Earnings Call: Q2 2018

Jul 25, 2018

We present both present numbers and comparisons to last year now exclude our Healthcare business in Finland, unless stated otherwise. As you know, we have agreed to divest this operation, and we expect to finalize the transaction in the fall. Next. The second quarter twenty eighteen was a quarter with an all time high number of openings and a continued high number of construction starts. This builds a strong foundation for future value creation. We added close to 200 beds in this quarter, which is an exceptionally high number. Net sales amounted to SEK2.7 billion. Growth was 22% adjusted for currency effects, a result of openings recent quarters and acquisitions. Operating profit EBITDA amounted to DKK128 million. This includes DKK53 million in nonrecurring costs for closing down units in Individual and Family Care. Following the changes in the market dynamics, we have made a comprehensive review of all units within Individual and Family Care. We have concluded that a number of units are not expected to be long term profitable and therefore, we have taken the decision to close them. Frederic will come back to this subject later in this presentation. The underlying EBITDA amounted to €181,000,000 corresponding to a margin of 6.6%, which is almost two percentage points lower than last year. Acquisitions and improved occupancy this year in units, which were under start up in Q2 last year, contributed positively to profits. This was offset by the costs for opening up new units and in addition to the closed down costs, the lower profit contribution from Individual and Family Care. Atendo reported an operating cash flow of €267,000,000 As I just mentioned, we signed an agreement during the second quarter to divest Atendo's healthcare operations. This is the operations that I co founded in year February. I am pleased to see that we found a solid new owner for this business in the Finnish company, Terverstalo. Following the finalization of the divestment, Atendo will be pure care company, and we will get financial strength to capture future opportunities through acquisitions and further organic growth. Next slide. Let's take a closer look at our current our contract models. You can see that the quarter reflects continued growth in own operations. Net sales increased by 32% compared to Q2 twenty seventeen. The increase is mainly explained by acquisitions, but also from new nursing homes and higher occupancy in units that were under start up during the corresponding quarter of last year. The largest part of the sales growth in owned operations is derived from the acquisition of Mikeva, which was consolidated into Atendo in November 2017. Atendo opened 34 new owned units in the first quarter with a total of eleven fifty five beds, an all time high number and the highest expected in our short and midterm plan. At the same time, we continue to find new opportunities and of 20 new units that will add seven seventy new beds. In total, we had 2,463 beds under construction by the end of Q2. This is a decrease versus previous quarter due to the many openings, yet a high number in a historical perspective. Now turning to Outsourcing. Net sales in Outsourcing operations increased by 6% as a result of slightly higher sales in existing contracts and contractual price adjustments. Looking at the results of tendering processes in Q2, our tender won contracts totaling SEK100 million and lost volumes of SEK70 million. We are not reporting sales for Staffing in Q2 as this contract model is part of Healthcare operations that will be divested. Next slide, please. This is a new chart that shows the rolling twelve month opening pace. As I just mentioned, we opened eleven fifty five beds in Q2 isolated. The number of open beds rolling to a month per end Q2 was 2,887 beds. This is more than a double amount compared to the same period last year and more than 30% higher than last quarter. This is the fundamental driver behind our future organic growth and future value creation. The high number of openings has an impact on profits and margins. Before we reach a sufficient occupancy, open units are loss making. Also, with the high activity in the market, the expected time to reach full occupancy has increased from earlier term month to around eighteen months. Many openings also mean higher demand on the organization to sell more beds. We are putting more efforts to sales and marketing, and we are pleased to see that we have never been selling more beds on a 12 basis, but still below the exceptional high opening rate. Q2 is expected to be the peak in terms of number of openings even if the rolling twelve months openings will remain on a high level the next quarters. On the right hand side of the slide, you can see photos of some of our own nursing homes that opened in Q2 twenty eighteen. Next slide, please. Attender now has 15,064 owned beds in operation, an increase by more than 50% from the corresponding period 2017 and plus 10% versus the first quarter. As we have opened up a record high number of units in this quarter, the number of beds under construction has declined versus last quarter. However, we are still on a higher level than a year ago with 2,463 beds under construction per end of Q2. We expect continued good underlying demand for new capacity, and we have a strong pipeline in both Finland and Sweden. Next slide, please. Let's then turn to the overall market trends. I already commented that Atento continues to seek strong interest in own operations in both Sweden and Finland. The public sector needs new solutions to get access to new capacity and replace outdated facilities, especially in Finland. We have seen higher interest from local authorities to divest outdated nursing homes to private providers in order to get access to modern care homes and to secure local services and local jobs. One example from the second quarter was that the local authority of Imatra in Eastern Finland choose to sell care facilities to Atendo in order to get a long term solution that secures access to local care for the citizens. The outsourcing market in Sweden improved slightly in the second quarter. Volumes were up versus previous quarter and versus last year in both Care for Older People and in Care for People with Disabilities. The main explanation is that old contracts are being out in the market for retender. During the quarter, the Swedish parliament voted down the bill from the government to impose a profit cap on private providers of welfare services. This was an expected outcome. The overall process to prepare for the social and health care reform in Finland moves forward on a local level. And 17 out of 18 Sothek counties have already started voluntarily operations based on current law. On the national level, the parliament has not yet voted for the reform. Atendo remains optimistic about the opportunities that the reform offers for private providers. The reform has a relatively smaller impact on Care Services versus the changes on the healthcare market. With that, I hand over to Fredrik for financial review of the quarter. Thank you, Patti. Before going into the numbers and explanations, I would like to remind everyone that if not stated otherwise, all figures related to the income statement are presented without the healthcare operations in Finland. So with that clarified, we can take a look at Slide seven. We continue to see strong sales growth this quarter. Total net sales amounted to SEK2.7 billion, up by 25% compared to the corresponding quarter last year. Acquisitions contributed with 18.8%, currency 3.6 and the remaining 2.9% were organic growth. Main part of the growth is a result from the consolidation of Mickiewa during the fourth quarter twenty seventeen, but also a high number of bolt on acquisitions during last year. Organic growth continues to increase from last year and we see good sales growth in our new own units, which are exceeding the lost sales from the closed units within IOF Care. EBITDA, including the closed down cost, was SEK 128,000,000 in the second quarter and EBITDA excluding the close down cost was SEK 181,000,000 with a margin of 6.6%. I will start with some details around the closure cost and after that I will come back with the comments on the underlying EBITDA development. As can be seen in the report, we have during the second quarter decided to close down units within Individual and Family Care, also called IOS. This decision is based on a thorough review of the total IOF service offering during the 2018 and it's resulting in a one time cost of SEK 53,000,000. If we first return to 2017, we experienced a rapid decline in demand for Integration Care services during the quarter and we started to close down main part of our Integration Care units. At that point, we expected to see demand for so called HVB homes, while decision was taken to convert a number of Integration Care units to traditional HVB homes. HVB is a Swedish abbreviation for Homes for Care and for Living. During 2018, we have experienced an oversupply also in the HVB market, like less results from the many converted Integration Care units. At the same time as we now are facing a lower demand from the local authorities also for HPB solutions. Given this change in the market, we have taken a new decision to not only close down all remaining Integration Care units, but also to close down an additional 150 beds in HVB units that are lacking good prospects for future value creation. In total, we have in this quarter taken the full cost to close down SEK250 million, which had net sales of approximately SEK60 million in the quarter. The profit impact on this unit has been negative during 2018. After the close down of this unit, Atenda will continue to operate three forty beds in HVB homes with total annual net sales of approximately SEK240 million. The one time effect of SEK53 million consists of both close down and phase out cost for the current as well as coming quarter for these units. The future profit impact from the units affected by the close down decision will be close to zero. If we then look at the underlying EBITDA, we have had a positive impact from acquisitions and higher profits from units that were on the start up in the second quarter last year. This quarter was also affected by the Easter holiday, but with fewer days than prior year, while the year on year calendar effect was positive. However, the positive effects could not compensate for the record number of openings we have right now. The openings in combination with lower profit contribution from IOF Care also excluding the closedown costs, results in an overall lower underlying EBITDA for the second quarter twenty eighteen compared to last year. I will return to this with some further details on the underlying profit development on next slide. Financial net was negative SEK39 million compared to negative SEK16 million in Q2 twenty seventeen. The higher interest expenses are explained both by higher debt and higher interest margins after the Mickiew acquisition, but also to some extent currency effects on interest in euro. Income tax for the quarter was minus SEK 13,000,000, which equals a tax rate of 24.5%. The higher tax rate is mainly explained by the losses in the Danish Home Care business and the lower share of remaining business in Finland. Net profit for the quarter was SEK40 million, which equals an EPS after dilution of SEK0.25 kronor. Next slide, please. As I mentioned, the underlying operating profit for the quarter was SEK 181,000,000, SEK 5,000,000 lower than last year. The largest profit contribution in this quarter comes from acquisitions, where our main part relates to the acquisition of Mickiewa. We are also pleased to see that the profit contribution from occupancy in units that were under start up during the comparison quarter is improving. And as presented on the previous slide, we have a positive year on year effect from the Easter holiday in this quarter. The extreme opening pace that we have had during the past twelve to fifteen months is pressuring the profit heavily in this quarter. This quarter, we have almost 2,900 beds in start up phase, which is an all time high number that shall be compared with approximately 1,100 beds during the same period last year. We expect that the rolling twelve month number of open beds now will stabilize or slightly decrease during the 2018. The high number of start ups will continue to put significant pressure on the result also going forward. In the longer term, the profit impact on the units that have passed the start up phase will more than offset the start up costs. It is, however, difficult to say an amount or exact quarter when this profit contribution will be higher than the total initial losses in the start up unit. We are still confident that there is a need for new nursing homes and that we will be able to fill these homes. Going to the last bullet, we noticed that we have some negative year on year effects from IOF Care also excluding the closedown costs. Main part of this relates to negative year on year effect from Integration Care units that still had a positive contribution to the result in Q2 twenty seventeen and some refers to slightly lower result in other IRF units. As we have communicated earlier, we expect this to be here with an extreme amount of new openings, a good foundation for future growth, but with initial profit pressure. Next slide, please. And then some comments on the cash flow in the quarter. Please note that the cash flow and the net debt is based on total business, including the Finnish Healthcare operations. Operating cash flow remained stable. Operating profit for the total business amounted to SEK 172,000,000. Change in working capital, paid tax and other non cash items had a positive impact of SEK 162,000,000 with the largest driver being improved working capital related to increased personnel related liabilities. Net investment in CapEx amounted to SEK 67,000,000 mainly due to fixed assets in the new own nursing homes. This take us to an operating cash flow in the quarter of SEK $267,000,000. Interest payments amounted to SEK 22,000,000. Cash flow from investment and real estate projects continues to be positive with a total contribution of million in this quarter and were now down from the very high investment level that we had during the 2017. As the summer period is an active time for construction projects, expecting negative cash flows in the third quarter. Cash flow from acquisitions amounted to minus SEK 147,000,000 and cash flow from financing activities minus SEK $219,000,000. Total cash flow from the quarter amounted to positive SEK 38,000,000. Net debt amounted to SEK 4,800,000,000.0, which equals a net debt to EBITDA of SEK 4. Excluding the close down cost, net debt to EBITDA amounts to 3.8, which is more in line with Atenza's financial target. With that, I hand back over to you, Pety. Thank you, Fredrik. Next slide, please. As part of the quality work, Atendo offers a wide range of activities for its customers. During the quarter, the focus on Atendo's nursing homes has been on outdoor activities with the recurring Atendo fitness walk taking place at several locations in Scandinavia. In the picture to the left, you see some examples of outdoor activities. We at Atendo see great value in identifying and rewarding good efforts, both by individual employees and by units for entire regions. The awards help us to create internal pride and enable us to spread best practices between different parts of the company. During the first quarter, we named the best units in Scandinavia, the disabled care unit, Atendo Sulvarsgarten in Jievle and the home care unit, Investeros. As we have mentioned before, Atendo has an ongoing project to recruit and train nurses in The Philippines to Atendo's nursing homes in Finland and Sweden. This quarter, the first nurse got the formal Swedish nurse license, something that shows progress of the project. With that, I would like to conclude the presentation. The result in Q2 was disappointing given the need to continue to restructure individual and family care. The underlying development follows the long term plan to open more units and to continue to identify new business opportunities. The fast pace of opening new units have a clear negative impact on profitability, short and midterm, but is also the foundation for the growth. Our strategy is very clear, to provide new nursing homes to the benefit of the people in need of care and to help local authorities reduce waiting lines. And with the divestment of the health care operations, Atendo will be a focused care company with financial strengths to further capitalize from opportunities in the market. Thank you for your attention. Over to you, Andreas. Thank you, Perthew. We are now opening up for questions. Operator, please go ahead. Thank you. And we have a question from Karl Malaby from Nordea Markets. Please go ahead. Your line is now open. Yes. Hi. Thank you for taking my Considering the high number of new openings now in Q2, can you provide some type of guidance in regards to exactly how many beds you plan to open in Q3 and Q4 this year? Well, we don't give specific numbers. But as you can see, the number of Savolino Crown and how many beds we have under construction, and basically do an easy math that it must be around 500 beds per quarter, plus or minus something. Okay. Thank you. The next question comes from the line of Christopher Willebert from Carnegie. Please go ahead. Your line is now open. Yes. Good morning and thank you. Is it possible in any way to quantify the impact on EBITDA from all number of units in start up phase? And also related to that, considering that you were almost flat on EBITDA here despite Q2 should be the peak with number of openings, Is it fair to assume you should be able to start grow EBITDA again in the second half of the year, although, of course, margins will continue to be impacted? Well, we don't give a specific guidance on coming year, but we expect 2018 to be better than H1 in terms of margins and profits. Is that also so if we adjust for seasonality with third quarter always being the strongest? Yes, that explains partly that, yes. But also on a year on year comparison, we expect the second half to be better than the first half. And in terms of the impact of openings, we can say that in the now in the second quarter, the costs, so to say, of new openings is slightly below the one off cost we had for closure in IOS. Okay. Yes. So the year over year impact, so to say? Correct. Yes. Okay. Is it also possible to quantify the calendar impact in the quarter year over year? I think it's a similar magnitude as the negative impact we had in Q1. So it's that ballpark. And at that point in time, we stated roughly SEK 10,000,000. Great. Thank you. And the next question comes from the line of Peter Testa from OneOver Investments. Please go ahead. Your line is now open. Yes. Thank you. I have a couple of questions. I'll go one at a If you look at the new units which have been coming on over the last twelve months, I was wondering if you could give some sort of sense of how the fill up rate has come in versus your expectation and maybe some comment on how the rate performance versus, say, average rates for the group has performed on the new units as they come in? Well, we have good effort on sales, and we are pleased that we have never been selling this much in rolling twelve months as we see now looking at the last twelve months. Therefore, we are happy about the pace of how we fill up the houses, but we don't give specific numbers around that. Okay. Okay. But I can comment that it's obviously, it is the number we sell new beds is below the number of openings. The state is lower. Yes. Was trying to understand the path because you've been working on an assumption that this would take longer because it's a good cautious assumption to take given the supply. I was wondering whether that was the case, but also the associated rate performance that's coming with that? Because obviously, you can build quicker if you have lower prices, slower if you have higher prices. So just trying to put the two together to understand together the fill rate performance. I can comment on the prices that we have seen price increases evenly across the business. So we don't see any price pressure at the moment. That's not an issue. Fine. Okay. And then if you on your comments upon the eighteen months, that's eighteen months to fill the beds and they become units and they become relatively profitable at that stage. If you looked at the time to breakeven, do you have any comments you could give this sort of time to breakeven on the beds, new units? Well, breakeven is, of course, shorter than eighteen months. If eighteen months is to fill the house, but we specify when do we have the breakeven. It varies house by house quite a lot. But we are happy that we have been able to squeeze down the breakeven level over the years with best practice solutions. But historically, we said around nine months, but obviously, that's higher Longer lead Okay. And then the last thing was just you made your comment at the end about, obviously, the strong balance sheet, which you have post the closure of the disposals, and you've essentially focused down the activity quite a lot down onto the nursing home market. You talked about also better pipeline in Sweden at the same time. And I was wondering if you could give some sort of sense in terms of the opportunities that you see in the balance sheet. Have to take advantage of it, whether you see more coming now in Sweden than before or whether we should look at more opportunities in Finland and whether that's M and A, bolt on larger units or how you might think about it? Well, overall, considering what is the current situation, it's obvious that the opportunities in Finland are stronger currently as in Sweden. But Sweden gradually paces up. Okay. And are you looking more this is on new units, I comment, or also M Comment and A of some on new units. But on bolt ons, it's quite similar. More activity in Finland. Okay. And very last, in the past, there have been some discussion about looking Continental Europe, but I know you obviously have management changes and so on ongoing. I was wondering how the view on Continental Europe may be evolving, if it's possible to say at this stage. We are actively looking at Europe, but we are really picky about the opportunities considering prices, geographics and business models. But we are actively seeking possible opportunities. Great. Thank you very much. Thanks for the answers. Thank you, Peter. And the next question comes from the line of Mikael Hoel from Ganske Bank. Please go ahead. Your line is now open. Yes. I have two questions. The first is regarding the time to fill the units. Is it similar, the market characteristics, both in Sweden and Finland, that it takes eighteen months currently? That's the first question. As long as we know from competitors, we think it's very similar. Okay. And the second question is related to seasonality when you fill the beds. For example, in Finland, you have 11% more beds in operation than in Q1, but it seems like sales in local currency actually slightly down from Q1. So is it that you normally fill the beds after the summer and in the beginning of the year? Is that the reason? Or why else don't we see any sales pickup quarter on quarter for own operations in Finland? Well, we don't specify the Finnish numbers. But overall, I can assure that the sales of net new beds sold also in Finland is all time high, rolling to a month. So we are the pace we are selling is a record number as well in Finland. But you have the breakdown on Page 20 in the report that own operations in Finland was SEK 1,088,000,000.000, and that was SEK $990,000,000 no, sorry, that was SEK 1,074,000,000.000 in Q1. So you do break that down and it doesn't grow? On sales, yes. That's correct. And is there a specific explanation for beds growing 11% and then sales in local currency in Finland slightly declining quarter on quarter? In own operations. Just a second. So which number Which number you refer now in Page 20? Own operations in Finland was 1,088,000,000.000 Yes. And I think that number in Q1. Q1 was SEK1074 million. But then, I mean, the currency moved a bit. So in local currency, I guess, it's a decline of 2% quarter on quarter on 11% more beds in operation. Well, overall, still, I can only comment that we have sold more net new beds in Finland as well in Q2. But there might be some single units, I don't know if there are some single cases that influenced this. But overall, it doesn't reflect the reality that we have sold more net new beds in Finland as well. And also come back to the Q1 report, we still had part of dental operations, part of health care. We had some own operations in Q1 as well. Yes, I can. There's nothing else. Okay. I understand. Andreas can comment on that. We can double check that. Yes. I'd say I'd stick to my comment that we have positive trend in net new beds. Yes. Thank you. And the next question comes from the line of Hans Brolstrom from Credit Suisse. Please go ahead. Your line is now open. Good morning. I would like to understand better why the closure costs for these individual care units are so high? I mean, they are over SEK 3,000,000 per bed, which sounds a very, very high number. Could you give some clarity of what actually is going into these significant costs? Are we talking about transfer cost for transferring patients to other providers? I mean, I can't imagine redundancy costs or anything like this. So that would be helpful. But of course, I suppose the follow-up question is the two fifty beds you still have there. I mean, are you confident of these if this is a robust business? Or is there a concern that this could also go in a year or two's time? So this is Frederic. Let me comment. So the closure cost, as I mentioned, is both closed down and phased out costs. So what we've done is that we've done a comprehensive review of all units and see which have the long term ability to run a healthy operation and come to the conclusion that a number then needs to close down. But then in these units, one is personnel restructuring, but it's also so that we sit with rental agreements that some are shorter term, but some are a couple of years longer. And also, there's a phase out process where we have certain obligations to the local authorities to we cannot transfer the clients immediately. But that means also that during the phase out period, we will have lower revenue, but still have a large share of cost base in place. So it will be negative profits during that phase out period. And then there's some other things like we need to make sure that the facilities are at a good standard when we leave them and there's some smaller assets that we need to write up. I can comment this vice versa situation. When you open a new nursing home, you don't open it if you have one client. So you basically want to collect a few clients before you open it because the loss, initial losses are even higher if you run the house with, let's say, three clients. But so I suppose, and how robust do you think the remaining two fifty beds are? Are you confident that this is a viable business? And what differentiates the ones you have closed with the ones you retain? Yes. Now we are confident that this is now done. And we have gone through all the units, locations, competitive landscape, prices, everything. And now these units, will be left inside Atendo, will reach Atendo's margins. And the shift we have seen in what has happened in the market is both on the supply and the demand side. There is much more supply after convert what has shifted in the Swedish migration, but also we see different buying pattern from local authorities. So what we can see on the units that we have decided to keep, they have more of a specialized concept on how to run the operations and a better quality worked out in how. Then it could be some different specializations. It's not that they're all in one because there are different flavors also within this segment. But they are more specialized and then have a much better ability to be attractive when local authorities needs to place different clients. So could you give us a sense of how big have the losses been from this business? Because clearly, I suppose the upside from this is that you are effectively removing a considerable source of margin pressure in the group, especially if you are effectively forestalling losses that would be made in the second half of the year by taking this charge? Yes. It's clear it would have been involving profits. The thing is that these units are in different stages, so to say. So some of them, if we take integration business, we know have been winding out for a while. Some of them are actually still running with profits and good occupancy because we have still agreements with local authorities. But that has been already we received a notice of termination. So we know that in the fall, they will be empty. So if we don't close them, there will be big losses, but it's not necessarily that they have big losses. And some of the units have been in a phase where we've been during a conversion from integration unit to sort of what we call a normal HPB, which means that in the conversion period, it could have been only some rental costs, it's not big profit losses, while other ones have had larger losses. So I understand you're looking for a number to correct your models, but it's slightly above the SEK 53,000,000, of course, will not come. And then it's some more losses that we have had in the 2018, but it's not a huge additional amount. But we see trend wise, this is definitely the right decision. I mean, I suppose my final question on this and then I'll jump back in the queue is, I mean, you've had a revision or reassessment of your Finnish Healthcare business. You now have this strategically motivated decision as well. Are there other businesses within the tender that you also are considering to disband or reduce significantly? Yes. As we have stated previously, we have had challenges in Danish Home Care business. And we are still running Danish operations with some losses, but we have been able to cut them smaller. And we are still looking at how do we proceed with Danish Home Care. But first, we try to improve the current business. On the other hand, we can comment that we have been our contract, the biggest contract in Denmark has been now agreed to be terminated by the 2019. And how significant that in revenue terms or profit terms? We're not specifying the Danish business, but it's been loss making for the last year, as you know. Then we took quite a hit in Q4. But on an ongoing basis, we are still running on losses, but one shouldn't expect any year negative year on year effect more for this quarter. But Denmark in total is SEK50 million in revenue in this Yes, second in revenue. But it could be a significant part of that business presumably that will be removed by the end of 'nineteen then? By the end of 'nineteen, yes. It's the largest contract, correct. Jump back in the queue. Thank you. Thank you, Hans. And we have a follow-up question from Krista Fondeliber from Carnegie. Please go ahead. Your line is now open. Yes, thank you. Two follow-up questions. Do you have any write downs in depreciations in the quarter related to properties? I was thinking maybe about the individual family beds that were closed down. And also in the financial net, were there any FX impacts on balance sheet items in the quarter? Thank you. We had 5,000,000 of write downs as part of the SEK53 million. And on can you repeat the question on FX on balance sheet? I mean, in the financial net, of course, you have translation effect as you have interest rates in Europe, but there was other balance sheet items that impacted the financial net in the quarter? I need to check that and come back. There shouldn't be any significant effect, but I'll make sure I'll verify that. Great. Thank you. Okay. Thank you, Gustafar. And we have a follow-up question as well from Jens Bustrom from Credit Suisse. Please go ahead. Your line is open. Yes. So some financial questions. The tax rate increase, I mean, is this something you see as a sustainable impact for this year? I mean, clearly, you're stating what is the reason for it, but how should we model this for the second half of the year? Of course, it's obviously noticeably higher than it has been. And the second point is also financial relating to the increase in interest margin, which certainly was higher than I had expected. Could you specify that and why you see that being on a year on year basis versus last year? Yes, I think that 24.5% is a good estimate on tax rate for the full year. And the reasons we stated are the losses in Denmark and also now that our remaining business, since the healthcare business in Finland is reported on a separate line that our average tax rate up. And then on the financial net, that is a consequence of both higher debt and higher interest margins following the MiKiva acquisition. And we didn't see that did not have a full impact in the first quarter because of how our financing is structured. But the second quarter now is a good proxy for where we will be as long as we have this type of leverage. So what is the lower threshold? At what point you might be returning to your previous interest margin? I mean, could you give us some numbers on how much higher the interest margin is at the moment? I mean, we can calculate it, but it would be interesting to get your perspective on that. Yes. We have in our agreement, our interest margin is dependent on our the amount of debt we have in. And of course, the tricky part to get to lower interest margin is to be to go down in leverage. But to have a meaningful change in that would be when we received the cash from the healthcare transaction. And remind us what is your latest thinking on the timing of that? I will think it's 2018. Or in Q4. Okay. I had a question regarding the comment you've had to made about your opportunities to buy privatized nursing homes and the one you mentioned, the Imata. I suppose we've learned in the past that you've been talking about existing public facilities being rather inefficient to operate. I mean is this a concern that we should have that you are now taking on potentially a significant stock of not terribly efficient units that might have lower structural margins? Or is this just a one off? How would you view that potential concern? Yes. Commenting on IMattra, for example, as a case which was relatively big case, is that the facilities that we are involved now, half of those are modern, let's say, built in built or remorted during the last five or six years. And half of the units, we will see that we have to replace. Of course, we are not willing to pay much for those that we rebuild, and we rather put it to give a market price for those premises that are modern. But roughly in this case, half modern keeping, half we will replace in upcoming years. Actually, the third construction project starts already this year. And then of course, don't want to run old facilities which are inefficient. That one, we don't do. And then, of course, also, we were running according to a tender model implementing that as we do with all acquisitions and all units we're taking over. So our efficient way of working will also follow this. And could you give us a sense of maybe this relates particularly to Finland or maybe it does to Sweden as well? In which case, please let us know. But how significant is the sort of acquisition of legacy facilities in the overall expansion in each of the countries? I mean, is it 10%, 50%? Just give us a sense of how important it is in terms of your growth expansion? It is, first, of course, the opportunity is more in Finland at the moment because of the social and health care reform. So we will see the real impact during the social and health care reform process. So we get back to this, let's say, next year when we know that the new legislation is in place and how does the local authorities see their opportunities to run their houses in the future. But the overall local authorities in Finland have roughly 25,000 beds. You. Do we have any last question, Hans? Yes. I would actually be interested, know it's going to be a tricky one to answer, but could you give us a sense of certainty for the future would be extremely helpful to have a trailing occupancy rate development for the group given the extraordinary variations in new bed development. Is that a figure you could give us? Well, I I also will take that into consideration, but we don't have that right now. But as you know, we have mature units, good occupancy, about 90%, and we'll think about if we can find some metrics for the start ups as well. Thank you. Thank you, Hans. Operator, do we have any final questions? There are no further questions registered. Okay. Then thank you all for your participation. And please feel free to contact us afterwards with comments or questions. And our next interim report will be published on November 9, and we hope to hear from you at that point in time. Thank you. This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.