Attendo AB (publ)

Welcome to Attendo Q2 Report 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Martin Tiveas and CFO Michael Malmgren. Please go ahead.

Thank you and good morning, everyone. Today, we present the 10 most results for the second quarter of 26. As usual, we'll focus on the key drivers behind our performance, our operational progress, and how we continue to execute our strategy. I will start by giving a general update on the development in the quarter, and then our CFO, Mikael Malmgren, will take you through the financials in more detail. Next slide, please. So let me start with the key highlights from the quarter. I'm pleased to present a strong quarter with improved results in both business areas, driven by higher occupancy, improved operational efficiency, and a strong delivery on our quality indicators. Customer satisfaction reached the highest level we've measured so far, and employee satisfaction continues to improve from already high levels. While reported net sales increased by 1%, underlying growth in continuing operations remains strong at around 5%. The delta is explained by ending outsourcing and home care contracts in Sweden as well as currency effects. Profitability improved significantly with lease adjusted EBITDA increasing by 56% to 321 million kronor. On the rolling 12-month basis, lease adjusted EBITDA margin improved by 2 percentage points to 7.8% for the group. Adjusted earnings per share increased by close to 80% in the quarter, and we delivered a strong free cash flow of 269 million, supporting increased investments in new capacity. By continuing to develop quality of care and by adding new capacity to society, we are part of the solution to the care challenges of both today and tomorrow. Next slide, please. Before we go into the quarter in more detail, just let me briefly recap the plan we presented in February. Since 2023, we have doubled our adjusted earnings per share from 3 kronor to 6 for the full year of 2025. That was the delivery of our previous financial plan. In February this year, we announced a new financial target to reach an adjusted EPS of at least 9 kronor per share by 2028. In other words, another 50% increase from last year's level. We illustrated the EPS journey from 6 to at least 9 kronor per share with three building blocks. The first building block is margin improvement in Scandinavia, where we communicated an expected margin uplift throughout 2026, driven by improved staffing accuracy, focused non-operations, exiting of unprofitable contracts, and improvements in ways of working. As you can see in our Q2 numbers, and also later in this presentation, the margin uplift in Scandinavia is already well underway. The second building block is our core growth model that we have followed over the past five years, what we call the balanced growth model. I will return to that in a moment. And the third building block is active capital allocation. Primarily through continuous share buybacks conducted within our mandate, we will target to buy back around 5% of outstanding shares per annum. After the second quarter of 2026, our rolling 12-month adjusted EPS reached 7.14 kronor, well on our path towards our financial target of reaching at least 9 per share by 2028. So let me just spend a moment on the balanced growth model itself. Next slide, please. Our model for balanced growth contains several growth levers that over time can fluctuate a bit between quarters and years, but together they build up to an EBITDA growth of at least 10% per annum. Newer capacity through greenfield openings contributing to average around 2-3% of growth per year. Marginal creative bolting acquisitions contributing around 2%. Occupancy improvement, where we assume at least 1 percentage point of improvement per year in existing capacity, That 1% point higher occupancy together with better ways of working typically also translates into higher productivity contributing to around 2%. Further, we have economies of scale effects and finally price compensating for annual cost inflation. On top of annual growth in EBITDA, continued share buybacks supports an even higher growth rate in adjusted earnings per share. As I said in the beginning of this presentation, in this quarter, we were in line with or ahead of plan on all these growth levers. Let me show you three where we have the most report today, which is new capacity, acquisitions and occupancy. Next slide, please. So starting with new capacity, this slide shows our project pipeline. As you can see, we now have around 900 places under construction, 600 in Finland, about 300 in Scandinavia, and we have signed agreements for a further close to 600 places where construction has not yet started. Over the next 12 months, we will open around 770 new places across Finland and Sweden. Already construction started projects, as you can see, now corresponds to around 4% of our total capacity. After planned closures of units with low occupancy or weak economics, that well supports the 2-3% net capacity growth in our balanced growth model and gives us good visibility on openings into 2027 and 2028. Next slide, please. The second growth lever is M&A, where we over time expect around 2% EBITDA growth per annum. Our approach is to acquire high-quality, marginally-created bolt-ons in segments we know well, and we integrate them into our own quality systems and ways of working. Year-to-date, we made four transactions, two smaller bolt-ons in Finland, completed early in the year, and another two strategic acquisitions signed during the second quarter. One is Skåningegård in southern Sweden, with nine units within disability care, individual and family care, and elderly care, and the other one being A-Klinika in Finland, with 17 units within substance abuse and addiction treatment. Combined, these businesses represent around 450 million kronor in net sales and around 50 million kronor in lease-adjusted EBITDA before synergies. That corresponds to roughly 4% EBITDA growth relative to our 2025 results. Hence, we've already delivered more than the full year ambition of at least 2% from acquisitions. Further, A-Klinika in particular strengthens our position in specialist care in Finland and broadens what we can offer the welfare regions. Next slide, please. The third growth lever is occupancy, and here we continue to deliver above the one percentage point per year that we assume in the model. We ended a quarter at 88% for the group, up around two and a half percentage points year on year. In Scandinavia, we see a clear improvement in occupancy from more sold beds and from active capacity management. During the quarter, we closed one old nursing home with poor location, In Finland, occupancy was 87% against 85% last year and stable sequentially. The second quarter is seasonally softer in Finland in combination with several openings during the quarter. Occupancy carries a very high drop through to earnings and we continue our path back to our target of reaching at least 92% average occupancy for the group, which is in line with historical levels. Next slide, please. So let's turn to the development of our rolling 12-month lease-adjusted EBITDA margin. So we see a continued margin uplift in both business areas, both sequentially and year-on-year. Rolling 12-month group margin is up to 2 percentage points from a year ago to 7.8. Finland has now delivered a steadily improving margin trajectory for 14 consecutive quarters. In Scandinavia, we expect to continue to gradually improve margins during 2026. You can also note that rolling 12 months net sales has been broadly flat at around 19 billion for a number of quarters as an effect of the transition in Scandinavia in combination with currency effects. We expect to gradually return to net sales growth from the second half of this year as the effect of the transition in Scandinavia wears off in combination with acquisitions. With that, I hand over to our CFO Mikael Malmgren. Please go ahead Mikael. Next slide please.

Thank you, Martin. Good morning, everyone. So let's take a look at the sales development for the quarter. Reported net sales increased by 1.3% to north of 4.7 billion kronor. Our continuing operations grew by 4.9%, with growth in both business areas. Scandinavia grew 7%, driven by more sole beds and owned homes, and price. Finland grew close to 4%, excluding the divested individual and family care business, and currency, driven mainly by owned nursing homes. However, reported growth was partially offset by firstly ended and ending outsourcing and home care contracts in Scandinavia, which reduced reported net sales by 113 million. Secondly, last year's divestment in Finland impacted sales by 24 million. And finally, FX headwind had a 22 million negative impact. Ending and exiting contracts, net sales impact, will gradually wear off during the remaining part of 2026 and first half year of 2027. In Scandinavia, only two decided outsourcing exits remain in the portfolio, and both leave in the fourth quarter of this year. Next slide, please. Moving to EBITA development. Reported EBITA improved by 121 million to 470 million. least adjusted EBITDA increased by 116 million to 321 million and up 56% versus same period last year. The improvement is broad-based with least adjusted EBITDA in Scandinavia improving 62 million and substantially higher than last year. and Finland also performing very well, improving lease-adjusted EBITDA by 53 million, excluding FX effects. Group and other items was broadly neutral in the quarter, and currency had a marginal effect on reported EBITDA and lease-adjusted EBITDA. Next slide, please. Turning to Finland. Net sales was 2.8 billion kronor, up 1.9% reported, and 2.7% adjusted for currency. Excluding the divested business and currency, growth in continuing operations was approximately 4%, driven mainly by more sole vets in primarily owned nursing homes. Going forward, we expect to see continued growth driven by new openings and further supported by recent acquisitions. Lease adjusted EBITDA was 235 million against 183, an increase of 29%, or plus 52 million, with the margin improving to 8.4% from 6.7%. Earnings improved in all segments, but the largest contribution came from care for older people. Two things drive it. First, occupancy, up to 87% from 85% last year, supported by higher inflow of new residents and a well-managed start to the summer period. Second, staffing is now well-matched to the needs of the operations, driven by investments in staffing This has been our biggest focus on our agenda in Finland for the past two years. Occupancy development was further supported by our active work to improve our geographical footprint. On capacity, we opened three new homes with 103 places during the quarter. We also took over one home with 59 places in high occupancy from a welfare region. At the same time, we continue to improve our geographical footprint, closing down around 100 places in units with low or no occupancy. We also started construction of two new homes with 65 places. During the quarter, we had a positive net inflow of new customers, and as a result, occupancy was stable despite some summer seasonality. Looking ahead, we plan to sustain our investment in new capacity with currently 600 plus places under construction in Finland. In addition, we have a strong pipeline of signed lease agreements equal to a further 270 plus places where construction has not yet started. Finally, as Martin covered earlier, we completed one Bolton acquisition in Finland during the quarter and A-Klinika, an additional strategic acquisition, closed on August 1st. A-Klinika is expected to deliver incremental EBITDA from January 1st onwards. Post-integration is completed. Next slide, please. So turning to Scandinavia. As communicated already last year, we expect to improve margins in Scandinavia during the whole 2026. In Q2, growth in continuing operations was 7% and offset by ending outsourcing and home care contracts. In line with our financial plan and margin uplift in Scandinavia, lease adjusted EBITDA increased more than 60 million to 106 million, with the margin improving to 5.4% from 2.2%. The improvement has three key drivers. Higher occupancy in our own homes, better operational efficiency, primarily more accurate staffing planning, and improved central support function ways of working. In addition, the second quarter of last year carried non-recurring costs in home care contracts that were being exited. Also in Scandinavia, we continue to improve our geographical footprint, closing one own nursing home, which had zero occupancy already end of Q1. At the same time, we're starting to increase our investments in new capacity, with new openings from Q4 onwards, and so we expect to see gradually positive net sales growth, further supported by the recent acquisition of Skåningegård. Next slide, please. As mentioned previously, net sales growth in continuing operations grew 7% in the quarter to 1.9 billion, and lease adjusted EBITDA grew close to 80%. This marks the third consecutive quarter of improved margins, reaching 5.7%. At the same time, the ended and ending contracts decreased 130 million. The revenue base is now small, and the impact year-over-year will continuously diminish over the next couple of quarters. As a result of our actions, total lease adjusted EBITDA increased 141%, with the margin now up to 5.4%. Next slide, please. We continue to see strong free cash flow on a rolling 12-month basis. That said, free cash flow to firm was slightly lower in the quarter due to timings of working capital. 178 million last year. The change is the main explanation for the year-on-year movement in free cash flow, where the comparison quarter had a more favorable working capital timing development. There's no change in the underlying payment behavior, and we expect this to be reversed ahead of next quarterly update. CapEx investments was stable at 44 million against 49 million. Again, a positive reminder of how capitalized our business model is. The firm was there for 269 million in the quarter and 1.2 billion on a rolling 12-month basis. Worth noting is that we paid our first of two dividends, 129 million, and we repurchased shares of 241 million against 36 million in the comparison quarter. Since the start of share buybacks in February 2024, we have repurchased 5% of outstanding shares on average per year, and the pace we aim to at least continue. As such, I'm happy to announce that the board has approved a new repurchase program targeting to repurchase an additional 250 million worth of shares until the time of the Q3 report in November. Next slide, please. So, a quick look at the key metrics, all of which continue to move in the right direction and ahead of that. starting with the earnings per share bridge on the right. Adjusted earnings per share improved by 79% from 0.85 to 1.52 kronor. By far, the largest contribution comes from the higher lease adjusted EBITDA at around 0.8 kronor per share. Financial items contribute positively as financing costs come down. Tax takes some of that as expected on higher profits and buybacks add further. On a rolling 12-month basis, adjusted earnings per share is now 7.14 kronor. If you look at the top right, the rolling 12-month lease adjusted margin was 7.8%, up from 5.8% a year ago, and improving every quarter throughout the period. At the bottom left, our leverage was 1.1 times, down from 1.7 times comparable period, and in line with previous quarters. Going forward, we expect leverage to increase slightly due to increased investments in new capacity, the recent acquisitions in both Scandinavia and Finland, and due to our active capital allocation. And bottom right, net increase expense was 25 million in the quarter against 31 million. During the quarter, we also refinanced the company one and a half years ahead of time, improving our financial flexibility by an additional 1 billion SEK. With improved financial flexibility supported by our bank group, we are confident to be able to sustain our investments in acquisition, add new capacity, and maintain an active capital allocation. At the same time, we expect a gradual improvement in the net interest expense as the effects of the refinancing comes through. With that, I hand over to you, Martin.