Attendo’s third quarter report 2023: STRONG GROWTH AND IMPROVED RESULT
Attendo reports a sustained strong growth and greatly improved results for the third quarter of 2023. Growth was 22 percent and the lease-adjusted operating profit doubled compared to the corresponding quarter in 2022. Meanwhile, quality parameters and employee engagement continue to develop positively.
Comments from Martin Tivéus, Attendo president and CEO
“Ahead of 2023, we set an ambitious plan to improve operational performance, continue to increase occupancy, while improving our contractual conditions. The result and cash flow in the third quarter show the strength of our plan, with growth of 22 percent and a doubling of earnings.
It is pleasing to see that we can once again report a positive occupancy development in Finland, where we have previously been limited due to imbalances in the labour market. In Scandinavia, we see a stabilisation in relation to the previous quarter's development and we can look ahead to an improvement in earnings in 2024.
We see a continued positive development on quality parameters and employee engagement while we continue to create conditions for organic growth. During the quarter, we started construction of new homes in both Sweden and Finland. Overall, we expect to reach our financial target of adjusted earnings per share of 4 SEK in 2024.
Group: High growth and stronger results
The Group's sales amounted to SEK 4,488 million, which corresponds to an increase of 22 percent in total and 15 percent measured in local currency. The growth is driven by improved conditions and more occupied beds. The lease adjusted operating profit (EBITA) for Q3 2023 increased by SEK 175 million, compared to last year, to SEK 346 million, corresponding to a margin of 7.7 percent (4.6).
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 the care for older people operations. The main factors behind the improvement are new terms and conditions, operational improvements and more occupied beds. The development during the quarter shows that, despite a strained labour market, we have succeeded well in both retaining and growing our fantastic group of employees to be able to welcome more and more new people in need of care, which I see as a sign of strength.
For the coming year, we expect to be able to compensate for cost increases with price adjustments. We have currently ongoing negotiations on conditions in social psychiatry and disabled care. With a gradual improvement in occupancy and conditions that better match the new staffing requirements, we look forward to returning to long-term sustainable profitability.
A stable financial situation is 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: Stabilisation according to plan
Sales in our Scandinavian care business increased by about 4 percent compared with the corresponding quarter last year. The reported result is down compared with the previous year. However, we see an underlying improvement in earnings in own nursing homes and own group homes (disabled care). At the same time, we still report losses in Denmark and lower results in home care, but we see an improvement in these areas in relation to the previous quarter and expect to continue to improve gradually in the coming quarters. For 2024, we expect to be able to compensate for cost increases through price adjustments for the business area as a whole.
I am very pleased that during the quarter we recruited Patrik Högberg as the new business area manager for Attendo Scandinavia. Patrik has solid leadership experience from the private and public sector and has all the prerequisites to continue developing the operations in Sweden and Denmark.
Strengthened organisation in nursing homes
As part of developing Attendo's operational model - Attendo Way - we are introducing a new, strengthened organisation in nursing homes in both of our business areas. An important part of this work is that we are increasing leadership density by introducing team leaders in nursing homes. The aim is to strengthen local managers and at the same time establish a more present leadership in operations, better communication and ultimately improved quality of care.
Focus going forward
I see good opportunities to continue developing Attendo going forward, to create value for customers, relatives, payors, shareholders and society as a whole. The development in Finland shows that it is possible to turn an industry around, both in terms of quality and financially, after a long period of difficult conditions. In Scandinavia, we have begun to see a stabilisation after a challenging period where the industry suffered from under-compensation for cost inflation and wage increases.
We are well on track to achieve our financial target of adjusted earnings per share of 4 SEK. As we previously announced, the timing of the fulfilment has been delayed due to inflation-related costs and higher interest costs. Our current assessment is that we will reach the target in 2024.
A stronger financial position also puts us in a good position to invest in the future of care.”
Summary of the third quarter
- Net sales amounted to SEK 4,488m (3,679). Total growth amounted to 22.0 percent, of which organic growth was 14.6 percent.
- Lease adjusted operating profit (EBITA) was SEK 346m (171), corresponding to a margin of 7.7 percent (4.6).
- Operating profit (EBITA) amounted to SEK 534m (295), corresponding to an operating margin of 11.9 percent (8.0). In relation to the comparison quarter, IFRS16-related effects of a non-recurring nature had a positive impact of SEK 45 million on the result.
- Profit for the period amounted to SEK 230m (95). Diluted earnings per share were SEK 1.43 (0.59). Adjusted earnings per share after dilution amounted to SEK 1.45 (0.80).
- Free cash flow amounted to SEK 197m (-273).
- The number of beds in Attendo's homes at the end of the period was 20,863 (21,082). The occupancy rate in homes was 86 percent (85).
Summary of the period January - September
- Net sales amounted to SEK 12,865m (10,707). Total growth amounted to 20.2 percent, of which organic growth was 12.5 percent.
- Lease adjusted EBITA was SEK 609m (191), corresponding to a lease adjusted operating margin of 4.7 percent (1.8).
- Operating profit (EBITA) amounted to SEK 1,058m (543), corresponding to an operating margin of 8.2 percent (5.1). In relation to the comparison period, IFRS16-related effects of a non-recurring nature had a positive impact of SEK 51 million on the result.
- The profit for the period amounted to SEK 318m (0). Diluted earnings per share were SEK 1.97 (0.00). Adjusted earnings per share after dilution were SEK 2.48 (0.74).
- Free cash flow amounted to SEK 320m (-82).
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-q3-2023
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 24 October 2023.
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 30,000 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.