Fourth Quarter 2016 Presentation 15 February, 2017 Henrik Borelius, CEO Tomas Björksiöö, CFO
2 Financial summary of Q4: Continued stable development Net sales SEK 2,647m (2,564), adjusted growth 4% Operating profit (EBITA) of SEK 241m (215) Operating margin (EBITA) of 9.1% (8.4) Operating cash flow of SEK 404m (324) High number of beds under construction: 1,935 Proposed dividends: 1.22 (0.54)
Business highlights: Stable growth in own operations Highlights by contract model Net sales by contract model Own operations Stable growth development of net sales, +11% 8 new own homes opened, 210 beds Construction of 11 new units started, 420 beds Increased number of beds under construction: 1,935 Outsourcing operations Net sales decreased slightly compared to previous year Contracts won with estimated annual sales of SEK 100m, lost contract volumes of SEK 70m YTD, won contracts exceed lost contracts SEKm Q4 2016 Q4 2015 Chg (%) Own operations 1,656 1,498 11 Outsourcing 787 805-2 Staffing 204 261(183*) -22 (11*) SEKm 2 600 2 100 1 600 1 100 Staffing operations Net sales increased adjusted for deconsolidation of subsidiary* 600 100-400 TT deconsolidation Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 Own operations Outsourcing Staffing Attendo * Adjusted for subsidiary Terveyden Tuottajat deconsolidation, 31 December 2015 3
Own operations: Increased number of beds under construction No. of beds under construction 1) New own units 1 469 1 716 1 935 650 780 595 611 654 887 922 855 918 827 861 755 737 Attendo Koskipuisto hoivakoti, Jämsä Finland Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 No. of beds in operation 2) 5 646 5 609 6 233 6 385 6 493 6 709 7 084 7 348 7 509 7 745 7 751 8 612 8 807 8 932 9 012 9 280 Attendo Kaisla, Sysmä Finland Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 Attendo Onnentäyttymys, Pornainen Finland 1) Own nursing homes (CoP) and own care homes (care for people with disabilities and social psychiatry). 2) Own nursing homes (CoP) and own care homes (care for people with disabilities, social psychiatry and individuals and families). 4
5 Market highlights: Continued strong demand for new nursing homes, SOTE reform in Finland move forward Market highlights Counties in SOTE reform Sweden Good demand for own operations solutions Tendered outsourcing contract volumes continued to increase slightly In November 2016, the Swedish government presented an investigation on how to restrict freedom of choice in schools, healthcare and care - The consultation process is ongoing and the investigation has been met with harsh criticism Finland Strong demand for own operations solutions Low activity in outsourcing market Staffing stable but challenging SOTE reform move forward - Freedom of choice model in health care - The SOTE counties need to corporatize their services - Service vouchers will be more important in social care 12
6 Strong margin development SEKm Q4 2016 Q4 2015 Change (%) Net sales 2,647 2,564 3 2 Organic -1.5 1 8.8 - Acquired 2.4 1.9 - Currency 2.3 0.0 - Operating profit (EBITA) 241 215 12 Operating margin (EBITA ) 9.1 8.4 - EBIT 210 201 4 Financial net -16-231 - Income tax -43 21 - Profit for the period 151-9 - Diluted earnings per share, SEK 0.94-0.06-1) Organic growth 1.6 %, adjusted for deconsolidation of subsidiary Terveyden Tuottajat (TT) 2) Adjusted for deconsolidation of subsidiary Terveyden Tuottajat (TT) and currency effect, net sales increased 4%
7 Higher operating profit due to higher occupancy in new units and improved planning and processes Q4 2016 vs. Q4 2015: Net +26m + Improved occupancy in units that were under start-up during Q4 2015 + Improved planning and processes + Acquisitions - Lower contribution from home care - Net new / ended outsourcing and staffing contracts
8 Strong cash generation in Q4 SEKm Q4 2016 Q4 2015 Operating profit (EBITA) 241 215 Change in working capital, paid tax and non cash items 217 155 Cash flow after change in working capital 458 370 Net investments in tangible and intangible assets -54-46 Operating cash flow 404 324 Interest received/paid -16-74 Free cash flow 388 250 Net of acquisitions / divestments -79-148 Cash flow from financing -148-282 Total cash flow 161-180 Net debt 2,722 2,827 Net debt/ebitda 2.4x 2.6x
9 Quality & employees: good results from customer surveys Attendo s quality definition Examples from fourth quarter 2016 Implementation plan/methods Client survey Continued solid quality results throughout the organization. Attendo s quality thermometer for 2016 Implementation Client amounted to 85% plan/methods survey 1 2 3 Projects Risk analysis Systematic quality work Internal audit Satisfied individuals Systematic quality work based on continuous improvement Best available knowledge Specific events Values External inspections Attendo s home Projects care in Sweden got higher Values customer satisfaction than LA and other private, according to The National Board of Health and Welfare Attendo s life style nursing homes scored high in the same survey - Attendo got 85%, vs 82% average Ongoing projects to take on around 400 people with an immigrant background as interns in Sweden Successful project to ensure access to competence: Philippine nurses are currently working and trained in Sweden
10 Summary Full Year 2016 Solid development in line with long term targets Continued strong demand for new own homes. 20 new own homes were opened with 770 beds. Increased pace of beds under construction, 1,935 by end of the year Net sales of SEK 10.2bn (9.8), growth of 7% adjusted for currency and deconsolidation Operating profit (EBITA) of SEK 1,002m (933) Operating margin (EBITA) of 9.8% (9,5) Operating cash flow of SEK 805m (765) The Board of Directors proposes a dividend of SEK 1.22 per share in line with Attendo s policy Net sales by service offering 19% 19% Net sales by contract model 30% 8% 62% 62% Care for older people Care Healthcare Own operations Outsourcing Staffing
2011A 2012A 2013A 2014A 2015A 2016A 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Strong market fundamentals ~80.000 new beds required (2016-2030) Thousands; beds 8,0 7,5 7,0 6,5 6,0 Demand for new beds per year SWE and FIN Nursing homes, 2011-2030 Share of new beds 2012-2016 21% 22% 5,5 5,0 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 3,4 2,3 1,1 2,8 1,8 1,0 3,1 2,1 1,0 4,3 3,0 1,3 4,0 2,6 1,4 4,9 3,3 1,6 Finland Sweden 17% 62% 38% 40% Attendo Other private Local authority 0,0 Sweden Finland 1) Driven by demography, stricter care need evaluation, replacement of old capacity, private penetration, financing. Source: SCB, Socialstyrelsen, Attendo 11
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