#Sweden #Stockholm #healthcare staffing #2024 report #Dedicare

Dedicare's Year-end Report for 2024

Dedicare, a key player in healthcare staffing, recently released its year-end report for the period from January 1 to December 31, 2024. The report highlights a series of challenges faced throughout the year, particularly in the final quarter. The fourth quarter saw net sales reaching SEK 389.0 million, which is a stark decrease from SEK 464.1 million in the same period the previous year. The EBITA for this quarter also showed a decline, reported at SEK 19.5 million compared to SEK 41.6 million in the prior year, indicating substantial pressure on the company’s financial performance.

For the entire year, the company's net sales totaled SEK 1,719.7 million, representing a 12.7% decline compared to the previous year's sales of SEK 1,970.7 million. This downturn can be attributed to several factors, including a challenging market for healthcare staffing, increased competition, and cost pressures. The overall EBITA for the year was recorded at SEK 69.3 million, substantially lower than 2023's figure of SEK 161.8 million.

Impact of Market Conditions

The report's findings underscore the difficult conditions pervasive across all markets where Dedicare operates. The Swedish healthcare staffing sector has been particularly hard hit, suffering a significant decrease of over 30% in 2024 due to staff contracting limits imposed by various healthcare regions. Consequently, the fourth quarter performance in Sweden was particularly dismal, with net sales falling to SEK 75.6 million, a 33.2% reduction year-on-year.

Despite the struggles in Sweden, the company reported that its Norwegian segment, which accounts for 64% of its revenues, also faced challenges with net sales decreasing by 7.8% in the fourth quarter. The EBITA margins for Norway similarly shrunk from 9.6% to 6.0% for the quarter. However, a new nationwide agreement initiated on October 1 has positioned Dedicare to provide a stable source of revenue moving forward, contributing an expected SEK 80-100 million in annual sales.

Strategic Measures and Financial Outlook

In light of these challenges, Dedicare has implemented strategic measures to navigate these market conditions. The company has realized annual savings of SEK 16 million through a series of cost-saving initiatives initiated in May. The operational restructuring undertaken throughout 2024 is aimed at enhancing efficiency to better respond to the current market landscape. Dedicare plans to capitalize on emerging opportunities, especially in the life sciences sector, where demand for staffing services is increasing.

Despite the daunting financial figures, Dedicare remains optimistic about its future positioning. CEO Bård Kristiansen expressed confidence that the diversified business model and the company's proactive adjustments have set a solid foundation to rebound from the current downturn. He indicated that Dedicare is well-prepared to face the ongoing challenges of a tough market while also exploring new pathways for growth, notably in sectors exhibiting robust demand.

In regards to shareholder returns, Dedicare’s Board of Directors has proposed a dividend of SEK 2.50 per share, aligning with the group's policy of distributing at least 50% of net profit, consistent with previous years where dividends were higher. The current dividend corresponds to 50.8% of the company's net profit, reflecting an ongoing commitment to shareholder value even amid challenging circumstances.

Conclusion

As Dedicare looks towards 2025, the company acknowledges that the difficult market conditions are likely to persist, prompting a focus on enhancing operational efficiency and strategic investments in growing markets. The organization's response strategy aims not only to withstand the current downturn but also to exploit new opportunities that arise.

Dedicare's proactive approach, along with a strong commitment from its employees and partners, underscores its potential to recover and grow, showcasing resilience in a continuously evolving landscape for healthcare staffing.