Humana Inc. · NYSE:HUM
Humana — Q1 2017 Earnings Presentation
21 slides from Humana's earnings presentation, May 18, 2017
Slide 1: Q1 January – March 2017
Q1 January – March 2017 18 May 2017
Slide 2: Q1 financial highlights
Q1 financial highlights Key highlights Q1 • Operating revenue grew 12% to SEK 1,649m (1,471) Revenue • Organic decline in the quarter of 1.9% due to: • Continuously challenging market conditions for Personal Assistance • Ongoing efficiency program in I&F, including conversion of some units and sligh
Slide 3: Operational highlights in Q1 (I/II)
Operational highlights in Q1 (I/II) Individual & Family - Personal Assistance - “A quarter with focus on efficiency” “Gaining relative strength” • Growing with 1%, of which organic -2.6%. Lower • Declining revenues due to continued tough market growth due to conversion of a number of conditions, pri
Slide 4: Operational highlights in Q1 (II/II)
Operational highlights in Q1 (II/II) Elderly Care - Other Nordics - “Strong pipeline for own elderly care homes” “Finland having a strong momentum” • New home in Gävle fully up and running with a • Norway focus on integrating KOA. Weak demand for notable positive impact migration related services. •
Slide 5: Politics and markets for private care in the Nordics
Politics and markets for private care in the Nordics Final report by Reepalu presented on May 9th • Not possible to replace profit restrictions with higher quality requirements • Investigation presents few concrete recommendations – Need to improve quality of public registries – Frequency inspection
Slide 6: Humana Q1 - Operating revenue
Humana Q1 - Operating revenue Operating revenue Comments • Operating revenue increased by SEK million 12% to SEK 1,649m driven by Other Nordics – above our growth target 1,649 – organic decline of 1.9% +12% • Acquisitions contributed with SEK 198m to revenue • Own managed operations accounted for 94
Slide 7: Humana Q1 - Operating profit
Humana Q1 - Operating profit Operating profit (EBIT) Comments SEK million % • Operating profit was SEK 66m (41). Acquisitions contributed 100 15 with SEK 14m. 66 10 • Adjusted operating profit was 41 SEK 66m (79 excl for SEK 38m 50 2.8% 4.0% 5 in IPO costs) 0 0 • Operating profit margin of 4.0% Q1 2
Slide 8: Individual & Family Q1
Individual & Family Q1 Operating revenue Comments SEK million • Operating revenue increased by +1% 553 1% 549 – organic decline of -2.6% mainly explained by conversion of units, lower occupancy and fewer clients • Operating profit declined compared with last year to SEK Q1 2016 Q1 2017 37m (55) • Ma
Slide 9: Personal Assistance Q1
Personal Assistance Q1 Operating revenue Comments SEK million • Operating revenue decreased by 666 648 3% to SEK 648m explained by: -3% – fewer clients and hours compared with last year – tough market conditions • Operating profit decreased to SEK 36m (38), operating margin 5.6% (5.8) Q1 2016 Q1 201
Slide 10: Elderly Care Q1
Elderly Care Q1 Operating revenue Comments SEK million • Operating revenue increased by 7% in Q1 2017 to SEK 154m 143 7% 154 – positive effect from own managed elderly care home – revenue per client increasing • Operating profit SEK -2m (-5) • Margin –1.6% (-3.8) Q1 2016 Q1 2017 – profitability impr
Slide 11: Other Nordics Q1
Other Nordics Q1 Operating revenue Comments SEK million • Operating revenue increased 293 160% to SEK 293m (113), +160% driven by acquisition of KOA and Arjessa in Finland 113 • Organic development at constant currency of -5.7% • Acquisitions contributed with SEK 179m to revenue increase Q1 2016 Q1
Slide 12: Central costs/other
Central costs/other Breakdown of central costs/other Comments SEK million • Central costs/other last year Costs Q1 2016 Q1 2017 included SEK 38m in IPO costs. Underline central costs -13 -17 • Underline central costs SEK 17m vs SEK 13m. Costs for acquisitions - -1 • Increase between the quarters Cos
Slide 13: Cash flow lowered due to changed payment terms and investments in organic growth
Cash flow lowered due to changed payment terms and investments in organic growth Breakdown of cash flow Comments SEK million Q1 2016 Q1 2017 • Cash flow for the quarter was SEK -108m vs. SEK 131m last Operating cash flow before changes year (incl. new share issue at 51 80 in working capital time of
Slide 14: Financial targets
Financial targets Revenue growth • Annual growth rate in the medium term of 8-10 percent, achieved through organic growth as well as bolt-on acquisitions Profitability • EBIT margin in the medium term of approximately 6 percent Capital structure • The net debt in relation to EBITDA is not to exceed
Slide 15: Q&A
Q&A
Slide 16: Appendix
Appendix
Slide 17: Consolidated income statement
Consolidated income statement Jan-‐Mar Jan-‐Mar Apr-‐Mar Jan-‐Dec SEK M 2017 2016 2016/17 2016 Opera7ng revenue 1 649 1 471 6 540 6 362 Other external costs -‐256 -‐211 -‐1 008 -‐963 Personnel costs -‐1 312 -‐1 171 -‐5 105 -‐4 964 Deprecia=on -‐14 -‐10 -‐54 -‐50 Other opera=ng costs
Slide 18: Consolidated balance sheet
Consolidated balance sheet Mar 31 Mar 31 Dec 31 SEK M 2017 2016 2016 Assets Non-current assets Goodwill 3 092 2 590 3 089 Other intangible assets 12 8 13 Property, plant and equipment 450 214 405 Financial assets 8 5 6 Total non-current assets 3 563 2 817 3 514 Current assets Trade receivables 539 4
Slide 19: Key ratios
Key ratios Jan-‐Mar Jan-‐Mar Apr-‐Mar Jan-‐Dec 2017 2016 2016/17 2016 Opera=ng revenue 1 649 1 471 6 540 6 362 EBIT, % 4,0% 2,8% 5,4% 5,2% Interest-‐bearing net debt, SEK M 1 685 832 1 685 1 628 Return on capital employed, % 1,8% 1,5% 9,5% 8,9% Equity/assets ra=o, % 35,5% 37,9% 35,5% 34,8% Oper
Slide 20: Consolidated cash flow statement
Consolidated cash flow statement Jan-‐Mar Jan-‐Mar Apr-‐Mar Jan-‐Dec SEK M 2017 2016 2016/17 2016 Profit before tax 52 -‐21 301 228 Adjustment for: Deprecia=on and impairment 14 10 54 50 Financial items, net 14 62 53 101 Cash flow from opera7ng ac7vi7es before changes in working capital 80 51 408
Slide 21: Segment financials
Segment financials Opera7ng revenue by business area Jan-‐Mar Jan-‐Mar Apr-‐Mar Jan-‐Dec SEK M 2017 2016 % 2016/17 2016 % Individual & Family 553 549 1% 2 219 2 214 0% Personal Assistance 648 666 -‐3% 2 627 2 645 -‐1% Elderly Care 154 143 7% 590 580 2% Other Nordics 293 113 160% 1 104 924 20%