Earnings Call: Q3 2020

Nov 5, 2020

Good morning, everyone, and welcome to Ambea's 3rd Quarter 2020 Interim Report Presentation. Speaking is Fredrik Rein, CEO and presented with me today is our CFO, Benoit Leasson and Jacob Parson, AMBIA Head of Business Control and Investor Relations. AMBIA delivers a strong quarter with 4 out of 5 business units improving results versus last year. Vardaga continues to be impacted by COVID with lower occupancy than normal, but has during the quarter improved efficiency to mitigate revenue losses. I will start today's presentation by giving an overview of the quarter and also cover the status of our growth drivers. Then Benno will take you through the financials for the group and will also describe the financial development for the segments. And we will also be more specific around corona and its likely effects on the Q4. I will then summarize the quarter before we open up for questions. So starting off with some highlights for the quarter. The negative effects from Corona in the 3rd quarter is in line with what we said in our Q2 report, around minus SEK 50,000,000 on EBITDA. We also estimate a SEK 90,000,000 negative effect on sales since occupancy has stayed roughly flat during the quarter until the end of September. Sales is down 4% versus Q3 last year, driven by currency effects and lower occupancy in Bardaga, but also due to a few contracted units came to an end. In the Q3, we also opened up 68 new beds. Adjusted EBITDA came in on $319,000,000 which is 2% above last year and margin strengthened from 11.0% to 11.7% versus the same quarter last year. 4 out of 5 business units show strength and profitability versus last year and especially Norway and Denmark show substantial improvement in the quarter. The restructuring program in Norway was completed during Q3. Synagis came in SEK 10,000,000 higher than earlier communicated, in total SEK 40,000,000 of savings, which have been realized gradually since Q2 and will have full effect by Q4. We have minor effects from corona in 4 out of 5 business units. But we closely and not without worries follow the increased spread of the virus in society. All staff are on high alert to stop the virus from coming into our home. Or if we identify an infected resident, we quickly isolate the individual and rapidly test all other residents and staff. These procedures so far work better than during spring and are important to avoid further spread of the virus. The negative EBITDA effect from COVID is minus $50,000,000 in Q3 and is predominantly shown in Varadaga. Occupancy continued to be lower than normal, but major effects have been done to bring down our operating costs during the quarter to mitigate lost revenues. Efficiency metrics are actually close to pre corona levels when it comes to, for example, personnel costs in relation to sales. So when Vardaga occupancy starts to improve again, these efficiency measures will help us to speed up margin recovery. Every week since the removal of the visitor ban on October 1, we have seen a small net increase of number of occupied beds. We hope that the positive trend will remain, and we work hard to protect our residents from the virus. Our contract management units in Bar Daga are now almost back on normal occupancy levels and actually have only a few empty beds. But we are low on occupancy in our own managed units, and we are also cautious when it comes to opening up and starting on new units until we feel certain that demand is there. Given all this, we estimate a lower corona effect in Q4 than in Q3. We forecast that the negative corona effect for Q4 will go down to $70,000,000 to $80,000,000 in sales and minus €30,000,000 to 40,000,000 profitability development, where we continue to deliver improvements. Despite the negative effect from Corona, AmbiA's total EBITDA margin has improved. Neltida had yet another strong quarter. In fact, it is the strongest quarter we have ever reported. Excluding the effect from COVID on Varadaga, the profitability improvements would have been significant. Important measures have been taken to generate savings in former Alaris units and efficiency improving actions also in other units. Both Altsiden in Denmark and Sten in Norway has improved EBITDA significantly versus last year. Cost improvement, implementation of Ambea's operating model and strong local leadership are behind these improvements. We are proud of the The LTM margin is continuing to climb upwards and reach 7.5% adjusted EBITDA in the quarter. It is fair to say that opening up new nursing homes in Sweden is challenging as many municipalities have empty beds at the moment. Ambea takes a cautious approach, and we will only open up and staff new nursing homes if we feel comfortable that they have a high likelihood of filling up within 12 to 18 months time frame. If not, we are taking discussions with our real estate owners to delay construction or just keep them empty with no staff cost until occupancy situation is back to normal again. We currently have a handful of such situation. In Q3, we only opened up 1 nursing home in Tires, Stockholm, which after 2 months already are at the 60% plus occupancy. In Q4, we plan to open up in Tijerp and the second one in Salem, Stockholm, where we are moving residents from an old subscale facility called Bijholmen, which helped the Saalem unit to a good occupancy start. The old Birhallmer facility will be turned into a Nizsedahome. Over to acquisitions. There were no acquisitions in the quarter and only one acquisition in Denmark year to date, Vivamos, which is continuing to develop financially better than planned. So with that, over to financials in our next session. Benoit will take over. Thank you, Frederic. As just said, we are rather pleased with the financial performance in all business areas given the challenging circumstances. So if we look into how the different business unit areas have affected the group numbers, we can see that starting with the VAR DAGA, sales was down SEK 44,000,000. But important to remember is that most of the SEK 90,000,000 that we reported as corona effect was just in WarDaga, where occupation were lower than normal and rather flat throughout the quarter. In total, the decline in sales was 5% versus last year. Nitra sales declined by SEK 17,000,000 or 2%. The comparison versus last year is affected by both the adjustment of capacity after the Aliris acquisition last year as well as an increase in contract management. Sales is only marginally affected by corona. In Norway Stendi, the rapid weakening NOK in the Q1 this year has affected the reported SEK numbers, of course. The average NOK SEK rate is down 10% versus last year, which means that the sales in local currency is more or less flat versus last year, but down SEK 80,000,000 reported in ZIK. In Altin and Denmark, we made 2 acquisitions around New Year, which have added on SEK 41,000,000 in sales in the quarter. And last, Clara, who is still hurt by the Swedish VAT regulation that changed for health care starting services in Q3 2019, and they've cooled down the market for these services significantly. So turning to the profit numbers. Overall, we are pleased with that we managed to increase our EBITDA and EBITDA margin under these challenging circumstances in 4 out of 5 business areas as well as for the group in total. BARDOG has a decline in EBITDA by €32,000,000 or in margin by 3.3 percentage points and was, as said, hurt the most by the negative corona effect. The Nicira margin is benefiting from the capacity adjustment made in 2017 2019, sorry, as well as the productivity increases. And EBITDA was even higher than last year despite the lower sales. In Stendi, the restructuring program started to have an effect already in Q2. And now in Q3, we saw further improvements and reported a double digit EBITDA margin in the quarter. Altiran is still in a build up phase. We are improving our capacity and competence. Altice had a very weak Q3 last year as comparison, but nevertheless, performed a very strong Q3 this year. The Q3 seasonality is more obvious in Denmark than in other segments. And finally, Klara continues to deliver stable margins. IFRS 16 effects. We have since the beginning of 2019 been reporting, including the new leasing stand out. This means that all reported quarterly and year to date data of 2020 are comparable with the reported number for 2019. However, data that includes quarters from 2018, like the rolling 12 data up to Q3 2019, is still affected by the different reporting standards. In this slide, you can see the effect of this. We can see that the rolling twelve margins, excluding IFRS 16, is increasing as well for 3 quarters in a row. Turning to cash flow. The strong operating cash flow continued in the quarter. This was the 5th consecutive quarter that we increased versus last year, now to SEK 369,000,000 versus SEK 318,000,000 last year. If we exclude the IFRS 16 effect, we are at the operating cash flow of SEK 163,000,000 in the quarter versus $117,000,000 last year. Q2 and to some extent Q3 were positive affected by the government program in Norway where tax payments in Q2 and Q3 were moved into Q4. This means that the Q4 cash flow will be, in some way, affected negatively by this. If we measure our cash conversion rate, which is the operating cash flow versus the EBITDA on a rolling 12 basis, we can see that the second quarter in for Q2 in a row, we were above 100%. The deleveraging of the group is continuing, of course, in line with the good cash flow. If we look back and compare with the Q3 last year, we have decreased our net debt by almost SEK 600,000,000 and come from a net debt ratio of 4.6 to below 3.6 as of now, and we are getting closer to our financial target at 3.25 times. As corona stroke the financial market in late Q1, the market for unrated commercial papers like ours more or less vanished, which means that we, at that time, shifted the financing to more traditional bank financing. In the Q3, we can see that the markets are normalizing again and are almost back to the credit spreads we saw before corona. And we can again utilize and fully our program fully and benefit from lower financing costs going forward. The increase in lease steps of SEK 949,000,000 year to date reflects the fact that we have increased the number of start ups of new units under our management, and these units comes with longer rental conditions than the average portfolio. Turning into the different business areas, starting with VAR DAGA. We see the total sales reached EUR 8.60 in the quarter, was down 5% versus last year. This is, of course, mostly driven by the lower occupancy rates in mature units, but also a decline in contract management due to seized contracts. If you compare quarter on quarter with Q2, we see a decline of 1% if we adjust for 1 more invoicing day in Q3. New units in the ramp up have, of course, affected the sales number versus last year positively, but not as much as expected. We have seen a slower ramp up pace in these new units due to the COVID-nineteen situation. In the later part of the quarter, we saw an improving occupancy in our Care Homes under contract management as well as an increased demand in our Home Care business. In the beginning of Q4, we now see many of our homes under contract management showing almost the same occupancy as the full corona. EBITDA for Vargas reached $50,000,000 versus last year $82,000,000 Most of the negative corona effect of the $50,000,000 in EBITDA, of course, broke Vargas. However, we also saw improved operational cost KPIs in the former Airis unit and better efficiency ratios, which indicates that the margin improvement can come rather rapidly when the occupancy rates are raising again in our own management portfolio. Newly started and ramp up units is now representing 18% of the total VAR DAGA portfolio. And the EBITDA margin of mature units went from 15.5% last year to 11.1% this year in Q3. This decline is both driven from lower occupancy asset unit by unit, but as well as we're now reporting the former Alaris units as mature, and these units came in with lower profitability in average. If we turn to NetEatera, where we have total sales reach EUR 915,000,000 in the quarter. It was down 2% versus last year. And Own Management were down 6%, which is SEK 757% in the quarter. This is an effect of the adjustment of the capacity that we did in 2019 and that we have relatively few new start ups this year. Contract Management sales reached €159,000,000 which is 29% up versus last year, and we see that the strong win rates in 2019 are now clearly turning around a negative sales trend in contract management that we had earlier for some time. EBITDA reached SEK 177 1,000,000 in the quarter or 19.3% margin. This is an increase by 0.7 percentage points and is actually the 7th consecutive quarter that we see an EBITDA margin growth in Etteda. We saw effects of the Alero synergy realization as well as from taking out the overlapping capacity. We also have fewer start ups, of course, as said, that helps the EBITA margin. And the rolling 12 EBITA margin now reached 15.4 percent, up 0.2 percentage point from last quarter. So turning to Norway and Spandie. Sales decreased in SEK by 10% and reached SEK 733,000,000. Currency effects had a major impact in the quarter, and sales in local currency were more or less flat. In local currency, the Own Management sales were actually increased by 4%, but were down 6% in SEK and reached SEK 679,000,000. Contract management sales reached SEK 54,000,000 versus last year, SEK 87,000,000, and decline is explained by returning of a nursing home contract in late 2019. EBITDA reached SEK 79,000,000 or a margin of 10.7% in the quarter versus 7.6% last year. We saw both a better sales mix, but mostly the profit increase comes from the cost improvement program that we launched in Q1. The adjusted rolling 12 EBITA margin increased by 0.7 percentage points from last quarter, and we are now at 4% rolling 12%. The announced program to reduce the administrative costs and strengthen the operational leadership in the organization was finalized now in Q3. As we saw more potential and first communicated, we increased the program. We now recorded SEK 27,000,000 in realization costs in the quarter and totally SEK $100,000,000 in the whole program, with annual expected savings of $40,000,000 realized from next quarter. Some of the savings have already been realized since the start of the program in Q2. So over to Denmark and Altria. Sales amounted to SEK 166,000,000, which is up 31% versus last year, explained by the 2 acquisitions made around Christmas. In local currency, the sales increase was even higher by 34%. The acquisitions called Divamos and Casablanca have performed well, in line with expectations and contributed positively on the profitability. In the seasonal strong third quarter, Altiran EBITDA of SEK 11,000,000 or an EBITDA margin of 6.6%. We are comparing, as said, with a very weak Q3 last year, which were affected by some one offs. We are now, for the first time, in positive ROAD in 12 EBITDA numbers, slightly, but nevertheless. We have invested in overhead, both for building up our own support organization as an independent company after the carve out from the former Alaris organization in Denmark and also strengthen both disabled care management and resources to support the organic growth going forward. We plan to continue our strategy to grow in more profitable segments of disabled care or owned managed nursing homes, And we are actually starting our 1st greenfield nursing home in Q2 next year in the municipality of Holte. In Clara, net sales were down 13%, reaching $59,000,000 in the quarter, dollars 1,000,000 down versus the previous two quarters. Sales decline versus last year is predominantly in the staffing business towards private operators impacted by the changed VAT regulation introduced last summer. Total revenue, which includes internal sales, were flat versus Q3 last year. And we continue to grow our Clara team services and with favorable mix development and administrative savings, we continue to grow our EBITDA as well, now from SEK 7,000,000 to 8,000,000. And if we look at the rolling 12 EBITA margin on total revenue, we are now at a decent level of 8%. And on that note, back to you, Fredrik. Thank you. To sum up our financial development, our growth target is 8% to 10% through a combination of acquired and organic growth. 2020 year to date shows only marginal growth given the corona effect on Bardaga and also low M and A activities and a cautious approach to Greenfield opening. Profitability wise, we have a midterm adjusted EBITDA target of 9.5%. We have seen small EBITDA margin improvement 3 quarters in a row, but we also need to have the negative effect from Corona on Vardaga behind us and also further margin improvement in both Norway and Denmark coming from delivering on the plants that are put in place in both these countries, These improvements are necessary to reach the midterm target margin level. And finally, regarding leverage, where we have seen improvement in many consecutive quarters. Cash flow is normally weak in the 3rd quarter, but our cash flow actually came in better than expected. And leverage is likely to continue to go down in the coming quarter, excluding effects from potential M and A activities. Over to sustainability. Since many years, Ambea has had a strong focus on sustainability and how we as a company can support the 17 global sustainability goals set up by the United Nations. We have presented details around targets and activities in our annual reports over several years. During the last year, we have strengthened our work around environment and reduction of our CO2 footprint, both in terms of broader tracking, but also raised our target for CO2 reduction. Our new target is a 50% reduction of CO2 emission by 2025. Actions have been initiated around electricity, travel, food to ensure a rapid impact. So summarizing the Q3, we believe Ambea did a strong Q3 despite the corona difficulties in Vargas. Profitability improved in all other four business units and the profitability improvement momentum in Denmark and Norway are, of course, especially important. The increased spread of the virus in the last few weeks will, of course, mean negative effect on ENVEA. However, we believe that the negative impact is likely to be lower going forward due to both slightly improved occupancy in October early November and the efficiency measures taken. We are also starting to see some municipality compensation or increased cost earlier this year being paid out, even if we're still taking a cautious view when it comes to forecasting the effect on such payments. And thanks to MBS high cash conversion, our debt position is improving. Compared to 12 months ago, our leverage is actually down one turn. Net debt to adjusted EBITDA is 1.0% lower year on year. Debt has been reduced by approximately 600,000,000 dollars And on an ending note, I'm very proud to tell you that Stendi in Norway won a very prestigious award last week. We were awarded a prize as the Service Company of the Year by NHO, the Norwegian Enterprise Confederation. The prize was awarded to us for our responsible and industry guiding work in the corona pandemic, another important sign on the positive momentum of our BEA's Norwegian business unit, Dundee. So with that, I conclude our presentation and open up for questions. So operator, please could we have the first question? Your first question comes from the line of Christopher Lindbergh from Carnegie. Please ask your question. Yes. Hi. Can you hear me? Yes. We hear you. Hi, great. Two topics I would like to discuss. First is the COVID situation in Sweden. So now in the just in the last couple of weeks, what have you seen happening with the move in rate as the virus is spreading or the spread of the virus is accelerating again and there are more alarming news in around that. And also related to the virus, when you talk about $40,000,000 in negative impact on EBITDA in the Q4, does this also include the negative effect you're having from generally slower ramp up of new homes? I guess that's maybe difficult to break out, but that's interesting to see that. And then regarding the margin improvements in Norway and Denmark, just to make sure there were no extraordinary positive things in the quarter. And I'm also interesting to hear how much of the $40,000,000 in savings in Norway have been achieved in the second and the third quarter. Yes, I'll stop that. So we if we start with the COVID situation, since the visitor ban in October 1, we have seen a small but still a net increase in number of occupied beds in own management every week. And the other thing is that what we have also seen is that the contract management units are showing same level of occupancy as we normal have. So that means that there are very few empty beds to be moved into in the contract management units and thereby sort of the empty beds are in own management. I think that is also one of the things that are driving that. And we haven't seen and that has been since October 1. And it's clear that the general spread in society has taken off in the last couple of weeks. But that sort of small increase week by week has actually continued the last 2 weeks as well. Does that mean that sort of we can be certain that, that will continue? No, it doesn't. I mean, we are kind of we are, of course, carefully following the general trends in society, and it's hard to see exactly where kind of that is and where that is kind of what is the impact what the impact is going to be on our nursing home. So it's but that's basically what we see up until now. Could I follow-up what you said about the contract management units? How much was occupancy down before? And I. E, how much has it improved? I don't have the exact number of that. But that when we saw in Q2, we saw impact hitting both our elderly care and home management as well as the elderly care and contract management. We feel it's pretty natural that the municipalities are filling up the contract management units before, because that's where they have costs anyway, so to say. So it's pretty clear that the ramp or the return to normal occupancy levels started already this summer on contract management and has sort of built up since then. I know that wasn't exactly the full answer to you, but I don't have Yes. But the reason I'm asking is that sounds like a very positive signal as if that capacity is gone now, then the next step would be to fill up your own management belt. So that should be a good leading indicator for the coming quarters. Do you agree? Yes. That's what we see. And the difficulty is, of course, to kind of fully project what is going to happen with the increased society spread. But apart from that, absolutely. Okay. And then on Norway and Denmark? Yes. On the negative 40, that includes impact of slower ramp up on new units. So that negative impact is also is on like for like, but also slower growth of both new units and units on the ramp up. So that's the full effect. And Norway and Denmark, you want to take that, Bruno? Yes. We can say that we started the program in Norway in late Q1. We saw effects in Q2 and Q3. And of course, we took, you can say, the most obvious things in Q1 already and the more difficult things, if you can call it like that, late Q3. So we say at least half of the total savings were already achieved in Q2 and Q3, and we have the full savings from Q4. Okay. And what's the next step then to bring the margin from here to maybe a more normalized, I don't know what that is in Norway, but maybe 8% or so? I mean, the next step is kind of a lot of kind of smaller activities because that comes down to being more efficient in staffing, making sure that all new tenders that we submit are done with the right margin and pricing strategy. And then, of course, continued kind of initiatives to do normal kind of savings in procurement. So you shouldn't expect sort of a stepwise improvement, but rather sort of a continued gradual improvement. Okay. Thank you very much. And regarding if there are extraordinary kind of positive effects impacting Q3. I think that you had a question, Christophe, regarding if there are extraordinary positive aspects. Yes. I'm not talking about one offs, but from time to time, you have those type of effects that we learn about afterwards that has impacted quarters. So just curious to see if there were any temporary things helping. Any material effect wasn't supposed to be in the quarter. No. No. I think the financials in Q3 are very representative on what we are. Yes, on underlying performance. Yes. Thank you. That's all for me. Your next question comes from the line of Klas Paje from Nordea. Please ask your question. Hi, and thank you for taking my questions. 2, if I may. The first one is on your guidance for Q4. So you said that negative sales impact you see a negative sales impact of SEK 70,000,000 to SEK 80,000,000 and negative EBITDA impact of SEK 30,000,000 to SEK 40,000,000 And I thought the drop through from sales to EBITDA was higher. So can you elaborate a bit on how you calculate that over the expected this expected impact? Are there any cushions in that that is extraordinary? That's my first question. Thank you. We have been working with, of course, with the staff cost when the occupancy is down. And to start with when occupancy go down rather rapidly, there is not so much in short term that you can do with staffing. But if the occupancies stay low in a for a period of time, then you can work with the staff costs in another way. So we have structure, have been saving more costs over time. That's one of the factors that we have not seen so much drop down on the revenue loss. And the other factor is that we see some money coming in from the municipalities in extra cost coverage that we are starting to get now in Q4. Okay. Thank you very much. And my second question relates to Norway. So Q4 last year was a disappointment in Norway according to lower volumes due to budget constraints, if I'm not mistaken. Can you say anything about how your view is on this for this year? Thank you. Yes. We I think that there is, of course, a seasonality with Q3 being strong and Q4 being weaker, and that is likely to happen this year as well. However, we do not see that kind of impact negative impact on occupancy as we saw last year. So the savings coming from the child welfare services were not sort of they were not as big as last year. So you shouldn't expect sort of that similar kind of negative impact this year as we saw last year. Okay. Thank you very much. That's it for me. Thank you. Your next question comes from the line of Karl Noren from Danske Bank. Please ask your question. Hello, good morning guys. Just a follow-up on the Q4. What kind of estimates have you done to conclude that minus €70,000,000 to €80,000,000 on top line? Is it have you like kind of seen is it based on the trends you're seeing now with occupancy increasing week per week? Or can I say anything about that? Yes. Correct. We see that we have a little bit smaller impact than we saw at in Q3. And we hope that this increase this small increase in occupancy is going to make that number a little bit lower than we saw in Q3. Okay. But do you expect the occupancy through the quarter to gradually increase kind of in the same levels as you're seeing right now? Yes, something like that. Okay, great. And also second question on Alte then in Denmark. Are you seeing that this kind of can we say that this is kind of the new normal if we exclude, of course, the seasonality effects and stuff? But can you say that you have reached kind of a new level in Denmark? Or can you could you elaborate a bit on the development there? Yes. First, the seasonality effect in Denmark is probably higher than in the other Nordic countries. We have no bank holidays in Q3 and the vacation effect is bigger in Denmark than in other countries, we can say. So there is a stronger seasonality in Denmark that we haven't been in Denmark for a long time, but we have seen that now. So this is not the new normal, but we will, of course, foresee that we have a better performance going forward in Denmark than we have seen before given the underlying performance. And the other thing I think is important is that we were very explicit also last year in Q3, there was a one off negative from a closure of home services contract. So that is sort of the increase versus last year is impacted by that as well. Yes, great. That's all for me. Thank you, guys. Okay. Your next question comes from the line of KJ Bouvier from DNB Markets. Please ask your question. Yes. Good morning, Fredrik. Fredrik, you mentioned that the municipalities placing it looking at the elderly is pretty low for the moment. Maybe you could if you could give some sort of more color to that, if you how you see it playing out over your foot print? And maybe what kind of hurdles we need to pass before we can get some sort of normalization into that? I think that one of the hurdles have been kind of a lot of negative media attention on spring around the difficulties in nursing homes. I think when what sort of when we passed the summer and little bit more over to this autumn that has been kind of the message in media has been slightly adjusted. I think they have sort of the difficulties around the healthcare system and elderly care as well. So we see less sort of negative system and elderly care as well. So we see less sort of negative media coverage, which of course impact reluctance for elderly and for their relatives to move into homes. So we see an increased traffic on our website regarding sort of an increased contact through our system from relatives and trying to understand what it means to move in. And also the fact that some of the routines are put in place that we can communicate around those has also sort of gradually improved confidence. I think we are not back to normal. And now that the spread in society is increasing again, I think we will continue and have to work hard to make sure that we don't see the same situation in our nursing homes as we saw this spring. Regarding the dialogue with municipalities, I think that that's been very positive all along and constructive. And there seem to be sort of no kind of limitations financially or so it's more to do with the basically the trust for elderly to feel comfortable with moving into nursing home. That is what needs to come back to normal until we can kind of count on that the occupancy is back on normal again. I don't know if that will answer to your questions, but Yes. Then if you look at it from, say, obviously, you're involved in a number of municipalities across your placing needs. But how do you see is this something that is similar across the whole footprint? Or it's some of the larger municipalities that really have this, say, net no placing need, if you put it like that? I think that maybe one difference. We don't really see a kind of a difference in different parts of Sweden driven by sort of COVID and kind of the view from the elderly. What we do see is, of course, where we have municipalities that have a kind of a lube or a full ability for elderly to choose. There we have a better chance of quickly recouping occupancy. Where we have municipality who kind of themselves are deciding on where individuals should move in. They, of course, prioritize their own homes. And secondly, prioritize contract management homes. And our kind of own managed home come in 3rd because that's where they're going to have sort of extra costs. So maybe that is the thing that we impact. And coming back a little bit to Christophe's question there, it's important for us that the kind of contract management homes are now starting to be kind of fully occupied again, because then the empty beds are more going to be on the own management side. And hopefully, that will help occupancies to be cooked soon. Thanks. Exactly. And if you take that, if I say give us an indication of how much of your own bed capacity are in used municipalities where you have, say, now fully contract management, say, the fully loaded contract management part or in LOE kind of municipalities? I think a good over 50% would be in the larger Stockholm area of our own management capacity. But we are also seeing actually low legislation being passed in more and more municipalities around Sweden. And I also heard that the city of Gothenburg, even though they are not given corona, they are not going to put in a new lube legislation now. They are opening up for freedom of choice with the current framework agreement situation they have there. So despite the whole corona situation, I see in more and more municipalities in Sweden that they are actually opening up for freedom of choice. That's very encouraging. And looking at when you now mouthful a part of the opening pipeline, what kind of cost would you still incur? Would you be able to mitigate lease cost with the property owners during this time to some extent? Or would you still feel that, that part of the cost equation will hit you? I think that in all the new homes we have right now, there's only a few of them that we have been able to sort of mitigate through actually later move ins. So if that's possible, we do that, but that could be a maximum up to the 6 months perhaps delayed opening. So the rent cost is likely to hit us. But what we, of course, can do is to avoid hiring any staff. So and that we do when we feel that we are not seeing them kind of a rather quick start of the homes. The ones we are opening now are typically ones where we either have an occupancy guarantee so that we know we're going to get this filled up quite quickly or a situation where we see that the municipality is closing down an older home or if like in the case of Southern Stockholm now that we ourselves can actually close down one of our smaller homes and kind of move in residents and staff and get to a quick start. So those are the ones we continue to open as planned. The others, we will delay. And when you look at the pipeline that you earlier indicated for, say, opening in the second half of 2021, which was quite a few units, do you see maybe half of those sliding into 2022 instead? I don't have the number, but maybe something like that. But we will be explicit on all on that on our website regarding each and every one of the new startups on if we are delaying. Excellent. And one final, Frederic. How long will you still be with us? When is your contract term ending, so to say? I will end at the last of December. But Ambi is in very good hands with a strong management team. So you shouldn't worry about that. I'm always worrying. I'm always worrying. So but good luck out there with the next assignment because I guess this is your last quarterly call then. Your next question comes from the line of Thomas Grass from Handelsbanken. Please ask your question. Yes. Hello, Frederic and Benoit. Just one question regarding the outlook for Q4. Much have been said, but I just wanted to know the difference between your assessment and attendance assessment earlier. To me, as I see it, you had now impacted earnings from COVID in your elderly homes and so on with $50,000,000 according to your early estimates. And now you expect them to be $30,000,000 for Q4, while Atendo had that they expected earnings to be affected by SEK 10,000,000 per month first in Q2, but now they have increased that to SEK 20,000,000 per month for the rest of 2020. So there yes, could you just elaborate on which one should we trust and what's the difference between your two situations and so on? Thank you. We cannot, of course, not comment on Atento's assessment. There might be different in kind of the share of business that they are in the elderly care segment versus others. And we, of course, have a slightly different mix both in terms of countries and a business focus. We have when we look at Q3 versus Q4, we saw that Q3 didn't really have sort of an improvement in occupancy, but it was roughly flat during the whole quarter. But what we do see in Q4 is a slight increase in the 1st 5, 6 weeks after sort of the visitor ban was lifted on October 1. And we are in our forecast kind of think that, that improvement will, although small, will continue to improve. And the second thing that is important is, of course, that we didn't get kind of almost no governmental support in Q2. We are expecting in Q2 and we are expecting in Q3. We are expecting in Q4 that, that we are seeing sort of municipalities starting to acknowledge our application for support. And we think that, that is going to be more in Q4 than in Q3. So I think those are the 2 things that make us sort of slightly more positive on the negative impact in Q4 than in Q3. All right. Right. Okay. I'll just try to understand the parcel because of the increase versus decrease. But yes, but I understand with the subsidies and so on that it will might improve. But still the occupancy rate and would you say that after the ban was lifted, would you say it's still a disappointment in the rate that people have been moving in? Or would you say it was according to your expectations? I think what we do now is very it is, of course, extremely hard to kind of forecast week by week what is happening. So we are just kind of every Monday when we summarize last week's performance, we look through and follow the development. And so far, we have seen a slight improvement every week since the business event. But we are of course also seeing an increase of the virus spreading in society and kind of the coming weeks will of course be very important to the occupancy development in the end of November December. So it is difficult to judge exactly where this will go from here. Yes. All right. Thank you for me, and good luck in the future, Frederic. There are no further questions at this time. Please go ahead. There are no more questions. And then I say thank you all for calling in. The Q4 report will be published on February 16. Wish you all a nice day.