GHP Specialty Care : Interim Report January - September 2021

Third quarter 2021

• Sales revenues increased to SEK 294.7 million (278.4)
• Organic growth increased to 9.1 (2.1) percent
• EBITDA amounted to SEK 31.0 million (34.6)
• EBITDA margin amounted to 10.5 percent (12.4)
• EBIT amounted to SEK 4.1 million (9.3)
• EBIT margin amounted to 1.4 percent (3.3)
• Result after tax amounted to SEK 1.2 million (6.7)
• Result per share amounted to SEK 0.02 (0.09)

First nine months 2021

• Sales revenues increased to SEK 1,066.5 million (978.5)
• Organic growth increased to 13.9 percent (1.6)
• EBITDA increased to SEK 140.7 million (134.1)
• EBITDA margin amounted to 13.2 percent (13.7)
• EBIT increased to SEK 60.7 million (59.7)
• EBIT margin amounted to 5.7 percent (6.1)
• Result after tax increased to SEK 42.5 million (41.3)
• Result per share increased to SEK 0.57 (0.52)

Sales revenues, rolling 12 months

SEK millions

1. 200

1. 100

EBIT, rolling 12 months

SEK millions

Capital gain of SEK 19.8 million in Q4 2020 is not included in the above graph

Sales revenues

Sales growth increased to 5.9 percent (1.5) for the third quarter and to 9.0 percent (4.1) for the nine-month period, of which organic growth was 9.1 percent (2.1) for the third quarter and 13.9 percent (1.6) for the nine-month period.

Operating result

The operating result before depreciation and amortisation for the third quarter of 2021 amounted to SEK 31.0 million (34.6), corresponding to an EBITDA margin of 10.5 percent (12.4).

The operating result after depreciation and amortisation amounted to SEK 4.1 million (9.3) for the third quarter of 2021, corresponding to an EBIT margin of 1.4 percent (3.3), and to 5.7 percent (6.1) for the nine-month period.

Net financial items

Net financial items amounted to SEK -2.4 million (-1.5) for the third quarter of 2021 and to SEK -6.8 million (-5.2) for the nine-month period.

Income tax

The tax expense amounted to SEK -0.5 million (-1.0) for the third quarter and to SEK -11.4 million (-13.2) for the nine-month period.

Result for the period

The result after tax for the third quarter of 2021 amounted to SEK 1.2 million (6.7), of which SEK 1.2 million (6.6) was attributable to Parent Company shareholders. For the first nine months of 2021 the corresponding figure was SEK 42.5 million (41.3), of which SEK 39.7 million (36.2) was attributable to Parent Company shareholders

Current and non-currentinterest-bearing liabilities

At 30 September 2021 the company had utilised credit of SEK 363.4 million (376.4). Of this figure, SEK 80.9 million (132.5) is current liabilities and

SEK 282.5 million (243.9) non-current liabilities. The lease liability at 30 September 2021 amounted to SEK

204.8 million, of which SEK 198.6 million is due to the IFRS 16 effect.

Cash flow and financial position

Cash flow was SEK -27.8 million (-13.0) for the third quarter of 2021 and SEK -88.2 million (148.3) for the nine-month period. The greatest differences in the financing activities are the repayments of deferment because of Covid-19 and dividends to shareholders.

Cash flow from operating activities included changes in working capital of SEK -26.0 million (-33.3) for the third quarter of 2021 and of SEK -11.5 million (2.8) for the nine-month period.

Cash flow during the third quarter was affected, amongst other things, by investments in hospital equipment of SEK

1.8 million, as well as investments in leasehold improvement of SEK 1.0 million.

The Group's cash and cash equivalents amounted to SEK 138.2 million (173.9) at 30 September 2021. In addition, the Group has been granted credit of SEK 70.0 million (70.0) by a bank but this credit is as yet unutilised.

Group taxes and employer's contributions to the tune of SEK 50.3 million included in the temporary payment respite have been repaid during the year.

No furlough assistance has been received during 2021.

Net loan debt amounted to SEK 214.1 million (202.5) at 30 September 2021. Net loan debt excluding IFRS 16 amounted to SEK 15.5 million (-10.7). For more information, see the table in note 9, Effects of IFRS 16 on the income statement. All covenants were met during the

period.

3

Personnel

The average number of employees for the third quarter of 2021 amounted to 764 (738).

Segment summary

Nordic Region

In the Nordic Region GHP runs 23 specialty care clinics in the fields of orthopaedics, spine surgery/spine care, obesity surgery and diabetes care, gastroenterology, urology, general surgery, arrhythmia, sports medicine, general and internal medicine, neurology, skin and specialist dentistry. The businesses focus on quality, continuity, development and efficiency and it is our conviction that this stems from a high degree of specialisation. GHP's motto is thus Quality through specialisation. The clinics' customers consist of County Councils/Regions, insurance companies and to a certain extent private individuals. In the Nordic Region GHP has one clinic in Denmark and the other businesses are in Sweden.

The third quarter was impacted as usual by the fact that it is the holiday period. Most of the clinics reduce their business operations as it is not efficient to keep the clinics fully open as patient volumes are lower. At the same time this means that profitability is lower in the third quarter compared with other quarters. The effect of this seasonal variation is becoming greater and greater as the Nordic Region segment grows.

In August, GHP's business operations at Löwenströmska Sjukhuset in Stockholm were hit by a water leak. This meant that the operating theatres could not be used as planned. GHP has insurance coverage that limits the financial impact of the water leak. It has, however, reduced the segment's sales revenues by approximately SEK 6 million because of the water leak. The insurance compensation is recorded as "Other operating revenues" in the income statement.

Organic growth in the quarter amounted to 7%. The above-mentioned water leak negatively impacted organic growth in the quarter by approximately 3 percentage points. Organic growth for the first nine months amounted to 16%.

The care backlog as a result of the pandemic means that the demand for specialty care is very high. GHP's clinics have prepared for this by gradually increasing capacity in their business operations. However, overcapacity in business operations in Denmark was still too high in the quarter and this had a negative impact on profitability. At the end of the quarter, there was a clear increase in patient flows and this, together with the action plan introduced, is expected to improve profitability in coming quarters.

In the previous year have GHP expand the dental clinic in Nacka, it is the greatest private clinic for speciality care in Sweden. The expansion had a temporary negative effect on the result compared to the result the same period last year.

In September GHP broadened its offering in Gothenburg by opening GHP Medicinskt Centrum Göteborg. The clinic is manned by experienced specialist doctors and concentrates on conditions in the field of general and internal medicine, with the focus on patients with health care insurance.

Seasonal variation

GHP's business is affected by seasonal variation, in particular round about the summer holiday. As most of the Group's clinics do not carry out any surgical procedures at all during a few summer weeks, sales, the operating result and cash flow are affected negatively during the third quarter. The clinics are closed during this period due to the fact that it is

inefficient to run a clinic at half capacity as certain economies of scale are lost. It is also the case that the demand for operations is considerably lower during the holidays as many people do not want to have recently undergone surgery during the holiday.

International

The International segment conducts business in the United Arab Emirates (UAE) and in Kuwait. GHP has conducted diabetes care at a clinic in the UAE for a number of years but during 2016 GHP expanded its business operations after having won a procurement process at the end of 2015. The procurement process comprised a management contract for the diabetes clinic, two accident and emergency hospitals and a paediatric and obstetric hospital. The hospitals' assets and employees remain under hospital management and GHP's company in the UAE only employs the hospitals' Group management.

In 2019 GHP signed an agreement with Kuwait Medical Center Holding Company (KMCH) whereby GHP is the operator of Kuwait Hospital in Kuwait City. The agreement runs for five years as from 1 July 2019 and can be extended.

GHP's client in the UAE, Pure Health, announced in September that the running of the hospitals in the northern emirates was going to be consolidated and that GHP's contract was therefore to be terminated as of 6 January 2022. GHP will receive full remuneration from the variable parts of the contract from the client until the transfer of the hospitals at the beginning of January 2022. The costs for winding down business operations are expected to be limited.

GHP will continue to run Kuwait Hospital as an independent unit on the basis of the existing management contract.

Regarding GHP's business development in the region, it will concentrate on GHP's diabetes project in Saudi Arabia, which has great future potential and over time will require considerable investments. As a consequence of the terminated contract in the UAE, GHP will accelerate the strategic alternative of finding a partner and additional owner for the project in Saudi Arabia, with the intention to over time no longer be majority owner.

The operating result in International increased in the quarter to SEK 14.8 million (6.5). The greatest improvement in the operating result comes from Kuwait, where the expansion of the hospital continued during the third quarter and where revenues in the comparative period were negatively impacted by the pandemic. Business operations in the UAE also displayed an improvement in the operating result.