Attendo AB (publ)

Thank you and good morning everyone. Today we present Attendo's year-end and Q4 results. Before diving into the development in the quarter, let me just take a few moments to reflect on Attendo's current state and a road ahead. Next slide, please. At the Toronto 2024, we served around 30,000 people with different care needs on a daily basis across almost 800 care units in the Nordics. Over the past few years, we had a strong focus on both the financial and an operational turnaround that was completed in 2023. In 2024, we entered the next phase with the acquisition and integration of Team Olivia in Sweden and the return to focus on operational efficiency in Finland. Net sales for the year was almost 19 billion SEK on a rolling 12-month basis. And with the 1 billion SEK in least adjusted EBITDA, our profitability has recovered significantly compared to where we were just a few years ago. With the acquisition of Team Olivia, we entered 2025 with the more diversified operations in Sweden, and we intend to keep growing our disabled care and individual and family care business going forward. These are attractive segments where there is a growing need in society for stronger specialization for those with more complex care needs. From an operational point of view, we're making good progress in terms of satisfaction among both customers, relatives, employees and payers in both Finland and Scandinavia. Recent surveys in Sweden also shows that with the launch of our new brands, Unica and Viljan, we have continued to improve customer satisfaction, both in disabled care and individual and family care. Further, external data shows that on top of higher customer satisfaction and quality of care, we're also providing care at a clearly lower cost to society and public sector. Hence, we deliver in line with our vision to provide better care for more people, creating value for both society and to shareholders. Next slide, please. Looking forward, we see a number of opportunities that Attender is well positioned to address. With an expected 30% increase in the elderly population over the coming five years, demographic trends are supporting strong growth for elderly care in all of our markets. Given that people are becoming healthier for longer in combination with the higher cost to serve in nursing homes, we also believe that demand for home care services will increase faster than for nursing home placements over the coming years. In disabled care and individual and family care, we see a trend that public payers need increasing support with taking care of more complex and specialized care needs that neither smaller municipalities nor smaller providers can cater to. The recent acquisition of Team Olivia hence gives us the size to enable increased investments in the competence, quality and methodology development needed to capture these future growth opportunities. Finally, we're looking forward to keep growing through a combination of greenfield expansion, acquisitions, and through improving occupancy in our existing business in the coming years. With a strong underlying cash flow, we can also continue our path with active capital allocations through share buybacks and dividends to create increasing shareholder value as we continue to grow. Slide four, please. So to summarize 2024, I'm really happy to say that we achieved record high satisfaction numbers for both customers, relatives and employees in both Finland and Sweden. In Finland, we continue the positive development in 2024, especially in the second half of the year, where we focus more on operational efficiency after several years of increasing staffing density requirements. In Scandinavia, we completed the integration of Team Olivia and built a stronger platform for profitable future growth in both home care, disabled care and IOF. We continue to generate strong cash flow, which has enabled us to continuously buy back shares. And all in all, we deliver on our 2024 least adjusted EPS target set in 2021, coming in slightly above our target of four SEC per share. I'll now give an overview of the development in the last quarter, followed by a more detailed financial analysis from our CFO, Mikael Malgren. Next slide, please. In the quarter, we took our growth pace back to double digits, showing a year-over-year sales growth of 10%, mainly driven by pricing in Finland and the addition of Team Olivia in our Scandinavian business area. Underlying adjusted EBITDA improved by almost 90%, or 118 million to 254 million, an effect of both underlying operational improvements and the acquisition of Team Bolivia. In Finland, we had continued positive impact from pricing in disabled care and social psychiatry, and slightly more sold beds. We also saw improvements in operational efficiency from Q3, continued into Q4, and a testimony to the efforts we made to improve staffing, reduce sick leave, and have the right planning in light of ongoing changes in regulation. Scandinavia continues to show progress in earnings growth, mainly attributed to the integration of Team Olivia and improvements in our nursing operations. On the downside, the result was hampered by ended outsourcing contracts and a significant calendar effect in December versus last year. So although we're not fully satisfied with the result in the fourth quarter, we have achieved a lot structurally over the year. With integration completed, a stronger organization in place, and new offerings, we had good opportunities to improve profitability in Sweden during 2025. Occupancy was slightly down, mainly due to a mix of new beds added, seasonal effects, and a slight net outflow of customers in Finland. Next slide, please. One of our primary ways to show how we create value for society is to measure satisfaction among key stakeholders. I'm happy to report that we have taken a significant leap in the national user service for elderly care both in Finland and Sweden during the autumn, putting us well ahead of both public sector and national average in the nursing home segment. In Q4, we received similar positive results in the disabled care and individual and family segment in Sweden. Internally, we continuously measure and report net promoter scores among key stakeholders. And in Q4, we see continued improvements in all three of our main target groups, employees, customers and relatives. This is a testimony to our dedicated work to improve conditions for employees, strengthen local leadership and provide better tools for planning and running an efficient and appreciated day-to-day care operation. It also strengthens our belief that there is a strong correlation between engaged employees and stakeholder satisfaction. Next slide, please. So let's turn to occupancy development. Group occupancy at the end of the year was 85%, a slight dip compared to last year. In Scandinavia, occupancy remained at 87%. In line with both last year and last quarter. Due to contracts ended in the quarter, we have slightly fewer beds in operation compared to Q3. Despite slightly more sold beds in Finland in the quarter, occupancy was slightly down compared to last year, mainly a temporary seasonal effect as more customers than usual went home for Christmas holidays, but also to added capacity. Occupancy in Finland has been fairly flat in the past years, while staffing density requirements has been steadily increasing. The return to lower staffing density requirements from January 1st will improve the supply-demand balance on the labour market for qualified care staff. It should also somewhat reduce the financial pressure on the welfare regions. Hence, we believe that this will lead to higher demand for nursing home placements going forward. This graph shows rolling 12-month sales growth in least adjusted EBITDA margin. The most significant driver for sales development over the past 12 months has been improved terms in our Finnish operations and the acquisition of Team Olivia in Sweden. Looking at the group margin, it has continued to improve during the year, mainly driven by better terms and higher operational efficiency in Finland. In Scandinavia, we have managed to further improve margins somewhat in nursing homes, but having said this, the integration of Team Olivia has taken more focus and effort than we anticipated during the second half of the year. With the integration now successfully completed, we will direct more focus on operational efficiency and margin improvement in Scandinavia going forward. So let's take a look at financials for the quarter.

Please go ahead, Mikael. Thank you, Martin, and good morning, everyone. So let's turn to page nine. Net sales in the quarter increased to 4.9 billion SEK, up 10% compared to quarter last year. The organic growth for the quarter was 2%. Organic growth was slightly negative in Etendo, Scandinavia, where we saw continued organic growth in primarily owned nursing homes. However, growth was impacted by outsourcing contracts that ended end of last year. Including acquisitions, Scandinavia grew 19%. In a tent of Finland, the organic growth was 5% and primarily driven by improved terms with several of our key segments showing positive growth. Currency had no material effect in the quarter. Slide 10, please. Excluding non-recurring items of 29 million, the reported result improved to 423 million, and correspondingly, the lease adjusted EBITDA increased from 136 to 254 million, up 87% versus last year. Lease adjusted EBITDA in Scandinavia improved by 8 million year over year, while Finland lease adjusted EBITDA improved 103 million year over year. Currency had no effect on lease adjusted EBITDA. Next slide, please. Growth for a tent of Finland amounts to 5% reported and 5% in local currency. Least adjusted EBITDA excluding non-recurring items was 201 million and an improvement of 103 million compared to last year. The quarter was, and as same as previous quarters, impacted by better terms across main segments. However, the quarter was further improved by, and as already seen in last quarter, a better operational efficiency. Occupancy rate was fairly flat when adjusting for seasonality with more sold belts and also more capacity added. The Finnish parliament announcement of change staffing requirements and care for older people from 0.65 to 0.60 care staff per resident was passed in the quarter and took effect from 1st of January 2025. We believe that we are well prepared for the change and expect that the reform will ease the balance on the Finnish labour market going forward. Finally, a majority of price negotiations with welfare regions are done, which indicate a stable and flat price versus cost development in 2025. Slide 12, please. Organic growth in Scandinavia was slightly negative, and we saw continued underlying growth in own nursing homes. However, growth was offset by lower revenues due to the outsourcing contracts that ended end of last year. Acquisitions had a considerable effect on sales and in total, Scandinavia grew by 19%. Lease adjusted a bit excluding non-recurring items relating to finalizing the integration of Team Olivia increased by 8 million to 69 million. The improvement was primarily driven by Team Olivia acquisitions and improved results from own nursing homes. Improved results was partially offset by ended outsourcing contracts, which had a negative 15 million SEK impact versus Q4 last year. Going forward, ended outsourcing contracts would have minor to no impact on the result in 2025. Similarly, calendar effect with more unsocial hours and also canceled care hours and especially home care during the holiday impacted the result negatively and is estimated to 50 million SEK. By the end of the quarter, the Team Olivia integration was successfully concluded. And while the integration took more focus from the day-to-day operations than planned, we now look forward to turning our full focus to realizing the full potential and as a first step to further improve our profitability during 2025. Slide 13, please. While the rolling 12-month, and as previously communicated, has been affected by two one-off items in Q1 and Q2, our free cash flow still improved to 732 million SEK, where Q4 free cash flow reached 422 million versus 404 million last year. In the quarter, networking capital was slightly lower due to timing effects between quarters and versus last year. CapEx was higher and will, as previously communicated, continue to normalize at more historical levels compared to last year's low. During the quarter, we had a strong share repurchase outcome, buying back a total of 124 million worth of shares. In Q1 I'm in, we have continued to repurchase an additional 45 million worth of shares. And today we announced that we will continue our repurchases until next quarterly report under a new program. The new program aims to repurchase up to 150 million and will be executed as previously under safe harbor regulation. Next slide, please. Over the course of the last 12 months, we have, in line with our financial plan for 2024 to 2026, initiated a more active capital allocation. As a result, we utilized more than 70% of our free cash flow for dividend and continued share buybacks. In addition, we had made a transformative acquisition with Team Olivia in April, and which was financed by both own cash and additional debt. And during the latter part of the year, we also paid down some of our debt. Next slide, please. Let's look at our key financial metrics, and I'm happy to share that all key metrics are improving in the right direction. If we start at the top left, the adjusted earnings per share improved by 0.43 sec per share or 0.49 sec per share when excluding integration costs, which is equal to more than 90% uplift versus last year. Improvement primarily due to higher lease adjusted EBITDA and continued share buybacks, and was as expected slightly offset by increased income tax. If we turn our attention to the top right figure and our lease adjusted margin in percent adjusted for non-recurring items, we continue to improve our lease adjusted EBITDA. In Q4, the rolling 12 month margin was 5.4%, up from 4.9% last quarter and up 1.1% compared to Q4 last year. If we instead look at the figure at the bottom left, we can see that we also continue to improve our least adjusted net debt to EBITDA ratio down to 1.7 times by end of Q4. And finally, when we look at the figure on the bottom right, net interest expense in the quarter was 36 million. The increase in Q2 and in Q3 is explained by higher financing costs due to the recent acquisition. While in Q4, we now see the effects of improved market interest rates and improved debt utilization. Next slide, please. I'd like to briefly recap on our adjusted EPS development. In 2022, our adjusted EPS was 0.68 sec per share. In 2023, we made a significant turnaround based on the plan we set out in 2021, and we achieved an adjusted EPS of 3.02 SEC per share. In 2024, our reported adjusted EPS reached our next milestone, i.e. an EPS of more than 4 SEC per share, an important step towards our long-term goal of reaching at least 550 per share in 2026. We can also see the effect of continuous share buybacks, which has a lagging effect on the reported EPS since we divide each month adjusted net profit with average shares outstanding at that time. So when we adjust our EPS with closing balance shares end of the year versus average shares during the year, the run rate EPS improves to 4.19 SEC per share. And if we exclude the communicated non-recurring items relating to the integration of Team Olivia, the EPS run rate amounts to 4.37 SEC per share. With that, I hand over to you, Martin.

Thank you, Mikael. Before we move on to the Q&A, let me just briefly summarize. For the full year 2024, we can conclude steady improvements, both financially and operationally, with higher stakeholder satisfaction and improved profitability. In Finland, we have continued to adapt to the new conditions imposed by the changes in staffing ratios. In spite of changing regulatory environment, we've been able to improve our quality of services, stakeholder satisfaction and profitability during 2024. In Sweden, we have strengthened our market position by adding Team Olivia to our operations and launching the new brands Unica and Viljan. All in all, the integration is taking more effort than anticipated, but with the integration now concluded, I see good potential going forward to continue growing in the area of complex care needs and to refocus the organization on occupancy growth and operational efficiency. We have a strong financial position with stable cash flow, allowing us to continue with active capital allocation in 2025. As early suggested, EPS has improved by almost 35% since last year. The board is proposing to the AGM that we raise the dividend to 1.20 SEK per share for 2024, as well as a continuation or share buybacks. That concludes our presentation, so let's turn to the Q&A session operator. Please go ahead.