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Attendo

Annual Report Feb 10, 2021

3003_10-k_2021-02-10_45735d15-0ab7-47bf-8590-4b3fd8aa8d8b.pdf

Annual Report

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Attendo AB (publ) Interim Report January–December 2020

Summary of the fourth quarter 2020

  • Net sales amounted to SEK 3,065m (3,054). Adjusted for currency effects, net sales increased by 2 percent. The divestment of the Norwegian operations reduced sales by approximately SEK 100m. Organic growth amounted to 5 percent.
  • Operating profit (EBITA) 1 amounted to SEK 193m (139), corresponding to an operating margin of 6.3 percent (4.6). The estimated financial impact of the pandemic during the quarter is SEK +/- 0m.
  • Adjusted EBITA1 , i.e. EBITA according to the previous IAS 17 accounting standard, was SEK 87m (35), corresponding to an adjusted operating margin of 2.8 percent (1.1). See the income statement on pages 26-27 for more information about the effects of IFRS 16.
  • Profit for the period amounted to SEK 4m (-40). Diluted earnings per share were SEK 0.02 (-0.25). Adjusted diluted earnings per share2 were SEK 0.31 (0.04).
  • Free cash flow amounted to SEK 132m (141).
  • The total number of beds in operation in Attendo's own homes was 17,668 (16,618), an increase by 6 percent. Occupancy in own homes was 80 percent (80).
  • Attendo is presenting updated financial targets, where growth and margin targets have been replaced by a target of adjusted earnings per share of SEK 4 or better in 2023, driven by operational improvements and organic growth. Read more on page 17.

Summary of January–December 2020

  • Net sales increased by 3 percent to SEK 12,288m (11,935). Adjusted for currency effects, net sales increased by 4 percent. The divestment of the Norwegian operations reduced sales by approximately SEK 200m
  • Operating profit (EBITA)1 amounted to SEK 797m (812), corresponding to an operating margin of 6.5 percent (6.8). The financial impact of the pandemic is estimated to SEK -120m.
  • Adjusted EBITA1 , i.e. EBITA according to the previous IAS 17 accounting standard, was SEK 375m (441), corresponding to an adjusted operating margin of 3.1 percent (3.7).
  • The loss for the period amounted to SEK -904m (81). Impairment losses were taken in the second quarter on goodwill and right-of-use assets, which reduced profit for the period by SEK -955m. Diluted earnings per share were SEK -5.63 (0.51). Adjusted diluted earnings per share2 were SEK 1.43 (1.71).
  • Free cash flow amounted to SEK 428m (196).
  • The board of directors is proposing no dividend for the 2020 financial year.
Change Jan-Dec Jan-Dec Change
Mkr Q4 2020 Q4 2019 (%) 2020 2019 (%)
Net sales 3,065 3,054 0 12,288 11,935 3
Operating profit (EBITA)1 193 139 39 797 812 -2
Operating margin (EBITA)1
, %
6.3 4.6 - 6.5 6.8 -
Adjusted operating profit (EBITA)1 87 35 149 375 441 -15
Adjusted operating margin (EBITA)1
, %
2.8 1.1 - 3.1 3.7 -
Profit for the period 4 -40 - -904 81 -
Earnings per share diluted, SEK 0.02 -0.25 - -5.63 0.51 -
Adjusted earnings per share diluted1,2
, SEK
0.31 0,04 675 1.43 1,71 -16
Free cash flow 132 141 - 428 196 -

1) Note that unless otherwise stated, EBITA and adjusted EBITA in this report refer to EBITA/adjusted EBITA excluding items affecting comparability. As of the first quarter of 2020, Attendo also reports adjusted diluted earnings per share in order to improve comparability. See also definitions of key data and alternative performance measures on pages 34-35.

2) Profit for the period attributable to the parent company shareholders excluding amortization of acquisition related intangible assets, IFRS 16 and items affecting comparability and related tax effects divided with the average number of shares outstanding, after dilution.

President and CEO Martin Tivéus comments on the report

In a challenging quarter, development remained positive in Finland and was stable in Scandinavia. Attendo presents new financial targets for 2023.

We continued to sell more beds in the fourth quarter and are reporting organic growth of five percent. The action programme in Finland is progressing as planned and we maintained stable development in Sweden despite the strong second wave of the pandemic. During the Christmas holidays, we began vaccinating customers at nursing homes, which is a prerequisite for normalising operations. Vaccination of customers at nursing homes in Sweden, which has been hit the hardest by the pandemic, is largely complete and vaccination of employees is in progress. Over the next few years, we expect to continue regaining profitability, primarily through the action programme in Finland, operational improvements and organic growth. In conjunction with this report, we are presenting new financial targets, including adjusted earnings per share of SEK 4 or better by 2023.

Action programme in Finland progressing as planned

The positive effects of the action programme in Finland continued in the fourth quarter of 2020 as higher occupancy and price effects compensated for the sharper staffing requirements previously imposed. The combination of the planned low rate of opening new units and high sales pace improved the occupancy rate to 82 percent, up 1 percentage point over the preceding quarter. The second wave of the pandemic had limited impact on Attendo Finland. Net sales in Attendo Finland rose by about 9 percent in the fourth quarter compared to the comparison quarter in 2019. In parallel, EBITA rose to SEK 48 million, an improvement of SEK 68 million over the corresponding quarter in 2019.

We renegotiated parts of our framework contracts in Finland during the quarter with regard to 2021, resulting in an average price adjustment of about 10 percent. For Attendo Finland as a whole, this entailed positive price effects amounting to about 3 percent of net sales. However, as a result of underlying cost inflation combined with costs related to the new staffing law, the net effect of the price adjustment on the margin is expected to be limited in 2021.

Stable in Sweden despite the second wave

The second wave of the pandemic has affected Sweden more severely than the other Nordic countries. Notwithstanding, we have kept the infection out of most care homes in Sweden and the number of customers who have deceased of covid-19 has been significantly lower than during the first wave. Demand of nursing home beds have been subdued and the average occupancy is clearly lower in the beginning 2021 versus the first quarter of 2020.

Net sales in Attendo Scandinavia declined by 8 percent as a consequence of the sale of the Norwegian operations, lower occupancy in relation to the comparison quarter due to concerns about the pandemic and discontinued home care operations. EBITA amounted to SEK 155 million, down 10 percent compared to the fourth quarter of 2019. Positive effects from outsourcing and home care operations have been offset by corona-related effects.

"The positive effects of the action programme in Finland continued during the fourth quarter and occupancy rose as a consequence of a low rate of openings and high sales pace."

Stable results for the Group overall

In spite of the ongoing pandemic and weak customer inflow in Scandinavia, we delivered stable results overall. Organic growth was 4.8 percent during the quarter, driven primarily by more sold beds in Finland and positive price effects. In a clear improvement over 2019, EBITA for the fourth quarter amounted to SEK 193 million. Profit in Finland recovered due to higher customer inflow and price adjustments, but we are reporting somewhat lower profits in Scandinavia. The pandemic had significant negative financial impact on Attendo in the fourth quarter, but this has been fully offset for the quarter by government compensation for additional costs incurred earlier in the year. For the full year, the pandemic is estimated to have reduced profits by about SEK -120 million, including government compensation.

Moving into 2021, we expect continued effects on sales during the first quarter and we enter 2021 with low occupancy in the Swedish operations. As the vaccination programme progresses, we expect customer inflow to gradually normalise during the year. Extraordinary costs for PPE and other direct costs related to the pandemic are expected to be covered by government support schemes.

Value creation model and new financial targets

Attendo's value creation model is built on three fundamental principles: a scalable platform and common tools, an operational model for the best methods at the local level and a values-driven culture among leaders and employees. We further developed our operational model in 2020 under the name "Attendo Way" to provide support to local operations in their work to ensure high-quality care while encouraging local commitment. As an aspect of Attendo Way, we have launched several digital tools to strengthen internal communication, planning and documentation and dialogue with relatives to our customers. In so doing, we have strengthened the company's capacity to increase customer satisfaction, quality and occupancy.

The next few years will be a period of profit growth linked to the changes in Finland, an improved operational model, organic growth within current and planned capacity and minor acquisitions. The target is adjusted earnings per share of SEK 4 or better by 2023.

Our greatest asset

Satisfied, committed employees are our greatest asset and in 2020, the year of the pandemic, it became more important than ever to show our employees how much we appreciate them and to strengthen our efforts with leadership, values and internal communication. As part of this work, we are putting the spotlight on talented Attendo employees who are making a difference. We celebrated Attendo's Care Hero of the Year in the fourth quarter and launched a magazine in which we highlight the extraordinary efforts of our employees during the pandemic. The result was a marked increase in employee satisfaction and commitment in 2020. The greatest improvement is shown in the employee net promoter score. It is also gratifying to see that we have increased customer satisfaction in all Attendo markets, despite the pandemic.

Finally, I would like to express my sincere thanks to our employees and customers. I am proud of the efforts of all employees during the pandemic to provide good, safe care to our customers and spread joy. As well, I am deeply grateful to our customers and their families for the support they have shown during a challenging time.

Martin Tivéus, President and CEO

Group

October-December 2020

Net sales and operating profit

Net sales increased by 0.4 percent to SEK 3,065m (3,054) during the quarter. Adjusted for currency effects, net sales increased by 2.3 percent. Organic growth accounted for 4.8 percent and the net change due to acquisitions and divestments was -2.5 percent. The latter is mainly attributable to the sale of Attendo's operations in Norway. Own homes demonstrated sustained strong growth due primarily to units opened in Finland in 2020 and 2019. Price increases had positive effect on organic growth, particularly in Attendo Finland, while the pandemic has negatively affected organic growth. Attendo is working actively to close down operations where the conditions for quality and profitability are lacking. Since the comparison quarter, Attendo has closed several own homes and home care operations, which has constrained organic growth. The loss of net sales from ended outsourcing contracts was greater than net sales under new outsourcing contracts.

The own operations contract model accounted for 87 percent of total consolidated net sales during the quarter and the outsourcing contract model accounted for 13 percent.

Operating profit (EBITA)1 amounted to SEK 193m (139) and the operating margin was 6.3 percent (4.6). Profit increased in Attendo Finland, but decreased in Attendo Scandinavia. Currency effects had marginal impact on profits.

Operating profit was positively affected by price effects and higher occupancy in own homes that opened in 2019 and 2018. EBITA was negatively affected by new own homes opened in 2020, as occupancy is initially low in new units. In the fourth quarter, Attendo received around SEK 50m in public compensation related to certain of the higher costs due to the pandemic that have affected Attendo during previous quarters. The net effect on profits due to the pandemic in the isolated quarter therefore is estimated to zero. Attendo has applied for additional compensation for higher costs in 2020 of about SEK 70m (not recognised in P&L).

Adjusted EBITA1 , i.e. EBITA according to the earlier IAS 17 accounting standard, was SEK 87m (35). The adjusted operating margin (EBITA) was 2.8 percent (1.1).

The total number of beds in operation in own homes was 17,668 (16,618), an increase by 6 percent. Occupancy in these homes was 80 percent (80). Mature units – those opened in 2017 or earlier, excluding Mikeva units – had an occupancy rate of about 87 percent (90) and showed an adjusted operating margin (EBITA)1 of 6.0 percent on a rolling 12 months' basis (r12), including all of Attendo's administrative expenses but excluding capital gains. The number of beds under construction in own operations was 1,036 across 16 homes. Attendo opened 31 homes during the year with a total of 1,349 beds, closed 367 beds and began construction on 8 homes with a total of 424 beds.

Operating profit (EBITA)* per business area, Q4 2020

Attendo Finland

Net sales per contract model, Q4 2020

Number of beds in own

operations, care for older people, care for people with disabilities and social psychiatry.

Operating profit (EBIT)1 amounted to SEK 162m (104), corresponding to an operating margin (EBIT) excluding items affecting comparability of 5.3 percent (3.4). The change is explained mainly by the change in operating profit (EBITA), as commented upon above.

Items affecting comparability during the quarter refer to currency effects related to the impairment of goodwill and right-of-use assets in the Finnish operations recognised in the second quarter of 2020.

Operating profit (EBIT) amounted to SEK 168m (104), corresponding to an operating margin (EBIT) of 5.5 percent (3.4).

Financial net

Net financial items amounted to SEK -164m (-156) for the quarter, including net interest expense of SEK -13m (-13). Interest expense related to the lease liability for land and buildings in accordance with IFRS 16 amounted to SEK -141m (-127).

Income tax

Income tax for the period amounted to SEK 0m (+12), corresponding to a tax rate of 0 percent (24.1). The tax rate for the period has been affected by the low result and temporary differences in the result. The effective tax rate for the full year is 20.9%.

Profit and earnings per share for the period

Profit for the period amounted to SEK 4m (-40), corresponding to basic and diluted earnings per share for shareholders in the parent company of SEK 0.02 (-0.25). Adjusted earnings per share after dilution and excluding items affecting comparability were SEK 0.31 (0.04).

January–December 2020

Net sales and operating profit

Net sales for the period increased by 3.0 percent to SEK 12,288m (11,935). Adjusted for currency effects, net sales increased by 3.7 percent. Organic growth accounted for 4.4 percent and acquired growth for -0.7 percent. Own homes demonstrated sustained strong growth, driven primarily by homes opened in Finland in 2019 and 2020. Price increases, particularly in Attendo Finland, and the leap day in 2020 had positive effect on organic growth. The pandemic has negatively affected organic growth. Attendo is working actively to close down operations where the conditions for quality and profitability are lacking. Since the comparison period, Attendo has closed several own homes and home care operations, which has constrained organic growth.

Operating profit (EBITA)1 amounted to SEK 797m (812) and the operating margin was 6.5 percent (6.8). Profit increased in Attendo Finland, but decreased in Attendo Scandinavia. Currency effects had marginal impact on profits.

In relation to the comparison period, EBITA was affected negatively by higher costs due to increased staffing requirements and other related costs that only partially affected the comparison period in the Attendo Finland business area. In addition, EBITA was negatively affected by new own homes opened in 2020, as occupancy is initially low in new units.

Attendo is investing in strengthening the organisation and has expanded central and regional managerial and support functions, which has entailed increased costs in Attendo Finland. The pandemic has reduced profit by an estimated SEK -120m due to the profit impact of the sales loss and cost increases, including public compensation.

Price effects, better financial performance in outsourcing and home care operations and higher occupancy in own homes opened in 2017-2019 had positive impact on operating profit.

Adjusted EBITA1 , i.e. EBITA according to the earlier IAS 17 accounting standard, was SEK 375m (441). The adjusted operating margin (EBITA)1 was 3.1 percent (3.7).

Operating profit (EBIT) 1 amounted to SEK 673m (672), corresponding to an operating margin (EBIT) excluding items affecting comparability of 5.5 percent (5.6). The change is explained by lower amortisation of acquisitionrelated intangible assets.

Items affecting comparability refer to the impairment of goodwill and right-ofuse assets related to operations in Finland. Impairment losses were taken in the second quarter on goodwill and right-of-use assets, which reduced profit for the period by SEK -955m.

The operating loss (EBIT) amounted to SEK -282m (672), corresponding to an operating margin (EBIT) of -2.3 percent (5.6).

Financial net

Net financial items amounted to SEK -644m (-565) for the period, including net interest expense of SEK -57m (-57). Interest expense related to the lease liability for land and buildings in accordance with IFRS 16 amounted to SEK -559m (-473).

Income tax

Tax expense for the period amounted to SEK +22m (-26), corresponding to a tax rate of 20.9 percent (24.1), adjusted for the impairment of goodwill during the period.

Profit and earnings per share for the period

The loss for the period was SEK -904m (81), corresponding to basic and diluted earnings per share for shareholders in the parent company of SEK -5.63 (0.51). Adjusted earnings per share after dilution and excluding items affecting comparability were SEK 1.43 (1.71).

1) Excluding items affecting comparability

Business area: Attendo Scandinavia

Jan-Dec Jan-Dec
SEKm Q4 2020 Q4 2019 2020 2019
Net sales 1,475 1,596 6,027 6,305
Operating profit (EBITA) 155 172 658 715
Operating margin (EBITA), % 10.5 10.8 10.9 11.3
Adjusted EBITA 112 125 481 555
Adjusted EBITA margin, % 7.6 7.8 8.0 8.8

October–December 2020

Net sales in Attendo Scandinavia amounted to SEK 1,475m (1,596), corresponding to a change of -7.6 percent. Adjusted for currency effects, the decrease in sales was -7.5 percent. The decline in sales is attributable mainly to the divestment of the operations in Norway (approximately 100m), lower sales as a consequence of the pandemic and discontinued operations within home care. The loss of net sales from ended outsourcing contracts was greater than net sales under new outsourcing contracts. Total occupancy and occupancy in mature units in own operations were lower than in the comparison quarter, but increased compared to the third quarter of 2020.

Operating profit (EBITA) amounted to SEK 155m (172), corresponding to an operating margin (EBITA) of 10.5 percent (10.8). Currency effects had marginal impact on profits.

Underlying operations were stable in comparison with the same quarter in 2019. EBITA was negatively affected by the opening of several own homes in Attendo Scandinavia since the beginning of the year, which significantly reduced profits because initial occupancy is low. This was offset by underlying profit growth in home care and outsourcing operations. During the quarter Attendo Scandinavia received about SEK 30m in public compensation for a part of certain additional costs incurred in earlier quarters. As a result, the net effect of the pandemic on operating profit for the quarter is less negative than in earlier quarters and is estimated to SEK -20m.

Adjusted EBITA, i.e. EBITA according to the earlier IAS 17 accounting standard, was SEK 112m (125), corresponding to an operating margin of 7.6 percent (7.8).

Two nursing homes for older people with a total of 108 beds were opened during the quarter. The number of beds opened in the last twelve months amounts to 548, a historically high level. A high percentage of new units has negative effect on the average occupancy rate. Construction of a 6-bed care home began during the quarter. At the end of the quarter, there were 796 beds under construction. Attendo won two outsourcing contracts in care for older people with estimated annual revenues of SEK 112m and lost two not yet ended contracts with estimated revenues of SEK 28m. Attendo Scandinavia acquired a few home care businesses during the quarter with a total of about 200 customers in the Stockholm area and the region around lake Mälaren in Sweden.

Attendo Scandinavia

of net sales Operations in Sweden and Denmark.

Net sales per service offering, Q4 2020

January-December 2020

Net sales in Attendo Scandinavia amounted to SEK 6,027m (6,305), corresponding to a change of -4.4 percent. Adjusted for currency effects, the change was -4.1 percent. The decline in sales is attributable mainly to lower sales due to the pandemic, divestment of the Norwegian operations and discontinued operations within home care. Total occupancy and occupancy in mature units in own operations decreased during the year due to the pandemic.

Operating profit (EBITA) amounted to SEK 658m (715), corresponding to an operating margin (EBITA) of 10.9 percent (11.3). Currency effects had marginal impact on profits.

Underlying EBITA excluding the effects of the pandemic and capital gains improved due to better financial performance in outsourcing and home care operations through improved planning and processes and discontinued operations in Denmark, as well as improved occupancy in own homes opened in 2018. Attendo Scandinavia has opened several own homes since the beginning of the year, which significantly reduced profits because initial occupancy is low. The estimated profit impact of the pandemic was SEK - 120m related to effect on profits due to the sales loss and cost increases, including public compensation.

Adjusted EBITA, i.e. EBITA according to the earlier IAS 17 accounting standard, was SEK 481m (555), corresponding to an adjusted operating margin of 8.0 percent (8.8).

Key data per quarter

Q4 Q1 Q2 Q3 Q4
Attendo Scandinavia 2019 2020 2020 2020 2020
Number of beds in operation in own homes 3,689 3,940 4,121 4,025 4,133
Number of opened beds in own homes (r12) 330 525 626 614 548
Occupancy in own homes, % 86 83 75 74 75
Number of beds in own homes under construction 1,110 965 898 898 796
Number of beds in operation in outsourcing 2,557 2,579 2,508 2,185 2,230
Net outsourcing contracts won/lost, SEKm -44 29 -10 -61 84
Home care customers 11,889 11,250 10,289 10,110 10,327

Beds refer to nursing homes for older people, homes for people with disabilities and social psychiatry.

Business area: Attendo Finland

SEKm Q4 2020 Q4 2019 Jan-Dec
2020
Jan-Dec
2019
Net sales 1,590 1,458 6,261 5,630
Operating profit (EBITA)1 48 -20 200 163
Operating margin (EBITA)1
, %
3.0 -1.4 3.2 2.9
Adjusted EBITA1 -15 -76 -45 -48
Adjusted EBITA margin1
, %
-0.9 -5.2 -0.7 -0.9

October–December 2020

Net sales in Attendo Finland amounted to SEK 1,590m (1,458) corresponding to growth of 9.1 percent. Adjusted for currency effects, net sales increased by 13.0 percent. The growth is primarily attributable to new own homes opened in 2019 and 2020, price increases and acquisitions. The price increases correspond to about 3 percent of total net sales. Since the comparison quarter, Attendo Finland has discontinued several own homes and most residents have been moved to newly built and modern Attendo homes, although a few units were discontinued entirely.

Operating profit (EBITA)1 increased to SEK 48m (-20) and the operating margin (EBITA) increased to 3.0 percent (-1.4). Currency effects had marginal impact.

The profit growth is attributable to higher occupancy in homes opened in 2019 and 2018 and price increases. EBITA was negatively affected by new own homes opened this year, for which occupancy is initially low, and by higher operating costs in local units in relation to the comparison quarter, mainly as a consequence of the new law. Compared to the same quarter in 2019, calendar effects had positive effect on profits. During the quarter, Attendo Finland received public compensation of about SEK 20m for certain additional costs incurred due to the pandemic in earlier quarters, which entailed an estimated effect of the pandemic on profits of SEK +20m for the isolated quarter.

Adjusted EBITA1 amounted to SEK -15m (-76) and the adjusted EBITA margin was -0.9 percent (-5.2).

Two own homes with a total of 90 beds were opened during the quarter, bringing the number of beds opened in the last twelve months to 801. 20 beds were discontinued during the quarter. At the end of the quarter, there were 240 beds under construction. At the end of the quarter, Attendo Finland had fewer unsold beds than in the comparison quarter. Attendo Finland acquired an individual and family care business during the quarter. Attendo Finland also divested a subsidiary, Attendo Suomen Hoiva ja Asunto Oy, which owns 11 properties and related debt. Attendo continues to run care operations in the premises.

Attendo Finland Market - new staffing law

The new law covering staffing in care for older people entered into force on 1 October 2020. The new law regulates how staffing should be calculated and causes a general increase in the staffing ratio from 0.5 care workers per resident to 0.7, to be fully implemented from April 2023. The increases will take effect in the following stages:

  • 0.55 as of 1 January 2021
  • 0.60 as of 1 January 2022
  • 0.70 as of 1 April 2023

The Finnish state is responsible for ensuring that local authorities receive the necessary funding to implement the new law. Private providers must negotiate with each local authority or region, which entails uncertainty about how compensation to private providers will be calculated. Costs related to the new law, such as hiring of new employees, are incurred some time before each of the various phases, meaning that it is likely that compensation will be delayed.

January-December 2020

Net sales in Attendo Finland during the period amounted to SEK 6,261m (5,630) corresponding to growth of 11.2 percent. Adjusted for currency effects, net sales increased by 12.3 percent. The growth is primarily attributable to new own homes opened in 2019 and 2020, price increases and acquisitions. The price increases correspond to about 3 percent of total net sales. Since the comparison period, Attendo Finland has discontinued several units in own operations and most residents have been moved to newly built and modern Attendo homes, although a few units were discontinued entirely. The leap day in 2020 had positive impact on growth.

Operating profit (EBITA)1 amounted to SEK 200m (163) and the operating margin (EBITA)* was 3.2 percent (2.9). Currency effects had marginal impact. Price effects and higher occupancy in own homes opened in 2017-2019 had positive impact on EBITA. Following the increased staffing requirements imposed by public authorities, Attendo Finland has since the comparison period increased staffing which has entailed significantly higher costs in relation to the comparison period. Profit in relation to the comparison period was therefore negatively affected by increased staffing, but also by new own homes, where occupancy is initially low. Attendo's investments in strengthening central and regional managerial and support functions have entailed increased costs. The estimated net impact on profit of the pandemic during the year is zero, as the profit impact of the sales loss and higher costs has been offset by public compensation.

Adjusted EBITA1 amounted to SEK -45m (-48) and the adjusted EBITA margin was -0.7 percent (-0.9).

Key data per quarter

Q4 Q1 Q2 Q3 Q4
Attendo Finland 2019 2020 2020 2020 2020
Number of beds in operation in own homes 12,929 13,320 13,529 13,460 13,535
Number of opened beds in own homes (r12) 1,620 1,661 1,416 1,016 801
Occupancy in own homes, % 79 80 79 81 82
Number of beds in own homes under construction 870 458 212 330 240
Number of beds in operation in outsourcing 244 244 244 161 161
Home care customers 596 584 835 677 674

Beds refer to nursing homes for older people, homes for people with disabilities and social psychiatry.

Cash flow

October–December 2020

Free cash flow was SEK 132m (141) during the quarter, whereof changes in working capital amounted to SEK 47m (129). The change in working capital is attributable mainly to an increase in employee-related costs and an increase in trade payables during the quarter.

Cash flow from operations was SEK 397m (456). Cash used for net investments in non-current assets was SEK -40m (-109) and cash flow from assets and liabilities held for sale amounted to SEK 0m (-52). Business acquisitions made a positive contribution to cash flow of SEK 6m (-39). Divestment of a subsidiary reduced cash flow during the quarter by SEK -9m (-). Cash flow from investing activities thus amounted to SEK -43m (-200). Cash flow from financing activities was SEK -403m (-468). Loans of SEK - 250m (-3,051) were repaid during the quarter and new loans of SEK 72m (2,789) were raised. Total cash flow amounted to SEK -49m (-212).

January–December 2020

Free cash flow during the period was SEK 428m (196), whereof changes in working capital amounted to SEK 246m (-60).

Cash flow from operations was SEK 1,645m (1,227). Cash used for net investments in non-current assets was SEK -319m (-241) and cash flow from assets and liabilities held for sale amounted to SEK 196m (260). Business acquisitions reduced cash flow by SEK -114m (-239). Divestment of subsidiaries reduced cash flow by SEK -22m (87). Cash flow from investing activities thus amounted to SEK -259m (-133). Cash flow from financing activities was SEK -1,172m (-3,485). Financing activities include loan repayments of SEK -475m (-5,388) and new borrowings of SEK 199m (2,789), Total cash flow amounted to SEK 214m (-2,391).

Financial position

Equity attributable to shareholders in the parent company amounted to SEK 4,849m (5,831) as of 31 December 2020, representing diluted equity per share attributable to shareholders in the parent company of SEK 30.13 (36.24). Net debt amounted to SEK 12,268m (11,831). Adjusted net debt, excluding lease liability for land and buildings, amounted to SEK 1,573m (2,360). Loans of SEK 475m were repaid during the year, of which SEK 225m on the revolving credit facility and SEK 250m on long-term loan facilities. Loans in the amount of SEK 297m were also divested in conjunction with the divestment of the wholly owned subsidiary Suomen Hoiva ja Asunto Oy.

SEKm Dec 31, 2020 Dec 31, 2019
Interest-bearing liabilities 12,976 12,339
Provisions for post-employment benefits 8 15
Cash and cash equivalents -716 -523
Net debt 12,268 11,831
Lease liability real estate -10,695 -9,471
Adjusted net debt 1,573 2,360

Interest-bearing liabilities as of 31 December 2020 amounted to SEK 12,976m (12,339). Cash and cash equivalents as of 31 December 2020 amounted to SEK 716m (523) and Attendo had SEK 1,800m (1,575) in unutilised credit facilities.

Net debt/EBITDA1 was 6.0 (6.1). Net debt/Adjusted EBITDA1 was 2.6 (3.6).

SEKm Dec 31, 2020 Dec 31, 2019
Net debt / EBITDA1 6.0 6.1
Adjusted net debt / adjusted EBITDA1 2.6 3.6

1) Excluding items affecting comparability.

Quality and employees

Vaccinations of customers and employees against covid-19 began in all countries during the quarter. The order of priority differs by country. In Sweden, residents of nursing homes have first priority, while in Finland, care workers will be vaccinated before residents. Attendo expects the absolute majority of residents and employees in all markets to have been offered vaccines by no later than the end of February 2021. In several locations in Sweden including Linköping and Stockholm, Attendo's customers were the first people to be vaccinated in those cities. This was covered by the media and instilled a sense hope and happiness in customers, their relatives and employees of Attendo.

The Swedish Coronavirus Commission presented its first partial report in December, which focused on transmission within care for older people. The Coronavirus Commission is an investigatory commission appointed by the Swedish Government. Its remit is to evaluate the management of the ongoing pandemic by authorities, regions, local authorities and the Government. The Commission identifies the general rate of transmission in society as the most important cause of transmission in nursing homes. The Commission furthermore writes that the strategy to protect older people has failed and that decisions on protective measures in care for older people were too little and too late. Attendo has provided the Commission with input information and data on the corona pandemic in Sweden and the other Nordic countries.

Our employees were able to nominate employees who have gone above and beyond during the year to be celebrated as Care Heroes. Nurse Lovelyn Buking in Västerås was named Attendo's Care Hero of the Year after receiving the most votes in Appendo – Attendo's employee app. Attendo's new magazine, Magasinet Omsorg, was launched in conjunction with the announcement. The issue celebrates Lovelyn Buking and all the other employees nominated as Care Heroes. In the magazine, we are able to follow our employees as they go about their days in the workplace and see what they are doing to exceed expectations and create peace of mind among the customers.

The past year has put tremendous pressure on Attendo's employees. Attendo's management has taken initiatives in various ways to show appreciation for the sacrifices that have been and are still being made during the pandemic. Christmas concerts starring famous performers were arranged in Finland and Sweden and live-streamed to an audience of thousands of employees and customers.

Attendo continuously monitors employee satisfaction in all markets. The trend was highly positive in 2020 in Sweden, Finland and Denmark. Likewise, the employee net promoter score – the extent to which they would recommend Attendo as an employer – increased to record levels. It is gratifying to know that Attendo's employees felt pride and faith in Attendo as an employer during the profoundly trying year.

The partnership between Attendo and Samhall intensified during the year. Samhall is a state-owned enterprise whose mission is to create jobs for people with disabilities and thus make room for them in the labour market. We were told during the quarter that Attendo recruited more employees from Samhall in 2020 than any other employer. Attendo is an inclusive workplace and welcomes everyone with a passion for care work and who wants to make a difference. This is a key aspect in the selection of employees, to which Samhall makes a valuable contribution.

Quality work at Attendo

Attendo's quality model rests on three pillars: satisfied customers, systematic improvements (safety and peace of mind) and best available knowledge. Ongoing development and monitoring of the necessary procedures, processes and documentation are essential to the quality of all health and social care. The work is led by local quality coordinators with the support of specialised quality functions. Recurring quality audits are conducted by Attendo, customers and government authorities.

Read more about quality work at Attendo at: www.attendo.com

Significant events in the fourth quarter

Acquisitions and divestments

  • Attendo acquired Pienryhmäkoti Omppu Oy, which operates individual and family care homes with a total of 14 beds in Lahti and Hämeenlinna, in Finland.
  • A number of home care businesses with a total of about 200 customers in the Stockholm area and region around lake Mälaren in Sweden were also acquired during the quarter.
  • The subsidiary Suomen Hoiva ja Asunto Oy was divested during the quarter. The company owns and manages 11 properties in Finland in which Attendo operates. As the properties were financed using specially regulated loans and state subsidies in Finland (ARA), the company is classified as a public benefit enterprise, which entails restrictions on the withdrawal of profits. The company was acquired by a consortium led by Pertti Karjalainen (employee of Attendo and major shareholder). The transaction was executed with principles and valuation established by the ARA authority and the valuation has been determined by independent valuation institute. As part of the sale of the company, bank loans of SEK 297m were divested along with buildings and land at a total book value of SEK 320m. The effect on Attendo's net sales and profits is immaterial. Attendo will continue to operation in the premises.

Other information

Number of shares

The total number of shares is 161,386,592. Attendo holds 473,744 treasury shares and the total number of shares outstanding as of 31 December 2020 was thus 160,912,848.

Number of employees

The average number of employees was 17,523 (16,163) in the fourth quarter and 18,178 (16,499) for the period of January–December.

Transactions with related parties

Transactions with related parties had a value of SEK 0m (0) during the period. All related-party transactions take place on market terms.

For further details, please refer to page 69 of Attendo's 2019 annual report.

Parent company, Attendo AB (publ)

The business of the parent company is to provide services to the subsidiaries and manage shares in subsidiaries. The company's expenses relate mainly to executive salaries, directors' fees and costs for external consultants.

Net sales for the period were SEK 13m (13), and were entirely related to services provided to subsidiaries. The loss for the year after net financial items was SEK -34m (-31). At the end of the quarter, cash and cash equivalents amounted to SEK 0m (0), shares in subsidiaries to SEK 6,494m (6,494) and non-restricted equity to SEK 6,010m (5,992).

Seasonal and calendar effects

Attendo's profitability is affected by factors including seasonal variations, weekends and national public holidays. For Attendo, public holidays and weekends have a negative effect on profitability mainly due to wage compensation for unsocial working hours. For example, profitability is affected by Easter in either the first or second quarter, depending on the quarter in which Easter falls, while the first and fourth quarters are affected by the Christmas and New Year's holidays.

Significant events after the reporting date

Changes in Attendo's executive management

Ammy Wehlin stepped down as Business Area Director for Attendo Scandinavia at year-end 2020 and was succeeded by Ulrika Eriksson. Ulrika Eriksson was born in 1969 and holds a master's degree in economics from the Stockholm School of Economics. She has served in several executive roles, most recently as CEO of KungSängen Sverige. Eriksson joined the company during the fourth quarter of 2020 to ensure a smooth transition and began as Business Area Director and member of executive management for Attendo AB on 1 January 2021.

Annual general meeting

The annual general meeting of shareholders in Attendo AB will be held 14 April 2021. Further information about the AGM will be published on Attendo's website. The annual report will be available at Attendo's head office and on the website no later than on 24 March 2021.

Dividend 2020

Dividends must be balanced with regard to the business's goals, scope and risk, including investment opportunities, and the company's financial position. In both financial and operational terms, 2020 was a challenging year for Attendo that was characterised by the pandemic. In addition, an impairment loss on goodwill was taken in the Finnish operations. In the light of these circumstances, the board of directors is therefore proposing to the 2021 annual general meeting that no dividend should be distributed for the 2020 financial year.

New financial targets

In connection with Attendo's IPO (initial public offering) in 2015, financial targets were set, linked to growth, margins, dividend policy and debt. Attendo has undergone major changes in recent years and conditions in Finland, Attendo's second-largest market, have changed. As a result of these factors combined with the new IFRS 16 accounting standard, the previous targets need to be revised based on current circumstances.

Profit target

As the company is in a phase of turnaround in which successive profit recovery is expected, Attendo has established a profit target for three years ahead. Attendo expects profit growth linked to the changes in Finland, an improved operational model, organic growth within current and planned capacity and minor acquisitions.

Attendo's ambition is to achieve adjusted earnings per share of SEK 4 or better by 2023, calculated on the basis of the IAS 17 accounting standard (which provides better comparability) and excluding amortisation of acquisition-related intangible assets and items affecting comparability. A calculation of this key figure is provided on page 28.

Dividends

Attendo's target is to distribute 30 percent of the company's adjusted profits as dividends. Like the profit target, this measurement is calculated based on the earlier IAS 17 accounting standard. Dividends must be balanced with regard to the business's goals, scope and risk, including investment opportunities, and the company's financial position.

Capital structure

Attendo's capital structure target is based on financial stability and the opportunity to execute long-term decisions. Attendo has set a target that adjusted net debt in relation to adjusted EBITDA should not exceed 3.75 over the long term (calculated based on IAS 17).

Risks and uncertainties

All business requires companies to take risks in various forms and to various extents. Risk management, defined as the work involved in identifying, managing and monitoring risks, is an important part of Attendo's strategy and its operations. Attendo takes a structured approach to managing risks, based on a framework that covers industry and market risks, operational risks and financial risks. External risks related to the conditions for private companies to operate care businesses, political risks, regulatory risks and reputational risks. Operational risks refer to risks linked directly to Attendo's operations, such as occupancy, pricing and access to skilled employees. Financial risks are related to factors including access to capital, exchange rates, interest rates and liquidity. The risks and how Attendo manages them are described in greater detail in Attendo's annual report (see the "Risks and risk management" section in the 2019 annual report, pages 24-27).

Current risks and risk management in

The corona pandemic had profound impact on Attendo's operations and financial performance in 2020. As a result of the pandemic, known risks such as occupancy in our units and access to qualified employees have become more apparent. Occupancy declined significantly during 2020 in Attendo Scandinavia, mainly due to the ban on visits to nursing homes for older people and concerns about the pandemic. In addition, the entire organisation has been forced to work under very challenging circumstances, with rapid changes of method and direction to protect our customers, many of whom are at high risk of contracting covid-19. From a risk perspective, the past year has thus been characterised by operational risks. Efforts to further develop Attendo also continued during 2020. In that context, the rate of expansion, regulatory conditions and risks and staffing and human capital risks have been assessed in the light of Attendo's overall business objectives.

In Finland, a comprehensive care reform has been implemented, where, among other things, staffing requirements are now being raised in several steps. Increased staffing requirements mean increased costs for all providers. The government is responsible to ensure that the local authorities receive the necessary funding to be able to implement the new law. Private providers must negotiate with each local authority or county, which means uncertainty about how the compensation to private providers will be handled. Costs linked to the new law, such as new recruitment, arise some time before the various steps, which means that compensation can be obtained with a time lag.

Vaccination of customers in nursing homes is ongoing in all markets, which is a prerequisite for the normalization of operations. In Sweden, which has been hardest hit by the pandemic, the vaccination of customers in nursing homes has largely been carried out and vaccination of employees is ongoing.

Lower occupancy is presently the risk that is having the most short-term financial impact on the business. Due to the rapid development that has characterised both the spread of the covid-19 virus and the measures that can and must be taken by Attendo and other social actors, there is significant uncertainty associated with all types of estimates of the operational or financial impact of the pandemic.

Accounting policies

The group applies International Financial Reporting Standards (IFRS) and interpretations from IFRIC, as adopted by the European Union, the Swedish Financial Reporting Board's standard RFR 1 Supplementary Accounting Rules for Groups and related interpretations and the Swedish Annual Accounts Act.

This interim report has been prepared according to IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act and should be read together with the annual report for 2019. The most significant accounting policies under IFRS, the reporting norm applied in preparing this interim report, are set forth in Note C1 on pages 49-53 of the annual report for 2019, which were applied to the preparation of this interim report.

As of the second quarter of 2020, Attendo has added "Items affecting comparability" as a line item on the income statement. Items classified as items affecting comparability are those where it is important to observe the effects on profit when profit for the period is compared with earlier periods, such as significant impairment losses and other significant, non-recurrent costs or income. Tax on items affecting comparability and tax items that are specifically classified as items affecting comparability are reported under "Tax" on the consolidated income statement. Items accounted for as items affecting comparability in a period are accounted for consistently in future periods by also reporting any reversals of these items as items affecting comparability. Segment reporting is presented before items affecting comparability, but items affecting comparability are allocated to the segments to which they refer in the notes to the financial statements.

Related to the corona pandemic, Attendo has received government grants to compensate for increased costs for protective gear and increased wage costs as a result of increased sick leave and cohort care. The private support in the form of compensation for additional costs in Sweden can only be obtained by private operators by seeking compensation through municipalities and regions that grant compensation and which in turn receive compensation from the government. In the financial reporting, this is reported in accordance with IAS 20 Accounting for Government Grants and Disclosures of Government Aid and has reduced corresponding costs.

Other and eliminations in the segment tables refers to costs for the head office and group eliminations.

The interim information on pages 1-14 is an integrated part of this financial report. The parent company's financial statements are prepared in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation, RFR 2 Accounting for Legal Entities.

The year-end report has not been reviewed by the company's auditors. This English report is an unofficial translation. In case of any discrepancy between the English version and the Swedish version, the Swedish text shall prevail.

Outlook

Attendo does not publish forecasts.

Danderyd, February 10, 2021

Martin Tivéus

CEO

Attendo's financial reports are available on www.attendo.com

Financial reports

Consolidated Income Statement

SEKm Q4 2020 Q4 2019 Jan-Dec 2020 Jan-Dec 2019
Net sales 3,065 3,054 12,288 11,935
Other operating income 8 20 73 110
Total revenue 3,073 3,074 12,361 12,045
Personnel costs -2,052 -2,127 -8,285 -8,133
Other external costs -512 -512 -2,023 -1,972
Operating profit before amortization and depreciations
(EBITDA)* 509 435 2,053 1,940
Amortization and depreciation of tangible and intangible
assets
-316 -296 -1,256 -1,128
Operating profit after depreciation (EBITA)* 193 139 797 812
Operating margin (EBITA)*, % 6.3 4.6 6.5 6.8
Amortization of acquisition related intangible assets -31 -35 -124 -140
Operating profit (EBIT), excluding items affecting
comparability 162 104 673 672
Operating margin (EBIT), excluding items affecting
comparability % 5.3 3.4 5.5 5.6
Items affecting comparability 6 - -955 -
Operating profit (EBIT) 168 104 -282 672
Operating margin (EBIT), % 5.5 3.4 -2.3 5.6
Net financial items -164 -156 -644 -565
Profit before tax 4 -52 -926 107
Income tax 0 12 22 -26
Profit for the period 4 -40 -904 81
Profit margin, % 0.1 -1.3 -7.4 0.7
Profit for the period attributable to:
The parent company shareholders 3 -40 -906 81
Non-controlling interests 1 - 2 -
Basic earnings per share, SEK 0.02 -0.25 -5.63 0.51
Diluted earnings per share, SEK 0.02 -0.25 -5.63 0.51
Average number of shares outstanding, basic, thousands 160,913 160,882 160,904 160,877
Average number of shares outstanding, diluted, thousands 160,924 160,904 160,920 160,899

*Excluding items affecting comparability.

Consolidated Statement of Comprehensive Income

SEKm Q4 2020 Q4 2019 Jan-Dec 2020 Jan-Dec 2019
Profit for the period 4 -40 -904 81
Other comprehensive income for the period
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit pension plans, net of tax
2 7 -8 -3
Items that may be reclassified to profit or loss
Exchange rate differences on translating foreign operations
attributable to the parent company shareholders -69 -72 -56 47
Other comprehensive income for the period -67 -65 -64 44
Total comprehensive income for the period -63 -105 -968 125
Total comprehensive income attributable to:
The Parent company shareholders -64 -105 -970 125
Non-controlling interests 1 - 2 -

Consolidated Balance Sheet

SEKm Dec 31, 2020 Dec 31, 2019
ASSETS
Non-current assets
Goodwill 6,644 7,446
Other intangible assets 493 564
Equipment 562 874
Right of use assets 9,709 8,856
Financial assets 410 331
Total non-current assets 17,818 18,071
Current assets
Trade receivables 1,039 1,090
Other current assets 481 400
Cash and cash equivalents 716 523
2,236 2,013
Assets held for sale 18 186
Total current assets 2,254 2,199
Total assets 20,072 20,270
EQUITY AND LIABILITIES
Equity
Equity attributable to the Parent company shareholders
4,849 5,831
Non-controlling interests 22 -
Total equity 4,871 5,831
Non-current liabilities
Liabilities to credit institutions 2,246 2,836
Long-term lease liabilities* 9,811 8,640
Provisions for post-employment benefits 8 15
Other provisions 64 142
Other non-current liabilities 120 151
Total non-current liabilities 12,249 11,784
Current liabilities
Liabilities to credit institutions 0 2
Short-term lease liabilities** 919 862
Trade payables 358 256
Short-term provisions 117 85
Other current liabilities 1,554 1,431
2,948 2,636
Liabilities held for sale 4 19
Total current liabilities 2,952 2,655
Total equity and liabilities 20,072 20,270

* Long-term lease liabilities include car leases amounting to SEK 16m (12m).

** Short-term lease liabilities include car leases amounting to SEK 19m (19m).

Consolidated Cash Flow Statement

Operational cash flow (alternative performance measure),

SEKm Q4 2020 Q4 2019 Jan-Dec 2020 Jan-Dec 2019
Operating profit (EBITA)* 193 139 797 812
Depreciation and amortization of tangible and intangible
assets 316 296 1,256 1,128
Changes in working capital 47 129 246 -60
Paid income tax 16 44 -37 -88
Other non-cash items -10 -2 15 8
Cash flow after changes in working capital 562 606 2,277 1,800
Investments in tangible and intangible assets -50 -113 -345 -345
Divestment of tangible and intangible assets 10 4 26 104
Operating cash flow 522 497 1,958 1,559
Interest received/paid -24 -23 -73 -100
Interest expense for lease liabilities of real estate -141 -127 -559 -473
Repayment of lease liabilities -225 -206 -898 -790
Free cash flow 132 141 428 196
Net change in assets and liabilities held for sale 0 -52 196 260
Acquisition of operations 6 -39 -114 -239
Divestment of subsidiaries -9 - -22 87
Warrants - - 2 -
Dividends paid - - - -96
Repayment of loans -250 -3,051 -475 -5,388
New borrowings 72 2,789 199 2,789
Totalt kassaflöde -49 -212 214 -2,391
Cash and cash equivalents at the beginning of the period 784 745 523 2,896
Effect of exchange rate changes on cash -19 -10 -21 18
Cash and cash equivalents at the end of the period 716 523 716 523
Q4 2020
397 456 1,645 1,227
-43 -200 -259 -133
-403 -468 -1,172 -3,485
-49 -212 214 -2,391
Q4 2019 Jan-Dec 2020 Jan-Dec 2019

*Excluding items affecting comparability.

Consolidated Statement of Changes in Equity

Jan-dec
SEKm Jan-Dec 2020 2019
Opening balance 5,831 5,801
Total comprehensive income attributable to:
The Parent company shareholders -970 125
Non-controlling interests 2 -
Transactions with owners
Vested shares 1 2
Transactions with non-controlling interest -14 -
Warrants 2 -
Share-savings plan -1 -1
Dividend - -96
Total transactions with owners -12 -95
Equity attributable to the Parent company shareholders 4,849 5,831
Non-controlling interests 22 -
Closing balance 4,871 5,831

Segment in summary

SEKm Attendo Scandinavia Attendo Finland
Other and eliminations
Consolidated
Q4 2020 Q4 2019 Q4 2020 Q4 2019 Q4 2020 Q4 2019 Q4 2020 Q4 2019
Net sales 1,475 1,596 1,590 1,458 - - 3,065 3,054
Own operations 1,115 1,136 1,553 1,419 - - 2,668 2,555
Outsourcing 360 460 37 39 - - 397 499
Operating profit
(EBITA)*
155 172 48 -20 -10 -14 193 139
Operating margin
(EBITA)*, % 10.5 10.8 3.0 -1.4 - - 6.3 4.6
Adjusted EBITA* 112 125 -15 -76 -10 -14 87 35
Adjusted operating
margin (EBITA)*, % 7.6 7.8 -0.9 -5.2 - - 2.8 1.1
SEKm Attendo Scandinavia Attendo Finland Other and eliminations Consolidated
Jan
Dec
Jan
Dec
Jan
Dec
Jan
Dec
Jan
Dec
Jan
Dec
Jan
Dec
Jan
Dec
2020 2019 2020 2019 2020 2019 2020 2019
Net sales 6,027 6,305 6,261 5,630 - - 12,288 11,935
Own operations 4,425 4,497 6,102 5,460 - - 10,527 9,957
Outsourcing 1,602 1,808 159 170 - - 1,761 1,978
Operating profit
(EBITA)* 658 715 200 163 -61 -66 797 812
Operating margin
(EBITA)*, % 10.9 11.3 3.2 2.9 - - 6.5 6.8
Adjusted EBITA* 481 555 -45 -48 -61 -66 375 441
Adjusted operating
margin (EBITA)*, % 8.0 8.8 -0.7 -0.9 - - 3.1 3.7

*Excluding items affecting comparability of SEK -955m.

Net financial items

SEKm Kv4 2020 Kv4 2019 Jan-dec 2020 Jan-dec 2019
Net interest expense (excluding lease liabilities for real estate) -13 -13 -57 -57
Interest expense, lease liabilities for real estate -141 -127 -559 -473
Other -10 -16 -28 -35
Net financial items -164 -156 -644 -565

Investments

Jan-Dec
SEKm Q4 2020 Q4 2019 Jan-Dec, 2020 2019
Investments in intangible assets
Investments in tangible assets 5 6 13 18
Divestments of tangible and intangible assets 46 107 333 327
Total net investments -11 -4 -27 -104
Investments in intangible assets 40 109 319 241
Intangible assets acquired through business combination
Goodwill 32 55 129 148
Customer relations 25 56 82 87
Other 0 0 0 0
Total intangible assets acquired through business
combination 57 111 211 235

Financial assets and liabilities

SEKm Level Dec 31, 2020 Dec 31, 2019
ASSETS
Financial assets measured at fair value
Trade receivables 1,039 1,090
Cash and cash equivalents 716 523
Total financial assets 1,755 1,613
LIABILITIES
Financial liabilities at fair value through profit or loss
Contingent considerations 3 0 0
Financial liabilities measured at amortised cost
Borrowings 2,246 2,838
Lease liabilities 10,730 9,502
Trade payables 358 256
Total financial liabilities 13,334 12,596

The table shows the Group's significant financial assets and liabilities. Assets and liabilities recognized as loans and receivables, and other financial liabilities are valued at amortized cost. Fair value for all financial assets and liabilities are equal to the carrying value. For complete table and further information see Attendo's Annual report 2019, note C24.

Valuation technique

Level 3: The fair value of contingent considerations is based on estimated outcome from the contractual clauses in the share purchase agreements.

Pledged assets and contingent liabilities

SEKm Dec 31, 2020 Dec 31, 2019
Assets pledged as collateral 64 73
Contingent liabilities* 4,615 5,040

* Leases of assets not yet in use are reported in contingent liabilities. Contingent liabilities also include a potential outflow of resources to complete

acquisitions of real estate and operations from a few local authorities in Finland.

Income Statement with IFRS16 impacts

The effects of the implementation of IFRS 16 leases on the income statement are shown below.

Q4, 2020 Q4, 2019
SEKm Excl.
IFRS 16-
effect
Exkl. IFRS
16-effekt
Exkl. IFRS 16-
effekt**
Excl. IFRS 16-
effect
Exkl. IFRS
16-effekt
Exkl. IFRS 16-
effekt**
Net sales 3,065 3,065 3,054 3,054
Other operating income 8 -1 7 20 -12 8
Total revenue 3,073 -1 3,072 3,074 -12 3,062
Personnel costs -2,052 -2,052 -2,127 -2,127
Other external costs -512 -366 -878 -512 -333 -845
Operating profit before amortization and
depreciation (EBITDA)*
509 -367 142 435 -345 90
Amortization and depreciation of tangible and
intangible assets
-316 261 -55 -296 241 -55
Operating profit (EBITA)* 193 -106 87 139 -104 35
Operating margin (EBITA)* % 6.3 2.8 4.6 1.1
Amortization of acquisition related intangible
assets
-31 -31 -35 - -35
Operating profit, excluding items affecting
comparability (EBIT)
Operating margin (EBIT), excluding items
162 -106 56 104 -104 0
affecting comparability % 5.3 1.8 3.4 0.0
Items affecting comparability 6 -1 5 - - -
Operating profit (EBIT) 168 -107 61 104 -104 0
Operating margin (EBIT) % 5.5 2.0 3.4
Net financial items -164 140 -24 -156 127 -29
Profit before tax 4 33 37 -52 23 -29
Income tax 0 -6 -6 12 -4 8
Profit for the period from continuing
operations
Profit margin %
4
0.1
27 31
1.0
-40
-1.3
19 -21
-0.7

* Excluding items affecting comparability.

** This column shows adjusted EBITDA and adjusted EBITA.

Jan-Dec, 2020 Jan-Dec, 2019

SEKm Reported IFRS 16
effect
Excl. IFRS 16-
effect**
Reported IFRS 16
effect
Excl. IFRS 16-
effect**
Net sales 12,288 12,288 11,935 11,935
Other operating income 73 -2 71 110 -21 89
Total revenue 12,361 -2 12,359 12,045 -21 12,024
Personnel costs -8,285 -8,285 -8,133 -8,133
Other external costs -2,023 -1 452 -3,475 -1,972 -1,263 -3,236
Operating profit before amortization and
depreciation (EBITDA)* 2,053 -1 454 599 1,940 -1,284 655
Amortization and depreciation of tangible and
intangible assets -1,256 1 032 -224 -1,128 913 -215
Operating profit (EBITA)* 797 -422 375 812 -371 441
Operating margin (EBITA)* % 6.5 3.1 6.8 3.7
Amortization of acquisition related intangible
assets -124 -124 -140 - -140
Operating profit, excluding items affecting
comparability (EBIT) 673 -422 251 672 -371 301
Operating margin (EBIT), excluding items
affecting comparability % 5.5 2.0 5.6 2.5
Items affecting comparability -955 134 -821 - - -
Operating profit (EBIT) -282 -288 -570 672 -371 301
Operating margin (EBIT) % -2.3 -4.6 5,6 2.5
Net financial items -644 559 -85 -565 473 -92
Profit before tax -926 271 -655 107 102 209
Income tax
Profit for the period 22
-904
-54
217
-32
-687
-26
81
-20
82
-46
163
Profit margin % -7.4 -5.6 0.7 1.4

* Excluding items affecting comparability.

** This column shows adjusted EBITDA and adjusted EBITA.

Adjusted earnings and adjusted earnings per share

Items affecting Total Adjusted
SEKm Reported Acquisitions 1 IFRS 16 2 comparability 3 adjustments earnings
Adjustments 2020
Net sales 12,288 - - - - 12,288
Operating profit before amortization and
depreciation (EBITDA)* 2,053 - -1,454 - -1,454 599
Amortization and depreciation of tangible and
intangible assets
- 1,256 - 1,032 - 1,032 -224
Operating profit (EBITA)* 797 - -422 - -422 375
Amortization of acquisition related intangible
assets -124 124 - - 124 -
Operating profit, excluding items affecting
comparability (EBIT) 673 124 -422 - -298 375
Items affecting comparability -955 - 134 821 955 -
Operating profit (EBIT) -282 124 -288 821 657 375
Net financial items -644 - 559 - 559 -85
Profit before tax -926 124 271 821 1,216 290
Income tax 22 -25 -54 - -79 -57
Profit for the period -904 99 217 821 1,137 233
Profit for the period attributable to:
The parent company shareholders -906 99 217 821 1,137 231
Non-controlling interests 2 - - - - 2
Average number of shares outstanding, diluted,
thousands 160,920 160,920 160,920 160,920 160,920 160,920
Earnings per share diluted, SEK -5.63 0.61 1.35 5.10 7.06 1.43
Items affecting Total Adjusted
SEKm Reported Acquisitions 1 IFRS 16 2 comparability 3 adjustments earnings
Adjustments 2019
Net sales 11,935 - - - - 11,935
Operating profit before amortization and
depreciation (EBITDA)* 1,940 - -1,284 - -1,284 656
Amortization and depreciation of tangible and
intangible assets - 1,128 - 913 - 913 -215
Operating profit (EBITA)* 812 - -371 - -371 441
Amortization of acquisition related intangible
assets -140 140 - - 140 -
Operating profit, excluding items affecting
comparability (EBIT) 672 140 -371 - -232 441
Items affecting comparability - - - - - -
Operating profit (EBIT) 672 140 -371 - -232 441
Net financial items -565 - 473 - 473 -92
Profit before tax 107 140 102 242 349
Income tax -26 -28 -20 - -48 -74
Profit for the period 81 112 82 - 194 275
Profit for the period attributable to:
The parent company shareholders 81 112 82 - 194 275
Non-controlling interests - - - - - -
Average number of shares outstanding diluted,
thousands
Earnings per share diluted, SEK
160,899
0.51
160,899
0.69
160,899
0.51
160,899
0.00
160,899
1.20
160,899
1.71

* Excluding items affecting comparability.

Profit for the period attributable to the parent company shareholders excluding amortization of acquisition related intangible assets (1), IFRS 16 (2) and items

affecting comparability (3) and related tax effects divided with the average number of shares outstanding, after dilution.

Key Data

Q4 2020 Q4 2019 Jan-Dec
2020
Jan-Dec
2019
Organic growth % 4.8 3.6 4.4 2.1
Acquired growth % -2.5 3.2 -0.7 4.8
Changes in currencies % -1.9 1.6 -0.7 1.7
Operating margin (EBITA margin) r12 * % - 6.5 6.8
Adjusted operating margin (EBITA margin) r12 * % - 3.1 3.7
Working capital** SEKm - -508 -283
Return on capital employed *, % - 3.7 3.6
Net debt to equity ratio* times - 2.5 2.0
Equity to asset ratio % - 24 29
Net debt / EBITDA r12 *, times - 6.0 6.1
Adjusted net debt / adjusted EBITDA r12 *, times - 2.6 3.6
Free cash flow SEKm 132 141 428 196
Net investments SEKm -40 -109 -319 -241
Average number of employees 17,523 16,163 18,178 16,499
Key data per share
Earnings per share, basic SEK 0.02 -0.25 -5.63 0.51
Earnings per share, diluted SEK 0.02 -0.25 -5.63 0.51
Adjusted earnings per share, diluted SEK 0.31 0.04 1.43 1.71
Equity per share, basic SEK - 36.24 30.14 36.24
Equity per share, diluted SEK - 36.24 30.13 36.24
Average number of shares outstanding, basic thousands 160,913 160,882 160,904 160,877
Average number of shares outstanding, diluted thousands 160,924 160,904 160,920 160,899
Number of shares, end of period thousands 161,387 161,387 161,387 161,387
Number of treasury shares, end of period thousands 474 496 474 496
Number of shares outstanding, end of period thousands 160,913 160,890 160,913 160,890

* Excluding items affecting comparability

Quarterly Data

SEKm Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020
Total net sales 2,878 2,990 3,013 3,054 3,128 3,112 2,983 3,065
– Net sales, own operations 2,382 2,499 2,521 2,555 2,628 2,627 2,604 2,668
– Net sales, outsourcing 496 491 492 499 500 485 379 397
SEKm Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020
Total net sales 2,878 2,990 3,013 3,054 3,128 3,112 2,983 3,065
– Net sales Scandinavia 1,537 1,588 1,584 1,596 1,594 1,548 1,410 1,475
– Net sales Finland 1,341 1,402 1,429 1,458 1,534 1,564 1,573 1,590
Operating profit (EBITDA) *
Operating margin (EBITDA margin),%
526 395 584 435 492 471 581 509
* 18.3 13.2 19.4 14.2 15.7 15.1 19.5 16.6
Operating profit (EBITA) * 258 121 294 139 182 153 269 193
Operating margin (EBITA margin),% * 9.0 4.0 9.8 4.6 5.8 4.9 9.0 6.3
Profit for the period 66 -39 94 -40 3 -975 64 4
Profit margin, % 2.3 -1.3 3.1 -1.3 0.1 -31.3 2.1 0.1
Earnings per share basic, SEK 0.41 -0.24 0.58 -0.25 0.02 -6.06 0.40 0.02
Earnings per share diluted, SEK 0.41 -0.24 0.58 -0.25 0.02 -6.06 0.40 0.02
Adjusted operating profit (EBITDA) *
Adjusted operating margin (EBITDA
210 97 259 90 141 98 218 142
margin),% * 7.3 3.2 8.6 2.9 4.5 3.1 7.3 4.6
Adjusted operating profit (EBITA) *
Adjusted operating margin (EBITA
160 42 204 35 84 42 162 87
margin),% * 5.5 1.4 6.8 1.1 2.7 1.3 5.4 2.8
Average number of employees 16,370 16,566 16,984 16,163 17,950 18,659 18,514 17,523
Own operations
Number of units in operation** 598 599 604 604 610 619 613 621
Number of beds in operation*** 15,923 16,216 16,470 16,618 17,260 17,650 17,485 17,668
Number of beds under construction*** 2,401 2,335 2,094 1,980 1,423 1,110 1,228 1,036
Number of opened beds (r12)*** 2,282 1,752 1,867 1,950 2,186 2,042 1,630 1,349
Occupancy in own homes,%*** 81 79 80 80 80 78 79 80

* Excluding items affecting comparability

** Refers to all units in Own operations.

*** Nursing homes for older people, homes for people with disabilities and social psychiatry.

Parent Company Income Statement

SEKm Q4 2020 Q4 2019 Jan-Dec 2020 Jan-Dec 2019
Net sales 3 3 13 13
Personnel costs -6 -6 -28 -26
Other external costs -3 -1 -10 -9
Operating profit -6 -4 -25 -22
Net financial items -2 -3 -9 -9
Profit after financial items -8 -7 -34 -31
Group contributions 54 48 54 48
Profit before tax 46 41 20 17
Income tax -5 -4 -5 -4
Profit for the period 41 37 15 13

Profit for the period corresponds to total comprehensive income.

Parent Company Balance Sheet

SEKm Dec 31, 2020 Dec 31, 2019
ASSETS
Non-current assets
Shares in subsidiaries 6,494 6,494
Total non-current assets 6,494 6,494
Current assets 54 49
Receivables to group companies 1 1
Other receivables 0 0
Cash and cash equivalents 55 50
Total current assets 6,549 6,544
EQUITY AND LIABILITIES
Equity 6,011 5,993
Current liabilities
Liabilities to group companies 525 538
Tax liabilities 0 -
Other liabilities 13 13
Total current liabilities 538 551
Total equity and liabilities 6,549 6,544

Information to shareholders and analysts

Financial Calendar

Annual Report 2020 week 11, 2021 Interim report January-March 2021 6 May 2021 Interim report January-June 2021 22 July 2021 Interim report January-September 2021 26 October 2021

The annual general meeting of shareholders in Attendo AB will be held 14 April 2021. Further information about the AGM will be published on Attendo's website. The annual report will be available at Attendo's head office and on the website no later than on 24 March 2021.

Telephone conference

A telephone conference will be held on 10 February 2021 at 10.00 (CET) with Attendo's CEO Martin Tivéus and CFO Fredrik Lagercrantz. For participation please dial in on the following number:

SE: +46 8
505
583 51
FI: +358 9
817
105 21
UK: +44 3
333
009
271
US: +1
8 33249 8403

Link to webcast

For further information please contact:

Fredrik Lagercrantz CFO Tel. +46 8 586 252 00

Andreas Koch Communications and IR Director Tel. +46 70 509 77 61

This is information that Attendo AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above at 08.00 CET on 10 February 2021.

Forward-looking information

This report contains forward-looking information based on current expectations of the Attendo's management. Although management deems that the expectations presented by such forward-looking information are reasonable, no guarantee can be given that these expectations will prove correct. Accordingly, the actual future outcome could vary considerably compared to what is stated in the forward-looking information, due to such factors as changed market conditions for Attendo's services and more general conditions regarding business cycles, market and competition, changes in legal requirements and other political measures, and fluctuation in exchange rates.

Attendo AB (publ) Vendevägen 85B 182 91 Danderyd

Tel +46 8 586 251 00 Fax +46 8 586 250 01 www.attendo.com

Company number: 559026-7885

Attendo's operations

Attendo is the leading private provider of care services in the Nordics. The company has operations in Sweden, Finland and Denmark. Attendo is the largest private care provider in Sweden and Finland. Attendo is a locally based company and has more than 700 units in operation in about 300 municipalities. The company has about 25,000 employees. With the vision of empowering the individual, Attendo provides services within care for older people, care for people with disabilities, social psychiatry and care for individuals and families.

Attendo provides services through two business areas, Attendo Scandinavia and Attendo Finland.

Attendo provides care services under two contract models:

  • Own operations, where Attendo provides services in own controlled units/premises or provides home care in customer choice models. Attendo has own units within care for older people, people with disabilities, social psychiatry and care for individuals and families.
  • Outsourcing operations, where Attendo provides services in publicly controlled units/premises or provides home care services based on outsourcing contracts. Attendo has outsourced units for care for older people, care for people with disabilities and care for individuals and families.

Local authorities (mainly municipalities) are usually the contracting authorities for a large majority of Attendo's service offerings, but contract types and duration of contracts vary depending on the contract model and service offering. Own operations are normally based on framework agreements and outsourcing operations are based on outsourcing contracts, following a tender process. The contract period is typically 2-5 years.

Definitions of key data and alternative performance measures (APM)

Explanations of financial measures

Acquired growth (APM) The net between the increase in the company's net sales from businesses and operations acquired
during the past 12 months and loss of net sales from businesses and operations divested during
the past 12 months.
Adjusted earnings per share (APM) Profit or loss for the period attributable to the parent company shareholders excluding effects
from amortization of acquisition-related intangible assets as well effects from the implementation
of IFRS 16 and items affecting comparability and related tax items divided by the number of
outstanding shares after dilution.
Adjusted EBITA (APM) See the definition of operating profit (EBITA) below. Adjusted operating profit (EBITA) is
operating profit according to the previous reporting standard IAS 17, i.e. excluding the effects of
the implementation of IFRS 16. Car leases were reported as finance leases under the previous
standard. Consequently, it is the effects of leases of real estate under IFRS 16 that differentiate
operating profit from adjusted operating profit. See the income statement including effects of
IFRS 16 for more information.
Adjusted EBITDA (APM) See the definition of operating profit (EBITDA) below. Adjusted operating profit (EBITDA) is
operating profit according to the previous accounting standard IAS 17, i.e., excluding the effects
of the implementation of IFRS 16. Car leases were reported as finance leases under the previous
standard. Consequently, it is the effects of leases of real estate under IFRS 16 that differentiate
operating profit from adjusted operating profit. See the income statement including effects of
IFRS 16 for more information.
Adjusted net debt (APM) See the definition of net debt below. Adjusted net debt is net debt according to the previous
reporting standard IAS 17, i.e., excluding the IFRS 16 effect on lease liabilities attributable to
right-of-use assets for real estate. See the table showing net debt calculation for more information.
Adjusted operating margin
(EBITA) (APM)
Adjusted operating profit (EBITA) divided by net sales.
Adjusted operating margin
(EBITDA) (APM)
Adjusted operating profit (EBITDA) divided by net sales.
Capital employed Equity plus interest-bearing liabilities and provisions for post-employment benefits.
Cash and cash equivalents Cash and bank balances, short term investments and derivatives with a positive fair value.
Earnings per share Profit or loss for the period attributable to the parent company shareholders divided by average
shares outstanding.
Equity/assets ratio Equity divided by total assets.
Equity per share Equity attributable to the parent company shareholders divided by average shares outstanding.
Free cash flow (APM) Free cash flow is a measure of the cash and cash equivalents the group generates in operating
activities and investing activities. The performance measure is defined as operational cash flow
after changes in working capital, cash flow from investments in and divestments of tangible and
intangible assets, as well as received/paid interest, interest expense for lease liabilities of real
estate and repayment of lease liabilities according to IFRS 16. See the Consolidated cash flow
table for reconciliation.
Items affecting comparability Items whose effects on profit are important to pay attention to when profit for the period is
compared with earlier periods, such as significant impairment losses and other significant, non
recurring costs or income.
Net debt (APM) Net debt is a way of describing the group's indebtedness and its ability to repay its debt with cash
and cash equivalents if all debts were to be due for payment today. Net debt is defined as interest
bearing liabilities plus provisions for post-employment benefits minus cash and cash equivalents.
Net debt is presented both including and excluding lease liabilities attributable to right-of-use
assets for real estate. See the section Financial position in this report for a reconciliation of net
debt.
Net debt to equity ratio Net debt divided by equity.
Net investments The net of investments in and divestments of tangible and intangible assets, excluding
acquisitions and divestment of operations as well as investments in and divestments of assets held
for sale.
Organic growth (APM) Attendo reports organic growth as a performance measure to show underlying sales development
excluding acquisitions and currency effects. The performance measure is calculated as sales
growth excluding acquisitions and changes in exchange rates. See Note C33 in the 2019 annual
report for a reconciliation of the performance measure on a full year basis.
Operating margin (EBIT margin) Operating profit or loss (EBIT) divided by net sales. Operating margin (EBIT margin) is
presented including and excluding items affecting comparability.
Operating margin (EBITA margin) Operating profit (EBITA) divided by net sales.
Operating profit (EBIT) (APM) Attendo reports operating profit (EBIT) as a performance measure because it shows the
development of operating activities independent of financing. Operating profit (EBIT) refers to
profit before financial items and tax. Operating profit (EBIT) is presented including and
excluding items affecting comparability. See the Consolidated income statement for a
reconciliation of EBIT.
Operating profit (EBITA) (APM) Operating profit (EBITA) is used as a performance measure because it shows the development of
operating activities without the effect of amortisation and impairments of intangible assets from
acquired companies and independently of financing. Operating profit (EBITA) refers to profit
before amortisation of acquisition-related intangible assets, financial items and tax. Operating
profit (EBITA) is excluding items affecting comparability. See the Consolidated income
statement for a reconciliation of EBITA.
Operating profit (EBITDA) (APM) Attendo reports operating profit (EBITDA) as a performance measure because it shows the
development of operating activities independent of financing and investments. Operating profit
(EBITDA) refers to profit or loss before depreciation, amortisation and impairments. Operating
profit (EBITDA) is excluding items affecting comparability. See the Consolidated income
statement for a reconciliation of EBITDA.
Profit (-loss) for the period Profit or loss for the period attributable to parent company shareholders and non-controlling
interest.
Profit margin Profit or loss for the period divided by net sales.
r12 "rolling 12 months" The sum of the period's past 12 months.
Return on capital employed (APM) Attendo reports return on capital employed because it shows profits in relation to the capital used
in operations. The definition of return on capital employed is operating profit (EBIT) excluding
items affecting comparability for the past 12 months divided by average capital employed.
Working capital (APM) Working capital is a key performance measurement for optimising cash generation. The
performance measure is defined as current assets excluding cash and cash equivalents and current
interest-bearing assets minus current non-interest-bearing liabilities and provisions. Assets and
liabilities held for sale are not included in working capital. See Note C33 in the 2019 annual
report for a reconciliation of the performance measure on a full year basis.

Explanations of operating measures

Mature unit Unit opened during the calendar year of 2017 or earlier, excluding units from the acquisition of
Mikeva.
Occupancy The number of occupied beds divided by the number of available beds. Occupancy is a weighted
average in the last month of each reporting period.

Attendo AB (publ) Vendevägen 85B 182 91 Danderyd

Tel +46 8 586 251 00 Fax +46 8 586 250 01 www.attendo.com

Company number: 559026-7885

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