Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Humana AB (STU:47H, Financial) achieved a record high adjusted operating profit of SEK 203 million in Q3.
- The integration of Team Olivia in Norway is proceeding according to plan, contributing positively to the company's performance.
- There is a 3% price adjustment for personal assistance in Sweden starting January 1, which is expected to improve financial stability.
- The company has shown strong growth through acquisitions, having acquired 19 companies over the past six years.
- Humana AB (STU:47H) reported an 11% year-on-year revenue growth, reaching SEK 10 billion in revenue for the first time.
Negative Points
- There is declining demand in open care services in Finland, expected to continue decreasing until the end of 2026.
- The personal assistance segment in Sweden continues to experience a net loss of customers.
- The integration of Team Olivia in Norway has resulted in a somewhat lower margin due to regulatory changes in scheduling.
- The elderly care segment in Finland is expected to be divested by the end of the year, reducing its contribution to the business.
- The company faces challenges in adjusting cost levels to reflect the lower run rate for revenues in the personal assistance segment.
Q & A Highlights
Q: Can you provide more details on the change of regulation around scheduling in Norway and its financial effects?
A: (Nathalie Boulas Nilsson, CEO) The change involves renegotiations with unions about how long personnel can stay in homes before needing a day off. The exact financial impact isn't clear yet, but we have booked cost provisions for the anticipated changes. (Christoffer Herou, CFO) Negotiations are ongoing, and costs have been accounted for since April.
Q: Is there potential to adjust cost levels in personal assistance to reflect lower revenue run rates?
A: (Nathalie Boulas Nilsson, CEO) Yes, there is potential. We are working on cost reductions, but there is typically a one-month lag in cost adjustments when we lose customers. We expect improvements as we stabilize customer numbers, and we are moving all businesses into the same operating system to enhance efficiency.
Q: What is the outlook for margins in Finland given the weakness in open care and improvements in other areas?
A: (Nathalie Boulas Nilsson, CEO) We expect stable margins next year. While open care services are declining, we are opening new units in target areas like child welfare and disability, which should offset the decline. We are also exploring ways to optimize service mix and improve profitability.
Q: Will adding another layer of governance incur additional costs?
A: (Nathalie Boulas Nilsson, CEO) No, we do not foresee any material additional costs from strengthening internal governance and control.
Q: Can you elaborate on the short-term agenda for consolidation within the Humana group?
A: (Nathalie Boulas Nilsson, CEO) We are reviewing our company structure to reduce complexity and inefficiencies. This involves merging companies where possible and streamlining processes, such as moving to a unified salary system in Sweden. We expect to see effects from these efforts over the next one to three years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
