Humana Inc. · NYSE:HUM
Humana — Q4 2018 Earnings Presentation
30 slides from Humana's earnings presentation, Feb 14, 2019
Slide 1: Interim report Q4 October-December 2018
Interim report Q4 October-December 2018 Rasmus Nerman, Ulf Bonnevier, 14 February 2019
Slide 2: Financial highlights Q4
Financial highlights Q4 Revenue and growth • Operating revenue increased 5% to SEK 1,700 M (1,616). • The organic growth increased for the fourth consecutive quarter to 4.8%, the highest rate as a listed company. Operating profit • Operating profit increased by 24 % to SEK 82M (66), excluding acquis
Slide 3: Operational highlights Q4
Operational highlights Q4 Selective and strategic acquisitions • Strengthening presence in Northern Sweden with RIK Assistans • Specialized provider of social psychiatry in Matiimi Oy • In Jan19: Agreement to acquire Coronaria Hoiva Oy Building for organic growth • Two new elderly care homes were op
Slide 4: Operational highlights Q4 – Individual & Family
Operational highlights Q4 – Individual & Family Varied demand in the sub segments • Despite improved performance and margin in 2018 the overall revenue development in I&F is still weak. • Lower demand in the quarter for family homes and outpatient care. • Good momentum in OwM LSS housing throughout
Slide 5: Operational highlights Q4 - Personal Assistance
Operational highlights Q4 - Personal Assistance Showcasing strength in Personal weak market Assistance • Although improving the market for Personal Assistance was weak also in 2018 - the total number of individuals entitled to personal assistance declined by 2.5%. • Due to quality, scale and relentl
Slide 6: Operational highlights Q4 - Elderly Care
Operational highlights Q4 - Elderly Care Stable and strong organic growth • Good market demand with very high occupancy in our units in general. • New housing units under OwM fully operational. • High quality marks from the National Board of Health and Welfare’s annual quality survey (Open Compariso
Slide 7: Operational highlights Q4 – Other Nordics
Operational highlights Q4 – Other Nordics A third strong pillar in Humana taking shape • Continued strong momentum in Norway also during Q4 where efforts to stabilise and increase capacity utilisation continue to yield results. • On top of strong financial performance operational control in Norway h
Slide 8: Acquisition of Coronaria Hoiva a strategic move to strengthen position in Finland
Acquisition of Coronaria Hoiva a strategic move to strengthen position in Finland A leading high-quality care provider A SEK 600M-business 736 • One of the largest private social care providers in Finland. 559 • Founded in 2008 and have developed several concepts within care, in areas where they are
Slide 9: Market and political highlights
Market and political highlights • The new government in Sweden has buried the question on profit cap and more than 240 Swedish municipalities are today controlled by party constellations that are positive to private providers in the welfare sector. • Massive criticism of the LSS investigation publis
Slide 10: Operating revenue
1 700 Financial summary Q4 1 616 Operating revenue Comments Q4, 2017 Q4 2018: Q4, 2018 • Operating revenue grew 5.2 % in Operating revenue the fourth quarter, to SEK 1,700 M +9% (1,616). 6 556 6 725 6 725 6 378 Full year 2018: • Operating revenue was SEK 6,725 M (6,556), an increase of 2.6%. • Adjus
Slide 11: Organic growth
Financial summary Q4 (%) Organic growth 5 4,8 4,4 4 3,4 3 Comments 2,3 2 • Organic growth increased to 4.8% (-1.7) in the quarter. 1 +9% • Organic growth for the full year was 0 3.4% (-1.3) • The growth was driven primarily -1 from new openings in Elderly Care -1,7 and Finland as well as improved -2
Slide 12: Organic growth by segment
Financial summary Q4 (%) 45 Organic growth by 40 segment 35 30 Comments 25 • Individual & Family still operating in a very tough market in some sub- 20 segments dampening the growth 15 +9% rate. 10 • Personal Assistance performing steadily taking market share in a 5 declining market. 0 • Elderly Car
Slide 13: Profitability
Financial summary Q4 95 82 Profitability 66 67 Comments Q4 2018: • Operating profit increased by 24% in the quarter, to SEK 82 M (66). Q4 2017 Q4 2018 • Excluding acquisition related costs, +9% operating profit increased by 42% to Operating profit Operating profit excl SEK 95 M (67). acq related cos
Slide 14: Operating revenue – Individual & Family
Operating revenue Financial summary Q4 – Individual & Family SEK M 553 540 Individual & Family Comments • Revenues for the quarter amounted to SEK 540 M (553), a decrease of 2%. The decrease is due to lower demand for family homes and outpatient solutions for children and adolescents. Q4 2017 Q4 201
Slide 15: Operating revenue – Personal Assistance
Operating revenue Financial summary Q4 – Personal Assistance SEK M 689 653 Personal Assistance Comments • Revenues for the fourth quarter amounted to SEK 689 M (653), an increase of 6%. • Acquisitions contributed SEK 22 M to Q4 2017 Q4 2018 revenue for the quarter and organically growth was 2.2%. Op
Slide 16: Operating revenue – Elderly Care
Operating revenue Financial summary Q4 – Elderly Care 129 SEK M 92 Elderly Care Comments • Revenues amounted to SEK 129 M (92) in the fourth quarter, an increase of 41%. Q4 2017 Q4 2018 • The organic increase was 41%. Operating profit (EBIT) • Operating profit amounted to SEK M % SEK 4 M (-8). 4 4 4
Slide 17: Operating revenue – Other Nordics
Operating revenue Financial summary Q4 – Other Nordics SEK M 341 319 Other Nordics Comments • Revenues amounted to SEK 341 M (319) in the fourth quarter, an increase of 7%. • Organic revenue increased by Q4 2017 Q4 2018 12.8%. • The Finnish operations show Operating profit (EBIT) continued strong gr
Slide 18: Central costs
Financial summary Q4 Central costs SEK M Costs Q4 2018 Q4 2017 Comments Underlying central costs 23 21 Acquisition related costs 13 1 • Underlying central costs in Q4 2018 SEK 23 M vs SEK 21 M in Sale and lease back - - Q4 2017. The increase is explained by increased staff Capital loss - - costs. Ce
Slide 19: Cash flow
Financial summary Q4 Cash flow SEK M Comments Q4 2018 Q4 2017 2018 2017 Cash flow from operating activities • Cash flow for the period was 102 81 461 376 before changes in working capital SEK 9 M (148). Changes in working capital 88 157 -18 -41 • Cash flow from operating activities for the fourth qu
Slide 20: Financial position
Financial summary Q4 Financial position Net debt/EBITDA 5 Comments • Net debt was lowered to SEK 4,2 1,378m (1,440) in Q4. 4 • Net debt/EBITDA was lowered 3,8 3,8 to 3.0x (3.8) 3,4 • Acquisition of Coronaria Hoiva 3,2 will, when completed, increase 3,0 leverage in the short term. 3 Leverage 2 Q3 Q4
Slide 21: Thank you! Q&A
Thank you! QA
Slide 22: Appendix
Appendix
Slide 23: 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 Re
Slide 24: Consolidated income statement
Consolidated income statement Oct-Dec Oct-Dec Jan-Dec Jan-Dec SEK M Note 2018 2017 2018 2017 Net revenue 1 700 1 616 6 714 6 542 Other revenue 1 0 11 14 Operating revenue 3 1 700 1 616 6 725 6 556 Other external costs -265 -264 -1 044 -1 016 Personnel costs -1 320 -1 269 -5 202 -5 145 Depreciation -
Slide 25: Consolidated balance sheet
Consolidated balance sheet 31 Dec 31 Dec SEK M Note 2018 2017 Assets Non-current assets Goodwill 4 3 168 3 104 Other intangible assets 8 10 Property, plant and equipment 560 413 Financial assets 9 8 Total non-current assets 3 745 3 535 Current assets Trade receivables and other receivables 847 842 O
Slide 26: Consolidated cash flow statement
Consolidated cash flow statement Oct-Dec Oct-Dec Jan-Dec Jan-Dec SEK M 2018 2017 2018 2017 Profit before tax 67 44 317 250 Adjustment for: Depreciation 21 15 70 60 Financial items, net 15 22 74 65 Cash flow from operating activities before changes in working capital 102 81 461 376 Changes in working
Slide 27: Key ratios
Key ratios Oct-Dec Oct-Dec Jan-Dec Jan-Dec 2018 2017 2018 2017 Operating revenue 1 700 1 616 6 725 6 556 EBIT, % 4,8% 4,1% 5,8% 4,8% Interest-bearing net debt, SEK M 1 378 1 440 1 378 1 440 Return on capital employed, % 2,0% 1,7% 9,7% 8,2% Equity/assets ratio, % 41,1% 37,4% 41,1% 37,4% Operating cas
Slide 28: Segments financials
Segments financials Operating revenue by business area Oct-Dec Oct-Dec Jan-Dec Jan-Dec SEK M 2018 2017 % 2018 2017 % Individual & Family 540 553 -2% 2 188 2 212 -1% Personal Assistance 689 653 6% 2 668 2 621 2% Elderly Care 129 92 41% 457 521 -12% Other Nordics 341 319 7% 1 401 1 188 18% Other reven
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: Humana
© Humana For further information, please contact: Rasmus Nerman, President and CEO Tel.: +45-70-828 18 60 Ulf Bonnevier, CFO and vice President Tel.: +46-70-164 73 17 Anna Sénne, Head of Investor Relations Tfn: +46-70-601 48 53 Financial calendar 2019 Annual Report 2018 Interim report Jan-Mar 2019 A