Attendo AB (publ)

Thank you and good morning everyone. Today we present the results for the first quarter of 2025 before diving into the development of the quarter. So just let me zoom out to make some comments on the status and strategy going forward. Slide two please. As a private welfare company, our mandate to do business and keep growing is closely linked to our ability to deliver a more appreciated and specialized care with higher stakeholder satisfaction at a lower cost to society than the public sector. Last year we completed the acquisition and integration of Timo Levi in Sweden and strengthened operational efficiency in Finland. Hence we entered 2025 with more diversified operations. From an operational point of view, we have made strong progress in terms of stakeholder satisfaction among both customers, relatives, employees and payers. Last year, according to national satisfaction surveys, we reached both higher satisfaction scores among care customers in both markets while delivering care at a clearly lower cost than public providers. Hence making room for increased availability to care services. This goes hand in hand with our long-term vision to deliver better care to more people. Next slide please. In the first quarter, we grew top line with around 8%, mainly driven by the acquisition of Timo Levi and more sold beds. Underlying adjusted EBITDA improved by 71 million or 44% to 234 million, an effect of both underlying operational improvements, increased occupancy in nursing homes and the Timo Levi acquisition. In Finland, we had positive effects for more sold beds in combination with continued improved operational efficiency, both in general and related to new lower staffing requirements that came into effect January 1st. In Scandinavia, we delivered expected earnings growth related to the integration of Timo Levi and improvements in own nursing home operations, mainly from inflow of new customers. Having said that, we also had some negative headwind from Homecare and slightly higher cost base due to new openings in recent quarters. Lease adjusted EBITDA per share continued to improve to 4.63 sec, an improvement by 46% compared to the first quarter last year. Our strong EPS growth is mainly linked to higher earnings, but also an effect of our share buyback program, reducing number of outstanding shares. All in all, we're well on track towards our adjusted EPS goal of minimum 550 per share in 2026. Nothing comments on the progress of our sustainability work and non-financial KPIs. Over the past few years, we've gradually been implementing new evidence-based methods to measure quality of life of individual nursing home residents. While we've been piloting these methods since 2021, we've now implemented them broadly in all of our nursing homes. In Sweden, we've introduced a method called ASKOT while we use a method called RAI in Finland. The purpose is to measure and improve the health and wellbeing of our nursing home residents. The results 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 residents experiences a positive impact from the care, food and services that we provide. The results indicate that this way of working with improving quality of life is having a positive impact on our nursing home residents. While it's still 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 build more knowledge about what actions that have the most impact on our residents' health and wellbeing to further develop our care operations for the future. So let's turn to occupancy development. In Scandinavia, we saw a solid inflow of new customers early in the quarter. Hence, occupancy remained almost flat in Scandinavia at 87%, despite the opening of a new 60-bed nursing home in Stockholm during the quarter. Finland showed a more distinct improvement in the quarter, bouncing back from the seasonal effect that brought occupancy down over the Christmas holidays. During the quarter, we also made two acquisitions with a total of 200 beds at 90% occupancy, which, in combination with the close down of a few low occupancy units, also impacted the occupancy level positively. This graph shows a rolling 12-month sales growth and least adjusted EBITDA margin. Sales continued to improve in the quarter, mainly driven by the acquisition of Team Olivia in Sweden and more sold beds. Sales in Finland remained strong, despite flat prices versus last year, as a result of the lower staffing requirements valid from January 1. If we look at the group margin, we continue to improve as more sold beds and higher staffing efficiency in Finland drives earnings recovery. In Scandinavia, we improved margins due to improved operational efficiency in own nursing homes and the Team Olivia acquisitions, slightly offset by weak development in the home care segment. As part of our strategy, we have terminated a few selected home care contracts with unsustainable business terms during the quarter. So let's take a look at the financials for the quarter and please go ahead, Mikael. Next slide please.

Thank you Martin and good morning everyone. Net sales in the quarter increased to 4.7 billion, up 8% compared to quarter last year. The organic growth for the quarter was 2%. Organic growth was flat in the tend of Scandinavia, where we see continued organic growth in primarily owned nursing homes. However, growth was also impacted by outsourcing contracts that ended last year, including acquisitions. Scandinavia grew 19%. In a tend of Finland, the organic growth was 2% and primarily driven by increase in net new customers, with several of our key segments showing positive growth. Adjusting for leap day and the exited rehab business end of last year, the underlying growth was approximately 4%. Currency had no material effect in the quarter. However, we do expect currency effects in Q2, since last year the euro to SEC was at a higher rate than currently trading. Next slide please. The reported result improved to 381 million and correspondingly the lease adjusted to Bita increased from 161 million to 234 million, up 45% versus same period last year. Lease adjusted to Bita in Scandinavia improved by 26 million year over year, while the Finland lease adjusted to Bita improved 52 million year over year. Currency had no material effect on lease adjusted to Bita. Next slide please. Growth through a tend of Finland amounts to 1% reported and 2% in local currency. As earlier mentioned, adjusting for leap day and exited rehab business December last year, the underlying organic growth was approximately 4%. Lease adjusted to Bita was 189 million, an improvement of 52 million compared to last year. The Finnish parliament announcement of change staffing requirements and care for older people from 0.65 to 0.60 care staff per resident took effect from 1st of January 25 and the team delivered an implementation better than the base plan. The quarter improved by, and seen already in the last quarter, from better staffing and manning. Occupancy rate improved when adjusting for seasonality with more sold beds and from exiting a few low or no occupancy units. In the quarter we also opened a new nursing home and acquired two quality nursing home businesses, which added an additional 200 placements. Next slide please. In Scandinavia, the organic growth was flat. We saw an underlying growth in own nursing homes. However, growth was offset by ended outsourcing contracts. Acquisitions had a considerable effect on sales and in total Scandinavia grew 19%. Lease adjusted to Bita increased by 26 million to 68 million. The improvement was primarily driven by team Melidia acquisition and improved results on nursing homes. In the quarter we opened a new nursing home in Stockholm and closed down one unit, which together had a negative 10 million SEC impact versus Q1 last year. Next quarter will also be impacted by startup costs as we're opening a new home in Denmark and we carry ramp up costs from March opening. In addition, a weak home care impacted the result negatively in the quarter. Finally, as part of our strategy, we terminated a few selective home care contracts where sustainable conditions mainly no longer exist. In Q2, we expect exits to impact our results by 10 to 15 million in one time exit costs. Next slide please. If we look at our cash flow, our cash flow improved to 752 million on a rolling 12 month basis, where Q1 free cash flow was 40 million versus 20 million last year. CAPEX was higher and as previously communicated, is continuing to normalize at more historical levels compared to last year's low. During the quarter, we also had a strong share repurchase program, buying back a total of 162 million SEC worth of shares. The cash flow was further impacted by recent acquisitions, which totaled 125 million SEC in the quarter. Next slide please. Over the course of the last 12 months, in line with our financial plan for Q24 to Q26, we initiated a more active capital allocation. As a result, we have utilized more than 80% of our free cash flow for dividend and continued share buybacks. In addition, we made a transformative acquisition with Team Olivia in April, and which was followed up by two quality Bolton acquisitions in Finland in this quarter. Next slide please. Let's have a look at our key financial metrics, and I'm happy to share that our key metrics continue to move in the right direction. If we start at the top left, the adjusted earnings per share improved by 0.56 SEC per share, almost doubling the EPS versus last year. Improvements primarily due to higher lease adjusted to BITA, but also lower financial costs and our share buybacks, which continue to support the improvement. If we turn to the top right figure and our lease adjusted margin in percent, adjusted for non-recurring items, we continue to improve our lease adjusted margin. In Q1, the rolling 12 month margin was 5.7%, up from .4% last quarter, and up .2% points compared to Q1 last year. If we direct our attention to the figure at the bottom left, we maintain our lease adjusted net debt to EBITDA ratio versus last quarter, which is in line with our target range, a 1.5 to 2.5 ratio. And finally, when we look at the figure on the bottom right, net interest expenses in the quarter was 31 million. The increase in Q2 and Q3 is explained by mainly higher financing costs due to the recent acquisitions. While in Q4 and Q1, we see the effect of improved market interest rates. With that, I hand over to you Martin. Thank you Mikael.

Next slide please. So before we move on to Q&A, let me just briefly summarize. So we started this year with the same strong trajectory as we ended last year. Improvements in financial performance stems mainly from our finished business, where a quick adoption to new staffing requirements and operational improvements have led to continued solid earnings growth. We also made two Bolton acquisitions during the quarter and continue to optimize our footprint through closing some non-performing units. We maintain a positive outlook for the year ahead as lower staffing requirements also gives regions financial relief that can transform into higher demand for nursing home placements. In Sweden, the team Olivia acquisition has strengthened our operations and contributed positively to our financial development. We expect to further improve operational efficiency post the integration period and build a stronger platform for growth within both both disabled care and .O.F. I'm also happy to see more solved bets in non-nursing homes and that the newly opened nursing homes added in late 2024 and early 2025 is filling up quickly. All in all, we're well on track towards our adjusted EPS target of at least 550 per share in 2026. So that concludes our presentation and let's turn to the Q&A session. So operator, please go ahead.

To ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from David Johansson from Nordia. Please go ahead.

Okay, good morning. Thank you for taking my questions. I have three, please. So first one on Finland, you know, it seems like the efficiency improvements is well underway now with the changed staffing regulation. So would you say now that we have seen the full effect of that adjustment now in Q1 or perhaps if there are further efficiencies expected from staffing also for Q2? And of course, the occupancy has picked up nicely as well. So if you could bridge those two together and how we should think about the margin outlook going forward, that would be helpful.

Yeah, so as you can see, this quarter and following the trend from Q4 last year, I think we have a very strong staffing efficiency now in Finland. Staffing efficiency was slightly decreased in the first part of the quarter in January, but we managed to transition quite fast this time. So it had some effect early in the quarter, but I'd say, you know, two thirds of the quarter was on par where we should be going forward. So you should expect sort of a similar staffing efficiency in the quarters out in Finland. In terms of occupancy, we did see a positive effect on selling more beds in the first quarter. We had expected somewhat of a sales effect as prices have been flat year over year due to the new staffing regulations. So it should improve conditions for the welfare regions in Finland to do more placements. Then, of course, early days. So we're still a bit conservative in terms of our plan forward. So in terms of the financial plan, we have a conservative outlook of improving occupancy with at least one percent per year. And I think that we'll keep that for now until we see how things turn out. But a promising start.

OK, that's encouraging. And in terms of, I think, seasonal effects, could you remind us of that impact and how that looks for Q2 for both divisions? Thank you.

Yes, so for if we start with Q1, obviously we had the lead day effect. On the other hand, we had no Easter. So we had one red day less. So for Q1, the seasonal impact was fairly limited in both business areas. Obviously, there will be a somewhat seasonal effect from Easter this year as we're adding one one day. Of red day. For Q2.

All right. But if you sort of looking between the divisions, would you say the impact is larger in Finland or in Scandinavia? Or how should we think about that?

I mean, it's slightly larger in Finland than in Scandinavia, as it's a bigger market for us.

All right. Then last question for me. Looking at the home care business now after facing out the home care contracts in Västerås and Linköping. So do you anticipate an extraordinary cost of that nature from this beyond the 10 to 15 million exit costs I think you alluded to? And have you seen this affecting other areas of the home care business or your dialogue with the customers anyway? Thank you.

Thanks. So first question. Yes, we have a one time cost of 10 to 15 million. Which is more related to exit costs of primarily for Västerås contract. I think as we also commented in the release, we exited a few selected contracts due to unsustainable terms. Västerås was one of them, but also the largest one. So it is connected with some exit costs but limited. Going forward, we don't expect that effect to spread. And we have a very solid and good home care business overall. And normally we also have a very long term about our home care contracts. These were three contracts we have had discussions over the past one to two years around terms and conditions. And we haven't managed to get to better terms and then we decided to exit. But that's just part of our normal strategy so to speak.

All right. That's all for me. Thank you. Thank you.

The next question comes from Jakob Lemke from SEB. Please go ahead.

Hi and good morning. My first question on Scandinavia. It would be interesting to hear the outlook for earnings improvements here in the coming quarters given that you don't have the Timo-Liga delta anymore.

Yeah, no, we still remain positive if we exclude the extraordinary cost that we will continue to see a margin improvement in Scandinavia. We are still positive about earnings improvements for Denmark and the synergies as well from the Timo-Liga integration that we expect to see in the coming quarters.

Do you think that it's possible to improve margin in Q2 also when you have the negative Easter effect?

I mean, we don't comment on the exact numbers, but we still remain confident that we can improve margins slightly in the coming Easter as well.

Then on Finland, with the occupancy increase we see here now in Q1, would you say that there is sort of a trend shift behind that? That you're now seeing more customer inflow?

One quarter is no trend, but it was a positive start, a promising start.

If I can rephrase, has it continued into the beginning here of Q2 as well?

We don't comment on that. We normally don't do that, but it was a promising start. We are a bit conservative after a few years of flat development in Finland, so looking forward to keep commenting on it in the next coming quarters when we see a trend for Q2.

I guess that's fair enough. Just a question regarding share repurchases. I noticed that you did not announce a new program here this morning. What expectations should we have going forward?

We have the idea that we don't have a mandate for a new program until after the general meeting, which is this afternoon. Such announcements will come later. We are also looking at capital allocation as such. We have made a few acquisitions earlier this quarter. We are looking at other potential opportunities as well. We are true to our long-term strategy to continue to share buybacks, but we are evaluating options short-term for the next one to two quarters.

A final question. I noticed there was a large tax cash out here in Q1. What is behind that and how would you think about taxing the common quarters?

We made an extraordinary payment for the full year of 2024, so to say a fylnadsinbetalning in Finland for 2024. We expect the normalized average tax rate otherwise to be around the previously 20-22%.

That's all from me. Thank you very much.

The next question comes from Christopher Lilleberg from Carnegie. Please go ahead.

Good morning. Yes, I'm wondering about the Scandinavian model and whether it would be possible maybe to talk a little bit and explain the dilutive effects now from home care and Denmark and whether the model in the residential living segment is more similar to what you have in Finland. And related to that, I also wonder if the higher occupancy in residential living were able to offset the startup cost you had in the quarter. Thank you.

Okay, so I mean, as we communicate before, we are close to break even or break even in Denmark and we've said that we expect that to deliver a 20 million positive impact for the full year. The residential living is doing well and is offsetting the improvements is offsetting and somewhat more the cost of starting up new units.

And the home care business is that loss making right now for you?

No, it's not loss making. However, it was weaker as you can anticipate from this quarter than last year.

Okay. And when you said that underlying improvement in residential were able to offset the startup cost, is that also adjusted for the M&A contribution from the Olivia acquisition?

Yes, that's separate.

Okay, great. Thank you.

And if you wish to ask a question, please dial pound key five on your telephone keypad. More phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Well, there seems to be no question that we haven't yet answered. We had a question from Julia Antonello at the Riga Partners on the Shared Buy By program. But I think that we already answered that in the previous question from from SCB. So with that, if no further questions, then thank you. You know where to reach us if you want to reach out for the questions. Otherwise, have a great day and thank you for calling in. Thank you very much.