Ambea (AMBEA) Q1 2025 earnings summary

Executive summary

• Net sales increased 5% year-over-year in Q1 2025, with 4% organic growth and positive contributions from acquisitions, notably Validia in Finland, establishing a presence in all four major Nordic countries.

• Adjusted EBITDA/EBITA rose 10% to a margin of 8.4%, driven by organic growth, improved occupancy, and margin recovery in Altiden.

• Free cash flow (R12, excl. IFRS 16) reached SEK 713 million, supporting dividends, acquisitions, and share buybacks, though Q1 free cash flow was SEK 262 million due to working capital changes.

• Continued focus on quality, leadership, and employee engagement, with stable Leadership Index and implementation of an AI-based recruitment tool.

• Profit for the period was SEK 116 million, up from SEK 111 million year-over-year.

Financial highlights

• Net sales for Q1 2025 were SEK 3,644 million, up 5% year-over-year, with 4% organic growth and 1.9% acquired growth, offset by -1.5% currency effects.

• Adjusted EBITDA/EBITA margin improved to 8.4% in Q1 2025, with strong contributions from Nytida, Vardaga, and Altiden.

• Operating cash flow remained stable, with cash conversion above 90% for several quarters, though Q1 saw a decrease to 70%.

• Net debt/Adjusted EBITDA (excl. IFRS 16) was 1.8x as of Q1, expected to rise post-Validia acquisition.

• Earnings per share: SEK 1.39 (up from SEK 1.25) before and after dilution.

Outlook and guidance

• Targeting annual growth rate of 8-10%, with more growth expected from acquisitions, especially Validia, which adds ~SEK 1.4 billion in annual sales.

• Profitability target is an adjusted EBITDA margin of 9.5% medium-term; achieved 9.8% rolling 12 months.

• Net debt/EBITDA target below 3.25x; currently at 1.8x, expected to rise to 2.8x post-Validia.

• Several new unit openings planned across Nytida, Vardaga, and Stendi in 2025 to support organic growth.

• New Social Service Act in Sweden and elderly care reform in Denmark expected to create growth opportunities.