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 in the Nordics for customers, clients and contractors 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.
Through investments in research and constant development to meet the changing needs of the market, Humana wants to set a new and higher standard of care in the Nordic region.
Seven reasons to invest in Humana:
1. Care is a stable and growing market
The market. The care market in the Nordics totals SEK 650m, 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. 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 2021, Humana gained about 600 new customers and clients. Our offering must be in line with underlying growth trends and meet the needs of a growing market.
Consolidation. The market is fragmented and consists of thousands of companies. The ongoing consolidation creates opportunities for a company like Humana to grow through acquisitions.
3. Strong market position through high quality and specialised offering
Market position. Humana has a strong market position in personal assistance and individual and family care and is growing in elderly care.
Specialisation. Our continuous reorganisation efforts to adapt the business to more complex customer offerings and research initiatives give us competitive advantages in a market with increased demand for specialist expertise.
Quality. High quality care is a prerequisite for meeting demand and establishing strong a strong position in the market. Humana has developed its quality monitoring initiatives and implemented a new Humana Quality Index, HQI. This will give us the conditions to keep contributing to a higher standard of social care.
Entry Barriers. Complex care services with advanced specialisation, permit requirements and investments create high entry barriers.
4. We drive the future of welfare
A sustainable business concept. Humana works to ensure sustainability at an individual level as well as socio-economic sustainability, which also includes taking responsibility for its environmental impact. Everyone is entitled to a good life, and Humana wants to contribute by establishing a new and higher standard of care.
Social sustainability. An investment in Humana is an investment in the care of vulnerable individuals and a route for employees into the labour market. We help more people lead a good life by delivering good care services, and invest in jobs for people who stand furthest from the labour market.
Socio-economic sustainability. In 2021, Nordic municipalities and states saves SEK 1 billion through Humanas's cost-effective care services.
5. Continuous growth and profitability
Growth. Humana has a history of stable growth and stable margins. We are continuing to focus on growth through a relevant offering and cost efficiency.
Revenue. Over the last five years, Humana has had an annual average revenue growth of 5.7 percent.
Operating margin. Over the last five years, Humana has had an annual average operating margin of 5.6 percent.
Earnings per share. The average annual increase in EPS during the last five years has been 11.7 percent.
Stability. Demand for our operations is independent of economic conditions or other major socio-economic challenges, which guarantees long-term, sustainable returns.
6. Good cash flow conversion reduces risk
Cash conversion. 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 conversion (operating cash flow divided by EBITDA), amounted to 85 percent in 2019, 93 percent in 2020 and 86 percent in 2021.
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. The Board has suggested that no dividend should be paid for 2021.Also for the years of 2019 and 2020, no dividend was paid.