Interim report July September 2019 Q3

• Net profit after tax for the period amounted to SEK 128m (102). Excluding the effects of IFRS 16, profit after tax amounted to SEK 134m (102). • Ear...

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Interim report July–September 2019

Q3

Humana is a Nordic care company. The company is a market leader in individual and family care and personal assistance with expanding operations in elderly care. Humana has 16,000 employees who all work with a shared vision – Everyone is entitled to a good life. Humana is a growth company with a focus on quality and customer satisfaction. The company had annual revenue of SEK 6,725m in 2018. Humana is listed on Nasdaq Stockholm and is headquartered in Stockholm. Humana AB CID 556760–8475 | Contact: +46 (0)8-599 299 00 | Warfvinges väg 39, SE-112 51 Stockholm | www.humana.se | [email protected]

Third quarter in brief Third quarter, July-September 2019

• • • • •

Operating revenue was SEK 1,928 million (1,677), an increase of 15%. The organic growth was 3.2%. Operating profit was SEK 176m (151), an increase of 17%. Excluding the effects of IFRS 16, the standard for recognising leases that applies from 1 January 2019, operating profit amounted to SEK 164m (151), an increase of 9%. Net profit after tax for the period amounted to SEK 128m (102). Excluding the effects of IFRS 16, profit after tax amounted to SEK 134m (102). Earnings per share for the period before and after dilution amounted to SEK 2.42 (1.92). Operating cash flow amounted to SEK 206m (35). Excluding the effects of IFRS 16, operating cash flow totalled SEK 121m (35).

The nine-month period, January-September 2019

• • • • •

Operating revenue was SEK 5,554m (5,021), an increase of 11%. The organic growth was 2.4%. Operating profit was SEK 298m (310), a decrease of 4%. This amount includes acquisition expenses and revenues of SEK -28m (5) and integration costs for Coronaria Hoiva of SEK -8m (-). Excluding the effects of IFRS 16, operating profit amounted to SEK 269m (310), a decrease of 13%. The effects of IFRS 16 on operating profit amounted to SEK 30m (-). Net profit after tax for the period amounted to SEK 170m (194). Excluding the effects of IFRS 16, profit after tax amounted to SEK 186m (194). Earnings per share for the period before and after dilution amounted to SEK 3.21 (3.65). Excluding the effects of IFRS 16, earnings per share amounted to SEK 3.52 (3.65). Operating cash flow amounted to SEK 375m (149). Excluding the effects of IFRS 16, operating cash flow totalled SEK 159m (149).

Significant events in and after the third quarter

• •



Humana signed during the quarter agreements for two new elderly housing units under own management, one in Norrtälje and one in Ängelholm. The housing units will each have 60 apartments. Both operations are scheduled to open in the first half of 2021. During the quarter, Humana entered an agreement with Samhällsbyggnadsbolaget i Norden for the sale of 37 commercial properties in Finland, Sweden and Norway. The value of the property portfolio, which is transferred through a sale and leaseback transaction, amounts to SEK 468m. The average length of the leases for the properties is 14.2 years and the additional annual rental charge amounts to SEK 32m. Existing properties were transferred to Humana in July 2019. Properties where construction is ongoing will be transferred when they are completed, which is expected to be by Q2 2020. Anu Kallio was appointed new head of Humana in Finland during the quarter. She will start no later than 1 March 2020. Anu Kallio was previously CEO of the Finnish care company Rinnekoti.

Interim report July-September 2019 | 2

Revenue and profit SEK m Net revenue Other revenue Operating revenue

Jul-Sep

Jul-Sep

Jan-Sep

Jan-Sep

Oct-Sep

2019

2018

%

2019

2018

% 2018/19

2018

%

1,919

1,678

14%

5,545

5,011

11%

7,243

6,714

8%

9

-1

n/a

9

10

-13%

10

11

-12%

Jan-Dec

1,928

1,677

15%

5,554

5,021

11%

7,253

6,725

8%

Operating profit

176

151

17%

298

310

-4%

380

391

-3%

Adjusted operating profit

172

151

14%

294

310

-5%

380

391

-3%

Net profit for the period

128

102

26%

170

194

-12%

221

245

-10%

Operating cash flow

206

35

484%

375

149

152%

512

285

80%

Excluding IFRS 16 effects: Operating revenue

1,928

1,677

15%

5,554

5,021

11%

7,253

6,725

8%

Operating profit

164

151

9%

269

310

-13%

350

391

-10%

Adjusted operating profit

159

151

6%

264

310

-15%

350

391

-10%

Net profit for the period

134

102

31%

186

194

-4%

238

245

-3%

Operating cash flow

121

35

243%

159

149

7%

296

285

4%

Interim report July-September 2019 | 3

Good growth, improved customer satisfaction and better results Humana’s revenues continued to grow in the third quarter and both operating profit and operating margin finished high. All of Humana’s business areas are progressing in the right direction. There is still potential for improvement, but there are also many reasons to be proud. For example, at Humana’s elderly housing units, customer satisfaction – our most important parameter – has increased further in this year’s national survey. In the third quarter, Humana’s operating revenue increased by 15 percent to SEK 1.9 billion and operating profit increased by 17 percent to SEK 176 million. Revenue growth was primarily acquisition driven, but we also had organic growth of 3.2 percent. The quarter was also strong in terms of cash flow, not least as a result of property sales during the quarter. During the autumn, we put considerable effort into reviewing our strategy together with our partially new Board of Directors. We determined that we are in attractive segments where we also have leading positions and that we are doing well, even in comparison to our competitors. However, there is clear potential to improve profitability and to create more stability and predictability in our operations. Every day, our employees put a lot of energy and commitment into our systematic quality assurance work. We were therefore particularly pleased when we saw the results for our elderly housing operations in the National Board of Health and Welfare’s latest national survey. The number of satisfied customers in Humana’s elderly housing reached 88 percent this year, compared with 87 percent in 2018. Our elderly customers are also clearly more satisfied than the national average for all elderly housing in Sweden (both public and private), where 81 percent are satisfied, which must also be considered an impressive figure. Swedish elderly care is usually much better than its reputation! Considering this, it is pleasing to be able to note that our high-quality elderly care business continues to grow. During the third quarter we entered two more agreements on new elderly housing under our own management: an additional one in central Norrtälje and one in Ängelholm. This means that, in addition to our contracted units, we will have a base of ten elderly housing units under our own management during 2021. The establishment of our new housing unit under own management in Staffanstorp, which opened in March, went better than expected with a high occupancy rate already and in September we opened our fifth own-management unit in Kungsängen.

As from the third quarter, we are reporting Finland and Norway as separate business areas. In Finland, revenues amounted to SEK 336m, a little more than twice as much as the comparative quarter last year. The increase is mainly attributable to the acquisition of Coronaria Hoiva, but we also continued to have good organic growth in Finland, where several new units opened during the year. After a sluggish start with a negative impact on earnings from Coronaria Hoiva in the second quarter, our newly acquired company is now showing a trend in the right direction, but the results are still too low. The action programme meant to strengthen profitability continues in parallel with the integration. In Norway, revenues amounted to SEK 194m. Performance was stable during the quarter and in line with the previous year. The Individual & Family business area’s turnover decreased slightly in the third quarter. Our efforts to adapt our offer to the customers’ partially changed requirements continues. At the same time, we have succeeded in adapting the use of resources to the current occupancy and the operating margin increased to 13.7 percent (13.3) for the quarter. The Personal Assistance business area continued to be very stable, both in terms of revenue and profit. We continue to be challenged as fewer people are granted personal assistance, but on the positive side, respiratory aid is again seen as a basic need for which individuals are entitled to assistance as from 1 November. The 6 percent increase in revenue for the quarter is largely due to the acquisition of Assistans på Gotland earlier this year and last year’s acquisition. For the Group, the third quarter can be summed up by good growth, increased customer satisfaction and improved profitability. However, the work continues to improve both stability and profitability going forward. Stockholm, 8 November 2019

Rasmus Nerman, President and CEO Humana AB

Interim report July-September 2019 | 4

Operating revenue by business area Jul-Sep

Jul-Sep

2019

2018

%

2019

2018

Individual & Family

529

538

-2%

1,577

1,645

-4%

Personal Assistance

708

666

6%

2,077

1,978

5%

Elderly Care

146

112

30%

421

328

Finland

336

163

106%

856

489

Norway

194

196

-1%

598

14

1

981%

24

1,928

1,677

15%

5,554

SEK m

Other revenue incl. Denmark 2) Total operating revenue

Jan-Sep Jan-Sep

Oct-Sep Jan-Dec % 2018/19

2018

%

2,116

2,188

-3%

2,766

2,668

4%

28%

550

457

20%

75%

1,015

648

57%

569

5%

775

746

4%

12

96%

31

19

63%

5,021

11%

7,253

6,725

8%

Organic growth by business area 1) % Individual & Family Personal Assistance Elderly Care Finland Norway Total organic growth

Jul-Sep

Jul-Sep

2019

2018

Jan-Sep Jan-Sep 2019

2018

2018/19

Oct-Sep Jan-Dec 2018

-1.7%

0.4%

-4.1%

-1.0%

-3.7%

-1.3%

1.3%

-1.0%

1.0%

0.2%

1.3%

0.7%

30.0%

32.4%

28.3%

30.7%

31.0%

33.4%

9.6%

21.0%

9.0%

14.6%

1.9%

12.7%

2.1%

14.2%

6.0%

4.1%

7.1%

7.6%

3.2%

4.4%

2.4%

2.9%

2.2%

3.4%

Operating profit per business area Jul-Sep

Jul-Sep

2019

2018

%

2019

2018

Individual & Family

72

72

1%

141

159

-11%

Personal Assistance

52

51

3%

117

111

6%

SEK m

Elderly Care

Jan-Sep Jan-Sep

Oct-Sep Jan-Dec % 2018/19

2018

%

178

196

-9%

158

151

4%

8

6

47%

12

5

135%

16

9

79%

Finland

19

18

3%

39

51

-23%

57

68

-17%

Norway

21

21

-3%

45

35

29%

65

55

19%

4

-17

n/a

-57

-51

n/a

-93

-88

n/a

176

151

17%

298

310

-4%

380

391

-3%

9%

269

310

-13%

350

391

-10%

Central costs/other incl. Denmark 2) 3) 4) Total operating profit

Excluding IFRS 16 effects (affects only Central costs): Total operating profit

164

151

Operating profit margins by business area Jul-Sep

Jul-Sep

2019

2018

2019

2018

2018/19

2018

Individual & Family

13.7%

13.3%

8.9%

9.7%

8.4%

9.0%

Personal Assistance

7.4%

7.6%

5.6%

5.6%

5.7%

5.7%

Elderly Care

5.6%

5.0%

2.9%

1.6%

2.9%

2.0%

Finland

5.7%

11.3%

4.6%

10.4%

5.6%

10.5%

Norway

10.7%

10.9%

7.6%

6.2%

8.4%

7.3%

9.1%

9.0%

5.4%

6.2%

5.2%

5.8%

8.5%

9.0%

4.8%

6.2%

4.8%

5.8%

%

Total operating profit margin

Jan-Sep Jan-Sep

Oct-Sep Jan-Dec

Excluding IFRS 16 effects: Total operating profit margin

1) Organic growth is calculated as revenue growth for comparable companies that Humana owned during the comparative period. 2) Operating revenue in Q2 2018 include the effect of the final deduction of purchase consideration of SEK 9m, linked to this, is acquisition costs of SEK 5m. Operating result and operating profit include; positive earn out effects of SEK 5m and a gain on sales of real estate of SEK 4m. 3) Operating profit full year 2019 includes SEK 28m in acquisition costs, operating profit full year 2018 includes acquisition costs of SEK 18m, of which SEK 5m was in Q2 and SEK 0m in third quarter. Operating result 2019 also include integration costs of SEK 8m of which SEK 4m derive from third quarter. 4) Operating result 2019 include IFRS16 effects of net SEK +30m (0), SEK +13m (0) in the third quarter.

Interim report July-September 2019 | 5

Group development Revenue Third-quarter operating revenue amounted to SEK 1,928m (1,677), an increase of 15% compared with the same quarter last year. Acquired operations, that is, companies that were not owned throughout the previous comparative period, contributed SEK 200m to revenues in the quarter, of which SEK 151m relates to revenues from Coronaria Hoiva in Finland. Organic revenue growth was 3.2% (4.4). Operations under own management accounted for 93% of total revenues and contracted operations accounted for 7%. Operating revenue for the nine-month period amounted to SEK 5,554m (5,021). This is an increase of 11% and very much in line with the target of an annual growth rate of 8-10%. Acquired operations accounted for SEK 421m of revenues. Organic revenue growth was 2.4% (2.9).

Profit

Operating profit for the third quarter increased to SEK 176m (151). This is a 17% increase and corresponds to an operating margin of 9.1% (9.0). Excluding the effects of the IFRS 16 accounting standard, which applies from 1 January 2019, operating profit amounted to SEK 164m (151). The effect of IFRS 16 on operating profit for the period amounted to SEK 13m (-) and is due to lower rental costs of SEK 85m and higher depreciation of SEK 72m (a reduction in central costs). Integration costs for Coronaria Hoiva were SEK 4m (-). Operating profit for the nine-month period was SEK 298m (310), a decrease of 4%. Excluding the effects of IFRS 16, operating profit amounted to SEK 269m (310), a decrease of 13%. The effects of IFRS 16 on operating profit amounted to SEK 30m (-). Excluding the effects of IFRS 16 and excluding acquisition expenses and revenues as well as integration costs, operating profit amounted to SEK 304m (305), a decrease of SEK -1m. Acquisition expenses and revenues amounted to SEK -28m (5) and were largely related to the acquisition of Coronaria Hoiva. Integration costs for Coronaria Hoiva were SEK 8m (-).

Interim report July-September 2019 | 6

Events First quarter 2019 •



Humana entered an agreement to acquire all shares in the Finnish company Coronaria Hoiva Oy from its owner Coronaria Oy. The purchase price amounted to EUR 71m, approximately SEK 736m (enterprise value). The company has about 1,100 employees. Its adjusted revenue for 2018 was EUR 54m, approximately SEK 559m, and its adjusted EBITDA was EUR 4.3m, approximately SEK 45m. Humana signed an agreement for a new elderly housing unit under own management in Vallentuna. The housing unit will have 60 apartments and is scheduled to open in Q4 2020.

Second quarter 2019 • • • • •

In April 2019, the Finnish competition authority approved the acquisition of Coronaria Hoiva Oy and the acquisition was subsequently completed. Coronaria Hoiva was consolidated into Humana as from April 2019. Humana signed an agreement for two new elderly housing units under own management, one in Falkenberg and one in Norrtälje. The housing units will have 60 and 80 apartments, respectively. Both operations are scheduled to open in the first half of 2021. Humana acquired assistance company Assistans på Gotland AB during the quarter. The company’s annual revenues amount to approximately SEK 56m and it has around 115 employees. Johanna Rastad, former head of business development at Humana, was appointed as the new business area manager for Individual & Family. The 2019 AGM approved a dividend of SEK 0.70 per share for the 2018 financial year, in accordance with the Board’s proposal.

Third quarter 2019 • •



Humana signed an agreement for two new elderly housing units under own management, another in Norrtälje and one in Ängelholm. The housing units will each have 60 apartments. Both operations are scheduled to open in the first half of 2021. Humana entered an agreement with Samhällsbyggnadsbolaget i Norden for the sale of 37 commercial properties in Finland, Sweden and Norway. The value of the property portfolio, which is transferred through a sale and leaseback transaction, amounts to SEK 468m. The average length of the leases for the properties is 14.2 years and the additional annual rental charge amounts to SEK 32m. Existing properties were transferred to Humana in July 2019. Properties where construction is ongoing will be transferred when they are completed, which is expected to be latest by Q2 2020. Anu Kallio was appointed new head of Humana in Finland. She will start no later than 1 March 2020. Anu Kallio was previously CEO of care company Rinnekoti.

Events after the end of the quarter •

No significant events to report after the end of the quarter.

Interim report July-September 2019 | 7

Performance by business area Individual & Family

Revenues for the third quarter amounted to SEK 529m (538), a decrease of 2% compared to the corresponding period last year. Revenues for the nine-month period amounted to SEK 1,577m (1,645), a decrease of 4%. The decrease is explained by lower occupancy, primarily in the market segment for children and adolescents. During the third quarter, capacity utilisation recovered somewhat, but it was still too weak at the end of the quarter. Operating profit for the quarter totalled SEK 72m (72). Operating profit for the nine-month period was SEK 141m (159), a decrease of 11%. The operating margin for the quarter was 13.7% (13.3) and for the nine-month period was 8.9% (9.7). The higher margin in the third quarter is largely explained by lower costs due to increased efficiency and adaptation of the organisation to better meet demand. Our efforts to increase sales and adjust to better meet the partially changed demands from customers continues.

Personal Assistance Revenues for the third quarter amounted to SEK 708m (666), an increase of 6% compared to the corresponding period last year. Revenues for the nine-month period amounted to SEK 2,077m (1,978), an increase of 5%. Most of the increase in revenue is explained by the acquisitions of this year and last year. The organic growth of 1.3% (-1.0%) is explained by a stable number of assistance hours and an increase in the assistance allowance. Operating profit for the quarter totalled SEK 52m (51), an increase of 3%. Operating profit for the nine-month period was SEK 117m (111), an increase of 6%. The operating margin was 7.4% (7.6) for the third quarter and 5.6% (5.6) for the nine-month period.

Elderly Care Revenues in Elderly Care amounted to SEK 146m (112) in the third quarter, an increase of 30%. Revenues for the nine-month period amounted to SEK 421m (328), an increase of 28%. The increase in revenue is explained in part by revenues from new contracted elderly housing units that began operating in the fourth quarter last year, and in part by the new elderly housing unit under own management in Staffanstorp, which opened in March, quickly reaching a high occupancy and thus fully contributing to revenue as from the third quarter. Operating profit for the third quarter amounted to SEK 8m (6). Operating profit for the nine-month period amounted to SEK 12m (5). The operating margin was 5.6% (5.0) for the third quarter and 2.9% (1.6) for the nine-month period. Start-up costs for the new elderly housing units under own management in Staffanstorp and Kungsängen (which opened in September 2019) had a negative impact of SEK 2m on third quarter earnings.

Finland

Revenues for the third quarter amounted to SEK 336m (163), an increase of 106% compared to the corresponding period last year. Revenues for the nine-month period amounted to SEK 856m (489), an increase of 75%. The acquisition of Coronaria Hoiva contributed SEK 151m to revenues for the quarter and SEK 295m for the nine-month period. Organic growth in the quarter of 9.6% (21.0%) is explained by the opening of new individual and family care units in Finland. Operating profit for the third quarter totalled SEK 19m (18), an increase of 3%. The operating margin was 5.7% (11.3). In the quarter the integration costs for Coronaria Hoiva amounted to SEK 4m and the negative result in the newly acquired business decreased. Openings of new units in Finland, especially within Arjessa, also had a negative impact on the margin, both in the second and third quarters. Operating profit for the nine-month period was SEK 39m (51), a decrease of 23%. The operating margin was 4.6% (10.4) for the nine-month period. The decline in earnings for the nine-month period is partly explained by the acquisition of Coronaria Hoiva with an operating profit of SEK -6m. Non-recurring costs for integration had an effect of SEK -8m on results.

Norway Revenues for the third quarter amounted to SEK 194m (196), a decrease of 1% compared to the corresponding period last year. Revenues for the nine-month period amounted to SEK 598m (569), an increase of 5%, which is explained by a change in customer mix. Organic growth in the quarter was 2.1% (14.2%). Operating profit for the quarter totalled SEK 21m (21), a decrease of 3%. Operating profit for the nine-month period was SEK 45m (35), an increase of 29%. The operating margin was 10.7% (10.9) for the third quarter and 7.6% (6.2) for the nine-month period.

Interim report July-September 2019 | 8

Financial position Financing Consolidated equity amounted to SEK 2,298m (2,092) on 30 September 2019. The equity/assets ratio was 28.1% (40.7). Humana’s interest-bearing net debt amounted to SEK 3,854m (1,405), including a rental lease debt of SEK 2,097m. The net debt, excluding IFRS 16, increased to SEK 1,757m (1,405), an increase of 25% compared to the corresponding period last year. Humana’s debt-to-equity ratio, its interest-bearing net debt in relation to EBITDA, increased to 6.0 times (3.2). The increased debt-to-equity ratio is explained by the new accounting standard IFRS 16 and increased credit utilisation in association with the acquisition of Coronaria Hoiva. The new acquisition loan of EUR 55m has the same terms and period as the original financing. The sale and leaseback transaction resulted in a positive liquidity effect by SEK 325m.

Financial position SEK m Non-current interest-bearing liabilities Current interest-bearing liabilities Cash and cash equivalents

30 Sep

30 Sep

31 Dec

2019

2018

2018

3,664

1,281

1,259

893

634

633

-703

-511

-514

Interest-bearing net debt

3,854

1,405

1,378

Equity/assets ratio, %

28.1%

40.7%

41.1%

6.0x

3.2x

3.0x

1,813

1,281

1,259

647

634

633

-703

-511

-514

1,757

1,405

1,378

37.8%

40.7%

41.1%

4.1x

3.2x

3.0x

Interest-bearing net debt/adjusted EBITDA 12 months, times Excluding IFRS 16 effects: Non-current interest-bearing liabilities Current interest-bearing liabilities Cash and cash equivalents Interest-bearing net debt 0 Equity/assets ratio, % Interest-bearing net debt/adjusted EBITDA 12 months, times

0

Cash flow and investment expenditures Operating cash flow during the quarter amounted to SEK 206m (35). Excluding the effects of IFRS 16, operating cash flow totalled SEK 121m (35). The change is mainly explained by higher results and a positive change in working capital of SEK -23m (-81). Cash flow for the period amounted to SEK 213m (6), where cash flow from operating activities was SEK 244m (87). Cash flow from investing activities amounted to SEK 288m (-62), of which SEK 325m (-) relates to the disposal of properties (sale and leaseback transaction in July) and SEK -38m (53) relates to investments in other fixed assets. SEK 0m (-10) relates to the acquisition of subsidiaries. Cash flow from financing activities amounted to SEK -281m (0), of which SEK -70m was amortisation of lease liabilities (effect of IFRS 16) and SEK -211m was loan repayment.

Financial targets* Revenue growth. Annual growth rate of 8-10% over the medium term, achieved through organic growth as well as bolt-on acquisitions. Profitability. An operating margin of approximately 6% over the medium term. Capital structure. Interest-bearing net debt to EBITDA not to exceed a factor of 3.0. However, leverage may temporarily exceed the target level, for example, in relation to acquisitions. Dividend policy. Payment of a dividend equivalent to 30% of net profit for the year. The proposed dividend shall consider Humana’s long-term development potential and financial position. *Before taking the new accounting standard IFRS 16 into consideration.

Interim report July-September 2019 | 9

Other information Employees The number of full-time employees on 30 September 2019 was 10,663 (10,044). Shares, share capital and shareholders The number of shares in Humana AB at 30 September 2019 amounted to 53,140,064 with a quotient value of SEK 0.022, corresponding to share capital of SEK 1,180,880. The number of shareholders as of 30 September 2019 was 4,016. The five largest shareholders were Impilo Care AB, Incentive AS (via funds and mandate), Air Syndication SCA (Argan Capital), Nordea Investment Funds and SEB Investment Management. Marketplace Humana AB shares trade on the Nasdaq Stockholm Main Market. The company’s ticker symbol is HUM and the ISIN code is SE0008040653. Share-based incentive programmes Humana has two long-term incentive programmes: a warrant programme for eight senior executives and a share savings programme for 150 other Humana employees. For more information on the programmes, see Note 7 and the 2018 annual report. Related party transactions The Group’s key personnel consists of the Board of Directors, Group management and the CEO, through ownership of Humana and through their roles as senior executives. Related party transactions are based on market conditions.

Risks and uncertainties In the course of its operations, the Group is exposed to different types of financial risk, such as financing risk, liquidity risk, credit risk and interest rate risk. Risks are described in more detail in the section in Humana’s 2018 annual report entitled Risks and risk management on pages 48-53 as well as note G19. The main risks related to operations and uncertainties that can affect Group development in 2019 are related to political decisions that may affect private care companies, and risks when implementing completed acquisitions. Humana conducts operations that are financed by state, municipal and county council entities, and as such operations can be affected by political decisions. As a result, Humana’s opportunities for growth are affected by public opinion and political views on the Group’s areas of operation. Humana is constantly monitoring the external situation. The purpose is to quickly perceive external changes in order to assess risks and opportunities, as well as adapt operations to external changes. The political situation is evaluated continuously. Parent Company Net profit for the Parent Company for the nine-month period amounted to SEK -66m (-36). The equity/assets ratio at 30 September was 43.5% (42.5 at 30 September 2018). The Parent Company is indirectly affected by the operations of the subsidiaries, so risks and uncertainties are the same as those for the Group described above.

The CEO certifies that this interim report for the third quarter of 2019 gives a true and fair view of the Parent Company’s and the Group’s operations, financial position and earnings, and describes the material risks and uncertainties facing the Parent Company and the Group. Stockholm, 8 November 2019 Rasmus Nerman President and CEO

Interim report July-September 2019 | 10

Review report Humana AB CID 556760-8475 Introduction

We have conducted a review of the condensed interim financial information (the interim report) for Humana AB as at 30 September 2019 and the nine-month period thus ended. The Board of Directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to reach a conclusion about this interim report based on our review. Focus and scope of the review

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, to conduct analytical reviews and to take other review measures. A review has a different focus and substantially smaller scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. The measures taken during a review are not such that we can assure full awareness of all important circumstances that might be identified during a full audit. Therefore, the conclusion reached based on a review does not have the guarantees that a conclusion reached based on an audit has. Conclusion

Based on our review, no circumstances have emerged that give us reason to believe that the interim report has not, in all material respects, been prepared for the Group in accordance with IAS 34 and the Annual Accounts Act and for the Parent Company in accordance with the Annual Accounts Act. Stockholm, 8 November 2019 KPMG AB

Helena Nilsson Authorised Public Accountant

Interim report July-September 2019 | 11

Consolidated income statement SEK m

Note

Net revenue Other revenue Operating revenue

3 8

Other external costs Personnel costs

8

Depreciation

Jul-Sep

Jul-Sep

2019

2018

Jan-Sep Jan-Sep 2019

2018 2018/19

Oct-Sep Jan-Dec 2018

1,919

1,678

5,545

5,011

6,714

7,243

9

-1

9

10

10

11

1,928

1,677

5,554

5,021

7,253

6,725

-228

-251

-697

-779

-962

-1,044

-1,434

-1,257

-4,289

-3,878

-5,608

-5,202

-90

-18

-242

-49

-263

-70

0

0

-28

-6

-41

-19

Operating costs

-1,752

-1,526

-5,256

-4,712

-6,873

-6,334

Operating profit

176

151

298

310

380

391

Financial revenue

83

0

107

1

107

1

-102

-19

-186

-60

-202

-76

0

0

0

1

0

1

158

132

219

251

285

317

-30

-30

-49

-57

-64

-72

128

102

170

194

221

245

128

102

170

194

222

246

0

0

-1

0

-1

-1

128

102

170

194

222

246

Other operating costs

Financial costs

8

Unrealised changes in value of derivatives Profit before tax Income tax Net profit for the period

8 0

Of which, attributable to: Owners of the Parent Company Non-controlling interests Net profit for the period Earnings per share, SEK, before dilution

5, 8

2.42

1.92

3.21

3.65

4.18

4.62

Earnings per share, SEK, after dilution

5, 8

2.42

1.92

3.21

3.65

4.18

4.62

53,140

53,140

53,140

53,140

53,140

53,140

Average number of share, thousands

Consolidated statement of other comprehensive income SEK m

Note

Net profit for the period

Jul-Sep

Jul-Sep

Jan-Sep Jan-Sep

Oct-Sep Jan-Dec

2019

2018

2019

128

102

170

194

221

245

-10

8

-32

-19

-16

-3

0

-12

46

57

13

26

118

98

183

232

218

269

119

98

184

232

218

269

0

0

-1

0

-1

-1

2018 2018/19

2018

Other comprehensive income Items that have been/can be reclassified to profit/loss Effect of currency hedge of net investment in foreign operations Exchange rate differences on translation of foreign operation

Net profit and other comprehensive income for the period

6c

Of which, attributable to: Owners of the Parent Company Non-controlling interests

Interim report July-September 2019 | 12

Consolidated balance sheet in summary SEK m

30 Sep

30 Sep

31 Dec

Note

2019

2018

2018

4

3,928

3,166

3,168

Assets Non-current assets Goodwill Other intangible assets

15

9

8

406

490

560

2,043

0

0

13

15

9

6,405

3,680

3,745

Trade receivables and other receivables

857

818

847

Other current receivables

205

136

112

Cash and cash equivalents

703

511

514

Total current assets

1,765

1,465

1,473

TOTAL ASSETS 0

8,170

5,145

5,218

Property, plant and equipment Right-of-use assets Financial assets: Total non-current assets Current assets

Equity and liabilities Equity Share capital Additional paid-in capital Reserves

1

1

1

1,096

1,094

1,094

41

42

28

1,140

955

1,007

2,278

2,092

2,130

20

0

17

2,298

2,092

2,147

Lease liability, long term

1,867

0

0

Other Interest-bearing liabilities

1,797

1,281

1,259

77

78

73

3,740

1,359

1,333

Lease liability, short term

271

0

0

Other interest-bearing liabilities

623

634

633

Trade payables

118

86

121

Retained earnings Equity attributable to owners of the parent company Equity attributable to non controlling interest Total 0 equity Non-current liabilities

Deferred tax liabilities Total non-current liabilities Current liabilities

Other current liabilities

1,120

974

985

Total current liabilities

2,132

1,694

1,739

TOTAL EQUITY AND LIABILITIES

8,170

5,145

5,218

Interim report July-September 2019 | 13

Consolidated statement of changes in equity in summary

Share Capital

Additional paid-in capital

Translation reserve

1

1,092

4

793

Profit for the period

-

-

-

Other comprehensive income for the period

-

-

Total comprehensive income for the period

-

-

SEK m Opening balance, 1 January 2018

Equity Retained attributable to earnings parent owners

Non controlling interest

Total equity

1,891

-

1,891

194

194

-

194

38

-

38

-

38

38

194

232

-

232

Comprehensive income for the period

Transactions with Company owners Dividend

-

-

-32

-32

-

-32

Share-savings plan

-

1

-

-

1

-

1

-

-

-

-

-

0

0

Sale to non controlling interest Total transactions with Company owners

-

1

-

-32

-31

0

-31

Closing balance, 30 September 2018

1

1,094

42

956

2,092

0

2,092

Opening balance, 1 January 2019

1

1,094

28

1,007

2,130

17

2,147

Profit for the period

-

-

-

170

170

-1

170

Other comprehensive income for the period

-

-

14

-

14

-

14

-

-

14

170

184

-1

183

Comprehensive income for the period

Total comprehensive income for the period Transactions with owners of the parent company Dividend

-

-

-

-37

-37

-

-37

Share-savings plan

-

1

-

-

1

-

1

Share contribution

-

-

-

-

-

4

4

Total

-

1

-

-37

-36

4

-32

1

1,096

41

1,140

2,278

20

2,298

Closing balance, 30 September 2019

Interim report July-September 2019 | 14

Consolidated statement of cash flows in summary Jul-Sep

Jul-Sep Jan-Sep Jan-Sep Oct-Sep Jan-Dec

2019

2018

2019

8

158

132

219

251

285

317

Depreciation

8

90

18

242

49

263

70

Financial items, net

8

19

19

80

59

95

74

0

0

0

0

0

0

266

168

540

359

643

461

-23

-81

-7

-107

82

-18

244

87

533

252

725

443

-24

-4

-76

-31

-99

-53

-12

-16

-47

-34

-71

-58

207 0

67 -10

411 -483

187 -32

556 -537

331 -86

0

0

0

4

0

4

325 -38

0 -52

325 -158

0 -103

325 -213

0 -158

288

-62

-316

-131

-425

-240

0

0

795

144

796

145

-211

0

-494

-251

-521

-279

-70

0

-181

0

-181

0

SEK m Profit before tax Adjustment for:

Note

Other non-cash items Cash flow from operating activities before changes in working capital Changes in working capital Cash flow from operating activities Financial items, net Income tax paid

8

Cash flow from operating activities, net Acquisition of subsidiaries, net cash impact Sales of subsidiaries, net cash impact Sales of Real estate Investments in other non-current assets, net Cash flow from investing activities Proceeds from new borrowings Repayment of borrowings Amortization of leasing debt Dividend

8

2018 2018/19

2018

0

0

-37

-32

-37

-32

-281

0

84

-139

57

-166

Cash flow for the period

213

6

178

-83

188

-74

Cash and cash equivalents at start of period

489

507

514

584

511

584

1

-2

11

9

5

3

703

511

703

511

703

514

Cash flow from financing activities

Exchange rate difference in cash/cash equivalents Cash and cash equivalents at end of period

Interim report July-September 2019 | 15

Key ratios Jul-Sep

Jul-Sep

2019

2018

2019

2018 2018/19

2018

Operating revenue

1,928

1,677

5,554

5,021

7,253

6,725

EBIT, %

9.1%

9.0%

5.4%

6.2%

5.2%

5.8%

Interest-bearing net debt, SEK m

3,854

1,405

3,854

1,405

3,854

1,378

Return on capital employed, %

2.6%

3.8%

4.4%

7.7%

5.6%

9.7%

28.1%

40.7%

28.1%

40.7%

28.1%

41.1%

Equity/assets ratio, % Operating cash flow, SEK m Interest-bearing net debt/Adjusted EBITDA 12 months, times

Jan-Sep Jan-Sep

Oct-Sep Jan-Dec

206

35

375

149

512

285

6.0x

3.2x

6.0x

3.2x

6.0x

3.0x

1,928

1,677

5,554

5,021

7,253

6,725

Excluding IFRS 16 effects: Operating revenue EBIT, %

8.5%

9.0%

4.8%

6.2%

4.8%

5.8%

Interest-bearing net debt, SEK m

1,757

1,405

1,757

1,405

1,757

1,378

Return on capital employed, %

3.4%

3.8%

5.6%

7.7%

7.4%

9.7%

37.8%

40.7%

37.8%

40.7%

37.8%

41.1%

121

35

159

149

296

285

4.1x

3.2x

4.1x

3.2x

4.1x

3.0x

Average number full-time employees Individual & Family

2,131

2,505

2,070

2,420

2,133

2,396

Average number full-time employees Personal Assistance

5,229

5,296

4,931

5,080

4,956

5,068

924

776

868

769

851

776

Average number full-time employees Finland

1,768

777

1,482

761

1,308

767

Average number full-time employees Norway

815

766

798

731

793

742

56

33

54

26

54

33

10,153

10,203

9,786

10,095

9,782

Equity/assets ratio, % Operating cash flow, SEK m Interest-bearing net debt/Adjusted EBITDA 12 months, times

Average number full-time employees Elderly Care

Average number full-time employees Central functions incl Dk Total average number full-time employees

0

10,923

Number of full-time employees on the closing date

0

10,663

10,044

10,663

10,044

10,663

9,729

Average number of customers Individual & Family

1,827

1,927

1,851

1,974

1,863

1,955

Average number of customers Personal Assistance

1,879

1,812

1,862

1,824

1,862

1,833

805

676

794

671

784

691

Average number of customers Finland

3,775

2,515

3,429

2,601

3,256

2,635

Average number of customers Norway

298

323

302

315

307

317

Average number of customers Elderly Care

Average number of customers Denmark

85

34

86

11

91

35

0

8,668

7,294

8,323

7,400

8,161

7,396

Average number of ordinary shares on the closing date, 000s

53,140

53,140

53,140

53,140

53,140

53,140

43

39

43

39

43

40

Total average number of customers

Equity per ordinary share, SEK

Interim report July-September 2019 | 16

Parent company Income statement in summary Jan-Sep

Jan-Sep

Oct-Sep

Jan-Dec

2019

2018

2018/19

2018

6

4

6

4

Operating costs

-18

-13

-20

-15

Operating profit

-12

-8

-14

-10

22

0

22

0

SEK m Operating revenue

Interest revenue from group companies Interest cost

-95

-38

-86

-29

Profit after financial items

-85

-47

-78

-40

Group contribution

0

0

142

142

Change untaxed reserves

0

0

5

5

-85

-47

69

107

Profit before tax Tax Net profit for the period

19

10

-16

-24

-66

-36

54

84

Balance sheet in summary 30 Sep

30 Sep

0

31 Dec

SEK m

2019

2018

0

2018

Non-current assets

1,628

1,626

1,629

1,627

Current assets

1,870

1,917

0

2,029

3,498

3,543

3,461

3,656

1,523

1,504

1,643

1,625

TOTAL ASSETS Equity Untaxed reserves Non-current Interest-bearing liabilities Other current liabilities TOTAL EQUITY AND LIABILITIES

174

179

169

174

1,195

1,243

0

1,231

608

617

65

627

3,498

3,543

3,527

3,656

Interim report July-September 2019 | 17

Notes Note 1 Accounting policies This interim report for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting along with applicable stipulations in the Swedish Annual Accounts Act. The report for the Parent Company has been prepared in accordance with Chapter 9 of the Swedish Annual Accounts Act – Interim Reports. From 1 January 2019, the Group applies IFRS 16 Leases, which is described in detail in the section “New accounting standards applied from 1 January 2019” below. In general, the same accounting policies and bases of calculation have been used as in the annual report for 2018, which was prepared in accordance with the International Financial Reporting Standards as ratified by the EU, and interpretations of these. Starting from the third quarter 2019 the Group reports five segments, Finland and Norway are reported as separate segments instead of grouped as Other Nordics. The comparative figures have been adjusted. Disclosures in accordance with IAS 34 16A appear in the financial statements and their associated notes as well as in the interim information on pages 2-10, which form an integral part of this financial report. New accounting standards applied from 1 January 2019 IFRS 16 Leases replaces IAS 17 Leases and applies as from 1 January 2019.

Effects of the transition to IFRS 16 Leases

IFRS 16 Leases means that lease payments that were previously recognised as other external expenses are replaced by the cost of depreciation on leased assets and an interest expense attributable to lease liabilities in the income statement, which corresponds to the reporting of financial leases in the previous IAS 17 standard. In the previous standard, operating leases were recognised outside the balance sheet with information on the obligation and lease payments were recognised as an expense over the lease term on a straight-line basis. Humana’s transition to IFRS 16 has a positive effect on operating profit and a negative effect on profit after financial items. It does not affect equity or deferred taxes. There is no transition effect for finance leases. The effects on the balance sheet as at 1 January 2019 are shown in the table below.

Scope

Humana’s lease portfolio contains about 1,000 leases and mainly comprises operational leases for premises, offices and company cars. Existing finance leases previously recognised in accordance with IAS 17 Leases are reclassified in accordance with IFRS 16 at the amounts at which they were recognised on the day before application of the new standard.

Method

Humana has chosen to recognise the transition to the new standard using the modified retrospective approach. The relief rule of not establishing a comparative year has been applied. The size of the right-of-use asset has been valued to correspond to the size of the lease liability at the time of transition. A marginal loan rate has been set for premises, while for cars the implicit interest in the lease is used. The right-of-use period has been established allowing for how termination and extension clauses have been applied. The simplified transition method for the transition to IFRS 16 C10 (c) has been applied, which means that leases that are 12 months or shorter are excluded from the calculation and exempt from capitalisation in the balance sheet, as are leases with a low-value underlying asset. Low value is USD 5 thousand. Humana rents apartments on short-term leases. These are not included in the calculation as it cannot be established with reasonable certainty whether they will be extended. Humana leases certain office equipment, such as printers and coffee machines, which are considered of low value.

Interim report July-September 2019 | 18

Note 2 Estimations and assessments Preparation of financial statements in compliance with IFRS requires management to make accounting estimates and assumptions which affect the application of the accounting policies and the carrying amounts of assets, liabilities, income and expenses. The actual outcome may differ from these accounting estimates. The critical assessments and sources of uncertainty in estimates are the same as in the most recent annual report.

Note 3a Operating segments Individual & Family Personal Assistance Elderly Care Jan-Sep

Jan-Sep

Jan-Sep

Jan-Sep

Jan-Sep

Jan-Sep

2019

2018

2019

2018

2019

2018

1,577

1,645

2,077

1,978

421

328

0

0

0

0

0

0

1,577

1,645

2,077

1,978

421

328

167

181

119

112

19

10

-26

-22

-1

-2

-7

-5

SEK m Net revenue – External revenue Other operating revenue Operating revenue Profit before depreciation, amortisation and other operating costs Depreciation Other operating costs Operating profit

0

0

0

0

0

0

141

159

117

111

12

5

Finland

Norway

Other 1) 2)

Total

Jan-Sep

Jan-Sep

Jan-Sep

Jan-Sep

Jan-Sep

Jan-Sep

Jan-Sep

2019

2018

2019

2018

2019

2018

2019

2018

856

489

598

569

15

3

5,545

5,011

SEK m Net revenue – External revenue Other operating revenue Operating revenue Profit before depreciation, amortisation and other operating costs Depreciation Other operating costs Operating profit

Jan-Sep

0

0

0

0

9

9

9

10

856

489

598

569

24

12

5,554

5,021

53

60

51

45

159

-45

568

365

-14

-10

-6

-10

-188

-1

-242

-49

0

0

0

-1

-28

-5

-28

-6

39

51

45

35

-57

-51

298

310

1) Operating revenue includes SEK 28m in acquisition costs in 2019 and SEK 5m in 2018. Operating revenue in Q2 2018 includes the effect of final settlement of contingent considerations of SEK 9m with associated acquisition costs of SEK 5m. Operating result and operating profit include; positive earn out effects of MSEK 5 and a gain on sales of real estate of MSEK 4. 2) Operating profit 2019 includes IFRS 16 effects of net SEK 30m (0). The effects of IFRS 16 are divided as follows: Profit before depreciation, amortisation and other operating costs includes lower rental costs of SEK 216 m and higher amortisations of SEK 186 m

Note 3b Revenue per country Jul-Sep

Jul-Sep

Jan-Sep

SEK m

2019

2018

2019

2018

Sweden

1,392

1,315

4,084

3,961

Finland

336

163

856

489

Norway

194

196

598

569

5

2

15

2

1,928

1,677

5,554

5,021

Denmark Total operating revenue

Jan-Sep

Interim report July-September 2019 | 19

Note 4a Acquisition of operations Acquisitions in 2019 • •

Coronaria Hoiva Oy (Finland) April 2019 Assistans på Gotland AB (Personal Assistance) June 2019

On 28 January, Humana entered an agreement to acquire all shares in Coronaria Hoiva Oy from its owner Coronaria Oy. Coronaria Hoiva Oy is one of the largest private care providers in Finland and provides elderly and LSS housing as well as social psychiatry for adults. The business had 63 units with four more planned to open in 2019. After the Finnish competition authority approved the acquisition, Humana took over on 16 April. Coronaria Hoiva was valued at EUR 71m. The purchase was financed with cash and new credit facilities. The acquisition of Coronaria Hoiva provides Humana with an attractive platform for continued organic growth in Finland and good opportunities for quality development and synergies. Humana’s Finnish operations previously consisted of the subsidiary Arjessa Oy. With this acquisition Humana becomes a complete care provider in Finland. Humana acquired all shares in Coronaria Hoiva Oy by paying the entire purchase price of EUR 49.6m in cash on the acquisition date of 16 April 2019. In the following acquisition analysis, no differences have been identified between carrying amounts and fair values. The acquisition analysis is based on the financial statements as of 31 March 2019. In May, Humana signed an agreement to acquire all shares in the assistance company Assistans på Gotland AB. The company’s annual revenues amount to approximately SEK 56m and it has around 115 employees. The acquisition was completed on 1 June.

Net assets in acquired companies as per the acquisition date SEK m

Coronaria Hoiva Oy *

Smaller acquisitions* and other, total.

339

0

340

77

6

83

Non-current assets Trade receivables and other receivables Cash and cash equivalents

Total

38

4

42

Interest-bearing liabilities

-525

-2

-527

Trade payables and other operating liabilities

-108

-9

-117

Deferred tax liability Net identifiable assets and liabilities Goodwill

0

0

0

-177

-1

-178

695

7

702

517

6

523

0

0

0

517

6

523

517

6

523

-38

-4

-42

478

1

480

Consideration paid Cash and cash equivalents Contingent earn-out payments Total consideration paid Impact on cash and cash equivalents Cash consideration paid Cash and cash equivalents in acquired units Total impact on cash and cash equivalents Settlement of payments attributable to acquisitions in previous years Total impact on cash and cash equivalents 0

-

3

3

478

5

483

295

20

315

-6

1

-5

5

0

5

Impact on revenue and profit 2019 Operating revenue Operating profit Net profit impact earn-out payment

0

*The acquisition analysis is preliminary since the final settlement has not been determined.

Interim report July-September 2019 | 20

Goodwill The goodwill of SEK 695m that is included in the acquisition of Coronaria Hoiva is partly due to the new platform for continued organic growth in Finland and partly to the synergy gains arising from the merger. This goodwill is not deemed to be tax deductible. Acquisition costs Acquisition costs amount to SEK 28m for the nine-month period and relate to the fees paid to external legal representatives and consultants associated with due diligence and transaction tax associated with acquisitions. The expenditures are recognised under other operating expenses in the consolidated income statement and other comprehensive income. If the two acquisitions made during the first nine months of 2019 would have been completed on 1 January 2019, Humana’s assessment is that total consolidated revenues for the first nine months would have amounted to SEK 5,721m (SEK 167m higher), operating profit to SEK 299m (SEK 1m higher) and profit for the year after tax to SEK 168m (SEK 2m lower).

Acquisitions in 2018 • • • • •

Luotsimaja Oy (Finland) June 2018 Västgöta Assistans AB (Personal Assistance) July 2018 Støttecompagniet ApS (Denmark) September 2018 RIK Assistans AB (Personal Assistance) October 2018 Matiimi Oy (Finland) December 2018

Humana made five minor acquisitions in 2018. With these acquisitions, Humana strengthened its operations in Finland, took its first step into Denmark and expanded its personal assistance operations in Sweden. In Finland, Humana acquired Luotsimaja Oy in Björneborg in western Finland and Matiimi Oy in the Birkaland region, both with operations in psychosocial disorders for children and adolescents. In Denmark, Humana acquired Støttecompagniet ApS in Copenhagen, with individual and family outpatient care. In Sweden, Humana acquired two businesses for the Personal Assistance business area, Västgöta Assistans AB in Kinna and RIK Assistans AB in Härnösand. For more information on these acquisitions, see the 2018 annual report.

Note 4b Acquisition of operations, goodwill SEK m Opening balance, 1 January Acquisitions of subsidiaries Sales of subsidiaries Exchange rate differences Closing balance, end of period

30 Sep

30 Sep

2019

2018

31 Dec 2018

3,168

3,104

3,104

702

16

43

-

-1

-1

58

48

22

3,928

3,166

3,168

Note 5 Earnings per share Jul-Sep SEK m Net profit for the period attributable to owners of the parent company Average number of shares, thousands

Jul-Sep Jan-Sep Jan-Sep

Oct-Sep Jan-Dec

2019

2018

2019

2018

2018/19

2018

128

102

170

194

222

246

53,140

53,140

53,140

53,140

53,140

53,140

Earnings per share, SEK, before dilution

2.42

1.92

3.21

3.65

4.18

4.62

Earnings per share, SEK, after dilution

2.42

1.92

3.21

3.65

4.18

4.62

Interim report July-September 2019 | 21

Note 6a Fair value of financial instruments and level in valuation hierarchy

30 September, 2019 SEK m

Financial Financial liabilities at liabilities fair value measured at fair through other value through comprehensive profit and loss income

Total

Fair value

Level 1

Level 2

Level 3

-

8

8

-

-

8

Financial Financial liabilities at liabilities fair value measured at fair through other value through comprehensive profit and loss income

Total

Fair value

Level 1

Level 2

Level 3

Financial liabilities Earn-out payments

30 September, 2018 SEK m

8

Financial liabilities Interest-rate swaps and interest options for hedging*

0

-

0

0

-

0

-

Earn-out payments

5

-

5

5

-

-

5

* Fair value is based on the quotations at Nordea AB (publ). Similar contracts are traded in an active market, and the rates reflect actual transactions for comparable instruments.

Fair value measurement

When the fair value of an asset or liability is to be determined, the Group uses observable data as far as possible. Fair value is categorised in various levels in a fair value hierarchy based on input data that is used in the valuation method as follows: Level 1: according to prices quoted in an active market for the same instruments Level 2: based on directly or indirectly observable market data that is not included in level 1 Level 3: based on input data that is not observable in the market

Note 6b Reconciliation of the opening and closing balances for financial instruments measured at level 3, earn out payments

SEK m Opening balance, 1 January

30 Sep

31 Dec

2019

2018

8

27

-5

-9

Total recognised gains and losses: Recognised in adjustment of earn-out payments in profit for the year Cost of acquisitions Settled during the period Closing balance, end of period

8

5

-3

-15

8

8

Interim report July-September 2019 | 22

Note 6c Hedge accounting The Group is hedging parts of the foreign exchange risk related to net investments in foreign operations. As at 30 September 2019, the Group had exposure in EUR and NOK, which is hedged with loans in foreign currencies. As from 1 January 2018, hedge accounting is applied and thus the effective part of the translation differences is recognised in the consolidated statement of other comprehensive income. As at 30 September 2019, the Group had loans of EUR 95m and loans of NOK 328m for which hedge accounting is applied. The related translation difference of SEK -41m (-24) before tax is consequently recognised in the consolidated statement of other comprehensive income.

Note 7 Incentive programmes As at 30 September 2019, Humana has two long-term incentive programmes that have been approved by the AGMs in 2016 and 2017. The warrant programme is directed at eight senior executives and the share savings programme is directed at key employees at Humana. The purpose of the programmes is to encourage a broad ownership among Humana employees, facilitate recruitment, retain competent employees and increase the motivation to achieve or exceed Humana’s financial targets. The warrants were acquired at market price and were issued in three separate series that can be redeemed at different times. The first date for redeeming the warrants was during the period 1-31 March 2018 at the subscription price of SEK 74.40. The second date for redeeming the warrants was during the period 1-31 March 2019 at the subscription price of SEK 77.50. The subscription price for Series 3 is SEK 80.60. For the share savings programme, participants could invest in saving shares (at market price) and then, based on the terms of the programme, can receive matching shares and potentially even performance-based shares at the end of the programme. The number of registered saving shares at 30 September 2019 amounts to 51,100, which corresponds to a maximum allocation of 67,600 shares.

Number of warrants Outstanding January 1

2019 960,280

Number sharebased programme Outstanding January 1

2019 73,000

Acquired

-

Acquired

-

Forfeited

-

Forfeited

-5,400

Exercised

-

Exercised

-

Expired

-480,140

Expired

Outstanding September 30

480,140

Outstanding September 30

67,600

Interim report July-September 2019 | 23

Note 8 Income statement and cash flow - effects on IFRS 16 Effects on income statement IFRS 16effect Jul-Sep 2019 2019

Jul-Sep SEK m

Note

Operating revenue Other external costs

1,928

0

Excl IFRS 16 Jul-Sep 2019 1,928

Jul-Sep 2018 1,676

IFRS 16effect Jan-Sep 2019 2019

Jan-Sep

5,554

0

Excl IFRS 16 Jan-Sep 2019 5,554

Jan-Sep 2018 5,022

-228

85

-313

-251

-697

216

-913

-779

-1,434

-

-1,434

-1,257

-4,289

-

-4,289

-3,879

-90

-72

-18

-18

-242

-186

-56

-49

0

-

0

0

-28

-

-28

-6

Operating costs

-1,752

13

-1,765

-1,526

-5,256

30

-5,285

-4,713

Operating profit

176

13

164

150

298

30

269

309

83

-

83

0

107

-

107

1

-102

-20

-81

-19

-186

-51

-136

-60

Personnel costs Depreciation Other operating costs

Financial revenue Financial costs Unrealised changes in value of derivatives Profit before tax Income tax Net profit for the period Earnings per share, SEK, before&after dilution

0

0

-

0

0

0

-

0

1

158

-7

165

132

219

-21

240

251

-30

2

-31

-30

-49

5

-53

-57

128

-6

134

102

170

-17

186

194

2.42

-0.11

2.52

1.92

3.21

-0.31

3.52

3.65

Effects on cash flow IFRS 16effect Jul-Sep 2019 2019

Jul-Sep SEK m

Profit before tax

Excl IFRS 16 Jul-Sep 2019

Jul-Sep 2018

IFRS 16effect Jan-Sep 2019 2019

Jan-Sep

Excl IFRS 16 Jan-Sep 2019

Jan-Sep 2018

158

7

165

132

219

21

240

251

Depreciation

90

-72

18

18

242

-186

56

49

Financial items, net

19

-20

-2

19

80

-51

29

59

0

-

0

0

0

-

0

0

Adjustment for:

Other non-cash items Cash flow from operating activities

244

-85

159

87

533

-216

317

252

Financial items, net

-24

20

-4

-4

-76

51

-25

-31

Income tax paid

-12

-

-12

-16

-47

-

-47

-34

207

-65

142

67

411

-165

245

187

Cash flow from operating activities, net Financing activities Proceeds from new borrowings Repayment of borrowings Amortization of leasing debt Dividend Cash flow from financing activities 1)

0

-

0

0

795

-

795

144

-211

-

-211

0

-494

-

-494

-251

-70

70

0

-

-181

181

0

0

0

-

0

0

-37

-

-37

-32

-281

70

-211

0

84

181

264

-139

According to IFRS 16, lease payments are allocated between amortisation of lease liabilities and interest expenses. In comparison with 2018, this means

that cash flow from operating activities is positively affected by the fact that depreciation of right of use assets is reversed as not affecting cash flow while most of the lease payments are recognised as amortisation of interest-bearing liabilities in cash flow from financing activities.

Interim report July-September 2019 | 24

Note 9a Reconciliation with IFRS financial statements In the financial reports that Humana issues, there are alternative performance measures specified that complement the measurements defined or specified in the applicable financial reporting rules. Alternative performance measures are indicated when, in their context, they provide clearer or more detailed information than the measures defined in the applicable financial reporting rules. The alternative performance measures are derived from the company’s consolidated financial statements and do not comply with IFRS. Jul-Sep Jul-Sep

Jan-Sep Jan-Sep

Oct-Sep Jan-Dec

2019

2018

2019

2018

2018/19

2018

176

151

298

310

380

391

-4

-

-4

-

-

-

172

151

294

310

380

391

176

151

298

310

380

391

Adjusted operating profit Operating profit Capital gains on sale of properties 0 Adjusted operating profit Adjusted EBITDA Operating profit Depreciation EBITDA 0 Adjusted EBITDA

90

18

242

49

263

70

266

168

540

359

643

461

262

168

536

359

643

461

1,676

1,559

4,993

4,736

6,597

6,333

53

69

122

137

146

218

3.2%

4.4%

2.4%

2.9%

2.2%

3.4%

176

151

298

310

380

391

90

18

242

49

263

70

-23

-81

-7

-107

82

-18

Organic revenue growth Revenue, base Revenue, organic growth 0 Total organic growth, constant currency rate Operating cash flow Operating profit Depreciation Changes in working capital Investments in other non-current assets, net Operating cash flow

-38

-52

-158

-103

-213

-158

206

35

375

149

512

285

30 Sep

30 Sep

31 Dec

2019

2018

2018

3,664

1,281

1,259

Interest-bearing net debt Non-current interest-bearing liabilities Current interest-bearing liabilities

893

634

633

-703

-511

-514

3,854

1,405

1,378

638

440

461

6.0x

3.2x

3.0x

8,170

5,145

5,218

-77

-78

-73

-118

-86

-121

Other current liabilities

-1,120

-974

-985

Capital employed

6,855

4,007

4,039

298

310

391

1

1

1

299

310

392

4.4%

7.7%

9.7%

Total equity

2,298

2,092

2,147

TOTAL ASSETS

8,170

5,145

5,218

28.1%

40.7%

41.1%

Cash and cash equivalents Interest-bearing net debt Adjusted EBITDA 12 month Interest-bearing net debt/Adjusted EBITDA 12 months, times Return on capital employed, % TOTAL ASSETS Deferred tax liabilities Trade payables

Operating profit Financial revenue Total Return on capital employed, % Equity/assets ratio, %

Equity/assets ratio, %

Interim report July-September 2019 | 25

Note 9b Financial definitions and intent Key financial figures Definition

Intent

Return on capital employed (%)

Operating profit and finance income divided by total capital employed multiplied by 100.

Indicates the operating return on the capital that owners and lenders have made available. The intent is to show consolidated returns, regardless of the financing.

EBITDA

Operating profit before depreciation, amortisation and impairment.

The measure is used to monitor the company’s profit/loss generated by operating activities and facilitate comparisons of profitability between different companies and industries.

Adjusted operating profit and adjusted EBITDA

Operating profit and EBITDA adjusted for items affecting comparability.

Adjustment of items affecting comparability is done to facilitate a fair comparison between two comparable periods and to show the underlying trend in operating activities excluding non-recurring items.

Operating cash flow

Operating profit including changes in depreciation/amortisation/impairment, working capital and investments in other non-current assets (net).

The exclusion of cash flow from acquisitions and financing facilitates an analysis of cash flow generation in operating activities.

Organic growth

Growth for comparable companies in each segment that Humana owned during the previous comparative period.

The measure shows the underlying sales growth in comparable companies between the different periods.

Interest-bearing net debt

Borrowing excluding interest rate derivatives less cash and cash equivalents and interest-bearing assets.

Net debt is used as a simple way to illustrate and assess the Group’s ability to meet financial commitments.

Interest-bearing net debt/EBITDA

Interest-bearing net debt divided by EBITDA.

Indicates consolidated debt in relation to EBITDA. This is used to illustrate the Group’s ability to meet financial commitments.

Equity/assets ratio (%)

Equity including non-controlling interests divided by total assets multiplied by 100.

Indicates the proportion of assets that are financed with equity. The aim is to assess the Group’s solvency in the long term.

Capital employed

Total assets less non-interest-bearing liabilities.

Indicates the portion of the company’s assets financed by interest-bearing capital.

Interim report July-September 2019 | 26

Other performance measures Definition Equity per ordinary share

Equity attributable to Parent Company shareholders divided by number of shares at end of period after redemption, repurchase and new share issue.

Average number of ordinary Calculated as the average daily number shares of ordinary shares outstanding after redemption and repurchase. Average equity

Average equity attributable to Parent Company shareholders per quarter, calculated from the opening and closing balance for each quarter.

Items affecting comparability

Non-recurring items that complicate the comparability between two given periods.

Average number of fulltime employees

Average number of full-time employees during the reporting period.

Average number of customers

Average number of customers during the period.

Earnings per ordinary share for the period

Profit for the period attributable to Parent Company shareholders less the period’s share of the adopted dividend for preference shares divided by average number of ordinary shares. Defined in IFRS.

Operating profit

Profit before financial items and tax.

EBIT margin (%)

EBIT divided by operating revenue multiplied by 100.

Interim report July-September 2019 | 27

This information is information that Humana AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below, at 08:00 CET on 8 November 2019.

Conference call

A conference call will be held 8 November 2019 at 09:00 CET, at which President and CEO Rasmus Nerman along with Vice President and CFO Ulf Bonnevier will present the report and answer questions. To participate, call: SE: +46 8 505 583 66 UK: +44 333 300 92 60 USA: +1 844 625 15 70

Financial calendar Interim report Oct-Dec 2019 Interim report Jan-Mar 2020 AGM 2020 Interim report Apr-Jun 2020

13 Feb 2020 7 May 2020 7 May 2020 20 Aug 2020

For further information: Ulf Bonnevier, Vice President and CFO +47 70 164 73 17, [email protected] Anna Sönne, Head of Investor Relations +46 70 601 48 53, [email protected]

Interim report July-September 2019 | 28