Acquisition of Aleris Care Announcement presentation 16 October - PowerPoint PPT Presentation

Acquisition of Aleris Care Announcement presentation 16 October 2018

Transaction summary Transaction in brief  Ambea has entered into an agreement to acquire Aleris Care at an enterprise value of SEK 2.6bn, The corresponding to an equity value of SEK Bridge approx. SEK 3.0bn acquisition financing in 2,600m  Closing of the acquisition is expected place, rights in Q1 2019, subject to customary issue in 2019 Enterprise value regulatory approvals  Ambea has secured bank financing for the acquisition, consisting of a 8.5x 14.0x SEK 1.4bn loan facility and a SEK 1.2bn bridge financing to be repaid EV/EBITA EV/EBITA by rights issue Financing after direct cost before synergies  Rights issue to be approved by the synergies and EGM, planned for H1 2019 to operational maintain financial strength and flexibility improvements 2 Note: EBITA-multiples based on adjusted LTM September 2018 SEK 186m (Reported SEK 127m).

Strategic rationale The New Ambea Group The largest private care company in the Nordics,  with leading positions in Sweden, Norway and #1 market position in Denmark the Nordics #1 1,796 #1 beds in the pipeline A robust platform in multiple countries with strong  organic growth pipeline #1 Significant synergies and margin improvement  opportunities Care SEK ~120m annual direct cost synergies and operational Significant cross-country improvement opportunity learning and best practise Cross-country learning opportunities and sharing of  sharing best practice 3 Note: Competitors include for-profit care service providers in segments where Ambea is present. Comparison based on LFY reported revenues, adjusted for major acquisitions and divestments. Aleris Care pro forma group accounts K3. Attendo adjusted for divested healthcare operations and the acquisition of Mikeva. Team Oliva Danish sales exclude sales related to Personal Assistance Source: Company information, company filings

Two complementary companies with strong own management businesses Ambea at a glance Aleris Care at a glance Geography Geography % sales % sales LTM H1 LTM H1 Sweden Norway Sweden Norway Care Denmark Own vs. Contract Own vs. Contract % sales % sales LTM H1 LTM H1 SEK 5,937 m sales LTM H1 SEK 4,665 m sales LTM H1 Own Management Own Management Contract Management Contract Management Staffing #3 in the Nordic market #6 in the Nordic market ‒ ‒ #2 in Sweden #6 in Sweden Segment Segment ‒ ‒ #7 in Norway #1 in Norway ‒ ‒ n.a. in Denmark #1 in Denmark % sales % sales LTM H1 LTM H1 67% Own Management of sales 77% Own Management of sales Nytida Norway IoF (SWE) Norway 1,038 beds in pipeline 758 beds in pipeline Vardaga Klara EC (SWE) Denmark 4 Note: Aleris Care pro forma group accounts K3. Sales adjusted for discontinued businesses, terminated contracts and units in the process of being closed Source: Company information, company filings

The new Ambea Group - the leading Nordic care provider The new Ambea Group From #3 to #1 in the Nordics Indicative market position Indicative market position pre transaction post transaction Indicative market position #1 #1 #1 SEK 10,602 m sales LTM H1 #1 in the Nordic market ‒ #1 in Sweden ‒ #1 in Norway ‒ #1 in Denmark 71% Own Management of sales Care 1,796 beds in pipeline 5 Note: Competitors include for-profit care service providers in segments where Ambea is present. Comparison based on LFY reported revenues, adjusted for major acquisitions and divestments. Aleris Care pro forma group accounts K3. Attendo adjusted for divested healthcare operations and the acquisition of Mikeva. Team Oliva Danish sales exclude sales related to Personal Assistance Source: Company information, company filings

Active in attractive markets Favorable demographic development in elderly care, with number of +80 year olds expected to increase 353 667 433 062 807 890 55% 223 291 522 096 256 694 2018 2030 E 2018 2030 E 2018 2030 E Individuals +80 years old Low private penetration in the Nordics compared to rest of Europe indicates future potential % private providers 6 Note: Share of private provision (incl. non-profit providers) of elderly care services in selected European countries. Indicative share of market Source: Socialstyrelsen, SCB, Konkurrensverket, Dansk Erhverv, SSB, DST

Significant number of beds in pipeline driving short term organic growth 1,796 beds in combined pipeline 18% 39% 23% 114 644 5 65 1,796 88 880 Ambea Aleris Care New Ambea Group pipeline pipeline pipeline Vardaga Nytida beds Nytida placements Norway Beds in pipeline as % of current OM beds/placements in operations 7 Source: Company information, company filings

Operational excellence drives margin improvement Significant cross-country learning opportunities Ambea care model… …results in margin improvements 9,0% 1 8,5% 8,6% 8,4% Industry-leading quality system 7,7% 6,9% 2 Leader in education of 5,5% high competence 4,6% 3 Operational excellence and digitalisation 4 KPI-driven unit performance management Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 2017 2018 Adjusted EBITA-margin LTM 8 Source: Company information, company filings

Attractive synergies to support further growth Annual financial impact  ~50% of synergies  Direct costs Overhead cost achieved in 2019  SEK 90m Certain overlapping functions synergies  100% of synergies  High degree of control of implementation achieved in 2020  Ambea care model  100% of Operational SEK 30m  Best practice and knowledge sharing improvements improvements achieved in 2020  Procurement contracts Total SEK 120m One-off effects  Majority of M&A costs in 2018 Integration &  Costs in connection to synergy realisation SEK ~135m  Majority of M&A costs and M&A-related costs realisation costs in 2019 Source: Company information 9

Ambea financial targets reconfirmed  Adjusted earnings per share accretive as of Medium-term Reconfirmed Q2 2019 provided the proposed rights issue  Targets reached further financial  Margin dilution short-term medium-term potential targets  Financial targets reconfirmed medium-term Ambea financial targets Annual growth ranging between 8-10% through a 8-10% Sales growth combination of organic and acquisition driven growth An adjusted EBITA margin of 9.5% in the 9.5% Adjusted EBITA margin medium-term Net debt to adjusted EBITDA below 3.25x with <3.25x Net debt / adjusted EBITDA short-term deviations, e.g. in association with acquisitions Given proposed rights issue in 2019, the Board 30% Earnings dividend anticipates to recommend to the AGM to resume dividend for fiscal year 2019, payable in 2020 Note: Earning per share adjusted for M&A related amortisations and one-off costs 10 Source: Company information

Transaction terms SEK 14.0x 9.4x 8.5x 2,600m The EV/EBITA acquisition EV/EBITA EV/EBITA after cost synergies Enterprise value after direct cost before synergies and operational synergies improvements  Closing of the acquisition expected in Q1 2019, subject to customary regulatory approvals Timetable  Rights issue is expected to be completed during H1 2019  Ambea has secured SEK 2.6bn in bank financing in order to finance the acquisition − Danske Bank, DNB and Nordea are the arrangers and lenders of the bank financing, which comprises (i) a revolving credit facility of SEK 1.4bn with an original term of 3 years, plus two optional extensions of 1 year each, and (ii) a bridge facility of up to SEK 1.2bn with an original term of 9 months, plus two optional extensions of 3 months each. The intention is to repay the bridge facility through the rights issue. Financing  Rights issue supported by largest shareholders, to be approved by the EGM, planned for H1 2019 to maintain financial strength and flexibility − ACTR Holding AB and ACTOR SCA, which are controlled by KKR and Triton – jointly holding 50.1% of the shares in Ambea intend to vote in favour of the rights issue at a general meeting and to subscribe for their respective pro-rata shares in the rights issue.  Transaction costs for the acquisition are estimated at SEK 35m Note: EBITA-multiples based on adjusted LTM September 2018 SEK 186m (Reported SEK 127m). 11 Source: Company information

Fully funded acquisition maintaining a strong financing structure Illustrative Net debt / EBITDA development Down to current level  Loan and bridge facility available to 5.4x after right issue, finance the acquisition trending towards  Plan to raise approximately target end of 2019 SEK 1.2bn in a rights issue – to be Rights issue approved by the EGM 4.0 3,9x Deleveraging  Rights issue expected to be to reach medium- 3,25x completed during H1 2019 term financial target  The larger shareholders ACTR Holding AB and ACTOR SCA, controlled by KKR and Triton and representing approximately 50.1 per cent of the total number of shares and votes in Ambea, intend to vote in Shareholder favour of the rights issue at a general Leverage Q2 Illustrative Illustrative Long-term support 2018 leverage post leverage post financial target meeting and to subscribe for their acquisition acquisition and respective pro-rata shares in the rights issue rights issue. The rights issue is expected to be resolved and completed during the first half of 2019. New Ambea Group Source: Company information 12