Humana AB (publ)

Good morning and welcome to Humana's Q1 2025 presentation. With us today we have our CEO Nathalie Bolas-Milsom and our CFO Kristoffer Herus. Please go ahead, Nathalie.

Thank you. Let's start off with some highlights from quarter one. For the fourth quarter in a row, we saw a profitability improvement within our businesses with an adjusted EBIT improvement of 8% compared to last year. We also saw an adjusted EBIT improvement in Sweden of 11%, which was nice for us. We are continuing to have a good profitable organic growth in Norway. During Q1, we had a growth of 7.6% in Norway. We have finalized the investment of the elderly care units in Finland within the quarter. And we are leaving the elderly care by doing that in Finland. And we are supporting during a three-month period. the buyer and after that we will continue to adjust the overhead and we are also investing in child welfare services and disability and have done that during the quarter and open new units. We have seen a strong cash flow during the period with also with a net debt decrease to 2.6 and we have repurchased our own shares with an amount of 55 million SEK during the quarter. The initiatives launched during the second half of 2024, aiming at increasing the cost efficiency, synergies, and the consolidation of our legal structure is well underway, moving as they should, and they have begun to give effect during Q1. The effects have partly been offset though by the system investments that we're making in order to further increase our efficiencies moving forward. And despite of what you may have seen the last few days in the media around personal assistance being overtaken by criminal gangs, we don't see that in our business and there are several positive signs But just to make a small comment on the media that has been underway, stating, for example, that we have had around 22 staff employed with criminal connections in our operations. It's nothing that we know anything about. No one has been informing us about this. And if it is true, we are not sure what criminal connections mean. And also it would mean that it's about 0.2% of the staff that we have employed within personal assistance. And I believe that you will see that in any business that you actually look at the staff. So we are not too worried about that in our area. The positive signs that we have seen within the personal assistance markets, however, during the quarter is that for the first time in a long time, we can see a small increase of new customers entering the market. We can also see a small increase in the number of hours on the market. And there's also been an indication that the index clause will be included in the budget proposition for next year, which for us will be very beneficial. So maybe we should end the positive science within personal assistance by noting that for the first time, even if the quarter as a whole had a net outflow of customers, the last month of the quarter, we actually had our first month for a very long time with a net zero customer outflow, which is a positive indication in that area. As we've talked a lot about also in previous presentations, we do operate within areas requiring specialized competence. And we know that this works for us because we have very high client satisfaction in these areas. And we have a well-filled toolbox in order to be able to do this. We invest in research and development. We have evidence-based methods, both our own that we have developed and that external partners have developed. that we use. We have an active internal competence transfer. We have our Humana Academy where our employees can continuously develop their competences. And we have a very strong value based culture to build from. To give you one example of how we use these methods, I'd like to point out, as you can see in this picture, the unit is called Tonvillan. It's one of the units where we work with young boys 15 to 20 years of age that have criminal behavior. And the whole point of the operations is to get the young boys and men out of the criminal behavior and into being productive citizens again. We have good success in this area, and we're using a method called B12 in this area, which we have developed ourselves, and there has been research done on this method as well. And we know that it's working. So when you see in the debate sometimes in the media that the HVB homes or the residential care units, that they are also called, is a growing ground for criminal gangs, it is quite the contrary. The HVB homes in Sweden are a part of the solution in breaking these negative trends. And how do we know that then? Well, we know that by keeping measuring the social impact of our services. And we can see that we have had a slight decline in Q1 of the number of completed placements that led to a lower level of intervention. And this is partly due to the fact that we have fewer people actually leaving us during Q1 this year compared to last year. But it's also a sign of that we're getting more complex placements and that we are receiving placements that are waiting for assist placements. So they are actually meant to move into a higher level of care after us. But we do, however, see that more than half of the clients in the residential care homes actually achieve the target in their implementation plans. And the target, for example, can be going back to school or being able to reunite with families. So we are definitely making a positive impact in society by working within this area.

OK, I will go through the financial slide. In the quarter we see a growth rate in the revenues of 5% compared to last year. The decrease from the previous quarter comes primarily from the divestment of the Finnish elderly care business as per end of January, as well as that the current quarter contains two days less compared to the previous quarter. I would like to highlight the adjusted EBIT contribution between our business areas. Only two years ago, Personal Assistance contributed with 40% of Humana's EBIT. The contribution in today's portfolio has changed a lot and we have been able to compensate for the decrease in Personal Assistance profitability. This shows strength in Humana's diversified portfolio. Also during Q1, there was a continued profit improvement compared to previous quarters, both in absolute and relative numbers, with an adjusted EBIT margin reaching 5.1%. The EBIT development compared to last year shows a mix between the segments with improvement in Sweden and Norway. while Finland had a weaker quarter, where a major part of the decreased EBIT comes from that elderly care in Finland constantly rebuked with 7 million SEK in Q1 last year. We see a slight decrease in revenues for Sweden, both compared to last year as well as previous quarter. Main reason for this is the continued decrease in revenues within business area personal assistance during the quarter, even though Natalie, as she mentioned, that March showed a promising sign. Even though the decrease in revenues we were able to compensate for this and reached an increase in adjusted EBIT of 11%. The main driver for the increased EBIT was the business area elderly care with very good occupancy. Norway continues to perform in most aspects. The revenue increase of 95% is of course primarily driven by the Team Olivia acquisition but also supported by an organic growth of 7.6%. The decrease in revenues from the previous quarter is mainly related to less number of days in Q1 and also a weakening of the Norwegian pound. On the operational side, we have so far been able to meet increased personnel costs with price increases and organic growth. Finland is in transition. This quarter the divestment of elderly care business was completed and is the main driver behind the drop in revenues. But we also see a decrease in revenues as well as the profitability coming from low demand. within some areas of child welfare services as well as open care services. We have an increased focus on finding growth opportunities and to work actively with our current portfolio. On the coming two slides, I want to highlight some of the major items within our cash flow for the last 12-month period. From the starting point of the reported EBIT of 523 million SEK, we do adjustments to come to the EBITDA excluding IFRS 16. We have a positive effect from the change in working capital of 113 million SEK. We have PropEx-related investments of almost 100 million SEK in our units. And on top of this, we have invested in the construction of an elderly care home amounting to 120 million SEK. This property is now finalized. Paid interest as well as paid income tax takes us down to a free cash flow for the period of 219 million SEK. During the last 12 months we have divested the elderly care business in Finland and at the same time acquired Team Olivia Norway. On top of this, we have conducted repurchase of shares amounting to a paid amount of 55 million SEK per quarter end. Finally, we have an FX rate effect leading to our change in net debt of 222 million SEK for the last 12 month period. As you probably know, our board has suggested to the AGM in early May a dividend of 1 SEK per share amounting to approximately 50 million SEK. When it comes to our financial targets, we are not where we want to be when it comes to our organic growth. We reach a total growth rate of 8%, but the organic growth rate suffers from the development within personal assistance and also the last quarter's development in some areas in Finland. Our adjusted EBIT has continuously improved the last quarters and for the current quarter we reached an adjusted EBIT of 5.1% for the last 12 months, to be compared with 4.6% one year ago. Our capital structure continues to improve, and we are now at a leverage ratio of 2.6. The reason for the positive development during the quarter is both an improved ABTA, as well as the decrease in net debt, mainly due to the divestment of the elderly care in Finland. And now back to you, Natalie.