Humana Inc. · NYSE:HUM
Humana — Q1 2019 Earnings Presentation
30 slides from Humana's earnings presentation, May 9, 2019
Slide 1: Interim report Q1, January-March 2019
Interim report Q1, January-March 2019 Rasmus Nerman, Ulf Bonnevier, 9 May 2019
Slide 2: Financial highlights Q1
Financial highlights Q1 Revenue and growth • Operating revenue increased 4% to SEK 1,708 M (1,648) • The organic growth was 1.5% (2.3) Operating profit • Operating profit decreased by 5 % to SEK 77 M (81) • Excluding the effects of IFRS 16 operating profit decreased by 13 % to SEK 70 M (81) • Operat
Slide 3: Operational highlights Q1
Operational highlights Q1 Strategic acquisition • Acquisition of Coronaria Hoiva completed in April following approval from Finnish Competition and Consumer Authority, KKV • The approval did not require any special conditions or concessions from Humana's side Building for organic growth • One new Ow
Slide 4: Operational highlights Q1 – Individual & Family
Operational highlights Q1 – Individual & Family Weak demand impacting the quarter • Weak demand from Q418 continued into Q119, especially early in the quarter • Overall low demand but foremost in the segments for children and youths • Demand (and utilization) has stabilized and improved throughout t
Slide 5: Operational highlights Q1 - Personal Assistance
Operational highlights Q1 - Personal Assistance Stable growth and Personal improved profitability in Assistance acquired companies • Following the harsh criticism of the, in January, published LSS inquiry there is now a rather strong political support of LSS • Increased willingness of ensuring the r
Slide 6: Operational highlights Q1 - Elderly Care
Operational highlights Q1 - Elderly Care Stable and strong organic growth • Good market demand with very high occupancy in our units • OwM elderly housing units have very high capacity utilisation • The two new tendered elderly housing units, which were opened during Q4, contributes positively to re
Slide 7: Operational highlights Q1 – Other Nordics
Operational highlights Q1 – Other Nordics Other Finnish operations Nordics double in size • The business area is showing good growth due to the opening of new units • Continued good momentum and growth in Norwegian operations – especially within BPA and HOT • Strong momentum with high demand for ser
Slide 8: Market and political highlights
Market and political highlights • The political climate in Sweden continues to be stable – Positive political signs with regards to personal assistance • An ongoing lawsuit in Norway could have implications for the sector regarding the usage of consultants in operations – This will have no impact on
Slide 9: Strengthened quality through systematic measurement
Strengthened quality through systematic measurement • Humana quality index (HQI) consists of a weighting of seven key quality indicators: Customer satisfaction Serious deviations Employee satisfaction Leadership index Employee health Values Competence Development 100 92 94 89 80 60 40
Slide 10: Financial summary Q1 2019 – Operating revenue
Financial summary Q1 2019 Operating revenue 1 708 Comments 1 648 • Operating revenue grew 4.0 % in Q1, to SEK 1,708 M (1,648) • Acquired operations, that is, companies that were not owned +9% throughout the previous comparative period, contributed SEK 34 M to revenues in the quarter • Organic revenu
Slide 11: Financial summary Q1 2019 – Organic growth
Financial summary Q1 2019 (%) Organic growth 5 4,8 4,4 4 3,4 3 Comments 2,3 2 1,5 • Organic growth decreased to 1.5% (2.3) in the quarter 1 +9% • The slower growth during the 0 quarter is due to decreased demand at the beginning of the year in the -1 Individual & Family business area -1,7 -2 -3 -4 -
Slide 12: Financial summary Q1 2019 – Profitability
Financial summary Q1 2019 Profitability Comments • Operating profit decreased by 5 % in the quarter, to SEK 77 M (81) • Excluding IFRS 16 effects, operating 81 81 profit decreased by 13% to SEK 70 M 77 (81). The effect of the accounting +9% 70 standard amounts to SEK 7 M and is due to decreased rent
Slide 13: Financial summary Q1 2019 – Individual & Family
Operating revenue Financial summary Q1 2019 – Individual & Family SEK M 551 512 Individual & Family Comments • Revenues for the quarter amounted to SEK 512 M (551), a decrease of 7%. The decrease is due to lower demand for solutions for children and adolescents Q1 2018 Q1 2019 • Organic growth was n
Slide 14: Financial summary Q1 2019 – Personal Assistance
Operating revenue Financial summary Q1 2019 – Personal Assistance SEK M 684 653 Personal Assistance Comments • Revenues amounted to SEK 684 M (653), an increase of 5% • Acquisitions last year account for SEK 21 M of the increase in Q1 2018 Q1 2019 revenues • Organic growth was 1,5 % (0.7) Operating
Slide 15: Financial summary Q1 2019 – Elderly Care
Operating revenue Financial summary Q1 2019 – Elderly Care 134 SEK M 108 Elderly Care Comments • Revenues amounted to SEK 134 M (108), an increase of 24 % • Operating profit amounted to Q1 2018 Q1 2019 SEK 4 M (-1) • Operating margin was 2.8% (-1.2) Operating profit (EBIT) • Good occupancy in our ow
Slide 16: Financial summary Q1 2019 – Other Nordics
Operating revenue Financial summary Q1 2019 – Other Nordics SEK M 378 336 Other Nordics Comments • Revenues amounted to SEK 378 M (336), an increase of 12% • Organic revenue increased to 8.5% • The growth was due to the opening Q1 2018 Q1 2019 of new units Operating profit (EBIT) • Operating profit
Slide 17: Financial summary Q1 2019 – Central costs
Financial summary Q1 2019 Central costs Comments SEK M • Underlying central costs was SEK 23 M (18). The increase is Costs Q1 2019 Q1 2018 explained mainly by Underlying central costs 23 18 – increased staff cost building more central structural capital Acquisition related costs 2 - – increased grow
Slide 18: Financial summary Q1 2019 – Cash flow
Financial summary Q1 2019 Cash flow SEK M Comments Q1 2019 Q1 2018 Cash flow from operating activities • Cash flow for the period was 144 97 before changes in working capital SEK -100 M (-95) Changes in working capital -50 -114 • A decrease in working capital contributed positively to the Cash flow
Slide 19: Financial summary Q1 2019 – Financial position
Financial summary Q1 2019 Financial position Net debt/EBITDA 6 5,7 Leverage Comments • Net debt increased to SEK 5 2,928 M (1,496) in Q1 • With the IFRS 16 effects 4,2 excluded net debt decreased slightly to 1,437 (1,496) 4 3,8 3,8 • Net debt/EBITDA increased to 3,4 5.7x (3.8), but decreased to 3,2
Slide 20: Thank you! Q&A
Thank you! QA
Slide 21: Appendix
Appendix
Slide 22: Humana at a glance
Humana at a glance Market leading positions in three countries Clear focus on full responsibility 2018 Outsourcing 6% Individual and family 1 2 2 1 Personal assistance Full responsibility and Elderly care customer choice 94% Operations in four segments Critical actor in the Nordic welfare Reve
Slide 23: Consolidated income statement
Consolidated income statement Jan-Mar Jan-Mar Apr-Mar Jan-Dec SEK M Note 2019 2018 2018/19 2018 Net revenue 1 708 1 648 6 770 6 714 Other revenue 0 0 11 11 Operating revenue 3 1 708 1 648 6 781 6 725 Other external costs 8 -216 -262 -998 -1 044 Personnel costs -1 344 -1 288 -5 254 -5 202 Depreciatio
Slide 24: Consolidated balance sheet
Consolidated balance sheet 31 Mar 31 Mar 31 Dec SEK M Note 2019 2018 2018 Assets Non-current assets Goodwill 4 3 193 3 142 3 168 Other intangible assets 7 9 8 Property, plant and equipment 551 421 560 Right-of-use assets 1 543 0 0 Financial assets: 13 9 9 Total non-current assets 5 306 3 581 3 745 C
Slide 25: Consolidated cash flow statement
Consolidated cash flow statement Jan-Mar Jan-Mar Apr-Mar Jan-Dec SEK M Note 2019 2018 2018/19 2018 Profit before tax 8 56 58 315 317 Adjustment for: Depreciation 8 68 15 123 70 Financial items, net 8 21 24 72 74 Other non-cash items -1 0 -1 0 Cash flow from operating activities before changes in wor
Slide 26: Income statement and cash flow excluding effects of IFRS 16
Income statement and cash flow excluding effects of IFRS 16 Effects of IFRS 16 on income statement Jan-Mar IFRS 16-effect Excl IFRS 16 Jan-Mar SEK M 2019 Jan -Mar 2019 Jan -Mar 2019 2018 Operating revenue 1 708 - 1 708 1 648 Other external costs -216 58 -274 -262 Personnel costs -1 344 - -1 344 -1 2
Slide 27: Key ratios
Key ratios Jan-Mar Jan-Mar Apr-Mar Jan-Dec 2019 2018 2018/19 2018 Operating revenue 1 708 1 648 6 781 6 725 EBIT, % 4,5% 4,9% 5,7% 5,8% Interest-bearing net debt, SEK M 2 928 1 496 2 928 1 378 Return on capital employed, % 1,4% 2,1% 7,0% 9,7% Equity/assets ratio, % 32,7% 38,3% 32,7% 41,1% Operating
Slide 28: Segments financials
Segments financials Operating revenue by business area Jan-Mar Jan-Mar Apr-Mar Jan-Dec SEK M 2019 2018 % 2018/19 2018 % Individual & Family 512 551 -7% 2 146 2 188 -2% Personal Assistance 684 653 5% 2 698 2 668 1% Elderly Care 134 108 24% 484 457 6% Other Nordics 378 336 12% 1 443 1 401 3% Other rev
Slide 29: Financial targets
Financial targets* Revenue growth 8-10 % • Annual growth rate in the medium term of 8-10%, achieved through organic growth as well as bolt-on acquisitions Profitability 6 % • EBIT margin in the medium term of approximately 6 percent Capital structure 3x • The net debt in relation to EBITDA is not to
Slide 30: For further information, please contact
For further information, Financial calendar 2019 please contact: Interim report Jan-Mar 2019 9 May 2019 Ulf Bonnevier, CFO and Vice President AGM 2019 9 May 2019 tel: +46 70-164 73 17 Interim report Apr-Jun 2019 16 Aug 2019 Anna Sönne, Head of Investor Relations Interim report Jul-Sep 2019 8 Nov 201