Attendo’s third quarter results for 2016: Establishing new nursing homes at faster pace

Attendo is showing continued stable growth and margin development in the third quarter of 2016. During the quarter, the pace of establishing new nursing home has increased to meet the growing shortage of nursing home beds in the Nordic countries.

Comments by Henrik Borelius, CEO

There was continued stable growth and margin performance in the third quarter. Growth was driven mainly by the opening of new own nursing homes and by acquisitions. Attendo is increasing the pace at which it is establishing new units, and increased the number of beds under construction during the quarter from an already high level. Although there is a substantial need for new beds in elderly care, a commission appointed by the Swedish government has presented proposals that could reduce the incentive to establish new nursing homes and to develop care solutions of tomorrow.

Own Operations showed continued good growth, both organically and through acquisitions. The increase is explained mainly by new own nursing homes, by higher occupancy in our units that were under start-up during the same quarter last year, and by acquisitions. Attendo continued to invest in new nursing homes, and five units were opened in Finland during the third quarter. Construction began on a total of 14 units in Sweden and Finland, which will provide 490 new beds. The total number of beds under construction is 1,716. This is partly an effect of acquisitions, but mainly because Attendo has been successful in identifying demand and rapidly translating this into construction starts.

Net sales in Outsourcing operations decreased slightly compared to the third quarter of 2015, as a result of ended contracts. During the third quarter of this year, Attendo won new contracts in care of older people that will provide estimated annual revenue of SEK 70 million, and lost contracts with annual revenue of SEK 100 million. Underlying net sales in Staffing operations were slightly higher in the quarter compared to the corresponding period in 2015. Demand for doctors staffing is still good, but the availability of doctors to employ is a limiting factor. The markets for Outsourcing and Staffing are expected to remain challenging but stable.

A commission appointed by the Swedish government recently submitted a proposal that would result in limitations for freedom of choice in schools, and in health and social care, by restricting the opportunities for private providers. This would reduce the ability of clients to choose their own care, and would make things more difficult for local authorities that engage private providers to meet their care needs. Attendo does not believe the proposal will be implemented since there is no majority in the Swedish parliament, the proposal is probably in breach of EU legislation, and local authorities around the country require the services of private providers in the field of social welfare. The ongoing debate in Sweden stands in contrast with that in Finland, where the forthcoming SOTE reform aims to expand the proportion of private providers in health and social care in order to improve quality and freedom of choice.

Attendo’s quality work in the third quarter was particularly focused on activities to meet the needs of older people for exercise and spending time outdoors. The recurring fitness “jog”, called Attendolunken had record number of participants – more than 2,100 older people participated. In Finland, Attendo has arranged a concert tour – Sydämeni Tango. These concerts have become very popular and, in all, around 3,000 older people and their families have attended. Attendo has carried out values weeks, aiming to increase quality and employee engagement. Attendo also launched the care industry’s first share-savings programme during the quarter. Engagement in Attendo’s development work and broad co-ownership are important parts of Attendo’s culture and success, and it is positive that more than 500 employees chose to participate in the programme.

In summary, Attendo demonstrated good financial performance during the quarter. The high number of beds under construction shows that we are well positioned to achieve our growth targets in the coming years.  

Summary of the third quarter 2016

• Net sales increased by 5 percent to SEK 2,568m (2,455). Adjusted for currency effects net sales increased by 4 percent. Adjusted for currency effects and deconsolidation of subsidiary net sales increased by 7 percent.
   
• Operating profit (EBITA) decreased by 1 percent to SEK 340m (345), representing an operating margin of 13.2 percent (14.1). Adjusted for a capital gain from divestment of real-estate in the third quarter 2015 of SEK 15m, operating profit (EBITA) increased by 3 percent.
  
  
• Profit for the period amounted to SEK 224m (182), which represents a profit margin of 8.7 percent (7.4) and earnings per share diluted of SEK 1.39 (1.14).
   
• Operating cash flow amounted to SEK 101m (207).

Invitation to teleconference
The report will be presented in a teleconference on 11 November 2016 at 09:00 am (CET). The teleconference will be hosted by Attendo’s CEO Henrik Borelius and CFO Tomas Björksiöö. 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 8 566 426 64
FI:                  +358 9 817 104 93
UK:                +44 20 30 08 98 08

You can follow the presentation and the conference on the following page: https://wonderland.videosync.fi/2016-11-11-attendo-q3-report

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

Attendo AB (publ)



For further information, please contact:

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

The information above is such that Attendo AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08.00 CEST on 11 November 2016.

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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, and, in Finland, healthcare and dental care. Attendo has 19 000 employees and is locally anchored with over 500 operations in more than 200 municipalities in Sweden, Finland, Norway and Denmark. www.attendo.com