Attendo’s first quarter report 2024: CONTINUED POSITIVE TREND DRIVEN BY FINLAND
Attendo continues to show a clear improvement in operating result and strong organic growth in the first quarter of 2024, driven by the turnaround program in Finland. Sales increased by 8 percent, while the lease-adjusted operating result improved by almost 40 percent compared to the first quarter of 2023. Attendo now presents a new financial target; to reach an adjusted EPS of at least SEK 5.5 in 2026.
Comments from Martin Tivéus, Attendo president and CEO
“In 2023, we have largely completed the three-year turnaround program aimed at adapting operations and conditions to new staffing requirements in Finland, restoring occupancy after the pandemic and a period of strong expansion, and returning to sustainable growth. At the same time, we have worked to strengthen our operational care model, with increased management density and new digital tools to relieve employees and free up time for care.
With the acquisition of Team Olivia's Swedish care operations in the first quarter of 2024, we mark the start of a new phase for Attendo. Over the next three years until 2026, we intend to build a stronger position in disabled care and individual and family care. We are also starting to plan to gradually meet the expected demand for care for older people in the Nordic region as a result of demographic developments.
Our focus is continued sustainable and profitable growth combined with increased investments in digitalization. In connection with this quarterly report, we present new financial targets, including a performance target of adjusted earnings per share of at least SEK 5.50 in 2026.
Profits in the first quarter increased significantly compared to 2023, mainly driven by the effects of the turnaround program in our Finnish operations.
Group: Higher profit driven by Finland
Sales in the first quarter increased by 8 percent, mainly driven by renegotiated contracts in Finland. The lease adjusted operating profit (EBITA) increased by SEK 45m (+39 percent), an increase entirely related to the Finnish operations.
Finland: Continued positive trend
Sales in Attendo Finland increased by 15 percent in the quarter in local currency. Profit has strengthened significantly year over year, mainly linked to renegotiated contracts based on higher staffing requirements in care for older people and higher prices in disabled care.
Occupancy in our nursing homes was in line with the previous quarter but lower than expected. The result has therefore been negatively affected by high personnel costs.
The Finnish government has announced that staffing requirements in care for older people will be reduced from 0.65 to 0.60 care staff per resident from 2025. Our assessment is that this will not have a material impact on results and that occupancy can develop positively.
Scandinavia: Stable profits in own operations
Sales are in line with the comparison quarter despite several ended outsourcing contracts. The reported result is at the same time lower due to ended contracts and continued losses in Denmark. Our own homes, which account for the majority of our sales in Scandinavia, continue to show both underlying growth and improved profits. Occupancy is marginally higher than in the previous quarter.
We are working to reverse the performance trend in Scandinavia through increased sales efforts, continued recovery in home care in Sweden and by reversing the situation in Denmark. We are making progress in the turnaround in Denmark and have, among other things, divested the last home care unit, changed leadership, strengthened quality work and expanded our sales efforts.
Stronger position in LSS / I&F
From the second quarter of 2024 and onwards, Team Olivia Care Sweden is part of Attendo. The acquisition strengthens our offering and our position in disabled care (LSS), individual and family care (I&F) and home care. It also gives us a better balance between our different service offerings in Sweden. The acquisition is expected to contribute to adjusted earnings by at least SEK 0.5 per share when the operations are fully integrated in 2025. At the beginning of the second quarter and in line with our strategy, we acquired an additional 8 group homes within disabled care in Sweden.
New financial targets
Over the past three years, we have succeeded in reversing the development in Finland and recovered a large part of the occupancy loss due to the pandemic while strengthening employee ownership and our operational model. During the period, we have implemented a model for increased focus on quality of life, we have strengthened operational leadership through new leadership training for care managers, introduced group managers in nursing homes in both Finland and Sweden, and taken several steps forward on our digitalization journey. The result is a more stable operation, but also better results in both customer and relatives’ satisfaction, employee satisfaction and payor satisfaction.
Attendo has previously set a target to reach an adjusted profit of SEK 4 per share, which still is expected to be achieved in 2024. With the clear turnaround in Finland and the acquisition of Team Olivia, we are now entering a new value creation phase, with new more forward-looking targets.
In the coming years we intend to continue to strengthen the company's operational and financial position, with the goal of reaching adjusted earnings per share of at least SEK 5.50 in 2026:
- Underlying operating profit growth of at least 10 percent annually, driven by increased occupancy, operational efficiency, price adjustments, new units and continuous smaller acquisitions in existing segments
- The acquisition of Team Olivia Care will generate at least SEK 0.5 annually from 2025
- Continuous share repurchases have further positive impact on earnings per share
Attendo maintains its current dividend target of distributing 30% of adjusted net profit and it is intended to be combined with continuous share buyback programs. The debt target, measured as adjusted net debt in relation to adjusted EBITDA, is to be between 1.5-2.5x.
Long-term value creation
Attendo is the oldest and leading private care company in the Nordic region, with a focus on Sweden and Finland. Needs in care for older people are expected to increase in the coming decade. The drivers are a growing number of older people and demand for providers that can handle complex care needs that local authorities and regions cannot solve on their own. We also see a strong desire from citizens to choose care solutions that suit their own needs.
For over 20 years, Attendo has worked with our mission "empowering the individual", which means that we should see, support and strengthen every person in need of care. Our customer focus combined with the fact that we offer payors cost-effective care and solve complex care needs means that we are well positioned for the future.”
Summary of the first quarter 2024
- Net sales amounted to SEK 4,386m (4,044). Total growth amounted to 8.5 percent, of which organic growth was 8.0 percent.
- Lease adjusted operating profit (EBITA) amounted to SEK 161m (116), corresponding to a margin of 3.7 percent (2.9).
- Operating profit (EBITA) amounted to SEK 292m (241), corresponding to an operating margin of 6.7 percent (6.0).
- Profit for the period amounted to SEK 63m (28). Earnings per share after dilution amounted to SEK 0.39 (0.17). Adjusted earnings per share after dilution amounted to SEK 0.58 (0.43). Free cash flow amounted to SEK 20m (8).
- The number of beds in Attendo's homes at the end of the period was 20,506 (20,923). Occupancy in homes was 86 percent (86).
Invitation to presentation
In connection with the release of the report, a webcast presentation will be held at 10.00 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-q1-report-2024
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 24 April 2024.
Attendo - the leading care company in the Nordics | For almost 40 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 almost 35,000 employees and is locally anchored with around 800 units in 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.