An investment in Humana is an investment in sustainable welfare. Humana creates great value for society, at an individual level and socio-economically. The company has a strong position in the growing care market and a clear strategy for achieving its overall goal of being the obvious provider of care services for customers, clients and contractors in the Nordic countries who demand high quality.
Several underlying trends in the world at large show that the need for care is increasing and is expected to continue to increase over the coming years. Thus, demand for innovative, cost-effective, high-quality care services will also increase. These trends include, among other things, an ageing population, increasing mental illness, old property holdings and increased demand for quality, specialisation and individual adaptation.
Meanwhile, the increased need, combined with a changed demographic structure with fewer people in the labour market, leads to economic pressure on states and municipalities, which in turn increases the need for cost-effective care services.
Another challenge is finding skilled labour in the care industry. All providers – public, private and non-profit alike – will be essential to meeting the need and coping with this major welfare challenge. As a long-term, high-quality care provider, Humana is part of the solution. The Company has a clear strategy for how its operations will continue to develop and clear financial targets that focus on growing profitably and sustainably – socially, economically and environmentally.
Seven reasons to invest in Humana:
1. Care is a stable and growing market
The market. The care market in the Nordics totals SEK 640m, of which about a quarter is private.
Continued growth. A growing and ageing population along with increased mental illness is expanding the market.
Non-cyclical market. The care market is less affected by business cycles.
2. A quality provider that contributes to sustainable welfare in the Nordics
A sustainable business concept. Humana’s vision and mission focus on sustainability at an individual level in society but also socio-economic sustainability. It also encompasses the environmental perspective.
Social sustainability. Humana helps more people live a good life by providing high-quality care services. Humana is also a large and attractive employer.
Socio-economic sustainability. In 2020, Nordic municipalities and states saved SEK 1 billion through Humana’s cost-effective care services.
3. Strong market position in crucial care segments
Market position. Humana has a strong market position in personal assistance and individual and family care and is growing in elderly care. This strong market position gives us clear competitive advantages.
Entry barriers. Complex care services with advanced specialisation, permit requirements and investments create high entry barriers.
Consolidation. The market is fragmented and consists of thousands of companies. The ongoing consolidation creates opportunities for a company like Humana.
4. Humana wants to grow and help more people have a good life
Growth-oriented. Humana is a growth-oriented company. We are proud of our business and the care we offer. Growing means that we help more people have a good life. In 2020, Humana gained around 300 customers and clients.
Growing organically and through acquisitions. Humana is growing by building new elderly care homes, housing with special service under LSS and health and social care homes. We also grow through selective acquisitions.
5. Humana has shown stable growth and profitability over the years
Stable business. Humana has a history of stable growth and stable margins.
Revenue. Over the last five years, Humana has had an annual average revenue growth of 5.2 percent.
Operating margin. Over the last five years, Humana has had an annual average operating margin of 5.4 percent.
6. Good cash flow generation reduces risk
Cash flow generation. Humana’s revenues come primarily from national and local governments. They pay on time and are creditworthy. Increasing revenue and stable profitability help to strengthen operating cash flow and to generate cash flow, which is used partly to invest in growth. For the last three years, cash flow generation, that is, operating cash flow divided by EBITDA, amounted to 62 percent in 2018, 85 percent in 2019 and 93 percent in 2020.
7. Attractive financial targets
Financial targets. Humana will create good value for its shareholders. Humana will be profitable and have an operating margin of 7 percent. Humana will grow 5 percent organically with an additional 2–3 percent possible from acquisitions. Humana will have a good capital structure with net debt not exceeding 4.5x EBITDA.
Dividend policy. Dividends may amount to 30 percent of net profit for the year. For the last three years the dividend has been 16 percent for 2018, 0 percent for 2019 and the Board proposes 0 percent for 2020.