Earnings call transcript: Ambea AB sees sales rise in Q1 2025

Ambea AB, a prominent player in the Nordic Healthcare Providers & Services industry, reported a 5% increase in net sales for Q1 2025, alongside a 10% rise in Group EBITDA, reaching an 8.4% margin. According to InvestingPro data, the company’s current market capitalization stands at $957 million, with trailing twelve-month revenue of $1.29 billion. Despite these positive financial metrics, the company’s stock fell by 3.32% in pre-market trading, reflecting investor concerns over the lack of specific earnings per share (EPS) and revenue data for the quarter. InvestingPro analysis suggests the stock is currently undervalued based on its Fair Value calculations.

Key Takeaways

• Net sales increased by 5% in Q1 2025.
• Group EBITDA rose by 10%, achieving an 8.4% margin.
• Stock price fell by 3.32% following the earnings call.
• Successful acquisition of Validia, adding SEK 1.4 billion in annual revenue.
• Concerns over margin challenges in Nytida.

Company Performance

Ambea AB demonstrated robust performance with a 5% increase in net sales and a 10% rise in Group EBITDA in Q1 2025. The company continued its expansion strategy by acquiring Validia in Finland, which is expected to contribute significantly to its annual revenue. The acquisition aligns with Ambea’s goal of maintaining a strong presence in the Nordic care services market.

Financial Highlights

• Net sales: Increased by 5% in Q1 2025.
• Group EBITDA: Rose by 10%, achieving an 8.4% margin.
• Organic growth: 4.2% in Q1 2025.
• Acquired growth: 1.9% in Q1 2025.

Market Reaction

Following the earnings call, Ambea AB’s stock price decreased by 3.32%, with a change of -3.8 points. Despite the recent decline, InvestingPro data shows impressive returns of 75.7% over the past year and a 20.5% gain in the last six months. The current decline may be attributed to investor concerns over the absence of specific EPS and revenue figures for the quarter, as well as potential challenges in the company’s Nytida segment. Two analysts have recently revised their earnings estimates upward for the upcoming period, suggesting confidence in the company’s prospects.

Outlook & Guidance

Ambea AB is targeting 8-10% annual growth and aims for a 9.5% adjusted EBITA margin in the medium term. The company plans to continue its focus on organic and acquired growth, with expectations for further profitability improvements in Denmark. The integration of Validia is ongoing and expected to complete in 2026.

Executive Commentary

CEO Marc Jensen highlighted Ambea’s strong market position, stating, "We are the only care provider with a strong presence in the four largest Nordic countries." He also expressed confidence in the company’s outlook, saying, "We remain comfortable on the both short, mid and long term outlook."

Risks and Challenges

• Margin challenges in Nytida could impact profitability.
• Increased leverage to 2.8x post-Validia acquisition may pose financial risks.
• New Danish legislation could affect expansion plans.
• The aging population presents both opportunities and challenges in meeting increased care demand.

Q&A

During the earnings call, analysts inquired about the margin challenges in Nytida and the company’s strategy for organic growth in Finland. The management confirmed stable demand in Stendi and highlighted new opportunities arising from Danish legislative changes.

Full transcript - Ambea AB (AMBEA) Q1 2025:

Conference Operator: Good day, and thank you for standing by. Welcome to the Ambira Interim Report First Quarter twenty twenty five Conference Call. At this time, all participants are in listen only mode. After the speakers’ presentation, there will be the question and answer session. Please be advised that this conference is being recorded.

I would now like to hand the conference over to your speaker today, Marc Jensen, President and CEO. Please go ahead.

Marc Jensen, President and CEO, Ambiya: Thank you so much, and welcome, everyone. Today, we will review Ambeya’s performance for the first quarter of twenty twenty five. My name is Marc Jensen. I’m CEO of Ambeya, and I’m joined by our CFO, Benno Eliason. Together, we will walk you through our results and highlights and the key developments during this period.

After that, I will summarize the quarter and compare Ambeya’s performance to our financial targets before we open for questions. I would like to begin with a brief overview of Ambeya. Ambeya remains the leading care provider in Sweden, Norway and Denmark. And with the market entry in Finland, we offer high quality care and support for over 16,000 care receivers across more than 1,000 units in the four largest Nordic countries. And with that in mind, let’s look at the acquisition of the Finnish business in Validia.

The acquisition of Validia was closed according to plan on April 1. Validia will be reported as a new business area and be consolidated in Ambeas accounts with full effect in the second quarter. The reception to Ambeya’s acquisition has been positive for Ambeya’s employees and customers alike, and we are impressed with the quality and engagement of the local team. The integration of Ambeya is proceeding according to plan. Validia is a platform acquisition in a new market for Ambeer and the integration is therefore in some parts lighter than what we are used to when acquiring in existing markets.

A key part of the integration is to pave the way for leveraging Ambeer’s shared knowledge and best practices across all our markets, contributing to a stronger Nordic welfare model. Most of the integration is expected to be completed in 2025, but the full integration will complete in 2026 with the establishment of Ambeer’s IT platform in Finland. The acquisition gave Ambeer access to a sizable care services market with a healthy growth. Concurrently with the integration, the key focus of Velidia is to deliver continued growth, which we are optimistic about and maintain good quality of care to our Finnish customers. The market for M and A within care services in Finland is quite active.

We are currently evaluating M and A opportunities and will continue to do so going forward. So let’s go straight to some of the important achievements within care quality. As we continue to grow, it remains just as important that we deliver safe, high quality care every single day. We follow a systematic approach to quality and sustainability with monthly follow ups of all our care units. During the quarter, we presented Ambeer’s Quality Award, an annual recognition given to one care unit within each business area.

These units stand out through their exceptional quality work closely aligned with Ambeer’s values and shared working methods. Notably, they’re also among the top financial performance in their peer groups, reflecting the strong correlation that we have between high quality and healthy financial outcomes. With over 1,000 units spread across various regions where employees provide daily care and support, local leadership plays a critical role in ensuring consistent quality. This quarter we conducted our first leadership index survey of the year, resulting in a score of 78 out of 100. This is a stable and encouraging result, underscoring our long term commitment to present and to present and supportive leadership.

Leadership remains a cornerstone at Ambeer and we continue to support leaders at every level. A key part of this effort is ensuring that all employee survey results are discussed in the local teams and important improvement areas to each team identified and agreed upon. This foster culture of continuous improvement and improved work environment. Finally, attracting the right talent is vital to our continuous success, but recruitment can be time consuming. This quarter we introduced a new AI based recruitment tool in VoorDagger.

It’s appreciated by candidates and managers and is already helping to streamline the hiring process, allowing our managers to spend more time focusing on care and on leadership. You can read more about our quality and sustainability work in the quarterly report as well as our 2024 annual report that we have recently published. Now I would like to highlight some of Ambeer’s future growth opportunities. We remain focused on expanding our services to meet the growing demand for care fueled by an aging population and increasing care needs. In Q1, both Nudtit and Stendi signed new contracts, adding 15 care places in total to the pipeline.

Our pipeline is by far the strongest in the Nordic Care sector. We have twelve eighty five beds and care places in our own management pipeline, most of them in Voorhodger. The pipeline decreased slightly compared to the previous quarter due to newly opened units in the first quarter. We plan to open two eighty beds in Voorhodger, Eighty One care places in Nytida and 49 beds in Stendy during the coming twelve months. We are not only opening new care units, but also expanding existing units.

We signed a contract to increase capacity by 30 beds at a planned nursing home in Terpu, Stockholm. Looking at Ambeya as a whole, more units are under construction, positioning us for future organic growth in our markets. Acquisitions are an important part of our growth agenda too, and we will now have a look at the acquired growth. As you can notice, we made acquisition in almost all business areas between 2021 and 2025, except for Stendi. Nytilde was most active in bolt on acquisitions, expanding our footprint within Social Care in Sweden.

This is a part of our strategy to strengthen our service offering through qualitative bolt on acquisitions. On 04/01/2025, Ambeya acquired Validia in Finland, making us the only care provider with a strong presence in the four largest Nordic countries. Validia runs operations in residential care and support for people with disabilities and thereby adding approximately billion in annual net sales. After the quarter ended, we acquired Avastar, which operates care units in both War Dogger’s and Nutella’s operational areas with annual sales of approximately SEK145 million. Avastar operates a nursing home and four care units for adults with lifelong disabilities and psychosocial problems.

Control of the company was transferred on May 5. Further bolt on acquisitions are expected in the coming quarters in several business areas as we continue to identify strategic opportunities for growth in all Nordic markets. Therefore, we foresee a continued active year within M and A. Let’s look at total revenue growth. The organic growth illustrated in the purple bars continues to show the strong trend observed since 2022.

The total organic growth in this quarter was 4.2%. Acquired growth was 1.9%. We saw negative currency effects of minus 1.5%, which affected overall growth. So summing up the highlights of the first quarter. In conclusion, the first quarter of twenty twenty five has been another successful quarter for Ambeya marked by strong financial performance, continued organic growth and improved occupancy.

Net sales increased by 5%, driven by 4% organic growth. Group EBITDA rose by 10%, reaching a margin of 8.4%. Altina Denmark continues to see profitability improvements from higher occupancy and strength operations and showed positive earnings again this quarter. Ambeer entered into agreement to acquire Velidia in Finland, making us the only care provider with a sizable platform in all four large Nordic countries and a strong position for growth. And now I will hand over to Benno, who will provide a financial overview of our performance this quarter.

Benno Eliason, CFO, Ambiya: Thank you, Mark. The good organic growth we have seen in recent quarters continues. In Q1, we achieved 5% growth in net sales, driven by acquired and start up units in Nyktira and increased occupancy in our care units in Vardaga and Altiden. Stendip had negative growth in SEK. In local currency, net sales growth was positive.

Clara saw a decline in sales due to weak external market. Turning to the EBITDA development. This slide shows how the different business areas have contributed to the adjusted EBITDA of the group. The first quarter last year was affected both positively by an extra invoicing day and negatively by the Easter holiday. This has of course affected the comparison for this quarter.

This effect was negative for the Swedish business areas, Valarga and Utira and positive for Stendi and Altira. Adjusted EBITDA increased by 10% and our margin improved to 8.4%, driven by strong results in Vadaga and Stendi and of course the positive earnings in Altiden. Nytira’s EBITDA was lower than last year, down 1.5 percentage points, mainly due to the occupancy challenges in individual and family care segment. Spendis EBITDA increased by 1.3 percentage points, reflecting a favorable demand that has contributed to the stable occupancy. Altius EBITDA increased significantly by 5.3 percentage points compared to the same quarter last year, reflecting the good occupancy growth together with operational improvements, specifically in social care.

And now to the cash flow development. Our operating cash flow amounted to SEK425 million with a stable cash conversion in the quarter. The decrease compared to the same quarter last year is mainly explained by an increase in working capital. This is attributable to normal fluctuations in payment flows related to the beginning and the end of the different quarters, and the underlying cash flow remains strong. This slide shows the way from the adjusted EBITDA down to the free cash flow post tax of SEK713 million, excluding IFRS 16.

We can see that we have invested SEK129 million in fixed assets, we have paid SEK141 million in interest and SEK144 million in taxes rolling 12. We had a negative effect from working capital of SEK43 million. Over time, we think that the net working capital contributions to the cash flow will be neutral to slightly positive. Utilization of the high free cash flow I will show on the next slide. So this is how we have used the generated SEK713 million.

SEK130 million was distributed to our shareholders as dividend, SEK254 million was spent on the four acquisitions we made in 2024 and SEK534 million was spent on the two share buyback programs. As you can see here, our net debt has increased by SEK 169,000,000 since the same quarter last year. This quarter, we can also look at the free cash flow development over a longer period of time, having a slide that shows the last three years of free cash flow. Comparing this, we can conclude a strong increase of almost 25% in terms of annual growth rate. This strong growth speaks for the good cash flow development across our businesses.

High free cash flow allows us to maintain the financial flexibility, supporting both dividend payments and strategic investments, including acquisitions and share buybacks, as well as reducing debts. Now a look at the different business areas, starting with Nithira. Sales increased by 8%, which is driven both by acquired operations as well as newly opened business. Nithira opened three new assisted living facilities with a total of 29 care places. As an offsetting effect, we saw continued lower occupancy in some parts of the individual and family care segment.

Is working actively and adjusting its service portfolio and selected units, aiming to increase occupancy and improve margins over time. This also follows the new Social Service Act that Sneetira welcomes and will come into force on 07/01/2025. EBITDA decreased by SEK7 million compared to the same quarter last year and landed at SEK118 million. The decrease in earnings was partly due to occupancy challenges within the individual family segment and that last year was positively impacted by calendar effects. EBITDA margin in the quarter was 10.5% and at 12.3% rolling 12%.

After the quarter ended, Neutrola acquired Avasta, adding four care units with 64 care places and approximately 62,000,000 in annual sales. Then turning to our Swedish elderly care Vardaga. In Vardaga, net sales increased by 7% year on year, driven by higher occupancy in new and mature owned managed nursing homes, as well as new contract management units. EBITDA amounted to SEK111 million, which was higher than last year, thanks to the higher occupancy, and last year was also positively impacted by calendar effects. Mature units showed an improved margin of 9.9%, which is 1.4 percentage points higher than the average margin for WarDaga’s total portfolio.

During the quarter, WarDaga decided to open a previously completed nursing home in Nordschoping in the third quarter of twenty twenty five. And after the quarter ended, Wadaga acquired Avasta, adding one nursing home in Gothenburg with 90 beds and approximately 82,000,000 in annual sales. And then turning to Norway and Stendi. Net sales in Stendi decreased by 2% in SIC, but increased by 1% in local currency. And sales in Own Management rose 5% in local currency.

Last year, Stendi terminated all contract management operations, which were exclusive within elderly care. EBITDA increased to SEK68 million, driven by favorable demand that has contributed to stable occupancy and the improvement was also an effect of last year was negatively impacted by calendar effects. The EBITA margin in the quarter increased by 1.3 percentage points to 8.3% and the Rolling 12 margin increased to 10.3%, thanks to the good earnings development over the last quarters. Stendi now performs at a consistent high level, supporting the Norwegian society with high quality social care. We see good opportunities to expand operations going forward through organic and acquired growth.

And then take a closer look of Altiden. Our Danish business area Altiden continues to improve earnings this quarter. We also saw higher occupancy. Net sales in Altiden increased by 6% in SEK Increase in own management sales increased by 12% in local currency, thanks to the higher occupancy in both elderly and social care. The decrease in contract management sales was mainly due to one large elderly care contract that expired in the first quarter of twenty twenty four.

AltiLM once again delivered a strong profitability improvement. EBITDA was up 17,000,000 compared to the same quarter last year, thanks to the good occupancy growth with operational improvement in social care. First quarter last year was also negatively impacted by calendar effects. EBITDA margin in the quarter was 2.4%. And now turning to Clara. In

Clara, net sales decreased by 5% due to a continued weak demand for staffing services. EBITDA decreased by 1,000,000 to 8,000,000 due to the lower net sales. Clara has adjusted its cost base to a structurally lower market demand, but remains well positioned to respond if demand should increase again. EBITDA margin was 8%, which is a robust margin given the situation with the public healthcare regions limitations of the use of temporary nurses. Clara’s EBITDA margin is still significantly above staffing competitors’ margins, thanks to Clara’s diversified portfolio consisting of different welfare services, for example, mobile nursing teams and student health services.

This diversity in Clara services and adaptability to changed market conditions is our core strength, of course. And with that, back to you, Marc. Thank you

Marc Jensen, President and CEO, Ambiya: so much, Berno. So to sum up our financial development versus our targets, We aim for an annual growth rate of 8% to 10%, driven by both organic and acquired growth. Total growth rolling 12 was 6%, driven by solid organic growth. Going forward, we will see more growth coming from acquisitions and, of course, through the acquisition of Validia, which will further boost our overall growth level. In terms of profitability, our target is to reach an adjusted EBITA margin of 9.5% in the medium term.

We reached our profitability target again at 9.8% rolling 12. On leverage, we target the net debt to EBITDA ratio to be below 3.25x. As of quarter one, we remain well below this target at 1.8x, thanks to the strong EBITDA and cash flow development. After completion of the acquisition of Alidia, Embraer’s leverage ratio is expected to be approximately 2.8 times. These financial targets underscore our commitment to delivering sustainable financial performance while investing in our long term growth.

We have reached two out of three financial targets and are close to the third with more growth coming from acquisitions. We are committed to consistently deliver on all three financial targets. And before we open for questions, I would like to provide an outlook post quarter one twenty twenty five. In the April, we closed the acquisition of Validia in Finland, adding approximately SEK 1,400,000,000.0 in annual revenue. This marks a significant milestone for Ambeya as we now have a strong presence in all four major Nordic countries.

Our entry into the Finnish market is not only a strategic expansion, it enables increased scale and fuels future Nordic growth. I would like to welcome our new colleagues, our care receivers and customers at Validia. After the end of the quarter, we also completed a bolt on acquisition within Vardog and Nuritida. The deal adds around SEK 145,000,000 in annual sales and further strengthens our positions in elderly and social care in Sweden. And looking ahead, we have several planned openings across our business areas.

In the coming quarters of twenty twenty five, we will open new units in Nytida, Vordogger and Instendi, supporting continued organic growth across The Nordics. We expect further profitability improvements in Alsiden following ongoing operational enhancement and increased occupancy in Denmark and a very strong performance by the local team. Finally, investing in our employees, our leadership, technology and innovation quality going forward is paramount to our continued success and a core priority. I would like to thank all of our employees having done the utmost for our care receivers again this quarter. Their daily work is a constant inspiration to me and the entire group management team.

And this concludes our presentation and we will now open for questions. Can we have the first question, please?

Conference Operator: And now we’re going to take our first question. And it comes from the line of David Joachimson from Nordea. Your line is open. Please ask your question.

David Joachimson, Analyst, Nordea: Okay. Thank you. Good morning. Three questions from Itlis. First one, if you could elaborate a bit more on the weaker margin, I think, in Ziddah and some of the restructuring work you seem to be doing there to adapt your services.

I think you comment on weak demand in some areas there. And then just on your margin expectations for Natura looking at the full year. I think it seems to be sliding a bit here. So just wondering about some of the puts and takes here that we should consider for the coming quarters. Thank you.

Marc Jensen, President and CEO, Ambiya: Yes, thank you so much. I can start with your first question on Nytida. I mean, it’s mainly driven by slower occupancy or slower occupancy in individual and family segment, and we have seen that for a few quarters now. There’s a new social securities act coming into play in Sweden from July 1, and it provides good opportunity for Nytida, as it is basing the municipalities’ demand more on knowledge and on the methods that are used and that plays well to the quality segment of Nytida. So we expect that with the tweaks we are doing and supporting the municipalities and getting into this new legislation that we will see better occupancy going forward and also that the New Teeter’s margin will strengthen somewhat.

So it’s absolutely our belief that New Teeter is in good shape and it’s a big business with almost 500 care units. So of course, over time, there will be a need for changes and adaptations to demand and also to new legislation coming in. But we remain comfortable on the both short, mid and long term outlook for Nudita and are positive about the opportunities also going forward this year.

David Joachimson, Analyst, Nordea: Okay. Thank you. That helpful. Then my second question is on your pipeline. So perhaps if you could quantify the impact to organic growth, I think, first, given the new openings and contracts that were signed during Q1, I think I believe there’s a total of 33 care places in Interdansk, then the another 30 in Vardaga.

And also your planned openings for the twelve months, if you could quantify the organic growth there? Thank you.

Marc Jensen, President and CEO, Ambiya: Yes. So I mean, the contracts that we sign in a quarter is for is normally not for opening within the next twelve months, because there is construction time or time to refurbish if is an existing facility. So it’s adding to the future pipeline, so to speak. And what we have done this quarter is that we have quantified the planned openings during the coming twelve months for both Voor Dogger and Mutita and Stendi that are the three units where we have plans to open own construction in the coming twelve months. It’s five nursing homes in Vardaga and two eighty beds there.

It’s seven care units and 81 care places in Nytida, it’s four units and 49 beds in Stendi in Norway. And they are spread across the next four quarters and thereby, of course, decreasing the pipeline going forward. But as we are constantly looking for new opportunities, we will sign and add more volume to the pipeline also in the coming quarters. Was that an answer to your question?

David Joachimson, Analyst, Nordea: I was hoping that maybe if you could quantify sort of the organic growth implication of that current pipeline.

Benno Eliason, CFO, Ambiya: You can say that in short term, these openings don’t affect the 2025 organic growth so much, because most of the large one in Var Daga will be opened in the fourth quarter. But gradually, it will, of course, help the organic growth going forward. But if you are opening the ones, for example, in Q4, normally a nursing home has taken twelve to twenty four months to fill up. So it will gradually affect the organic growth, but not so much short term.

David Joachimson, Analyst, Nordea: Okay, thank you. That’s clear. And then maybe just a last question and perhaps a general update on STANDI and where the demand situation is at. Seems to me that demand for special care needs in Norway have remained at a high level. So would you say it’s starting to tail off now?

Or should we expect it to remain at a stable level also for the coming quarters?

Marc Jensen, President and CEO, Ambiya: So with the visibility we have, I mean, the level is stable. It has been, again, this quarter. And with the outlook we have into the coming quarters, it looks the same, so to speak. So with the visibility we have now, the demand looks stable at a good level.

David Joachimson, Analyst, Nordea: Okay. Thank you. Those are my questions.

Conference Operator: Thank you. Now we’re going to take our next question. And it comes from the line of Christopher Lebergh from Carnegie Investment Bank. Your line is open. Please ask your question.

Christopher Lebergh, Analyst, Carnegie Investment Bank: Thank you. Two questions. The first one, just coming back to the net debt margin. Is it possible to quantify how big of a seasonal effect was on the margin if we compare with Q1 last year? And the second question relates to Denmark.

And if you could talk a little bit about your strategy for expansion there now with the new legislation. Thank you.

Benno Eliason, CFO, Ambiya: I can start with margin and seasonality of Netira. There was two effects of the seasonality last year that was a little bit different from a normal year. The first one was that there was an extra invoicing day last year and that the Easter was in the first quarter instead of normally in the second quarter. The total of these two were last year positive for Neutera. It wasn’t very much, but there were some positive effects of that and that will be reversed this year, of course, especially when coming into the second quarter.

So the total decrease in EBITDA is not because of these effects. So there was this effect as well as the lower occupancy within individual and family care that contributed to the lower EBITDA.

Christopher Lebergh, Analyst, Carnegie Investment Bank: Yeah. Could I ask follow-up on that before you turn to the next question? But how quickly do you expect to turn margins around again in Italy? Guess, we won’t see it in the second quarter because of the Easter effects, but

Benno Eliason, CFO, Ambiya: No, exactly. In second quarter, we will have a negative calendar effect compared to last year. But we hope that we the margin dilution we have seen for a couple of quarters, we hope that we will can turn that around in the second half of the year. That is absolutely our target to do that.

Marc Jensen, President and CEO, Ambiya: Thanks. Okay, and then turning to Denmark and your question there. So the new legislation, which is coming into force in July 1 in elderly care, We have spoken about that also in the previous quarters. It opens new opportunities for establishment of own managed nursing homes in Denmark, and we are looking and in process with several developers and municipalities at new project development in Denmark. So far no contracts are signed, but it’s absolutely our target to do that going forward and to leverage the opportunity that we have now in Denmark with the free right to establishment and also the new remuneration model in Denmark.

So we believe that the reform is positive and will give us a better opportunity to grow Danish elderly care going forward, which we will actually pursue.

Christopher Lebergh, Analyst, Carnegie Investment Bank: Great, thank you.

Conference Operator: Thank you. Now we’re going to take our next question. And the question comes from the line of Piotr Pelemke from SEB. Your line is open. Please ask your question.

Piotr Pelemke, Analyst, SEB: Yes. Good morning. My first question is on stand in, if you can sort of elaborate a bit more on the previous question that or I guess my question is, do you expect or should we interpret it as that you expect the current the earnings level to persist for the remainder of the year based on what we’re seeing now?

Benno Eliason, CFO, Ambiya: There is in Standard, there are you can say there are larger seasonality effects going forward than in the other business areas. So the second quarter, we have the full Easter effect, which were in the first quarter last year. So now we have a rolling 12 that consists of no Easter holiday, and that an extra cost in Stendi. Beside of that, we think that the margin level at the second half of the year underlying will be still at a good level. So we said the last quarter that we are not foreseeing the level of 2024 to be long in the long run that we can keep that level probably, and that is still our best estimate.

But we think that it will be on a rather high level during the year anyhow.

Piotr Pelemke, Analyst, SEB: Okay, that’s clear. And then I have a question on Vardaga. Now that you have relatively more openings ahead, I am wondering if you can you think that you can offset the sort of negative earnings impact from new openings with higher earnings from the existing units.

Benno Eliason, CFO, Ambiya: We see that we think there is still a potential for the mature units to increase profitability slightly. But of course, in the later part of the third quarter and the fourth quarter with a lot of openings, that will, of course, hurt our margins shorter term. And probably that won’t be compensated for at the mature units. That is our best prediction as of now.

Piotr Pelemke, Analyst, SEB: And then finally, Justy, if you can talk a bit about the development for Validia here in the start of 2025 and how they’re tracking versus the margin they did in the full year 2024?

Benno Eliason, CFO, Ambiya: We have not so far come into the details of the Validia number going forward. We’ll come back on that in the next quarter. So we are not making any new estimates or forecasts on Validia beside what we said when we made the deal in March.

Piotr Pelemke, Analyst, SEB: Okay. That’s all for me. Thank you very much.

Conference Operator: Thank you. Now we’re going to take our next question. Question comes from the line of Karl Johan Bonnivier from DNB Markets. Your line is open. Please ask your question.

Karl Johan Bonnivier, Analyst, DNB Markets: Yes. Morning, Marc and Ben, and congrats to a solid start to the year and a solid development for the operation. I saw your comment, Mark, on that you managed now to get one of the units that has been, say, built ready, but not opened yet in Nordscherping now to be open and adding to the pipeline in the second half. Any news on opportunities for the other remaining units that you have in that category?

Marc Jensen, President and CEO, Ambiya: We are working, of course, with all of them. They are four left after Nordscherping, and we are working with them as we have been doing all along. There’s no kind of concrete plans yet for any of them, is, you know, things that can change relatively fast also. So let’s see how it looks going forward, but for now only concrete plans for one of the five being Nordschirping.

Karl Johan Bonnivier, Analyst, DNB Markets: Good start, good start. And just on Validia as well, how much of an organic pipeline do you see Validia adding to your opportunities?

Marc Jensen, President and CEO, Ambiya: So we are not adding any numbers, of course, yet on Validia, but there is organic opportunities also in Finland. Of course, this has to be considered carefully also with the regions in Finland and also based on their leads for new capacity. But we are evaluating a number of organic growth opportunities also in Finland, and we expect that we can add some Finnish organic growth to the pipeline also in the second or in the third quarter this year.

Karl Johan Bonnivier, Analyst, DNB Markets: And maybe also on the regions in Finland. Have you feel that or you feel that you are in a good discussion with them, so to say, given the change of ownership of the operation and what that might imply from that perspective?

Marc Jensen, President and CEO, Ambiya: We have a very strong team in Finland that we are impressed with. And the team has been in good dialogue with all the regions, all customers in Finland. And the acquisition has been received well. I mean, we have the existing team running full steam in Finland, so it’s the same counterparts and no changes to that. And we are doing a soft integration of the Finnish business into Ambeya.

It’s progressing well. So we think it has been well received both internally and externally in Finland.

Karl Johan Bonnivier, Analyst, DNB Markets: Sounds encouraging. All the best out there.

Marc Jensen, President and CEO, Ambiya: Thank you.

Conference Operator: You. Dear speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Marc Jensen, for any closing remarks.

Marc Jensen, President and CEO, Ambiya: So thank you all for calling in. The report for the second quarter will, for the first time, include the results of ALLETE in Finland, as we have discussed, and will be published on 08/19/2025. So thank you all. Have a nice day. Stay safe and healthy.

Conference Operator: This concludes today’s conference call. Thank you for participating. You may now all disconnect. Have a nice day.

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