Categories Earnings Call Transcripts, Health Care

Humana AB (HUM) Q4 2022 Earnings Call Transcript

HUM Earnings Call - Final Transcript

Humana AB (NYSE: HUM) Q4 2022 earnings call dated Feb. 09, 2023

Corporate Participants:

Johanna Rastad — Chief Executive Officer and President

Fredrik Larsson — Chief Financial Officer

Analysts:

Kristofer Liljeberg — Carnegie — Analyst

Jakob Lembke — ABG Sundal Collier — Analyst

Karl-Johan Bonnevier — DNB — Analyst

Victor Forssell — Nordea — Analyst

Albert Moller Broock — ABG Sundal Collier — Analyst

Presentation:

Operator

Welcome to Humana Q4 Report 2022.

[Operator Instructions] Now, I will hand the conference over to the speakers, CEO, Johanna Rastad; and CFO, Fredrik Larsson. Please go ahead.

Johanna Rastad — Chief Executive Officer and President

Good morning, and welcome to this presentation of Humana’s fourth quarter and year-end 2022 results. I’m Johanna Rastad, CEO; and next to me, I have our CFO, Fredrik Larsson.

This is a rather challenging report to present, given that we just, over a week ago, got the information that Swedish Health and Social Care Inspectorate, IVO revoked our permit of Humana Assistants AB. That’s the main company in the Personal Assistance business.

I’ll start this presentation giving attention to that particular post Q4 closure event, and thereafter, walk you through the remaining business.

On the 31st of January, Humana Assistants AB’s permit to conduct operations within Personal Assistance and related services was revoked by IVO. And according to that decision. Humana Assistants had to cease operations by the 10th of February, at the latest. And being the largest of our Personal Assistance companies, Humana Assistants contributes with approximately 37% of yearly operating revenues and 41% of year operating profits of the Group.

So we were given 10 days to terminate the business consisting of over 2,000 clients and 11,000 employees. We do not agree with the decision and the day after, on the 1st of February, we appealed the decision and also the suspension, which was approved by the administrative court on 7 February, on the basis that the outcome of the process is uncertain. IVO themselves can appeal suspension decision before the 28th of February.

And as I said, we disagree with IVO’s decision and we find the legal process to be unpredictable and its decision without proportionality. I can — I will not speculate on the outcome of the appeal. That’s up to the court to decide. We will, however — we are, however, very pleased. Just to be allowed to try this in court.

And on the 7th of February, we were also notified that the Insurance Board will start sending payments directly to our customers rather than to Humana Assistants. This causes an additional administrative burden on our clients, and on as well, and also delays payments to us as they need to go by our clients.

And operationally, it has been a very tough period with a lot of frustration, anger and worry amongst clients, employees and other stakeholders.

Instantly after we got the message from IVO, we formed a crisis group that managed this process since, also to ensure that the rest of the operations continue according to previously planned.

And thankfully, Fredrik Larsson, our new CFO, started the 1st of February. A good timing, and a warm welcome to you, Fredrik.

Fredrik Larsson — Chief Financial Officer

Thank you very much.

Johanna Rastad — Chief Executive Officer and President

I understand there are lots of questions about the financial implications of what has happened and we are analyzing everything, as we speak. It is however tricky for us to convey a lot of information regarding that due to the uncertainty of the coming period. If we don’t have all the information you request at this moment, please bear with us as this has been a rather turbulent time.

Now over to the fourth quarter events. In the quarter, we grew with 17.5%, and proudly achieved the highest organic growth ever since the IPO, reaching 5.5%. All business areas apart from Personnel Assistants contributed to the organic growth. We also achieved improved profitability with operating profits reaching SEK127 million, and adjusted operating profit of SEK89 million, hence finally beating last year.

And in the quarter, we made revaluation of earn-outs, which affects operating revenues as well as operating profit positively with a total effect in the quarter of SEK38 million.

The inflation pressure continues, and we estimate it to be about SEK14 million in the quarter. Staffing continues to be a challenge, so also increasing sick absence rates. We do believe the outlook for ’23 to be challenging with both higher inflation pressure, as well as continued staffing challenges.

During the spring, we have important salary negotiations coming up in our main markets. And gladly, we continue working on social measure — outcome measurements and also started drafting our first social outcome contract to really drive the development of Care forwards.

As illustrated in this picture, Personal Assistance and Individual & Family continue to represent the largest business areas, both by revenue and operating profit.

And here you can see the nice organic growth development reaching new highs of 5.5% in the quarter, hence above mid-term target levels.

Profitability increases with 54%. When removing one-off effects following the revaluation of earn-outs, the increase is 4.2% in the quarter.

The leverage ratio increased due to increase in lease liabilities, following investments in new units and indexation of existing leases, acquisitions, share buybacks in the first quarter and lower adjusted EBITDA.

The large positive one-off in the quarter steals this picture. However, the underlying performance continued to improve throughout the year. We are pleased to have an adjusted operating profit that finally beats last year. This was driven by growth through improved utilization and price increases with the main contributors being Individual & Family and Elderly Care. We have worked with price increases over the year, and it has paid off in the quarter.

On the other hand, our positives are weighed down by mainly higher costs, following shortage of staff and inflation.

And now over to Personal Assistance and their performance in the fourth quarter ’22. Sales growth continued although organic growth has been challenged by the shortage of staff. We had a positive one-off of SEK32 million following the new estimate of earn-out.

Staff cost continued to increase, partly due to wage drift, but also overhead costs for Assistance, and administrative costs related to acquisitions.

The reimbursement increase of 1.5% implemented 1st of January is yet another example of the little priority given to individuals in need of personal assistance.

And then over to a positive note, Individual & Family continues its strong development growing at 10% with an organic contribution of 9%. And this is driven by continued strong demand in the strategically selected areas, the high occupancy in both young and adult as well as well managed price negotiations.

When occupancy is high, we can easily navigate our costs. Hence, we see a clear improvement in profitability with operating profits reaching SEK41 million. And this, despite inflation pressure.

Turning over to Elderly Care, which continues to deliver positive contribution. And that’s mainly due to continued good ramp up speed, but also clearly improved cost control. We still have relatively too high costs due to high sick leave and inflation. And the new Elderly Care facility in Taby will start in the first quarter.

And over to Finland, continues to achieve solid organic growth of 12%, but struggles with high personnel cost due to high sick leave and shortage of staff. Some price increases has been achieved. As of 1st of January 2023, the new counties are in place, and it will be interesting to follow their developments.

And over to Norway, Norway ended the year with a stable demand and continued slow, but steady increase in the number of clients, mainly in Child and Youth and Personal Assistance. Margins are lower than previous years, mainly driven by the challenges in Child and Youth as well as [Indecipherable] for continued growth by strengthened administration and system infrastructure.

So that concludes the review of the business areas. And a short note on the cash flow, so cash flow for the quarter amounted to SEK90 million. The cash flow from operating activities increasing to SEK259 million. Increased cash flow from operating activities is mainly due to decreased working capital, partly offset by increased interest rate. Cash flow from investing activities amounted to SEK75 million, and cash flow from financing activities, minus SEK94 million.

And now over to the next page, and the reason why a society should carefully Humana and other private care providers’ long term health. If you want to have freedom of choice, alternative to the public sector needs to be there. To manage the societal challenges, we need to have price and quality competition as well as some actors driving positive change through social innovation. At Humana, we continue to measure quality through HQI and monitoring — and the monitoring of the development of sales relations. HQI in the quarter measures to 76, with positive increases in many areas, such as more satisfied employees, clients and customers.

We have moved into — to presented update the social outcome measurements on our web page. Here, we update results over time, and also launch new, important measurements. So, please have a look. In the quarter, we started the drafts our first outcome contract, which is very exciting.

And now, some final remarks. With respect to Humana Assistants, our focus since the afternoon of the 1st of January is of course first and foremost, care for our clients and employees. Our focus is set on them, to secure their safety and well being, and of course our continued operations. We will also continue to process the case in court.

But we also need to see beyond the crisis management. We’re not perfect and we also need to improve. So we will review our current business model to understand how we can make it more sustainable going forward. This is a work currently being done by our incredibly strong Personal Assistance team.

And we cannot forget we have other clients and employees in our company to care for too. In the remaining businesses, we continue working towards our clearly set goals. And that means securing staff, ensuring price increases and our social outcome measurements forward.

And with that, over to questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] The next question comes from Kristofer Liljeberg from Carnegie. Please go ahead.

Kristofer Liljeberg — Carnegie — Analyst

Yes, thank you. I’ll start with two questions and then I could take other ones afterwards. But first of all, when it comes to your cash flows here, which are becoming more important, of course, how are you thinking about the investments, capex investments in 2023?

And for the Personal Assistance business, can you say anything what you could do to prevent clients and make them happy to stay as Humana Assistants provider?

Johanna Rastad — Chief Executive Officer and President

Thank you, Kristofer. With regards to your first question, capex investments, will of course be held at the limited. And some of our commitments, we need to honor, of course, but we won’t start new, larger projects. But this is also something that we have and we have sort of turned down the pace already before this event due to the leverage situation.

And regarding your second question…

Kristofer Liljeberg — Carnegie — Analyst

Sorry, is it possible to provide the approximate figure for capex versus what you have in 2022? It’s fair to assume that you could stop that amount or something similar?

Johanna Rastad — Chief Executive Officer and President

That’s a good question. I don’t — I have to come back to that. I’ll think about it, Kristofer, and see if I can come up with something…

Kristofer Liljeberg — Carnegie — Analyst

Okay.

Johanna Rastad — Chief Executive Officer and President

That is worthwhile for you to get.

And relating to your second question, I think there is plenty that is — that can be done and that’s already being — sort of happening right here and right now. Now, we have a lawyer, a client base, and I think this event has lifted a lot of the questions that the whole Personal Assistance market as such had and the challenges that has prevailed over quite some time. And I actually believe, and I know from the responses we get from our clients that we have a fairly large support out there. So I feel confident that, if you want to call it the stickiness of our clients, is relatively good.

That said, just to give you some indication, I mean, there are two events that have triggered — that can trigger them — clients leaving over the last, what is it, 9 days. And with the revoked permit, the first announcement of that triggered about 40 clients leaving us. And after the second event, with the Insurance Board coming out and saying that they will pay directly to the clients, that makes the administrative burden higher for some clients, and it is difficult for them to manage. So we lost approximately another 40, 50 clients post that.

So that’s where we stand right now. And it’s difficult for me to predict going forward, but given, actually very positive feedback from several of our clients, we do believe that they actually believe in us, also going forward.

Kristofer Liljeberg — Carnegie — Analyst

Okay, that’s helpful. Thank you. I’ll get back in the queue.

Johanna Rastad — Chief Executive Officer and President

Yeah.

Jakob Lembke — ABG Sundal Collier — Analyst

The next question comes from Jakob Lembke from SEB. Please go ahead. Hi, good morning. I have a few questions, and I think the first one is a follow-up on lost clients. I’m wondering how flexible you are in adapting the cost to these lost clients, and also, if you continue to lose clients during 2023?

Johanna Rastad — Chief Executive Officer and President

Well, thank you. First and foremost, we’ll try to protect all our clients and our employees. It’s been nine days since this event and even though we have lost clients, we have also, during this period, gained new ones. So we are not thinking about adjusting the cost base right here right now, but rather meet the market and make sure that we can try to offer very good service even despite these decisions. So, I think that’s the priority right here right now.

Jakob Lembke — ABG Sundal Collier — Analyst

Okay, and then I’m wondering about, if you have some sort of estimate on one-off related costs that you will have relating to the situation you are in now?

Johanna Rastad — Chief Executive Officer and President

No, we haven’t made any assumptions yet.

Jakob Lembke — ABG Sundal Collier — Analyst

Okay. And then I’m also wondering about your borrowing and if it — If you have any covenants, such as net debt-EBITDA ratio for example?

Johanna Rastad — Chief Executive Officer and President

We have covenants in the loan agreements with our banks. We have a very close dialog with the banks, and have had since this event. So, it’s a good dialog with the banks.

Jakob Lembke — ABG Sundal Collier — Analyst

Okay, and there is no level you can communicate? I mean, your — a bit about your financial target model for example?

Johanna Rastad — Chief Executive Officer and President

Yeah, we are slightly — we are — we have been too high on leverage over the few quarters. So, that’s definitely showing. And we’re monitoring that closely. And that’s also why we have invested quite a bit in expansion, which is also shown in the growth achieved and — but it is clear — clearly on the agenda to tone that down. So — but it’s no default — no defaulters.

Jakob Lembke — ABG Sundal Collier — Analyst

Okay. And then just a final question, more operationally. I mean, Individual & Family, always it was a very weak quarter last year and I’m just wondering if it’s possible to quantify how much of the growth this year is due to price and how much is volume?

Johanna Rastad — Chief Executive Officer and President

It’s an estimate. So you have to take it for what it is. The challenging bit, we’re making that sort of estimate is that we have, continuously, shifts in the client base. So the level of the service offering sort of changes. But I would say out of that 9% organic growth, it’s roughly 2%, 3% relates to price increases.

Jakob Lembke — ABG Sundal Collier — Analyst

Okay, understood. Thank you for taking my questions.

Johanna Rastad — Chief Executive Officer and President

Thank you.

Operator

The next question comes from Karl-Johan Bonnevier from DNB Markets. Please go ahead.

Karl-Johan Bonnevier — DNB — Analyst

Yes, good morning, Johanna. Looking at — coming back to Personal Assistance, just to get a feel for it. When now [Indecipherable] is starting to pay your clients rather than you, how quickly can you turnaround your system? Is that something that will take a couple of quarters to be able to do it, or is it months or weeks that you feel like you’re — before you’re going to be able to change your setup so you get paid indirectly?

Johanna Rastad — Chief Executive Officer and President

Good morning, Karl-Johan. Well, I would say the main payment — I’ll start with the main payments from the insurance Board generally lands with the customers around the 20th of each month. That’s the main payments. And then salaries are paid on the 23rd. So we have — it’s a small frame for us to make sure that we get the payments. And we have to then send the invoices to the clients.

And we have some experience with this, during some of the acquisitions we have of, I would say, the administrative way of working. So that’s really what the team is working intensively on now. I think the difference in this respect is that it has to go through all the over 2,000 clients, and it’s been done in a smaller volume before. So it’s a bit more challenging due to volume.

On the other hand, It’s one model fits all. So, I think in terms of the process, we know what to do. It’s not a black box.

Karl-Johan Bonnevier — DNB — Analyst

So it sounds on you like you should be able to basically reshape the model already during the Q1 to this kind of new strange setup that you’re forced to work in from an administer point of view.

Johanna Rastad — Chief Executive Officer and President

Yes, yeah, that’s what we believe. And the team — as soon as we got the message, the Personnel Assistance team, they are very well managed from an administrative point of view. So they’re already on this, having information sessions and instructing our clients how to go about it and also holding their hands through the process. And that is a really important aspect. I mean, it is a service that we offer our clients because it’s actually quite tough when you have a lot of personal assistance people around you helping you out on a daily basis. And it can just get a lot at some point of time.

Karl-Johan Bonnevier — DNB — Analyst

Yeah, and I guess from a client retention point of view, if you get questions about that, this must be one of the key items to also see that it really works because I guess that’s something that the clients never has worked with either before. So if you can — the more you can help, and I guess that retention rate you should get.

Johanna Rastad — Chief Executive Officer and President

Yeah, exactly. So it’s important that we — and also in terms of communication, and I think it’s not about holding hands, it is also — there are different ways of doing it and there are different levels of services that you can achieve. So it’s really — I view this as some — this is a bid for us to change our business model in a sense, just to make sure that we can offer our clients a good service and that we can keep our operations steady.

Karl-Johan Bonnevier — DNB — Analyst

And then the second question is really looking at the price adjustments here you indicated before in the previous question, looking at the inflationary environment going — out there for the moment, what do you see, say, in the form of cost pressure that you are not able to mitigate through price increases at this stage? And what are the risks?

Johanna Rastad — Chief Executive Officer and President

Well, I’ll start with the first in the inflation pressure. I mean, in the quarter, we estimate the other costs, which is then still a relatively small portion of the total costs that we have, all SEK14 million, sort of fuel — electricity and fuel. They’re two large components of costs being the salary increases that will happen depending on where you look in the organization, but somewhere clusters in the latter part of the spring, early summer. And that will really define how, if we have a high salary inflation, that will of course challenging for us.

And then it’s the adjustments leases that will land despite our f efforts of trying to get a lower increase, but that will most likely land somewhere around 10%, 11%. And so that’s on the cost side.

Our ability to balance with price increases, when we got the OPI in December of 3.5%, so that’s — for the Swedish Individual & Family and Elderly Care, that’s something to hang on to. And it’s a lot easier within the Individual & Family segment, not only in Sweden, but also across the borders to adjust prices. First, because it’s a higher client turnover but it’s more individually negotiated prices.

Karl-Johan Bonnevier — DNB — Analyst

And how do you see Finland and Norway in this perfect looking at price price cost?

Johanna Rastad — Chief Executive Officer and President

Yeah, if you put the next to each other, it slightly easy for us to navigate the prices in Norway than it is in Finland. But the Child Welfare Service service, for instance, there we have invested quite a lot in making sure that we have a good offering, and it’s easier to also be more competitive from our side on prices or get higher prices in Child Welfare.

Karl-Johan Bonnevier — DNB — Analyst

But that’s looking at say, maybe salaries going up 4%, 5% leases 10%, 11% and as you put, it’s still inflation in other cost elements as well. I guess the OPI of 3.5% in Sweden for the main operation is not going to be enough for covering your cost expansion in the second half of this year?

Johanna Rastad — Chief Executive Officer and President

No, if it ends up at 4.5%, of course, we have — it will be challenging, because the relative uptick is — wants to be at that level. But it’s — I mean, you get — we get very different signals from the negotiations. So it’s actually quite difficult to say at this point in time where that will end up. I mean, there are some signals that we won’t at 4.5% either.

But of course, it will be — and I think that’s — I think it is, that will be the case in ’23. It’s going to be challenging from that perspective.

Karl-Johan Bonnevier — DNB — Analyst

And if this is the case for ’23, I guess the OPI should cover that more going into ’24, at least, for you. Is that kind of a good assessment of it?

Johanna Rastad — Chief Executive Officer and President

Yeah, if you draw that out.

Karl-Johan Bonnevier — DNB — Analyst

Makes sense. Thank you very much, and fight on.

Johanna Rastad — Chief Executive Officer and President

Thank you.

Operator

The next question comes from Victor Forssell from Nordea. Please go ahead.

Victor Forssell — Nordea — Analyst

Thank you, and good morning, Johanna. My first question is relating to the payments from the Social Insurance Board. Just to understand the flows a little bit better, so they announced this on the 7th of February. Is there anything sort of retroactive as well where they won’t be paying you for — in January, February, et cetera, some details here on the flows from here on, given the decision, well, just two days ago?

Johanna Rastad — Chief Executive Officer and President

It’s as per the announcements. So no retroactive change.

Victor Forssell — Nordea — Analyst

All right, perfect. And coming back to some of the previous questions, I appreciate you putting a figure on the clients that so far have left. You also mentioned that you have gained new ones. So I’m just curious to hear what timeframe those are related to, and also if they are related to the market growth that we actually were anticipating for this year?

Johanna Rastad — Chief Executive Officer and President

Interesting. Well, the new clients — I mean, we are of course are super pleased that there are new clients turning to us since IVO announced about the permit. So it’s been during this period that we have actually gained. But it’s not a massive amount that can compensate for the loss, but it’s still — at least it sends signals that this is something that the industry is, I wouldn’t say used to, but unfortunately has had to live with for quite some time.

And looking backwards, I think one of the — just illustrated with numbers, we have over 70 companies within Personal Assistance that have their permits revoked over the few — going a few — looking at a few years back. And there also, at least what I know about, 50, 60 companies that are under review. So it is an industry-wide phenomenon. So we’re not alone in that sense.

And coming to your question on the — so the market growth. We do expect to see volume growth. I think, however, it will be — we will be challenging for, which I can discuss on the Insurance Board to handle and that things very quickly. And their own estimates is that the initiatives that Assistants will have an effect somewhere around mid of the year. That’s when, like the curve should slightly turn in terms of the number of peoples receiving personal assistance. So, I think it’s a bit early.

Victor Forssell — Nordea — Analyst

Alright, thank you. I follow-up there, because it sounds to me as if — I mean, I’m not sure about the lead times here until you actually sign a customer and that is turning into effect, but I mean, it sounds at least as if the clients you have gained actually have decided on choosing you as an operator beforehand, and they sort of came into effect here in the last seven days. Is that the right way of seeing it or is it actually the first contact that actually came here in the last couple of days? Because what I’m trying to understand is where sort of the — where the negative impact could actually start to materialize more, if that happens, that is.

Johanna Rastad — Chief Executive Officer and President

Yeah, it’s — I would say that the contact may have been taking before this, it takes a little while for us to make sure that we get all the paperwork in place and that we make the plans, the individual plans for clients and so on. But it’s free for any clients at any point in time to choose another provider or choose the municipality as a providers. So, these are in a highly individual clients with highly individual needs.

And — so — but I wouldn’t expect a higher volume of clients turning to our right here right now. Now, it’s literally — it’s more of an illustration of that, it’s not that — it’s only people feeling us if they are actually people that believe we’re doing a good job and come to us despite this. And I think that’s just important to know.

When it comes to how many clients we will lose, it’s really hard to tell. The client stickiness or what you want to call it, is difficult to really estimate. What we do know — I mean this is — It’s, for obvious reasons, very new situation for us, but there are other companies that have ended up in a similar situation to us, and also have had the process in court over quite some time. And it’s this initial period when people will move, and then we should be able to balance it over time.

Karl-Johan Bonnevier — DNB — Analyst

All right. Thanks, Johanna, for your answers.

Johanna Rastad — Chief Executive Officer and President

Thank you, Victor.

Operator

The next question comes from Kristofer Liljeberg from Carnegie. Please go ahead.

Kristofer Liljeberg — Carnegie — Analyst

Yeah, thank you for some additional questions. First on Elderly Care. We’ve seen quite good improvements here in the second half of the year with better occupancy rates, et cetera. How do you see the potential to improve earnings further for Elderly Care in 2023?

And then for Finland, could you comment on the current sick leave situation and how much salary increases you have been able to negotiate there?

And then on, again, on Personal Assistance, could you say anything how we should model extra type of costs you will have now based on what has happened in the last week versus otherwise when it comes to maybe the legal process, administration, et cetera? Anything on how significant that might be, would be helpful. Thank you.

Johanna Rastad — Chief Executive Officer and President

Well, thank you, Kristofer. Starting with Elderly Care development. No, we are very pleased. What is — they clearly have increased their occupancy and making it so much easier for us to balance costs, and then particularly in the new units. We still have a few units that are struggling with getting more, more clients, and we have dedicated action plans on each of them. And I would say what comes around — and they also — I should also — worth noting is that they have a more critical cost base now than they used to have. What is challenging for Elderly Care is the sick leave.

And that, you can — that also relates to your second question in terms of Finland. They are both at high levels and sort of approaching similar levels, and in some instances, higher than we had last here at this point in time. So that is a challenge. And it’s not only COVID, it’s also influence of virus and so on. So it is a challenging situation. And we do notice that people are more precautious, which means that the absence rates are high.

And then sort of adding on to your next question on Finland, the salary increase. Well, the current collective agreement is valid from 1st of May until the 30th of April ’24. And then salary increases are agreed for one year at a time. So, we will negotiate, if I’m not completely mistaken, I think in the second quarter this year. So that’s when the negotiation will happen.

And in terms of extra costs, it is really difficult to tell. I mean, I think there will be extra costs in two levels. First of all within Personal Assistance. That team has worked extremely hard over this period. And they’ve done a tremendous job but we have to be careful with that team because they have been highly exposed during these 19 days.

So, I think there you can expect higher administrative costs in this shift by the Insurance Board at the local level. And now it’s all hands on this trying to solve it, but I think we’re going to have to make sure that our clients or our employees get a chance to rest a bit. And and then we will have central costs for the legal process and of course, to support all sorts of financial support over this period that we have used. And where that stands, I don’t — I really don’t know.

Kristofer Liljeberg — Carnegie — Analyst

Okay, coming back to Elderly Care, given the current run rate you earned instead of making a loss as you did in Q1, Q2, you had SEK9 million EBIT in the third quarter, now SEK6 million, I guess, is this the run rate we should expect even if you adjust — or even if you open this new unit in — outside Stockholm?

Johanna Rastad — Chief Executive Officer and President

I think this is probably a reasonable level for us to stick to. I — it really depends on if we manage to keep the occupancy levels at these rates. And then — so that would be sort of the underlying business, if you wish. The Taby opening will happen in February. And that will of course weigh down over this year. So that’s — yeah — and which is maybe a bit unfortunate because we have a good traction in Elderly Care. But you have to bear that in mind.

Kristofer Liljeberg — Carnegie — Analyst

Okay, but even with Taby, you think you could continue to make SEK5 million, SEK6 million per quarter in earnings?

Johanna Rastad — Chief Executive Officer and President

The Taby opening will definitely burden quite a bit, and that’s the expectations. So it’s — I don’t dare to give you projections on that, really. But the underlying, we should be able to keep at this level, over time.

Kristofer Liljeberg — Carnegie — Analyst

Okay. But given the financial situation, I guess it must be important for you to really drive earnings in all businesses. So try to stop any new openings. And I would assume the same for Individual & Family. But would it make sense for you to not doing this opening or maybe sell this property to someone else?

Johanna Rastad — Chief Executive Officer and President

Well, yes, I mean we are looking at — we have looked at those type of alternatives, and not isolated to Taby, of course, but also looking at other things, but we will review everything also post this event in Personal Assistance because of course, that shifts our focus for the coming year.

Kristofer Liljeberg — Carnegie — Analyst

Okay, and I have one final question. On the payment now, in Personal Assistance, when you said you had some experience from this way of working with some acquisitions in the past…

Johanna Rastad — Chief Executive Officer and President

Yeah…

Kristofer Liljeberg — Carnegie — Analyst

In those occasions, is it possible to say anything about how that impacts working capital or how much longer it has taken — how many more days has it taken for you to get all collection?

Johanna Rastad — Chief Executive Officer and President

Actually, I don’t have that data. So I can’t really — I can’t answer that, Kristofer. I’m sorry.

Kristofer Liljeberg — Carnegie — Analyst

Okay. Okay, thank you.

Johanna Rastad — Chief Executive Officer and President

Thank you.

Operator

The next question comes from Victor Forssell from Nordea. Please go ahead.

Victor Forssell — Nordea — Analyst

Yeah, thank you for taking my follow-up here. I’ll just squeeze in one. Regarding you sort of turning around, a bit, your business model now, in Personal Assistance, I would just like to get a sense of how much of what you can do is easening the sort of administrative burden for the clients, because what I assume right now is that, well your competitors are seeing this window of opportunity for them of course, to be able to do business as you have been doing previously. But now the change of model makes it perhaps a bit more vulnerable for your clients. So just to get a sense of how much can you release your clients’ burden and how much will they still be able to — or have to do by themselves. Just to get some underlying sense of that would be interesting to hear. Thank you.

Johanna Rastad — Chief Executive Officer and President

Yeah. Thank you, Victor. That’s also a good question. We can actually do quite a lot. I mean, looking at — I think we need to go back to why do clients search our help, in a sense. Why — what’s the reason for taking us as a provider? And I think we have to remember that payments is one, but most of it has to do with making sure we find the right staffing and people around — that is around the client, making sure that those people have the right education and training and that we look after them in a good way, whereas the admin side is still a smaller aspect of the service we provide. And for most of our clients, we work tightly with them so we can help them out. But it is still important to know that the money is challenge — is sent to them and then we can help them with manuals and everything so they know how to come about it.

But the Personal Assistance’s task and I think the decision of taking — of choosing a care provider has to do lot more with the contact person you have and the individuals working around you. And from that perspective, there’s a lot we can do and to make sure that we have a good service offering, and that also our employees are satisfied, because if they’re satisfied, they also do a better job around the clients.

And like the infrastructure we have with the Humana Academy, for instance, where you can — you’re offered a training assistance, it’s the highly professionalized service from that perspective.

Victor Forssell — Nordea — Analyst

Okay. Thank you.

Johanna Rastad — Chief Executive Officer and President

Thank you.

Operator

The next question comes from Albert from ABG Sundal Collier. Please go ahead.

Albert Moller Broock — ABG Sundal Collier — Analyst

Alright. Hi. So, I had like a follow-up question on the one from Kristofer regarding your earlier experience from handling the payment processes for Personal Assistance. And I was wondering if you had experienced any credit losses from clients not paying their invoices, and if you expect that to be a problem since there’s quite a lot of clients to handle?

And my second question relates to the Norway segments, where you said you had higher wages due to collective agreement. And I was wondering — you said for Finland, that it was to be renewed on the 1st of May. Do you have the same dates for Norway, please? Thank you.

Johanna Rastad — Chief Executive Officer and President

Well, thank you. Thank you very much for that. Well, I’ll start with the credit losses. I mean, we haven’t experienced anything like this before. But of course, we have our ears to the ground and try to understand others — other companies that have been exposed to the same challenge. And there is of course a risk of late payments. But based on previous companies’ experience, credit losses are not expected to be significant.

I can’t know — make any judgments on 100% that is applicable to us, but that’s at least what other people experienced, other companies experienced in similar situations.

When it comes to Norway, the agreements for workers and social services is up for negotiations — was up for negotiations during the fall. But I can also provide you with more details on how that negotiation is — when it’s exactly due. It has been postponed due to the market conditions that we see.

Victor Forssell — Nordea — Analyst

That’s all right. Thank you very much.

Johanna Rastad — Chief Executive Officer and President

Thank you.

Operator

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Johanna Rastad — Chief Executive Officer and President

Well, thank you very much for all your questions. And I really understand that this is difficult for the markets to understand the consequences going forwards, but we will keep you updated on the developments that happens in both the near and the longer term.

So, thank you very much.

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