Humana Inc. · NYSE:HUM
Humana — Q3 2019 Earnings Presentation
33 slides from Humana's earnings presentation, Nov 8, 2019
Slide 1: Interim report Q3, July-September 2019
Everyone is entitled to a good life. Interim report Q3, July-September 2019 Rasmus Nerman, Ulf Bonnevier, 8 November 2019
Slide 2: Financial highlights Q3
Financial highlights Q3 Revenue and growth • Operating revenue increased 15% to SEK 1,928m (1,677) • The organic growth was 3.2% (4.4) Operating profit • Operating profit increased by 17% to SEK 176m (151). Excluding the effects of IFRS 16 operating profit increased 9% to SEK 164m (151) • Operating
Slide 3: Operational highlights Q3
Operational highlights Q3 • Continued focus on organic growth • Two new contracts for elderly housing units under own management, in Norrtälje and Ängelholm, both units to open in 2021 • Sale of 37 commercial properties in Finland, Sweden and Norway. The value of the property portfolio, which was tr
Slide 4: Individual & Family: Solid performance driven by higher efficiency
Operational highlights Q3 2019 – Individual & Family Solid performance driven by higher efficiency • The operating margin increased to 13.7 % (13.3), mainly explained by improved efficiency and better adaptation to meet the current demand • Occupancy decreased slightly during the quarter, primarily
Slide 5: Personal Assistance: Healthy growth and stable margins
Operational highlights Q3 2019 - Personal Assistance Healthy growth and stable Personal margins Assistance • The steady performance continues with high customer satisfaction and increased market share • Margin remains stable. Investments in quality and efficiency paying off • Challenges in the marke
Slide 6: Elderly Care: Two new OwM contracts and higher customer satisfaction
Operational highlights Q3 2019 - Elderly Care Two new OwM contracts and higher customer satisfaction • Good market demand with high occupancy in all units under own management • In September Humana’s fifth own- management unit was opened in Kungsängen • Two new agreements on new housing units under
Slide 7: Finland: Integration work progresses and good organic growth
Operational highlights Q3 2019 - Elderly Care Integration work progresses and good organic growth Finland • Good organic growth in I&F segments in Finland (Arjessa) • Progress in improving Coronaria Hoiva • Structured improvement program continuing as planned to realise full potential • The work on
Slide 8: Norway: Stable development
Operational highlights Q3 2019 – Other Nordics Stable development in Norway • Performance was stable although revenues decreased slightly in comparison with the strong Q3 in 2018 • Strong momentum in personal assistance (BPA) and disabled care housing services (HOT) • Slightly increased grants to ch
Slide 9: Operating revenue
Financial summary Q3 2019 Operating revenue 15% • The revenue growth of 15% was primarily acquisition driven. Acquired operations 1 928 contributed SEK 200m to revenues in the Q3, 2018 1 677 quarter, of which SEK 151m relates to revenues Q3, 2019 from Coronaria Hoiva in Finland • Organic growth was
Slide 10: Organic growth
Financial summary Q3 2019 Organic growth (%) 10 • The somewhat weaker organic growth of 3,2% compared to last years 4,4% is due to the 5 4,4 4,8 occupancy development and negative organic 3,4 3,2 growth in the Individual & Family business area. 2,3 2,5 1,5 0 -1,7 -4,3 -5 -10 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 11: Profitability
Financial summary Q3 2019 +17% +9% Profitability 176 164 151 151 Q3 2018 • Operating profit margin was 9.1% (9.0) and Q3 2019 8.5% (9.0) when excluding the effects of IFRS 16 • The effect of IFRS 16 amounted to SEK 13m (-), due to lower rental costs of SEK 85m and higher depreciations of SEK 72m (a
Slide 12: Profitability – 9 months
Financial summary Q3 2019 -4% -13% 0% Profitability – 9 months 310 310 305 304 298 269 9 mo. 2018 • The effects of IFRS 16 was SEK 30m (-) 9 mo. 2019 • Acquisition expenses and revenues amounted to SEK -28m (5), largely related to the acquisition of Coronaria Hoiva. Integration costs for Coronaria H
Slide 13: Individual & Family
Financial summary Q3 2019 -2% Individual & Family 538 529 Operating revenue, SEK m • The revenue decrease is due to lower occupancy in housing solutions for children and adolescents • Negative organic growth of -1.7% (0.4) • The adaptation work to increase sales and better meet a partially changed d
Slide 14: Personal Assistance
Financial summary Q3 2019 6% Personal Assistance 708 666 Operating revenue, SEK m • Acquisitions, this year and last year, account for most of the increase in revenues • The organic growth of 1.3% (-1.0) is due to a stable number of assistance hours and an increase in the assistance allowance Q3 201
Slide 15: Elderly Care
Financial summary Q3 2019 30% 146 Elderly Care Operating revenue, SEK m 112 • Good occupancy in our own managed housing units and two new (in Q4 2018) tendered elderly housing units contributing • Start-up costs for the new elderly housing units under own management in Staffanstorp and Q3 2018 Q3 20
Slide 16: Finland
Financial summary Q3 2019 106% 336 Finland Operating revenue, SEK m • The acquisition of Coronaria Hoiva contributed 163 SEK 151m to revenues • Organic growth at 9.6% (21.0) explained by the opening of new individual and family care units in Finland Q3 2018 Q3 2019 +3,1% • Results for Coronaria Hoiv
Slide 17: Norway
Financial summary Q3 2019 -1% 196 194 Norway Operating revenue, SEK m • Revenues decreased slightly in the quarter in reporting currency • Organic growth at 2.1% (14.2). The organic growth is explained by a different mix of clients Q3 2018 Q3 2019 • Operating margin was 10.7% (10.9) 25 -2,6% 12 21 O
Slide 18: Central costs
Costs, SEK M Q1 2019 Q1 2018 Underlying central costs Financial summary Q3 2019 23 Central costs 18 Acquisition related costs 2 - Effects of IFRS 16 -7 Central costs, SEK m Q3 2019 Q3 2018 2019 2018 - • Underlying central costs was up SEK 1m Central overhead costs Underlying central costs 18 17 68 5
Slide 19: Cash flow
SEK M Q1 2019 Q1 2018 Financial summary Q3 2019 Cash flow from operating activities before changes in working capital 144 97 Changes in working capital Cash flow -50 -114 Q3 2019 Q3 2019 Q3 2018 Cash flow from operating activities excl IFRS 16 95 Cash flow from operating activities -17 266 182 168 b
Slide 20: Financial position
Financial summary Q3 2019 Net debt/EBITDA Financial position 8 7,1 7 Leverage • Net debt increased to SEK 3,854m Leverage excl IFRS 16 (1,405) in Q3 6,0 6 5,7 • With the IFRS 16 effects excluded 5 4,8 net debt increased to 1,757m 4,2 4,1 (1,405) 4 3,8 3,8 3,4 • The sale and leaseback transaction 3,2
Slide 21: Thank you!
Thank you!
Slide 22: Appendix
Appendix 22
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 16,000 Employees Operations and revenue split Clear focus on full responsibility Split of revenues: Norway Other Outsourcing 11%
Slide 24: Consolidated income statement
Consolidated income statement Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec SEK m Note 2019 2018 2019 2018 2018/19 2018 Net revenue 1,919 1,678 5,545 5,011 7,243 6,714 Other revenue 9 -1 9 10 10 11 Operating revenue 3 1,928 1,677 5,554 5,021 7,253 6,725 Other external costs 8 -228 -251 -697 -779 -
Slide 25: Income statement excluding effects of IFRS 16
Income statement excluding effects of IFRS 16 IFRS 16- Excl IFRS IFRS 16- Excl IFRS Jul-Sep effect 16 Jul-Sep Jan-Sep effect 16 Jan-Sep Jul-Sep Jul-Sep Jan-Sep Jan-Sep Note SEK m 2019 2019 2019 2018 2019 2019 2019 2018 Operating revenue 1,928 0 1,928 1,676 5,554 0 5,554 5,022 Other external costs -2
Slide 26: Consolidated balance sheet
Consolidated balance sheet 30 Sep 30 Sep 31 Dec SEK m Note 2019 2018 2018 Assets Equity and liabilities Non-current assets Equity Goodwill 4 3,928 3,166 3,168 Share capital 1 1 1 Other intangible assets 15 9 8 Additional paid-in capital 1,096 1,094 1,094 Property, plant and equipment 406 490 560 Res
Slide 27: Consolidated cash flow statement
Consolidated cash flow statement Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec SEK m Note 2019 2018 2019 2018 2018/19 2018 Profit before tax 8 158 132 219 251 285 317 Adjustment for: Depreciation 8 90 18 242 49 263 70 Financial items, net 8 19 19 80 59 95 74 Other non-cash items 0 0 0 0 0 0 Cash f
Slide 28: Cash flow excluding effects of IFRS 16
Cash flow excluding effects of IFRS 16 IFRS 16- Excl IFRS IFRS 16- Excl IFRS Jul-Sep effect 16 Jul-Sep Jan-Sep effect 16 Jan-Sep Jul-Sep Jul-Sep Jan-Sep Jan-Sep SEK m 2019 2019 2019 2018 2019 2019 2019 2018 Profit before tax 158 7 165 132 219 21 240 251 Adjustment for: Depreciation 90 -72 18 18 242
Slide 29: Key ratios
Key ratios Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec 2019 2018 2019 2018 2018/19 2018 Average number full-time employees Individual & Operating revenue 1,928 1,677 5,554 5,021 7,253 6,725 Family 2,131 2,505 2,070 2,420 2,133 2,396 EBIT, % 9.1% 9.0% 5.4% 6.2% 5.2% 5.8% Average number full-time
Slide 30: Segments financials
Operating profit per business Segments financials area Jul- Sep Jul- Sep Jan- Sep Jan- Sep Oct- Sep 2018/ Jan- Dec SEK m 2019 2018 % 2019 2018 % 19 2018 % Individual & Family 72 72 1% 141 159 -11% 178 196 -9% Operating revenue by business Personal Assistance 52 51 3% 117 111 6% 158 151 4% area Elder
Slide 31: 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% • Capital structure 3x The net debt in relation to EBITDA is not to exceed 3
Slide 32: Financial calendar
Financial calendar Interim report Oct-Dec 2019 13 Feb 2020 Interim report Jan-Mar 2020 7 May 2020 AGM 2020 7 May 2020 Interim report Apr-Jun 2020 20 Aug 2020 32
Slide 33: 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