Nobina Interim Report 1 September 2020–30 November 2020

The third quarter

• Net sales amounted to SEK 2,854 million (2,763), an increase of 3.3 percent compared to the prior-year quarter, of which +5.1 percent was organic growth offset by –1.8 percent of currency effects.
• EBITA amounted to SEK 307 million (243).
• EBIT amounted to SEK 288 million (225).
• Profit before tax amounted to SEK 251 million (191).
• Profit after tax amounted to SEK 199 million (148), and earnings per share totalled SEK 2.25 (1.66) before dilution.
• Cash flow from operations was SEK 485 million (318).

The nine-month period

• Net sales amounted to SEK 7,927 million (8,040), a decrease of 1.4 percent, of which 0.0 percent was organic growth and –1.4 percent derived from currency effects.
• EBITA amounted to SEK 586 million (573).
• EBIT amounted to SEK 533 million (533).
• Profit before tax amounted to SEK 420 million (389).
• Profit after tax amounted to SEK 334 million (305), and earnings per share totalled SEK 3.78 (3.45) before dilution.
• Cash flow from operations was SEK 1,536 million (1,121).

Significant events during the third quarter

• The City of Turku awarded a new contract to Nobina to operate and develop city transport services in the Turku region. The contract is worth more than EUR 71 million over eight years, with an option for two additional years, and will include 42 fully electric buses. Traffic is scheduled to start in July 2021.
• As part of a new agreement for bus-for-rail services covering unscheduled disruption of Öresundståg services, Nobina is collaborating with SJ Öresund and Bergkvarabuss to create the conditions required to find quick solutions focusing on the needs of passengers. The contract will start in December 2020.

Significant events after the end of the quarter

• Nobina’s buses in Norrtälje, together with SL, will become the first in Sweden to reopen their front entrance doors thanks to the new glass shield around the driving compartment. The use of the front entrance doors will improve the flow through the bus, and reduce the risk of crowding.
• Skånetrafiken has awarded Nobina a renewed agreement to operate and develop regional and rural traffic services in Lund. The total value of the contract is almost SEK 1.6 billion over an eight-year term, with an option to extend for two additional years. The new contract will start in two stages during 2021 and 2022 with a total of 99 buses.
• In December, Nobina entered into an agreement to acquire the bus company Karl Erik Elofsson Buss AB based in Kungsbacka. Through the acquisition, Nobina strengthens its position in western Sweden and expects to generate new synergies between existing contracts, upcoming tenders and investments in replacement traffic. The acquisition comprises an operation of approximately 100 buses and 100 employees in the markets for tendered scheduled traffic, school traffic and replacement traffic and has an annual turnover of appr. SEK 90 million. The acquisition is a continued part of Nobina’s strategy to both broaden and grow in the Nordic market, while at the same time building a platform for increased competitiveness in smaller contracts.
• In December, Nobina also entered into an agreement regarding a strategic acquisition of Göteborgs Buss AB based in Gothenburg and thereby, through the wholly owned subsidiary Samtrans, strengthened its position in special needs transportation and at the same time achieved market access in western Sweden. The acquisition comprises an operation of approximately 170 vehicles and 220 employees in tendered special needs transportation and has an annual turnover of appr. SEK 130 million. The acquisition is part of Nobina’s strategy to strengthen and develop its position in special needs transportation.

Statement from the CEO

We have continued to deliver strong earnings, driven by increased efficiency, the effects of the renegotiation of incentive contracts, and, above all, from the adjustment of operations carried out by Samtrans during this challenging year. During the quarter, organic growth was 5.1 percent and adjusted EBT SEK 270 million (209). For the first nine months of the fiscal year, total Group earnings were 10 percent higher year-on-year. Our tendering work has been successful and we secured a renewed agreement to operate regional and rural traffic services in Lund for a period of eight years, which will include new electric buses, and we recently completed two acquisitions.

The acquisitions are part of our strategy to both broaden and grow the business in the Nordic region. The acquisition of KE Buss AB strengthens our position in western Sweden and broadens our contract portfolio, with new synergies between existing contracts, forthcoming tenders and bus-for-rail services. Above all, we can see an opportunity to create a platform for increased competitiveness in small-scale contracts. Also our second acquisition Göteborgs Buss AB has operations in western Sweden with a strong position in service transport and special needs transportation. This means we have expanded our special needs transportation business into a new geography to add to the expansion in prior years with Samtrans in the Stockholm Region and Orslev in the Faxe municipality in Denmark. Both acquisitions together comprise 320 employees and 270 vehicles.

Safe travel

The pandemic is continuing to affect society and people’s willingness to travel. The steady recovery in travel volume we saw in the summer turned into a rapid decrease in the late autumn, and we are now back to the same low levels of travel we witnessed in April and May. However, even in the midst of a pandemic, public transport has a central role in keeping society functioning. Our special task force, with experts from different parts of the company, has continued to draw up clear guidelines for operations. We carry out real-time analysis of passenger journey and numbers, add extra traffic as required and modify timetables. The safety of our drivers has naturally been in focus since the outbreak of the pandemic. Allowing passengers to board the bus through the rear doors was one measure to guarantee safety, though this also meant fewer available seats, the risk of crowding and lower ticket revenue for our clients. A few weeks ago, we launched a solution in Sweden to address these different challenStatement from the CEO ges, a protective glass shield around the driving compartment. In collaboration with the PTA, SL, these screens have been installed in buses in Norrtälje and Tyresö and we are now reviewing a similar solution for our buses in other traffic areas of Sweden. Drivers regain contact with passengers, more space is created and there is a better passenger flow through the bus. The focus on a good work environment is an integral part of our operations. I am pleased to see the strong level of engagement for their duties among Nobina’s employees, and this has enabled us to continue to deliver 99,97 percent of our traffic services.

Successful transition

One good example of engagement can be found in our subsidiary for special needs transportation, Samtrans. Its rapid adjustment during the spring to provide even more support to society during the pandemic in the form of various emergency logistics services has been very important. By the end of the quarter, Samtrans operated 175 mobile testing stations across Sweden and thereby helped society to improve its goal for increased testing and tracing. These services are still needed and we expect as a Group that we can continue to offer solutions for mobile infrastructure in many different situations in the future. This in parallel to our primary role, to provide a public transport solution that is vital to the development of society in the form of flexible and safe buses using fossil-free fuels.

Ambitious climate target

We naturally take this assignment very seriously, particularly in relation to our opportunity to contribute to tackling climate challenges. Today, we are launching a new, ambitious target for the reduction of our climate-affecting emissions. By 2030 we aim to reduce climate impact from fuel per driven kilometre by 80 percent with 2015 as base year. To achieve this target, we must convert the entire bus fleet to 100-percent renewable fuels or electricity from only renewable sources. We continue to see a rapid shift to electric buses in our markets, and we are driving this development through our complete solutions concept for electrification, Nobina Electrical Solutions. Buses have the potential to be one of the most flexible and green modes of transport for everyone who needs to travel. In addition to initiatives linked to the new climate target, our endeavours moving forward will include making our depots “green” and developing new digital services and other technology that facilitate door-to-door travel with minimal climate impact. This was a reflection on an exciting future. 2020, however, is an unusual year. As I look back on last spring, and our precarious situation, I can only feel enormous pride in what this organisation has since achieved. I’m not only talking about the financial performance, which will offer us the strength to continue investing in the public transport of the future and create value for all of our stakeholders, but also the flexibility and adaptability that has characterised the business. We are still in the midst of a pandemic with many challenges, but Nobina’s role as a critical resource has become even more important and our latest acquisitions demonstrate our strong confidence in our industry/business. We will carry these insights with us, together with all of our passengers and partners, as we now move into 2021, a year of new challenges and many opportunities.

Magnus Rosén,

President and CEO

This information is such that Nobina AB (publ) is obligated to publish in accordance with the EU Market Abuse Regulation. The information was published, through the agency of the above-mentioned contact person, on 22 December 2020, at 8:00 a.m.