Humana Inc. · NYSE:HUM
Humana — Q1 2020 Earnings Presentation
32 slides from Humana's earnings presentation, May 7, 2020
Slide 1: Interim report Q1, January-March 2020
Everyone is entitled to a good life. Interim report Q1, January-March 2020 Rasmus Nerman, Ulf Bonnevier, Eva Nilsson Bågenholm, 7 May 2020
Slide 2: A quarter characterised by mobilisation, unity and heroic efforts
A quarter characterised by mobilisation, unity and heroic efforts • Crisis mgmt organisation in place since February supporting all Nordic operations handling the pandemic • Ensuring a safe work environment • Preventing the spread of the virus • Protecting both clients and staff • Challenging time –
Slide 3: Other operational highlights Q1
Other operational highlights Q1 • Humana Quality Index still at 94 in the first quarter, in spite of the challenging time • Strong results in this year’s employee survey. The already strong overall employee satisfaction figures continued to increase • New financial targets from 2020 HQI 100 80 60 89
Slide 4: Financial highlights Q1
Financial highlights Q1 Revenue and growth • Operating revenue was SEK 1,938m (1,708), an increase by 13% • The organic growth was 3.8% (1.5) Operating profit • Operating profit was SEK 98m (77), an increase by 28%. • Operating margin was 5.1% (4.5), an increase compared to the same period last year
Slide 5: Individual & Family: Better results although challenging market remains
Operational highlights Q1 2020 Better results although challenging market remains • Revenue increased organically for the first time in a few years • Weaker markets in children and adolescents segment continue • Weaker demand partly offset by good operational efficiency in the quarter • LSS and Adul
Slide 6: Personal Assistance: Steady performance continues
Operational highlights Q1 2020 Personal Steady performance continues Assistance • Yet another stable quarter • Very strong results in our employee satisfaction survey for personal assistants • Decreased customer mobility due to the pandemic • The number of assistance hours increased, despite the neg
Slide 7: Elderly Care: Focus on covid-19 while growth projects continue
Operational highlights Q1 2020 Focus on covid-19 while growth projects continue • Good organic growth with revenue increase according to plan • Focus on handling the covid-19 situation where safety for clients and staff is top priority • So far our strategy to handle the covid- 19 situation has been
Slide 8: Finland: Good development during challenging quarter
Operational highlights Q1 2020 Good development during challenging quarter Finland • Covid-19 situation impacting Finland with fewer open care visits and high sick leave • Strategy to handle the situation has been successful with limited spread • I&F segments performing well whereas profitability ch
Slide 9: Norway: Stable development in Norway
Operational highlights Q1 2020 Stable development in Norway • The strong momentum in Norway continues with personal assistance (BPA) and disabled care housing services (HOT) driving growth • Impact from covid-19 situation managed well • Increase in sick leave resolved due to timely and successful re
Slide 10: Operating revenue
Financial summary Q1 2020 Operating revenue 13% • The revenue growth of 13% is primarily acquisition driven. Acquired operations 1 938 contributed SEK 164m to revenues in the 1 708 Q1, 2019 quarter, of which SEK 148m relates to revenues Q1, 2020 from Coronaria Hoiva in Finland • Organic growth was 3
Slide 11: Organic growth
Financial summary Q1 2020 Organic growth (%) 10 • All business areas contributing to the growth • The leap year positively impacted organic growth 5 4,4 4,8 3,4 3,2 3,8 by 1% for the quarter, compared with the same 2,3 2,5 1,5 quarter last year 0,7 0 -5 -10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2019 2020
Slide 12: Profitability
Financial summary Q1 2020 Profitability +28% • Operating profit margin was 5.1% (4.5) 100 98 • The covid-19 pandemic has affected the Group in Q1 2019 90 terms of profit negatively 77 Q1 2020 80 ‒ Volume effects 70 ‒ Increased sick leave 60 50 ‒ Increased need and use of PPE (personal 40 protective
Slide 13: Individual & Family
Financial summary Q1 2020 +1% Individual & Family 512 519 Operating revenue, SEK m • Organic growth of 1.4% (-7.0) positively impacted by leap year • Still lower occupancy as a result of lower demand in the market segment for children and adolescents. An increased capacity utilisation in the adult s
Slide 14: Personal Assistance
Financial summary Q1 2020 5% Personal Assistance 719 684 • The increase in revenue of 5% is due to more assistance hours (despite a negative effect on the number of hours due to covid-19), a higher assistance allowance and acquisitions • Organic growth of 2.9% (1.5) Q1 2019 Q1 2020 • Operating profi
Slide 15: Elderly Care
Financial summary Q1 2020 9% 134 146 Elderly Care Operating revenue, SEK m • The revenue increase is due to the new elderly housing under own management in Staffanstorp and Kungsängen • The revenue increase of 9% is organic Q1 2019 Q1 2020 • Start-up costs of SEK 3m for Kungsängen, which 4 opened in
Slide 16: Finland
Financial summary Q1 2020 96% 350 Finland Operating revenue, SEK m • The acquisition of Coronaria Hoiva contributed 179 SEK 148m to revenues • Organic growth at 10.2% (7.7). Openings of units and more customers contributed Q1 2019 Q1 2020 • Operating profit increased by 7% • Operating margin was 4.7
Slide 17: Norway
Financial summary Q1 2020 0% 194 194 Norway Operating revenue, SEK m • Flat revenue year on year explained by currency effects • Organic growth at 4.6% (9.2). The organic growth is due to openings of units and more customers. Q1 2019 Q1 2020 • Operating margin was 6.7% (4.5). The increase 14 7 is ma
Slide 18: Financial position
Financial summary Q1 2020 Net debt/EBITDA Financial position 8 7,1 7 Leverage • Net debt increased to SEK 3,798m 6,0 (2,928) versus Q1 prior year 6 5,7 5,4 5,2 • Leverage continues to move in the 5 right direction 4 3 2 Q1 Q2 Q3 Q4 Q1 2019 2020 18
Slide 19: Cash flow
SEK M Q1 2019 Q1 2018 Financial summary Q1 2020 Cash flow from operating activities before changes in working capital 144 97 Changes in working capital Cash flow -50 -114 Q1 2020 Q1 2019 Cash flow from operating activities 95 Cash flow from operating activities before -17 187 144 changes in working
Slide 20: Thank you!
Thank you!
Slide 21: Appendix
Appendix 21
Slide 22: Humana at a glance
Humana at a glance Critical actor in the Nordic welfare Market leading positions in the Nordics 1 Individual & Family 9,000 1 Personal Assistance Customers ✓ Elderly Care 15,000 Employees Operations and revenue split Clear focus on full responsibility Split of revenues: Norway Outsourcing 11% Indivi
Slide 23: Consolidated income statement
Consolidated income statement Jan-Mar Jan-Mar Apr-Mar Jan-Dec SEK m Note 2020 2019 2019/20 2019 Net revenue 1,932 1,708 7,671 7,446 Other operating revenue 6 0 26 21 Operating revenue 3 1,938 1,708 7,697 7,467 Other external expenses -240 -216 -981 -958 Personnel costs -1,511 -1,344 -5,950 -5,784 De
Slide 24: Consolidated balance sheet
Consolidated balance sheet 31 Mar 31 Mar 31 Dec 31 Mar 31 Mar 31 Dec SEK m Note 2020 2019 2019 Note SEK m 2020 2019 2019 Assets Equity and liabilities Non-current assets Equity Goodwill 4 3,923 3,193 3,897 Share capital 1 1 1 Other intangible assets 6 7 5 Additional paid-in capital 1,096 1,095 1,096
Slide 25: Consolidated cash flow statement
Consolidated cash flow statement Jan-Mar Jan-Mar Apr-Mar Jan-Dec SEK m 2020 2019 2019/20 2019 Profit before tax 64 56 257 249 Adjustments for: Depreciation/amortisation 88 68 348 327 Financial items, net 34 21 133 121 Other non-cash items 0 -1 1 0 Cash flow from operating activities before changes i
Slide 26: Key ratios
Key ratios Jan-Mar Jan-Mar Apr-Mar Jan-Dec Jan-Mar Jan-Mar Apr-Mar Jan-Dec 2020 2019 2019/20 2019 2020 2019 2019/20 2019 Average number of employees, Individual & Family, FTE 2,085 2,249 2,021 2,026 Operating revenue 1,938 1,708 7,697 7,467 Average number of employees, Personal Assistance, FTE 4,887
Slide 27: Segments financials
Segments financials Operating revenue by business area Jan-Mar Jan-Mar Apr-Mar Jan-Dec SEK M 2020 2019 % 2019/20 2019 % Individual & Family 519 512 1% 2,102 2,095 0% Personal Assistance 719 684 5% 2,819 2,783 1% Elderly Care 146 134 9% 576 564 2% Finland 350 179 96% 1,375 1,204 14% Norway 194 194 0%
Slide 28: Segments financials, cont’d
Segments financials, cont’d Operating profit by business area Jan-Mar Jan-Mar Apr-Mar Jan-Dec SEK M 2020 2019 % 2019/20 2019 % Individual & Family 33 28 18% 173 168 3% Personal Assistance 40 39 3% 155 154 1% - Elderly Care 0 4 -112% 9 13 33% Finland 17 15 7% 50 49 2% Norway 13 9 49% 63 59 7% Other 2
Slide 29: Central costs
SEK M Q1 2019 Q1 2018 Financial summary Q1 2020 Cash flow from operating activities before changes in working capital 144 97 Changes in working capital Central costs -50 -114 Cash flow from operating activities 95 -17 Central costs, SEK m Q1 2020 Q1 2019 • New care homes under own Financial items, n
Slide 30: Financial targets
Financial targets • Profitability An operating margin of 7% over the medium term. • Revenue growth Annual organic revenue growth of 5% over the medium term. Bolt-on acquisitions may generate additional annual growth of 2-3 %. • Capital structure Interest-bearing net debt not exceeding 4.5 times EBIT
Slide 31: Financial calendar
Financial calendar Interim report Jan-Mar 2020 7 May 2020 AGM 2020 7 May 2020 Interim report Apr-Jun 2020 20 Aug 2020 Interim report Jul-Sep 2020 6 Nov 2020 Interim report Oct-Dec 2020 11 Feb 2021 31
Slide 32: For further information, please contact:
For further information, please contact: Ulf Bonnevier, CFO and Vice President, +46 70-164 73 17, ulf.Bonnevier@humana.se Anna Sönne, Head of Investor Relations +46 70-601 48 53, anna.sonne@humana.se