Release Date: July 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Attendo AB (FRA:7AT, Financial) reported a 12% increase in sales for Q2, primarily driven by the acquisition of Olivia Care.
- The company's underlying adjusted EBITA improved by SEK40 million to SEK187 million.
- Employee engagement and customer satisfaction metrics showed strong progress, with a Net Promoter Score reaching an all-time high of 26.
- The company reported strong cash flow during the quarter, maintaining a strong balance sheet despite recent acquisitions.
- Occupancy rates in Scandinavia increased by 1 percentage point, indicating improved operational efficiency.
Negative Points
- In Finland, the company faced a negative cost price effect due to high wage increases in 2023.
- Customer inflow in Finland was initially lower than expected, leading to inefficiencies in staffing.
- The company experienced lower revenue from outsourcing contracts that ended at the end of last year.
- Attendo AB (FRA:7AT) expects Q3 to be impacted by additional nonrecurring integration and divestment costs for Denmark of around SEK20 million.
- Net interest expense increased due to acquisitions, and this trend is expected to continue.
Q & A Highlights
Q&A Highlights from Attendo AB (FRA:7AT) Q2 2024 Earnings Call
Q: Can you quantify the earnings impact from Team Olivia? Also, what are your expectations for occupancy in Finland and the new staffing regulation?
A: Team Olivia delivered close to SEK30 million, slightly better than our expectations. Regarding Finland, we experienced slower development in H1 due to financial constraints in welfare regions. We expect slight improvement in H2 and positive impact from new staffing regulations starting in 2025. (Mikael Malmgren, CFO; Martin Tiveus, CEO)
Q: Could you elaborate on the development in social psychiatry and disabled care in Finland? Will this improve earnings in Q3?
A: We saw improved terms and growth in occupancy in our disabled care segment. We don't foresee an improvement in EBITDA in Q3 but expect a similar pattern to Q2. (Martin Tiveus, CEO)
Q: What are the expected improvements in Denmark's profitability? Will Denmark show black numbers adjusted for one-offs in Q3?
A: We have successfully implemented operational improvements and see increased occupancy. We maintain our target to break even in Q4 on a run rate basis going into 2025. (Martin Tiveus, CEO)
Q: Can you comment on the net wins from new outsourcing contracts in Sweden? Also, is the EPS target for this year inclusive of the Olivia acquisition?
A: We have reorganized our approach to focus on quality tenders, not price. The SEK4 billion EPS target includes Team Olivia. (Martin Tiveus, CEO)
Q: Do you expect prices in Finland to be net up next year with the new staffing regulation?
A: We don't expect major price movements next year. Costs will be similar to this year, and we expect profitability to remain stable. (Martin Tiveus, CEO)
Q: Can you quantify the loss in Denmark for the second quarter?
A: Losses improved by approximately SEK5 million compared to last year. Previously, we communicated about SEK40 million annually, and Q2 is similar to the average. (Mikael Malmgren, CFO)
Q: Were the nonrecurring payments in Finland incurred in the P&L this quarter?
A: No, these were communicated as part of the 2023 salary agreement and were provisioned monthly until June when fully released. (Mikael Malmgren, CFO)
Q: What caused the slight downtrend in occupancy in Finland this quarter?
A: The downtrend was due to net new homes added in the quarter. (Mikael Malmgren, CFO)
Q: Can you quantify the annual EBITDA impact from the business exits in Denmark?
A: The homecare business exit will have a positive SEK10 million annualized impact, and the outsourcing contract exit will add another SEK2 million annually. (Mikael Malmgren, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
