Welcome to Attendo Q3 Report 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to CEO Virpi Holmqvist and CFO Mikael Malmgren. Please go ahead.
Good morning, everyone, and thank you for joining us. Today, we will present our results for the third quarter of 2026. I am pleased to announce that this is the strongest quarter for Attendo yet to date. Attendo delivers another quarter of strong results where we have continued to improve both the quality of our care and our financial performance. For me, these two things go hand in hand. When we focus on quality, give our employees the right conditions, and continuously improve our ways of working, we build ourselves strong for the future. I will start with the development during the quarter and our progress in our strategic priorities. After that, our CFO, Mikael Malmgren, will follow and walk you through the financial results. Next slide, please. Let me start with the key highlights from the quarter. Attendo is reporting the strongest quarter yet to date.
This is supported by higher occupancy, better ways of working, and importantly, improved performance on quality indicators. Our employees' dedicated focus on quality is reflected in the positive result in the Elderly Care Satisfaction Survey for 2026, published for both Finland and Sweden in the quarter. In both countries, we score higher than the public sector regarding customer satisfaction in the municipalities and regions where we operate. In Sweden, the satisfaction rate is the highest yet to date. The results are a testament to our long-standing commitment to quality and demonstrate how we continue to develop and improve our care services to meet growing needs as part of our broader responsibility to society. Turning to our financial performance, reported net sales increased by 3%, while underlying growth in continuing operation remained strong at around 6%.
The difference is mainly explained by ended outsourcing and home care contracts in Sweden, divestment, as well as currency effects. Profitability improved with lease-adjusted EBITA increasing by SEK 75 million to SEK 557 million, mainly driven by Scandinavia. On a rolling 12-month basis, our lease-adjusted EBITA margin improved by 2% to 8.1% for the group. Adjusted earnings per share increased by 23% during the quarter, and the free cash flow improved from already high levels to SEK 375 million. All in all, this gives us a solid foundation to continue to invest in quality and in the new capacity needed by society. Currently, we have 885 new places under constructions. Next slide, please. Our employees make a difference every day.
Their dedication and focus on quality are reflected in the positive results of the latest Elderly Care Satisfaction Surveys conducted by Finnish Institute for Health and Welfare in Finland and the National Board of Health and Welfare in Sweden. In Sweden, the customer satisfaction at our nursing homes has increased from 77% to 85% over the past year. This is an all-time high result for Sweden, higher than our main peers and the public. In Finland, the recommendation index for nursing homes stands at 40, compared with 31 for the public sector. Also, 14 Attendo homes in Finland are among the best in the regions, and one ranks among the three highest nationwide. These results are a testament to our long-standing commitment to quality and demonstrate how we continue to develop and improve. Next slide, please.
Having focused on margin uplift and efficiency in the past year, which are still important priorities, we are now transitioning towards our sustainable balanced growth model that aims to deliver an EBITA growth of at least 10% per year. This is also in line with our plan to achieve adjusted earnings per share of at least SEK 9 in 2028. You have seen the model before, but let me remind you. The model has six drivers. Firstly, on the back of demographic growing demands, we aim to add new capacity through greenfield opening in attractive micro locations where it is a positive demand, a good payer relationship, and access to staff. Adding new capacity should contribute 2%-3% of growth per year on average. I will share some more details about our increased investment case later in the presentation.
Secondly, adding high-quality and margin-accretive bolt-on acquisition is a key competence of Attendo, where we aim to add at least 2% growth from M&A. We are well ahead for 2026. Occupancy is another key growth lever, excuse me, where we target to improve it by at least 1 percentage point per year in existing capacity, and with the midterm target of at least 92% in next couple of years. From higher occupancy and better ways of working, we also increase our productivity, which adds additional 2% growth. As we expand our business, we also see good opportunities for further economies of scale. Finally, price. Compensating for annual cost inflation should add additional 2%. On top of that, continued share buybacks support an even higher growth rate in earnings per share.
Please bear in mind that the drivers can fluctuate a bit between quarters and years, but together they build up to an EBITA growth of at least 10% per annum. Next slide, please. One of our key growth drivers going forward is investment in new capacity to meet the growing needs in society. As such, our pipeline increased for the fourth consecutive quarter, reaching a total of more than 1,500 new places, an equivalent to up to SEK 1.5 billion in the future net sales. Worth noting is that Attendo Scandinavia's places under construction grew to more than 400 new places. Next slide, please. As we are increasing our investment pace from around 2% towards 3% in new capacity, we are targeting to open around 650 new places in the next 12 months, compared to 327 new opening in the last 12 months.
We are positive about these investments as we see an increased demand for our care services, evident and supported by the recent opening 12 to 24 months ago that have already reached 84% of the average occupancy. We remain confident that they will continue to fill up towards our target for occupancy of 92%. Next slide, please. Let's have a look at occupancy, where we continue to have a positive development. Year-on-year, our group occupancy is up to 1.5%, reaching 88%. Occupancy continues to be above the annual improvement of 1 percentage point that we assume in our balanced growth model. Occupancy reached 90% in Scandinavia and remains at a high level compared to last year. In Finland, occupancy remained stable and reached 88%. As earlier communicated, we have some seasonality during Q2.
We have an inflow of net new customers, but we have also opened many new places during Q3. Improving occupancy is important for our financial performance, but it also reflects our ability to create attractive care environments and build trust with residents, their families, and public customers. Next slide, please. Let us now turn to the development of our rolling 12-month lease-adjusted EBITA margin. We continue to see improving margins in both business areas, both compared with last year and with the previous quarter. At group level, the rolling 12-month margin has improved by around 2 percentage points year-on-year, reaching 8.1%. Finland has now delivered 15 consecutive quarters of margin improvement. This is a strong achievement and reflects several years of systematic work to improve quality, leadership, occupancy, and operational efficiency.
In Scandinavia, we continue to see improved margins compared to last year as an effect of higher occupancy, good quality in our operations, and improved ways of working within our support functions. Looking at net sales, the rolling 12-month revenue has remained broadly stable at around SEK 19 billion for several quarters. This reflects the transition in Scandinavia, including ended contracts together with currency effect. With that, I will leave over to our CFO, Mikael Malmgren. Please go ahead, Mikael.
Thank you, Virpi, and good morning, everyone. Next slide, please. Let's take a look at the sales development for the quarter. Reported net sales increased by 3% to north of SEK 4.9 billion. Our continuing operations grew by 6%. Both business areas showed growth, where Scandinavia continued operations grew close to 8%, driven by more sold beds in own homes, acquisitions, and inflation. Finland's continuing operations grew 5%, excluding the divested child welfare business, driven mainly by own nursing homes and acquisitions. However, reported growth was partially offset by ended and ending contracts in Scandinavia, which reduced reported net sales by SEK 104 million. Secondly, last year's divestment in Finland impacted sales by SEK 26 million. While FX in the quarter had a minor SEK 4 million negative impact. Ending and exiting contracts net sales impact will gradually wear off during the remaining part of 2026 and first half year of 2027.
Next slide, please. Moving to EBITA development. Reported EBITA improved by SEK 58 million to SEK 706 million from SEK 648 million. Previous year was impacted by a positive one-off IFRS 16 adjustment stemming from a release of onerous contract right-of-use assets provisions. Lease-adjusted EBITA increased by SEK 75 million to SEK 557 million, up 15% versus same period last year, and above our long-term growth model of at least 10%. The improvement is broad-based, with lease-adjusted EBITA in Scandi improving SEK 56 million, substantially higher than last year, and Finland also performed well, improving lease-adjusted EBITA by SEK 22 million. Group and other items were broadly neutral in the quarter, and currency had a marginal SEK 2 million negative impact on reported EBITA and lease-adjusted EBITA. Next slide, please. Turning to Finland. Net sales were SEK 2.9 billion, up 4% reported.
Excluding the divested business and currency, growth in continuing operations was 5%, driven by more sold beds in primarily on nursing homes and recent acquisition. Going forward, we expect to see continued net sales growth, driven by new openings and further supported by the recent acquisition. Lease-adjusted EBITA was SEK 371 million against SEK 351 million, an increase of 6%, with the margin improving to 12.6% from 12.5%. Largest contribution came from improved occupancy in disabled care and better cost structure following the divestment of the child welfare business in Q4 last year. Occupancy was stable as we continued to welcome more new customers following our new openings in elderly care in the quarter. At the same time, the quarter was impacted by a higher-than-last-year salary increase, which impacted September, and some startup costs from recent openings, both which will have a further impact in Q4.
We continue to add new capacity, opening three homes with 124 places during the quarter. Already on 1st of October, we opened additional four homes. In total, 318 new places are planned to open during Q4, and we also expect to take over one welfare unit with 60 places. All in all, we have a strong pipeline of new projects, both under construction and signed agreements where construction has not yet started. Finally, as covered earlier, we completed one bolt-on acquisition in Finland during the quarter, A-klinikka Oy, which closed on August 1st. During Q4, we expect some one-off costs as we finalize the integration. Next slide, please. Turning to Scandinavia. In Q4 last year, we stated that we expected to improve margins in Scandinavia during every quarter of 2026. Q3 marked our fourth consecutive quarter of positive EBITA growth.
Although the improvement started already in Q4 last year, and we expect to open a new nursing home in the quarter four, we still target to improve the lease-adjusted EBITA in the fourth quarter versus last year as well. As such, and in line with our margin uplift plan in Scandinavia, lease-adjusted EBITA increased SEK 56 million to SEK 206 million versus SEK 150 million last year. Overall margin improved to 10.4%, up from 7.7% last year. The improvement follows three key drivers: higher occupancy in owned homes, recent acquisitions, and improved central and support functions ways of working. With stable operations, higher quality, and more satisfied customers, we are starting to increase our investments in new capacity, with new openings planned for both Q4 and Q1. Next slide, please.
As mentioned previously, net sales growth in continuing operations in Attendo Scandinavia grew 8% in the quarter to almost SEK 2 billion, and lease-adjusted EBITA grew 36% and marked the fourth consecutive quarter of improved margins. At the same time, the ended and ending contracts decreased net sales by SEK 104 million. The revenue base is now small, and the impact year-over-year will continuously diminish over the next couple of quarters. As a result, lease-adjusted EBITA margins improved from 7.7% to 10.4%, as you can see at the bottom right of the page. Next slide, please. Our free cash flow to firm continued to improve from high levels, with free cash flow to firm on a rolling 12-month basis reaching SEK 1,370 million. The quarterly free cash flow to firm primarily improved due to improved EBITA and the lower working capital effect, reversing the timing effect we mentioned back in Q2.
At the same time, CapEx investments were slightly higher at SEK 47 million. As a result, free cash flow to firm improved to SEK 375 million from SEK 235 million last year. In the quarter, worth noting, we invested SEK 387 million in acquisitions. We also bought back shares worth SEK 263 million against SEK 101 million in comparable quarter. Since start of share buybacks in February 2024, we have repurchased more than 5% of outstanding shares on average per year, a pace we target to at least maintain. As such, I am happy to announce that the board has approved a new repurchase program targeting to repurchase additional SEK 300 million worth of shares until the time of the Q4 report in February. Next slide, please. A quick look at the key metrics.
Starting with the earnings per share bridge on the top left, adjusted earnings per share improved by 23%, from SEK 2.39 to SEK 2.93, and ahead of our balanced growth plan of at least 15% earnings share growth. By far, the largest contribution comes from higher lease-adjusted EBITA at around SEK 0.5 per share. Financial items also contributed positively as financing costs continue to come down. Tax takes some of it back on higher results, and buybacks add further SEK 0.16. On a 12-month basis, adjusted earnings per share is now at SEK 7.68, compared to our midterm target of at least SEK 9 in 2028. If we instead look at the graph on the top right, the rolling 12-month lease-adjusted EBITA margin was 8.1%, up from 6.2% a year ago and improving every quarter throughout the period.
At the bottom left, our leverage was 1.2 times, up slightly from 1.1 times previous quarters due to recent acquisitions and our active capital allocation. Finally, on the bottom right, net interest expenses was SEK 23 million in the quarter against SEK 30 million last year. Next slide, please. With that, I hand over to you, Virpi.
Thank you, Mikael. Let me finish by highlighting a few key points from the quarter. First, Attendo reported our strongest quarter yet to date, where we have continued to improve both the quality of our care and our financial performance. When we focus on quality, give our employees the right conditions to do their work, and continuously improve how we operate, we also build a stronger long-term business. Our employees' dedication and focus on quality are reflected in the positive result of the latest nationwide external elderly care satisfaction surveys in both Finland and Sweden. In Sweden, we see an all-time high result for our nursing homes. For me, quality comes first, and when the quality of our care services is high, we fulfill our promise, better care for more people.
Our strong result for the third quarter reflects several years of systematic work to improve quality, strengthen our operations, and create a more stable and efficient organization. On a rolling 12-month basis, lease-adjusted earnings per share have increased by 44% to SEK 7.68. We are well on track towards our target of at least SEK 9 per share in 2028. We have improved our free cash flow to firm from already high levels. Our strong financial performance and cash flow allows us to gradually place greater emphasis on growth through new capacity. Today, we have around 900 new care places under constructions and a total pipeline of more than 1,500 places to meet the increased demand for care. Our decision to invest and establish new capacity for the future are always made in close cooperation and partnership with municipalities and welfare region.
Our strategy and financial targets remain unchanged, but the stronger operational platform gives us capacity to invest and grow sustainably. To conclude, my first month as a CEO has reinforced my confidence in Attendo and in the direction we have chosen. Thank you for your attention. We are happy to answer your questions. Operator, please go ahead. Next slide, please.
If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad. The next question comes from Julia Angeli Strand from Handelsbanken. Please go ahead.
Hi, thank you for taking my question. I'll have a bit of one question. What is your view on the margin durability from here? I understand we should not anticipate a massive margin expansion, but given the strong occupancy and underlying demand, shouldn't we be able to maintain the margin?
Thank you, Julia, and good morning. Let me start by commenting on the overall level. I mean, we still remain confident and positive about the belief that we will continue to see some margin uplift as a total. If we start with Scandinavia, I mean, we are very happy to see the development that we have seen for the past four consecutive quarters. As you may recall, we stated already back in Q4 2025 that we remain confident that we would deliver on margin improvements throughout 2026. We believe that Scandinavia still has more to give, and we are looking forward to the future of that development. If we turn our attention to Finland, on the other hand, we have had a really strong development with, as you know, 15 quarters of strong margin development where we focus on operational efficiency and manning.
We still see upside in the midterm perspective when it comes to occupancy and productivity with more to give. At the same time, we don't guide on margins, and we do see that we are transitioning to a balanced growth model with more revenue growth EBITA. In the short term, we will have a large number of openings and some integration costs, but we are still also positive there in the short term for seeing EBITA growth in absolute terms.
Okay, I understand. Just a follow-up on, I think you mentioned this earlier, you anticipate you will reach 92% occupancy quite near term. When did you expect to reach that number?
I mean, in short, we have the balanced sustainable growth model, which we aim to deliver a 1% improvement year by year, and that is still the target that we commit or believe we will maintain. We are currently at around 88%.
The next question comes from Anna Salamon from ABG Sundal Collier. Please go ahead.
Good morning, and thank you, Virpi and Mikael. I can start off with some questions on Finland. Could you please, if possible, quantify the Q4 margin drag in Finland from startup costs on the about 320 places opening in October to December?
I mean, we will not, as you know, comment on margins per se. That is how we do it. We do estimate that the integration and costs and opening of new places will have an impact of EUR 1 + 1 million in the quarter.
Thank you. How long does a new Finnish home take to reach break-even for occupancy and a mature margin? Is that getting faster for recent openings, do you see?
Yes, if you look back in your history, those homes we have opened within 12 to 24 months, they have reached the 84% occupancy level within that time. That is the average ramp-up time we are now looking at.
Thank you. Then quick on the new wage increases. How much do you expect to recover through price adjustments from the welfare regions, and when?
Yeah, good question again. Thank you. I mean, the price negotiations are still early days, both in Scandinavia and in Sweden. Many of them are tied to some sort of KPI or care price index. There are, of course, also tenders ongoing for new agreements or current agreements. That is still very early days, and we will have to come back to that in the Q4 report.
Okay, thank you. Then just quickly on Scandinavia, the margin rose 2.7 percentage points. Can you split this between occupancy, central cost, and acquisitions? Is the central cost level a new run rate?
No, sorry, we don't give that detailed development, unfortunately.
Okay, thanks. On the outsourcing, do you expect more of this outsourcing or home care contracts in Scandinavia to end beyond those already decided?
I mean, we continuously evaluate our contract portfolio, where we always make sure that we have sustainable terms. At the moment, we don't have any new contracts that we view as such, but we will continue to monitor that as we progress.
Okay, thank you. Then quickly just on the buyback program. How much is for the incentive program delivery versus cancellation?
I am sorry, but we can't go into that level of detail. That's an AGM decision at the end of the day.
Yeah.
But we have our program to buy back at least 5% as a target right now, which we've done for the past couple of years.
Yeah. My last question, Denmark, is that a market that you're looking at, or are you more focused on Sweden for Scandinavia?
We currently operate three elderly care homes in Denmark, and we have previously communicated that we are evaluating the implication of the new Danish legislation for our business and the market. Based on that assessment, we will determine the future strategic focus and approach to Denmark. We will come back to that.
Okay, thank you. Those were all my questions.
Thank you.
The next question comes from Björn Olsson from SEB. Please go ahead.
You write in your CEO letter, Virpi, that the satisfaction rate in Sweden has improved from 77% to 84%. Could you give any flavor on the changes you have done to achieve this?
Well, the customer satisfaction is usually the end result of employee satisfaction. So, what we have done, we have invested in leaders training, so better leadership. We have also put effort on the encounters with the customers and the employees. So, I think those are the two main things what we have done in that area.
Okay, fascinating. Good job. Second, on Finland, I noticed that the sort of, if you look at on a year-on-year, sort of second derivatives point of view, the occupancy improvement rate is a bit slower than Q3 last year. Is this just drag effect of the increase because of new openings, or are your mature homes almost full by now?
Interesting observation, Björn. Good morning. I would say that partially this is driven by the increased new homes openings in the quarter.
Okay. I guess then we should sort of extrapolate that slower pace ahead.
I cannot comment on that, Björn.
Okay. Then I will leave the question hanging. Thank you.
The next question comes from Kristofer Liljeberg from DNB Carnegie. Please go ahead.
Hi, morning. Four questions. First one on your previous comment here that you expect EBITA growth in absolute numbers to continue near term in Finland. Is that also valid for Q4?
That is our ambition as well, yes.
Okay, great. Coming back to the previous question here about the occupancy in Finland, the fact that you managed to improve it even slightly, despite more openings, what is your view on Q4 now when the number of new openings will be twice or more than twice as high as in the third quarter?
Yes, the opening pace is increasing, but we still believe in the historical results what we have. As I said, if we look at the homes we have opened during the last 12 to 24 months, we have reached that 84%. So, we believe in that pace in the future as well.
How would you characterize demand? Because I notice, based on my calculations at least, that you added 370, 375 new clients in Finland this quarter, and that's more or less what you're going to add in capacity in the fourth quarter. Yeah, how do you view demand? Do you see an uptick there?
Yes. Of course, we don't know, we can't say about the future how the occupancy develops, and it's up to, very much up to also the welfare region's situation. But we still believe that the pace will be same as it has been historically.
Okay. On the buybacks, did you say that you target 5% of the shares per year going forward?
I mean, what we said was that we have bought back approximately 5% on average per year since February 2024, and that's a pace we aim to continue with at least. This program is a testament to that we just launched a SEK 300 million.
Okay, great. I noticed that the number of ended contracts in Scandi, of course, the bases get smaller and that impact will become smaller and smaller. But when it comes to closed places in own management homes, that also seems to be declining a bit. Would you say that you still have a right sizing to do, or should we assume that this will also become less of a drag on top line growth here in 2027?
Yeah, I mean, overall, that is the plan, Kristofer. We obviously always evaluate our portfolio in both countries. But as we mentioned before, we are transitioning into a more revenue EBITA growth model, which means that we will start seeing added capacity net.
Okay, great. Okay, that's all. Thank you.
The next question comes from Filip Wetterqvist from SB1 Markets. Please go ahead.
Good morning, Virpi, Mikael. First question on your earnings per share target. You are running well ahead of plan, and on my calculations, if you continue to develop like you have been doing, you should be able to reach it by year-end 2027. Do you view the target as being too conservative, or do you see that growth could potentially slow ahead, or some flavor on your view on the target would be helpful?
Sorry. Yes, we have had a strong quarter behind us, and we have strong momentum given the increasing demand of care in our society. Let me remind you that our target is at least SEK 9 per share.
All right. On Scandinavia, you point to lower costs for central functions. I know you do not guide on costs or anything, but could you just give some flavor on what type of cost savings you have done there?
I mean, we take a broad perspective, both in terms of where we put our resources and focus, but also on procurement and systems and simplifying that. It is a broad-based approach.
These savings are, would you say that they have come down quarter-on-quarter, or is it more year-over-year? Trying to get an idea of following quarters.
I mean, it is a year-over-year, but we still believe that we have slightly more to give going into the future as well.
All right, perfect. One last question on Finland. You are opening up quite a lot of new units here in the next couple of quarters, but do you expect to close any units as well? Trying to figure out the net effect of openings minus closures.
Well, we continuously monitor our footprint, so we continue to do that and see how the situation develops.
Okay, but you do not expect to close any units in Q4?
Sorry, I do not think that I can comment on that.
But generally, w hen we close down units, they are usually units that are poor performing and with low or even zero occupancy in those cases.
Yep, got it.
There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.
Thank you for your questions and joining us today. We look forward to continuing our work to develop Attendo and meet the growing demand for high-quality care. As always, please feel free to contact us if you have any further questions after the call. Thank you, and have a good day.
Thank you.