Dedicare's Year-end Report 1 January - 31 December 2024: Continued weak progress in the fourth quarter concluded a challenging 2024

STOCKHOLM, Feb. 7, 2025 /PRNewswire/ -- Fourth quarter 2024

• Net sales SEK 389.0 million (464.1)
• EBITA SEK 19.5 million (41.6), adjusted for non-recurring items SEK 12.8 million (30.7)
• EBITA margin 5.0 percent (9.0), adjusted for non-recurring items 3.3 percent (6.6)
• EBIT SEK 17.2 million (39.3), adjusted for non-recurring items SEK 10.6 million (28.4)
• EBIT margin 4.4 percent (8.5), adjusted for non-recurring items 2.7 percent (6.1)
• Profit after financial items SEK 17.7 million (41.5)
• Profit for the period SEK 14.4 million (33.7)
• Basic earnings per share SEK 1.51 (3.53)
• Diluted earnings per share SEK 1.50 (3.50)

The period January - December 2024

• Net sales SEK 1,719.7 million (1,970.7)
• EBITA SEK 69.3 million (161.8), adjusted for non-recurring items SEK 73.3 million (151.1)
• EBITA margin 4.0 percent (8.2), adjusted for non-recurring items 4.3 percent (7.7)
• EBIT SEK 60.2 million (148.4), adjusted for non-recurring items SEK 64.2 million (137.7)
• EBIT margin 3.5 percent (7.5), adjusted for non-recurring items 3.7 percent (7.0)
• Profit after financial items SEK 59.7 million (139.9)
• Profit for the period SEK 47.1 million (110.4)
• Basic earnings per share SEK 4.92 (11.55)
• Diluted earnings per share SEK 4.89 (11.44)

Performance measures

Dividend

Dedicare's Board of Directors has proposed an ordinary dividend of SEK 2.50 per share (6.50), corresponding to SEK 23.9 million (62.2) for the financial year 2024. The group's dividend policy is that the annual dividend should amount to at least 50 percent of consolidated net profit over a business cycle. The proposed dividend corresponds to 50.8 percent (56.3) of net profit for the year. Dedicare's equity/assets ratio amounts to 45.5 percent (37.2) after the proposed dividend, which is consistent with the group's long-term target of at least 30 percent.

Chief Executive Officer's statement 

"Continued weak progress in the fourth quarter concluded a challenging 2024"

"The challenging market for healthcare staffing also left its mark on the final quarter of the year, with net sales and EBITA both down significantly in the quarter, year on year. Full-year sales were down by 12.7 percent, and our EBITA margin was 4.0 percent. We took a series of actions in the year to adapt to the prevailing market conditions in healthcare staffing, generating annual savings of SEK 16 million. We're benefiting from our diversity and presence on markets and are investing where we see opportunities, including life science, where demand is rising.

The Dedicare group's net sales were SEK 389.0 million in the fourth quarter, and SEK 1,719.7 million for the full year 2024. This was a 16.2 percent downturn in the quarter in year-in-year terms, and 12.7 percent annualised. All our markets weakened, but the Swedish healthcare staffing market was down most, by over 30 percent in 2024 due to healthcare regions' staff contracting limits. Consolidated EBITA was also down in the quarter. After non-recurring items, our EBITA margin was 3.3 percent (6.6) for the quarter and 4.3 percent (7.7) for the full year. Reduced demand with intensified competition over each assignment, resulting in price pressure and increased payroll expenses explain the lower profitability. The group's financial position remains stable, and at year-end our equity/assets ratio was 47.6 percent.

To adapt to prevailing market conditions in healthcare staffing, Dedicare took a range of measures in the year including implementing the cost savings programme initiated in May, which has generated an annual cost saving of SEK 16 million. In addition, we're working continuously on a variety of projects to enhance our operational efficiency. Overall, these actions mean that we're going into 2025 with a lower cost base than we had last year. Our work on adapting our business to prevailing market conditions is continuing.

The Norwegian healthcare staffing market was down by around 10 percent in 2024, with the fourth quarter also featuring price pressure and rising payroll expenses due to the sharper competition we've been reporting on for several quarters. Net sales in Norway, which make up 64 percent of the Dedicare group's revenues, were down by 7.8 percent to SEK 251.5 million in the quarter. Profitability was also negatively impacted, and our EBITA margin was 6.0 percent (9.6) for the quarter and 6.5 percent (10.1) for the full year.

A new nationwide agreement came into effect on 1 October, with Dedicare reappointed to provide doctors, specialist physicians, psychologists and other healthcare staff for every hospital in all Norway's healthcare regions. This deal will contribute an estimated SEK 80-100 million of annual sales and has a two-year term with a further two-year extension option.

In tandem with the nationwide deal for nurse staffing, the staffing of social workers in municipalities and Acapedia's preschool operation, this provides a continued stable base to operate from in Norway.

Net sales in the quarter for the Sweden segment were SEK 75.6 million, down by 33.2 percent on the corresponding quarter of the previous year. As in the previous two quarters, EBITA was negative, at SEK -1.5 million. For the full year, net sales in Sweden were SEK 333.1 million, a 31.4 percent decrease on 2023, with EBITA of SEK -5.6 million (29.1).

The Swedish healthcare staffing market has been hard hit by limits on staff contracting. Now some way into 2025, we still see no signs of improvement on the Swedish healthcare staffing market and have witnessed several insolvencies among our competitors. Dedicare is continuing to adapt its organisation to the prevailing market situation by restructuring its Swedish business. What's positive is the increased demand for staffing services in life science, where we've now provided consultants in Sweden, Denmark and Norway. We'll be focusing here in 2025 to exploit the opportunities on this market.

For the Denmark segment, net sales in the quarter were SEK 57.0 million, down by 11.3 percent, and net sales for the year were SEK 233.6 million, a 12.2 percent decrease. But profitability increased slightly, with an EBITA margin of 4.0 percent (1.7) for the quarter and 6.5 percent (5.7) for the full year.

Denmark has been subject to contracting limits on nurse staffing for some time, which had a negative impact on sales right through 2024. One positive in the quarter was us securing a new framework agreement with the Southern Denmark regional health authority, which means Dedicare now has framework agreements in place with all Denmark's regional authorities. This new deal comes into effect in March 2025 and has a four-year term. However, we only anticipate limited net sales from it.

Net sales for the UK segment for the quarter were SEK 12.4 million, and SEK 53.9 million for the full year, down for the quarter but an increase for the year as a whole. The UK doctor staffing market has also slowed, and accordingly we're keeping our primary focus on international recruitment, which currently offers more potential.

To summarise, 2024 was a challenging year for Dedicare. But at the same time, I can note that Dedicare's size and diversified business offer us better potential than most of our competitors to deal with downturns like the current one, which means we're winning market shares. We also expect these challenging market conditions to persist into 2025, so we'll be increasing our operational efficiency still further.

After adapting our organisation in 2024, I view the Dedicare group as now well positioned to face continued challenges but also to exploit the opportunities across all our service segments. We also have the potential to grow on declining markets, while simultaneously investing where demand is growing, as in life science.

Finally, I'd like to thank our consultants and in-house staff for their contributions in the year: you're making a positive difference every day! Thanks also to all our collaborative partners and their staff-municipalities, regional authorities and private companies-for a fruitful collaboration through the year, and finally, thanks to all our shareholders for your commitment."

Bård Kristiansen, CEO and Managing Director

This information is mandatory for Dedicare AB (publ) to publish pursuant to the EU Market Abuse Regulation (MAR) and the Swedish Securities Markets Act. This information was submitted for publication through the agency of the above contact at 8 a.m. CET on 7 February 2025

For more information, please contact:
Bård Kristiansen, CEO & Managing Director, +47 97 08 88 83
Anette Sandsjö, CFO, +46 (0)73 343 44 68

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