Attendo’s third quarter report 2024: IMPROVEMENT IN PERFORMANCE AND CUSTOMER SATISFACTION
Attendo continues to report good growth in both sales and profit in the third quarter of 2024. In Scandinavia, sales and profit increased mainly as a result of the acquisition of Team Olivia and continued good development in own nursing homes. In Finland, sales are also increasing and profit improved compared with the third quarter of 2023. Attendo also noted a clear increase in customer satisfaction in national user surveys in both Sweden and Finland.
Comments from Martin Tivéus, Attendo president and CEO
“We continue to show good growth in both sales and earnings in the third quarter. At the same time, the integration of Team Olivia is entering the final phase as we are now creating two new brands for our I&F and disabled care operations in the Swedish market - Viljan and Unika. The ambition is to strengthen our position as a leading provider of highly specialised care in these segments.
We received confirmation in the quarter that our focus on quality, customer care and efficiency is yielding results. In national customer surveys, Attendo receives significantly higher customer satisfaction ratings than publicly run nursing homes in Sweden and the industry average in Finland. At the same time, reports show that private providers reduce costs for taxpayers. This shows that we as a private provider can create benefits for care recipients, society and shareholders.
In the quarter, 127 beds were opened in new nursing homes, which together with existing spare capacity creates conditions for future organic growth. Attendo has previously set the target of achieving adjusted earnings of 4 SEK per share, which is still expected to be achieved in 2024.
Growth driven by acquisitions
In the third quarter, sales for the Attendo Group increased by 9 percent to SEK 4.9 billion, mainly driven by the acquisition of Team Olivia. Adjusted for non-recurring items, the underlying lease-adjusted operating profit (EBITA) also increased in the quarter by SEK 74m to SEK 420m (346). The result improved significantly in both Sweden and Finland. Cash flow remains strong, but was affected by increased holiday taking and interest payments in the quarter. We will continue with share buybacks in the next quarter.
Improved result in Finland
Profit in the Finnish operations increased by SEK 28 million to SEK 277 million (249), mainly driven by lower personnel costs and higher efficiency during the important summer period. The improvement in earnings is also driven by a continued positive year-on-year price effect in functional care and social psychiatry, offset, however, by some negative effect of the timing of price and wage increases in elderly care compared with the previous year.
At the end of September, the Finnish government submitted a proposal to Parliament to reduce staffing requirements in nursing homes from 0.65 to 0.60 as of January 2025. Contract negotiations on the reduced staffing requirement are expected to be finalised before the end of the year. We are well prepared for the expected change, and believe that in the long term the reform will ease the balance in the labour market for care workers in Finland.
Upturn in Scandinavia driven by acquisitions and own operations
Profit in the Scandinavian operations increased by SEK 48m to SEK 164m (116), adjusted for non-recurring items. The improvement in profit is mainly due to the acquisition of Team Olivia and improved results in own nursing homes. As in the previous quarter of 2024, earnings were negatively affected by the termination of outsourcing contracts.
It is gratifying to see that the acquisition of Team Olivia is already making an important contribution to earnings. We have worked intensively since April to integrate the businesses and build a strong team together. Since October, the new organisation is in place, and we are now starting the work of developing our disabled care and I&F business.
New brands in Sweden in disabled care and I&F
At the end of September, Attendo presented two new brands within Attendo Scandinavia - Unika for disabled care and Viljan for individual and family care. This is partly a consequence of the merger with Team Olivia, which has long worked with a diversified brand portfolio. But it also marks a new strategy and increased ambition in these care segments where we see good opportunities for further growth.
With the new brands as a base, we will have better opportunities to profile our operations towards key target groups, to bundle our offerings and to develop our competences. At the same time, the organisations will have better opportunities to be seen in their own new channels. It also gives Attendo's elderly care operations in Sweden an exclusive opportunity to strengthen its position as the leading brand in nursing homes and home care.
Leading customer satisfaction in elderly care in Sweden and Finland
One of Attendo's long-term goals is to have the most satisfied care customers in the markets where we operate. In Sweden, the National Board of Health and Welfare conducts an annual user survey, in which older people answer questions about how they experience care. This year's survey shows a sharp improvement in satisfaction with Attendo in nursing homes - from 75% in 2023 to 81% in 2024. Attendo also has more units with 100% satisfaction than in previous years. The survey shows that Attendo now has a higher average satisfaction rate in nursing homes than public providers (78%) in the local authorities where we operate.
In Finland, the National Institute for Health and Welfare (THL) presented its second national user survey on customer satisfaction in care for older people during the quarter. The average satisfaction (Net Promoter Score, NPS) with Attendo's operations increased to 40 from 31 in the previous survey (2022). The average for the industry as a whole was 36 (36). It is also gratifying that Attendo now has four care units on THL's national top 10 list of care units with the highest customer satisfaction in Finland.
Better care to more people
Public finances in the local authorities and welfare regions where we operate continue to be strained in both Finland and Sweden, which has led to fewer citizens than normal being granted places in nursing homes over the past year.
During the quarter, Attendo Finland presented a care survey that shows widespread concern about access to care among the Finnish public. About 8 out of 10 worry that there will be no care services for themselves or a close relative in need, and two-thirds worry that they will be cared for by relatives instead. A similar proportion believe that there are already people living at home who should be offered a nursing home.
The report confirms that there is a large gap between the current allocation of care services and what the public expects. As a private provider, Attendo can play an important role here by building new, modern capacity and introducing more efficient ways of working with the help of new technology so that existing social resources last longer. This is well in line with our long-term ambition - to provide society with better care to more people.”
Summary of the third quarter 2024
- Net sales amounted to SEK 4,875m (4,488). Total growth amounted to 8.6 percent, of which organic growth was 2.2 percent.
- Lease adjusted operating profit (EBITA) was SEK 402m (346), corresponding to a margin of 8.2 percent (7.7). Adjusted for M&A related integration costs and close down cost for home care in Denmark the profit was SEK 420m, which corresponds to a margin of 8.6 percent.
- Operating profit (EBITA) amounted to SEK 536m (534), corresponding to an operating margin of 11.0 percent (11.9).
- Profit for the period amounted to SEK 235m (230). Earnings per share after dilution amounted to SEK 1.50 (1.43). Adjusted earnings per share after dilution amounted to SEK 1.87 (1.45).
- Free cash flow amounted to SEK 91m (197).
- The number of beds in Attendo's homes at the end of the period was 21,225 (20,863). Occupancy in homes was 86 percent (86).
Summary of the period January - September 2024
- Net sales amounted to SEK 14,102m (12,865). Total growth amounted to 9.6 percent, of which organic growth was 4.3 percent.
- Lease adjusted EBITA was SEK 726m (609), corresponding to an operating margin of 5.1 percent (4.7). Adjusted for integration costs and close down costs the profit amounted to SEK 770m, which corresponds to a margin of 5.5 percent.
- Operating profit (EBITA) amounted to SEK 1,127m (1,058), corresponding to an operating margin of 8.0 percent (8.2).
- The profit for the period amounted to SEK 342m (318). Diluted earnings per share were SEK 2.15 (1.97). Adjusted earnings per share after dilution were SEK 3.11 (2.48).
- Free cash flow amounted to SEK 310m (320).
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-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: [email protected].
The quarterly report and other information material will be made public on:
https://www.attendo.com/
Attendo AB (publ)
For further information, please contact:
Mikael Malmgren, Chief Financial Officer
Phone: +46 8 586 252 00 I email: [email protected]
Stefan Svanström, Head of Community Communications Attendo
Phone: +46 708 67 38 07 I email: [email protected]
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 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 about 34,000 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.
