Humana AB (publ)

Good morning. Welcome to Humana's Q4 report presentation. My name is Evelina Pettersson. I'm the head of IR at Humana. With me today, I have our CEO, Nathalie Bolas-Nilsson, and our CFO, Christopher Heroux. Please go ahead, Nathalie.

Thank you, Evelina. We will give you a short introduction, followed by financials and operational performance. We will then wrap it up with concluding remarks and open up for questions. Humana is a Nordic care provider with a high degree of specialized care. We have a well diversified portfolio of services in the Nordic countries, with Sweden being the largest market followed by Norway and then Finland. We have a high customer satisfaction and satisfied employees. We have during 2025 worked on securing our growth moving forward. And after talking about our pipeline in our two previous quarterly reportings, we can now inform you that the work has been fruitful and many new projects have been signed, many of them during the Q4, amounting to approximately 300 new placements and 450 million in net revenue. We are expecting to continue to build our pipeline and sign several more projects in the near future. The projects are primarily within our targeted areas with high growth and profitability, disability, LSS and elderly care. As you may have noticed in our recent press release, one of the projects signed is a new large elderly care unit in Sollentuna with 100 beds and an LSS unit. We are also continuing to pursue M&A in targeted areas and have during the period acquired Familjehjälpgruppen in Norway that will complement our institutional offering with a broader range of specialized services for children and young people. In light of our strong Q3 report, the Q4 report looks a bit on the soft side at a first glance, and we will get into that in the upcoming slides. We would, however, like to highlight that we see an underlying profitability improvement in Norway and Finland, which we will get back to also. The results of our yearly customer satisfaction survey came in during the quarter, and we are proud to say that we can see an improvement to 85 from already high numbers, which is quite an achievement considering we have a large part of our clients that are not placed with us on a voluntary basis. Earnings per share have increased with 65% year over year. We have continued to buy back shares during the period amounting to 44 million crowns and the proposed dividend of 1.35 crowns is an increase with 35%.

The year over year decrease in revenues comes mainly from two factors. The fact that we during the year still have a net customer outflow within personal assistance, although at a much lower pace compared to the previous year and FX effects coming from the strengthening of the Swedish crown compared to Norwegian crown and Euro. On top of this, we also have changes in portfolio with divestment of elderly care in Finland. In the light of this decrease, the importance of the efforts being made regarding building up the growth pipeline becomes visible. Starting to the right on this slide, Norway, Finland and individual and family within Sweden showed stability. However, personal assistance faced two negative one-off effects during the quarter in comparison to Q4 last year. The first one of these effects is relating to older reclaims amounting to 9 million SEK. And the other one relates to a positive one-time effect which was recognized during last year, but no such effect in the current quarter. For the full year, the EBIT within personal assistance has improved. The EBIT decrease in the current quarter results in an adjusted EBIT for the year of 4.8%. We have been active in our capital allocation during the year, and this has continued in the current quarter as well, with the share buybacks amounting to 44 million SEK in the quarter and 153 million SEK during the year, corresponding to 6.7% of Humana's total number of shares. And earlier this morning, our board took a decision to repurchase up to an additional 1 million shares. At year end, we are at a net debt of 1.2 billion SEK compared to 1.5 billion one year ago. On the note on how we have worked with our liquidity during the year, it is also worth to mention that we have amortized another 50 million SEK on our bank loans during the quarter and 450 million SEK in total during 2025, supporting that our net interest costs for the year has decreased from 143 million last year to 99 million SEK this year. We are pleased to see this year's development in earnings per share. The increase from 2.87 crowns last year to 4.73 crowns this year is a 65% increase. In this quarterly report, our board is suggesting a dividend for the year of 1.35 Swedish crowns per share, which is an increase of 35% compared to 2024.

We had a soft Q4 in Sweden compared to Q4 2024. The operating profit is primarily burdened, as Kristoffer mentioned, by the one-offs related to old reclaim processes within personal assistance, together with the accruals that had a positive impact in Q4 2024. Compared to Q4 last year, we have the negative impact of 9 million crowns in reclaims and 6 million in the accruals. To get a more correct picture of the development in personal assistance, you need to look at the full year where both adjusted EBIT and profitability have improved year over year. With individual and family, elderly care is performing very well, and we invested in a new journaling system during the quarter. The adult segment is continuing to develop nicely, whereas the child and youth segment still is experiencing headwinds, as we have mentioned in previous reporting. This is something we see to some extent in all of our countries in that segment. As mentioned earlier, our pipeline growth efforts within our target segments, elderly care and LSS are bearing fruit, and we now have several signed projects. Norway has improved profitability of 7.2% in Q4 25 compared to 7.1 in Q4 24. The main part of the perceived lower revenue is the currency impact. and in NOK it looks significantly better. This also applies to the operating profit. All sub-segments are improving compared to last year, except for children and young. This week we welcomed Familjehjälpsgruppen in Norway, which will complement our care chain for children and youth. The newly acquired company has an annual turnover of 120 million NOK. Also in Finland, we have an underlying profitability improvement. We opened two new units during the quarter that impacts the EBIT with growth costs of 3 million. The elderly care divestment stands for 3 million in difference in the comparison. This together with the currency impact of 1 million shows that we have an underlying improvement and expect continued improvements moving forward. We are beginning to see the effects of the new sales organization that we told you about previously, and we have created a strong pipeline of signed projects of 130 apartments that will drive our growth moving forward. During the year, we refinanced our loans. This together with our active work on capital allocation and cash flow has put us in a good position as regards our goal on capital structure. We still have a way to go on reaching our targets on organic growth and profitability, but we feel confident that we will do so. As regards growth, we have secured projects within our target segments that will add approximately 450 million crowns in revenue, which will help us reach our goal. Several more projects will follow in the near future. The projects are well distributed between the countries. We also continue to pursue attractive bolt-on acquisitions, where Familjehjälpgruppen is a recent example. How will we then reach our profitability target? Well, we have already secured part of the measures we need to take. The efficiency program is on track. We have several digitalization and AI projects that will contribute once they are fully rolled out and taken into use by our employees. We need to continue to focus on filling our free capacity. This may look like a big improvement, but it is equivalent to around 30 more placements than what we have today within child and youth, or 40 placements within disability or LSS. We have the available capacity, and although we have had some headwinds within children and young, the disability segment is still ramping up some of the newer units. We have also reinforced our sales and marketing organization in Finland and are in the process of also doing so in Sweden. We have secured approximately half of the growth we need to reach our goals for the next few years in growing higher margin segments. We expect to continue to secure new projects in the near future. And we also are pursuing bought on acquisitions with Familjehjälpen just being added. Going forward, we will continue to focus on securing our growth, both by signing new projects and by filling our available capacity. We will monitor that we reach the full effects of our efficiency programs, and we will continue to use and spread digitalization and AI to boost efficiencies. And of course, we will continue to work actively with our capital allocation. And with that, we conclude and open up for questions.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Christopher Liljeberg from Carnegie. Please go ahead.

Hi, good morning. Three questions for me. First, on the outlook of clients in personal assistance, it seems it has come down a little bit again in Q4 after having stabilized in the third quarter. So when do you think this trend could actually reverse and become positive or at least flat going forward?

We do expect it to go flat over this year. We have seen, if we compare 24 to 25, In 24, we lost about 10% on the net revenue from clients. In 24, it was halved to 5%. So we are moving in the right direction, but we haven't really seen the flattening out yet. We do know that a lot of companies on the market are looking to exit the market, which means that customers should be moving around. So we'll see, but that's our best guess during this year.

And when you say to flatten out in this quarter, do you mean that the number of clients end of 2026 will be on par with what the end 2025 or will it still be down year over year?

I think it will be a small decline during the year still actually. I think it will flatten out towards the second half of the year, considering that we haven't fully flattened out yet. So I think we're still on a little bit of a downward slope, but we halved it last year. So compared to 24, so we continue to see improvements.

Okay. And is this still now due to a slow inflow of new clients rather than existing clients leaving you?

I would say we have, on a voluntary basis, customers that leave for other companies and customers that are coming in from other companies or new customers. We're very close to zero there. So we have more or less the same amount of customers coming in as leaving. But then we have customers that die and we have customers that have decisions withdrawn. That's a natural part of the business. And so we're not quite filling up as many as we need to cover also that part. But the ones that are leaving on a voluntary basis and the ones that are coming in is pretty much on a zero level now.

Okay, great. And then my second question relates to the 450 million in future new revenues that you mentioned. What's the timing for this?

Yeah, we have several of the units opening up already during this year. So it's about a third per coming three year period approximately.

Okay, and then my last question. This slide where you show the different factors to drive modding higher. So you have a checkbox on the efficiency program. Does that mean that you are on track with the measurements or the measures you're doing or have you already received those savings?

We are definitely on track and we have seen most of the impacts already implemented that were planned for this year. There's a small delay in one of the digital systems implementation. that we needed to perform, but that is primarily during this year's savings. That is a little bit postponed in time that we also mentioned in the report, but most of it is definitely on track and being implemented.

And saving them from what we have seen.

Yeah.

The starting point, I guess, is 2025.

Yeah. If you look at the efficiency programs, we announced previously that we would see around 35 million in 2025, an additional 20 million in 26. And we had the consolidation program on around 10 million. And then we also had some purchasing and the refinancing. All of that. is in line, but you haven't seen the full effects of our saving programs in 2025 due to the fact that we made a lot of digital investments as well. So we are expecting that you will start seeing it. We can see it in our books. It's in line and it's performing as it should. There is one small part only that has been a little bit delayed, and it's one of the projects that we haven't had delivered from our supplier. But other than that, we're in good shape.

Yeah. So the graph should maybe instead have lower IT investment costs in it. If you have already seen the set up, never mind, but okay. And then you mentioned also this recent acquisition and further Bolton acquisition as a contribution factor to more than Is that you acquiring businesses with a higher margin or are you more alluding to potential cost synergies here?

It's both, of course, but definitely the ones we are pursuing and actively pursuing and in process with our higher margin areas. Yeah. But we also have synergies in those.

Okay.

Thank you. The next question comes from Julia Angelistrand from Handelsbanken. Please go ahead.

Good morning, and thank you for taking my questions. So I'll start off with a question on growth as a general theme. I noticed that there are some headwinds in certain segments. So where do you see growth coming from in 2026?

Well, we are improving, I would say, in all of our segments, even the personal assistance on the bottom line. We improved the margins, we improved the EBIT. So all of the segments are improving in all of the countries except for child and youth. where we have some headwinds. We've talked about that in previous reporting as well. It's been a weak demand. We don't have a big drop, but we have small adjustments, I would say, in all markets.

Okay, and then on growth, sales growth in Norway and Finland, which seems to have some structural headwinds also. What can you do there to increased demand on your services?

I think we're doing well in both Finland and Norway. In Finland we have seen an underlying improvement and Finland is primarily impacted by the divestment of the elderly care and the growth costs and the currency impact since we report in SEC. but we have underlying profitability improvements. And we just opened two new units in disability during the quarter, and they ramp up fairly quickly. We have around a six month ramp up period of those. So they should start contributing during this year in a nice way. So that's nice. And we have several more projects coming up during this year, also opening this year in June. in Finland, and that's coupled with that we have a little bit of free capacity there as well in some areas. And we have a new active sales organization there that we have started to see the results of. So we're quite pleased with the development in Finland. In Norway, I would say we also there we have stable performance. They're doing well. The child and youth segment is a little bit on the weak side.

but all the other areas are improving so we expect growth in the hot area which is the disability area in norway okay understood and then if i can just squeeze in two short ones yeah um the reclaims in personal assistance is this something that happens often should we expect this to happen again? Or it happens a one time effect?

Yeah, it actually happens continuously. It's part of being in the personal assistance business. We have a rolling reclaim process continuously and we've talked about that previously as well. We have around 100 million continuously in reclaim processes. We win around 85% of all the reclaim processes if we look in the historical data and we make provisions for about 20%. So it's a part of the natural business, unfortunately, within personal assistance. So most months we have something that comes out, positive or negative, and it's not that often that it comes in several in one month. This time it happened and it had a little bit of an impact, but sometimes we had a positive impact. If you look at this quarter compared to quarter 2024, I talked about 9 million in difference in reclaims, but we actually only had negative impact of 7.7 in reclaims this quarter. But last year we had a positive impact. So that's what makes up the difference. So it comes in positive sometimes and negative sometimes, yeah. Maybe I can add to that, that most of the reclaim processes are old. We have fewer reclaim processes coming in, fewer amounts. If we look at the period that the reclaim processes are for, it's before 2021, most of it. So it's old processes that are now coming to an end. So we are expecting to reduce the reclaim portfolio that we are rolling continuously by the end of the year. So that's a positive for us.

Okay, I understand. That's clear. But then to my last one, I know that within individual family in Sweden, you're in some areas, one of the few providers and this quarter you had some lower occupancy. And so when do you think that occupancy will improve because I guess it needs to improve at some point.

There is a big need for, there are a lot of children that needs the support and the help. And we do get quite a lot of requests for children, but it's very, all the permits are quite limited in the difference that you can have in one unit between how old the children are and also what type of specific issues they have and that is so it's not always a perfect match and when the requirements change when there's new types of groups or new types of projects it takes about one year to change for us in our permit because Evo is not very quick in approving changes in permits. So it is a slow process to adjust for the need. So that's part of it, but also I would say it's not a big decrease that we have seen. I think we have around a 3% decrease or something year over year. So it's not a lot, but since it's such a big segment, it makes an impact. um we are still optimistic because we see that it goes up and down and we also see that there are a lot of children that are not being placed so we hope to be able to pick up this segment again and we are one of the few ones that can offer many of the services that we do yeah okay do you have a view on what could be sort of an inflection point for this to change or is that Well, we've been saying for quite a while that this is the one segment that is the most difficult to guess how it will develop and it's um since we do see that there is quite a big need um in the municipalities there has been a little bit of a hesitation we think also due to the um political aspect of the atbs and the discussions there hasn't been that much lately though so hopefully it will uh start picking up again yeah okay uh thank you for that those were all of my questions

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions or closing comments.

And we noticed here a written question about the status of our lawsuit against Evo. And it will actually be up in court in April. So after that, we will know more if it comes in. Of course, if we lose, we don't really lose because we've taken all the costs already. If we win, it will be a major upside. But we do expect if we win that it will be appealed by the state since this is a very important process for them. So we expect that it would take at least a year until we actually know if we win. But it's in April, we will have a first indication. End of April, the process is 20th to the 29th. And then it usually takes a few weeks before we get a verdict.

with that we have no more questions so we want to thank you all for listening and have a good day