Attendo expects increased costs of approximately SEK 200m related to the operations in Finland, an effect of new requirements and an action program to further strengthen the customer satisfaction
As a result of the recent discussions in Finland on care for older people, parts of the operations have faced increased requirements for staffing density above current permits and national guidelines. In addition, Attendo is carrying out a comprehensive action programme aimed at further improving quality and customer satisfaction. In all, this means increased costs of approximately SEK 200 million in 2019. Attendo continues to see good opportunities for value creation through organic growth in Finland.
Attendo is staffing its units based on national guidelines, local requirements and assessments of individual care needs. During early 2019, the supervisory authorities in Finland carried out a very large number of inspections of private providers in care for older people. Attendo has received over 150 inspections over the past two months. There have in many cases been heightened demands for staffing density that are above current permits, national guidelines in the aftermath of the authorities’ review of care in Finland, based on inspection assessments of the customers’ care needs. Attendo is continuously adapting staffing to these new requirements and will continue discussions with payors and relevant authorities in order to achieve clear common ground rules and compensation for increased costs.
Attendo is today launching an action programme aimed to further strengthen quality, employee engagement and customer experience in Finland. The programme includes measures to free up time for licenced nurses and auxiliary nurses for the direct care tasks, to improve and strengthen internal competence, and to increase stakeholder communication and dialogue. The programme includes, among other things more assistants on weekdays and weekends, expanded teams within quality and competence development, and ongoing external quality audits.
Previous assessment of Attendo’s financial development:
In connection with Attendo’s year-end report 2018 (published February 14, 2019), an assessment of the company's margin was made as follows: “Attendo is expecting good profit growth during coming years, but given the ongoing pace of expansion, the possibilities to increase the margin from the existing underlying level are expected to be limited in 2019 and 2020.”
In view of the situation described above, Attendo estimates that the costs for the full year 2019 will increase by a total of approximately SEK 200 million, which will lower the margin versus previous assessment. Attendo estimates the possibility of price adjustments to compensate for increased costs as limited during the current year, which means that operating profit is expected to decrease by the corresponding amount. The cost increase will to a large extent impact the result already during the first quarter.
The ambition is to over time be able to compensate for cost increases with higher prices, which is expected to have a partial impact from 2020. The company is also adjusting its rate of new unit openings in Finland downwards, which gives a positive margin effect from 2020. The company believes that these effects will partially be able to compensate for the higher costs in 2020, but not fully. Furthermore, the ongoing review of care for older people in Finland could lead to a number of changes after the April election. A national change in the staffing guidelines in Finland could, for example, lead to an upward adjustment of prices.
Attendo continues to see strong growth opportunities and profit growth over time. The needs are as great as before and the local authorities in Finland still see substantial advantages with private providers. Studies show that local authorities’ own nursing homes have significantly higher cost level than private nursing homes, which, in combination with the increasing need for care for older people, indicates continued growth in the private care sector. Attendo has a leading position in Finland and, with the latest measures, the company will be even better equipped to benefit from future opportunities.
For more detailed information on the content of Attendo’s action programme for Finland, please refer to the separate attached press release.
Attendo AB (publ)
For further information, please contact:
Andreas Koch, Communications and IR-Director Attendo
Phone: +46 705 09 77 61
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 person set out above at 18.30 CET on 27 March 2019.
Invitation to teleconference
Investors, analysts and journalists are hereby invited to participate in a teleconference on 28 March at 11:00 am (CET), hosted by Attendo’s CEO Martin Tivéus and CFO Fredrik Lagercrantz. The presentation will be held in English.
To participate in the conference, please dial in on any number below at least ten minutes before the start of the call:
SE: +46 8 566 427 05
FI: +358 9 817 105 20
UK: +44 33 33 009 262
The conference can also be reached on the following page:
Attendo - the leading care and healthcare company in the Nordics
Attendo is the leading private provider of publicly financed care and healthcare services in the Nordic region. The company was founded in 1985 and was first to provide outsourced care for older people in Sweden. In addition to care for older people, Attendo provides care for people with disabilities, individuals and families. Attendo has approximately 24,000 employees and is locally anchored with over 700 operations in more than 200 municipalities in Sweden, Finland, Norway and Denmark. www.attendo.com