Attendo shows increased growth and continued improvement in operating result in the second quarter of 2024. The Scandinavian operation shows a clear improvement in both sales and profit, driven primarily by the acquisition of Team Olivia and continued strong development in own nursing homes. Profit in Finland has been maintained over the quarter, where negative effects in elderly care have been offset by improved results in disabled care and social psychiatry.
Comments from Martin Tivéus, Attendo president and CEO
"In the second quarter, we started the integration of Team OIivia Care. With a larger and more specialised operations in disabled care and in individual and family care, we have excellent opportunities to become the leading provider in these segments. Through the acquisition and positive development in our own operations, we have more than doubled underlying profit in Scandinavia compared with the previous year.
In Finland, we report a result in line with the previous year, where a slightly lower result in care for older people has been offset by higher results in disabled care and social psychiatry.
It is also pleasing to see the results of our goal-oriented efforts to be recognised as the best employer in the sector. Our long-term success is based on committed employees who provide customers with good and safe care. During the quarter, our internal surveys showed a record-high recommendation rate for Attendo as an employer, combined with continued high ratings in the latest customer surveys.
High growth driven by acquisitions
Sales increased by 12 per cent in the second quarter to SEK 4,841m, mainly driven by the acquisition of Team Olivia Care and renegotiated contracts in Finland. Adjusted for non-recurring items, the underlying lease-adjusted operating profit (EBITA) in the quarter increased by SEK 40m to SEK 187m (147). Free cash flow continued to increase and the financial position is strong.
Maintained profit in Finland in spite of negative cost/price effect
Sales in Attendo Finland increased by 6 percent during the quarter in local currency. Compared with the result for the second quarter of 2023, there is a negative effect of high salary increases in the autumn of 2023, which on a quarterly basis was not offset by price adjustments. However, on an annualized basis, we expect price adjustments to fully compensate for the cost increases.
We have also had higher staffing levels in the operations in preparation for welcoming new customers. Average occupancy during the quarter has been lower than expected. However, we could see a positive development towards the end of the quarter.
The negative effects on results, which primarily affect care for older people, have been offset by improved results in disabled care and social psychiatry.
Improved earnings in Scandinavia driven by acquisitions and own operations
Sales in Attendo Scandinavia increased by 21 percent, mainly driven by the acquisition of Team Olivia Care, by more beds sold and by price adjustments in own nursing homes. Underlying profit, adjusted for integration and exit costs, more than doubled during the quarter to SEK 75m (36). The improvement in profit is mainly driven by the acquisition of Team Olivia Care, profit improvements in own nursing homes and reduced losses in the Danish operations.
The contribution from the acquisition is in line with both our own expectations and what we have previously communicated. Occupancy in Attendo Scandinavia has increased by one percentage point since the first quarter and we have had solid development in own care homes during the quarter. At the same time, the termination of profitable outsourcing contracts at the end of 2023 had a negative impact on both sales and earnings.
As part of focusing the Danish operations on our own operated nursing homes, we divested the Danish home care business during the quarter, which resulted in a negative one-off cost in the quarter. The divestment will improve profitability in Denmark going forward.
Our financial targets
Attendo has a previous target of achieving adjusted earnings of SEK 4 per share, which is still expected to be achieved in 2024. In May 2024, we presented new financial targets to achieve adjusted earnings per share of at least SEK 5.50 in 2026. We expect to achieve underlying growth in operating profit of at least 10 percent annually, driven by increased occupancy, operational efficiency, price adjustments, new units and continuous add-on acquisitions in existing segments. In addition, we expect positive effects from continuous share buybacks. With a strong cash flow, we have good opportunities for active capital allocation in the form of new investments combined with share buybacks and dividends. The debt target, measured as adjusted net debt in relation to adjusted EBITDA, is for Attendo to be between 1.5-2.5x.
Increasingly engaged employees
Promoting employee engagement is key to good care. A central part of creating favourable conditions locally is increased leader density and committed leadership. Hence, we place great emphasis on developing the leadership in all levels of the organisation. During the quarter, we gathered nearly 900 leaders at Attendo in various forums to discuss future prospects, share experiences and celebrate common successes. We also recognised the best care units in both Sweden and Finland, which is an important part of our work to highlight and honour employees who have been particularly successful in their care assignments.
In recent years, our employee surveys have shown a steady increase in engagement and pride. This quarter's survey showed the best result to date, well above the industry average. The recommendation score for Attendo as an employer was +26 in the second quarter (scale -100 to +100), up from +11 for the corresponding period in 2023.
Measuring how our customers experience their care is an equally central part of our work on quality and social sustainability. We measure the results regularly using both internal and external surveys. The second quarter results show continued positive development in both business areas. The combined customer satisfaction score (cNPS) for the Group as a whole in the latest measurements was +45 (+40). In other words, our methodical work is having an effect, for example by working in a structured way on quality of life. But it is also an indication that employee engagement and customer satisfaction go hand in hand.
Diversity, equality and inclusion are key elements of our corporate culture. In Finland, we celebrated LGBT rights in June by celebrating Pride month both locally and by participating in the big parade in Helsinki on 29 June. Another example of employee engagement and inclusion is that during the quarter we organised a music festival (Simon Festarit) for people with disabilities in northern Finland.
We support both individuals and society
Society's need for increasingly specialised care in disability care and individual and family care is growing. We believe in care where the individual is at the centre, where each person should be able to live their everyday life according to their personal wishes and needs. With the acquisition of Team Olivia, we now have even better opportunities to support different individuals with more competent and committed employees, while together we have greater resources to develop central support for method and quality work.
For payors, this means we will be a better partner with greater breadth, depth and ability to manage complex care needs. In addition, we continue to strengthen our capacity and offer in care for older people to meet the needs of an ageing population. Long-term trends show a rising demand for care with increased health care and social care content, regardless of the care segment. Our goal is to be the leading care provider supporting both individuals and society in the years to come."
Summary of the second quarter 2024
- Net sales amounted to SEK 4,841m (4,333). Total growth amounted to 11.7 percent, of which organic growth was 2.9 percent.
- Lease adjusted operating profit (EBITA) was SEK 163m (147), corresponding to a margin of 3.4 percent (3.4). Adjusted for M&A related integration and close down cost for home care in Denmark the profit was SEK 187m, which corresponds to a margin of 3.9 percent.
- Operating profit (EBITA) amounted to SEK 299m (283), corresponding to an operating margin of 6.2 percent (6.5).
- Profit for the period amounted to SEK 44m (60). Earnings per share after dilution amounted to SEK 0.28 (0.37). Adjusted earnings per share after dilution amounted to SEK 0.68 (0.60).
- Free cash flow amounted to SEK 199m (115).
- Team Oliva consolidated from 1 April 2024
- The number of beds in Attendo's homes at the end of the period was 21,326 (20,870). Occupancy in homes was 86 percent (86).
Summary of the period January - June 2024
- Net sales amounted to SEK 9,227m (8,377). Total growth amounted to 10.1 percent, of which organic growth was 5.3 percent.
- Lease adjusted EBITA was SEK 324m (263), corresponding to a lease adjusted operating margin of 3.5 percent (3.1). Adjusted for integration costs and close down costs the profit amounted to SEK 350m, which corresponds to a margin of 3.8 percent.
- Operating profit (EBITA) amounted to SEK 591m (524), corresponding to an operating margin of 6.4 percent (6.3).
- The profit for the period amounted to SEK 107m (88). Diluted earnings per share were SEK 0.67 (0.55). Adjusted earnings per share after dilution were SEK 1.26 (1.03).
- Free cash flow amounted to SEK 219m (123).
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-q2-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 and the Securities Markets act. The information was submitted for publication, through the agency of the contact persons set out above at 08.00 CET on 19 July 2024.
attendo.com
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 Finland, Sweden 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.