Attendo AB (publ)

good morning everyone today we're presenting the q1 results we'll also present updated financial targets as we're approaching the end of the turnaround program we initiated in the beginning of 2021. with the acquisition of tim olivia's care business in sweden sustainable terms in finland and a stronger financial position attenders well positioned to create value for customers payers and shareholders in the rc camp i'll start by giving you an update on the development in the first quarter together with our cfo michael mangan In the second part of this presentation, we'll move into the updated financial targets. Attendance had a positive momentum during the past year, reflecting the outcome of the turnaround program that we launched in 2021. In the first quarter, organic growth was 8% and the beta increased with 39% year over year. Both sales and the beta improvements are entirely attributable to the improvements in our operations in Finland. Improvement in Finland is mainly driven by the contractual changes we achieved last year, primarily within elderly care. Still, I'm not entirely happy about the results. Sales in Q1 was somewhat lower than we had anticipated. As we recruited for slightly higher occupancy entering the quarter, this also had a negative impact on staffing efficiency and personal costs. In Scandinavia, our own operations in Sweden continue to improve year on year, while the overall Overall result was negatively affected by losses in Denmark and ended outsourcing contracts. We've taken a number of actions to turn the situation in Denmark, something that should have a positive impact from the second half of the year. A key factor to strengthen the trend of Scandinavia is the acquisition of Team Olivia Care, which will be consolidated now from the second quarter. This will give us a leading position in the attractive segments of disabled care, as well as individual and family care. With this acquisition, we also further strengthen our home care operations. Overall, we're achieving a better balance between our service offerings in Sweden and creating a stronger platform for further growth. As a result of the overall improvement in earnings as a group, we have significantly strengthened our financial position and as a result, lowered our net debt to WTA. This allows for active capital allocation and selective M&A and is an important part of our revised equity story that we'll come back to shortly. Slide 50. So now some comments on the progress of our sustainability work and non-financial KPIs. Over the past few years, we have gradually been implementing new evidence-based methods to measure quality of life of individual nursing home residents. While we have been piloting these methods since 2021, we have now implemented them in the majority of our nursing homes. In Sweden, we have introduced a method called ASKOT, while we use a method called RAI in Finland. The purpose is to measure and improve the health and well-being of our nursing home residents. The result of the ASKOT and RAI assessments helps our staff to better understand what to focus on to impact quality of life for each individual resident. It also provides the data to understand if the resident experiences a positive impact from the care, food and services that we provide. The first broader results indicate that this way of working with improving quality of life is having a positive impact on our customers. While it's too early to draw more detailed conclusions from the measurements, we will, as we get more data, be able to compare development over time. This will also help us to build more knowledge about what actions that have the most impact on customer health and well-being to further develop our care operations for the future. Next slide, please. Let's now turn to the development of occupancy, a key factor for our long-term profitability. Group occupancy at the end of the first quarter was 86%, essentially unchanged from the fourth quarter. In Finland, we succeeded with our 2023 targets to maintain occupancy, despite increasing staffing density requirements and a strained labor market. For the first quarter of this year, occupancy remained essentially unchanged, as sales were slightly slower than we had anticipated. For 2024, however, our target is to increase occupancy again with two to three percentage points as the labor market stabilizes. In Scandinavia, occupancy has developed flat to slight positive over the past quarters. And while we recognize that some of our payers have financial constraints or have limited access to private providers for political reasons, like in Gothenburg, we believe that we will continue to increase occupancy in 2024. We see a growing underlying need in society, and we continue to see increased number of customers that would like to get an apartment in one of our nursing homes. Next slide, please. The top chart shows sales on a rolling 12-month basis, both for the group and for each business area. The most significant factor for sales development over the past 12 months is improved conditions in Finland. The bottom chart shows a rolling 12-month lease adjusted EBITDA margin but the group margin continues to increase, driven by the performance in the Finnish elderly care segment. In Finland, we received the full year effect in Q1 of the improved terms established last year. We expect normal seasonal effects during the year, with Q2 generally being our weakest quarter. In Scandinavia, we've had a margin pressure over the last couple of years, initially due to a sharp drop in occupancy during the pandemic, and later due to issues in Denmark, less than fair compensation for inflation, and ended outsourcing contracts. From this point, we expect margins to start improving, mainly driven by the Tim O'Leary acquisition, improvements in Denmark, and occupancy. Let's take a closer look at the financial for the quarter, and please go ahead, Mikael.

Thank you, Martin. So let's turn to page six. Net sales in the quarter increased to 4.4 billion SEK, which is up 8% compared to the quarter last year. The organic growth for the quarter was also 8% excluding foreign exchange. Organic growth was flat in Antendo, Scandinavia, where we saw continued organic growth in own operating units. This was offset by ended outsourcing contracts. In Finland, the organic growth was 343 million, or 15%, and primarily driven by improved terms. Currency effects had a minor effect on sales with 20 million. Slide seven, please. Reported EBITDA increased by 51 million to 292 million kronor and lease adjusted EBITDA increased from 116 to 161 million kronor. Lease adjusted EBITDA in Scandinavia decreased year over year, while in Finland the lease adjusted EBITDA grew with 64 million. IFRS related effects was 5 million and foreign exchange effects contributed slightly positive to EBITDA this quarter as well. Next slide, please. As mentioned, growth for Attenda Finland amounts to 15% reported and in local currency. Lease adjusted EBITDA increased from 73 million to 138 million. The positive development is mainly an effect of price adjustments that are now catching up to historical cost development. Occupancy remained unchanged in the quarter and was also impacted by higher than expected customer outflow around Easter. We target to improve occupancy in the following quarters. To note, the Finnish government announced that staffing requirements and care for older people will be reduced from 0.65 to 0.60 care staff per resident from 2025. Our in-going view is that this will not have a material effect on profitability. And please note that Q2 and Q3 will be impacted by higher salary increases compared to last year. Slide nine, please. Turning to Attendo, Scandinavia, the net sales was flat. Underlying growth in owned homes driven by price and net new sold beds was offset by lower revenues and ended outsourcing contracts. We report lower profit year over year in Scandinavia. On a segment level, Denmark and outsourcing showed lower results year over year, while we report higher results from owned operations in both elderly care and disabled care. As part of our turnaround program in Denmark, We exited loss-making home care operations in Copenhagen in April. In addition, we have changed the local leadership. We've improved the staff turnover and quality measures. Slide 10, please. Cash flow. On a rolling 12-month basis, our free cash flow remains strong at $736 million. And the free cash flow in the quarter was slightly better than previous year, driven by our profit improvement. However, in the quarter, working capital was impacted by end-of-month Easter close and a one-time payment of historical accrued vacation days. CapEx was also slightly higher and is expected to be higher than last year from a historical perspective low level. During the quarter, we also repurchased shares, as announced, to a value of 45 million. And in April, we have continued to repurchase additional 40 million kroner so far. Next slide, please. So let's start at the top left. The adjusted earnings per share improved too and due to improved lease adjusted EBITDA and was as expected slightly offset by increasing financing costs and increased income tax. On the top right, we note that the lease adjusted EBITDA margin continued to improve during the quarter and is now at 4.5% on a rolling 12 month basis. On the bottom left, lease adjusted net debt EBITDA remained at historically low 1.2 and down from 3.6 last year. In Q2, and due to primarily the acquisitions concluded in April, the ratio is expected to increase to approximately two. The net interest expense in the quarter was similar level compared to the last quarters. And on a rolling 12-month basis, the net interest expense also remains relatively stable compared to last quarters, but higher compared to one year ago. The increase compared to last year is due to the interest rate increases in 2022 and 2023. Going forward, the net interest expense will increase. This is primarily driven by the now finalized Team Olivia care acquisition, which was acquired beginning of April at a purchase price of 950 million kronor on a debt and cash-free basis. With that, I hand over to you, Martin.

Thank you, Mikael. Before turning to the financial targets and the Q&A session, let me just briefly summarize the latest development. The return run in Finland was a driving factor behind the group's sales and profitability improvement in the first quarter. The trend in Scandinavia has been slightly downwards for some time, but we believe that we are now past the turning point and that we'll see an improvement going forward. In addition, we'll get a positive contribution from the acquisition of Team Olivia from Q2 and onwards. Our focus for this year is to increase occupancy, work with operational efficiency, complete the turnaround in Denmark, and integrate Team Olivia in the Swedish operations. Financially, we expect to achieve our previously communicated financial target of four SEC per share in 2024. This concludes the Q1 presentation. I will now continue to present the next phase for Attendo and our new financial targets. Over the past three years, We have achieved a turnaround in Finland, recovering much of the occupancy loss during the pandemic in Scandinavia, while strengthening employee engagement and our operating model. During this period, we have implemented a care model with stronger focus on quality of life, strength and operational leadership through new leadership training for local managers, introduction for group managers in nursing homes, both in Finland and in Sweden. We've also taken several steps forward in our digitalization journey. The result is a more robust daily operation with higher satisfaction among customer relatives, employees and payers. Also financially, we're now in a much stronger position that gives us better options for the future development of Attendo. Now moving into our focus for the next three years. First and foremost, we still have plenty of opportunities to grow and improve our elderly care operations. We still have around 3,000 empty nursing home beds in both business areas, and hence operating on a significantly lower occupancy level than historically. The shortage of nursing homes is already evident in many geographies, and given the current low level of new establishments and constraints in public finances, this opens up growth opportunities for private operators in both existing and new geographies. In addition, as overall demand increases and people are getting healthier for longer, demand for home care services is likely to increase faster over the years to come. Secondly, we see great opportunities for further growth in disabled care and individual and family care, both organically and through M&A. The acquisition of Team Olivia will strengthen our capabilities in complex care needs in Sweden. Together, we'll form a wider and stronger platform within disabled care and individual family care. Combined, we'll provide an expertise in these segments that no local authority can build on their own. and will become a better partner and care provider for both society and individuals. Thirdly, we still have room to improve efficiency as we increase occupancy and continue our digitalization journey. Overall, we aim to achieve adjusted earnings per share of at least 5,50 in 2026. Mikael will now walk you through how we built up this target. Mikael, please go ahead.