Earnings call transcript: Ambea AB sees strong Q4 2024 growth, stock rises

Ambea AB reported robust financial results for the fourth quarter of 2024, with significant increases in net sales and earnings per share. The company’s stock surged by 7.76% following the announcement, reflecting investor optimism about the company’s performance and outlook. According to InvestingPro data, Ambea has demonstrated impressive momentum with an 80.6% return over the past year. The company’s strategic expansions and acquisitions across Scandinavia have bolstered its market position, driving organic and acquired growth.

Key Takeaways

• Ambea’s net sales increased by 7% in Q4 2024.
• Earnings per share rose by 42%, with a proposed dividend increase of 47%.
• The company achieved an EBITDA margin of 9.5%.
• Stock price jumped 7.76% following the earnings release.

Company Performance

Ambea AB demonstrated strong performance in the final quarter of 2024, driven by both organic and acquired growth. The company expanded its care services in Sweden, Norway, and Denmark, contributing to a 5.3% organic growth and a 1.5% acquired growth. This expansion aligns with Ambea’s strategy to cater to the increasing demand for care services for the aging population.

Financial Highlights

• Revenue: Increased by 7% year-over-year.
• Earnings per share: Up 42% compared to Q4 2023.
• EBITDA margin: Achieved 9.5%, a 20% increase from the previous year.
• Free cash flow: Surged 43% higher than in 2023.

Market Reaction

Ambea’s stock experienced a notable rise of 7.76% in the pre-market session, closing at 101.8. This movement reflects positive investor sentiment, driven by the company’s strong financial performance and promising growth prospects. The stock is trading closer to its 52-week high, with InvestingPro analysis indicating the stock is currently undervalued based on their proprietary Fair Value model. The company maintains a strong financial health score of 3.49 out of 5, labeled as "GREAT" by InvestingPro’s comprehensive assessment system.

Outlook & Guidance

Looking ahead, Ambea aims for an 8-10% annual growth rate and plans to maintain an adjusted EBITDA margin of 9.5%. The company is also targeting a net debt to EBITDA ratio below 3.25x, with ongoing acquisition discussions and new unit openings planned for Q1 2025. With a PEG ratio of just 0.17, InvestingPro data suggests the stock is trading at an attractive valuation relative to its growth prospects. Ambea expects continued improvements in the Danish market, further supporting its growth objectives. For deeper insights into Ambea’s growth potential and comprehensive analysis, subscribers can access the full Pro Research Report, part of InvestingPro’s coverage of 1,400+ top stocks.

Executive Commentary

Marc Jensen, CEO of Ambea, emphasized the importance of the company’s workforce, stating, "Our employees are the true reason Ambea is developing and getting better by the day." He also highlighted the increasing complexity of care needs and reaffirmed the company’s commitment to delivering on its financial targets.

Risks and Challenges

• Ongoing salary negotiations may impact cost structures.
• Increasing complexity in care needs could strain resources.
• Potential challenges in integrating acquired companies.
• Regulatory changes, such as the upcoming CSRD directive reporting in 2025, may require adjustments.

Q&A

During the earnings call, analysts inquired about the stabilization of Vardaga’s margins and Altiden’s EBITDA targets. Management indicated that margin improvements are expected to stabilize, and Altiden is targeting a 4-5% EBITDA margin. The company also addressed the potential impact of salary negotiations on its cost structure and discussed opportunities for acquisitions across business units.

Full transcript - Ambea AB (AMBEA) Q4 2024:

Conference Operator: Welcome to the Interim Report Fourth Quarter twenty twenty four Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your first speaker today, Mark Jensen. Please go ahead.

Marc Jensen, CEO, AMBEA: Thank you, and welcome, everyone. Today, we will review AMBEA’s performance for the fourth quarter of twenty twenty four. My name is Marc Jenssen. I’m CEO of AMBEA, and I’m joined by our CFO, Benno Eliason. Together, we will walk you through our results and highlight the key developments during this period.

After that, I will summarize the quarter and compare to our financial targets before we open for questions. I would like to begin with a brief overview of Ambea. AMBEA remains the leading care provider in Sweden, Norway and Denmark offering high quality care and support for over 15,000 care receivers across nine eighty units. We are delivering care across a wide spectrum of services, including elderly care, disability care and psychosocial support. Our competency based approach ensures that every person receives high quality personalized care.

Let’s go straight to some of the important achievements within care quality. Quality ultimately arises in the interaction between our care receivers and our employees. We always want to make it easy for employees to do the right thing in any given situation so that they can spend their time on things that creates quality and value. We have a systematic approach to quality and sustainability where we carefully follow-up all our units every month. In the quarterly report, we highlight some of the activities that we carried out during the last quarter and relevant KPIs.

The satisfaction levels of our care receivers and their loved ones are the outmost important to us. In quarter four, we received strong results from care receiver surveys carry out in all three Scandinavian countries. As well as reviewing overall trends, we follow-up results and create action plans on a unit by unit basis. In Sweden, where we have national surveys for care receiver satisfaction, we publish the results for each care home on Nootedeaters and Voldhaugar’s webpages to create transparency and highlight our work on care receiver satisfaction. Providing high quality care is also about creating meaningful activities in everyday life.

An example of this comes from Vodoger’s Vila Orholmen, which had the opportunity to participate in Las Liri in series broadcasted on the national Swedish television channel SVT. Together with us, our care receivers explore painting and creative activities, highlighting how such activities can boost the well-being of our care receivers suffering from dementia. Unit surveys are once a year carried out by the National Board of Health and Welfare in Sweden. These surveys cover areas such as care receiver involvement and influence, employee development and the various routines in place at each unit. Results for both Nootida and WarDOG have remained strong and are at higher levels than for both other private and public care providers.

We use the unit results as the basis for tailored action plans in line with our goal of continuous improvement of quality of care. Our mission states together we create a safe, secure and sustainable care for everyone. So let’s focus on some of the recent achievements within sustainability. Our commitment to creating a supportive and engaging environment for both employees and residents have been a key focus this quarter. In a highly labor intensive organization, employee Net Promoter Score or eNPS is very important.

Employee referrals are a key recruitment channel for us and eNPS also measures engagement and overall employee satisfaction. It makes us very proud to be able to demonstrate what a positive work culture our employees experience, which is a foundation of our strong employer brand. During the quarter, we celebrated the graduation of 28 Ukrainian employees as certified care assistants. These individuals complete a training program established by Ampea, Reskovslifta, Svea International and Metlearn in late twenty twenty three. This initiative was created to strengthen their position in the Swedish labor market, while supporting their professional growth.

All participants balanced these studies for the Swedish language qualification besides their roles in Vodog or Nootida, demonstrating incredible dedication and resilience. As part of EU’s Green Deal, Ampere will report in line with the new CSRD directive in the 2025 annual report being released in spring twenty twenty six. During 2024, we have conducted a dual materiality analysis to identify the areas where our operations have the greatest impact on society and our stakeholders. In 2025, we will continue to develop our processes for sustainability reporting to enable efficient data collection to accurate reporting and transparency in line with CSRD. A strong old management pipeline is paramount to our growth agenda.

So we turn the page for a fresh view on the pipeline. We remain focused on expanding our care services to meet the growing demand for care fueled by an aging population and increasing care needs. In quarter four, we reached a milestone with over 10,000 beds or care places in home management operations. Furthermore, there are thirteen oh eight beds or care places in our own management pipeline, most of them in Sweden. The pipeline increased slightly compared to the previous quarter due to newly signed contracts in both Neutida and Stendi.

Our pipeline is by far the strongest in the Scandinavian care sector and we are working hard to expand it. Looking at Ambea 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 what we have achieved in 2024. Nootida acquired four companies in 2024, expanding our footprint within social care in Sweden.

This as a part of our strategy to strengthen our service offering through qualitative bolt on acquisitions. In quarter four, Nutila acquired care providers, free ups operations in foster homes, HVB homes and assisted living facilities, and thereby adding SEK180 million in annual net sales. Further acquisitions are expected in the coming quarters as we continue to identify strategic opportunities for growth. And with that in mind, let’s look at total revenue growth. The organic growth illustrated in the purple bars continues to follow the strong development we have seen since 2022.

The total organic growth in this quarter was 5.3% and acquired growth was 1.5%. We remain positive about our overall growth potential in the coming quarters where volume, service and price mix as well as acquisitions are expected to contribute. So summing up the highlights of the fourth quarter. In conclusion, the fourth quarter of twenty twenty four has been another successful quarter for AMBEA, marked by a strong financial performance, continued organic growth, improved occupancy and a sizable bow down acquisition. Net sales increased by 7%, reflecting 5% organic growth.

Group EBITDA rose by 20% reaching a margin of 9.5%, a significant improvement compared to last year. The growth highlights our strong operational performance and our continuous investments in leadership innovation and care quality. Altina Denmark continues to see profitability improvements from strength in operations and overhead cost reductions and showed positive earnings this quarter and for the financial year in total. Nootyila acquired three years operations in quarter four. This is a great complement to our Nootyila business.

And the Board proposes a dividend of SEK 2.2 per share. Now I will pass the presentation to Beno, who will provide a financial overview of our performance this quarter.

Benno Eliason, CFO, AMBEA: Thank you, Marc. I just highlighted the good organic growth we have seen in the last quarter continues. In Q4, we achieved 7% to growth in net sales, largely driven by increased occupancy and due to the acquired and start up units. All business area contributed to the growth except for Clara. And as you can see in this slide, BarDaga and Neteida were the largest contributors in the quarter.

Turning to EBITDA, this slide, it shows how the different business areas have contributed to the EBITDA growth of the group. And the total EBITDA increased by 20%, and our margin improved to 9.5%, which reflects the significant EBITDA improvements in Varadaga, Stendi and positive earnings in Altiden. As Altiden continued to show positive earnings this quarter, EBITDA increased by strong 7.4 percentage points compared to the same quarter last year. Varadaga’s EBITDA was higher than last year, up two percentage points mainly due to higher occupancy and Sanddys EBITDA increased significantly by 2.5 percentage points also supported by positive one time effect in the quarter. Now turning to cash flow.

Operating cash flow increased by SEK138 million to SEK876 million with strong cash conversion in the quarter. The cash flow development over the last quarters reflects the strong EBITDA development and a positive FX for net working capital, especially in the last quarter. This slide shows the way from the full year reported EBITDA down to the free cash flow post tax of SEK875 million, excluding IFRS 16. Free cash flow is 43% higher than full year twenty twenty three, which we reported last year. We can see here in this graph that we have invested SEK100 million in fixed assets, have paid SEK149 million in interest and SEK138 million in taxes.

We had also a positive effect from working capital of SEK101 million due to our asset light model for growth, but also favorable cutoff of the year end. Over time, we think that the net working capital contribution to the cash flow will be rather neutral to slightly positive. This allowed us to maintain the financial flexibility, supporting both dividend payments and strategic investments, including acquisition and share buybacks, which I will show on the next slide. So this slide shows that how we have Jern. Yoos, they generated SEK875 million.

SEK130 million was distributed to our shareholders as dividend, SEK253 million was spent on the four acquisitions in 2024 and SEK431 million was spent on the two share buyback programs. And based on our strong cash flow, we continue to reduce our debts full year by SEK 58,000,000. And as we conclude the year, I would like to bring attention to the favorable development in earnings per share and dividends on the next slide. This slide shows the strong development of our earnings and dividend per share over the years. For the full year 2024, we have increased the reported earnings per share by 42% and the proposed dividend by 47% versus last year.

And the positive development over the years in earnings per share and dividend per share is, of course, mostly due to the strong underlying earnings development, but it’s also positive affected by the share buyback programs that we have conducted the last year. And on that positive note, we continued to the overview of our five business areas. We start with Netila. Sales increased by 9%, which is driven by new and acquired operations as well as higher prices. As an offsetting effect, we saw continued lower occupancy in some parts of the individual and family care.

To meet the long term increasing demand for care services, we continue expanding our capacity. Net Era increased their own management pipeline with new beds during the quarter. During the quarter, Net Era expanded the capacity of an existing unit by adding 14 new care places and signed a contract and planned an extension for a total of 16 new care places. EBITDA decreased by SEK 9,000,000 compared to the same quarter last year and landed at SEK 121,000,000. The decrease in earnings was partly due to the occupancy challenges within the Individual and Family segment, but this quarter had also a slightly negative calendar effect compared to last year, while we also saw a reimbursement of energy cost in fact affecting that quarter positively.

The reported EBITDA margin in the quarter was 10.9% and at 12.7% rolling 12%. In the quarter, Nikita acquired Freehub’s operations in Foster Homes and various residential care services, adding SEK180 million in annual net sales. And then turning to the Swedish Eledrica, Bardaga. In Bardaga, net sales increased by 9% year on year, driven by higher occupancy in our own management unit and new contract management units. In the own management portfolio, net sales increased by 8% and net sales in the contracts management portfolio increased by 11%, which is a result of commenced operations of previously won tenders.

EBITDA amounted to SEK 122,000,000, which was significantly higher than last year, up 39% and primarily because of the higher occupancy, but also driven by earlier measures related to two rental contracts handed back. Material units showed an improved margin of 10.3%, which is one percentage point higher than average margin for Bardaga’s total portfolio. On the next slide, we turn to our business area in Norway called Stendi. Net sales in Stendi increased by 3% in SEK and by 4% in local currency due to stable occupancy and better service and pricemix, which means that the high demand for care services for children and youth with complex needs remained strong. In the quarter, Stendi signed six new contracts, adding 42 beds to our pipeline.

EBITDA increased to SEK93 million. Earnings were positively impacted in Q4 by SEK30 million for a reversal of provisions for salary reviews as review dates were postponed in several contact areas. Excluding that effect and the fact that Q4 last year had some temporary positive effects, Steni showed an underlying EBITDA that was more or less in line with last year’s strong Q4 performance. EBITDA margin in the quarter increased by 2.5 percentage points to 11.2% and the rolling 12% margin increased to 10%, thanks to the good earnings development over the last quarters. And the outstanding outperformed at the 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. So let’s take a closer look at Altiden. Our Danish business area, Altiden, stood out this quarter. Improved occupancy, operational improvement and strategic initiatives have all contributed to the better result. We have, in the quarter, continued to strengthen our market position and laid the foundation for future growth.

Net sales in Altria (NYSE:MO) increased by 4% in SIK due to increased occupancy in both Ocea and Elevekar. The decrease we see in contract management sales was mainly due to one large elderly care contract that expired in the first quarter of twenty twenty four. That means that the increase in own management sales was 12% in local currency in the quarter, thanks to the highest occupancy. Naviento once again delivered a strong profitability improvement. EBITDA was up SEK 24,000,000 compared to the same quarter last year, thanks to the continued profitability improvement measures regarding capacity, reduced overhead costs and organizational adjustment that gained effect.

And now EBITDA margin in the quarter was 3% and rolling 12%, we achieved breakeven with a margin of 1%. Now over to Klara. In Klara, net sales decreased by 9% due to the continued weak demand for staffing services. EBITDA decreased by SEK3 million to SEK11 million due to lower net sales, which could not fully be offset by lower costs. EBITDA margin was 10.4%, which is a robust margin given the situation with the public healthcare regions limitations on the use of temporary nurses.

And 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. The diversity in Clara services and adaptability to change market condition is our core strength. And with that, back to you, Marc, for some concluding remarks. Thank you, Wenon. To sum up our financial development versus our targets.

Marc Jensen, CEO, AMBEA: We aim for an annual growth rate of 8% to 10% driven by organic and acquired growth. 2024 shows solid organic growth with a total growth of 7%. Going forward, we will see more growth coming from acquisitions adding to the overall growth level. In terms of profitability, our target is to reach an adjusted EBITDA margin of 9.5% in the medium term. We reached our profitability target for the first time with 9.7% growing 12% and we remain committed to the target.

On leverage, we target the net debt to EBITDA ratio to be below 3.25 times. As of Q4, we remain well below this target at 1.7 times, thanks to the strong EBITDA and cash flow development. These financial targets underscore our commitment to delivering sustainable financial performance, while investing in our long term growth. Free cash flow will be used for bolt on acquisitions, future dividends according to our policy for share buybacks and eventually for debt reduction. In combination, this will ensure that we continue to deliver value to our shareholders, which is also reflected in the new share buyback program decided by the Board and communicated yesterday.

For the financial year 2024, we have reached two out of three financial targets and are close to the third. We are committed to consistently deliver on all three financial targets and further we will invest in our people and operation to support society and deliver high quality care. And before we open for questions, I would like to provide an outlook post quarter four twenty twenty four. We continue to see strong demand for care placements, which is driving increased occupancy across our operations. This solid demand provides a strong foundation for continued growth.

As part of our expansion, we are planning to open new units within Nutida and Stendi during the first quarter of twenty twenty five. These openings will help us to meet the growing need for high quality care services. At the same time, we are actively exploring opportunities to further strengthen our business. Discussions with potential acquisition targets are ongoing and we remain focused on identifying opportunities that align with our long term goals and deliver shareholder value. In Altina, we expect further improvements in profitability supported by operational efficiencies and an increased demand for care services.

From my recent visits to our care homes in all countries and from dialogue with our employees and operational managers, it is evident that care needs are getting increasingly complex. It comes across in most of our services being children, youth, adult or the elderly. It is therefore most important that our ability to adapt to society’s needs and continuously develop our teams is on top of the agenda. In the light of society struggling to cater for constantly increasing care needs, I will raise attention to our 35,000 employees who are going to work with the aim to give all care receivers a better and more independent life. Our employees are the true reason Ambiya is developing and getting better by the day.

Thank you all. And this concludes our presentation and we will now open for questions. So operator, can we have the first question please?

Conference Operator: Thank you. We will now take our first question. And the first question comes from the line of David Janssen from Nordea. Please go ahead. Your line is now open.

David Janssen, Analyst, Nordea: Hi, good morning. Thank you for taking my questions. I have three. So first one on Vardagia, which obviously looks very strong here, the 9.7% margin. And you comment on handed back rental contracts having an impact here.

So first, if you could elaborate a bit on the magnitude here and also if you could quantify what has been the cost of this historically, I think maybe on a full year basis will be helpful. And then secondly, looking at the growth trajectory also in Vardagia, I think entering the fourth quarter now without any new openings, it seems to me like the growth in Vale Daghia should come down a bit from here until you start to open new homes. So first, if this is the right way to look at this and you comment a bit on the pipeline from here. So does that mean that maybe we should expect a weaker H1 before growth takes off again with new homes towards the end of the year? Thank you.

Benno Eliason, CFO, AMBEA: I can start with the handed back a rental contract. That was something we did in the beginning of twenty twenty four. And the effect of that on a yearly basis is around SEK 20,000,000, so around SEK 5,000,000 a quarter. So that is the financial effect. On the growth side of BarDaga, we have a little bit lower growth pace than we are this quarter, 8% in our management.

We have had double digits for some quarters previously. So exactly as you said, we have not that many openings the last years. So that means that the growth pace has come down a little bit and we will open next Vardagal unit in the later part of 2025.

Karl Johan Bonavier, Analyst, DNB Markets: Okay.

Marc Jensen, CEO, AMBEA: Thanks. Two openings later part of 2025 and one significant extension of an existing facility, but that will come in the second half of the year.

David Janssen, Analyst, Nordea: Okay. Thank you. Then just my last question, if you could comment on Standby and the demand situation for children and youth care. So growth also looks to have come down a bit here sequentially. Do Do you think we should see this as demand maybe dropping off now a bit entering into 2025?

Thank you.

Marc Jensen, CEO, AMBEA: I don’t think we should see the demand dropping off. That’s not what we experienced. We experienced a stable high demand for children and youth care and also children and youth with complex needs. So with the outlook we have was as far as we can see into the future, we expect that occupancy to be stable on the existing level within children and youth.

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

Conference Operator: Thank you. We will now go to our next question. Please stand by. And the next question comes from Jakob Lemke from SEB. Please go ahead.

Your line is now open.

David Janssen, Analyst, Nordea: Yes. Hi. First question on Vardaga. I mean, you have very strong margin improvement here across entire 2024. Wondering a bit how much more potential you see going into 2025?

Benno Eliason, CFO, AMBEA: As you said, we had a really good margin development in Varadaga. We see that there are there is still occupancy gains to gain in some units, not as much as 2024, but there’s still room for higher occupancy. And there’s also, of course, always room for more efficiency. But I think that the development we had in 2024, we won’t see that increasing margin in 2025, of course, but there’s still room for improvement for sure.

David Janssen, Analyst, Nordea: Okay. And then on Altru then, good to see two quarters now with clearly moving in the right direction. But when you look forward, do you see any risk that sort of these improvements are kind of revert? Or is it sort of smooth sailing ahead?

Marc Jensen, CEO, AMBEA: Nothing in this industry is smooth sailing. But we have a good confidence in Altium and in the Danish team who has done a tremendously good job in turning around the business. We still expect that there will be improvements to gain going forward. We do not see that the team is slipping on the improvements that have been done so far. So the platform is much more stable now.

The team is in good shape and we also see a better demand situation in the Danish market. So overall, we expect continuous improvements in the Danish business also into 2025.

David Janssen, Analyst, Nordea: Okay. And with the sort of setup and platform you have now, what is the sort of margin potential you could do in Denmark?

Marc Jensen, CEO, AMBEA: So we have said in the mid term that we think we could reach 4%, five % in the Danish market, and that’s still absolutely our ambition to get to that level. And that’s what we’re working on. It’s of course also a question of how much you want to grow as if you would open nursing homes as an example with the new reform coming into play in Denmark in July. Obviously, I mean, there will be costs linked to that, attached to that if we would kind of expand faster in the elderly care segment in Denmark. But as we see it, I mean, it’s absolutely possible to reach 4%, five % EBITDA in the Danish market and that is what we’re aiming for.

David Janssen, Analyst, Nordea: Okay. Very clear. And then on acquisitions, these targets you mentioned that you are in discussion with, is it fair to assume that they are sort of similar size as the one you’ve done in 2024?

Marc Jensen, CEO, AMBEA: So the ones that we are in discussions with now are smaller, mid size acquisition opportunities, bolt on opportunities. And some of them are the same size, some of them are slightly larger than what we have seen. But as you know, I mean, it always depends and nothing is said before the final word. So let’s see where it will take us. But we have a good pipeline within M and A, and we absolutely believe that we can continue the acquisition journey that we kind of reignited in 2024 and have good outlook for this year as well.

David Janssen, Analyst, Nordea: And then finally, a question on the net financials. I know you hedge some of the net financials, but do you expect to see sort of substantial impact from lower interest rate in 2025?

Benno Eliason, CFO, AMBEA: We expect to see lower interest rates in 2025 and 2024. Substantial, I don’t know really what you mean, but we expect to see lower interest

Karl Johan Bonavier, Analyst, DNB Markets: costs for sure. Yes.

David Janssen, Analyst, Nordea: I guess the average interest rate you pay that it can come down with a couple of percent?

Benno Eliason, CFO, AMBEA: Not maybe not a couple of percent, but it has come down.

David Janssen, Analyst, Nordea: Okay. That’s all for me. Thank you.

Marc Jensen, CEO, AMBEA: Thank you.

Conference Operator: Thank you. We will now go to our next question. Please stand by. And the next question comes from Karl Johan Bonavier from DNB Markets. Please go ahead.

Your line is now open.

Karl Johan Bonavier, Analyst, DNB Markets: Yes. Good morning, Mark and Ben. First, congratulations to a very good progression during 2024, very impressive. A couple of questions, question from me as well. First, looking at the what you just talked about in Stenvy and development and the provision that you then reversed in the quarter, Could you elaborate a little what that how that provision came by and what it means for the future if you see the same thing if you’re naturally provisioned for the same things ongoing?

So this was more of a temporary effect.

Benno Eliason, CFO, AMBEA: Yes. I can start with a provision of the salary review. Normally in all Scandinavian markets, we have a salary review at January or January or something. And if the contract labor contracts are not ready at that time, If negotiation still is ongoing, we normally accrue for the cost for the salary increases. And it has always been the fact that when the salaries are agreements are done, then retroactive payment from the start of the contracts time will occur.

But this year, it doesn’t happen in Norway. So we didn’t get when the salary increases were finalized after a long negotiation period in November, I think it was, then the point from where the salary were increased were postponed from April 1 to August 1 to October 1. So that made that the reversal we had in our books where we released, of course, for that matter, and that was around SEK 30,000,000. So you can say in the 2024, we have had the price increase for January 1, but the salary increase that were later than usual. So that means that the 2024 was a little bit boosted on that.

That won’t affect anything going forward.

Karl Johan Bonavier, Analyst, DNB Markets: But when I look at the year on year base, you could say that Q2 and Q3 really should have been SEK 10,000,000, SEK 15 million better looking at that accrual.

Benno Eliason, CFO, AMBEA: Yes. What we know now, yes, that we accrued for costs that didn’t occur.

Karl Johan Bonavier, Analyst, DNB Markets: It’s more of an item affecting the quarter, but not really an item affecting the year if you

David Janssen, Analyst, Nordea: are thinking about it in a proper way? Yes.

Benno Eliason, CFO, AMBEA: Yes. You can say that.

Karl Johan Bonavier, Analyst, DNB Markets: Excellent. Then looking at on the same theme going into 2025, how do you see the balance between the kind of price adjustments you are getting out there for your services and the ongoing cost inflation looking at the salary agreements, rental agreements and everything?

Benno Eliason, CFO, AMBEA: We have no salary agreement finalized yet for this year, so it’s a little bit hard to predict that. We have got price increase upon January 1, most of our contracts in all countries. But since we don’t know what the salary increases will be, that is not so easy to answer that question, what the balance would be.

Karl Johan Bonavier, Analyst, DNB Markets: But your gut feeling standing here at at this time with, I guess, probably getting both positive messages and more negative ones, do you see that you are in a good balance between price and cost going into 2020?

Benno Eliason, CFO, AMBEA: Yes. We think that the balance is okay for this year. That is what we expect.

Karl Johan Bonavier, Analyst, DNB Markets: Excellent. And when you look at your M and A ambition, you have obviously done a lot of transactions in NiTi, Dalflake. Do you see yourself now in the efforts you’re talking about going also into the other unit?

Marc Jensen, CEO, AMBEA: So what we have said is that we are looking at qualitative acquisition opportunities, basically in all business areas, maybe the last years apart from Altadena and Denmark. It’s about finding the right targets and then also being able to agree the right price. And we would be interested in basically acquisitions across our business units going forward. Maybe not the high focus on Denmark over the next quarters, but that could definitely be in the Swedish business areas and also Norway.

Karl Johan Bonavier, Analyst, DNB Markets: Excellent. Makes sense. And then just on the share buybacks, if you conclude the and get up to 8,000,000 shares bought back coming AGM, do you perceive yourself doing what you have done historically, canceling those shares at the AGM?

Marc Jensen, CEO, AMBEA: Yes, that’s what we see.

Karl Johan Bonavier, Analyst, DNB Markets: Excellent. Thank you very much and all the best out there.

Benno Eliason, CFO, AMBEA: Thank you. Thank you.

Conference Operator: Thank you. There are no further questions on the phone lines. I’d now like to hand back to Mark Jensen for any closing remarks.

Marc Jensen, CEO, AMBEA: So thank you all for calling in. The report for quarter one for twenty twenty five will be published on 05/06/2025. So have a nice day everyone. Stay safe and healthy.

Conference Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.

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