Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Attendo AB (LTS:0RCY, Financial) reported an 8% organic growth and a 39% increase in EBITA year over year, driven by improvements in Finland.
- The acquisition of Team Olivia's care business in Sweden is expected to strengthen Attendo's position in disabled care and individual and family care segments.
- The company has significantly strengthened its financial position, reducing net debt to EBITDA, allowing for active capital allocation and selective M&A.
- Attendo has implemented new evidence-based methods to measure and improve the quality of life for nursing home residents, showing positive initial results.
- The company has set a target to achieve at least SEK5.50 earnings per share by 2026, indicating confidence in future growth and profitability.
Negative Points
- Sales in Q1 were lower than anticipated, impacting staffing efficiency and personnel costs.
- The overall result was negatively affected by losses in Denmark and ended outsourcing contracts.
- Occupancy rates remained flat, with a target to increase by only two to three percentage points in 2024.
- Scandinavia experienced margin pressure due to a sharp drop in occupancy during the pandemic and issues in Denmark.
- Higher salary increases in Finland are expected to impact Q2 and Q3 earnings negatively.
Q & A Highlights
Q: Can you provide an indication of the price increases in Q1 year over year in Scandinavia and Finland?
A: The price increase was approximately 4% in both business areas.
Q: How much sequential underlying improvement can we expect in earnings in Scandinavia in Q2 versus Q1 before adding Team Olivia?
A: We expect it to be slightly better than Q1 underlying.
Q: How are you able to improve margins sequentially in Finland despite unchanged occupancy, considering the early Easter holidays in Q1?
A: There was a slight negative impact from the seasonality of Easter, but the sequential improvements in profitability are primarily related to the Q1 price increase compared to last year.
Q: Regarding the Finnish government's decision to reduce staffing requirements, you mentioned it won't significantly impact profitability. Could you elaborate?
A: The change from 0.65 to 0.60 care staff per resident will reduce labor market pressure and salary inflation, potentially benefiting occupancy and cost stability. It's part of a larger budget savings package, and we expect margins in Finland to remain fairly intact.
Q: What is the potential for growth in the Team Olivia business in the coming years?
A: We see both pricing and volume growth potential. We plan to open six new houses this year, which could lead to slightly higher volume growth in that segment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
