Attendo

Comments from Martin Tivéus, Attendo's CEO

“In 2023, we have been able to show strong growth and a recovery in terms of earnings after a weak 2022. We see the strongest development in our Finnish business area, as a result of our determined turnaround program recent years. Scandinavia developed somewhat weaker financially, but at the same time we were able to show good development in several operational key figures.

In early 2024, we were able to announce the acquisition of Team Oliva's Swedish care operations. The acquisition clearly strengthens our position in disabled care and individual and family care (I&F) in Sweden and complements our already strong position in home care. Together, we will be better equipped to meet society's increasing need for more complex care and at the same time become a better provider and partner for both customers and local authorities. 

Attendo has a financial target of reaching an adjusted profit per share of SEK 4 during 2024. The main drivers to reach the target are higher occupancy, price effects from earlier price increases as well as operational efficiency. The contribution from the acquisition of Team Olivia comes on top of this target. We expect to present new financial targets including updated plan for capital allocation in connection with the Q1 2024 report.

Group: Higher earnings and cash flow

Group sales in the quarter amounted to SEK 4,422m, corresponding to growth of 17 percent in total and 13 percent in local currency. The growth is mainly driven by renegotiated contracts in Finland. The lease adjusted operating profit (EBITA) adjusted for non-recurring effects for the fourth quarter 2023 increased by

SEK 143m compared to the previous year to SEK 151m, corresponding to a margin of 3.4 percent (0.2). Cash flow continued to improve due to stronger earnings and a reduction in working capital. Financially, we have thus clearly strengthened the company in 2023.

Finland: Continued positive trend

Sales in Attendo Finland increased by 24 percent in the quarter in local currency. Profit has strengthened significantly, driven by improvements in care for older people. The main factors behind the improvement are new terms and conditions and operational improvements that is partly explained by lower staff turnover.

Occupancy amounted to 85 percent in the fourth quarter, the same level as the comparison period but slightly lower than the third quarter, primarily an effect of higher mortality in November. Large parts of the price negotiations for 2024 have been completed and we expect to be able to compensate for inflation during the year through price adjustments. Stable surpluses are crucial for us to be able to invest in new nursing homes, which in turn is necessary to meet future needs, for the benefit of both customers and welfare regions.

Scandinavia: Profit increases in own operations

Sales in our Scandinavian care business were basically unchanged. As a number of outsourcing contracts have expired, the number of available beds has decreased slightly, while prices and occupancy are higher. Occupancy has increased two percentage points year over year but is unchanged from the third quarter.

We see an underlying improvement in results in both nursing homes and group homes under our own operations. At the same time, the reported result is down slightly compared to previous year. The lower result is mainly explained by ended outsourcing operations, losses in Denmark and that the price increases for 2023 do not fully compensate for wage increases and inflation. Sequentially, we see that the turnaround to profitability in Denmark will take until the second half of the year as the result is partly related to the occupancy trend in units during start-up. For 2024, we expect to be able to compensate for cost increases through price adjustments.

Team Olivia strengthens Attendo’s position within disabled care and I&F

We were pleased to announce the agreement to acquire parts of Team Oliva in mid-January 2024. The acquisition strengthens our position in care for people with disabilities, individual and family care and home care in Sweden. The need for care is steadily increasing and society needs support from private providers, not least when it comes to care for people with complex care needs where Team Olivia has a prominent position. The acquisition also provides clear economies of scale, which means increased resources for quality development, digitization and improvement of working methods and methodology in the care-related work. We also get a better balance between different service offerings in Sweden. The acquisition is expected to contribute to adjusted earnings per share of at least SEK 0.5 when the operations are fully integrated.

Stronger financial position

Attendo's financial position has gradually strengthened during 2023 as an effect of the progress in the transition work, which is reflected not least in the debt-ratio, which since the same period last year has fallen from 4.4 to 1.2 (lease adjusted net debt / lease adjusted EBITDA).

The stronger financial position enables both investments to develop care and to pay dividends to shareholders. Attendo’s Board of Directors has also decided to utilize the authorization by the 2023 AGM to acquire own shares in order to adjust the company’s capital structure.

At the end of the year, we negotiated a new long-term financing agreement that also covers the acquisition of Team Olivia. The loan agreement is sustainability-linked, which means that the terms of the financing are linked to the progress we make in the area of social sustainability. We have well-being and quality of life for both customers and employees at the top of our agenda and it is therefore natural that we now focus on progress in these areas in our financing solution.

Focus on employees

It is gratifying to see that our long-term efforts to create a stronger culture and greater engagement are also reflected in our employee surveys. The recommendation rate (eNPS) has increased from 4 to 20 in one year (scale -100 to +100).

An important part of our corporate culture is to recognize good efforts for our customers. One example of this is the Care Heroes award in Attendo Scandinavia. Our operations can nominate colleagues who go the extra mile in their care work, after which all employees are given the opportunity to read portraits of the nominees in our internal app and vote. Several of the nominees were recognized in the media and also by the Minister for the Elderly, Anna Tenje, who chose to celebrate one of the winners in person.

In Finland, we have received considerable attention for our systematic work on culture, employee engagement and participation. During the fourth quarter, Attendo Finland was nominated as one of the finalists for the Impact of the Year award for cultural change. Attendo Finland received a special honourable mention for a comprehensive change in the corporate culture. The award is given by the Finnish Impact Society (a foundation that promotes good care) and Mediuutiset, an independent health and social care media. According to the jury's motivation, Attendo's cultural change has been both impressive and evidence-based, supporting the well-being of both staff and customers in many ways."

Summary of the fourth quarter

• Net sales amounted to SEK 4,422m (3,789). Total growth amounted to 16.7 percent, of which organic growth was 13.2 percent.
• Lease adjusted operating profit (EBITA) was SEK 136m (8), corresponding to a margin of 3.1 percent (0.2). Non-recurring items amounted to approximately SEK -15m. 
• Operating profit (EBITA) amounted to SEK 275m (131), corresponding to an operating margin of 6.2 percent (3.5). The result was affected by non-recurring items of approximately SEK -5m.
• Profit for the period amounted to SEK 58m (-44). Diluted earnings per share were SEK 0.36 (-0.27). Adjusted earnings per share after dilution amounted to SEK 0.54 (-0.07).
• Free cash flow amounted to SEK 404m (106).
• The number of beds in Attendo's homes at the end of the period was 20,575 (20,932). The occupancy rate in homes was 86 percent (85).

Summary of the period January - December

• Net sales amounted to SEK 17,287m (14,496). Total growth amounted to 19.3 percent, of which organic growth was 12.7 percent.
• Lease adjusted EBITA was SEK 745m (199), corresponding to a margin of 4.3 percent (1.4).
• Operating profit (EBITA) amounted to SEK 1,333m (674), corresponding to an operating margin of 7.7 percent (4.6).
• Profit for the period amounted to SEK 376m (-44). Diluted earnings per share were SEK 2.33 (-0.28). Adjusted earnings per share after dilution were SEK 3.02 (0.68).
• Free cash flow amounted to SEK 724m (24). 
• The Board of Directors proposes a dividend of SEK 1 (0) per share for the financial year 2023, corresponding to approximately 30 percent of the adjusted profit for the year, in accordance with Attendo's dividend policy.

Invitation to presentation

In connection with the release of the report, a webcast presentation will be held at 11.00 am (CET), hosted by Attendo CEO Martin Tivéus and CFO Mikael Malmgren.

You can follow the presentation on the following page:
https://ir.financialhearings.com/attendo-q4-2023 

Analysts and investors will have the opportunity to ask questions during the presentation by calling in. To obtain call-in details, please send your request to: kommunikation@attendo.se.

The quarterly report and other information material will be made public on:
https://www.attendo.com/

Attendo AB (publ)

For further information, please contact:

Andreas Koch, Communications and IR-Director Attendo
Phone: +46 705 09 77 61   I   email: andreas.koch@attendo.com

Stefan Svanström, Head of Community Communications Attendo
Phone: +46 708 67 38 07   I   email: stefan.svanstrom@attendo.com

This is information that Attendo AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above at 08.00 CET on 8 February 2024.

attendo.com

Attendo - the leading care company in the Nordics   |   For over 35 years, seeing, supporting and strengthening people with care needs has been the starting point of everything Attendo does. In addition to care for older people, Attendo provides care for people with disabilities and social care for individuals and families. Attendo has more than 31,000 employees and is locally anchored with over 700 facilities in close to 300 municipalities in Sweden, Finland and Denmark. Every day Attendo has tens of thousands of encounters with its customers. In all these encounters, our employees manifest Attendo’s shared values of care, commitment and competence.