and earnings per share after dilution of SEK

Net sales by segment January–June 2019

Net sales by contract model January–June 2019

Distribution of net sales

Net sales by segment	2019 Jan–Jun	2018 Jan–Jun
Vardaga	31%	37%
Nytida	34%	49%
Stendi	28%	9%
Altiden	4%	–
Klara	3%	5%
Total	100%	100%

Net sales by contract model	2019 Jan–Jun	2018 Jan–Jun
Own Management	72%	68%
Contract Management	25%	27%
Staffing	3%	5%
Total	100%	100%

Distribution of net sales

	Own Management			Contract Management			Staffing			Total
SEK million	2019 Jan–Jun	2018 Jan–Jun	%	2019 Jan–Jun	2018 Jan–Jun	%	2019 Jan–Jun	2018 Jan–Jun	%	2019 Jan–Jun	2018 Jan–Jun	%
Vardaga	971	550	77	704	557	26	–	–	–	1,675	1,107	51
Nytida	1,578	1,217	29	235	247	-1	–	–	–	1,813	1,464	24
Stendi	1,321	253	426	203	–	–	–	–	–	1,524	253	502
Altiden	26	–	–	200	–	–	–	–	–	226	–	–
Klara	–	–	–	–	–	–	155	161	-4	155	161	-4
Group	3,896	2,020	92	1,342	804	68	155	161	-4	5,393	2,985	81

Cash flow

SEK million	2019 Apr–Jun	2018 Apr–Jun	2019 Jan–Jun	2018 Jan–Jun	2018/2019 Rolling 12 months	2018 Jan–Dec
Cash flow from operating activities before changes in working capital	171	120	331	197	599	465
Cash flow from changes in working capital	47	127	-59	121	-107	74
From operating activities	218	247	272	318	491	538
Cash flow from investing activities (excluding acquisitions/divest ments and investments in financial assets)	-40	-11	-60	-16	-77	-32
Free cash flow	178	236	212	302	414	506

Free cash flow for the quarter amounted to SEK 178 million (236). The year-on-year decline in free cash flow was largely due to calendar effects on tied-up working capital and increased investments in new units.

In Norway, earned holiday pay of approximately NOK 65 million was paid during the quarter. Holiday pay in Norway is paid once per year, while it is expensed in line with the actual

holidays taken. In Sweden, holiday pay is expensed and paid in conjunction with actual holidays taken.

The adoption of IFRS 16 had a positive impact on cash flow from operating activities of SEK 132 million year-on-year. The acquisition of Aleris's care operations had a negative impact on cash flow of SEK -1 million during the quarter.

Financial position

SEK million	30 Jun 2019	30 Jun 20191 excl. IFRS 16	30 Jun 2018	31 Dec 2018
Net interest-bearing debt	7,848	3,525	2,193	1,993
Equity/assets ratio (%)	27.9	40.7	43.5	46.7
Net debt/Rolling 12 months adjusted EBITDA	7.8	5.2	4.0	3.3

For definitions of key figures, see Note 9

At 30 June 2019, net debt amounted to SEK 7,848 million (2,193), or 7.8 times rolling 12 months adjusted EBITDA. The increase in net debt was attributable to a higher borrowing within existing credit frameworks as a result of the acquisition of Aleris's care operations and a lease liability recognised in accordance with IFRS 16.

At the balance-sheet date, equity amounted to SEK 3,864 million, compared with SEK 2,707 million at 31 December 2018. The adoption of IFRS 16 had a positive impact of SEK 11 million on equity.

1 Alternative performance measures.

Vardaga

At Vardaga's just over 100 residential care facilities across Sweden, we provide elderly care where every day is as meaningful as the next. Every one of our nursing homes, short-term accommodation units, home care and day services offers a high level of expertise and a safe environment. Our employees ensure quality of life and safety for every care receiver.

Quarter

Vardaga's net sales rose 58 per cent year-on-year to SEK 879 million (556).

Net sales in Own Management rose 84 per cent to SEK 517 million (280) due to the acquisition of Aleris Omsorg and to start-up units.

Net sales in Contract Management amounted to SEK 362 million (276). The 30 per cent increase was due to a positive impact from the acquisition of Aleris Omsorg, reduced by lost contracts in existing operations. During the quarter, Vardaga defended contracts corresponding to an annual volume of SEK 22 million.

EBITA rose 3 per cent to SEK 34 million (33). The acquisition of Aleris Omsorg and favourable occupancy rates at units started already under Own Management made a positive contribution to EBITA, while costs for start-ups were charged to earnings. Calendar effects had a negative impact on earnings compared with the preceding year.

The EBITA margin was 3.9 per cent (5.9). Excluding the effects of IFRS 16, the margin declined 3.5 percentage points to 2.4 per cent. The margin decline was attributable to higher number of start-ups under Own Management and the acquisition of Aleris Omsorg. The EBITA margin for comparable units was positively impacted by a higher share of operations under Own Management and favourable occupancy rates.

January–June period

Vardaga's net sales rose 51 per cent year-on-year to SEK 1,676 million (1,107).

Net sales in Own Management rose 77 per cent to SEK 971 million (550) due to the acquisition of Aleris Omsorg and to start-up units.

Net sales in Contract Management amounted to SEK 704 million (557). The 26 per cent increase was due to a positive impact from the acquisition of Aleris Omsorg, reduced by lost contracts in existing operations.

EBITA rose 26 per cent to SEK 86 million (68). The acquisition of Aleris Omsorg and increased occupancy rate of newly opened units that were under start-up made a positive contribution, while start-ups of new operations had a negative impact.

The EBITA margin was 5.1 per cent (6.1). The reduced margin was mainly attributable to the acquisition of Aleris Omsorg together with the start-up of new units.

Vardaga's operating margin (EBITA), RTM %

SEK million	2019 Apr–Jun	2019 Apr–Jun1 excl. IFRS 16	2018 April–June	∆2 %	2019 Jan–Jun	2018 Jan–Jun	∆ %	2018/2019 Rolling 12 months	2018 Full-year	∆ %
Net sales	879	879	556	58	1,675	1,107	51	2,792	2,224	26
EBITA	34	21	33	3	86	68	24	176	159	11
Operating margin, EBITA (%)	3.9	2.4	5.9		5.1	6.1		6.3	7.1
Operating margin EBITA comparable units (%)	10.0	8.5	6.4		10.2	6.7		9.4	7.6

1 Alternative performance measures.

2 Related to the change between Apr-Jun 2018 and Apr-Jun 2019 with account for IFRS 16.

Own Management – total in operation

	OB		Quarterly change		CB
	Units	Beds	Units	Beds	Units	Beds
Beds	41	2,139	3	174	44	2,313
Home-care customers	–	2,305	–	7	–	2,312

Own Management – pipeline

	Quarterly change
	OB	New during the quarter1	CB
Beds	1,964	174	120	1,910

Contract Management – pipeline

		Allocation decisions during the quarter2	Started-up/terminated during the quarter
	Units	Beds	Annual revenue	Annual revenue 3
Won		–	– –	–
Renewed confidence	1	40	22	–
Lost		–	– –	34
Handed back to municipal management		–	– –	–

1 New refers to the total sum of signed contracts and units under construction. For more information about expected opening dates, refer to Own Management – Pipeline under ambea.com/investor-relations/

2 Allocation decisions during the quarter mean that Ambea has received decisions during the quarter about contracts that are to be handed back or started up. The period of time between allocation and handback/start-up varies, but generally amounts to about 9-12 months for Vardaga.

3 Shows the contracts started up or handed back during the quarter and their annual revenue.

4 Pertain to units from the acquisition of Aleris Omsorg for the period from the transfer date.

Nytida

Nytida provides support and care for children, young people and adults with lifelong disabilities and psychosocial problems. We provide residential care, day services, support for individuals and families, and schools in approximately 400 units across Sweden. Using proven models and in-depth knowledge, our 8,500 employees help to strengthen the ability of individuals to live an independent life.

Quarter

Net sales rose 26 per cent to SEK 940 million (747).

Net sales in Own Management amounted to SEK 818 million (622), up 32 per cent. Growth was attributable to the acquisition of Aleris Omsorg and to start-up units.

Net sales in Contract Management amounted to SEK 122 million (125). The decline in sales was due to contracts terminated in 2018. During the quarter, Nytida secured contracts corresponding to an annual volume of SEK 9 million, while the municipalities announced that they would take back annual revenue corresponding to SEK 4 million. During the quarter, contracts corresponding to annual sales of SEK 4 million were terminated, while the effect of new start-up contracts amounted to annual revenue of SEK 8 million.

EBITA rose 44 per cent to SEK 115 million (80). The acquisition of Aleris Omsorg and a favourable occupancy rate at established units under Own Management made a positive contribution to earnings. Calendar effects had a negative impact on Nytida's earnings compared with the preceding year. The development in social care for children & youth contributed positively compared with the preceding year.

During the second quarter, continued activities were conducted as part of the programme announced earlier to optimise overlapping capacity. The positive earnings effect achieved as a result of the action programme is expected to increase during the latter part of the year.

The EBITA margin was 12.2 per cent (10.7).

After the end of the quarter, Nytida acquired Pusselbiten School, which offers special needs activities for children and young people in Skåne.

January–June period

Net sales rose 24 per cent to SEK 1,813 million (1,464).

Net sales in Own Management amounted to SEK 1,578 million (1,217), up 30 per cent. Growth was attributable to the acquisition of Aleris Omsorg and to start-up units.

Net sales in Contract Management amounted to SEK 235 million (247), down 4 per cent and attributable to terminated contracts.

EBITA rose 40 per cent to SEK 218 million (156). The acquisition of Aleris Omsorg makes a positive contribution. During the first quarter, an action programme commenced to reduce overlapping activities due to the acquisition of Aleris. The annual effect of the action programme is deemed to amount to approximately SEK 24 million. The impact on earnings is expected to be gradual, starting in the second quarter.

The EBITA margin was 12.0 per cent (10.7).

SEK million	2019 Apr–Jun	2019 Apr–Jun1 excl IFRS 16	2018 Apr–Jun	∆2 %	2019 Jan–Jun	2018 Jan–Jun	∆ %	2018/2019 Rolling 12 months	2018 Full-year	∆ %
Net sales	940	940	747	26	1,813	1,464	24	3,331	2,982	12
EBITA	115	106	80	44	218	156	40	430	369	16
Operating margin, EBITA (%)	12.2	11.3	10.7		12.0	10.7		12.9	12.3

1 Alternative performance measures.

2 Related to the change between Apr-Jun 2018 and Apr-Jun 2019 with account for IFRS 16.

Nytida's operating margin (EBITA), RTM

Own Management – total in operation

	OB		Quarterly change1		CB
	Beds/		Beds/		Beds/
Beds	Units	Placements	Units	Placements	Units	Placements
	222	2,465	–	-21	222	2,444
Placements	91	2,705	–	21	91	2,726

Own Management – pipeline

	Quarterly change
	OB	Opened during the quarter	New during the quarter2	CB
Beds	1793	16	17	180
Placements	21	21	–	–

Contract Management – pipeline

		Allocation decisions during the quarter4	Started-up/terminated during the quarter
	Units	Beds	Annual revenue	Annual revenue 5
Won	1	6	9	8
Renewed confidence	12	66	65	–
Lost	–	–	–	4
Handed back to municipal management	1	56	4	–

2 New refers to the total sum of signed contracts and units under construction. For more information about expected opening dates, refer to Own Management – Pipeline under ambea.com/investor-relations/

3 Opening balance adjusted by 10 beds.

3 Allocation decisions during the quarter mean that Ambea has received decisions during the quarter about contracts that are to be handed back or started up. The period of time between allocation and handback/start-up varies, but generally amounts to about 6-9 months for Nytida.

4 Shows the contracts started up or handed back during the quarter and their annual revenue.

Stendi

Stendi is the largest care provider in Norway and runs nationwide operations in support and residential care for adults, children and young people. Stendi also provides personal assistance, elderly care and home care services. Stendi has about 5,000 employees and more than 400 units across Norway.

Quarter

Net sales rose 551 per cent to SEK 853 million (131). The increase was largely due to the acquisition of Aleris Omsorg. During the quarter, acquired units with low occupancy rates were closed according to plan. Currency effects on sales in comparable existing units had a positive impact of SEK 3 million year-on-year.

Net sales in Own Management amounted to SEK 742 million (130), up 568 per cent. Growth was attributable to the acquisition of Aleris Omsorg.

Net sales in Contract Management amounted to SEK 111 million (0), and the entire increase was attributable to the acquisition of Aleris's care operations. Contracts were retaken during the period in an amount corresponding to annual revenue of SEK 144 million. The retaken contracts are not deemed to have any negative impact on earnings.

EBITA rose 67 per cent to SEK 10 million (6). The increase was largely due to the acquisition of Aleris Omsorg. During the first quarter, a major restructuring programme commenced in Stendi to implement Ambea's operational model. In the second quarter, early positive EBITA effects of the programme were noted.

The EBITA margin was 1.2 per cent (4.6).

January–June period

Net sales amounted to SEK 1,524 million (253). The increase was largely due to the acquisition of Aleris Omsorg. Currency effects on sales in comparable existing units had a positive impact of SEK 6 million year-on-year.

Net sales in Own Management amounted to SEK 1,320 million (251), up 425 per cent. Growth was attributable to the acquisition of Aleris Omsorg.

Net sales in Contract Management amounted to SEK 203 million (0), and the entire increase was attributable to the acquisition of Aleris's care operations. During the period, one contract management unit was closed.

EBITA was SEK -9 million (9). During the first quarter, a major restructuring programme was initiated to address the negative earnings trend that commenced in the operations of the acquired company Aleris Omsorg in November 2018. Ambea's management model involving a larger number of the company's own employees was introduced to ensure quality and economic stability. During the quarter, vacant capacity related to acquired units was closed down, and the costs were charged to the transfer balance for Aleris's care operations. For more information, refer to Note 5. The annual effect of the programme is an estimated SEK 8 million with a gradual start in the second quarter, in addition to the measures now being implemented and which displayed positive results during the second quarter to increase profitability and management.

The EBITA margin was -0.6 per cent (3.6).

SEK million	2019 Apr–Jun	2019 Apr–Jun1 excl IFRS 16	2018 Apr–Jun	∆2 %	2019 Jan–Jun	2018 Jan–Jun	∆ %	2018/2019 Rolling 12 months	2018 Full-year	∆ %
Net sales	853	853	131	551	1,524	253	502	1,820	548	178
EBITA	10	9	6	67	-9	9	n/a	16	33	-127
Operating margin, EBITA (%)	1.2	1.1	4.6		-0.6	3.6		0.9	6.0

1 Alternative performance measures.

2 Related to the change between Apr-Jun 2018 and Apr-Jun 2019 with account for IFRS 16.

Stendi's operating margin (EBITA), RTM %

Own Management – total in operation

	OB Beds/ Units Placements		Quarterly change Beds/ Units Placements		CB Beds/ Units Placements
Beds	430	881	4	42	434	923
Home-care customers	–	18	–	1	–	19

Own Management – pipeline

	Quarterly change
	Opened during the New during the OB quarter quarter1				CB
Beds		3	3	–		–

Contract Management – pipeline

	Allocation decisions during the quarter2	Started-up/terminated during the quarter
	Units	Beds	Annual revenue	Annual revenue 3
Won	–		– –	–
Renewed confidence	–		– –	–
Lost	–		– –	–
Handed back to municipal management	–		– –	144

2 Allocation decisions during the quarter mean that Ambea has received decisions during the quarter about contracts

that are to be handed back or started up. The period of time between allocation and handback/start-up varies.

3 Shows the contracts started up or handed back during the quarter and their annual revenue.

Altiden

Altiden is the largest private care provider in Denmark, with operations comprising elderly care, home care, rehabilitation and disability care. All over Denmark, we provide skilled care services based on respect. Approximately 1,000 employees ensure quality of life and a safe environment with a focus on development.

Quarter

Net sales amounted to SEK 129 million (0). All of Altiden's operations comprise units from the acquisition of Aleris Omsorg.

Net sales in Own Management amounted to SEK 14 million (0). During the quarter, the start-up of previously opened units progressed as planned.

Net sales in Contract Management amounted to SEK 116 million (0). No new allocation decisions were announced during the quarter. No management contracts were started up or terminated during the quarter.

EBITA was SEK -5 million (0). EBITA was negatively impacted by higher costs to build up a separate organisation in Altiden and strengthening it for future growth.

The EBITA margin was -3.9 per cent (0).

January–June period

Net sales amounted to SEK 226 million (0). All of Altiden's operations comprise units from the acquisition of Aleris Omsorg.

Net sales in Own Management amounted to SEK 26 million (0). During the quarter, the start-up of previously opened units progressed as planned.

Net sales in Contract Management amounted to SEK 200 million (0). No new allocation decisions were announced during the period. No management contracts were started up or terminated during the quarter.

EBITA was SEK -5 million (0). EBITA was negatively impacted by higher costs to build up a separate organisation in Altiden and strengthening it for future growth.

The EBITA margin was -2.2 per cent (0).

SEK million	2019 Apr–Jun	2019 Apr–Jun1 excl IFRS 16	2018 Apr–Jun	∆2 %	2019 Jan–Jun	2018 Jan–Jun	∆ %	2018/2019 Rolling 12 months	2018 Full-year	∆ %
Net sales	129	129	–	–	226	–	–	226	–	–
EBITA	-5	-5	–	–	-5	–	–	-5	–	–
Operating margin, EBITA (%)	-3.9	-3.9	–		-2.2	–		-2.2	–

1 Alternative performance measures.

2 Related to the change between Apr-Jun 2018 and Apr-Jun 2019 with account for IFRS 16.

Own Management – total in operation

	Units	OB	Beds/ Placements	Units	Quarterly change Beds/ Placements	Units	CB Beds/ Placements
Beds		2	30	1	5		3 35
Home-care customers		–	1,9381	–	31		– 1,969

Own Management – pipeline

	Quarterly change
	OB		Opened during the quarter	New during the quarter2	CB
Beds		77	5	5	77

Contract Management – pipeline

		Allocation decisions during the quarter3	Started-up/terminated during the quarter
	Units	Beds		Annual revenue	Annual revenue 4
Won	–		–	–	–
Renewed confidence	–		–	–	–
Lost	–		–	–	–
Handed back to municipal management	–		–	–	–

1 Opening balance adjusted by 743 customers.

3 Allocation decisions during the quarter mean that Ambea has received decisions during the quarter about contracts

that are to be handed back or started up. The period of time between allocation and handback/start-up varies.

4 Shows the contracts started up or handed back during the quarter and their annual revenue.

Klara

Klara is one of Sweden's leading providers of staffing services for social care. We are an authorised staffing company and are ISO certified. With personal service and long experience in the industry, Klara provides the best staffing solutions for both public and private clients. We mediate thousands of assignments every year and conduct operations throughout Sweden.

Quarter

Net sales declined 8 per cent to SEK 76 million (83). Two thirds of sales comprise revenue from customers in the public sector. The decline is attributable to a negative trend in the supply of temporary doctors and nurses to the private customer segment. The decline was partly offset by increased sales in Klara Team, which offers qualified on-call services on a subscription basis.

EBITA was SEK 6 million (4), representing a margin of 8.0 per cent (5.3). The performance of Klara Team and effects of the previously completed adaptation of administrative costs had a positive impact.

In June 2018, the Supreme Administrative Court issued a decision regarding VAT liability for staffing agencies supplying temporary care staff. For Klara, these new guidelines from the Swedish Tax Agency entail that the supply of temporary care staff to municipalities, counties and private social care companies will be subject to VAT from 1 July 2019. Ambea assesses that this regulatory change will lead to a need for new business models and probably result in lower sales, but also have a limited effect on Klara's earnings. Some of the administrative cost-savings programme implemented in 2018 specifically addressed the need to adapt the cost mass in the staffing operations.

January–June period

Net sales declined 4 per cent to SEK 155 million (161). Two thirds of sales comprise revenue from customers in the public sector. The decline is attributable to a negative trend, primarily in the hiring out of nurses. The reduced sales from the hiring out of nurses was partly offset by increased sales in Klara Team, which offers qualified oncall services on a subscription basis.

EBITA was SEK 11 million (7), representing a margin of 6.9 per cent (4.3). The performance of Klara Team and effects of the previously completed adaptation of administrative costs had a positive impact.

SEK million	2019 Apr–Jun	2019 Apr–Jun1 excl IFRS 16	2018 Apr–Jun	∆2 %	2019 Jan–Jun	2018 Jan–Jun	∆ %	2018/2019 Rolling 12 months	2018 Full-year	∆ %
Net sales	76	76	83	-8	155	161	-4	315	321	-2
EBITA	6	6	4	50	11	7	57	19	16	19
Operating margin, EBITA (%)	7.9	7.9	4.8		7.1	4.3		6.0	5.0

1 Alternative performance measures.

2 Related to the change between Apr-Jun 2018 and Apr-Jun 2019 with account for IFRS 16.

Other events

New share issue

Following authorisation at the Annual General Meeting on 16 May, Ambea conducted a rights issue of 27,001,440 shares with the aim of repaying part of the financing of the acquisition of Aleris's care operations in Sweden, Norway and Denmark. As a result of the rights issue, the number of shares in Ambea increased, amounting to 94,617,996 shares on the final trading day of the quarter (28 June). Ambea obtained approximately SEK 1,200 million from the rights issue and recognised issue expenses of SEK 17 million.

Incentive programmes

The Annual General Meeting on 16 May 2019 resolved to introduce two new longterm incentive programmes: (i) a warrants programme for Group management and (ii) a matching share plan for certain employees in the Ambea Group. Both programmes correspond essentially to the programmes adopted in 2017 and 2018. For further information about the programmes, see information from the Annual General Meeting at ambea.se/investerare/bolagsstyrning/bolagsstamma/arsstamma-2019

Legal process on social costs for temporary personnel in Norway

Since the first quarter, Ambea, through the acquisition of Aleris's care operations, has been party to an ongoing legal process in Norway regarding social security costs for temporary employees. Ambea's exposure due to this process is limited to NOK 30 million, which has been reserved as a provision in the combined balance sheet after the acquisition. Ambea is working actively to increase the proportion of permanent employees in the Norwegian operations.

Tax audit in Norway

The Norwegian Tax Administration had previously initiated an audit of Aleris's care operations' reporting of tax for temporary employees. The audit continued during the quarter and Ambea is waiting for feedback on the Tax Administration's assessment.

Tax audit in Sweden

In 2018, Ambea received a reassessment notice from the Swedish Tax Agency regarding VAT of SEK 12 million, including tax surcharges, for prior years in Ambea AB (publ). The reassessment was mainly related to VAT on IPO costs in 2017. The company has appealed the Swedish Tax Agency's preliminary decision and is awaiting further assessment in the Administrative Court, which is why no provision has been made for the cost.

Related-party transactions

During the quarter, no transactions took place between Ambea and its related parties that had any material impact on the company's position and earnings. The nature and volume of transactions remained unchanged during the period compared with the preceding year.

Events after the end of the quarter

On 1 July, Ambea's Nytida business area acquired Pusselbiten School, which conducts special needs operations, after-school activities and short-term supervision in Skåne.

Seasonal variations

Ambea's operating profit is affected by seasonal variations, weekends and public holidays.

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

The company's personnel costs are affected in a similar manner when employees take out their holidays. For example, the company is most profitable in the third quarter, as employees typically take their holidays during July and August and therefore receive holiday pay that is accrued continuously throughout the year. Costs during

the summer months are also generally lower due to a reduced schedule for central activities, such as mandatory training programmes and central initiatives, during this period.

Employees

During the quarter, the average number of full-time employees (FTEs) was 12,544 (7,301), and the increase was mainly due to acquisitions.

Parent Company

The Parent Company's earnings pertain to Group-wide costs. During the quarter, Parent Company net sales amounted to SEK 4 million (6). The quarterly results totalled SEK -29 million (0).

The weaker earnings were mainly attributable to increased interest expense due to the acquisition of Aleris's care operations.

Risks and uncertainties

Ambea is exposed to a variety of risks and attaches great importance to continuously analysing, minimising and managing these risks. The risk assessment is also central to the annual strategy process, where risks in relation to the company's ability to achieve its financial targets and strategic ambitions are specifically evaluated. Ambea has identified the following risks: brand risks, industry and market risks, compliance and legal risks, operational risks and financial risks. For a description of these risks and how they are managed, refer to pages 45–47 of the 2018 Annual Report.

Other information

The company's auditors have not reviewed this report.

The Board of Directors' assurance

The Board of Directors and President hereby provide their assurance that this interim report provides a true and fair overview of the operations, position and earnings of the Parent Company and the Group, and describes the material risks and uncertainties facing the Parent Company and the companies in the Group.

Stockholm, 19 August 2019

Lena Hofsberger Chair of the Board

Daniel Björklund	Anders Borg	Lars Gatenbeck
Liselott Kilaas	Gunilla Rudebjer	Mikael Stöhr
Patricia Briceño Employee representative	Charalampos Kalpakas Employee representative	Magnus Sällström Employee representative

Fredrik Gren President and CEO

Presentation of second quarter of 2019

Ambea will hold a presentation for the financial market, with the possibility to participate by teleconference, at 10:00 a.m. CEST on Tuesday, 20 August 2019. The presentation will be held in English, and be available as a webcast at www.ambea.se.

Call-up information

To make sure that the hook-up to the conference call works, please call at least five minutes before the conference call starts to register.

Phone numbers:

Sweden:	+46 (0)8 506 921 80
UK:	+44 (0)20 71 92 80 00
US:	+1 63 15 10 74 95

Contact

Jacob Persson, Head of Investor Relations, telephone +46 (0)708 64 07 52

Forthcoming report occasions

Report on the third quarter 8 November 2019 Report on the fourth quarter 14 February 2020

Ambea is the leading private care company in Sweden, Norway and Denmark, with more than 900 units and approximately 26,000 employees. Within our group of companies, we provide residential facilities, support, education and social care staffing. 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, is headquartered in Solna and listed on Nasdaq Stockholm. ambea.se

Consolidated income statement in summary

SEK million	2019 Apr–Jun	2018 Apr–Jun	2019 Jan–Jun	2018 Jan–Jun	2018/2019 Rolling 12 months	2018 Jan–Dec
OPERATING INCOME
Net sales	2,877	1,518	5,393	2,985	8,485	6,076
Other operating income	25	17	41	27	84	70
Total operating income	2,902	1,535	5,434	3,012	8,569	6,146
OPERATING EXPENSES
Consumables	-121	-45	-212	-89	-307	-184
Other external costs	-409	-309	-786	-606	-1,430	-1,251
Personnel costs	-2,087	-1,052	-3,896	-2,066	-5,972	-4,142
Depreciation, amortisation and impairment of tangible and intan gible assets	-200	-34	-394	-66	-464	-135
Profit/loss from participations in Group companies	–	–	–	-4	–	-4
Other operating expenses	-2	0	-2	0	-3	-1
Operating expenses	-2,819	-1,440	-5,290	-2,831	-8,176	-5,717
OPERATING PROFIT	83	95	144	181	393	429
Financial income	1	1	13	2	13	2
Financial expenses	-68	-4	-129	-14	-155	-40
Net financial items	-67	-3	-116	-12	-142	-38
PROFIT AFTER NET FINANCIAL ITEMS	16	92	28	169	251	391
PROFIT BEFORE TAX	16	92	28	169	251	391
Tax on profit for the period	-4	-17	-6	-34	-68	-96
PROFIT FOR THE PERIOD	12	75	22	135	183	295
Profit for the period attributable to shareholders of the Parent Company	12	75	22	135	183	295
Earnings/loss per share before dilution, SEK	0.16	1.00	0.29	1.80	2.40	3.95
Earnings/loss per share after dilution, SEK	0.16	1.00	0.29	1.80	2.40	3.94

Consolidated statement of comprehensive income in summary

SEK million	2019 Apr–Jun	2018 Apr–Jun	2019 Jan–Jun	2018 Jan–Jun	2018/2019 Rolling 12 months	2018 Jan–Dec
PROFIT FOR THE PERIOD AFTER TAX	12	75	22	135	183	295

OTHER COMPREHENSIVE INCOME, ITEMS NOT TRANSFERABLE TO PROFIT OR LOSS
Remeasurement of defined-benefit pension plans	–	–	–	–	–	–
Tax related to remeasurement of defined-benefit pension plans	–	–	–	–	–	–
Total items not transferable to profit or loss	–	–	–	–	–	–

OTHER COMPREHENSIVE INCOME, ITEMS TRANSFERABLE TO PROFIT OR LOSS
Translation differences	13	9	19	23	1	5
Hedging of net investments in foreign operations	-3	-8	-14	-21	2	-5
Cash flow hedges	0	–	0	–	0	–
Hedging cost reserve	-2	–	-3	–	–3	–
Tax	2	2	4	5	0	1
Total items transferable to profit or loss	10	3	6	7	0	1
Total other comprehensive income	10	3	6	7	0	1
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	22	78	28	142	183	296
Comprehensive income for the period attributable to share holders of the Parent Company	22	78	28	142	183	296

Earnings per share

SEK million	2019 Apr–Jun	2018 Apr–Jun	2019 Jan–Jun	2018 Jan–Jun	2018/2019 Rolling 12 months	2018 Jan–Dec
Profit for the period attributable to shareholders of the Parent Company, SEK million	12	75	22	135	183	295
Earnings per share before dilution
Average number of shares, thousands	78,919	74,873	76,833	74,873	75,776	74,798
Earnings/loss per share before dilution, SEK	0.16	1.00	0.29	1.80	2.40	3.94
Earnings per share after dilution
Average number of shares, thousands	79,067	74,893	76,986	74,892	75,931	74,835
Earnings/loss per share after dilution, SEK	0.16	1.00	0.29	1.80	2.40	3.94

Consolidated balance sheet in summary

SEK million	30 Jun 2019	30 Jun 2018	31 Dec 2018
ASSETS
Fixed assets
Goodwill	6,563	4,069	4,058
Customer contracts and customer relationships	648	488	446
Other intangible assets	7	18	22
Right-of-use assets1	4,364	–	–
Tangible assets	251	215	211
Derivative instruments	1	–	0
Deferred tax assets	70	59	35
Non-current receivables	32	26	27
Total fixed assets	11,936	4,875	4,799

Current assets
Inventories	0	0	0
Accounts receivable	1,221	623	622
Other receivables	104	71	68
Prepaid expenses and accrued income	273	161	167
Cash and cash equivalents	238	80	62
Total current assets excluding assets held for sale	1,836	935	919
Assets held for sale	89	70	74
Total current assets	1,925	1,005	993
TOTAL ASSETS	13,861	5,880	5,792

1 In the previous period, right-of-use assets relating to leased cars were recognised as tangible assets.

Consolidated balance sheet in summary – continuation

SEK million	30 Jun 2019	30 Jun 2018	31 Dec 2018
EQUITY AND LIABILITIES
Equity
Share capital	2	2	2
Other capital contributions	6 167	4,965	4,965
Reserves	25	7	1
Retained earnings including profit or loss for the period	-2 330	-2,418	-2,261
Total equity attributable to shareholders of the Parent Company	3,864	2,556	2,707
Non-controlling interests	–	–	–
Total equity	3,864	2,556	2,707
Non-current liabilities
Non-current interest-bearing liabilities	2,194	616	614
Lease liabilities1	3,846	–	–
Other non-interest-bearing liabilities	0	0	0
Pension provisions	38	6	4
Other provisions	63	0	0
Deferred tax liabilities	155	121	114
Total non-current liabilities	6,296	743	732
Current liabilities
Current interest-bearing liabilities	0	42	37
Commercial papers	1,497	1,615	1,404
Lease liabilities2	549	–	–
Accounts payable	287	183	198
Current tax liabilities	35	61	93
Other non-interest-bearing liabilities	168	73	74
Accrued expenses and deferred income	1,165	607	547
Total current liabilities	3,701	2,581	2,353
TOTAL EQUITY AND LIABILITIES	13,861	5,880	5,792

Consolidated statement of changes in equity in summary

SEK million	2019 Jan–Jun	2018 Jan–Jun	2018 Jan–Dec
Opening balance	2,707	2,480	2,480
Total comprehensive income	28	142	296
Transactions with shareholders
Warrants issued	–	2	3
Share buybacks	–	–	-4
New share issue	1,220	–	–
Issue expenses	-17	–	–
Dividends	-74	-68	-68
Closing balance	3,864	2,556	2,707

1 In the previous period, lease liabilities relating to leased cars were recognised as non-current interest-bearing liabilities.

2 In the previous period, lease liabilities relating to leased cars were recognised as current interest-bearing liabilities.

Consolidated cash flow statement in summary

SEK million	2019 Apr–Jun	2018 Apr–Jun	2019 Jan–Jun	2018 Jan–Jun	2018/2019 Rolling 12 months	2018 Jan–Dec
OPERATING ACTIVITIES
Profit before tax	16	92	28	169	250	391
Adjustment for non-cash items	185	34	400	71	462	134
Cash flow from operating activities before working capital and tax	201	126	428	240	712	525
Tax paid	-30	-6	-97	-43	-114	-60
Cash flow from operating activities before changes in work ing capital	171	120	331	197	599	465
CASH FLOW FROM CHANGES IN WORKING CAPITAL
Change in operating receivables	-64	54	-132	44	-142	36
Change in operating liabilities	110	74	73	77	34	37
Cash flow from operating activities	218	247	272	318	491	538
INVESTING ACTIVITIES
Investment in intangible assets	0	-2	-4	-2	-3	-1
Investment in tangible assets	-40	-9	-67	-18	-87	-38
Divestment of tangible assets	1	–	11	4	14	7
Free cash flow	178	236	212	302	414	506
Acquisition and disposal of shares and participations	6	-296	-2,587	-349	-2,605	-368
Other financial assets	4	0	-3	0	-3	0
Cash flow from investing activities	-31	-307	-2,650	-365	-2,684	-400
Cash flow after investing activities	187	-60	-2,378	-47	-2,193	139
FINANCING ACTIVITIES
New loans/Loans raised	1,421	-105	6,357	262	6,445	1,399
Repayment of loan liabilities	-2,549	-8	-3,654	-28	-3,982	-1,405
Repayment of lease liability	-121	–	-256	–	-256	–
Change in revolving credit facility	-126	244	-1,018	-118	-989	-89
New share issue	1,202	–	1,202	–	1,203	1
Premiums for warrants	–	2	–	2	0	2
Share buybacks	–	–	–	–	-4	-4
Dividends paid	-74	-68	-74	-68	-74	-68
Cash flow from financing activities	-247	67	2,558	51	2,344	-164
CASH FLOW DURING THE PERIOD	-60	7	180	4	151	-25
Cash and cash equivalents on the opening date	297	77	62	87	80	87
Exchange rate differences in cash and cash equivalents	0	-4	-4	-11	7	0
Cash and cash equivalents on the closing date	238	80	238	80	238	62

Parent Company income statement in summary

SEK million	2019 Apr–Jun	2018 Apr–Jun	2019 Jan–Jun	2018 Jan–Jun	2018/2019 Rolling 12 months	2018 Jan–Dec
INCOME
Net sales	4	6	9	11	27	29
Total income	4	6	9	11	27	29
OPERATING EXPENSES
Other external costs	-2	-5	-8	-11	-17	-22
Personnel costs	-6	-6	-10	-11	-24	-25
Amortisation of intangible assets	0	0	0	0	0	0
Operating expenses	-8	-11	-18	-22	-42	-47
OPERATING PROFIT	-4	-5	-9	-11	-15	-18
Financial items	-25	5	-49	6	-53	2
LOSS AFTER FINANCIAL ITEMS	-29	0	-57	-5	-68	-16
Appropriations	–	–	–	–	15	15
PROFIT/LOSS BEFORE TAX	-29	0	-57	-5	-53	-1
Tax on profit for the period	–	–	–	–		–
PROFIT/LOSS FOR THE PERIOD	-29	0	-57	-5	-53	-1

Parent Company balance sheet in summary

SEK million	30 Jun 2019	30 Jun 2018	31 Dec 2018
ASSETS
Intangible assets
Software	1	1	1

Financial assets
Participations in Group companies	7,206	4,128	4,129
Other financial assets		–	32
Derivative assets	4	–	–
Total fixed assets	7,212	4,129	4,162
Current assets
Receivables from Group companies	28	55	23
Other receivables	18	4	16
Tax assets	5	2	2
Prepaid expenses and accrued income	9	6	4
Cash and bank balances	0	9	0
Total current assets	60	76	45
TOTAL ASSETS	7,272	4,205	4,207
EQUITY AND LIABILITIES
Share capital	2	2	2
Statutory reserve	0	0	0
Total restricted equity	3	2	2
Share premium reserve	1,402	200	200
Retained earnings	1,776	1,856	1,852
Loss for the period	-58	-5	-1
Total non-restricted equity	3,121	2,051	2,051
TOTAL EQUITY	3,123	2,053	2,053
Non-current liabilities
Liabilities to credit institutions	2,619	522	713
Current liabilities
Commercial papers	1,479	1,615	1,404
Accounts payable	16	5	7
Other liabilities	0	0	2
Accrued expenses and deferred income	15	10	28
Total current liabilities	1,529	1,630	1,441
TOTAL EQUITY AND LIABILITIES	7,272	4,205	4,207

Key financial figures

SEK million	2019 Apr–Jun	2019 Apr–Jun excl IFRS 16	2018 Apr–Jun	%	2019 Jan–Jun	2018 Jan–Jun	%	2018/2019 Rolling 12 months	2018 Jan–Dec	%
Net sales	2,877	2,877	1,518	90	5,393	2,985	81	8,485	6,076	40
Growth in net sales (%)	90	90	5		81	4		40	4
EBITDA	283	113	129	119	538	247	118	857	564	52
Operating margin, EBITDA (%)	9.8	3.9	8.5		10.0	8.3		10.1	9.3
Items affecting comparability	57	57	-		114			149	39
Adjusted EBITDA	340	170	129	164	652	251	160	1,006	603	67
Operating margin, adjusted EBITDA (%)	11.8	5.9	8.5		12.1	8.4		11.9	9.9
EBITA	118	94	114	4	209	218	-5	499	508	-2
Operating margin, EBITA (%)	4.1	3.3	7.5		3.9	7.3		5.9	8.4
Adjusted EBITA	175	151	114	54	323	222	45	648	547	18
Operating margin, adjusted EBITA (%)	6.1	5.3	7.5		6.0	7.4		7.6	9.0
Operating profit/loss, EBIT	83	59	95	-13	144	181	-20	393	429	-8
Operating margin, EBIT (%)	2.9	2.1	6.3		2.7	6.1		4.6	7.1
Profit before tax	16	30	92	-83	28	169	-83	251	391	-36
Profit after tax	12	23	75	-84	22	135	-82	183	295	-38
Earnings/loss per share before dilution, SEK	0.16	0.29	1.00	-84	0.29	1.80	-84	2.40	3.95	-39
Earnings/loss per share after dilution, SEK	0.16	0.29	1.00	-84	0.29	1.80	-84	2.40	3.94	-39
Return on equity (%)	0.4	0.7	2.9	-88	0.7	5.8	-83	5.7	11.4	-45
Operating cash flow	338	168	248	38	550	366	49	831	609	28
Free cash flow	178	46	236	-25	212	302	-30	414	506	-18
Cash conversion (%)	99.4	98.8	192.2	-48	84.4	145.8	-43	82.6	107.5

Notes

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 accounting policies applied are consistent with those applied in the preparation of the most recent annual report, except for hedge accounting. Hedge accounting in accordance with IFRS 9 was applied to the hedge agreement signed in March 2019. Hedge accounting in accordance with IFRS 9 is applied as of 1 January 2019. Existing hedge relationships in accordance with IAS 39 meet the criteria for continued hedge accounting in accordance with IFRS 9, and no effects arose as a result of the transition.

New or revised IFRS standards

IFRS 16 Leases took effect on 1 January 2019 and supersedes the previous IFRS related to lease accounting. For a more detailed description of accounting policies, refer to Note G1 in the 2018 Annual Report.

Selection of method and exceptions

Ambea has chosen to apply the simplified transitional approach, which requires a restatement on the transition date by adjusting the opening balance at 1 January 2019. Ambea has

also elected to apply the transition relief that excludes shortterm leases and leases of low-value.

Discounting

For contracts with terms of up to 3 years, the marginal lending rate is 1.75 per cent. For contracts with terms of 3 years or more, Ambea has assumed a risk-free interest rate corresponding to STIBOR and the equivalent for Norway, and added a margin of 1.75 per cent.

Transition effects, IFRS 16

Given that the transition to IFRS 16 will have a material impact on the financial statements, Ambea has elected to recognise a reconciliation between its commitments for operating leases at the end of 2018 and its lease liability at the start of 2019.

In Note G1 in the 2018 Annual Report and in this interim report, selected key figures are presented without the effects of IFRS 16. For definitions, refer to Note 9, and for reconciliation with IFRS financial statements, refer to Note 8.

Earnings per share

Due to the new issue conducted, the comparative figures for earnings per share were restated to reflect the bonus issue element.

Reconciliation of operating lease capitalisation

SEK million	Group
Obligations for operating leases excl. extension options at 1 January 2019	3,730
Extension options	142
Liabilities for finance leases at 1 January 2019	39
Discounting with the Group's weighted average incremental borrowing rate	-671
Short-term leases	-36
Right-of-use assets recognised at 1 January 2019	3,204

Note 2 Key judgements and estimates

For information about key judgements and estimates in this interim report, refer to Note G32 in the company's 2018 Annual Report.

Note 3 Segment information

Due to the acquisition of Aleris's care operations, a segment comprising the Danish operations has been added. The name of the Norwegian operations has now been changed from Heimta to Stendi, and also includes the operations acquired from Aleris.

Vardaga Comprises elderly care in Sweden.

Nytida Comprises care for people with functional disabilities in Sweden.
Stendi Comprises support for children and young people, personal assistance, residential care, elderly care and home care in Norway.
Altiden Comprises elderly care, home care, social care and disability care in Denmark.
Klara Comprises staffing solutions, such as the supply of temporary doctors, nurses and other care workers, in Sweden.

Segments

Apr–Jun 2019 SEK million	Vardaga	Nytida	Stendi	Altiden	Klara	Unallocated items1	Group adjust ments	Group
OPERATING INCOME
Net sales	879	940	853	129	76	–	–	2,877
Other operating income	5	5	11	–	11	4	-11	25
Internal transactions	–	–	–	–	-11		11	–
Total income from external customers	884	945	864	129	76	4	–	2,902
EBITA	34	115	10	-5	6	-43	–	118
EBITA margin, %	3.9	12.2	1.2	-3.9	7.9	–		4.1
Items affecting comparability	–	–	–	-	–	57	–	57
Adjusted EBITA	34	115	10	-5	6	14	–	175
Adjusted EBITA margin, %	3.9	12.2	1.2	-3.9	7.9		–	6.1
Amortisation of intangible assets								-35
Operating profit (EBIT)								83
Net financial items								-66
Profit after net financial items								16
Profit before tax								16
Tax on profit for the period								-4
PROFIT FOR THE PERIOD								12
ASSETS	4,335	6,140	2,581	241	182	382	–	13,861

Apr–Jun 2018 SEK million	Vardaga	Nytida	Stendi	Altiden	Klara	Unallocated items1	Group adjust ments	Group
OPERATING INCOME
Net sales	556	747	131	–	83	–	–	1,518
Other operating income	7	5	2	–	9	3	-9	17
Internal transactions	–	–	–	–	-9	–	9	–
Total income from external customers	563	752	133	–	83	3	–	1,535
EBITA	33	80	6	–	4	-10	–	114
EBITA margin, %	5.9	10.7	4.6	–	4.8	–	–	7.5
Items affecting comparability	–	–	–	–	–	–	–	–
Adjusted EBITA	33	80	6	–	4	-10	–	114
Adjusted EBITA margin, %	5.9	10.7	4.6	–	4.8	–	–	7.5
Amortisation of intangible assets								-19
Operating profit (EBIT)								95
Net financial items								-3
Profit after net financial items								92
Profit before tax								92
Tax on profit for the period								-17
PROFIT FOR THE PERIOD								75
ASSETS	1,372	3,640	546	–	181	141	–	5,880

1 The "Unallocated items" column consists of centrally approved costs for general cen-

tral administration, restructures and acquisitions and for IPO costs.

Segments

January–June 2019 SEK million	Vardaga	Nytida	Stendi	Altiden	Klara	Unallocated items1	Group adjust ments	Group
OPERATING INCOME
Net sales	1,675	1,813	1,524	226	155	–	–	5,393
Other operating income	8	8	17	–	21	8	-21	41
Internal transactions	–	–	–	–	-21	–	21	–
Total income from external customers	1,683	1,821	1,541	226	155	8	–	5,434
EBITA	86	218	-9	-5	11	-92		209
EBITA margin, %	5.1	12	–	–	7.1	–	–	3.9
Items affecting comparability	–	–	–	–	–	114	–	114
Adjusted EBITA	86	218	-9	-5	11	22	–	323
Adjusted EBITA margin, %	5.1	12.0	-0.6	-2.2	7.1	–	–	6.0
Amortisation of intangible assets								-64
Operating profit (EBIT)								144
Net financial items								-116
Profit after net financial items								28
Profit before tax								28
Tax on profit for the period								-6
PROFIT FOR THE PERIOD								22
ASSETS	4,335	6,140	2,581	241	182	382	–	13,861

January–June 2018 SEK million	Vardaga	Nytida	Stendi	Altiden	Klara	Unallocated items1	Group adjust ments	Group
OPERATING INCOME
Net sales	1,107	1,464	253	–	161	–	–	2,985
Other operating income	11	7	3	–	17	6	-9	27
Internal transactions	–	–	–	–	-17	–	9	–
Total income from external customers	1,118	1,471	256	–	161	6	–	3,012
EBITA	68	156	9	–	7	-23	–	218
EBITA margin, %	6.1	10.7	3.6	–	4.3	–	–	7.3
Items affecting comparability	–	–	–	–	–	4	–	4
Adjusted EBITA	68	156	9	–	7	-19	–	222
Adjusted EBITA margin, %	6.1	10.7	3.6	–	4.3	–	–	7.4
Amortisation of intangible assets								-37
Operating profit (EBIT)								181
Net financial items								-12
Profit after net financial items								169
Profit before tax								169
Tax on profit for the period								-34
PROFIT FOR THE PERIOD								135
ASSETS	1,372	3,640	546	–	181	141	–	5,880

1 The "Unallocated items" column consists of centrally approved costs for general cen-

tral administration, restructures and acquisitions and for IPO costs.

Note 4 Income

Jan-Jun	Vardaga		Nytida		Stendi		Altiden			Klara	Group
SEK million	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018
Own Management	971	550	1,578	1,217	1,321	178	26	–	–	–	3,896	1,809
Contract Management	704	557	235	247	203	–	200	–	–	–	1,342	893
Staffing	–	–	–	–	–	–	–	–	155	162	155	162
Total	1,675	1,107	1,813	1,464	1,524	178	226	–	155	162	5,393	2,864

Note 5 Preliminary effects of the acquisition of Aleris's care operations

On 16 October 2018, it was announced that Ambea had agreed to acquire Aleris Omsorg. Aleris Omsorg conducts care operations in Sweden, Norway and Denmark. Ambea acquired 100 per cent of the shares in the Parent Company, Aleris Care AB, on 21 January 2019, following approval from the relevant competition authorities, for a purchase price of approximately SEK 2,600 million on a debt-free, cash-free basis at the transfer date. The acquisition makes Ambea the largest care services provider in Scandinavia. The acquisition of Aleris Omsorg is creating a stable platform for future organic growth and significant potential for both direct cost synergies and operational improvements. In addition to direct cost synergies of SEK 90 million and identified operational improvements of SEK 30 million, Ambea expects that additional efficiencies can be realised over the next two to three years.

The acquisition was recognised using the acquisition method, and Aleris's Care Operations have been included in the financial statements for the Ambea Group since 21 January 2019.

Acquired receivables mainly comprise accounts receivable. As these are expected to be paid, in all material respects, the fair value is consistent with the carrying amount. Aleris's customers are predominantly municipalities, whereby credit risk is deemed low.

In the acquisition calculation, adjustments were made on the provisions line, since additional reserve requirements were identified, of which the majority pertain to disputes related to the legal process regarding social security costs for temporary employees in Norway.

Acquired lease liabilities have been measured at the present value of the remaining lease payments (as defined in IFRS 16) as if the acquired lease was new at the acquisition date. Calculations have been made using the same methodology and assumptions as when the effects of IFRS 16 were calculated for Ambea, and are presented in Note G6 in the 2018 Annual Report. At the acquisition date, right-of-use assets have been measured at the same amount as lease liabilities.

Goodwill arising is primarily attributable to human capital, the pipeline under Own Management, a stronger market position and expected synergies. The expected direct cost synergies amount to SEK 90 million annually, of which half are expected to be realised in 2019 and the remainder in 2020. Identified operational improvements are expected to amount to SEK 30 million annually, and estimated to be realised in 2020. Integration costs related to the acquisition are an estimated SEK 100 million, most of which are expected to be recognised in 2019.

Since the acquisition date, Aleris Omsorg has contributed SEK 2,308 million to net sales and SEK 0 million to profit before tax. If the acquisition had taken place on 1 January 2019, Aleris Omsorg would have contributed SEK 2,583 million to net sales and SEK -3 million to profit before tax.

In June 2019, negotiations were completed on the transfer balance with Aleris, whereby Aleris compensated Ambea with SEK 5.6 million and interest.

Net assets of Aleris's care operations at the acquisition date

SEK million	Fair value recognised in the Group
Tangible assets	100
Intangible assets1	260
Financial assets	32
Right-of-use assets	1,268
Accounts receivable and other receivables	605
Cash and cash equivalents	455
Non-current interest-bearing liabilities	2
Deferred tax liability	41
Pension provisions	26
Other provisions	73
Lease liabilities	1,268
Accounts payable and other liabilities	735
Net identifiable assets and liabilities	575
Group goodwill	2,475
Price of shares	3,050
Cash (acquired)	455
Purchase consideration (net cash outflow)	2,594
Change in the Group's goodwill
Opening balance, 1 January 2019	4,058
Acquisition of Aleris Omsorg	2,475
Translation difference	30
Closing cumulative cost	6,563

1 The acquisition analysis is preliminary. The measurement of intangible assets and their related amortisation period had not ended when the financial statements were published for the second quarter of 2019. The value of intangible assets may therefore be adjusted in a future period, with a corresponding adjustment of goodwill.

Note 6 Fair value of financial instruments in the fair value hierarchy

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

Level 1 – Quoted prices (unadjusted) in 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 current assets or Other current liabilities.

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

Ambea has credit/loans denominated in both SEK and NOK and is thereby exposed to interest-rate risk. According to the company's financial policy, at least 50 per cent of the interest-rate risk should be hedged. To reduce the company's interest-rate risk, the company purchased an interest-rate swap and an interest rate cap in March 2019, both with maturities of three years. In total, 54 per cent of the company's interest-rate risk is hedged through interest-rate derivatives.

Derivatives are classified as Level 2 assets in the fair value hierarchy. The change in fair value of the interest rate cap is recognised in other comprehensive income and SEK 2 million was charged against other comprehensive income for the quarter. At 30 June 2019, the value of the derivatives was SEK 1 million. Ambea uses the standard report of issuing banks for the market valuation of purchased interest-rate caps. The measurement is based on the bank's standard pricing model and method. The measurement is based on the bank's average price.

Consolidated assets and liabilities measured at fair value

SEK million	30 Jun	30 Jun	31 Dec
	2019	2018	2018
Interest rate derivatives	1	0	0

Note 7 Pledged assets and contingent liabilities

SEK million	30 Jun 2019	30 Jun 2018	31 Dec 2018
Leased assets	81	86	80
Chattel mortgages	7	13	10
Real estate mortgages	9	23	9
Factoring	2	2	2
Total pledged assets	99	124	101

Contingent liabilities

The Group is sometimes involved in lawsuits and legal proceedings that are related to day-to-day business activities. The claims relate to, but are not limited to, the Group's business practices, personnel matters and tax issues. With respect to matters that do not require any provisions, the Group, based on information that is currently available, is of the opinion that these will not result in any significantly negative effects on the Group's financial results.

Note 8 Reconciliation with IFRS financial statements

SEK million	2019 Apr–Jun	2018 Apr–Jun	2019 Jan–Jun	2018 Jan–Jun	2018/2019 Rolling 12 months	2018 Jan–Dec
Growth/Acquired growth
Growth in net sales (%)	90	5	81	4	40	4
Of which acquired growth (%)	88	8	79	8	42	5
Of which currency effect (%)	0	0	0	0	0	0
Of which organic growth (%)	1	-3	2	-4	1	-1
Operating margin (EBIT)
Net sales	2,877	1,518	5,393	2,985	8,485	6,076
Operating profit (EBIT)	83	95	144	181	393	429
Operating margin, EBIT (%)	2.9	6.3	2.7	6.1	4.6	7.1
EBITA and adjusted EBITA
Operating profit (EBIT)	83	95	144	181	393	429
Amortisation and impairment of intangible assets	35	19	65	37	106	79
EBITA	118	114	209	218	499	508
Items affecting comparability	57	–	114	4	149	39
Adjusted EBITA	175	114	323	222	648	547
Net sales	2,877	1,518	5,393	2,985	8,485	6,076
EBITA margin (%)	4.1	7.5	3.9	7.3	5.9	8.4
Adjusted EBITA margin (%)	6.1	7.5	6.0	7.4	7.6	9.0
EBITDA and adjusted EBITDA
Operating profit (EBIT)	83	95	144	181	393	429
Depreciation, amortisation and impairment of tangible and intangible assets	200	34	394	66	464	135
EBITDA	283	129	538	247	857	564
Items affecting comparability	57	–	114	4	149	39
Adjusted EBITDA	340	129	652	251	1,006	603
Net sales	2,877	1,518	5,393	2,985	8,485	6,076
EBITDA margin	9.8	8.5	10.0	8.3	10.1	9.3
Adjusted EBITDA margin	11.8	8.5	12.1	8.4	11.9	9.9
EBITDA and adjusted EBITDA excluding IFRS 16
Operating profit (EBIT)	83	n/a	144	n/a	393	n/a
Depreciation, amortisation and impairment of tangible and intangible assets	200	n/a	394	n/a	464	n/a
Additional: Rental expenses	-170	n/a	-329	n/a	-329	n/a
Net effect of IFRS 16 on EBITDA	-170	n/a	-329	n/a	-329	n/a
EBITDA excluding effects of IFRS 16	113	n/a	209	n/a	528	n/a
Items affecting comparability	57	n/a	114	n/a	149	n/a
Adjusted EBITDA excluding IFRS 16	170	n/a	323	n/a	677	n/a

SEK million	2019 Apr–Jun	2018 Apr–Jun	2019 Jan–Jun	2018 Jan–Jun	2018/2019 Rolling 12 months	2018 Jan–Dec
Operating cash flow
Adjusted EBITDA	340	129	652	251	1,006	603
Adjustment for non-cash items	-19	-1	-2	3	-10	-5
Cash flow from investing activities excl. acquisitions and divestments of subsidiaries	-40	-11	-60	-16	-77	-32
Adjustment for cash flow from investing activities related to in creased capacity/growth	10	3	19	7	21	9
Changes in working capital	47	128	-59	121	-107	73
Operating cash flow	338	248	550	366	831	648
Cash conversion (%)
Operating cash flow	338	248	550	366	831	648
Adjusted EBITDA	340	129	652	251	1,006	603
Cash conversion (%)	99.4	192.2	84.4	145.8	82.6	107.5
Items affecting comparability
Reversal of restructuring and acquisition-related costs	57	–	114	–	149	35
– of which costs included in the line item of consumables	2	–	2	–	2	–
– of which costs included in the line item of other external costs	26	–	62	–	96	34
– of which costs included in the line item of personnel costs	29	–	50		51	1
Reversal of income and costs for discontinuation of entire seg ments	–	–	–	4	–	4
Personal assistance
– of which, income	–	–	–	–	–	–
– of which costs included in the line item of other external costs	–	–	–	–	–	–
– of which costs included in the line item of personnel costs	–	–	–	–	–	–
– of which, profit or loss from participations in Group companies	–	–	–	4	–	4
Total items affecting comparability	57	–	114	4	149	39

Debt/equity ratio SEK million	30 Jun 2019	30 Jun 2018	31 Dec 2018
Non-current interest-bearing liabilities	6,040	616	614
Current interest-bearing liabilities	2,046	1,657	1,441
Total interest-bearing liabilities	8,086	2,273	2,055
Total equity	3,864	2,556	2,707
Debt/equity ratio	2.1	0.9	0.8

Net debt, net debt/Adjusted EBITDA, RTM SEK million	30 Jun 2019	30 Jun 2018	31 Dec 2018
Non-current interest-bearing liabilities	6,040	616	614
Current interest-bearing liabilities	2,046	1,657	1,441
Less: cash and cash equivalents	-238	-80	-62
Net debt	7,848	2,193	1,993
Adjusted EBITDA, RTM	1,006	556	603
Net debt/Adjusted EBITDA, RTM	7.8	4.0	3.3

Equity/assets ratio SEK million	30 Jun 2019	30 Jun 2018	31 Dec 2018
Total equity	3,864	2,556	2,707
Total assets	13,853	5,880	5,762
Equity/assets ratio (%)	27.8	43.5	46.7

Return on equity SEK million	2019 Apr–Jun	2018 Apr–Jun	2019 Jan–Jun	2018 Jan–Jun	2018/2019 Rolling 12 months	2018 Jan–Dec
Opening equity attributable to shareholders of the Parent Company	2,721	2,544	2,707	2,480	2,556	2,480
Closing equity attributable to shareholders of the Parent Com pany	3,864	2,556	3,864	2,556	3,864	2,707
Average equity attributable to shareholders of the Parent Company	3,293	2,550	3,286	2,518	3,210	2,594

Profit after tax	12	75	22	135	183	295
Return on equity (%)	0.4	2.9	0.7	5.4	5.7	11.4

Profit before and after tax excluding effects of IFRS 16 SEK million		2019
		Jan–Jun
Profit before tax	16	28
Net effects of IFRS 16 on EBIT	-24	-42
Less: IFRS 16 effect included in the line item of Financial expenses	38	73
Net effects of IFRS 16 on profit before tax	14	31
Profit before tax excluding effects of IFRS 16	30	59
Tax on profit for the period	-4	-6
Less: Effects of IFRS 16 on Deferred tax	-3	-7
Profit after tax excluding effects of IFRS 16	23	46
Earnings per share before dilution, excluding effects of IFRS 16
Number of shares (000s)	78,919	78,919
Earnings per share before dilution, excluding effects of IFRS 16	0.29	0.59
Earnings per share after dilution, excluding effects of IFRS 16
Number of shares (000s)	79,067	79,067
Earnings per share before dilution, excluding effects of IFRS 16	0.29	0.59

Operating cash flow excluding IFRS 16 SEK million	2019 Apr–Jun	2019 Jan–Jun
Operating cash flow	338	550
Less: Effect of IFRS 16 on EBITDA	-170	-329
Operating cash flow excluding IFRS 16	168	221

Net sales	2,877	5,393
EBITDA margin excluding effects of IFRS 16	3.9	3.9
Adjusted EBITDA margin excluding effects of IFRS 16	5.9	6.0

Operating profit (EBIT) excluding effects of IFRS 16	2019 Apr–Jun	2019 Jan–Jun
Operating profit (EBIT)	83	144
Less: Effects of IFRS 16 included in the line item of depreciation, amortisation and impairment of tangible and intangible assets	146	287
Additional: Rental expenses	-170	-329
Net effects of IFRS 16 on EBIT	-24	-42
EBIT excluding effects of IFRS 16	59	102
EBITA and adjusted EBITA excluding effects of IFRS 16
Operating profit (EBIT)	83	144
Amortisation and impairment of intangible assets	35	65
Less: Effects of IFRS 16 included in the line item of depreciation, amortisation and impairment of tangible and intangible assets	146	287
Additional: Rental expenses	-170	-329
Net effects of IFRS 16 on EBITA	-24	-42
EBITA excluding effects of IFRS 16	94	167
Items affecting comparability	57	114
Adjusted EBITA excluding effects of IFRS 16	151	281

Net sales	2,877	5,393
EBITA margin excluding effects of IFRS 16 (%)	3.3	3.1
Adjusted EBITA margin excluding effects of IFRS 16 (%)	5.3	5.2

Cash conversion excluding IFRS 16 SEK million	2019 Apr–Jun	2019 Jan–Jun
Operating cash flow excluding effects of IFRS 16	168	221
Adjusted EBITDA excluding effects of IFRS 16	170	323
Cash conversion (%) excluding IFRS 16	98.8	68.4

Free cash flow excluding effects of IFRS 16 SEK million	2019 Apr–Jun	2019 Jan–Jun
Free cash flow	178	212
Less: Effect of IFRS 16 on EBITDA	-170	-329
Change in prepaid rents recognised as an item of operating receivables	-1	-1
Additional: Interest payments		73
Free cash flow excluding effects of IFRS 16		-45

Return on equity, excluding effects of IFRS 16 SEK million		2019
		Jan–Jun
Opening equity attributable to shareholders of the Parent Company	2,707	2,707
Closing equity attributable to shareholders of the Parent Company	3,864	3,864
Net effects of IFRS 16 on profit after tax		24
Profit after tax excluding effects of IFRS 16		187
Closing equity attributable to shareholders of the Parent Company, excluding effects of IFRS 16		3,888
Average equity attributable to shareholders of the Parent Company, excluding effects of IFRS 16		3,298
Return on equity, excluding effects of IFRS 16 (%)		1.4

Net debt, Net debt/Adjusted EBITDA, RTM excluding effects of IFRS 16 SEK million
Non-current interest-bearing liabilities	6,040
Less: non-current lease liabilities pertaining to properties recognised on the Lease liability line	-3,803
Current interest-bearing liabilities	2,046
Less: current lease liabilities pertaining to properties recognised on the Lease liability line
Less: cash and cash equivalents	-238
Net debt excluding effects of IFRS 16	3,525
Adjusted EBITDA, RTM, adjusted for IFRS 16	677
Net debt/Adjusted EBITDA, RTM, excluding effects of IFRS 16	5.2

Equity/assets ratio excluding effects of IFRS 16 SEK million
Total equity, excluding effects of IFRS 16	3,888
Total assets	13,861
Less: right-of-use assets attributable to property	-4,292
Less: Effects of IFRS 16 on deferred tax are recognised on the Deferred tax assets line
Less: Effects of IFRS 16 on prepaid rents are recognised on the Prepaid expenses and accrued income line
Total assets excluding effects of IFRS 16	9,562
Equity/assets ratio (%)	40.7

Note 9 Definitions and purpose

The definition of operating cash flow has been changed. As of the interim report for the first quarter of 2019, calculations have been based on Adjusted EBITDA, and cash flows related to increased capacity/growth have been excluded to create better visibility of the underlying cash flows for the growing proportion of Own Management, and for better comparability of the cash conversion rate. The comparative figures have been restated.

The definition of organic growth has changed to also include adjustment for currency. The comparative figures have been restated.

In 2019, alternative performance measures are presented where the effects of IFRS 16 are eliminated to facilitate analysis with the comparative year.

Key financial figures	Definition and calculation	Purpose
Growth (%)	Growth consists of the increase in sales in relation to the comparative period.	This key figure is used to follow up the com pany's sales increase
	The period's increase in net sales/Net sales in the period of comparison
Acquired growth (%)	The period's net sales growth from acquisitions/the comparative period's net sales	The key figure used to monitor the proportion of the company's sales growth generated through acquisitions
Currency effect on growth (%)	The increase in net sales for the period at tributable to change in exchange rates/Net sales in the comparative period	The key figure used to monitor the proportion of the company's sales growth generated through exchange-rate fluctuations
Organic growth (%)	The increase in net sales for the period adjusted for acquisitions, divestments and currency/Net sales in the comparative period	This key figure is used when analysing un derlying sales growth driven by comparable units between different periods
Operating profit (EBIT)	Profit for the period before financial items and tax	The key figure used to monitor the company's profit generated by operating activities.
	Total operating income – Operating expenses	This key figure enables comparisons of profitability between companies/industries
EBITA	Operating profit before amortisation and impairment of intangible assets	This key figure is used to follow up the com pany's profit generated by operating activi
	Operating profit (EBIT) + Amortisation and impairment of intangible assets	ties. This key figure enables comparisons of profitability between companies/industries
Items affecting comparability	Items related to events in the company's operations that impact comparability with profit during other periods. Include:	The key figure of Items affecting compara bility is used to achieve a fair comparison of the underlying development of business
	- Transaction costs attributable to major acquisitions	operations
	- Major re-organisations
Adjusted EBITA	Operating profit before amortisation and impairment of intangible assets adjusted for items from events in the company's oper ations that affect comparisons with profit during other periods	The key figure is used to follow up the company's profit generated by operating activities in order to obtain a fair comparison of the underlying development of business operations. This key figure enables compar
	EBITA + Items affecting comparability	isons of profitability between companies/ industries

Key financial figures	Definition and calculation	Purpose
EBITDA	Operating profit before depreciation, amor tisation and impairment of intangible and tangible assets	The key figure used to follow up the compa ny's profit generated by operating activities. This key figure enables comparisons of profit
	Operating profit (EBIT) + Depreciation, am ortisation and impairment of tangible and intangible assets	ability between companies/industries
Adjusted EBITDA	Operating profit before depreciation/amor tisation and impairment of intangible and tangible assets adjusted for items from such events in the company's operations that affect comparisons with profit from other periods	This key figure is used to follow up the com pany's profit generated by operating activi ties with a fair comparison of the underlying development of the business operations. This key figure enables comparisons of profitabili ty between companies/industries
	EBITDA + Items affecting comparability
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 the cash flow from the company's operations, excluding busi ness combinations, company divestments, financing, tax and items affecting compa rability and is used to follow up whether the
	Adjusted EBITDA + Changes in working capi tal + Cash flow from investing activities excl. acquisitions and divestments of subsidiaries + adjustments for cash flow from investing activities related to increased capacity/ growth	company is able to generate a sufficiently positive cash flow to maintain and expand its operations
Free cash flow	Total cash flow from operating activities and cash flow from investing activities excluding acquisitions and divestments of operations	This key figure shows cash flow from op erating activities including cash flow from investing activities excluding acquisitions
	Cash flow from operating activities + Cash flow from investing activities excluding ac quisitions and sales of subsidiaries	and divestments of operations and is used because it is a relevant measure for investors to be able to understand the Group's cash flow from operating activities
Cash conversion (%)	Cash conversion as a percentage is defined as operating cash flow divided by adjusted EBITDA	The key figure used as an efficiency measure of the proportion of a company's profit that is converted to cash
	Operating cash flow/Adjusted EBITDA
Net debt Net debt /Adjusted EBITDA, RTM	The Group's interest-bearing liabilities ex cluding pension provisions adjusted for cash and cash equivalents	This key figure is a measure of the company's debt/equity ratio and is used by the company to assess its capacity to meet its financial
	Interest-bearing liabilities – cash and cash equivalents	commitments
	Net debt/Adjusted EBITDA is a measure of the debt/equity ratio defined as the closing balance for net debt in relation to rolling adjusted EBITDA.	The key figure used to monitor the level of the company's indebtedness to ensure that financial covenants are met
	Net debt/Adjusted EBITDA, RTM
Return on equity (%)	Return on equity shows the company's return on the capital provided by its owners	This key figure is used to show the returns generated on the capital that shareholders
	Profit for the period/Equity (average equity at the beginning and end of the period)	have invested in the company
Operating profit (EBIT) excluding effects of IFRS 16	Profit for the period before financial items and tax, adjusted for the effects of IFRS 16 EBIT + net effects of IFRS 16 on EBIT	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements

Key financial figures	Definition and calculation	Purpose
Operating margin (EBIT) excluding effects of IFRS 16	Operating profit adjusted for the effects of IFRS 16 as a percentage of net sales Operating profit (EBIT) excluding effects of IFRS 16/Net sales	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
EBITA excluding effects of IFRS 16	Operating profit before amortisation and impairment of intangible assets, adjusted for the effects of IFRS 16 EBITA + net effects of IFRS 16 on EBITA	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
Operating margin (%)	Operating profit as a percentage of net sales. Operating profit (EBIT)/Net sales	This key figure is used to follow up the per 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
Adjusted EBITA excluding effects of IFRS 16	Operating profit before amortisation and impairment of intangible assets adjusted for items from such events in the company's op erations that affect comparisons with profit from other periods, adjusted for the effects of IFRS 16 Adjusted EBITA + net effects of IFRS 16 on EBITA	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
EBITDA excluding effects of IFRS 16	Operating profit before depreciation, amor tisation and impairment of intangible and tangible assets, adjusted for the effects of IFRS 16	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
Adjusted EBITDA excluding effects of IFRS 16	Operating profit before amortisation and impairment of intangible assets adjusted for items from such events in the company's op erations that affect comparisons with profit from other periods, adjusted for the effects of IFRS 16 Adjusted EBITDA + net effects of IFRS 16 on EBITA	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
Operating cash flow excluding effects of IFRS 16	Total cash flow, adjusted for the effects of IFRS 16, from operating activities excluding tax, net financial items and items affecting comparability and cash flow from investing activities excluding acquisitions and disposal of units Adjusted EBITDA + Changes in working capi tal + Cash flow from investing activities excl. acquisitions and divestments of subsidiaries + adjustments for cash flow from investing activities related to increased capacity/ growth	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
Cash Conversion (%) excluding effects of IFRS 16	Cash generation or Cash conversion as a percentage is defined as operating cash flow divided by Adjusted EBITDA, adjusted for the effects of IFRS 16 Operating cash flow excluding the effects of IFRS 16/EBITDA excluding the effects of IFRS 16	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements

Key financial figures	Definition and calculation	Purpose
Free cash flow excluding effects of IFRS 16	Total cash flow from operating activities and cash flow from investing activities excluding acquisitions and divestments of operations, adjusted for the effects of IFRS 16 Free cash flow – net effects of IFRS 16 on EBITDA – Change in operating receivables/ liabilities attributable to IFRS 16 + interest payments attributable to IFRS 16	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
Net debt excluding effects of IFRS 16	The Group's interest-bearing liabilities ex cluding pension provisions adjusted for cash and cash equivalents Net debt – lease liabilities related to proper ties	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
Net debt / Adjusted EBITDA, RTM ex cluding effects of IFRS 16	Net debt/Adjusted EBITDA excluding the ef fects of IFRS 16 is a measure of the debt/eq uity ratio defined as the closing balance for net debt, adjusted for the effects of IFRS, in relation to rolling adjusted EBITDA, adjusted for the effects of IFRS 16 Net debt excluding the effects of IFRS 16/ Adjusted EBITA excluding the effects of IFRS 16 RTM	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
Profit before tax excluding effects of IFRS 16	Profit before tax, adjusted for the effects of IFRS 16 Profit before tax + net effects of IFRS 16 on profit before tax	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
Profit after tax excluding effects of IFRS 16	Profit after tax, adjusted for the effects of IFRS 16 Profit before tax excluding the effects of IFRS 16 + effects of IFRS 16 on deferred tax	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
Earnings per share before dilution, excluding effects of IFRS 16	Earnings per share before dilution, excluding the effects of IFRS 16 on profit for the year Profit after tax excluding the effects of IFRS 16 /Average number of shares before dilution	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
Earnings per share after dilution, ex cluding effects of IFRS 16	Earnings per share before dilution, excluding the effects of IFRS 16 on profit for the year and equity Profit after tax excluding the effects of IFRS 16 /Average number of shares after dilution	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
Return on equity, excluding effects of IFRS 16	Profit after tax excluding the effects of IFRS 16 /Average equity attributable to sharehold ers of the Parent Company, excluding the effects of IFRS 16	This key figure is used to facilitate a com parison with the preceding period, since IFRS 16 is only applied to the period's financial statements
Equity/assets ratio (%)	The equity/assets ratio is used to show the proportion of assets that is financed by equity Equity/Total assets	This key figure shows the percentage of total assets financed with equity and enables an analysis of the company's long-term finan cial strength and ability to withstand losses
Comparable units	Comparable units include units that have been in Ambea's operation for at least 13 months.	This key figure is used to show the EBITA margin in units with a stable status to com pare with the total EBITA margin, which also includes start-up units.

Quality management in the second quarter of 2019

Summary

All of Aleris's operations in Sweden have now implemented Ambea's quality index. Work is now being initiated in all operations to enhance the quality areas that are not in line with Ambea's quality requirements. Accordingly, the index has declined somewhat in both Vardaga and Nytida. Compared with the first quarter, the Quality and HR Flash¹ decreased somewhat during the second quarter, in Vardaga from 7.4 to 6.8 and in Nytida from 7.0 to 6.9.
During the quarter, Vardaga started a training programme to improve employees' skills in palliative care (care in the last phase of life). For each resident, four to five palliative representatives are trained, who can then lead the work in social care during the last phase of life and support colleagues in the operation.
Stendi underwent reorganisation processes during the quarter after it was decided to replace the former, decentralised quality structure with a central quality organisation. As of 1 June, quality is part of the staff functions under the business area manager. Focus on this work will be intensified moving forward and the new Quality and Development department has started to integrate Ambea's quality procedures and management systems in Stendi.

1 The quality and HR flash is Ambea's tool for follow-up of the Group's quality and HR work. It is sent out to all operations in Nytida and Vardaga every month.

Daniel Mårs, Kristina Alexandersson and Anna Bossen (not in the photo) developed Vardaga's new palliative care training course

All of the regions in Stendi's operations for children and young people have been inspected by the inspection authority, all with favourable results and without major deviations.
In May, a user survey was conducted among care receivers at Altiden's elderly care facilities. The results showed, for example, that 97.3 per cent of the residents could recommend Altiden to others.

Awards and distinctions

• Gender equality: Again this year, Ambea was included in the Allbright Foundation's list of the stock exchange's companies with the highest gender equality. Since the end of April, Ambea's management group has comprised four women and three men, while eight of ten listed companies have male-dominated management groups according to the Allbright report.
• Talent prize: Murtada Hacham, an employee of Altiden's home care organisation in Glostrup, won the 2019 Welfare Talent Prize after being nominated by his colleagues. The award, which is supported by the Danish Union of Public Employees and the PenSam pension and life insurance company, is presented annually to honour an employee who makes a special effort every day for society's elderly, children and sick.

57%

The quarter in figures (Sweden)

The share of serious deviations during the second quarter (grade 4) was somewhat higher compared with the preceding quarter, but was still at a low level (0.17 per cent).
Two complaints were made in accordance with Lex Sarah, both in Vardaga. The Swedish Health and Social Care Inspectorate (IVO) has issued its decision for one of the complaints and the case is now closed without any action required. One Lex Maria complaint was made, also in Vardaga. IVO has not yet made a decision. In the preceding quarter, three Lex Sarah complaints were submitted and no Lex Maria complaints.
Individual complaints investigated by the IVO: Three separate complaints were submitted pertaining to Vardaga's operations, but IVO has not yet made a decision in any of these cases. Two complaints regarding Nytida's operations were submitted, and a decision has been made in one of the cases, with IVO making some criticism. In the preceding quarter, eleven separate complaints were submitted.

Kvinnor Män

• Inspections: IVO carried out 16 inspections of Nytida's units and to date, nine decisions have been issued, seven without criticism and two with criticism. For Vardaga, an inspection was conducted and a decision containing criticism was received.

AI assistant

Ambea — Interim / Quarterly Report 2019

2999_ir_2019-08-20_25008d11-6772-461e-8f55-4f4ac0c9465d.pdf

Continued earnings growth with measures in Norway having an impact

Second quarter April–June

First six months January–June

Significant events during the quarter

Consolidated key figures

Continued earnings growth with measures in Norway having an impact

Group

Second quarter

Net sales

Earnings

Net financial items

Income tax

Profit for the period

Net sales by segment April – June 2019

Net sales by contract model April – June 2019

Distribution of net sales

Distribution of net sales

Own Management – total in operation, including acquisitions

Own Management – pipeline

Contract Management – pipeline

Group

January – June

Earnings

Net financial items

Income tax

Profit for the period

Net sales by segment January–June 2019

Net sales by contract model January–June 2019

Distribution of net sales

Distribution of net sales

Cash flow

Financial position

Vardaga

Quarter

January–June period

Own Management – total in operation

Own Management – pipeline

Contract Management – pipeline

Nytida

Quarter

January–June period

Own Management – total in operation

Own Management – pipeline

Contract Management – pipeline

Stendi

Quarter

January–June period

Own Management – total in operation

Own Management – pipeline

Contract Management – pipeline

Altiden

Quarter

January–June period

Own Management – total in operation

Own Management – pipeline

Contract Management – pipeline

Klara

Quarter

January–June period

Other events

New share issue

Incentive programmes

Legal process on social costs for temporary personnel in Norway

Tax audit in Norway

Tax audit in Sweden

Related-party transactions

Events after the end of the quarter

Seasonal variations

Employees

Parent Company

Risks and uncertainties

Other information

The Board of Directors' assurance

Presentation of second quarter of 2019

Call-up information

Contact

Forthcoming report occasions

Ambea Interim / Quarterly Report 2019