Humana Inc. · NYSE:HUM
Humana — Q2 2020 Earnings Presentation
31 slides from Humana's earnings presentation, Aug 20, 2020
Slide 1: Interim report Q2, April-June 2020
Everyone is entitled to a good life. Interim report Q2, April-June 2020 Rasmus Nerman, Ulf Bonnevier, 20 August 2020
Slide 2: A quarter with focus on minimising the effects of the pandemic
A quarter with focus on minimising the effects of the pandemic • Crisis organisation supporting all Nordic operations to handle the COVID-19 pandemic, ensuring a safe work environment and to prevent transmission • Humana has stood well up to the pandemic • The transmission of the virus has been low
Slide 3: Systematic quality work key during the pandemic
Systematic quality work key during the pandemic • Humana Quality Index stable at 94, despite high sickness absence due to COVID-19 Number of serious deviations reported at the • HQI same level as last year despite the pandemic 100 80 60 2017 92 94 94 94 2018 40 89 2019 20 2020 Q1 2020 Q2 0 • Q2 inte
Slide 4: Other operational highlights in Q2
Other operational highlights in Q2 • Signed new contract for an elderly care home under own management in Täby • Ulf Bonnevier, CFO and Vice President, will leave Humana on 31 August • Noora Jayasekara, Humana’s Group finance director since 2018, appointed new CFO as from 1 September • Main financia
Slide 5: Financial highlights Q2
Financial highlights Q2 Revenue and growth • Operating revenue was SEK 1,980m (1,918), an increase by 3% • The organic growth was 3.4% (2.5) Operating profit • Operating profit was SEK 100m (45), an increase by 123%. • Adjusted operating profit was SEK 83m (45) • Operating margin was 5.1% (2.3) Cash
Slide 6: Strengthened results although challenging market remains
Operational highlights Q2 2020 Strengthened results although challenging market remains • The COVID-19 situation had a negative effect on demand with delayed and prolonged placement processes • Weak market in children and adolescents segment continue • Adult and LSS segments coping well with increas
Slide 7: Personal Assistance: Steady performance continues
Operational highlights Q2 2020 Personal Steady performance continues Assistance • The market continues to decrease with 2% this year • Overall a solid performance in an eventful quarter • Growing organically despite the decreasing market and negative effect of cancelled hours as a result of the pand
Slide 8: A challenging quarter due to COVID-19
Operational highlights Q2 2020 A challenging quarter due to COVID-19 • Focus on handling the COVID-19 situation where safety for clients and staff is priority • Our strategy to handle the situation has been successful with limited spread • Currently no infection in our units • Following national inv
Slide 9: Finland: Continued good development in challenging times
Operational highlights Q2 2020 Continued good development in challenging times Finland • COVID-19 situation impacting Finland with fewer open care visits and high sick leave • A few units closed during pandemic • I&F segments performing well whereas profitability challenges in newly acquired operati
Slide 10: Strong development in Norway
Operational highlights Q2 2020 Strong development in Norway • Strong momentum in Norway with personal assistance, BPA, and disabled care housing services, HOT, driving growth • Impact from COVID-19 situation managed well • Overall a very strong performance with strong organic growth and earnings imp
Slide 11: Operating revenue
Financial summary Q2 2020 Operating revenue 3% • The revenue grew with 3% in the quarter 1 980 • Acquired operations contributed SEK 16m 1 918 Q2, 2019 • Capital gain from sale of real estate Q2, 2020 increased revenue by SEK 17m • Currency effects reduced revenues • Organic growth 3.4% • The pandem
Slide 12: Organic growth
Financial summary Q2 2020 Organic growth (%) 10 • Organic growth was 3.4% (2.5) in the quarter 5 4,4 4,8 3,4 3,8 3,4 3,2 2,3 2,5 1,5 0,7 0 -5 -10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 Group organic growth, % 12
Slide 13: Profitability
Financial summary Q2 2020 Profitability • Operating profit margin was 5.1% (2.3) +123% • Operating profit adjusted for SEK 17m of capital 120 gain from sale of real estate. Adjusted operating Q2 2019 100 margin was 4.2% (2.3) 100 Q2 2020 83 • The pandemic has affected the Group profit-wise 80 from s
Slide 14: Individual & Family
Financial summary Q2 2020 -1% Individual & Family 535 532 Operating revenue, SEK m • Organic growth of -0.7% (-3.6) • Lower demand in the market segment children and adolescents. Increased occupancy in the adult segment has compensated • COVID-19 had a negative effect on demand Q2 2019 Q2 2020 • Ope
Slide 15: Personal Assistance
Financial summary Q2 2020 7% Personal Assistance 733 685 • The increased revenues are explained by: • More performed assistance hours, despite of a somewhat negative effect by the pandemic • A higher attendance allowance • Acquisitions Q2 2019 Q2 2020 30 29 8 • Organic growth of 5.4% (-0.1) 26 Opera
Slide 16: Elderly Care
Financial summary Q2 2020 9% 142 155 Elderly Care Operating revenue, SEK m • The revenue increase of 9% is organic • The revenue increase is due to the new elderly care homes under own management in Staffanstorp and in Kungsängen, opened in 2019 Q2 2019 Q2 2020 • The pandemic weakened occupancy rate
Slide 17: Finland
Financial summary Q2 2020 -1% 341 338 Finland Operating revenue, SEK m • Organic growth at 0.0% (10.1). Openings of units had a positive effect but leaving unprofitable outsourcing contracts decreased volume • The operating margin was 3.2% (1.4) Q2 2019 Q2 2020 • The increased profit is due to impro
Slide 18: Norway
Financial summary Q2 2020 -4% 210 201 Norway Operating revenue, SEK m • Revenues decreased by 4%, entirely due to currency effects (the weakened Norwegian krona). In local currency revenues increased from 189 MNOK to 207 MNOK • Organic growth at 9.5% (6.2). The organic Q2 2019 Q2 2020 growth is due
Slide 19: Financial position
Financial summary Q2 2020 Net debt/EBITDA Financial position 8 7,1 7 Leverage • Net debt decreased SEK 291m to 6,0 SEK 3,591m (3,882) versus Q2 6 5,7 5,4 prior year, driven by cash flow and 5,2 sale of properties 5 4,6 • Leverage continued to move in the 4 right direction 3 2 Q1 Q2 Q3 Q4 Q1 Q2 2019
Slide 20: Cash flow
Financial summary Q2 2020 Q2 2020 Q2 2019 Cash flow Cash flow from operating activities before 193 130 changes in working capital • The improvement comes from: Changes in working capital 61 66 • Higher profit Cash flow from operating activities 254 195 Financial items, net -46 -37 • Lower investment
Slide 21: Thank you!
Thank you! Financial calendar Interim report Jul-Sep 2020 6 Nov 2020 Interim report Oct-Dec 2020 11 Feb 2021
Slide 22: Appendix
Humana Appendix
Slide 23: 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 24: Consolidated income statement
Consolidated income statement Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jul-Jun Jan-Dec SEK m 2020 2019 2020 2019 2019/20 2019 Net revenue 1 962 1 918 3 894 3 626 7 715 7 446 Other revenue 18 0 24 0 44 21 Operating revenue 1 980 1 918 3 918 3 626 7 759 7 467 Other external costs -244 -253 -484 -469 -972 -958
Slide 25: Consolidated balance sheet
Consolidated balance sheet 30 Jun 30 Jun 31 Dec 30 Jun 30 Jun 31 Dec SEK m 2020 2019 2019 SEK m Note 2020 2019 2019 Assets Equity and liabilities Non-current assets Equity Goodwill 3 853 3 914 3 897 Share capital 1 1 1 Other intangible assets 5 16 5 Additional paid-in capital 1 096 1 095 1 096 Prope
Slide 26: Consolidated cash flow statement
Consolidated cash flow statement Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jul-Jun Jan-Dec SEK m Note 2020 2019 2020 2019 2019/20 2019 Profit before tax 64 5 128 61 316 249 Adjustment for: Depreciation 93 84 182 152 357 327 Financial items, net 36 40 70 61 130 121 Other non-cash items 0 1 0 0 0 0 Cash flow fr
Slide 27: Key ratios
Key ratios Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jul-Jun Jan-Dec 2020 2019 2020 2019 2019/20 2019 Operating revenue 1 980 1 918 3 918 3 626 7 759 7 467 EBIT, % 5,1% 2,3% 5,1% 3,4% 5,7% 4,9% Interest-bearing net debt, SEK m 3 591 3 882 3 591 3 882 3 591 3 712 Return on capital employed, % 1,4% 0,7% 2,9% 1,
Slide 28: Segments financials
Segments financials Operating revenue by business area Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jul-Jun Jan-Dec SEK m 2020 2019 % 2020 2019 % 2019/20 2019 % Individual & Family 532 535 -1% 1 051 1 047 0% 2 098 2 095 0% Personal Assistance 733 685 7% 1 452 1 369 6% 2 867 2 783 3% Elderly Care 155 142 9% 301 2
Slide 29: Central costs
Financial summary Q2 2020 Central costs Central costs, SEK m Q2 Q2 Jan-Jun Jan-Jun • Higher non-recurring central costs 2020 2019 2020 2019 related to transactions Underlying central costs 33 27 60 50 Acquisition related costs 0 26 0 28 • Capital gain from sale of real estate Effects of IFRS 16 -9 -
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: 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