annual report 2016 - humanacorporate.humana.se/afw/files/press/humana/annualreport2016.pdfhumana in...

Annual Report 2016

Contents Introduction 1 Humana in brief 2 The year in brief 4 Message from the CEO

Our value creation 8 Humana’s value creation 10 Strategy and objectives 12 Humana as an investment Responsible care provider 16 The market 20 Quality assurance 22 Employees

Our care work 26 Individual & Family 28 Personal Assistance 30 Elderly care 32 Other Nordics

Corporate governance 36 Corporate Governance report 37 Chairman’s statement 46 Board of Directors 48 Group management

Financial overview 53 Directors’ report 61 Three-year overview 61 Quarterly overview 62 Key ratios 70 Risks and risk management

Financial statements 57 Consolidated financial statements 63 Parent Company financial statements 74 Notes to the financial statements 92 Proposed appropriation of profits 93 Audit report 96 Financial definitions 99 Sector definitions

Marilyne Personal Assistant

Introduction Our value creation Responsible care provider Our care work Financial overviewGovernance Notes and other information

Humana in briefHumana is a leading Nordic care company dedicated to giving people a good life. The services Humana offers include individual and family care, personal assistance, elderly care and special services housing under LSS (the Swedish Act Concerning Support and Service for Persons with Certain Functional Impairments). In Sweden, Humana is the market leader in individual and family care and personal assistance. In Norway and Finland, Humana is the second largest provider of individual and family care.

Everyone is entitled to a good life

Individual & FamilyHumana provides housing, care and treatment in psychosocial change processes and social psychiatry to families and individuals of all ages. Almost all operations are run under own management.Percentage of Group revenues:

35%Personal AssistanceHumana provides personal assistance to people with disabilities to enable them to live life the way others do. Customers represent all ages and are spread across 240 municipalities in Sweden.Percentage of Group revenues:

41%

Elderly CareHumana provides elderly care within two areas: elderly housing and home care services. The business is mainly based on tender but housing under own management is becoming more common.Percentage of Group revenues:

9%Other NordicsIn Norway and Finland the main area of Humana’s activities are individual and family care for children, youths and adults. In Norway, Humana has also offered personal assistance since 2015.Percentage of Group revenues:

15%

Our business areas

Customers9,000

Employees16,000

Operating profitSEK million

329Operating revenue

SEK million

6,362

Humana in brief

Humana Annual Report 2016 | 1

4,190 number of shareholders

LGBT certification for Tiangruppen

Finland

On 8 April Humana took its first step towards LGBT certification with the certi-fication of Tiangruppen and its operations. According to research, people who are LGBT are overrepresented amongst those with mental illness. Humana's intention is to continue on this path and certify more of its operations.

The year in brief

Humana launches quality reporting On 12 May, a group-wide quality report was published for the first time, aimed at communicating how Humana is working to develop and strengthen operations in a clear and transparent manner.

Expansion into FinlandOn 4 May Humana acquired the leading provider in individual and family care for children and youths in Finland, Arjessa Oy. Through the acquisition, Humana estab-lished a platform for further growth in Fin-land. Arjessa’s revenue for 2016 amounted to SEK 386 million and operating profit was SEK 32 million.

Initial public offering (IPO)On 22 March 2016, the Humana share was listed on the Nasdaq Stockholm stock exchange. The initial price per share was SEK 62, corresponding to a market value of approximately SEK 3.3 billion.

First elderly housing unit under own management On 7 March Humana welcomed its first residents to its elderly housing unit on Södra Centralgatan in Gävle – 81 flats that focus on the future of elderly care and the first housing under Humana’s own management.

2 | Humana Annual Report 2016


SEK M %

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4,000

6,000

2016201520142013201220110

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14%

The year in brief

Operating revenue Adjusted operating margin, %*

*Operating profit for 2016 was adjusted for SEK 40 million in IPO expenses. Figures for 2015 include cost

adjustments of SEK 27 million. 2011–2012 comply with the standards of the Swedish Accounting Standards

Board (BFN). 2013–2016 comply with IFRS accounting standards.

Operating revenue (SEK M) and adjusted operating margin (%)*

Operating revenue (SEK M) by business area

Revenue growth: 14%Individual & Family: 16%Personal Assistance: -2%Elderly Care: -1%Other Nordics: 122%

74 employee satisfac-tion index

Humana has satisfied employeesThe first Group-wide employ-ee survey was conducted in September, which provided the opportunity to compare the results between the Company’s different business areas. As a Group, results were very good with an employee satisfaction index of 74.

Key ratios, SEK M

2016 2015

Operating revenue 6,362 5,655

Operating profit 329 312

Operating margin, % 5.2 5.6

Adjusted operating profit 369 340

Adjusted operating margin, % 5.8 6.1

Profit for the year 170 114

Operating cash flow -134 389

Interest-bearing net debt 1,628 1,174

Interest-bearing net debt/adjusted EBITDA 3.9 3.0

Average number of employees, full-time equivalents 9,912 9,154

Average number of customers 8,361 7,262

Humana strengthens its position in Norway On 31 May, Humana acquired the KOA Group (Kvæfjord Opplevelse og Avlastning AS) in Norway, a prominent provider in individual and family care, including psy-chiatry, addiction treatment and special services housing (HOT). In 2016, revenues in the KOA Group amounted to SEK 352 million and operating profit was SEK 64 million.

Other acquisitions in 2016: April Nygårds Gotland Vård ABSept. FUGA Omsorg ABSept. Kilen akut/utredningsbe-

handlingshem ABNov. Platea ABDec. Pienryhmäkoti Pulenhehtaarin Metsä OyTotal number of acquisitions: 7

Outsourcing contracts won: 4 Borås (group home) Vellinge (group home and elderly housing) Håbo (elderly housing)

Humana in AlmedalenIn June, Humana participated in Almedalen with two of its own seminars, three roundtables, a popular gathering about core values, several panels and question and answer sessions. There were several individual conversations with politicians, other decision-makers and partners.

Humana Academy launched at Group levelOn 22 June Humana gathered its resources and competencies in education and research under one umbrella: Humana Academy.

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20162015

Other NordicsElderly CarePersonal AssistanceIndividual & Family

SEK M

Rörelseintäkter (MSEK) per affärsområde


A strategic year that maps out the way forwardWhen I look back on my first year as CEO of Humana, I am amazed that so much has happened in such a short time. In 2016, we passed several important milestones including the inauguration of our first elderly housing unit under our own management, our entry to the Finnish market, strategic acquisitions in Norway and the launch of Humana Academy at Group level. At the same time, we continued our progress well in line with our goals and completed a successful IPO. Our important efforts in the areas of quality and employees gave good results, as proven by the National Board of Health and Welfare’s open benchmark reports and continued good results in our employee surveys. I hope that all employees at Humana feel as proud as I do. Together we make a difference. For thousands of people every day.

Strong financial development In 2016, Humana has enjoyed strong growth, both through acquisi-tions and by starting up new operations. Revenue increased 14 percent to SEK 6,362 million, which exceeded our growth target of 8–10 percent. This strong growth is proof of the inherent strength of our operations. The adjusted operating margin was 5.8 percent, which was in line with the Group’s long-term target of a margin of about six percent. During the year, the proportion of operations under Humana’s own management increased to 95 percent, which is in line with our strategic focus on operations that enable long-term investments in quality and staff.

Humana’s first elderly housing unit under own management opened in Gävle during the year. Växjö and Österåker will follow in 2017. Our residence in Gävle received much attention and we were nominated for awards such as the Svenska Ljuspriset (Swedish Lighting Award). Our long-term plan involves opening two to three new elderly housing units per year with a concept of high qual-ity in both the building and operations, in a central location with a strong focus on innovative, modern solutions. Humana intends to become a leading quality provider in the field of elderly care. During the year all residences with special services under LSS were brought under the Individual & Family business area. For the Elderly Care area this means more opportunities to focus on its core business and continue to build elderly housing un-der our own management where we continue to see a strong demand.

Seven acquisitions were completed during the year. The strategically important acquisition of Arjessa entails our establishment in the Finn-ish care market and a strengthening of Humana’s position as a Nordic care provider. Humana now has a leading position in individual and family care in Finland and we intend to strengthen our position going forward. Contrary to Sweden, the political debate in Finland is con-structive and visionary, focused on increasing the quality of care and efficiency while strengthening individual freedom of choice.

Humana’s acquisition of KOA in Norway during the year has further strengthened our position in Norway, geographically as well as in terms of content. Humana is today one of the leading players in Norway with a nationwide service offering.

Looking ahead, we see continued opportunities for the Group to invest and grow. The need for our services is increasing steadily and the municipalities’ signals are clear – they need Humana’s exper-tise and experience to be able to meet future care needs. The IPO

we completed in March means significantly improved financing opportunities, which in turn allows for the continued growth and development of our services.

Employees who create qualityHumana’s core values are strongly rooted in the Company. This is especially apparent in the recent employee survey in which the knowledge of and embracing of our core values received very high

ratings. It makes me proud and happy, because it reinforces what we already know about Humana and its 16,000 employees. We are unique indi-viduals who are all different but united by our values and our commitment to help others lead a better life. Shared and strong core values lead to satisfied employees and better quality, which in turn contributes to lower risk for our investors.

Our commitment to leadership develop-ment and a new quality management system will make us even better. The Nordic welfare system has great challenges within recruitment, particularly in the care area. Humana contrib-utes to filling those needs by being an attractive employer that can offer jobs filled with meaning and good prospects for development.

The care sector in focusWelfare in Sweden and the Nordic countries is not without challeng-es. Social exclusion and increased mental illness combined with an ageing and growing population means that society must focus on the key issues. Unfortunately the debate in Sweden is dominated by wel-fare companies' profits. The fact that companies like Humana deliver equal or better care at a lower cost to society is rarely mentioned in the debate. In everyday municipal life, outside of the rhetorical bat-tlefield, we can conclude that municipal procurement of private care continues to increase. The knowledge and expertise about what gives taxpayers the best value for their money is obviously higher there than you might think when you listen to the political debate.

“The Welfare Study”, which was presented in November 2016, includes proposals on restricting private ownership of publicly-funded businesses in healthcare, education and social services along with increased bureaucracy. At the time of writing, there is no majority in parliament to support the basis for the investigation, but the question is likely to remain over the 2018 election. Humana participates in the debate, both on its own behalf and through the Association of Private

The strategically important acquisition of Arjessa meant our establishment in the Finnish care market and a strengthening of Humana’s position as a Nordic care provider.



Care Providers, and very clearly focuses on quality, business develop-ment and the effective use of taxpayer's money.

Personal assistance is also under political pressure. Political deci-sions, combined with some precedential rulings and a stricter assistance assessment have affected the market negatively. Humana continues to believe strongly in this great reform that gives around 20,000 individu-als the opportunity to live a life like others. It is an important freedom reform that we will defend to the utmost.

Creating public valueEvery year Humana helps 9,000 customers and clients to a better life. It is of course our most important contribution to positive social de-velopment. But we also contribute in many other ways. Among other things, we draw attention to inadequate accessibility with our annual municipal survey the Accessibility Barometer. The Children’s Barometer similarly illustrates the tough situation social workers are faced with concerning children and young people’s mental health.

As a modern care company aiming to be the leading company within our field, we also put a lot of effort into the development of our operations and our employees. Every year, the Humana Acade-my trains thousands of our employees, but it is also aimed at people

such as municipal social workers. In 2016, 8,000 web-based courses were conducted at the Humana Academy.

We cooperate with several colleges and universities on various projects in addition to developing and owning the rights to several treatment methods in the individual and family care area. An exam-ple of this is ‘Integro’, which aims to aims to place young unaccom-panied migrants into private, secure housing and give them support. Integro is one of several of Humana’s initiatives in the area of inte-gration. Humana also sets up internships for newly arrived migrants and language internships in Västra Götaland. There is considerable diversity at Humana. As there is commitment.

Finally, I would like to thank all of the employees at Humana for the past year as well as all investors for their confidence in Humana’s IPO. Our share was heavily oversubscribed, which can be seen as evidence that Humana is regarded as a company of the future.

About 700 employees also became shareholders in conjunction with the IPO, which makes me as CEO additionally proud. The fact that em-ployees and investors believe in the company bodes well for the future.

Rasmus NermanCEO and President

Message from the CEO

Every year Humana helps 9,000 customers and clients to a better life.

Start of building our elderly housing unit in Växjö.


Everyone is entitled to a good life

VISION

Sara Former Individual & Family client


Our value creation

Humana’s primary objective is to provide the best possible care for our customers, clients and buyers. To succeed, the business must rest on a solid foundation, both financially and in terms of values. Our work is therefore based on several different strategies that bring together financial and quality requirements with education, research and development. The results reach our customers, and also our employ-ees, investors and further out to the society in general on a daily basis.

The preferred provider-of-choice for care services among customers, clients and

employers who have high quality standards.

OBJECTIVEQuality operations.

Long-term, sustainable growth.Attractive employer.Socially responsible

provider.

TARGETAREAS

Commitment, happiness and responsibility are essential elements of our core values. Our corporate

culture is characterised by entrepreneurship and

employees’ own responsibility.

COREVALUES


Care that creates value for societyHumana helps to improve the lives of all the clients and customers we provide care to, each and every day. We also want to be a long-term, valued partner to our buyers and other parties that we work with. Our operations must be of high quality and help improve care in all of society. In short, we want to actively help create a sustainable welfare system.

Humana is a private care company and an important resource in a market characterised by growing care needs where freedom of choice now feels natural by many. As a socially responsible provider we want to help improve quality in the public and private care sectors. We do this by working continuously with quality and development work in our core business, but also by collaborating in research projects with Humana Academy and other providers in our areas of expertise. We want to drive the development of evi-dence-based practices and continually set a higher standard of care services in society.

New and alternative care services At Humana, we are proud to offer and develop a high-quality alternative within the Swedish care sector. Our aim is to be the clear care services provider-of-choice for customers, clients and employers with high quality standards. Humana also wants to help develop new treatment methods and approaches that society can benefit from.

Responsible employerHumana offers services that raise the quality of life in people's ev-eryday lives. To succeed, we depend on skilled employees who enjoy their work and feel satisfied. Humana strives to be a healthy organ-isation with strong leadership. We offer employee wellness pro-grammes and prevent and eliminate health risks in the workplace. Humana is subject to a collective agreement and we have advocated for collective agreements in the industry.

Increased prosperity for society By performing care services efficiently and with high levels of quality, we are helping to give taxpayers more and better care for their money. One such example is individual and family services that help lower the costs to society of the target group of socially vulnerable youths in the long term, while eliminating their social exclusion. We also see it as our responsibility to participate in public debate and influence the issues that are important to our customers and clients. One of the ways we achieve this is through representa-tion on industry councils and boards. In Sweden we evaluate mu-nicipal efforts in selected areas, such as the Accessibility Barometer and Children’s Barometer.

Openness and transparencyFor several years Humana has embraced the “Ethical platform for transparency and insight in care and healthcare”, an agreement between the parties under the collective agreements in care and healthcare, which was established through Government initiative. The aim is to increase transparency and insight concerning quality, finances and employment conditions at providers that receive public financing. Humana follows the Association of Private Care Provid-ers’ ethical guidelines, which include requirements for openness and transparency, sound competition, generally accepted marketing and business practices, and management of corruption risks.

Since 2016 Humana has been listed on Nasdaq Stockholm, which means that the Company complies with the Swedish Corpo-rate Governance Code.



Inclusion and equality in the workplaceHumana provides jobs for 16,000 people. Equality and diversity are important to us. At Humana, 50 per-cent of employees in business area management roles are women, and women represent 60 percent of Group management. We are also proud to offer many young adults and people with an international background a first entry into the labour market. A third of our em-ployees are born outside the Nordic region. Humana works in partnership with the Swedish Public Employ-ment Service, Red Cross and many local associations to facilitate asylum seekers’ entrance into the labour market. We have also worked with Samhall in several of Humana's operations over the last few years.

Innovation improves the care industry Evidence-based practices and innovative solutions improve the care industry. That is why we participate for example in research projects aiming to reduce elderly persons' incidence of falling. Falling accidents cost Swedish society about SEK 25 billion per year. The new solutions involve adapting the environment, education, adapted physical training and support so that individuals are able to reduce their own risk of falling.

In the new elderly housing Humana is building, tech-nical innovations are prioritised to make it easier for the staff, but also to provide a higher standard of accommo-dation and privacy for the elderly residents in their flats.

In Individual & Family, Humana contributes innovation by developing treatment methods and through research partnerships with various universities.

Investments develop the industry and welfare With growing care needs, public care need responsible private providers such as Humana who are willing to invest in care. We provide specialist skills and invest for the future in areas that include quality improvements and the construction of elderly housing units and residences with special services under LSS. Investments are also made in the form of training in the Humana Academy as well as improving methods and systems.

Cost effectiveness Increasingly higher demands are placed on taxpay-er-funded care providers. Tougher conditions and increased micromanagement means high demands on cost efficiency. We continuously monitor costs with the aim of providing the best possible care as efficient-ly as possible, without sacrificing quality. As a leading provider, we are competitive in the industry, which drives cost-efficiency and quality development in both the public and private sector.

How Humana creates value

Humana’s value creation

Reduced environmental impactHumana is working to reduce its environmental im-pact associated with transportation, energy use, waste management and procurement. In 2016, a compre-hensive energy analysis of all properties owned by Humana was carried out. The results of the analysis will form the basis of an action plan to reduce energy consumption. All of the electricity Humana buys is renewable and it is now agreed that, for the majority of our operations, new vehicles that are purchased or leased will be environmentally friendly. Humana’s operational environmental initiatives occur locally and are based on each operation’s environmental policy.

Individual freedom of choiceIt would not be possible to fulfil society’s ambitions for increased freedom of choice for the individual and simultaneously obtain the necessary resources without new providers that offer fresh perspectives and new work methods. Individual freedom of choice is also important for anyone working in care. Private providers like Humana broaden the range of employ-ers, which increases the possibility for choice in each individual’s professional life and career.

Educating Swedish social servicesHumana has more than 15 years of experience in con-tinuous learning. We wish to share our knowledge and expertise in complex care services. Within individual and family care in particular, we have a long tradition of contributing knowledge externally, including to social workers throughout Sweden. This is now all offered through Humana Academy.


Humana’s strategy for growth and a stronger position in the NordicsHumana’s well entrenched core values are the basis of our ambition to continuously develop and improve our operations. During the year, Humana's strategy has been further clarified in order to meet changes in the outside world and new market trends. Today, Humana is well equipped for continued sustainable growth and a stronger position on the Nordic care market.

Since 2001, Humana has grown rapidly, both organically and through acquisitions. Today, Humana is a leading care group in the Nordic region with about 16,000 employees who provide care services for 9,000 individuals. Humana aims to continue providing plenty of job opportunities with good development opportunities in an industry that really makes a difference in society.

Humana’s main aim is to be the clear care services provider-of- choice for customers, clients and employers with high quality stan-dards. High quality is a basic requirement for the business to grow and develop further, and maintain sustainable profitability over time. How we perform our care services, and thus manage trust, is critical and depends on our employees. Attracting, recruiting and retaining employees who share our vision and values is fundamental to Humana achieving long-term sustainable growth.

Our employees have always been the focus, but during the year, strategic HR issues gained prominence on the Group management team’s agenda. To ensure success in this area an HR director was recruited to the Group management team. Since 2015, there is a central quality assurance organisation to ensure focus on the overall quality work throughout the entire Group. The central quality assurance organisation is led by Humana’s quality director, who is a member of Group management.

Our strategic target areasHumana’s goal is to continuously grow the business over the long term by consistently improving working practices that provide taxpayers with more care for the money and meet the needs of our stakeholders.

Our four target areas are:• Quality operations • Attractive employer• Long-term, sustainable growth• Socially responsible provider

Quality operations Quality operations means that Humana will drive the development of the industry to ensure high quality in all the services we deliver.

We will continue to develop the quality work within the Group and in 2017 a new comprehensive quality management system will be launched. This means for example that we will further develop the internal quality organisation, the methods we use and take responsibility for and develop comparable quality indicators for measuring quality in an objective manner. Through education we secure skills internally and also share our expertise with external partners such as municipal employees.

Long-term, sustainable growthLong-term, sustainable growth means that Humana will continue to grow both organically and through acquisitions.

Humana will grow organically by starting up new operations, gaining market share, and broadening and deepening the service content of the segments and markets that we operate in today. In addition, we continuously evaluate new markets, both in terms of content and geography. Important factors when expanding internationally are favourable market conditions, clear regulatory frameworks and that companies that are acquired shares our vision of quality and core values. Humana’s solid experience in risk assess-ment, acquisition processes and integration of new businesses are key factors to our success with acquisitions.

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Humana’s strategy for growth and a stronger position in the Nordics

Strategy and objectives

Financial targets

Socially responsible providerHumana aims to be a modern care company and an important part of the Nordic welfare system. Humana will be a driving force in the care industry and thus contribute to sustainable welfare.

Humana will influence the development of care in the right direction by contributing to the debate on welfare issues, meeting with politicians, establishing facts, publishing reports and training functions within the public sector that affect the care industry. We will also participate in research partnerships that are in line with our vision. In summary, Humana aims to be an important part of the welfare system and its development by producing and sharing new knowledge and raising awareness of the issues. We also want to share our expertise in method development and external training, for example via Humana Academy.

Attractive employerHumana will be the most attractive employer in the industry and help increase interest in and the status of care as a profession.

Humana is one of Sweden’s and the Nordics’ largest largest private employer in terms of number of employees. By focusing on skills development and career opportunities within the Group, we want to attract, recruit and retain motivated individuals who share our core values. We want to create jobs for many people and take gender equality and diversity into account when recruiting. Humana even works as a catalyst for inclusion by creating oppor-tunities for people currently outside the labour market. Humana invests in an organisation that will contribute to good leadership, a better understanding of the Group’s vision and goals, sustainable core values and a corporate culture and diversity that strengthens our competitiveness.

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8–10%Revenue growth

Annual revenue growth of 8–10 percent in the medium term, achieved through organic growth and bolt-on acquisitions.

3.0 timesCapital structure

Interest-bearing net debt in rela-tion to EBITDA shall not exceed three times. However, indebt-edness may temporarily exceed the target level, for example in conjunction with acquisitions.

approx. 6%Profitability

An operating margin in the medium term amounting to approximately 6 percent.

30%Dividend policy

A dividend amounting to 30 percent of the profit for the year will be distributed. The proposed dividend will take into account Humana’s long-term development potential and financial position.


Humana as an investment

A growth company with an attractive expansion strategy Since 2009, revenue growth in Humana has been 21 percent per year, of which organic growth has been around eight percent. Humana is a growth company combining acquisitions with organic growth, that is, the inflow of new customers, start of new operations under own management, increased capacity and improved capacity utilisation at existing units.

Over the last ten years, Humana has acquired no less than 38 companies in Sweden, Norway and Finland. One of Humana's main strengths is the ability to identify attractive quality companies with a corporate culture that is consistent with Humana’s and then integrate and develop the company successfully. Through continu-ous investment in new units and leadership that is specialised in the care industry, Humana creates sustainable growth.

A stable and growing industry In 2015 the Swedish municipalities’ total cost for care was approxi-mately SEK 231 billion. In addition, the Swedish Social Insurance Agency’s costs for personal assistance were nearly SEK 30 billion. The care markets in Norway and Finland are each roughly half as big as the Swedish market.

The markets have grown by an average of 4-5 percent annually over the past ten years and the pace of privatisation has contin-ued to increase, now accounting for 19 percent in Sweden and 17 percent in Finland. In Norway the degree of privatisation varies in Humana’s relevant segments.

Growth in the care market is predicted to continue to increase due to a growing and ageing population, increased requirements for specialisation and personalisation, as well as an increase in mental illness, particularly among young people. There is an ongoing consolidation of the market. To keep pace with increasing demands from employers, clients and public authorities, consolidation is expected to increase. Humana’s strategy is to continue to take an active role in this market consolidation.

A market leading position focused on own management and specialisation Humana is a leading private care company in the Nordic region. Of Humana’s revenues, 95 percent is from operations under Humana’s own management, which means that Humana takes full responsi-bility for all operations. A significant part of the Group’s revenue is based on individual contracts with, or for, individuals. Humana’s operations in personal assistance and home care services in Sweden are covered by freedom of choice. Quite often, the contracts in in-dividual and family care have high requirements for specialisation, expertise and compliance. This means that entry barriers in several of Humana’s operations are high.

The increased specialisation within the care area means that municipalities in the Nordic countries, which are often small and numerous due to the limited population base, are not able to provide the breadth of specialisation demanded by the market. A geographical move to break destructive patterns is often preferred in individual and family care, which benefits Humana with its broad geographical

spread. Through Humana's proven dynamic care, a model used with-in individual and family care, each individual’s varied health and care needs are accommodated if the customer’s needs change over time, contributing to crucial continuity and good care results.

A high-quality provider that is socially responsibleHumana aims to be the clear provider-of-choice for customers and employers with high quality standards. Humana strives to always provide quality care that meets our customers’ and clients’ needs and wishes. Constantly developing and improving quality at all levels helps create a sustainable business.

As a leading Nordic care company, Humana wants to take social responsibility. We feel a responsibility to efficiently leverage our public resources and create more care for taxpayers’ money.

95% Of Humana’s revenues come from opera-tions under Humana’s own management

4–5% average market growth in Sweden over the last ten years

231 billion Swedish municipalities’ total cost for care in 2015

Humana is a leading provider in the Nordic care market with clear ambitions for growth. Humana is a quality provider with a strong market position in an attractive and growing industry. We work daily to deliver on our vision “Everyone is entitled to a good life”.

2009 2010 2011 2012 2013 2014 2015 20160

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Humana’s revenue growth, SEK thousands

Operating revenue 21% average growth/year



Humana as an investment


Employees16,000

web-based coursescompleted in 2016

8,000

Annica Personal assistant


Responsible care provider Care plays a central role in today’s modern welfare system. A safe upbringing, equal opportunities for people with functional impairments and an enjoyable old age are things that many take for granted. In order for society to cope with these demands a variety of care providers are needed with shared incentives to improve quality, knowledge and innovation in the field. As a Nordic provider with operations in all segments of care, Humana wants to play an active role in this process, thereby helping to safeguard the welfare system of tomorrow.

SEK, the Swedish care market

231 billion

The Group’s employee satisfaction index

74Swedish market

growth

4%


A market that places people at the centre

From institution to individualCare and healthcare in Sweden has changed fundamentally in recent decades. From a starting point of institutions, such as or-phanages and mental institutions, Swedish social policies switched focus in the late 1950s. A collectivist approach was replaced to an increasing extent by an individualist approach. A central idea in the care ideology that began to emerge was about individual autonomy and influence. The abolition of long-term care hospitals and nursing homes came with the ÄDEL Reform of 1992, and the abolition of mental hospitals came with the Psychiatry Reform of 1995.

Acts that changed careThe changing perception of care has influenced legislation in the in-dustry. In 1986, the Care Act was established, the first law that gave individuals the opportunity to appeal an administrative decision. Since then, a number of acts aimed at regulating the individual’s right to care have been implemented and further developed. One example is the Social Services Act, under which society’s social ser-vices should facilitate people’s economic and social security, equal living conditions and active participation in society. Another central act is the Act Concerning Support and Service for Persons with Certain Functional Impairments (LSS), which was implemented on

1 January 1994. LSS regulates special support and special services for certain people with disabilities, such as the rules covering who is entitled to personal assistance.

In addition to LSS, several regulations have been put in place that have driven developments towards a greater diversity of providers and freedom of choice for individuals. The Public Procurement Act has resulted in increased opportunities for private providers to engage in care activities on a contractual basis. Another example is the Act on System of Choice in the Public Sector (LOV), which aims to stimulate greater competition between care providers, with a focus on improving the quality and efficiency of care. LOV took effect on 1 January 2009 and enables local municipalities and county councils to allow individuals to choose their care provider. More than half of all municipalities apply LOV to different parts of their care services.

Diversity that promotes freedom of choiceThe changing perception of care and healthcare, combined with the laws established over the years, have gradually changed the market. Today’s market includes both public, non-profit and private providers that offer a variety of working methods and treatments. This diversity is important when implementing the idea of care that places the individual’s needs and autonomy first and foremost.

Everyone is entitled to a good life. Basically, it’s about ensuring each individual’s security in different life stages – in the case of psychosocial problems affecting children, youths and adults, in the case of disability and in old age. Care and healthcare is today a cornerstone of the welfare system, which is why innovative and effective care services are needed regardless of who performs them.

2017: See the individual’s needs – Individual freedom of choice

Disability under LSSPersonal assistanceResidences with special support and services

Elderly careHome care serviceElderly housing units

Children, youths and adultsResidential care homeOutpatient careFamily homeAssisted living homeShort-term housing (adults) Special housing (adults)

The Swedish care market

231 SEK billion

Market size

2015

4%Annual market growth

2006–2015

ProvidersPublic Non-profitPrivate

Care and healthcare in Sweden has gone from being built on institutions to being based on each individual’s needs.

1950: Manage social problems– Institutions

Poor housesMental institutionsOrphanagesInstitutional elderly careInstitutions



The market for care and healthcare

The private care and healthcare market in SwedenToday, the private market for care and healthcare consists of just over 12,000 companies with more than 170,000 employees. The private care and healthcare sector showed continued strong growth in 2015, which, among other things, was driven by an increase in mental illness, particularly among youths, combined with demo-graphic factors and increased specialisation and personalisation. Refugee reception in 2015 also helped the market grow.

Even though the sector has several large providers, care and healthcare is still mainly a sector made up of small companies. Of the just over 12,000 companies, 93 percent have fewer than 20 employees. The majority of companies are run by women.1,2

The care market in SwedenThe care market is financed primarily through public funds and to a small extent through fees from patients and users. The main buyers of care services are Sweden’s 290 municipalities, 20 county councils and the Swedish Social Insurance Agency (Försäkringskassan). The municipalities’ costs for care in 2015 were SEK 231 billion, which is an annual growth rate of just over four percent.

The municipalities have overall responsibility for meeting local care needs for their citizens and are the primary buyers of care services. They can choose to run the services under their own man-agement or under contract to private providers. Försäkringskassan is the authority responsible for assessing and qualifying individuals to receive a specific number of assistance hours per week. Municipali-ties can also make decisions on personal assistance.

1) Grant Thornton, “Den privata vård- och omsorgsmarknaden ur ett finansiellt perspektiv” (The private care market from a financial perspective), 2015, published in 2016. 2) Privat Vårdfakta 2016 (Private care facts 2016), Association of Private Care Providers.

Norway

132 billion SEK Market size

The Norwegian market is more regulated than the Swedish market, where public and non-profit organisations are often preferred in procurement. How-ever privatisation is increasing, particularly in the personal assistance segment.

Finland

70 billion SEK Market size

Market conditions are similar to Sweden’s in terms of procurement and incentives for freedom of choice. The market is currently under-going further privatisation to increase quality and productivity.

The Nordic care market

Private share Source: SCB 2015Municipalities

0

50

100

150

200

250

2015201420132012201120102009

Private

20082007

SEK billions

2006

159.0

138.3

168.1

145.5

178.4

153.5

182.7

154.8

188.8

158.2

194.2

161.9

199.2

164.5

205.9

168.9

215.2

174.8

231.3

186

20.6 22.5 24.9 27.9 30.7 32.3 34.7 37.040.4

45.3

19.6%

18.8%17.4%

17.4%16.6%16.2%

15.3%14.0%

13.4%13.0%

Municipalities’ total costs for care in Sweden, 2006–20151)

Distribution of providers Private 34% Under municipal management 66%

Distribution of providers Private 15% Under municipal management 85%

1) Total cost of care also includes the reception of refugees (SEK 14 billion in 2015 and SEK 7 billion in 2014) but no funds for personal assistance granted by Försäkringskassan.

12,000companies

170,000employees

The market’s three main segments The care market is traditionally grouped into individual and family care, care for people with disabilities under LSS and elderly care. Hu-mana’s operations in Sweden include all segments. There are similar segments in Norway and Finland, but they use other names.

Individual and family careThe services provided in the individual and family care area are the most complex. Substance abuse, neuro-psychiatric disabilities, depression and self-harm are problems that can result in the need for support and treatment. The segment also includes support for unaccompanied refugee minors.

SEK 47 billion, market size in 2015

Care for people with disabilitiesLSS has roughly 10 categories of which personal assistance and special services residences (group homes) are the most common. In order to receive personal assistance, a person must have a permanent disability or a disease such as MS and a great need for help with dai-ly tasks. Individuals are entitled to choose who will provide the per-sonal assistance. Government-funded costs for personal assistance granted by Försäkringskassan increased in 2015 to SEK 30 billion.

SEK 59 billion, market size in 20152)

Elderly CareElderly care consists mostly of home care service and elderly housing units, but also day care operations, flats adapted for the elderly, meeting places and family member services. The 65-plus age group today makes up about 20 percent of the population and is increasing steadily.

SEK 125 billion, market size in 2015

Distribution, personal assistance providers3)

Private companies 66% Under municipal management 24% Non-profit/self-employed 10%

Distribution, group home providers Private 21% Under municipal management 79%

2) Does not include funds granted by Försäkringskassan. 3) Based on Försäkringskassan’s payments.


Trends that characterise the care market

In May 2016, Humana completed two important acquisitions in Norway. The acquisition of KOA Group broadened our previous care services in Norway to include psychosocial interventions for adults including qualified addiction treatment and psychiatry. At the same time Humana’s geographical presence was strengthened. The acquisition of Arjessa means an expansion into Finland and is an important milestone in our ambition to become the leading care company in the Nordic region. Seven acquisitions were complet-ed in 2016. Continued consolidation is expected in the industry, especially in the personal assistance segment in Sweden, as a result of changing terms and market conditions.

In 2015, the care companies Capio and Attendo were listed on the stock exchange. On 22 March 2016, Humana was listed on the Nasdaq Stockholm exchange.

Modes of operationA market trend in Sweden is that the number of care and healthcare businesses operated under outsourcing contract have decreased while operations under own management have increased. Operations under own management means that the care provider has full responsibility for staff, permits, operations and property. At the end of 2016, 95% of Humana’s operations were under its own management.

The political dimensionIn March 2015, the government commissioned an investigation into profits made in the welfare sector, which was presented in November 2016. Humana is critical of the investigation regarding profit limitation but welcomed the fact that the investigation also focused on the quality of welfare. Our view is that tough monitor-ing of quality and regulatory compliance benefits Humana, which has a strong set of values and acts responsibly, but it also benefits the Swedish welfare system. The welfare investigation will be fully completed in the spring of 2017. At the time of writing there is no majority in parliament in support of profit limitation.

Increasing demands for expertiseToday’s well-informed citizens are placing higher demands on services and the need for specialised care is growing. This devel-opment is good for the individual and motivates care providers to work on quality and improvement. A major challenge for society is to provide care by educated staff. For care providers, whether they are public or private, the challenge is to recruit and retain motivated staff members with the right knowledge and specialist expertise.

Municipal challengesPressure on the welfare system is increasing, particularly in care. The increase in mental health issues among young people and a growing and ageing population are two factors driving the increased need. Combined with the ongoing migration crisis and an already

strained economy, municipalities are becoming less and less able to manage care on their own. If society is to cope with welfare services, many different providers will be required, including responsible private providers that are in it for the long haul.

Development of the care segment in SwedenThe care market segment faces different challenges, although the entire care system is characterised by increasing demand. More information is available under the Our care work section.

Individual and family careDemand is increasing steadily due to increasing numbers of people in need of care at the same time as there is an increasing need for more complex care and specialist skills, for example to care for people with psychosocial and neuropsychiatric problems. In 2016, Humana also worked actively with unaccompanied refugee chil-dren. This entailed an expansion of the range of services. Humana is the market leader in the individual and family segment and the company expects to see continued growth.

Care for people with disabilitiesSince LSS was established in 1994, the number of private providers has increased and the municipally run proportion has dropped. Humana is the largest provider of personal assistance in a highly fragmented market with relatively stable demand.

Over the last few years the number of individuals in Sweden who are entitled to personal assistance has remained unchanged, while the number of assistance hours per individual has increased. Since the end of 2015, the total number of assistance hours as determined by Försäkringskassan began to decrease and has steadily decreased since. As a result of a relatively small increase in the assistance allowance, while regulatory requirements are increasing, the market should remain challenging for some smaller providers. This will most likely result in increased consolidation within the sector.

The number of residences with special services under LSS that are privately run has remained relatively constant between 2011 and 2015. It is estimated that the proportion that are privately run will increase as a result of municipalities not having the capacity to han-dle the increased demand and need for specialisation themselves.

Elderly careOur assessment is that the need for elderly care is increasing as a result of an increasing number of elderly people in the population, which will result in demand exceeding municipal resources. Munic-ipalities are increasingly implementing the freedom of choice sys-tem, which is expected to boost market share for private providers.

In recent years, the number of elderly housing places has de-clined, which has been offset by an increase in home care services. This means that customers or users live at home well into old age

Humana has shown to be highly capable of managing external changes, consolidation and changing market conditions over time. Ongoing political discussions about welfare issues have led to some concern in the industry, while the overall market has shown continued growth during the year. The use of private providers by municipalities and county councils continues to increase.



The market for care and healthcare

and therefore have an increased need for care services in their homes. An increasingly aware population also places higher de-mands on the quality of service, which creates challenges for home care services.

Private providers mainly operate elderly housing units under outsourcing contracts, but housing under own management is becoming more common. Humana participates in tenders where the focus is on quality, but mainly invests in housing under its own management, which allows for long-term investments in the quality and competences of our employees. In 2016, Humana opened its first elderly housing unit under our own management. The construction of two elderly housing residences under our own management in Växjö and Österåker is ongoing and they will open in 2017. Our overall assessment is that demand for elderly care will continue to increase.

Other NordicsIn Norway and Finland, Humana is the second largest provider of individual and family care. Our ambition is to further develop the platform that we established during the year in the Finnish care market while expanding Norwegian operations.

Market development in NorwaySimilar to the Swedish care market, the Norwegian market is frag-mented, with both large and small companies as well as different modes of operation. As in Sweden, the need for more complex care and healthcare is increasing. One difference between the countries is that decisions about individual care are more often taken central-ly in Norway, the market thus having a higher degree of government regulation. In addition there is a higher prevalence of family homes

and the market for personal assistance is relatively undeveloped. In recent years, however, ‘Fritt brukervalg’ (freedom of choice) is

being introduced to an increasing extent, which means that the con-ditions for private providers in areas such as personal assistance and addiction treatment have improved, so these segments are potential growth areas. In conclusion, Humana believes that the conditions for sustained growth in Norway are good.

Market development in FinlandSweden and Finland are the countries that resemble each other the most in terms of similar requirements regarding procurement and incentives for freedom of choice. Finland also faces similar challeng-es as Sweden: an ageing population, increased demand for complex care and healthcare, and scarce public resources.

The political discussions, however, differ significantly from those in Sweden. While Swedish politicians discuss profit limitations, Finland is planning the biggest social reform ever – the SOTE reform. The reform aims to expand care and healthcare and increase citizens’ freedom of choice. The reform could mean that social services, care and healthcare will be removed from the municipalities and that a regional division in provinces will be introduced. It amasses many of the welfare system’s core tasks, and the reform has strong political support.

The reform will also introduce a national system of choice that requires a greater number of private providers in the Finnish welfare system. The ambition is that services today provided by local public au-thorities will be converted into public corporations competing on equal terms, thereby increasing quality and productivity. Private companies are therefore seen as key components to coping with the future national economy. Overall, Humana has a positive view on the development and growth prospects for the Finnish operations.

If society is to cope with welfare services, many different providers will be required, including responsi-ble private providers that are in it for the long haul.

95%of Humana’s operations are under our own management


Our distinctive culture of quality improves the care industryOur work to ensure quality is a top priority in all business areas and at all levels within the organisation. It covers everything from the responsibility employees take in their daily tasks to the strategic initiatives Humana takes as a care company when it comes to management systems, systematic monitoring and internal control. Our hope and ambition is that our quality assurance work will help to create an even better Humana, but will also improve the entire care industry.

As care and healthcare has moved towards increased specialisation and freedom of choice, quality issues have become increasingly important. We think that this is a positive development. It is about seeing the individual’s needs and working every day to improve peo-ple’s lives. We work in a targeted and systematic manner to improve quality so that we can meet the expectations set by our customers, clients, users, family members, buyers and not least, ourselves.

Humana’s employees are the foundation of our business, so that’s why we give them the best chance to do a good job by providing a positive work environment and continuous professional development. Humana has many highly educated employees, particularly with regards to psychotherapeutic skills. Our employees include psychol-ogists, psychotherapists, doctors, nurses, assistant nurses, personal assistants and treatment assistants. A large proportion of them have many years of practical experience in care and healthcare.

We believe that care and healthcare should be based on scientific evidence. Therefore Humana works as much as possible using evi-dence-based practices. Our specialists gather support from national guidelines, research, quality indexes and development work. In addition, we promote the development of evidence-based practices and are involved in several research projects.

Quality for sustainable growthThe demand for our services confirms Humana's raison d’être and enables sustainable growth. By focusing on quality Humana builds a long-term platform for expansion. Humana's daily care encom-passes our four cornerstones for quality: individual solutions, a high level of expertise, our core values and evidence-based methods. It is important for us as a leading provider to set an example in the Nor-dic care market and we believe that the most important evidence of good quality is when customers, clients and buyers are so pleased that they recommend Humana to others. Just over half of our 9,000 customers are from the freedom of choice markets where they have actively chosen Humana as their provider.

Humana has had a Group-wide framework and organisation for quality assurance initiatives since 2015. During the year we continued to develop new processes and practices. The central quality assurance organisation ensures that each business area has the necessary tools and systems, but also that professional develop-ment and knowledge transfer between divisions works well. You can find more information about our quality assurance initiatives in the brochure titled ‘Quality Report 2016’ on our website. Systematic improvements We work systematically with the improvement process to ensure continuous development in line with Humana’s growth. According to our core values, each employee has a responsibility to perform their duties in the best possible way and we actively encourage all employ-

ees to report deviations. This is one of the most important require-ments if Humana is to become an even better care provider. We work continuously to develop the Group's quality management system so that it helps employees to perform care services of the highest quality.

It is important to follow objective quality indicators that are easy to measure, evaluate and compare over time and between units. Unfortunately nationally agreed quality indicators are lacking today in large parts of the care sector. In elderly care some progress has been made. A few quality indicators are reported, for example in the 2016 open benchmark reports and elderly care guides, which are produced in co-operation between the National Board of Health and Welfare and the Swedish Association of Local Authorities and Regions (SKL). An in-depth analysis of open benchmark reports published at the end of 2016 showed that Humana's elderly housing units generally received very high ratings, especially for security, reception and the opportunity of staff contact. Ahead of the 2017 report, extra attention will be paid to areas where Humana's elderly care can improve, such as information to our customers about how they can make comments and lodge complaints. We see this as an important component of our systematic quality assurance efforts and want to gather customer feedback, complaints and suggestions to a greater extent.



Quality monitoringIndividual & Family:Every month, Individual and Family compiles results from the different units that are evaluated in relation to targets. Data is col-lected on aspects such as the number of deviations and follow-ups, number of completed treatments, number of dynamic care touch-points and breakdowns, and how satisfied a placing municipality is. Dynamic Care is Humana’s model for a combination of different measures and forms of care that is dynamically adjusted according to individual needs.

Personal Assistance:Personal Assistance compiles and submits monthly reports includ-ing the proportion of assistants who have undergone introductory training, how many customers have a current implementation plan and the number of complaints received and resolved. A survey is carried out four times a year (nationally standardised questions conducted by external partners) on how satisfied customers are with their assistance (customer satisfaction index). The results are gathered together once a year for an overall result.

Elderly Care:Every month, Elderly Care compiles and reports data on deviations and follow-ups, the number of Lex Sarah and Lex Maria cases, and results from the quality register. Humana’s elderly care shows excel-lent results in the national user survey conducted each year by the National Board of Health and Welfare for people living in elderly housing or receiving home care service.

Other Nordics:Since 2015, Humana has developed its own surveys of the Norwe-gian operations. This is because there are no national user surveys for operations for children and youths in Norway. Children and youths who reside in an institution or family home responded to how they perceive their situation. The information is used to develop care for the individual as well as develop the business as a whole.

Within Arjessa in Finland, operational efficiency is monitored in two ways, partly based on clients' experiences and partly through a fact-based performance measurement. In 2016 Arjessa started using a new method of measuring the client’s experience; they can now answer the questions directly on their phone or computer. Munici-palities are also asked about how they experience the placement. The second part consists of a measurement of efficiency in relation to the client and the ‘benefit’ that society gets from the client's placement.

Quality assurance

Humana’s quality work• Engagement in core value work• Company-wide quality assurance group • Accountability throughout the organisation• Employees with a high skill level • The desire to always work in an evidence-based manner• Systematic measurements of subjective and objective quality• Systems and procedures in place for deviations• Active participation in research and development projects

Laws, guidelines and rules There are laws, national guidelines and other regulations whose purpose are to ensure that all care providers comply with quality requirements. Part of Humana’s systematic quality assurance work is reporting, investigating and remedying deviations as well as reporting social services misconduct according to Lex Sarah and health care misconduct according to Lex Maria. Humana is regularly evaluated by municipal employers and the Health and Social Care Inspectorate (IVO), which grants permits for Humana’s operations.

77Results, satisfied customer index Personal Assistance

3210

0.6 1.2 1.80.6 0.6 1.2 1.2

3.0 3.0

13.2

16.3

1.8 2.3

5.8

4 5 6 7 8 9 100

10

20

30

40

50

27.5

33.7

46.7

39.5

Quality measurement, Individual & Family, Finland

Customers: Were your wishes and opinions considered? Municipalities: Did the service have a positive impact on the customer’s situation?

(Scale: 0 ‘not at all’ – 10 ‘very much so’)

0 20 40 60 80 100%

Nationally

Blåvingevägen 33

Ekhaga

Ekbacken Hus H

Eskilsgården

Hedegården

Kavlagården

Pilegården

Riddarstensgården

Sannagården

Vidhöge

2016

Humana in total

TotalnöjdhetAndel positiva svar

HUMANA

2015

Satisfaction in Elderly Care, Sweden (percentage of positive answers)

0

1

2

3

4

5

2016

2015

NKI efter avslutad placering divison BoU

3,13 3,19

3,59 3,60

4,003,83

4,50 4,58

3,44

3,073,22 3,20

3,66 3,78

Satisfaction in Division Child & Youth, Individual & Family, Sweden.

A Was the objective of the placement achieved? B Do you consider that initiatives were adapted to the client’s needs? C Did cooperation with the staff of the unit work? D Did you find that the unit was available when you needed to contact them? E Did the unit provide the information and documentation you needed? F Has the placement met your expectations? G Would you be willing to recommend us?

A B C D E F GScale from 1–5 with 1 being ‘No, absolutely not’, 5 being ‘Yes absolutely’, and 3 being ‘Neither yes nor no’.

%


We attract skilful and motivated individuals who want to develop their competenceOur employees' commitment and their willingness to improve are Humana’s main assets. Our corporate culture is also characterised by a focus on entrepreneurship and a decentralised organisation where employees are given mandate and encouraged to take responsibility. Our core values and corporate culture help us to achieve our vision: Everyone is entitled to a good life.

Through its many years of experience, Humana has built up a professional and efficient organisation that supports the business, focuses on quality and helps each employee continue to learn. The strong desire to constantly evolve, both as individuals and as an organisation, is the key to reaching our goals.

The ongoing work on our core values acts as the basis for all of Humana’s operations, both in strategic planning and in our daily contact with clients, customers and buyers. At Humana, each employee has a responsibility to perform their duties in the best possible way. As an employer, we have a responsibility to create the best conditions for continuous learning and professional develop-ment. It is a responsibility that we take very seriously. In several areas, Humana has been a pioneer in the industry, for example, in customised training for personal assistants, web training and the recruitment of specialists in a range of areas of expertise.

Sought after specialist skillsHumana has over 450 specialists working actively with medical and psychosocial care and treatment. Our employees are often sought after as consultants or lecturers in municipal organisations and therefore also contribute to the development of the care sector. Within individual and family care in particular, Humana has a long tradition of contributing knowledge externally. For example, our specialists contribute by teaching and implementing Humana's own outpatient method IHF (intensive home-based family therapy) and the proven method TFCO (Treatment Foster Care Oregon) to external parties. In addition, since 2014 Humana holds exclusive rights to implement, train and mentor within the parental support programme Connect, a programme that many of the country’s municipalites use.

Employee survey Humana uses the words commitment, happiness and responsibility to define its values, and strives to comply with the meaning of these words in all operations. In the employee survey, we monitor things such as how well our employees know and can relate to these words. During the year our first Group-wide employee survey was conducted. The response rate was 76 percent, which gives a good basis for drawing conclusions about the attitudes of Humana’s employees. The employee satisfaction index is 74 for the Group as a whole on a 100-point scale, which is a very good result and, of course, the areas for improvement will be followed up. This is done by having all line managers in the organisation present action plans based on the Group’s results.

An attractive employer and a driving force for equality and diversity Humana offers educational opportunities, skills development, leader-ship and mentoring programmes. The initiatives, together with our core values and corporate culture, mean that Humana is well positioned to meet the increasing demands for professionalism and competence in the future. Each year we receive more than 60,000 job applications, which demonstrates that Humana not only attracts specialists with extensive training, but also many young people and those with an international background who, thanks to Humana, can enter the labour market. One third of our current employees were born outside the Nordic region. Humana serves as a type of integration driver, which we are proud of.

According to estimates from the SKL, the care and healthcare in-dustry will need to recruit 230,000 people over the next eight years. To meet this challenge, Humana has developed action programmes to further position ourselves as an attractive employer on the labour market. The recruitment issue is high on the agenda of Group man-agement and further initiatives are being developed.

Humana has built up a large needs-oriented and sought-after specialist expertise. • 20 medical doctors (specialised in psychiatry, child and adolescent

psychiatry, forensic psychiatry and general medicine)

• 100 registered nurses (including many who are specialised in psychiatry)

• 40 licensed psychologists and psychotherapists

• 300 social workers, of whom many have basic psychotherapy training

• 20 lawyers with substantial experience with The Act Concerning Support and Service for Persons with Certain Functional Impairments

Humana’s core values Our core values constitute Humana's ethical and moral platform as well as guiding us daily in all of our operations. The work with core values began in 2011 and is an ongoing dialogue that is well anchored in the National Board of Health and Welfare’s national guidelines on ethics in elderly care, as well as in Humana’s operations where the employ-ees’ own experiences are systematically taken into account to create a shared learning experience.



Employees

Encouraging individual learning and knowledge sharing is high-ly valued at Humana and our employees are offered a wide range of internal courses.

After many years of experience in edu-cation and research in several areas, we gathered together our expertise under one umbrella during the year: Humana Academy. By taking this integrated ap-proach, we wanted to create a structured process so that employees could both contribute to and undergo training and take part in development projects. Huma-

na Academy helps to secure the supply of expertise and provide qualified training both internally and externally. Humana Academy spans all of our operations, and includes education and research.

The Humana Academy brand (previous-ly Humana Akademin) has been around since 2007, originating from Personal Assistance. Today Humana Academy offers just over 100 different courses that cover topics such as introductory and basic training, workplace health and safety, legislation, leadership, core values, customer interaction, quality, disabilities, methodology and treatment,

IT systems and finance. More than half of the programmes are conducted under our own management, and about 40 percent of the courses are web-based. In 2016, 8,000 courses were taken un-der Humana Academy’s management. A new learning portal will be launched in 2017 that provides Humana Acade-my with new opportunities to manage a great variety of internal and external needs. This means that in the future Hu-mana will be able to provide additional support to employees, be an even better employer and continue to be a leading promoter of increased knowledge and skills in the industry.

Humana Academy creates engagement

8,000web-based courses completed in 2016

We offer just over 100 different courses.


SvenResident at Ekhaga elderly care home

operating revenuein Individual & Family

in 2016

SEK 2,214 Moperating revenue

in Personal Assistancein 2016

SEK 2,645 M


Our care work Humana’s operations include all aspects of care. We are the market leader in Sweden in individual and family care and personal assistance, and we have made strategic investments during the year to strengthen our position in elderly care. Humana also has a leading position in Norway and Finland, where our care work is mainly focused on individual and family care and also personal assistance in Norway.

operating revenuein Other Nordics

in 2016

SEK 924 Moperating revenue

in Elderly Carein 2016

SEK 580 Mof Humana’s total revenue in 2016 came from operations

under Humana’s own management

95%


It’s amazing how much they have helped me.

Maryem

When you meet Maryem it’s hard to believe that she has a background filled with tough relationships, self-harm and suicide attempts. She laughs easily and feels like a secure person.

“Without the support of the staff at DG I would never have been like this,” she says and smiles.

DG is Dalilagården, one of Humana’s homes for young girls. Like so many other residential care homes (HVB), the building is a house, and the idea is that it should be a home-like environment.

Young people at Dalilagården are placed there for various reasons and on various legal grounds, and the experi-ence of being placed is very different for them. At first it was a shock for Maryem.

Individual & FamilyHumana provides assessments, residential care homes, temporary and regular family homes, special housing, outpatient care and assisted living homes for children, youths, adults and the elderly along with residences with special services under LSS. We have more than 40 years of experience in psychosocial change management and social psychiatry, and more than 25 years of experience in receiving unaccompanied refugee children and youths. Humana is the market leader in individual and family care in Sweden.

The market has largely been privatised since the 1950s. Through the psychiatric reform and as society faces increasing mental illness, the need for further specialisation and a continued influx of unaccom-panied refugee children, private providers have become a greater and more important part of the market.

Individual & Family business areaHumana has framework agreements with about 240 municipalities in Sweden. The operations, which are established throughout the coun-try, receive children, youths and adults who need assistance in their daily lives and who often cannot continue to live in their own homes. Many clients suffer from complex psychosocial and neuropsychiatric problems that require long-term interventions. Services include assess-ment, care and treatment, housing with support measures, halfway houses, family homes, outpatient care and aftercare. Our capital- and labour-intensive operations are based on the individual’s needs, and almost all operations are run under our own management.

Humana has 690 places for children and youths spread across 80 residential units, and 600 places for adults across 42 units. We partner with over 800 family homes throughout Sweden and pro-vide daily assistance for around 800 children and youths in family homes and outpatient care.

Children and youthsFor children and adolescents, in addition to residential care units and assisted living homes that receive clients with psychosocial and neuro-

psychiatric problems, Humana also offers specialised units. Humana has specialist expertise in areas such as abuse issues and self-harm, and units for unaccompanied refugee children. Humana has been working with unaccompanied minors since 1992 and is one of the most experienced private providers in the market with particular expertise in trauma. Due to the increasing number of unaccompanied young people in Sweden, many businesses have moved away from providing care and accommodation to pure treatment activities because these young people often are in need of interventions due to their traumatic experiences.

Family homes and outpatient careHumana provides temporary and regular family homes and oper-ates outpatient care throughout Sweden. Operations are geographi-cally dispersed to satisfy the need for proximity to the families that Humana supports.

AdultsFor adult clients in need of interventions in social psychiatry, neuro-psychiatry, comorbidity, forensic psychiatry and geriatric psychiatry, Humana offers short-term and special housing as well as residential care homes.

LSS operationsHumana runs LSS operations in the form of service housing and residences with special services, daily activities, preschools, schools and short-term operations throughout Sweden. Operations are run



SEK M %

0

700

1,400

2,100

20162015 20140

4

8

12

“There were so many rules, I felt terri-ble, I didn’t know anyone and was shy. It was scary.”

The turnaround came after a long peri-od of self-harm. It affected everyone in the house negatively and staff wondered if she was ready for open housing or if perhaps they should think about other options for her own good. Dalilagården is an open residence and doesn’t pro-vide the same opportunities to watch over residents or confiscate things such as razor blades or enter the residents’ rooms as state institutions do. One of the treatment assistants took her out for a drive and she was convinced that they were taking her to Youth Psychiatric Care (BUP) to leave her with them.

“Instead he stopped at a Thai restau-rant. He bought food and then we sat on a hill and just talked. For a long time. That was when I understood that they genuinely care.”

It's a feeling she comes back to time and time again, the joy of feeling safe. They picked her up when it was necessary and helped her to set boundaries. Even when she didn’t understand she could see in retrospect that the staff had been right. Like with her boyfriend, a really good relationship in contrast to her previous ones.

“I didn’t understand why the staff were so strict about how little I was allowed to see him at first, but now of course I do,

it wouldn’t have been a good idea. If we hadn't taken things slowly we probably wouldn’t still be together today.”

Today she feels better than great, as she says herself. She lives in a support-ed flat and gets help from the coaches at Tiangruppen, and attends upper secondary school, something she would never have thought possible. What she wants to do in the future goes without saying.

“I want to be a treatment assistant, that’s my dream job. I'm going to have to work and study hard, but it’s going to happen!”

Individual & Family

Operating revenue and operating margin by year

2016 2015

Operating revenue, SEK M 2,214 1,902

Revenue growth, % 16 20

Organic growth, % 4 2

Share of Humana’s revenue, % 35 34

Operating profit, SEK M 211 221


Average number of employees, full-time equivalents

2,528 2,115 Operating revenue Operating margin, %

Percentage of Group revenues 2016

under Humana’s own management and under contract on behalf of municipalities. Actions are individually adapted for children, youths and adults with some form of disability.

Development in 2016Revenue grew 16 percent in 2016 to SEK 2,214 million (1,902). Operating profit was SEK 211 million (221).

To strengthen opportunities for future quality development and growth, special services housing operations under LSS that were previously in the Elderly Care business area were placed in the Individual & Family business area in the second half of the year. In many municipalities, there is a shortage of residences with special services under LSS, which creates future opportunities for growth.

Since 2011, 28 companies have been acquired within the business area including four in 2016. For example, Fuga Omsorg conducts daily activities under LSS and will help us continue to grow in this area. The business area is also growing organically and in 2016 five new units were opened, of which two of them are residences with special services under LSS run under our own management, as well as increased capacity in existing units in all areas of operation.

During the year, we noted that needs continued to be high in mental health care and skilled care and healthcare for unaccompa-nied refugee children. During the second half of the year, we noticed a decrease in demand for family homes and transit accommodation

for unaccompanied minors. Municipalities’ focus on migration in the beginning of the year reduced the demand for placements for adults in need of housing under the Social Services Act (social psychiatry) later in the year. In the second half of the year, Humana worked actively to adapt the content of the operations in Individual & Family affected by the changed market conditions.

OutlookMental illness in society is expected to increase, especially in ado-lescents and young adults, leading to an even larger need for care and treatment efforts. This is especially true for specialised activities for children, youths and adults with various psychosocial prob-lems. Humana’s continuing work with dynamic care will become increasingly valuable as the business area grows. Dynamic Care is Humana’s designation for a combination of different measures and forms of care and treatment that are dynamically adjusted accord-ing to the customer’s needs.

Individual & Family expects to see synergy effects in the future through cooperation with other business areas within the Group and with individual and family units in Humana's operations in Norway and Finland. Within the business area, we continue to focus on improvements to our operations. We are also working actively to secure future employment needs.

35%

Facts


SEK M %

0

900

1,800

2,700

2016201520140

3

6

9

Personal AssistanceWith around 1,900 customers in 241 municipalities, Humana is the leading provider in the market for per-sonal assistance – a market that is currently undergoing significant changes. LSS, which was a milestone when it was adopted by parliament more than 20 years ago, is being challenged today by a government that wants to reduce spending at any cost. Despite the tougher market conditions, Humana did well in 2016.

Thanks to the assistance allowance, many more people are able to live independently. Personal assistance is considered a socioeconom-ically successful reform in which the majority of costs go directly back to the community as taxes.

The market for personal assistance has changed significantly since the introduction of the assistance allowance. From being operated entirely by the municipality when it was introduced, today 7 out of 10 choose private companies or cooperatives. At the end of 2016 there were almost 16,000 people receiving assistance from Försäkringskas-san. In recent years, public policy and regulatory decisions have affected the industry, its customers and providers negatively. Humana predicts structural changes and market consolidation in the years to come.

Personal Assistance business areaThe Personal Assistance business area employs around 9,000 people. Humana has a nationwide organisation, with five regional offices and 18 smaller offices. In 2016, Humana hired several thousand personal assistants in Sweden, of which many are young and first- or second-generation Swedes. In our experience, the assistance profes-sion provides important entry-level jobs for the labour market.

Work as a personal assistant is normally based in the customer’s home. Customers have a variety of disabilities and diagnoses, repre-sent all ages and can be found throughout the country. At Humana it is always the customer or close relatives who choose the assistants. For each customer, an individual plan for how the assistance will be carried out is created. Each customer has a team of assistants, where one of the assistants is often the supervisor. One or more in the group of assistants are often relatives.

The customer also receives the support of a personal team. This team is headed by a regular customer and assistant manager who, when not available, is backed up by one or two colleagues with good insight into the customer’s specific situation. The customer also has access to a lawyer when necessary. Additionally, central support is available for the customer and the assistants.

In the area of personal assistance, customer satisfaction in Humana remains high, despite the changes caused by policy and regulatory decisions. The overall results of Humana’s customer satisfaction survey (satisfied customer index) indicate the same high levels as in previous years. A large percentage of customers report that they would consider recommending Humana to their friends.

Development in 2016Revenue in the business area decreased by 1.6 percent in 2016 to SEK 2,645 million (2,689). Operating profit amounted to SEK 151 million (182), with an equivalent of an operating margin of 5.7 percent (6.8). Operating profit was negatively affected by increased costs for social security costs for young people, a substantially lower upward adjustment of the state reimbursement level than the con-tractual wage increases and fewer performed assistance hours.

The state reimbursement level for 2017 is SEK 291 per hour, an increase of SEK 3 (1.0 percent) compared to a previously communi-cated 2016-2018 annual increase of 1.4 percent.

The total number of assistance hours granted by Försäkringskas-san started to decrease at the end of 2015 and since then has steadily decreased due to fewer people being eligible for assistance. In 2016 Humana also noted significantly more stringent assessments from both Försäkringskassan and municipalities regarding personal assis-tance. This has meant that fewer people are granted assistance and that many who already have assistance get fewer assistance hours, leading to a shrinking assistance market.

An ongoing efficiency programme at Humana has helped to large-ly offset the impact of increased social security fees for young people and the low upward adjustment of the state reimbursement amount.

OutlookThe increase in the State's gross costs for personal assistance has prompted the government to issue tough directives to curb the development. Unfortunately, both those entitled to assistance and serious providers have been hit by the government's new direction.

In addition to the reduced growth rate of the assistance allow-ance, Försäkringskassan has introduced payment in arrears from October 2016, which has particularly affected the industry's smaller providers. At the same time as the transition to payment in arrears with its obvious effect on liquidity, further cost-driven administra-tive requirements regarding documentation and reporting were also introduced. While the changing market conditions create signifi-cant challenges, consolidation opportunities are opening up.

To meet the industry's major challenges Humana’s focus remains on quality in the operation of assistance assignments and continued streamlining of administrative work, for example through advanced digital solutions.

Operating revenue and operating margin by year 2016 2015

Operating revenue, SEK M 2,645 2,689

Revenue growth, % -2 3

Organic growth, % -2 3


Operating profit, SEK M 151 182





Facts

41%



Tim Palm is a DJ and is studying to be an engineer at KTH. His dream is to be able to support himself with his music, but he’s a realist and wants an education to fall back on. He has AMC which means that he has very limited mobility in his limbs, but he still plays the drums. Any-thing is possible if you choose to see the possibilities.

Tim's bedroom also serves as a studio. He moves quickly and expertly between keyboards, his computer and his tablets. It started with singing a long time ago, before he went on to play the guitar. With his feet.

“I managed the riff to Smoke on the Water, but then I gave up and submit-ted an application to start playing the drums instead,” he says, laughing.

Nothing is impossible, that’s quite clear. Sometimes he gets angry when he realises that there is something he’s not going to be able to do, but this rarely lasts long. Instead, he thinks about the solution, because of course there must be one? He’s surrounded by people with the same attitude. His father is an engineer and designed parts of the stu-dio. The drum teacher didn’t react when they met either.

“He was cool and said that we’d find a way.” It turned out that he develops drum kits so we’ve experimented a lot.

Continuing his studies felt natural, and his interest in technology led him to the Royal Institute of Technology (KTH) in Stockholm. After completing the pro-gramme, he will be both an engineer and a teacher. The commute from Enköping goes smoothly with the train and metro.

For Tim, daily life would be impossible without the assistants who have become a natural part of his life.

“They are natural to me in the same way that others have other things that are natural in their life, it’s no stranger than that.”

In his spare time, he plays music and some video games. And meets friends of course.

“Disabled or not, it makes no difference to me. I hang out with people with the same interests as me and disabilities are not what I’m interested in,” he says, and laughs again.

Personal Assistance

Tim

Disabilities are not what I'm interested in.


SEK M %

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-8

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0

Elderly careHumana’s Elderly Care business area provides services in the form of elderly housing units and home care services. More and more, business is being conducted under Humana’s own manage-ment. Whether the business is operated under Humana’s own management or under contract, Humana has a clear focus on quality and we participate in tender procurement in those that allow for good staff levels and good care for our elderly people.

With the growing population and people reaching higher ages, the increased needs of Swedish elderly care and the role of private providers in this market are all the more being brought to attention. In the early 1990s, elderly care was run almost exclusively by the public sector. Privatisation in the elderly care stands at approximately 20 percent today.

Elderly Care business areaHumana has worked with elderly care since 2010 through the acquisition of Avesina’s elderly care business. Humana’s current of-fering in the business area includes elderly housing units and home care service. The previous activities within residences with special services under LSS have been reorganised within the Group during the year to be included in the Individual & Family business area.

Humana operates 11 elderly housing units in the business area. Ten elderly housing units and two day care operations are operated under contract in seven different municipalities. Another housing unit under Humana’s own management opened during the spring of 2016 in Gävle. Humana operates home care activities under LOV (the Act on System of Choice in the Public Sector) in 13 municipal-ities. Under the LOV Act, an individual who has received a decision from the municipality can freely choose providers.

Devlopment in 2016Revenue reduced 1 percent in 2016 to SEK 580 million (585). Op-erating loss was SEK -6 million (-58).

During the spring the first elderly housing unit under our own management opened in Gävle. The new housing unit has an inno-

vative contemporary design and décor with a focus on comfort and durability, good technical solutions and high quality of operations. This has already resulted in high demand for places. The construc-tion of a further two elderly housing units under our own manage-ment continued during the year and our residences in Växjö and Österåker will open in 2017.

One challenge in the home care service segment has been to meet the tough economic conditions that prevail. Humana welcomes orderliness and clear guidelines, but increasing demands for micro-management and deteriorating financial conditions cause concern and difficulties in daily operations.

On 1 March 2016, Humana transferred its home care businesses in Solna, Sollentuna and central Stockholm to Attendo. The take-over in the City of Stockholm includes home care operations in the districts of Kungsholmen, Norrmalm and Östermalm.

During the year the Elderly Care business area in partnership with other units at Humana have engaged in an integration project to bring more newly arrived migrants to work. We know from experience that jobs in care can serve as a critical entry-level job into the labour market.

OutlookHumana predicts continued strong and increasing demand for services from private care providers in elderly care. From Humana's established position as a long-term quality provider, our focus will be on activities that help us grow with facilities under our own management and on strengthening profitability.


2016 2015

Operating revenue, SEK M 580 585

Revenue growth, % -1 -11

Organic growth, % -1 -11


Operating profit, SEK M -6 -58

Operating margin, % -1.1 -9.8



Percentage of Group revenues 2016 Facts

9%



Elderly Care

Being a waitress at a big party was more fun than you could imagine!

Ingrid is now 95 and has children, grandchildren and great-grandchildren. Those who live furthest away have moved all the way to Australia. When she was young she herself moved from Alfta in Hälsingland to Gävle, where she met her husband. “It was exciting, even if there wasn't much going on in Gävle at the time. At seven o'clock the streets were dead, except on weekends when we could go dancing until eleven.”

Ingrid and her sister got married at the same time. Her sister was hoping that no one would notice her pregnancy if Ingrid got married at the same time as her. Her sister then moved back to Alfta while Ingrid stayed faithful to Gävle. Today in her old age she sometimes thinks that she could have gone even further away. “Sometimes I lie and think about what my life could have been like. I could have moved to Skåne. Or Stockholm. There were so many possibilities.” She describes herself as being very dutiful. She did what was expected and wishes that she sometimes felt a little freer. At the same time she’s very grate-ful for the way her life turned out.

The only disappointment was that her husband died too soon, when he was 70, after a life filled with far too many cigarettes. She has no doubts about her favourite time in life.

“It was when the children were small, they were incredibly good. I love chil-dren,” she says emphatically.

Another highlight was when her older sister worked as a cook and she went with her as a waitress. She worked at lots of small eating places, but the most fun was the great farmers’ party with more than a hundred guests. “Huge platters that we had to carry around, it was fun, believe me.” The best thing now is seeing the family. Her children come the most often and the small great-grandchildren who live in Australia come to see her more rare-ly. Living in a brand new elderly housing residence is just fine. “I enjoy my own company and here I can choose when I want to be alone or socialise with others. That’s great.”

Ingrid Östlund is sure. Getting old is better today than it used to be.

“My aunt lived above us and almost never left home when she was old. I enjoy my life at Södra Centralgatan. And my children often come to visit me.”

Ingrid


Other NordicsHumana’s Other Nordics business area is already an integral part of the Group’s business and we see good opportunities to continue to develop the operations. The political climate for private care companies varies in the Nordic region and it is much more welcoming in Finland and certain parts of Norway than it currently is in Sweden.

During the year Humana completed two strategically important acquisitions in the Nordic region. Through the acquisition of the KOA Group in Norway and Arjessa in Finland Humana has taken the position of the largest provider of individual and family care in the Nordic region. Both companies were well run and our newly acquired employees' commitment, happiness and pride in their activities have contributed to the ongoing successful integration.

NorwayThe total care market in Norway amounts to SEK 132 billion.

In Norway, Humana operates individual and family care for chil-dren and youths as well as providing special services housing and personal assistance. During the year, we have seen improvements in Humana's already existing Norwegian operations, but the relatively new acquisitions have also performed well. Today, Humana is the second largest provider of services in individual and family care in Norway.

The acquisition in May 2016 of KOA Group (Kvæfjord Opplevelse og Avlastning AS) expanded Humana's former care services in Norway to include psychosocial interventions for adults, including qualified ad-diction treatment and psychiatry, while it strengthened the company’s geographical presence. KOA is one of the largest providers of individual and family care and special services housing in Norway.

Huge growth potentialMarket conditions in Norway are positive. Like the Swedish market, the Norwegian market is also fragmented. One difference between the countries is a higher prevalence of family homes in Norway and a relatively undeveloped market for personal assistance. The total need for more complex care and healthcare is therefore increasing.

Increased focus on adults combined with growth in personal assistanceHumana in Norway offers accommodation at residential care homes, in family homes and outpatient care as well as care and healthcare services for children and adults and user’s choice personal assistance (BPA). Humana’s housing operations for children and adolescents, and now also adults, are geared towards individuals with neuropsychological disabilities, substance abuse or criminality issues, and often psychiatric diagnoses.

Outpatient care is primarily aimed at adolescents in their teens with the need for special support in order to cope with school, independent living and to create a network that can help them fend for themselves in everyday life. We also provide support to families with dependent children. Housing operations, operated in accor-dance with the Act on Municipal Health and Care Services (HOT), are mainly for individuals with complex physical and psychological impairment or injuries such as brain damage.

OutlookThe underlying need for care is increasing steadily and Humana intends to participate in the Norwegian care market’s consolidation. The acquisition of Dedicare Assistanse in 2015 was an important acquisition that opens the door for significant opportunities for further expansion in personal assistance. The goal is to utilise the strength of experience and expertise that already exists in the well-established Swedish operations to build an even stronger care offering in Norway.

For most children, home is a safe place. A place for care and love where the adult is present. For some children, the situation may instead be just the opposite.

I saw that it was a home.

Vilde



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Other Nordics

Vilde, 20, had a tough start in life. She had difficult home relationships and the authorities didn’t listen to her about family home placements. Despite this, she laughs often and refuses to see her-self as a victim. When she was 11, her mother died from cancer and she and her sister had to move in with their father instead. It was a turbulent time. “We carried a great sadness with us that we couldn't express, and it led to a lot of trouble.” Eventually the situation became unac-ceptable. Vilde and her sister were at risk of getting into trouble and were quickly placed in a temporary family home. It was the first in a series of family homes

before she was placed in a treatment centre under Humana's management, along with four other young people. She was 14 and suddenly her treatment was what counted the most, not whether the new place felt like a “home“. “There were shoes all over the hallway when I came in and the breakfast stuff was still out. It felt like they had dropped everything to run to school. Everything was so normal. For me, who expected it to be like a prison, it was like coming home.” She stayed at the treatment centre for four years. The years were good, but also a bit difficult. Everyone at the home was in the same situation and had a

great need for attention, which wasn’t always easy for the staff to give enough of.

“There’s probably no one who knows their rights better than children living in a chil-dren’s home,” she says with a laugh. Today, Vilde sees a bright future for herself. After several years in the institution, she felt ready to do something on her own when she turned 18. She moved to Spain and has only recently come back to Norway. Now she is the chairperson of a non-profit organisation for young people. “The best part of my life is right now, it feels meaningful to give something back and it gives meaning to my life at the same time.“


2016 2015

Operating revenue, SEK M 924 416

Revenue growth, % 122 98

Organic growth, % 7 -


Operating profit, SEK M 89 -13

Operating margin, % 9.6 -3.2


920 393 Operating revenue Operating margin, %


Facts

FinlandThe total care market in Finland amounts to SEK 70 billion.

Humana’s acquisition of the leading individual and family care provider Arjessa in May 2016 meant a geographical expansion into Finland and is an important milestone in Humana’s ambition to become the leading care company in the Nordics. Today, Humana is the second largest provider of services in individual and family care for children and youths in Finland. Humana’s focus is on operations under own management in the area of psychiatric and psychosocial treatments for children, youths and families as well as institutional care for children.

During the year, the coordination of Arjessa with Humana's values, care methods and approaches was prioritised. Our newly ac-quired colleagues’ commitment and pride in their operations has been clear and was a positive contribution to the integration process.

Sweden and Finland are the countries that resemble each other the most in terms of care organisation and the alternative provid-ers' share of the market. They also have similar requirements for procurements and incentives for freedom of choice.

Outlook A new social and healthcare reform takes effect in Finland on 1 January 2019. This creates some uncertainty about how the care market will develop as the application and the actual outcome of the reform is unknown. Some consequences of the reform is that the number of public organisations responsible for the execution of social and health services will decrease significantly and the

individual's freedom of choice will increase. The idea is that an individual should be able to choose providers in the public, private or non-profit sectors based on clear quality criteria.

In Finland, the need for more complex care and healthcare is on the rise. Our ambition is to further develop the platform that Hu-mana established in the Finnish care market. In the long term, we want to expand through organic growth but also through further acquisitions that sustainably complement our business.

Development, Other Nordics 2016Humana's growth in Norway was strong in 2016. Revenues in-creased substantially as a result of the acquisitions, but Humana's original Norwegian operations also showed strong organic growth and improved profitability.

The acquisition of Arjessa Oy in Finland has contributed to both overall revenue and profit for the year. Humana has launched a number of organic expansion initiatives in the form of new units, but it has also started to look at ways to establish operations in the family home area in Finland. At the end of 2016 Humana acquired Pienryhmäkoti Puolenhehtaarin Metsä Oy (PPM) with operations in the Uusimaa region in Finland. The acquisition represents an im-portant geographical expansion for Humana as well as a strengthen-ing of psychosocial treatment and care services for young people.

Humana’s revenue in Other Nordics amounted to SEK 924 mil-lion, an increase of 122 percent. Even the operating profit improved significantly. The operating margin was 9.6 percent (-3.2).

15%




Corporate governance37 Chairman’s statement38 Regulatory framework and governance model43 Internal control over financial reporting46 Board of Directors48 Group management

Board of Directors’ report53 Operations, market, aquisitions and disposals54 Consolidated statements of profit and loss and other

comprehensive income55 Operating revenue and operating profit55 Performance by business area57 Consolidated statements of financial position 58 Financial position, cash flow and capital structure59 Consolidated statements of cash flows60 Consolidated statements of changes in equity61 Three-year overview, quarterly overview and key ratios63 Parent Company finanncial statements 67 Employees67 Future, financial targets and fulfilment of target68 The Humana share70 Risk and risk management

Financial statements57 Consolidated statements of profit and loss and other

comprehensive income 58 Consolidated statements of financial position 59 Consolidated statements of cash flows60 Consolidated statements of changes in equity 61 Three-year overview, quarterly overview and

key ratios 63 Parent Company financial statements74 Notes to the financial statements92 Proposed appropriation of profits93 Audit Report96 Financial definitions97 Sector/operational definitions

Contents


Corporate governance The objective of Humana’s corporate governance is to contribute to sustainable and value-creating business through documented processes and effective control. With well-functioning governance, efficient decision-making processes and well-established risk assessment, the conditions for continuing to deliver quality care in the long term are created. Humana endeavours to provide its owners and other stakeholders with a clear and transparent governance model and division of responsibility.

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JUL JUN

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APR

A 45:1 share split was approved at

an extraordinary general meeting

on 15 February 2016

2016 annual general meeting

Q2 Q3

Q1 Q4



The Board held 14 meetings in 2016, six of which were by conference call. Important Board issues processed during the year was the IPO of Humana made in March last year, evaluation and analysis of companies Humana acquired during the year and an evaluation of the Finnish market, which was the basis for the decision to expand into Finland through the acquisition Arjessa Oy.

15 Jan 2016Adoption of policies. Financial reporting as a listed company. Decision on transfer of home care service units to Attendo. Issues concerning IPO.

15 Feb 2016 Q4 Report Financial calendar for 2016. 45:1 share split Evaluation of the Board. Setting up connection to the central securities depository Euroclear.

22 Feb 2016 Adoption of 2015 Annual Report. Preparations for IPO.

6 Mar 2016Annual General Meeting and preparatory decisions for IPO.

9 Mar 2016Adoption of prospectus before IPO.

21 Mar 2016Decision on share based-incentive programme and decision to list Humana at an initial price of SEK 62. Allocation of shares.

29 Mar 2016Discussion on acquisition of KOA Group.

11 Apr 2016Discussion on acquisition of Arjessa.

25 Apr 2016Organic growth projects.

28 Apr 2016Acquisition updates.

18 May 2016Q1 report and decision to acquire Arjessa.

5–6 Sep 2016 Strategy days in Norway. Review of business plans for 2017.

17 Nov 2016Q3 report and review of audit and Board evaluation.

Work of the Board 2016

8 Dec 2016Budget review and report from auditors. Evaluation of CEO.

18 Aug 2016 Humana’s core value work. Q2 report and implemen-tation of change due to new regulation (ESMA) in Humana’s communiation and insider policy.


“Now that Humana is a

Nordic company, we have new

opportunities.”

Chairman’s statementAs we look back on 2016, we can see that this was an intensive and successful year, with continuing growth for our operations, both financially and in terms of quality. During the year, Humana made a successful establishment in Finland and we were able to double our operations in Norway, both through acquisitions and by our own efforts. Humana’s successful launch to trade on Nasdaq Stockholm in the spring brought a strengthening of the Company’s financial resources and has contributed to increased visibility and brand awareness.

In parallel with Humana’s positive business development, the sector is being affected by a highly unfavourable, and largely unjustified, political process. In an arrangement with the Left Party, Sweden’s current government is proposing the introduction of legislation imposing profit limits for private companies in the welfare sector. In the current debate, it should be noted that Humana, which is a leading player in Sweden’s private healthcare sector, is an important partner of the country’s municipalities, and our market share and that of other private companies continues to increase. This means that contractors of our services and the customers and clients who actively choose Humana as their caregiver appreciate our services and the quality we offer.

Humana and other private players are together contributing towards taking social responsibility in order to resolve the increasing care and healthcare needs while making necessary investments and, particular-ly important, ultimately creating more care for taxpayers’ money. We can only see what is going on as pure propaganda and electioneering, which does not address the main challenges of welfare.

Instead, we should work with politicians and principals to develop new strategies and action plans to enhance the attractiveness for young people to study and work in care and healthcare professions. There is a staffing crisis throughout the sector, which will become worse in the next few years unless significant efforts are made to increase the sector’s attractiveness, particularly to public sector employers.

Humana has a strong position in the increasingly intense competi-tion for skilled labour, and we are pleased to confirm that our work on core values, increased training and the Company’s decentralised working model, involving a high level of individual responsibility, have contributed to consistently good results in Humana’s employee survey.

The challenges for 2017 and the next few years largely concern grasping the opportunities offered by an IPO in the form of raising of capital, brand development and recruitment of the employees of the future. Now that Humana is a Nordic company, opportunities for cross-border human resources and business development have already opened up. This strengthens our expertise and competitive-ness and enhances our attractiveness on the market, which is an ad-vantage that we must harness. Market characteristics, challenges and opportunities vary from country to country, which creates signifi-cant scope for Humana to transfer product development, experience and inspiration from one market to another.

2016 has been an exciting and eventful year for all of us at the Company. We feel well prepared to embrace an equally, and perhaps even more, exciting and challenging 2017.

Per BåtelsonChairman of the Board

Chairman’s statement



Regulations and governance model Humana is a Swedish public limited company listed on Nasdaq Stockholm. The Company, corporate ID number 556760-8475, has its registered office and head office in Stockholm. The corporate governance report is part of the Company’s Board of Directors’ Report and is audited by the Company’s auditors.

Humana’s governance is based on Swedish rules and legislation, primarily the Swedish Companies Act, but also the listing agreement with Nasdaq Stockholm. The governance can be divided into exter-nal and internal governance instruments.

External governance instruments External governance instruments form the framework for corpo-rate governance at Humana. The external instruments include the Swedish Companies Act, the Swedish Annual Accounts Act, Nasdaq Stockholm’s Rules for Issuers and the Swedish Corporate Govern-ance Code. Humana applies the Swedish Corporate Governance Code. The Company has deviated from the Code in one point in the 2016 financial year:

Deviation from the Code (Rule 7.3)For companies that do not have a separate internal audit function, the board of directors is to evaluate the need for such a function annually and to explain its decision in its report on internal controls in the company’s corporate governance report.

ExplanationIt is the assessment of Humana’s Board of Directors and Audit Committee that Humana’s internal governance and control functions sufficiently satisfactorily as to ensure good order. The Board bases its assessment on Humana having strengthened its internal control function with the addition of one employee and the Company having further expanded its quality management organisation during the year. In addition, the Company is in the process of implementing a Group-wide quality management system. The system is expected to be implemented during 2017. Internal control is conducted through internal monitoring and self-assessment. The results are reported to the Board. Consequently, the Board has decided not to appoint an internal auditor.

Internal control instruments Internal control instruments include the articles of association adopted by the AGM, internal rules and guidelines such as the Board’s rules of procedure and the CEO’s instructions. Humana has also adopted a set of instructions for financial reporting that are documented in the Company’s financial manual. Humana’s Board has also adopted a number of policies and guidelines that govern the Company’s operations. Alongside the above-mentioned internal doc-umentation, Humana’s work follows a Group-wide vision, a business concept and four well-defined target areas.

1. Shareholders

2. General Meeting

4. Board of Directors

8. Group management

Business areas and central functions

5. Audit Committee 6. Remuneration Committee

Governance modelHumana’s shareholders ultimately decide on the Group’s governance by appointing the Company’s Board at the General Meeting. The Board, in turn, is responsible for ensuring that Humana’s corporate governance complies with laws and other external and internal governance instruments.

3. Nomination Committee 7. External auditor


1. ShareholdersHumana’s shares were admitted to trading on Nasdaq Stockholm on 22 March 2016. The number of shares outstanding was 53,140,064. All shares carry the same rights to the Company’s earnings and capital. The Company’s registered share capital on 31 December amounted to SEK 1,180,879. There is no provision in Humana AB’s articles of association restricting the transfer of shares. There are also no outstanding mandates from the Board to issue new shares.

Humana had 4,190 shareholders at the end of the year. The ten largest shareholders registered directly or as an owner group with Euroclear Sweden accounted for 78 percent of the votes and shares in the Company. Swedish investors owned 44 percent of the shares. The largest shareholder as at 31 December was Argan Capital, through the company Air Syndication S.C.A., with 44,4 percent of the votes. More information about Humana’s shares and sharehold-ers can be found in the section entitled The Humana share on pages 68-69.

2. General MeetingThe General Meeting is Humana’s highest decision-making body and all shareholders are entitled to attend. By exercising their voting rights, Humana’s shareholders can participate and decide on a num-ber of important issues such as the election of directors and auditors, adoption of the financial statements, discharge from liability for the President and CEO and the Board, and decide of the proposed appropriation of the Company’s profit. All shareholders listed in the share register who have provided timely notification of their intention to attend according to the regulations contained in the notice convening the meeting are entitled to participate in Humana’s meeting and vote their shares. Shareholders may also be represented by proxy at the meeting.

Humana held an extraordinary general meeting on 15 February 2016. All 89 shareholders were represented at the meeting.

Resolutions passed at the 2016 EGM included: • a 45:1 share split• adoption of instructions for the Nomination Committee • guidelines for remuneration of senior executives

Humana’s Annual General Meeting was held on 6 March 2016 in Stockholm. All shareholders were represented at the meeting.

Resolutions passed at the 2016 AGM included: • that no dividend be paid for the 2015 financial year and that the

Company’s profits be carried forward instead.• that the Board of Directors and the CEO be discharged from

liability for the 2015 financial year.• that the Board continue to comprise eight ordinary members with-

out deputies and that all members be re-elected:- re-election of Per Båtelson as Chairman of the Board.- re-election of members Per Granath, Helen Fasth Gillstedt,

Simon Lindfors, Maria Nilsson, Ulrika Östlund, Lloyd Perry and Wojciech Goc.

• payment of directors’ fees totalling SEK 1,927,500. The fees were distributed as follows:- SEK 600,000 to the Chairman. - SEK 230,000 to each of the other elected Board members, apart

from Lloyd Perry and Wojciech Goc who do not receive any fees.- payment of fees for committee work as follows: SEK 20,000 to

each of the Audit Committee members, and an additional com-pensation of SEK 80,00 to the Audit Committee Chair.

- SEK 12,500 to each of the Remuneration Committee members.• that KPMG AB be elected as auditing firm, with Petra Lindström

as chief auditor.

2017 Annual General Meeting Humana’s 2017 Annual General Meeting will be held on Thursday, 18 May at 15.00 in the IHM auditorium, Warfvinges väg 39, Kung-sholmen. Registration begins at 14.30.

Notification Shareholders wishing to attend the AGM must have notified the Company by 16.00 CET on Friday, 12 of May 2017 at the address:Humanas AGM 2017Box 191101 23 Stockholm

Notification may also be made directly to the Company by telephone on +46 8-402 91 60 between the hours of 09:00 and 16:00. The noti-fication should include name, address, personal or corporate ID num-ber, daytime telephone number, number of shares and the number of assistants (maximum two). If participation is by proxy, the original of the proxy (with any authorisation documents, such as registration certificate) should be received by Humana before the AGM.

Participation in the AGMShareholders registered in the share register maintained by Euroclear Sweden AB on or before Friday 12 of May 2017, and who have noti-fied the Company of their intention to attend the meeting by 16.00 CET on the same day are entitled to participate in the meeting. Shareholders whose shares are registered in the name of a nominee need to temporarily register the shares in their own name with Euroclear Sweden AB in order to participate in the meeting. To do so, shareholders must contact their nominee in sufficient time before Friday 12 of May 2017.

Proposal for resolution at the 2017 AGM The Board of Directors proposes a dividend of SEK 0.50 for 2016, corresponding to a total dividend of SEK 27 million.

Notice of annual general meetingAccording to the current Articles of Association, a notice of a general meeting of shareholders shall be made through advertisement in Post- och Inrikes Tidningar and on the Company’s website. An announcement to the effect that a notice has been issued shall be made in Dagens Industri. Documents to be presented at the Annual General Meeting will be available on the Company’s website no later than three weeks before the meeting.

Important dates for the 2017 AGM • 12 May - Record date for 2017 AGM • 12 May - Deadline for notification of intention to attend 2017

AGM• 18 May - Last day for trading in Humana shares, including right

to dividend• 18 May - 14:30 admission to AGM• 18 May - 15:00 AGM begins• 22 May - Record date for dividend • 26 May - Payment date for dividend

Governance



3. Nomination CommitteeThe Nomination Committee’s task is to make certain that members of Humana’s Board of Directors have relevant knowledge and expe-rience to participate in and ensure Humana’s optimum development over time. The Nomination Committee assesses the Board’s work, basing its assessment among others on the Board’s own annual eval-uation, the requirements of the Code, Company-specific needs and comments provided to the Committee by Humana’s Chairman.

The Nomination Committee’s work also includes presenting a proposal to the AGM on the number of Board members and the composition of the Board, and making proposals on remuneration of the Board, including fees for committee work. The Nomination Committee also proposes candidates for the positions of Chairman of the Board and Chairman of the AGM, and makes proposals on the election and remuneration of auditors. The Nomination Committee’s proposals regarding Board members, Board fees and the election of auditors are presented in the notice convening the meeting. A state-ment explaining the Nomination Committee’s proposed Board com-position is published on Humana’s website when the notice is issued.

In accordance with the Swedish Corporate Governance Code, Nom-ination Committee instructions were adopted at an extraordinary general meeting held in February 2016. The instructions require the Company to have a Nomination Committee consisting of one repre-sentative from each of the four largest shareholders (in terms of votes), based on information from Euroclear Sweden AB on the last banking day in August, and the Chairman of the Board (the convener). The member representing the largest shareholder in terms of voting rights shall be appointed Chairman of the Nomination Committee. The Chairman of the Board of directors shall not be the Chairman of the Nomination Committee. The members of the Nomination Commit-tee for the 2017 AGM were presented on 23 September 2016, and represented approx. 72 percent of the votes in the Company. Members of the Nomination Committee do not receive any remuneration for their Committee work.

Members of the Nomination Committee prior to the 2017 AGM:• Lloyd Perry, representative from Argan Capital (through the company

Air Syndication SCA), Chair of the Committee• Sven-Erik Zachrisson, representative from Zirkona AB• Oskar Andersson, representative from Bodenholm • Mikael Moll, representative from Zeres Capital• Per Båtelson, Chairman of the Board, Humana

4. Board of Directors The Board of Humana has overall responsibility for building a value-creating and sustainable business for shareholders and other stakeholders with continuity and a long-term perspective. The Board is responsible for the Company’s overall strategy, ensuring well-in-formed decision-making processes and having a good perception of trends in the sector and Humana’s business environment. Another important function of Humana’s Board is to ensure that the Compa-ny has good risk management, control and business monitoring.

Board compositionAccording to the articles of association, the Board of Humana shall consist of three to eight members. Members of the Board shall to-gether possess skills and experience that are important to Humana’s optimum development. Humana’s Board of Directors has five male members and three female members, and consisted of eight elected members without deputies during 2016. President and CEO Rasmus Nerman attends all Board meetings. Ulf Bonnevier, Humana’s CFO, attends Board meetings and acts as Board secretary. Other Humana executives attend Board meetings in a reporting capacity for certain matters. All Board members are independent of the Company and

its management, with the exception of Per Granath. Six of the Board members are also independent of the Company’s major shareholders. The exceptions are Lloyd Perry and Wojciech Goc. This means that Humana fulfilled Nasdaq Stockholm’s requirements for 2016 and the Swedish Corporate Governance Code’s rules on the independ-ence of directors. The composition of the Board and a presentation of Board members can be found on pages 46-47.

The work of the Board The Board’s duties and responsibilities are regulated by the Swedish Companies Act and Humana’s Articles of Association. In addition, the Board’s work is also regulated by annually defined rules of procedure, which govern matters such as the division of duties and responsibility between Board members, the Chairman and the CEO. The Board also adopts instructions for the Board’s committees.

The Board continuously monitors strategic direction, economic development and the Company’s methods and processes in order to maintain well-functioning operations. Humana’s Board is also responsible for ensuring good quality financial reporting and inter-nal control, and evaluating the business in relation to the goals and guidelines defined by the Board. The Chairman of the Board and the CEO are responsible for monitoring the Company’s develop-ment, and for preparing and leading Board meetings. The Chairman is also responsible for ensuring that Board members conduct an an-nual evaluation of their work and that they receive the information they need to perform their duties effectively and satisfactorily.

The Board held 14 meetings in 2016, six of which were by conference call. A report from the CEO and a review of results are permanent items at each meeting. Four times during the year, the Board reviews the interim reports: at the meetings in February, May, August and November. The annual report and annual finan-cial statements were on the agenda of the February meeting. The meetings in February and March included discussions and decisions prior to the Company’s IPO. The Board has also adopted and revised policies. Examples of policies that have been adopted or complete-ly revised during the year are the communication policy and the insider policy. In September, the Board made a trip to northern Norway to visit businesses acquired in connection with the purchase of KOA Group in May 2016. The Board also held its two annual strategy days during the trip, with a review of the business plans of all business areas.

The Board regularly evaluates the work of CEO Rasmus Nerman. Humana’s chief auditor Petra Lindström from KPMG reported on her observations in connection with the annual audit, and the Board also had a separate agenda item with the auditor during which mem-bers of Group management were not present.

During the year, the Board has focused on work and decisions prior to the Company’s listing on Nasdaq Stockholm, refinancing of the Company in connection with the IPO, and the acquisitions and geographical expansion that have been made possible by the IPO. There has been a particular focus on identifying, analysing and evaluating the Finnish healthcare market.

Evaluation of the work of the BoardHumana’s Chairman Per Båtelson is responsible for ensuring an an-nual evaluation of the work of the Board, including its committees (Audit Committee and Remuneration Committee), is conducted. His evaluation of the Board’s work processes, skills, background, experience and composition has been presented to the Nomination Committee.

Directors’ feesThe 2016 AGM adopted the following fees for Board members, the Chairman of the Board and committee work for assignments from the 2016 AGM to the 2017 AGM:


• Chairman Per Båtelson received SEK 600,000 in his capacity as Chairman of Humana’s Board.

• Helen Fasth Gillstedt, Maria Nilsson, Ulrika Östlund, Per Granath and Simon Lindfors were each awarded fees of SEK 230,000.

• The Chair of the Audit Committee, Helen Fasth Gillstedt, received a fee of SEK 100,000. Audit Committee members Per Båtelson and Simon Lindfors each received SEK 20,000.

• Remuneration Committee members Per Båtelson, Maria Nilsson and Ulrika Östlund were each awarded fees of SEK 12,500.

• No directors’ fees were paid to Wojciech Goc and Lloyd Perry.

Total remuneration for Board and committee work in 2016-2017 amounted to SEK 1,927,500.

5. Audit Committee The Audit Committee’s main task is to support the Board in fulfilling its responsibilities in the areas of financial reporting, accounting, au-diting, internal control and risk management. The work also includes ensuring a solid financial structure. The Audit Committee works ac-cording to rules of procedure defined by the Board. The Committee’s duties also include reviewing internal audit procedures, and scrutinis-ing and monitoring the auditor’s impartiality and independence.

The Chair of the Committee, Helen Fasth Gillstedt, has the accounting expertise required by the Swedish Companies Act, and three of the members are independent of the Company and its largest owner.

The Audit Committee held five minuted meetings in 2016. All Audit Committee meetings have been reported to the Board.

Audit Committee members 2016-2017Helen Fasth Gillstedt, ChairPer BåtelsonSimon Lindfors Wojciech Goc

6. Remuneration CommitteeThe Remuneration Committee’s main tasks are to submit proposals to the Board on remuneration of the President and CEO, remuner-ation policies and payments and other conditions of employment for Group management, and to monitor and evaluate current and completed variable pay arrangements and any long-term incentive programmes. The purpose of long-term incentive programmes is to attract and retain talented employees and to strengthen the link between employees’ and shareholders’ interests. Remuneration Com-mittee members are also responsible for monitoring and evaluating application of the guidelines for remuneration of senior executives as adopted by the AGM. The Remuneration Committee according to a plan adopted by the Board of Directors.

The Remuneration Committee held five minuted meetings in 2016. All meetings have been reported to the Board.

Remuneration Committee members 2016-2017 Per Båtelson, ChairMaria NilssonUlrika ÖstlundLloyd Perry

7. External auditor The external auditor’s tasks are to audit Humana’s annual report, financial reporting and accounting policies and to examine the administration of the Company. The external audit of the financial statements of Humana and its subsidiaries, including the admin-

istration by the Board and Group management, is performed in accordance with International Standards on Auditing and generally accepted auditing practice in Sweden.

The auditor is appointed by the AGM following a proposal from the Nomination Committee and elected for a period of one year. Humana’s AGM on 6 March 2016 adopted a resolution to elect KPMG AB as the Company’s auditor until the end of the 2017 AGM. KPMG AB has performed tax consultancy services in addi-tion to its audit work during the last five years.

8. Group management Group management comprises Humana’s President and CEO and nine other managers. The gender distribution for Group manage-ment is six women and four men. Members of Group Management have the following positions:Rasmus Nerman, President and CEOUlf Bonnevier, CFOClaus Forum, Head of Individual & Family business areaAnna Giertz Skablova, HR DirectorCecilia Lannebo, Head of Investor RelationsMona Lien, Country Manager NorwayEva Nilsson Bågenholm, Director of Quality Assurance Helena Pharmanson, Director of Marketing and Communications Eva-Lotta Sandberg, Head of Elderly Care business areaHarald Wessman, Head of Personal Assistance business area

Remuneration of Group managementThe guidelines on remuneration and other conditions of employ-ment for the CEO and other senior executives were adopted at an EGM held on 15 February 2016.

Group management’s remuneration shall consist of a fixed salary, possible variable salary, pension and other benefits. Total remuneration shall be market-based and competitive and reflect the individual’s per-formance and responsibility.

Humana has two long-term incentive programmes: one for the Com-pany’s senior executives and one for 187 other Humana employees. The purpose of the incentive programmes is to encourage a broad sharehold-ing among Humana employees, facilitate recruitment, retain competent employees and increase motivation to achieve or exceed Humana’s financial targets. The programmes comprise a warrant programme and a share saving programme. The warrant programme, which is for eight members of Group management, amounts to 1,440,420 warrants enti-tling holders to subscribe for the same number of new Humana shares. The market value amounts to approximately SEK 5.5 million and in the event of full subscription, dilution will be about 2.6 percent of the total number of Humana shares. The warrants have been issued in three series with different maturities. The share saving programme, imple-mented beginning of 2017, is for 187 key employees. Participants in the programme use their own money (or funds) to purchase Humana shares at the market price over the stock exchange. Participants who retain their saving shares over the programme’s three-year period will, at the end of these three years, receive matching shares for each saving share acquired. At full allotment, the total number of shares is a maximum of 106,000 shares, corresponding to about 0.2 percent of the total number of shares outstanding in the Company.

The variable salary may include long-term variable pay in the form of cash, shares and/or share-related instruments in Humana AB. Variable cash salary shall be subject to the fulfilment of defined and measurable targets, and shall not exceed 30 percent of the annual fixed salary. The terms and conditions for variable salary should be designed in such a way that, in the event of exceptional economic circumstances, the Board has the ability to limit or withhold payment of variable salary if such a measure is considered reasonable.

In special cases, one-time remuneration may be agreed, provided such remuneration does not exceed an amount corresponding to the

Governance



individual’s annual fixed salary and maximum variable cash salary, and is not paid more than once a year for the individual in question. Retirement benefits shall be defined-contribution arrangements.

The notice period shall be six months, whether given by the Com-pany or the senior executive. If the period of service exceeds five years, the notice period given by the company is extended to twelve months, while from the senior executive the notice period remains six months. Termination benefits may be payable to senior executives whose length of service exceeds five years, but with the maximum amount corre-sponding to six months’ salary. Termination benefit agreements are made separately after a decision by the Remuneration Committee.

The Board of Directors is entitled to deviate from the guidelines adopted by the AGM if there are particular reasons for doing so in an individual case.

Executives covered by the guidelines include the CEO and other members of Group management.

Board proposals for new guidelines on remuneration of Group management Prior to the 2017 AGM, there are no proposed changes to the guidelines on remuneration and other conditions of employment for Group management.

Name PositionMember of Group management since

Employed by Humana since

Shares held 31 December 2016

Rasmus Nerman President and CEO 20141 2014 144,473

Ulf Bonnevier Deputy CEO/CFO 2012 2012 160,436

Anna Giertz Skablova Director of Human Resources 2017 2017 -

Claus Forum Business Area Manager, Individual & Family 2011 2011 160,436

Cecilia Lannebo Head of Investor Relations (IR) 2015 20142 -

Mona Lien Business Area Manager, Other Nordics 20141 2014 19,098

Eva Nilsson Bågenholm Director of Quality Assurance 2015 2015 3,682

Helena Pharmanson Director of Marketing and Communications 2010 2010 96,504

Eva-Lotta Sandberg Business Area Manager, Elderly Care 2013 2012 80,459

Harald Wessman Business Area Manager, Personal Assistance 2008 2008 960,201

1) Rasmus Nerman was previously President and CEO of INOM Group, which was acquired by Humana in 2014. Mona Lien also came from INOM Group, where she was head of Norwegian operations.

2) Contracted as Head of Investor Relations since August 2014.


Internal control over financial reporting Internal control is about making an analysis of the current situation, assessing which risks are significant and which risks should be managed with effective controls. Everything cannot, and should not, be equally controlled in an effective organisation; instead, it is about managing relevant risks with effective controls in order to keep one step ahead and reduce the Company’s overall risk exposure.

According to the Swedish Companies Act and the Swedish Corpo-rate Governance Code, Humana’s Board is ultimately responsible for ensuring the Company’s organisation is structured in such a way as to allow satisfactory monitoring and control of financial report-ing, administration and operations. Humana’s CEO has delegated responsibility to the CFO for implementing and maintaining formal procedures that ensure compliance with established principles on financial reporting and internal control. However, it is each employ-ee’s responsibility to participate in internal governance and control. This includes complying with the financial manual adopted by the Board and performing the controls that have been established to pre-vent, discover and deal with defects and errors.

Responsibility for internal control Internal governance and control is an integral part of the Company’scorporate governance. To clarify and create a structure for how the organisation manages its risks and who is responsible for what in the area of the Company’s risk management and internal governance and controls, the Company works on the basis of a model with three lines of responsibility for its control work.

Group management

Board/Audit Committee

Regulatory framew

ork

External audit

First line of responsibility:- Regular operational

monitoring- Internal controls - Manuals - Instructions

Second line of responsibility:- Financial controls- Security- Quality controls- Inspections- Risk monitoring

Third line of responsibility:- Internal audit

At the top, the Board is ultimately responsible for the organisation, and defines policies for risk management based on owner preferences and directives. The organisation’s President and CEO is subordinate to the Board and formally responsible for day-to-day management.

First line of responsibility: Humana is a decentralised company that allows the individual a large measure of responsibility and freedom on a day-to-day basis to make decisions that help to improve and make life easier for the Company’s customers and clients. The first line of responsibility in the process of managing operational risks is therefore the organisation in day-to-day operations, which includes regional managers, unit managers, supervisors and employees in the business operations. They are owners of their own risks and are responsible for working on daily internal control by identifying, evaluating, controlling and mitigating risks, and ensuring that policies and governing documents are understood and followed. They set up appropriate control activities and ensure that these are carried out correctly. Effectiveness is dependent on key factors such as corporate culture and the sense of right and wrong

that management establishes in the business, as well as the clarity of employees’ responsibility for their work.

Second line of responsibility:The second line of responsibility is more functionally oriented. This involves Humana’s functions that work specifically on monitoring risk-taking. Their task is to ensure compliance with the Board’s level of risk in the first line, which is achieved by setting requirements, defining instructions and policies, and monitoring compliance. These functions are not responsible for operation of the business, but serve in a support and monitoring capacity. In its financial organisation, Humana has a function that works on risk control and compliance. This function helps to develop processes related to risk management and internal governance and control, and is responsible for monitoring the work of the first line.

Third line of responsibility:The third line includes the internal audit function, which works on behalf of the Board and reviews the work of the first and second lines. Humana has not appointed a separate audit function (internal audit) and therefore deviates from the Code on this issue. It is the as-sessment of Humana’s Board of Directors and Audit Committee that Humana’s internal governance and control functions sufficiently satisfactorily as to ensure good order. The Board bases its assessment on the fact that Humana has a fully implemented set of values and associated quality control which underpins the entire organisation. It is also the Board’s assessment that Humana has strengthened its internal control function with the addition of one employee and the Company having further expanded its quality management organi-sation. In addition, the Company is in the process of implementing a Group-wide quality management system. The system is expected to be implemented during 2017. Internal control is conducted through internal monitoring and self-assessment. The results are reported to the Board.

Internal control system – COSO model Humana’s internal control structure follows the COSO framework principles. The framework is based on five main components that together allow good internal control: Control Environment, Risk Assessment, Control Activities, Information & Communication and Monitoring. From the model, a number of development priority areas have been identified in the work on internal control.

Facts about COSOCOSO is an abbreviation of Committee of Sponsoring Organisations of the Treadway Commission and is the organisation behind the COSO cube. The cube represents a framework for evaluating and working on an organisation’s internal governance and control in terms of operational goals, reporting, and compliance with laws and regulations. It is suitable for any business wanting to evaluate and develop its internal governance and control.

Governance



Control environmentThe Board is responsible for establishing an effective system of internal control, and controls the work through the CEO. Members of Humana’s Group management work within their respective func-tions and areas of responsibility to spread, influence and increase employees’ knowledge and responsibilities in the area of control. An efficient control environment involves a clear organisational struc-ture, decision-making channels, shared values in terms of ethics, morality and integrity, and authority that is clearly defined and com-municated through governing documents. Examples of Humana’s governing documents include policies, guidelines, manuals and instructions. Humana’s quality management work is central to the business and includes quality management systems in each business area (implementation of a Group-wide quality management system is in progress), and systematic monitoring and control. Humana invests systematically in strengthening and developing its capital structure. By investing, Humana increases its competitiveness, while the Company reduces its level of risk in the business. Important elements of Humana’s control environment and efforts to build long-term structural capital include:• a strong corporate culture with well-grounded values that permeate

the Company. Through a well-established corporate culture with shared values, Humana’s employees are given a clear direction and mandate to work on personalised interaction with a focus on solutions in everyday life.

• clear guidelines on ethics and morality.• extensive quality-assurance work at all levels of the Company.• Group-wide policies in several key areas such as employees, com-

munication, diversity and transparency. • a decentralised organisational structure with clear delegation of

authority and responsibility.• identified and well-defined key processes, such as quality assur-

ance, and evidence-based and measurable treatment methods. Humana works to ensure that care and healthcare is based on evidence-based methods as far as possible. Humana takes social re-sponsibility, running and actively participating in several research projects with universities and colleges.

• comprehensive skills development through Humana Academy. Humana Academy provides traditional training and web-based interactive training, both for its own employees and for municipal-ities and colleagues in the sector.

In addition, Humana has a number of governing documents designed to support and help all employees to act in accordance with Humana’s internal rules and guidelines. Governing documents on accounting and financial reporting cover areas of particular importance in working to establish correct, complete and up-to-date accounting, reporting and information disclosure. The financial manual is Humana’s central governance document with respect to guidelines for achieving good internal governance and control over financial reporting. As Humana is an acquisition-driven company, it is an essential part of the integration process to ensure that values and the control environment in general are aligned with Humana’s guidelines.

Risk assessmentRisks and risk management in Humana’s operations are described in more detail in the section entitled Risks and risk management on pages 70-73. The specific financial risks are described in more detail in note G21.

Financial risk management is a natural part of the ongoing work on financial reporting. Humana continuously updates its analysis of risks that may lead to errors in financial reporting. A Group-wide analysis of risks of errors in financial reporting is conducted annually. The risk reviews identify a number of items in the financial statements and administrative flows and processes where the risk of

errors is more substantial. Identified risks are related to the sched-ule for the final accounts, integration of acquisitions, and IT and support systems.

Control activitiesHumana regularly conducts control activities for the significant risks that are thought to exist and that the Board considers important to manage for internal control over financial reporting. The Compa-ny’s CFO is responsible for ensuring that identified risks associated with financial reporting at Group level are managed. The control activities follow the structure of the reporting process and financial organisation. The financial staff in each reporting unit are respon-sible for producing correct accounting records, and true and fair financial statements. Each unit’s reporting is validated and checked in the local accounting stage before being transferred to the business areas and Group finance for consolidation. Controllers and financial managers in each business area make budgets, update forecasts and analyse results. The checks and reports may be subject to special investigations where necessary. All business areas submit their financial results in monthly written reports to the CFO and Group Controller. The CFO presents these reports to Group management.

Information & CommunicationHumana’s Board receives monthly financial reports on the Group’s financial position and financial performance. The Board deals with all quarterly and annual reports before they are published externally and monitors the audit of internal control and financial reports.

Humana’s communication and information channels enable prompt communication of information to relevant employees. Gov-erning documents in the form of policies, guidelines and manuals, in the case of financial reporting, are primarily communicated through the intranet and the Group’s financial manual. The finan-cial manual is updated regularly as required. In addition to written communication, there are also verbal discussions of news, risks, outcomes of controls and other matters during regular meetings and at the annual financial conference. Communication also takes the form of monthly closing accounts meetings which are attended by all financial managers. Individual employees have a responsibility to report only deviations take away defects and deviations that are discovered in controls, even if these have been remedied. The aim is to provide a good picture of how the work is conducted and to be able to make improvements to the processes.

Up-to-date information is communicated to external parties on Humana’s financial website, with the publication of news and press releases. Quarterly reports are published externally and are supple-mented by webcasts, presentations and investor meetings. There is also an agenda for communication with shareholders in connection with the Annual General Meeting. The annual report is provided to shareholders and other stakeholders, both in print and as a publica-tion on Humana’s website.

Monitoring Each unit manager and financial organisation is ultimately respon-sible for ongoing monitoring of the financial information for the unit. The information undergoes further monitoring by the business area, corporate functions, Group management and finally the Board. A compilation of identified actions and their status is reported to the Board as part of the ongoing work of the Audit Committee. Humana’s Audit Committee is responsible for ensuring compliance with the Company’s financial reporting and internal control, and ensuring the Company’s financial statements are prepared in accord-ance with the law, applicable financial reporting standards and other listing requirements.

Humana does not have an internal audit function, as the Board’s assessment is that the Company’s internal organisation and processes for monitoring perform this function satisfactorily. See page 38 in


the section External governance instruments. The form of moni-toring is decided on by the Board, which also annually assesses the need for a special internal audit function.

Activities in 2016A number of workshops in the area of the Group’s internal control were conducted during the year. The work has been focused on iden-tifying and analysing risks that could affect financial reporting. In addition to the review at Group level, a risk analysis was also carried out in the Group’s Swedish business areas. From the risk analysis, a number of control activities were identified that will form the basis of efforts to strengthen internal control in 2017.

During the year, Humana also formed a steering group that will lead work in the sub-areas of internal control. The steering group will be jointly responsible for driving the development of the Group’s accounting and payroll systems, and working to establish a central management plan. The steering group’s tasks are as follows:• taking responsibility for common target-setting and deciding on

targets.• developing existing policies and guidelines, and producing new

ones in areas that are not comprehensive at present.• conducting risk analyses.• implementing budgets and resource planning. • taking responsibility for monitoring projects, targets, budgets and

risks.

The steering committee continues the process of gathering all of the companies into one common accounting system. At the beginning of the year, there were about 10 active accounting systems being used by Humana’s companies and the companies acquired during the year. The process of implementing a Group-wide payroll system is also initiated. The introduction of a common accounting and payroll system is aimed at reducing the risk of errors in financial reporting, achieving more efficient processes and enabling costs savings.

Humana also completed the process of improving the Company’s financial manual during the year. The aim is that the documentation will help to achieve more uniform and more efficient processes.

Focus in 2017Internal control work at Humana in 2017 will continue to focus on the work that was started in 2016. The work will be done according to the overall processes and procedures for the Group’s internal con-trol program that were formulated in 2016. The focus of the work is to continuously reduce risks through clearer and more established work processes and work manuals. Efforts to further develop the Company’s finance manual will be completed during the year, while the work processes for how acquisi-tions should gradually be integrated into existing operations will be clarified. Other activities in the area of internal control that will be initiated in 2017 are:• to implement a comprehensive risk analysis of the Norwegian oper-

ations. • to move the finance function that is now handled externally in

Finland to an internal function and raise the level of competence in the Finnish organisation.

• to continue the system shift from local systems to Group-wide systems.

• to introduce a greater degree of joint Group contracts in procure-ments.

Governance

Auditor’s opinion on the Corporate Governance Report

To the shareholders of Humana AB, corp. id no. 556760-8475

Duties and allocation of responsibilitiesThe Board is responsible for the Corporate Governance Report for 2016 on pages 38-49 and for ensuring that it has been prepared in accordance with the Annual Accounts Act.

Focus and scope of the reviewOur review was conducted in accordance with FAR’s statement RevU 16 Auditor’s Review of the Corporate Governance Report. This means that our review of the Corporate Governance Report 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. We believe that this review provides a sufficient basis for our opinion.

OpinionA corporate governance report has been prepared. Disclosures in accordance with chapter 6, section 6, paragraph 2, items 2-6 of the Annual Accounts Act and chapter 7, section 31, paragraph 2 of the same Act are consistent with the annual report and consolidated financial statements and comply with the Annual Accounts Act.

Stockholm, 6 April 2017

Petra LindströmAuthorised Public Accountant



Board of Directors

Per Båtelson

Helen Fasth Gillstedt

Wojciech Goc

Per Granath

Simon Lindfors

Maria Nilsson

Lloyd Perry

Ulrika Östlund

Position Born 1950. Chairman of the Board since 2014, director since 2008. Chair of Remuneration Committee and member of Audit Committee.

Born 1962. Director since 2014. Chair of Audit Committee.

Born 1966. Director since 2011. Member of Audit Committee.

Born 1954. Director since 2006. Member of the Finance Committee.

Born 1964. Director since 2011. Member of Audit Committee and Finance Committee.

Born 1957. Director since 2006. Member of Remuneration Committee.

Born 1965. Director since 2008. Member of Remuneration Committee and Finance Committee.


Education Engineering Physics, Chalmers University of Technology. Studies in business economics, University of Gothenburg.

M.Sc. Econ., Stockholm School of Economics. Studies in Sustainable Community Development at Stockholm University and the Royal Institute of Technology.

MBA, Texas Christian University. M.A. Economics, Poznán University of Economics.

M.Sc. Chemistry, Royal Institute of Technology. Economics studies at the Gothenburg School of Business, Economics and Law at the University of Gothenburg and at Stockholm University. Healthcare Management at Harvard Business School, Paris.

MBA, Stockholm School of Economics.

Higher education studies in HR administration, Frans Schartau.

MBA, University of Chicago, Graduate School of Business. B.A. Economics and History, Northwestern University, Evanston, Illinois.

Studies in Systems Science with complementary studies in economics, Mid-Sweden University, Östersund.

Other current assignments Chairman of Internationella Engelska Skolan AB, IVBAR AB and SCI Innovation AB. Director of MedGroup Oy and Polybiocept AB.

Director of AcadeMedia AB, Munters AB, Handelsbanken Fonder AB, Samhall AB, NAI Svefa Holding AB and Lindorff Group AB. Director on the Advisory Board for Save the Children Sweden. Own company in business development.

Managing Partner, Argan Capital Advisors LLP (UK). Chairman of Janton OY (Finland). Chairman of the Supervisory Board of AAT Holding SA (Poland) and Hortex Holding SA (Poland).

Chairman of Aktiebolaget Salktennis. Director of Capacent Holding (publ), Svefa Holding AB (publ), G & S Fastigheter i Sverige AB and Föreningen Vård-företagarna.

Nordic adviser to Advent International and Five Arrows, a fund established by the Rothschild family and Rothschild Group. Chairman of NFT Ventures. Director of Silvicapital AB, Silvilao AB and SilviPar AB.

Director of Ewalie AB, Samhall AB and SOS Alarm Sverige AB. Chairman of Swesale AB. Chairman of Store Support AB. Own limited company operating as independent consultant specialising in growth companies.

Managing Partner, Argan Capital Advisors LLP (UK). Chairman of GCE Group AB (Sweden). Member of the Supervisory Board of AAT Holding SA (Poland), DHI Company SAS (France) and Hortex Holding SA (Poland).

Director of Q-it AB. Owner of Q-it AB.

Professional experience and previous assignments Chairman of Apoteket AB (publ). Director and CEO of Global Health Partner AB. Director of Oriola KD Oy, Forte AB, KRY AB, Permobil AB, Mediatech AB and Unilabs Holding AB. Also former director and CEO of Capio AB.

Director of Intrum Justitia AB, Swedesurvey AB, Precise Biometrics and neXus Technology AB. Executive positions in the SAS Group and the Statoil Group.

Chairman of Paroc Group Oy (Finland). Director of GCE Group AB (Sweden) and EFL SA (Poland).

President and CEO of Humana 2006-2015. Chairman of Resurs Bemanning AB (publ). Director of Akademiska Hus Aktiebolag and GustaviaDavegårdh Hold-ing Aktiebolag. President and CEO of Intellecta AB (publ), 2003-2006. Vice President Handelsbanken Capital Markets in charge of healthcare and services sectors, 2000-2003.

Principal at Apax Partners and Partner of IT Provider. Chairman of IPM Informed Portfolio Management AB. Director of Avesina Healthcare Holding, Capio AB och Unilabs SA.

Deputy CEO of Manpower AB and CEO of Right Management Consultant and 2Secure. Chairman of Resurs Bemanning AB.

Director of IX Europe (UK). Managing Partner of BA Capital Partners Europe. Vice Chairman of BA Partners Inc. Associate at Bear, Sterns & Co.

Chairman of Vård-företagarna. Director of Almega Aktiebolag and the Confederation of Swedish Enterprise. Director and CEO of Elina Management Aktiebolag and Familjeforum Holding AB. Director of Öjebo gruppbostad i Järvsö AB. CEO of INOM – Innovativ Omsorg i Norden AB.

Director’s fee (AGM year) 600,000 230,000 - 230,000 230,000 230,000 - 230,000

Remuneration for committee work 32,500 100,000 - - 20,000 12,500 - 12,500

Independent of the Company and its management Yes Yes Yes No Yes Yes Yes Yes

Independent of the principal owner Yes Yes No Yes Yes Yes No Yes

Total shareholding, Dec 31 2016 (own, related parties, in companies and endowment insurance), of which: 59,182 32,473 - 3,869,610 373,504 330,355 - 168,366

Shareholding (own and related parties), number 59,182 32,473 - 483 - 330,355 - -

Shares via company, number - - - 3,869,1271 373,5042 - - 168,3663

Shares in endowment insurance, number - - - - - - - -

Attendance at board meetings (14) 14 13 13 14 11 13 11 14

Attendance at Audit Committee meetings (5) 5 5 5 - 4 - - -

Attendance at Remuneration Committee meetings (4) 4 - - - - 4 4 4


Per Båtelson

Helen Fasth Gillstedt

Wojciech Goc

Per Granath

Simon Lindfors

Maria Nilsson

Lloyd Perry

Ulrika Östlund

Position Born 1950. Chairman of the Board since 2014, director since 2008. Chair of Remuneration Committee and member of Audit Committee.

Born 1962. Director since 2014. Chair of Audit Committee.

Born 1966. Director since 2011. Member of Audit Committee.

Born 1954. Director since 2006. Member of the Finance Committee.

Born 1964. Director since 2011. Member of Audit Committee and Finance Committee.


Born 1965. Director since 2008. Member of Remuneration Committee and Finance Committee.


Education Engineering Physics, Chalmers University of Technology. Studies in business economics, University of Gothenburg.

M.Sc. Econ., Stockholm School of Economics. Studies in Sustainable Community Development at Stockholm University and the Royal Institute of Technology.

MBA, Texas Christian University. M.A. Economics, Poznán University of Economics.

M.Sc. Chemistry, Royal Institute of Technology. Economics studies at the Gothenburg School of Business, Economics and Law at the University of Gothenburg and at Stockholm University. Healthcare Management at Harvard Business School, Paris.

MBA, Stockholm School of Economics.

Higher education studies in HR administration, Frans Schartau.

MBA, University of Chicago, Graduate School of Business. B.A. Economics and History, Northwestern University, Evanston, Illinois.

Studies in Systems Science with complementary studies in economics, Mid-Sweden University, Östersund.

Other current assignments Chairman of Internationella Engelska Skolan AB, IVBAR AB and SCI Innovation AB. Director of MedGroup Oy and Polybiocept AB.

Director of AcadeMedia AB, Munters AB, Handelsbanken Fonder AB, Samhall AB, NAI Svefa Holding AB and Lindorff Group AB. Director on the Advisory Board for Save the Children Sweden. Own company in business development.

Managing Partner, Argan Capital Advisors LLP (UK). Chairman of Janton OY (Finland). Chairman of the Supervisory Board of AAT Holding SA (Poland) and Hortex Holding SA (Poland).

Chairman of Aktiebolaget Salktennis. Director of Capacent Holding (publ), Svefa Holding AB (publ), G & S Fastigheter i Sverige AB and Föreningen Vård-företagarna.

Nordic adviser to Advent International and Five Arrows, a fund established by the Rothschild family and Rothschild Group. Chairman of NFT Ventures. Director of Silvicapital AB, Silvilao AB and SilviPar AB.

Director of Ewalie AB, Samhall AB and SOS Alarm Sverige AB. Chairman of Swesale AB. Chairman of Store Support AB. Own limited company operating as independent consultant specialising in growth companies.

Managing Partner, Argan Capital Advisors LLP (UK). Chairman of GCE Group AB (Sweden). Member of the Supervisory Board of AAT Holding SA (Poland), DHI Company SAS (France) and Hortex Holding SA (Poland).

Director of Q-it AB. Owner of Q-it AB.

Professional experience and previous assignments Chairman of Apoteket AB (publ). Director and CEO of Global Health Partner AB. Director of Oriola KD Oy, Forte AB, KRY AB, Permobil AB, Mediatech AB and Unilabs Holding AB. Also former director and CEO of Capio AB.

Director of Intrum Justitia AB, Swedesurvey AB, Precise Biometrics and neXus Technology AB. Executive positions in the SAS Group and the Statoil Group.

Chairman of Paroc Group Oy (Finland). Director of GCE Group AB (Sweden) and EFL SA (Poland).

President and CEO of Humana 2006-2015. Chairman of Resurs Bemanning AB (publ). Director of Akademiska Hus Aktiebolag and GustaviaDavegårdh Hold-ing Aktiebolag. President and CEO of Intellecta AB (publ), 2003-2006. Vice President Handelsbanken Capital Markets in charge of healthcare and services sectors, 2000-2003.

Principal at Apax Partners and Partner of IT Provider. Chairman of IPM Informed Portfolio Management AB. Director of Avesina Healthcare Holding, Capio AB och Unilabs SA.

Deputy CEO of Manpower AB and CEO of Right Management Consultant and 2Secure. Chairman of Resurs Bemanning AB.

Director of IX Europe (UK). Managing Partner of BA Capital Partners Europe. Vice Chairman of BA Partners Inc. Associate at Bear, Sterns & Co.

Chairman of Vård-företagarna. Director of Almega Aktiebolag and the Confederation of Swedish Enterprise. Director and CEO of Elina Management Aktiebolag and Familjeforum Holding AB. Director of Öjebo gruppbostad i Järvsö AB. CEO of INOM – Innovativ Omsorg i Norden AB.

Director’s fee (AGM year) 600,000 230,000 - 230,000 230,000 230,000 - 230,000

Remuneration for committee work 32,500 100,000 - - 20,000 12,500 - 12,500

Independent of the Company and its management Yes Yes Yes No Yes Yes Yes Yes

Independent of the principal owner Yes Yes No Yes Yes Yes No Yes

Total shareholding, Dec 31 2016 (own, related parties, in companies and endowment insurance), of which: 59,182 32,473 - 3,869,610 373,504 330,355 - 168,366

Shareholding (own and related parties), number 59,182 32,473 - 483 - 330,355 - -

Shares via company, number - - - 3,869,1271 373,5042 - - 168,3663

Shares in endowment insurance, number - - - - - - - -

Attendance at board meetings (14) 14 13 13 14 11 13 11 14

Attendance at Audit Committee meetings (5) 5 5 5 - 4 - - -

Attendance at Remuneration Committee meetings (4) 4 - - - - 4 4 4

1) Per Granath owns 3,869,127 shares through the legal entity Zirkona AB.2) Simon Lindfors owns 373,504 shares through the legal entity SLP Partners AB. 3) Ulrika Östlund owns 168,366 shares through the legal entity Q-it AB.

Governance



Group management

Rasmus Nerman

Ulf Bonnevier

Claus Forum

Anna Giertz Skablova

Cecilia Lannebo

Mona Lien

Eva Nilsson Bågenholm

Helena Pharmanson

Eva-Lotta Sandberg

Harald Wessman

Position Born 1978. President and CEO since 2015. Former deputy CEO and Business Area Manager, Individual & Family, 2014.

Born 1964. CFO since 2012.

Born 1965. Business Area Manager, Individual & Family since 2011. Former Business Area Manager, Norway between 2014-2015.

Born 1970. Director of Human Resources since January 2017.

Born 1973. Contracted as Head of Investor Relations since 2014.

Born 1962. Country Manager, Norway. Former Business Area Manager, Norway, 2015.

Born 1960. Director of Quality Assurance since 2015.

Born 1966. Director of Marketing and Communications since 2010.

Born 1971. Business Area Manager, Elderly Care, since 2013. Business Development Manager 2012-2013.

Born 1956. Business Area Manager, Personal Assistance since 2008.

Education M.Sc. Econ., Stockholm School of Economics. M.Sc. in International Leadership, CEMS MIM.

M.Sc. Econ. with focus on accounting and auditing, Uppsala University. Stockholm School of Economics IFL Executive Education.

M.Sc. in international social work and pedagogic leadership, University of Gothenburg. Teaching certificate, Lärarhögskolan i Jelling.

MBA in General Management at Rotterdam School of Management, Erasmus University (Netherlands) and M.Sc. in linguistics.

M.Sc. in Business and Economics from the University of Mälardalen and Wirtschafts University in Vienna. International marketing at Mälardalen University. Financial analyst, Kämpasten. Paul Ronge Media Training and Crisis Communication.

B.A. Political Science and Psychology, Oslo University and Trondheim. Management programme at BI Norwegian Business School.

Nursing Degree, Umeå University. Medical Doctor degree, University of Gothenburg. Licensed physician, specialist in internal medicine.

International MBA, Uppsala University. Director’s programme at the Stockholm Chamber of Commerce.

B.Sc. Economics, University of Gävle. Knowledge Management studies at Luleå University of Technology. Stockholm School of Economics IFL Executive Education.

M.Sc. Econ., Stockholm School of Economics. MBA from Ivey Business School, Canada.

Other current assignments Director of Vård-företagarna Bransch Individ & Familj.

- - - Director and founder of i-Core Communications AB. Deputy director of Zubizuri AB.

Member of NHO Service. Director of Stiftelsen Danviks Hospital. Vice Chairman, Director of Oriola-KD AB.

- Director of Vård-företagarna Bransch Äldreomsorg.

-

Professional experience and previous assignments President and CEO of INOM Group. Management consultant in healthcare, The Boston Consulting Group.

Country Manager of Ipsos in Sweden. CFO Western Europe of Synovate. CEO of Wolters Kluwer in Scandinavia.

Chairman and CEO of Vindora Utbildning AB. CEO of Nordstenen AB.

Director of Human Resources for TietoEnator AB and Teligent AB. Senior Consultant at PA Consulting Group. Positions in human resources and organisation at ICA AB and Baltic Beverages Holding AB.

Head of Investor Relations at Eniro AB, Hakon Invest AB and Retail and Brands AB. Equity Analyst at SEB.

CEO Løft AS, Head of Business Development, INOM Norway.

Specialist physician at Sahlgrenska University Hospital. Chairman of the Swedish Medical Association. Swedish government national coordinator for the elderly 2011-2014. Government investigator, Plastic Surgery Study (Skönhetsutredningen) 2015.

Sales Director, Pfizer Sverige AB. Various marketing and sales roles at Pfizer and Pharmacia.

CEO and deputy director of AffärsConcept i Stockholm Aktiebolag. Co-author of the publication Strategiska Offentliga inköp (2010 and 2013).

CEO for several small companies, management consultant at McKinsey, management positions in organisational development and HR at Electrolux.

Total shareholding 31 Dec 2016 (own, related parties, in companies and endowment insurance),of which: 144,473 160,436 160,436 - - 19,098 3,682 96,504 80,459 960,201

Shares own and related parties, number 144,473 160,436 160,436 - - 19,098 3,682 533 483 483

Shares via company, number - - - - - - - - - -

Shares in endowment insurance, number - - - - - - - 95,971 79,976 23,200

Shares in endowment insurance through companies, number - - - - - - - - - 936,5181

Share options, number 239,616 191,691 206,688 - - 107,826 23,961 114,033 114,033 114,033


Rasmus Nerman

Ulf Bonnevier

Claus Forum

Anna Giertz Skablova

Cecilia Lannebo

Mona Lien

Eva Nilsson Bågenholm

Helena Pharmanson

Eva-Lotta Sandberg

Harald Wessman

Position Born 1978. President and CEO since 2015. Former deputy CEO and Business Area Manager, Individual & Family, 2014.

Born 1964. CFO since 2012.

Born 1965. Business Area Manager, Individual & Family since 2011. Former Business Area Manager, Norway between 2014-2015.

Born 1970. Director of Human Resources since January 2017.

Born 1973. Contracted as Head of Investor Relations since 2014.

Born 1962. Country Manager, Norway. Former Business Area Manager, Norway, 2015.

Born 1960. Director of Quality Assurance since 2015.

Born 1966. Director of Marketing and Communications since 2010.

Born 1971. Business Area Manager, Elderly Care, since 2013. Business Development Manager 2012-2013.

Born 1956. Business Area Manager, Personal Assistance since 2008.

Education M.Sc. Econ., Stockholm School of Economics. M.Sc. in International Leadership, CEMS MIM.

M.Sc. Econ. with focus on accounting and auditing, Uppsala University. Stockholm School of Economics IFL Executive Education.

M.Sc. in international social work and pedagogic leadership, University of Gothenburg. Teaching certificate, Lärarhögskolan i Jelling.

MBA in General Management at Rotterdam School of Management, Erasmus University (Netherlands) and M.Sc. in linguistics.

M.Sc. in Business and Economics from the University of Mälardalen and Wirtschafts University in Vienna. International marketing at Mälardalen University. Financial analyst, Kämpasten. Paul Ronge Media Training and Crisis Communication.

B.A. Political Science and Psychology, Oslo University and Trondheim. Management programme at BI Norwegian Business School.

Nursing Degree, Umeå University. Medical Doctor degree, University of Gothenburg. Licensed physician, specialist in internal medicine.

International MBA, Uppsala University. Director’s programme at the Stockholm Chamber of Commerce.

B.Sc. Economics, University of Gävle. Knowledge Management studies at Luleå University of Technology. Stockholm School of Economics IFL Executive Education.

M.Sc. Econ., Stockholm School of Economics. MBA from Ivey Business School, Canada.

Other current assignments Director of Vård-företagarna Bransch Individ & Familj.

- - - Director and founder of i-Core Communications AB. Deputy director of Zubizuri AB.

Member of NHO Service. Director of Stiftelsen Danviks Hospital. Vice Chairman, Director of Oriola-KD AB.

- Director of Vård-företagarna Bransch Äldreomsorg.

-

Professional experience and previous assignments President and CEO of INOM Group. Management consultant in healthcare, The Boston Consulting Group.

Country Manager of Ipsos in Sweden. CFO Western Europe of Synovate. CEO of Wolters Kluwer in Scandinavia.

Chairman and CEO of Vindora Utbildning AB. CEO of Nordstenen AB.

Director of Human Resources for TietoEnator AB and Teligent AB. Senior Consultant at PA Consulting Group. Positions in human resources and organisation at ICA AB and Baltic Beverages Holding AB.

Head of Investor Relations at Eniro AB, Hakon Invest AB and Retail and Brands AB. Equity Analyst at SEB.

CEO Løft AS, Head of Business Development, INOM Norway.

Specialist physician at Sahlgrenska University Hospital. Chairman of the Swedish Medical Association. Swedish government national coordinator for the elderly 2011-2014. Government investigator, Plastic Surgery Study (Skönhetsutredningen) 2015.

Sales Director, Pfizer Sverige AB. Various marketing and sales roles at Pfizer and Pharmacia.

CEO and deputy director of AffärsConcept i Stockholm Aktiebolag. Co-author of the publication Strategiska Offentliga inköp (2010 and 2013).

CEO for several small companies, management consultant at McKinsey, management positions in organisational development and HR at Electrolux.

Total shareholding 31 Dec 2016 (own, related parties, in companies and endowment insurance),of which: 144,473 160,436 160,436 - - 19,098 3,682 96,504 80,459 960,201

Shares own and related parties, number 144,473 160,436 160,436 - - 19,098 3,682 533 483 483

Shares via company, number - - - - - - - - - -

Shares in endowment insurance, number - - - - - - - 95,971 79,976 23,200

Shares in endowment insurance through companies, number - - - - - - - - - 936,5181

Share options, number 239,616 191,691 206,688 - - 107,826 23,961 114,033 114,033 114,033

1) Harald Wessman owns shares in endowment insurance through the company Dectera AB

Governance

Operating revenue increased by 13 percent during the year.

13% 16,000Humana has approximately

16,000 competent employees who work to improve the lives

of other people.


Financial overview Humana is a leading Nordic care company listed on Nasdaq Stockholm. The Company provides services in the areas of individual and family care, personal assistance and elderly care in Sweden, Norway and Finland, and special services housing pursuant to the LSS Act. Operating revenue was SEK 6,362 million in 2016, corresponding to growth of 13 percent. Humana has about 16,000 employees who work every day to help more than 9,000 customers achieve a better life.

5.8%Humana is a growth company,

and made seven qualitativeacquisitions in 2016.

7 Humana’s employees work every

day to help more than 9,000 customers/clients achieve

a better life.

9,000Humana’s adjusted operating

margin in 2016 was 5.8%.


Introduction Our value creation Responsible care provider Our care work Financial overviewGovernance Notes and other informationFinancial overview

Top: Humana’s shares were admitted to trading on Nasdaq Stockholm on 22 March.Above: Ekhaga, Humana’s first elderly housing unit under own manage-ment in Gävle.

The year has been eventful with Humana’s successful IPO, the expan-sion into Finland, no fewer than seven acquisitions and the establishment of several new qualitative operations.

Q1 January – March • Rasmus Nerman completed his first quarter as President and CEO

of Humana. • The 2016 AGM made a number of decisions associated with the IPO.• Humana’s shares were admitted to trading on Nasdaq Stockholm

on 22 March.• In connection with the IPO, a new share issue and 45:1 split were con-

ducted. Total proceeds from the share issue were SEK 450 million.• A new long-term financing agreement was also signed in connection

with the IPO.• Inauguration of Humana’s first elderly housing unit under own man-

agement in Gävle.

Q2 April – June • Humana expanded into Finland through the acquisition of Arjessa Oy.

Arjessa’s revenue for 2016 was SEK 386 million and operating profit was SEK 32 million.

• Humana strengthened its geographical presence and care offering in Norway with the acquisition of Kvæfjord Opplevelse og Avlastning AS (KOA Group). KOA’s revenue for 2016 amounted to SEK 352 million and operating profit was SEK 64 million.

• Humana acquired Nygårds Vård Gotland AB, now part of the Individual & Family business area.

• Political debate about profits in the welfare system and dividend restrictions increased during the quarter.

• A number of political decisions on measures to reduce government costs in the personal assistance segment adversely affected the market and Humana. These included stricter assessment by Försäkringskass-an and increased payroll expenses.

• Humana’s first Group quality report was published.

Q3 July – September • The wage negotiations conducted with the Swedish Municipal Workers'

Union in the area of personal assistance were concluded, resulting in a payroll increase of 2.2 percent, compared with an increase of 1.0 percent in the state reimbursement level.

• Humana acquired two small companies, Kilen AB and FUGA omsorg AB.

• To further strengthen the growth and development of group homes and focus on the growth potential of elderly housing units under own management, a reorganisation of Humana’s LSS operations in special services housing was conducted. With effect from the third quarter, the operations have moved from Elderly Care to Individual & Family.

Q4 October – December • Försäkringskassan moved from payment in advance to payment in

arrears. The negative impact on working capital for the quarter was about SEK 300 million.

• Humana acquired Platea AB, which runs residential care homes for younger children and is also active in family and outpatient care.

• Humana also acquired Pienryhmäkoti in Finland. The acquisition helped strengthen Humana’s presence in the important region of Nyland.

Key ratios by quarterQ1 Q2 Q3 Q4

Operating revenue, SEK million 1,471 1,534 1,676 1,681

Revenue growth Q 2016 vs. Q 2015, % 9 11 19 11

Organic revenue growth, % 4 2 3 -0

Operating profit, SEK million 41 56 159 73

Average number of customers 7,494 7,818 8,932 9,199

Average number of full-time employees 9,379 9,459 10,694 10,116

Important events during 2016


Board of Directors’ report

Board of Directors’ reportHumana AB, corporate identity number 556760-8475. The Board of Directors and CEO of Humana AB, registered office in Stockholm, hereby present the annual report and consolidated accounts for the financial year 2016.

Operations Humana is a leading care company in the Nordic region with some 16,000 employees, providing services in the areas of individual and family care, personal assistance and elderly care, and special services housing pursuant to the LSS Act. Since the Company was founded in 2001, Humana has grown from offering high-quality services within personal assistance to currently having a market-leading position in individual and family care and personal assistance in Sweden. In Finland and Norway, Humana is the second-largest provider of services in individual and family care. Humana’s strategy is to provide operations in the care sector which are run under own management. Humana’s employees work every day to help more than 9,000 customers and clients achieve a better life.

Market Humana is active in all segments of the Swedish care market and in individual and family care, and in the personal assistance segment in Norway. In Finland, the market into which Humana expanded with the acquisition of Arjessa in spring 2016, Humana is a leader in the individual and family care segment.

Care market Market size Growth (%) vs. previous year

Private care (%)

Estimated no. of companies

Sweden SEK 231 billion1 5 19 12,500

Finland SEK 73 billion2 2 17 na

Norway SEK 132 billion3 2 10 2,3301) Municipal costs 2015. The cost of personal assistance financed by Försäkringskassan is

approximately SEK 30 billion.

2) NHG analysis 2014.

3) NHO Service 2015. Number of companies including foundations.

Acquisitions/disposals during the year Humana is a growth company in the care sector. The goal is for the business to grow through a combination of organic growth, i.e., by its own efforts, and company acquisitions. Humana is active in the ongoing market consolidation and is continuously seeking attractive acquisition candidates that fit into the Company’s strategy. Huma-na’s financial objective is to achieve an annual growth rate of 8-10 percent in the medium term. Humana has three primary aims in its acquisition strategy:• to achieve volume and economies of scale• to strengthen the geographical presence and existing operations

through small complementary acquisitions • to complement existing operations with new service areas in which

Humana sees growth potential

Humana has completed 38 acquisitions since 2009. In 2016, Humana made seven acquisitions: • April 2016 Nygårds Vård Gotland AB (Individual & Family)• May 2016 Arjessa Oy (Other Nordics)• May 2016 Kvæfjord Opplevelse og Avlastning AS (Other Nordics)• September 2016 Kilen Akut Behandlingshem AB (Individual &

Family)• September 2016 FUGA omsorg AB (Individual & Family)• November 2016 Platea AB (Individual & Family)• December 2016 Pienryhmäkoti Puolenhehtaarin Metsä Oy

(Other Nordics)

Arjessa OyIn May, Humana signed an agreement to acquire Arjessa Oy, one of the leading individual and family care providers in Finland. The deci-sion to expand into Finland was in line with Humana’s stated growth strategy and represented an important platform for further expansion in Finland. The acquisition made Humana a genuine leader in Nordic care. In addition to increasing the geographical presence and position as a leading provider, the Arjessa acquisition also strengthened Huma-na’s position and expertise in the areas of psychosocial problems and mental illness. The company’s revenue for 2016 was SEK 386 million and operating profit was SEK 32 million. The purchase consideration amounted to SEK 271 million.

Kvæfjord Opplevelse og Avlastning AS (KOA Group)Kvæfjord Opplevelse og Avlastning AS (KOA Group) conducts its own operations in the areas of individual and family care and special services housing pursuant to the HOT Act. The acquisition expanded Humana’s existing care services to include psychosocial interventions for adults, while also strengthening the Company’s geographical presence. The KOA Group’s revenue for 2016 was SEK 352 million and operating profit was SEK 64 million. The prelimi-nary purchase consideration is SEK 223 million, which includes an additional consideration of SEK 18 million.

Other minor acquisitions • Nygårds Vård Gotland AB, which provides accommodation with

special services for adults with mental disabilities, open compulso-ry psychiatric care and open forensic psychiatric care. The Nygårds acquisition represented a geographical expansion of the Individual & Family business area.

• Kilen Akut Behandlingshem AB, a company with six care places. The target group is young people with severe behavioural disorders in combination with comprehensive psychosocial problems.

• Fuga omsorg AB provides development-oriented daily activities for individuals with learning disabilities, autism or Asperger’s syndrome.

• Platea AB offers residential care homes, family homes and outpa-tient care for young children and their families.

• Pienryhmäkoti Puolenhehtaarin Metsä Oy, with operations in the region of Nyland in Finland, offers psychosocial care and treat-ment for children and young people.

The total purchase consideration, including contingent consid-eration, for the seven acquisitions during the year was SEK 555 million. The seven acquisitions contributed SEK 442 million to Humana’s revenue in 2016 and SEK 53 million to the Compa-ny’s operating profit. If the acquisitions had been conducted on 1 January 2016, Humana’s revenue would have increased by SEK 361 million to SEK 6,723 million and operating profit by SEK 46 million to SEK 374 million.

During the first quarter, three home care service units in Stock-holm were transferred to Attendo in order to focus on and harness the growth opportunities in the market for establishing elderly housing under own management, and to streamline and improve the profitability of Humana’s remaining home care service operations. The units’ revenue for 2015 amounted to SEK 59 million, while operating profit was SEK -7 million.



Consolidated income statements

SEK millions (excl. earnings per share) Note 2016 2015Operating revenue

Net revenue 3 6,362 5,593

Other operating revenue 4 - 62

Total revenue 6,362 5,655

Operating expenses

Other external expenses 6, 8 -963 -794

Personnel costs 7 -4,964 -4,430

Depreciation/amortisation of assets 13, 14 -50 -46

Goodwill impairment 12 - -36

Other operating expenses 4 -57 -37

Operating profit 3 329 312

Finance income 9 11 1

Finance expenses 9 -140 -172

Unrealised changes in value of derivatives 27 7

Profit before tax 228 149

Tax 10 -58 -35


Attributable to:

Parent Company shareholders 170 114

Earnings per ordinary share, basic, SEK 11 2.87 0.61

Earnings per ordinary share, diluted, SEK 11 2.87 0.61

Operating revenue and growth, Group

Adjusted operating profit and operating margin, Group

Operating revenue, SEK M Growth, %

Adjusted operating profit, SEK M Adjusted operating margin, %

Consolidated statements of comprehensive incomeSEK millions Note 2016 2015Profit for the year 170 114

Other comprehensive income - -

Other comprehensive income for the year - -

Items that have been/may be reclassified to profit or loss:

Exchange differences on translation of foreign operation 15 -7

Exchange differences reclassified to profit or loss - 0

Comprehensive income for the year 185 107

Attributable to:

Parent Company shareholders 185 107

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0

3

6

9

12

15

5,6556,362

2015 2016

SEK M %

0

100

200

300

400

0

1

2

3

4

5

6

7

8

9

10

340369

2015 2016

SEK M %



Operating revenue and operating profitGroupThe Group’s operating revenue was SEK 6,362 million (SEK 5,655, incl. capital gain of 62 million), an increase of 13 percent compared with 2015. This meant that the increase in revenue exceeded the Group’s revenue target of annual revenue growth of 8-10 percent in the medium to long term. Own managed operations accounted for 95 percent of revenue at the end of 2016. Acquisitions contributed SEK 720 million to revenue. Organically, revenue increased by SEK 69 million or 1.1 percent.

Operating profit for 2016 increased to SEK 329 (312) million, corresponding to an operating margin of 5.2 (5.6) percent. Operat-ing profit was negatively affected by non-recurring costs of SEK 40 million associated with the IPO. Not including costs associated with the IPO, adjusted operating profit was SEK 369 million (SEK 340 million). The adjusted operating margin for the full year amounted to 5.8 (6.1) percent, which is in line with Humana’s profitability target. Operating profit was adversely affected by increased costs of SEK 51 million arising from higher social security contributions for young people, an increase of SEK 18 (1) million in rental costs as a result of a sale & leaseback agreement, and acquisition costs of SEK 16 (4) million. Acquired companies made a positive contribution of SEK 91 million to operating profit.

Earnings growth, change in operating and non-recurring costs 2016 2015Operating profit, SEK million 329 312

Earnings impact of changes in operating costs, SEK M

Increased costs due to higher social security contri-butions for young people

-51 -

Increased rental costs due to property sales and sale & leaseback

-18 -1

Acquisition costs -16 -4

Net effect operating costs -85 -5

Effect of non-recurring items, SEK M

IPO -40 -

Capital gain on property sale - 62

Change of CEO - -6

Consultancy costs associated with refinancing - -15

Goodwill impairment - -36

Capital loss on disposal of Villa Skaar - -32

Net effect of non-recurring costs -40 -27

SeasonalityDistribution of revenue during the year shows that Humana’s operations are not significantly affected by any seasonal variations. Changes in revenue between quarters and compared with the preceding year are partly attributable to the point in time at which acquisitions were made in 2015 and 2016. Revenues and earnings are positively affected by months with many days and no long weekends. The Company’s third quarter is the strongest in terms of earnings, as this is when employees take holidays, resulting in changes in the holiday pay liability.

Performance by business areaIndividual & FamilyRevenue increased by 16 percent to SEK 2,214 (1,902) million, or SEK 312 million, with acquisitions contributing SEK 230 million to the total. The increase in revenue during the year is mainly attrib-utable to more units and more clients than in the previous year. Or-ganic growth was 4.4 percent. Operating profit was SEK 211 (221) million, corresponding to an operating margin of 9.5 (11.6) percent. The margin decline is due to lower occupancy rates, higher expan-sion costs, higher social security contributions for young people, reorganisation of units and increased rental costs now that previous-

ly owned properties are being leased. Acquisitions contributed SEK 35 million to operating profit for the year.

The average number of clients increased by 16 percent during the year. The increase is attributable to Humana’s organic establishment of more units, acquisitions and the fact that higher demand in the individual and family area due to increased mental illness.

Humana continued to expand during the year, both organically and through acquisitions. In 2016, four acquisitions were made in the Individual & Family business area:• Nygårds Vård Gotland AB• Kilen Akut Behandlingshem AB• FUGA omsorg AB• Platea AB

Personal AssistanceRevenue declined by 2 percent to SEK 2,645 (2,689) million, which was slightly better than the market, which fell by 3 percent. The de-cline in revenue was due to a smaller number of customers compared with the previous year. Stricter assessment by Försäkringskassan contributed to a reduction in the rate of increase in the number of assistance hours, while retracted assistance decisions reduced the number of customers. Operating profit declined to SEK 151 (182) million. Earnings were adversely affected by a higher increase in pay-roll expenses than the state reimbursement level and the withdrawal of the social security contribution subsidy for young people. The cost increase due to higher social security contributions for young people amounted to SEK 39 million during the year. An efficiency pro-gramme is in progress, aimed at adjusting costs to changing market conditions. Implemented measures have largely compensated for the cost increases. There were no acquisitions in the business area during the year.

Elderly CareRevenue for the Elderly Care business area declined by 1 percent to SEK 580 (585) million during the year. Revenue was positively affected by the establishment of an elderly housing unit under own management, but negatively affected by the decision to transfer three home care service units with annual revenue of SEK 59 million to Attendo in the first quarter of 2016. The elderly care market in Sweden is increasing in the face of an ageing population. To meet market demand, construction of two elderly housing units under own management is in progress. The homes will open in 2017. It has also been decided to construct another unit in southern Sweden. Operating profit improved to SEK -6 million (SEK -22 million, excl. goodwill impairment of -36 million) during the year. The improve-ment is attributable to the disposal of unprofitable home care service units and the establishment of the elderly housing unit under our management in Gävle. There were no acquisitions in the business area during 2016.

Other Nordics Revenue from Humana’s operations in Finland and Norway in 2016 amounted to SEK 924 (416) million, an increase of 122 percent. Ac-quisitions, notably KOA Group in Norway and Arjessa in Finland, contributed SEK 490 million to revenue. Humana expanded into Finland with the strategically important acquisition of Arjessa in 2016. The acquisition expanded the Norway business area to include Finland and resulted in the formation of a new business area, Other Nordics. With the acquisition of KOA Group in Norway, Humana strengthened both its geographic presence and specialisation, and the Company became number two in the Norwegian care market. Operating profit for the year increased by SEK 102 million to SEK 89 million (SEK -13 million, incl. capital loss of 32 million on the sale of Villa Skaar), corresponding to an operating margin of 9.6 (-3.2) percent. Acquisitions contributed SEK 55 million to operating



profit. At the end of the year, Humana acquired Pienryhmäkoti Puolenhehtaarin Metsä Oy, with operations in the region of Nyland in Finland.

Depreciation/amortisation and EBITDADepreciation/amortisation increased to SEK 50 (46) million due to increased depreciation/amortisation in acquired companies and in-creased investments. EBITDA amounted to SEK 379 (394) million, corresponding to an EBITDA margin of 6 (7) percent.

Net financial items Net financial items improved during the year, as a result of a more favourable loan agreement signed in connection with the Company’s IPO. The Group’s net financial items for the year amounted to SEK -129 million, SEK 42 million of which related to the expensing of previously capitalised financing costs (SEK -171, SEK 43 million of which related to the expensing of previously capitalised financing costs). The effect of unrealised changes in the value of derivatives was SEK 27 (7) million.

Profit before tax Profit before tax was SEK 228 (149) million, corresponding to a profit margin before tax of 3.6 (2.6) percent.

Tax Reported tax was SEK -58 (-35) million, corresponding to an effec-tive tax rate of 25.5 (23.7) percent.

Profit for the year and earnings per share Profit after tax for 2016 was SEK 170 (114) million, an increase of SEK 56 million compared with the previous year. Earnings per share amounted to SEK 2.87 (0.61). The improvement is partly an effect of higher earnings, but is also attributable to the conversion of the previous preference shares in March, after which there was no preference shareholder return to deduct.

Operating profit by segmentSEK millions 2016 2015Individual & Family 2,214 1,902

Personal Assistance 2,645 2,689

Elderly Care 580 585

Other Nordics 924 416

Total operating revenue 6,362 5,593

Operating revenue by countrySEK millions 2016 2015Sweden 5,438 5,238

Finland 227 -

Norway 697 416

Total operating revenue 6,362 5,655

Key ratios by business areaIndividual & Family Personal Assistance Elderly Care Other Nordics

2016 2015 2016 2015 2016 2015 2016 2015Operating revenue, SEK million 2,214 1,902 2,645 2,689 580 585 924 416

Organic revenue growth, % 4 2 -2 3 -1 -11 7 -

Operating profit, SEK million 211 221 151 182 -6 -581 89 -132

Operating margin, % 9.5 11.6 5.7 6.8 -1.1 -9.8 9.6 -3.2

Average number of customers/clients 2,165 1,861 1,904 1,952 3,006 3,248 1,286 202

Average number of full-time employees 2,528 2,115 5,198 5,313 1,248 1,319 920 393

1) Includes goodwill impairment of SEK 36 million2) Includes capital loss of SEK 32 million on the disposal of Villa Skaar



Consolidated balance sheets

SEK millions Note 31/12/2016 31/12/2015ASSETS

Non-current assets

Goodwill 5,12 3,089 2,584

Other intangible assets 13 13 9

Property, plant and equipment 14 405 200

Financial assets 6 4

Total non-current assets 3,514 2,797

Current assets

Current receivables

Trade receivables 15 523 440

Tax receivables 51 53

Other receivables 6 19

Prepaid expenses and accrued income 16 401 28

Total current receivables 981 540

Cash and cash equivalents 17 465 501

Total current assets 1,446 1,040

TOTAL ASSETS 4,960 3,838

EQUITY AND LIABILITIES

Equity 18

Share capital 1 1

Other paid-in capital 1,091 642

Translation reserve 8 -7

Retained earnings, including profit for the year 626 458

Total equity attributable to Parent Company shareholders 1,726 1,093

Non-current liabilities

Interest-bearing liabilities 19 1,405 1,550

Deferred tax liability 10 78 66

Total non-current liabilities 1,484 1,616

Current liabilities

Interest-bearing liabilities 19 677 125

Derivative instruments 21 10 38

Trade payables 103 79

Other current liabilities 262 245

Accrued expenses and deferred income 20 698 643

Total current liabilities 1,750 1,129

TOTAL EQUITY AND LIABILITIES 4,960 3,838



Balance sheet Humana’s total assets were SEK 4,960 (3,838) million at the end of 2016, an increase of 29 percent from 2015. The increase is mainly attributable to Humana’s seven acquisitions during the year.

Non-current assetsThe Group’s non-current assets increased to SEK 3,514 (2,797) million during the year. The increase is largely attributable to the acquisitions of Arjessa and KOA Group, which increased the Group's goodwill. Goodwill of SEK 3,089 (2,584) million was the largest item in the category at 88 percent. The balance sheet also includes other intangible assets, comprising systems and licences, and property, plant and equipment, which also includes finance leases (leased cars).

Current assetsThe largest item under current assets is trade receivables at SEK 523 (440) million. The large increase in current receivables is mainly due to the change in payment terms for Personal Assistance, introduced in October 2016, with SEK 346 (-) million representing receivables from Försäkringskassan in the form of accrued income for assistance provided. In addition, Humana’s underlying growth and the acquisi-tions of Arjessa and KOA Group brought increased trade receivables. Humana’s customers consist mainly of state, municipal and county council entities in Sweden, Finland and Norway, and credit risk is therefore considered to be low.

Cash and cash equivalents Cash and cash equivalents, consisting of cash and bank balances, declined slightly to SEK 465 (501) million during the year. Humana’s credit facility includes a bank overdraft facility of SEK 200 (100) million. The overdraft facility was fully utilised as at 31 December 2016.

Financing Equity increased with the new share issue in connection with the IPO and was SEK 1,726 (1,093) million at the end of the year. The equity/assets ratio was 35 (29) percent. No dividend was paid during the previous year.

The Group’s interest-bearing net debt was SEK 1,628 (1,174) mil-lion at the end of the year. The net debt to adjusted EBITDA ratio was 3.9 (3.0), which means the Group’s target for the ratio to remain below 3.0 times was not achieved. However, Humana’s target for the Company’s capital structure allows debt to temporarily, e.g., in connection with acquisitions, exceed the target level of 3.0 times.

Financial position

SEK millions31 Dec

201631 Dec

2015Non-current interest-bearing liabilities 1,405 1,550

Current interest-bearing liabilities 687 125

Cash and cash equivalents -465 -501


Equity/assets ratio 34.8% 28.5%

Interest-bearing net debt/adjusted EBITDA, 12 months, times 3.9x 3.0x

Cash flowThe Group’s cash flow from operating activities was SEK 379 (367) million. Cash flow from operating activities for the year was nega-tively affected by costs SEK 40 million associated with the Compa-ny’s IPO and SEK 16 (4) million associated with acquisitions.

Change in working capitalThe change in working capital during 2016 was SEK -372 (38) million. The change from payment in advance to payment in arrears in the area of personal assistance, introduced in October 2016, had an impact of approximately SEK 300 million on working capital in the fourth quarter. Working capital was also negatively affected by increased trade receivables as a result of growth.

Cash flow from investing activities Investing activities amounted to SEK -616 (78) million and were mainly related to acquisitions, including settlement of additional purchase considerations for acquisitions made in previous years, totalling SEK 474 (141) million. In the previous year, the sale of a property portfolio affected cash flow by SEK 250 million.

Financing activities Humana entered into a new five-year loan agreement with DNB and SEB in March. The loan agreement, which amounts to SEK 2,200 million, is divided into three parts. The annual interest rate is about 2 percent, most of which is variable interest. Two covenants are associated with the loan agreement: net debt/EBITDA and interest coverage ratio.

A new share issue of SEK 450 (-) million was completed in con-nection with the IPO. New loans of SEK 1,969 (1,639) million were taken out during the year. The Group’s repayment of interest-bearing liabilities had an effect of SEK -1,678 (-1,732) million on cash flow. No dividend was paid. Cash flow from financing activities was SEK 733 (-93) million.

Capital structure SEK millions 2016 2015Total assets 4,960 3,838

Capital employed 3,818 2,768

Equity 1,726 1,093


Net debt/adjusted EBITDA, times 3.9 3.0

Investments SEK millions 2016 2015Acquisition of operations, net cash impact -474 -141

Disposal of operations, net cash impact - 261

Capital expenditures in other non-current assets, net

-142 -42

Total investments -616 78



Consolidated statements of cash flows

SEK millions Note 2016 2015Cash flow from operating activities

Profit/loss before tax 228 149

Adjustments for:

Depreciation/amortisation and impairment 50 82

Finance income -11 -1

Finance expenses 139 172

Unrealised changes in value of derivatives -27 -7

Capital gain/loss 4 - -29

Other - 2

Cash flow from operating activities before changes in working capital 379 367

Changes:

Decrease (+)/increase (–) in trade receivables 2 -30

Decrease (+)/increase (-) in other operating receivables -363 29

Decrease (-)/increase (+) in other operating liabilities -16 35

Decrease (–)/increase (+) in trade payables 6 3

Cash flow from operating activities 8 405

Interest received - 2

Interest paid -99 -102

Tax paid -70 -31

Net cash flow from operating activities -161 274

Investing activities:

Acquisition of subsidiaries, net cash impact 5 -474 -141

Disposal of subsidiaries, net cash impact 4 - 261

Disposal of property, plant and equipment 1 4

Investments in intangible assets and property, plant and equipment -143 -46

Cash flow from investing activities -616 78

Financing activities:

Loans raised 1,969 1,639

Repayment of loans -1,678 -1,732

New share issue 442* -

Cash flow from financing activities 733 -93

Cash flow for the year -44 258

Cash and cash equivalents at start of year 17 501 244

Exchange differences 8 -2

Cash and cash equivalents at end of year 17 465 501

*Includes transaction costs of SEK -8 million.



Consolidated statements of changes in equity

Equity attributable to Parent Company shareholders

SEK millions Note Share capitalOther paid-in

capitalTranslation

reserve

Retained earnings,

including profit for the year Total equity

K18

Opening equity, 1 Jan 2015 1 642 0 343 986

Profit for the year - - - 114 114

Other comprehensive income - - -7 - -7

Comprehensive income for the year - - -7 114 107

Closing equity, 31 Dec 2015 1 642 -7 457 1,093

Opening equity, 1 Jan 2016 1 642 -7 457 1,093

Owner transactions

New share issue 0 450 - - 450

Listing expenses - -8 - - -8

Tax on listing expenses - 2 - - 2

Warrant issue - 5 - - 5

Total owner transactions 0 448 - - 448

Profit for the year - - - 170 170

Other comprehensive income - - 15 - 15

Comprehensive income for the year - - 15 170 185

Closing equity, 31 Dec 2016 1 1,091 8 626 1,726



Three-year overview

Quarterly overview

SEK millions 2016 2015 2014Condensed consolidated income statements

Operating revenue 6,362 5,655 5,065

Operating profit before depreciation, amortisation and impairment (EBITDA) 379 394 339

Operating profit (EBIT) 329 312 307

Profit before tax 228 149 156

Profit for the year (attributable to Parent Company shareholders) 170 114 115

Condensed consolidated balance sheet

Assets

Goodwill 3,089 2,584 2,565

Other non-current assets 424 213 305

Current assets 1,446 1,040 790

Total assets 4,960 3,838 3,660

Condensed equity and liabilities

Equity 1,726 1,093 986

Non-current liabilities 1,484 1,616 1,710

Current liabilities 1,750 1,129 963

Total equity and liabilities 4,960 3,838 3,660

Condensed consolidated statements of cash flows

Net cash flow from operating activities -161 274 156

Cash flow from investing activities -616 78 -868

Cash flow from financing activities 733 -93 668

Cash flow for the year -44 258 -45

2016 2015

SEK millions Full year Q1 Q2 Q3 Q4 Full year Q1 Q2 Q3 Q4 Operating revenue by segment

Individual & Family 2,214 549 552 553 560 1,902 443 452 472 535

Personal Assistance 2,645 666 656 671 651 2,689 656 671 688 673

Elderly Care 580 143 144 145 147 585 148 145 144 148

Other Nordics 924 113 182 307 322 417 104 110 100 103

Operating revenue 6,362 1,471 1,534 1,676 1,681 5,593 1,351 1,379 1,404 1,459

Operating profit by segment

Individual & Family 211 55 43 79 34 221 48 43 79 51

Personal Assistance 151 38 35 43 34 182 49 33 56 45

Elderly Care -6 -5 -5 6 -2 -58 -2 -7 3 -51

Other Nordics 89 4 18 44 23 -13 5 -28 7 3

Other -115 -51 -34 -13 -16 -20 -15 -16 -19 30

Operating profit 329 41 56 159 73 312 84 24 126 78

Operating margin by segment

Individual & Family, % 9.5 10.1 7.7 14.3 6.1 11.6 10.9 9.4 16.8 9.5

Personal Assistance, % 5.7 5.8 5.4 6.4 5.2 6.8 7.4 4.9 8.1 6.7

Elderly Care, % -1.1 -3.8 -3.6 4.4 -1.5 -9.8 -1.3 -5.1 1.8 -34.2

Other Nordics, % 9.6 3.9 9.7 14.2 7.3 -3.2 4.4 -25.2 7.1 2.7

Operating margin, % 5.2 2.8 3.7 9.5 4.3 5.6 6.2 1.7 9 5.3



Key ratios

SEK millions 2016 2015Operating revenue 6,362 5,655

Profit measures

Operating profit before depreciation, amortisation and impairment (EBITDA) 379 394

Operating profit (EBIT) 329 312


Earnings per ordinary share, SEK 2.87 0.61

Margin measures

Operating margin before depreciation, amortisation and impairment (EBITDA), % 6.0 7.0

Operating margin (EBIT), % 5.2 5.5

Capital structure

Equity/assets ratio, % 34.8 28.5

Return on capital employed, % 8.9 11.3


Interest-bearing net debt/adjusted EBITDA, times 3.9x 3.0x

Operating cash flow -134 389

Per-share data

Number of ordinary shares at end of year 53,140,064 45,881,685

Operating cash flow per share, SEK -2.5 8.5

Other

Number of full-time employees at end of year 10,091 9,231

Average number of customers 8,361 7,262



Parent Company income statements

Parent CompanyThe Parent Company’s registered office is in Stockholm. Operating profit for the year was SEK 54 (0) million. The Parent Company’s equity/assets ratio was 43.6 (59.8) percent.

SEK millions Note 2016 2015Operating revenue

Operating revenue P1 5 7

Operating expenses

Other external expenses P1, P2 -9 -12

Personnel costs -5 0

Other operating expenses -40 0

Operating profit/loss -48 -5

Profit/loss from financial items

Income from shares in Group companies - Group contributions received 155 45

Interest income 0 0

Interest expenses -36 -46

Profit/loss after financial items 70 -6

Change in tax allocation reserve P5 -1 7

Profit/loss before tax 69 0

Tax -15 0

Profit for the year and comprehensive income for the year 54 0



Parent Company balance sheets

SEK millions Note 31/12/2016 31/12/2015ASSETS

Non-current assets P3

Financial assets

Shares in subsidiaries P4 1,623 1,623

Total non-current assets 1,623 1,623

Current assets

Current receivables

Receivables from Group companies 1,890 47

1,890 47

Cash and bank balances 0 51

Total current assets 1,890 98


EQUITY AND LIABILITIES

Equity

Restricted equity

Share capital G18 1 1

Unrestricted equity

Share premium reserve 1,090 642

Retained earnings 386 386


Total equity 1,532 1,030

Untaxed reserves

Tax allocation reserve P5 171 170

Total untaxed reserves 171 170

Non-current liabilities

Liabilities to credit institutions P6 1,354 470

Total non-current liabilities 1,354 470

Current liabilities

Liabilities to credit institutions 439 25

Trade payables 1 2

Tax liability 13 -

Liabilities to Group companies - 20

Other current liabilities 0 0

Accrued expenses and deferred income P7 3 5

Total current liabilities 456 52

TOTAL EQUITY AND LIABILITIES 3,513 1,722



Parent Company statements of cash flows

SEK millions 2016 2015Cash flow from operating activities

Operating profit/loss -48 -5

Adjustments for non-cash items

Other non-cash items 5 45

-43 40

Interest received - 2

Interest paid -36 -42

Tax paid -2 14

Cash flow from operating activities before changes in working capital -81 14

Cash flows from changes in working capital

Decrease (+)/increase (–) in receivables - 5

Decrease (–)/increase (+) in current liabilities -1 0

Decrease (–)/increase (+) in trade payables -1 -6

Cash flow from operating activities -83 11

Cash flow from investing activities - -

Financing activities

Loans raised 1,769 495

Repayment of loans -495 -969

New share issue 442* -

Loans, Group companies -1,684 505

Cash flow from financing activities 32 31

Cash flow for the year -51 42

Cash and cash equivalents at start of year 51 9

Cash and cash equivalents at end of year 0 51

*Includes transaction costs of SEK -8 million.



Parent Company statements of changes in equity

SEK millions Share capitalShare premium

reserve

Retained earn-ings,

including profit for the year Total equity

Opening equity, 1 Jan 2015 1 642 386 1,030

Profit for the year and comprehensive income for the year - - 0 0

Closing equity, 31 Dec 2015 1 642 386 1,030

Opening equity, 1 Jan 2016 1 642 386 1,030

Profit for the year and comprehensive income for the year - - 54 54

Owner transactions

New share issue 0 450 - 450

Listing expenses - -8 - -8

Tax on listing expenses - 2 - 2

Warrant issue - 5 - 5

Total owner transactions 0 448 - 448

Closing equity, 31 Dec 2016 1 1,090 440 1,532

DividendHumana’s Board proposes a dividend of SEK 0.50 per share for the 2016 financial year to the 2017 an-nual general meeting. The proposal, which represents a dividend of approximately 15 percent of profit, is below the company’s long-term objective. The proposal should be seen considering estimated good future expansion opportunities and of the consequences of the company’s debt exceeding the long-term target.

SEK 2016Profit brought forward 1,476,932,773

Profit for the year 53,823,142

Total 1,530,755,915

To be distributed as follows:

Dividend of SEK 0.50 per share (total of 53,140,064 shares) 26,570,032

Carried forward 1,504,185,883

Total 1,530,755,915



Financial targets Outcome

Revenue Annual growth rate of 8-10 percent in the medium term, achieved through organic growth as well as bolt-on acquisitions.

Humana’s operating revenue increased by 13 percent during the financial year, which was above the Compa-ny’s target.

Profitability • An operating margin of approximately 6 percent over the medium term.

Adjusted operating profit amounted to SEK 369 (340) million, an operating a margin of 5.8% (6.0%), which was in line with Humana’s profitability target.

Capital structure • Interest-bearing net debt in relation to EBITDA not to exceed a factor of 3.0 times.

• However, leverage may temporarily exceed the target level, for example, in relation to acquisitions.

Humana’s interest-bearing net debt to adjusted EBITDA was 3.9 times, which was above the target for the Group’s capital structure.

Dividend policy • Payment of a dividend equivalent to 30 percent of net profit for the year.

• The proposed dividend shall consider Humana’s long-term development potential and financial posi-tion.

The Board’s dividend proposal to the 2017 AGM is SEK 0.50 per share. The proposal, which represents a divi-dend of approximately 15 percent of net profit for the year, is below the Company’s long-term target. The pro-posal should be viewed in the context of an assessment of good future growth potential and as a consequence of the Company's debt exceeding the long-term target.

EmployeesThe average number of full-time employees at Humana in 2016 was 9,912, an increase of 8 percent from the previous year. The increase in the number of employees is due to the expansion and acquisitions made during the year. The average number of employees working in the Group’s central functions was 19 (14). The average number of employees per country is distributed as follows:• Sweden, 8,993 employees (-5%) = 91% • Norway, 659 employees (+3%) = 7%• Finland, 260 employees (new market for Humana) = 2%

68 (69) percent of the average number of employees were women and 32 (31) were men. The proportion of women who were part of the management of any of Humana’s four business areas was 50 (58) percent. The change compared with the previous year was due en-tirely to the inclusion of Finland in the year’s figures. The proportion of women in Humana’s Group management increased to 60 (56) percent during the year.

Humana conducts its own initiatives to improve expertise in the Company. A total of 8,000 (6,800) web-based training courses were conducted in Human Academy in 2016, an increase of 18 percent from 2015.

Humana endeavours to ensure that the Company’s employees reflect the diversity of the Group’s customers and society in general. Humana therefore works actively on diversity issues. As one of the largest private employers in Sweden, Humana is a key contributor to job creation for individuals of foreign origin.

EnvironmentHumana’s operational environmental work is conducted locally in the different businesses and is based on each business’s environ-mental policy. Focus areas for Humana include the environmental impact of transport, energy consumption, waste management and purchasing. A comprehensive energy analysis of all properties owned by Humana was conducted in 2016. The analysis will be be used as the basis for an action plan to reduce energy consumption.

Events after the end of the year• The Board of Humana proposes that the 2017 AGM adopt a

dividend of SEK 0.50 per share for the financial year 2016.• Humana made a small acquisition – Skelleftea Support and

Treatment AB (Individual & Family) – in January. • Humana has signed an agreement to establish an elderly housing

unit under own management in Staffanstorp in southern Sweden. The home is expected to open during 2018.

The future, financial targets and performanceThe futureHumana will continue to develop its position as a leading care com-pany in the Nordic region in 2017. The goal is to continue to grow, both organically and through acquisitions, while the Group advances its positions in the day-to-day process of offering a high-quality op-eration and being an attractive employer and responsible community player that drives the sector’s sustainable development.

The Corporate Governance Report on pages 37–48 has a detailed description of the Group’s governance, the Board’s work and internal control mechanisms.

Note K7 contains guidelines for the remuneration of senior executives.



The Humana shareHumana’s market capitalisation was SEK 3.8 billion at the end of the year. Since its admittance to trading on Nasdaq Stockholm on 22 March 2016, the share has shown a positive price trend, rising by 16 percent.

Trading and market capitalisationSince the IPO, a total of 27.4 million shares have been traded at a value of just under SEK 2 billion. The average daily share turnover amounted to SEK 10 million. The turnover rate for the Humana share on Nasdaq Stockholm was in line with the average for the OMX Stockholm Stock Exchange AllShare, which was 0.67 times. The majority, about 96 percent, of the Humana share turnover took place on Nasdaq Stockholm. In addition to trading on the Stock-holm Stock Exchange, 3 percent was conducted on the Bats CXE marketplace and 1 percent on Bats BXE. The market capitalisation at the end of 2016 was SEK 3.8 billion.

Share price development in 2016The Humana share was listed on the Nasdaq Stockholm on 22 March 2016 at a share price of SEK 62. The market capitalisation on the IPO date was therefore SEK 3.3 billion. Since the IPO, the share has risen by 16 percent, closing the year at a price of SEK 71.75. The highest price paid was SEK 85.50, recorded on 19 August, and the lowest price paid was 67.25 on 31 March and 3 May.

Share-based incentive programmes Humana has two long-term incentive programmes: one for the Company’s senior executives and one including 187 other Humana employees. The purpose of the incentive programmes is to encour-age a broad shareholding among Humana employees, facilitate recruitment, retain competent employees and increase motivation to achieve or exceed Humana’s financial targets.

The programmes comprise a warrant programme and a share saving programme. The warrant programme involves eight senior executives with a total of 1,440,420 warrants entitling the holder to subscribe for the same number of new Humana shares. The market value amounts to approximately SEK 5.5 million and in the event of full subscription, dilution will be about 2.6 percent of the total number of Humana shares. At full allotment, the share saving programme’s total number of shares is estimated at a maximum of 106,000 shares, corresponding to approximately 0.2 percent of the total number of shares outstanding in the Company.

Dividend and dividend policy Humana's goal is for the Company’s dividend to amount to 30 per-cent of profit for the year and for the proposed dividend to take into account Humana’s long-term development potential and financial position. The Board has proposed to the 2017 Annual General Meet-ing a dividend of SEK 0.50 per share, corresponding to 15 percent of profit for the year the year.

Share capitalHumana carried out a 45:1 share split in 2016. After the split, con-version of preference shares and new share issue in connection with the IPO, the number of Humana shares on 31 December 2016 was 53,140,064. Each share has a par value of SEK 0.022, which means that share capital amounts to SEK 1,180,890. Humana’s share capital consists of one class of shares, with each share having equal voting rights and equal entitlement to receive to dividends.

Ownership structure The number of Humana shareholders was 4,190 at the end of the year. The proportion of share ownership in Sweden was 44 percent. Total foreign ownership was 56 percent, distributed as follows: shareholders in Luxembourg, 46 percent, in the UK, 4 percent, and in the US, 1 percent. The ten largest individual shareholders held 78 percent of the share capital. Members of Humana’s Group manage-ment owned a total of 1,625,289 Humana shares at 31 December 2016, while Humana’s Board members owned 4,833,490 shares. Group management’s and the Board’s holdings corresponded to a total of 12 percent of the capital and shares.

Distribution of Swedish/foreign ownership

Foreign owners, 56%

Swedish owners, 44%

Foreign share ownership by country

Luxembourg, 46%

Sweden, 44%

UK, 4%

US, 3%

Norway, 1%

Other countries, 2%

Humana’s share price 2016-03-22-2016-12-31

0

1,000

2,000

3,000

4,000

5,000

6,000

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Turnover no. of shares per week, thousands

DECNOVOCTSEPAUGJULJUNMAYAPR

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85OMX Stockholm PIHumana

Humana price development 2016-03-22–2016-12-31


The Humana share

Key ratios2016

Number of shares at end of year (millions) 53,140,064

Market capitalisation at end of year (SEK million) 3,813

Number of shareholders 4,190

Share price at end of year, SEK 71.75

Price change during the year, % +16

Year high, SEK 85.50

Year low, SEK 67.25

Earnings per share, SEK 2.87

Shares held in Sweden 44

Shares held by the 10 largest shareholders, % 78

Ten largest shareholders1

31 December 2016Votes

%Capital

%Air Syndication SCA 44.4 44.4

Zirkona AB 7.3 7.3

Bodenholm Master 6.6 6.6

Zeres Public Market Fund 4.2 4.2

SEB Investment Management 3.7 3.7

Handelsbanken Fonder 3.2 3.2

Lannebo Fonder 3.0 3.0

Danica Pension 2.2 2.2

SEB-Stiftelsen 1.9 1.9

MSIL IPB Client Account 1.8 1.8

Total 78.3 78.3

1) Shareholders who are registered directly or as an owner group with Euroclear Sweden.

Shareholder structure, 31 December 2016

Number of shares

Number of sharehold-

ersVotes

%Capital

%-500 3,686 88.0 88.0

501 - 1,000 148 3.5 3.5

1,001 - 5,000 172 4.1 4.1

5,001 - 10,000 63 1.5 1.5

10,001 - 15,000 19 0.4 0.4

15,001 - 20,000 15 0.4 0.4

20,001 - 87 2.1 2.1

Total 4,190 100.0 100.0

Shareholder categories, 31 December 2016%

Foreign owners 56.0

Financial companies 28.6

Swedish private individuals 4.9

Other Swedish legal entities 9.3

Other 1.2

Total 100.0

Financial calendar2017 18 May Interim Report, January–March

18 May Annual General Meeting

18 August Interim Report, April-June

16 November Interim Report, July-September

2018 22 February Interim Report, October-December (preliminary)

Analysts monitoring HumanaCompany Name E-mailABG Sundal Collier Daniel Thorsson [email protected]

Carnegie Kristofer Liljeberg [email protected]

Danske Bank Lars Hevreng [email protected]

DNB (Den Norske Bank) Karl-Johan Bonnevier [email protected]

Nordea Hans Mähler [email protected]

Carl Mellerby [email protected]

SEB Stefan Andersson [email protected]



Risks and risk managementAs is the case with all business, Humana’s operations are associated with risks. To clarify and allow proactive efforts for minimising risk exposure, Humana conducts regular risk analyses in which all risks are graded according to probability and impact.

Risk managementA risk is defined as an uncertainty about an event occurring that could affect the Company’s ability to achieve defined objectives. Risks are a natural part of all business operations, and must be managed effectively by the organisation. Risk management is aimed at preventing, mitigating or precluding risks from materialising or affecting operations in a negative way. Humana endeavours to effec-tively identify, assess and manage the Company’s risks.

Humana’s management have drawn up a gross list of conceivable events that could have an impact on the Company’s operations and its ability to achieve defined objectives. The gross list has been eval-uated and reduced to a net list containing the most relevant risks. These risks have been graded according to a probability and impact perspective. In Humana’s case, an increased probability of a risk occurring is not always a negative factor, but can also be seen as pos-itive in cases where the Company believes that the change sharpens requirements, thereby raising standards in the industry as a whole. Quantifying risks in a risk matrix makes it possible for Humana to allocate the right amount of time and resources to its work on risk mitigation. The risks are monitored by Group Management and in the Board’s work. As Humana conducts operations in Sweden, Finland and Norway, the assessment is based on the situation in all these markets and then compiled into a Group matrix. As the Swedish market accounts for the majority of Humana’s revenue, comments on the risks that differ and are assessed as significant in the Norwegian and Finnish markets are provided separately under each risk.

PurposeThe purpose of Humana’s risk management work is to: • create awareness in the management and Board about the

Company’s risks and ensure effective information about its risk exposure.

• create effective governance and control of the business so that the Company is able to achieve its objectives.

• Provide data and processes that support daily operations.

Risk categoriesHumana has decided to divide its identified risks into four risk categories:

Sector and market-related risksMarket risks concern external factors, events and changes in Humana’s markets that could have an effect on the conditions for achieving the Company’s defined objectives. The Company has limited scope to influence these types of risks, but they are still risks that Humana needs to address as a company. There are often two sides to every sector or market risk: a downside, i.e., a risk or threat, and an upside, i.e., an opportunity.

Operational risksOperational risks are mainly related to internal factors and events that could adversely affect the Company’s operating activities and ultimately its brand. Humana’s reputation and good-standing are key to maintaining the trust of the Company’s customers, clients, buyers

and employees. Negative publicity about private care providers or a serious incident within the Group’s operations could have a considera-ble adverse impact on the Company’s business and earnings.

Compliance risks related to laws and regulationsHumana’s operations are regulated by data protection laws such as the Swedish Personal Data Act, the Swedish Patient Data Act, the Finnish Personal Data Act and the Norwegian Personal Health Data Filing Act. These regulations require systematised and secure routines to be in place for handling and storing personal informa-tion. In addition, Humana’s business is dependent on the Com-pany’s ability to obtain and maintain a number of permits and to successfully attract certain professional categories in order to provide specialised care services.

Financial risksIn the course of its operations, the Group is exposed to various types of financial risks, such as financing risk, liquidity risk, credit risk, interest rate risk and currency risk. The Group's financial policy for financial risk management has been formulated by the Board and provides a framework of guidelines and rules in the form of a risk mandate and limits for financing activities. Responsibility for the Group’s financial transactions and risks is managed by the CFO in consultation with the Board. The overall goal of the finance function is to provide cost-effective financing and minimise adverse effects of market fluctuations on the Group’s earnings.

The Company’s aggregate risks and measures are managed by the audit committee, which report to the Board of Directors for assess-ment and approval.

Sector and market-related risksA. Increased sector regulation

The care sector is subject to extensive rules in the form of complex laws and regulations at the national, regional and local levels. Laws and regulations cover areas such as availability of services, access to services, quality of services, staff qualifications and obligations, and confidentiality rules. Humana works with clear requirement speci-fications, documentation and quality monitoring to ensure delivery of high-quality services. The Company is in favour of more stringent standards. Adoption of more stringent rules and regulations would raise the status and quality of all actors.

B. Dividend and profit-restricting legislative changes in the care sector

Certain political parties in Sweden have questioned the privatisation of care and support services and have advocated restrictions on the ability to run private care companies for profit. The introduction of legal requirements that limit or prohibit profits, or restrict the rate of privatisation or the number of services eligible for privatisation could adversely affect the business model for private care companies. However, in Finland, the political attitude to private care companies is very good.


C. Other political risks

The care sector operates under a distinct political agenda. The Company’s operations are funded by the state and municipalities, and changes in political control could have consequences for private care providers. Private actors’ offerings are dependent on political de-cisions made by each municipality and regional authority. Humana is a significant actor in the sector, and the Company has a high level of specialist expertise. Increasing needs for care services in the future and an associated increase in costs will present a challenge to society in general.

D. Changes in the remuneration model and allowance level for personal assistance

Humana’s Personal Assistance business area receives an allowance from Försäkringskassan and municipalities. A legislative amendment introduced on 1 January 2017, means that different flat rates can be set. The flat rate for 2017 involves a lower increase (1.0%) than the previously announced increase (1.4%). An allowance level that changes at short notice creates uncertainty, while reducing the abil-ity to act quickly. In addition, allowance levels that are effectively lower than the increase in salary costs affect the sector’s profitability. The ongoing LSS investigation, which will issue its final report by October 2018, includes a review of the remuneration model.

E. Changes in pricing and demand

Prices of publicly funded care services can be influenced, limited or set by local, regional and national authorities. This means that the prices are not exclusively controlled by market forces such as supply and demand. A decrease in demand for private care services would have a negative impact on Humana’s business. Increased demand may lead to price pressure, as state funds have to be allocated among a larger number of recipients.

Operational risksF. Operational incidents and subsequent negative publicity

about private care providers

For Humana, the Group’s reputation is fundamental for main-taining good relationships with current and potential clients and customers, and local, regional and regulatory authorities. There is a risk of an incident occurring in one of Humana’s or another private operator’s operations – as a result of intentional action or neglect – which could cause injury to one or more persons under Huma-na’s care. Such an event could lead to negative publicity, causing subsequent harm to the sector and company in question. Further, an incident could lead to the loss of customers and therefore revenue.

G. Computer system limitations

Human handles a large amount of data in the form of personal in-formation, patient journals and other business-critical information. Breakdowns or disruptions in IT systems, including such caused by sabotage, computer viruses, operator error or software defects, could have a negative impact on the Group’s operations. Humana strives to minimise such disruptions as far as possible by using firewalls, encryption and parallel computer centres for backup copying.

H. Framework agreements

Many of the master agreements that Humana enters into with Swedish municipalities to conduct operations under own manage-ment contain assumptions on volume, entailing that the scope and volume of the services offered under such master agreements may be uncertain. If Humana cannot fulfil the requirements made in master agreements, the agreements may be cancelled.

Since Humana secures long-term leases for premises used in its operations, the Company bears the risk that operating revenue may be lower than its personnel costs and costs for premises. Humana works daily to optimise its capacity utilisation with respect to care places in the Group’s operations conducted under own management and to match costs effectively.

I. Future expansion and growth

Humana is a growth company that plans to continue expanding its business through organic growth combined with acquisitions. The future success of the Company’s acquisition strategy is dependent on several factors, such as Humana’s ability to identify suitable acquisi-tion candidates, and negotiate the right level of purchase prices and acceptable terms. Future growth is also affected by Humana’s capaci-ty and expertise with regard to running organic projects, attracting customers and ensuring access to appropriate properties. Effective integration of acquisitions into existing operations is also of key importance to Humana. The Company may also encounter business risks, tax risks and economic risks associated with the acquisition and integration of companies. In addition, there are increasing requirements to attract the right employees and ensure sufficient central staffing as the business grows.

J. Expertise and ability to attract employees

Humana is dependent on its ability to attract, engage and retain qualified personnel at a reasonable cost. The Company’s operations are very labour-intensive, and the expertise requirements vary from business area to business area. In Personal Assistance, the formal competence requirements are low, while some of the services offered in the Individual & Family and Norway business areas require a high level of expertise and specialisation. Humana’s quality is de-pendent on employees’ ability to make the right decisions and have the right attitude in their daily work. Should the Company fail to at-tract the right personnel, this could affect its growth opportunities.

Compliance risks related to laws and regulationsK. Violation of data protection laws

Humana’s operations are covered by data protection laws. Current legislation contains strict requirements with regard to processes and security when handling, storing and disposing of personal data, and ensuring that individuals are properly informed about how compa-nies handle personal information. Humana works continuously to improve its processes and routines, and conducts checks and controls on a regular basis.

L. Dependence on permits and professional qualifications

Humana’s operations and growth are dependent on the Company’s ability to secure and retain a number of permits to conduct care operations. Professionals with the right skills are also required. A number of the permits that Humana has in its business are tied to specific properties owned by the Company. If such properties are sold or moved, Humana will be required to apply for new permits. Permits could also affect Humana’s ability to move companies within the Group.

Risks

Prob

abili

tyH

igh

Low

Low

AD

C E

Q

P

R

O B

M

N L

KH G

F

I

J

HighImpact



M. Legal processes and investigations

Humana may be negatively affected by judicial rulings, settlements, and costs associated with legal processes and investigations. In the future, Humana could be party to legal action arising out of alleged malpractice or medication errors. In the event of incorrect processes or practice, Humana could be liable to pay damages or compensation.

N. Occupational health and safety

Humana’s operations are covered by regulations on occupational health and safety. Deficiencies in meeting such regulations could lead to fines or penalties.

Financial risks O. Financing and liquidity

Liquidity risk is the risk of the Group encountering problems in meeting its obligations associated with the Company’s financial liabilities. The finance department is responsible for the Group’s procurement of central financing. The Group’s policy is to minimise borrowing needs by balancing surplus and deficit liquidity within the Group and to achieve financing flexibility through agreements for additional available credit. To facilitate liquidity planning and control, the Group has credit facilities, such as bank overdraft facili-ties, and a cash pool. Changes in demand may affect the Company’s revenue, which in combination with existing borrowing could affect its financing costs and liquidity situation.

P. Interest rate risk

Changes in the cost of borrowing, i.e., interest rates, could increase Humana's costs, which in turn could adversely affect the Group’s earnings and cash flow. Human uses derivatives and interest rate swaps to stabilise its interest expenses.

Q. Credit risk

Humana’s credit risks and credit losses are largely associated with trade receivables. Most of the Group’s trade receivables are from state, municipal and county council entities, which are considered to have good credit quality. If Humana has any surplus liquidity, it is invested in deposit accounts, and derivatives are only entered into with the major Nordic banks.

R. Currency risk

As the Group operates in Sweden, Finland and Norway, it is exposed to currency risks from exposure to the Euro and Norwegian krone (NOK). The Group’s earnings are affected by translation of Finnish and Norwegian subsidiaries’ income statements at the average ex-change rate for the financial year. Currency risk also arises through business transactions, reported assets and liabilities, and net invest-ments in foreign operations. The currency exposure is partly offset by borrowing in the local currency.

In its risk matrix, Humana has assessed the probability of an event occurring and its impact on Humana. The Probability/Impact grading represents the level of the risk for Humana.


Sector and market-related risksRisk Comments (C)/risk management (RM)A. Increased sector

regulationC: Humana is in favour of increased sector regulation as increased requirements and controls help to raise quality in the sector, and as Humana is far ahead in this area. The Norwegian care market is considered more regulated and centralised than the Swedish and Finnish markets. RM: Humana engages in lobbying for increased sector regulation through participation on boards and in networks and implements internal action plans accordingly.

B. Dividend-restricting legislative changes in the care sector

C: The probability of legislation on dividend and profit restrictions being introduced is considered to have increased a little since the previous year. RM: Dialogue with key stakeholders and influencers. High internal preparedness.

C. Other political risks C: Other political risks are considered to have decreased slightly during the year. Humana has expanded its operations in Norway and also established operations in Finland, resulting in a reduction in the total exposure to Sweden, which is the only country to have pursued the issue of profit and dividend restrictions. RM: Continuous knowledge gathering and relationship-building in public affairs

D. Changes in the remuneration model and allow-ance level for per-sonal assistance

C: A review of the entire remuneration model is in progress within the framework of the LSS investigation. In addition, there has been a change in the law which opens to the introduction of various flat rate, which may increase the risk. RM: Dialogue with key stakeholders and influencers. An action plan has been initiated internally, with the aim of increasing flexibility, manoeuvrability and preparedness. Humana is represented in the investigation’s reference groups.

E. Changes in pricing and demand

C: Demand and the need for government-funded care is increasing in society. The risk of price pressure due to budgetary constraints is considered to have increased a little in Sweden, Finland and Norway compared with the previous year. RM: Continuing focus on high service quality and customer adaptation.

Operational risksRisk Comments (C)/risk management (RM)F. Operational

incidents and negative publicity about private care providers

C: Political debate about profits in welfare and a sharp increase in the need for care in the community at large is heightening the media focus on the care and health care sector. Awareness of and interest in the sector is increasing, but so is the risk of negative publicity if something goes wrong. The fact that Humana is now publicly listed also increases external interest in monitoring and scrutinising the Company. RM: Continuing focus on quality work, core value work and crisis management. Well-grounded internal communication plan. Trans-parent and accessible approach to media

G. Computer system limitations

C: Work on IT systems and processes has continued during the year. The probability of computer system limitations is considered to have decreased slightly. RM: Continuous system development and monitoring and streamlining of systems. Development of competence, systems, and rou-tines with operating partners.

H. Framework agreements

C: A small proportion of Humana’s operations are conducted under framework agreements and the Company’s influence in the event of changes is considered relatively low. RM: Focus on high service quality (leading expertise and good therapeutic results), and close work with municipalities.

I. Future expansion and growth

C: The political situation, fragmented markets, increased sector requirements and an underlying growing market create opportunities for continuing consolidation and growth. RM: Identify future leaders with good knowledge and experience in implementing organic acquisition projects and successful integration processes. Find good business partners who are effective negotiators and have solid legal and financial skills.

J. Expertise and ability to attract employees

C: Employee surveys show that employees enjoy working at Humana. Scope for employing managers and middle managers is expect-ed to remain good, while certain specific occupational categories are perceived as more difficult. RM: Clear strategy built on Humana’s values, opportunities for training, leadership and future career paths in order to attract new employees to the Company.

Compliance risks related to laws and regulationsRisk Comments (C)/risk management (RM)K. Violation of data

protection lawsC: As a result of increased knowledge, awareness, improved processes and procedures, and continuous improvement of systems, the risk is considered to have declined a little from the previous year. RM: Competence, training, processes and routines.

L. Dependence on permits and profes-sional qualifications

C: The refugee crisis has resulted in a marked increase in processing times for government authorities, social services and the IVO (Health and Social Care Inspectorate). The situation is slowly beginning to return to more normal lead times. RM: Identify business managers with the right background and experience.

M. Legal processes and investigations

C: The risk is considered to have increased compared with the previous year. Humana’s IPO means an increased legal compliance framework and a greater external focus on the Company. Increased transparency also brings increased scrutiny. RM: Routines, processes and competence, and the right legal partners.

N. Occupational health and safety

C: The risk is considered the same as in the previous year and there are no major incidents or issues to report at present. RM: The right internal competence through proactive training, action plans and control.

Financial risksRisk Comments (C)/risk management (RM)O. Financing and

liquidityC: The Company's IPO, which increases Humana’s access to the capital market, has reduced the risk of financing and liquidity con-straints. The Company’s transparency has increased. RM: The Group’s financial policy sets frameworks and guidelines for risk mandates and limits in financing activities. Human has avail-able overdraft facilities to deal with liquidity fluctuations.

P. Interest-rate risk C: Humana's financing costs are affected by market interest rates. The risk has been reduced slightly by a renegotiation of the Com-pany's long-term loans during the year and a slightly lower debt level.RM: Derivative instruments and interest rate swap contracts are used to manage interest rate risk.

Q. Credit risk C: Most of the Humana’s trade receivables are from state, municipal and county council entities, which are considered to have good credit quality. The risk of credit losses is considered low. RM: Humana’s surplus liquidity is invested at low risk in deposit accounts and contracts are only entered into with banks that have high credit ratings.

R. Currency risk C: Humana’s main operations are conducted in Sweden and the Company is only exposed to minor risks arising from the translation of Finnish and Norwegian operations from EUR and NOK. RM: Humana takes out loans in foreign currencies in order to offset some of the Company’s currency exposure.

Risks



Note G1 General informationHumana AB is a Swedish-registered limited liability company with its registered office in Stockholm. Humana is a public company. The address of the head offic-es is Warfvinges väg 39, SE-112 51 Stockholm, Sweden. The Company’s shares were admitted to trading on Nasdaq Stockholm on 22 March 2016.

The consolidated financial statements cover the Parent Company and its sub-sidiaries (see Note G24), together referred to as the Group. The Group runs care operations in the Individual & Family, Personal Assistance, Elderly Care and Other Nordics segments.

Humana AB is 44.4 percent owned by Air Syndication S.C.A. (corporate identi-ty number B 133.432, Luxembourg).

The financial statements were approved for publication by the Board of Directors and CEO on 6 April 2017. The annual report will be presented for adoption at the AGM on 18 May 2017.

Note G2 General accounting policiesGeneral accounting policiesConformity with standards and lawsThe consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the Interpretations issued by the IFRS Interpretations Committee (IFRS IC) as adopted by the EU. In addition, the Swedish Financial Reporting Board’s recommendation RFR 1 Supplementary Accounting Rules for Groups has been applied.

Basis of preparationAssets and liabilities are measured at historical cost, apart from certain financial assets and liabilities which are measured at fair value. Financial assets and liabili-ties measured at fair value consist of derivative instruments and contingent con-siderations from acquisitions.

Functional currency and presentation currencyThe Parent Company's functional currency is the Swedish krona (SEK). The pre-sentation currency for the Parent Company and the Group is also the Swedish krona. All amounts are rounded to the nearest SEK million unless stated other-wise.

Accounting estimatesPreparation 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.

Accounting estimates and assumptions are reviewed regularly. Changes in accounting estimates are recognised prospectively.

Critical accounting estimates made by management that have a significant impact on the financial statements and may entail a material adjustment in the future are mainly related to goodwill impairment testing and the preparation of acquisition analyses.

Goodwill impairment testingGoodwill is tested for impairment annually. These tests involve calculations that are based on management's assumptions about growth rates, operating margins and discount rates.

In 2015, the Swedish government commissioned an inquiry “Order in the wel-fare sector” (SOU 2016:78), the purpose of which was to ensure that public funds are used for the intended activity and that any surplus should, as a general princi-ple, be returned to the activity in which it originated.

The first progress report was presented in November 2016, and included the commission of inquiry’s proposed new methods to restrict freedom of choice and diversity, and a proposal on how to limit profits in activities related to permit requirements for conducting publicly funded welfare operations. The proposal is based on prohibiting operating profit from exceeding a fixed percentage of work-ing capital plus the government borrowing rate.

The proposal has attracted very strong criticism from several quarters, and the investigators who came up with the original proposal have distanced themselves from the context model used and have subsequently left the commission of inqui-ry. A majority of members of the Swedish parliament have currently indicated that they do not intend to support proposals aimed at introducing profit limits or restricting freedom of choice and diversity. At the time of writing, the government has not taken a position on whether it will continue to work on the much criticised proposal from the commission of inquiry.

Current regulations were applied during the year’s impairment testing. Assessments other than those made by the company may lead to completely dif-ferent results and financial position. More information on impairment testing can be found in Note G12.

Fair value measurement in acquisition accountingWhen a subsidiary or operation is acquired, an acquisition analysis is prepared, which includes an assessment of the fair values of assets and liabilities. These assets and liabilities are valued using various measurement methods. Assessments other than those made by management may result in a different future position. A high proportion of goodwill, for example, gives rise to an asset item that is subject to annual impairment testing rather than ongoing amortisa-tion. More information about acquisition analyses can be found in Note G5.

Classification of leases under sale and leaseback transactionsHumana conducted a property sale and leaseback transaction in 2015. An assess-ment was made of the lease in the transaction, which constituted combined leases of land and buildings. Classification of the contract was determined by considering whether it was a finance lease or an operating lease. Title of the land was not trans-ferred, and there was no risk to the Group regarding the building’s residual value. Humana determined that the lease term did not cover most of the economic life of the properties and that the present value of the minimum lease payments did not in essence amount to all of the fair value of the properties. There were no preferential purchase or extension options and the rent on the properties was set at market con-ditions. Based on these factors, the assessment was that the leases transferred sub-stantially all financial risks and rewards incidental to ownership of the properties to the lessor and they were therefore classified as operating leases.

For more detailed accounting policies, see the Significant Accounting Policies section.

Note G3 Segment reportingThe Group’s operations are divided into operating segments based on compo-nents of the business that are reviewed by the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), who are the Company’s chief operating decision makers. This is referred to as the management approach. The Group’s operations are organised in such a way that the CEO and CFO review the results of each business area. The business areas are also operating segments. Each operating segment in Sweden has a manager who is responsible for the day-to-day opera-tions and regularly reports the results of the segment’s performance to the CEO and CFO. Other Nordics has one manager per country. The Group’s internal reporting is therefore structured in such a way as to allow the CEO and CFO to review the business areas’ performance and results. However, the CEO and CFO only monitor the Group’s total assets, not assets by segment.

Individual & Family provides care and treatment in psychiatry and psychoso-cial change processes to clients of all age groups. This is done through operations such as residential care homes, temporary and regular family homes, special housing, outpatient care, assisted living homes, specially adapted housing for individuals with disabilities, and special education schools.

Personal Assistance provides care services and assistance to individuals with disabilities.

Elderly Care consists of operations that offer personalised elderly care (home care services and residential care homes for the elderly).

Other Nordics (Norway and Finland) provides care and treatment for children, young people and adults by offering various forms of living arrangements, family homes, outpatient care and other support. The operations are focused on specialist treatment in psychiatry and psychosocial change. The operations in Norway also include personal assistance (BPA) and special services housing (HOT).

Other refers to the Group’s costs for Group-wide functions such as central administration and central project costs. It also includes income and expenses related to the sale and acquisition of businesses.

Humana has concentrated its special services housing operations (operations governed by the Act concerning Support and Service for Persons with Certain Functional Impairments) under the Individual & Family business area. Revenues from LSS operations that has been transferred from the Elderly Care to the Individual & Family business area amounted to SEK 152 million in 2015, while operating profit amounted to SEK 4 million.

Notes to the consolidated financial statements


Income statement by segment

2016SEK millions

Individual & Family

Personal Assistance

Elderly Care

Other Nordics Other Group

Net revenue – external income 2,214 2,645 580 924 0 6,362

Other revenue 0 0 0 0 0 0

Operating revenue 2,214 2,645 580 924 0 6,362

Profit before depreci-ation/amortisation and other operating expenses 238 153 -1 103 -57 436

Depreciation/amortisa-tion -26 -3 -6 -13 -2 -50

Other operating expenses 0 0 0 0 -56 -57

Operating profit 211 151 -6 89 -115 329

Finance income 11

Finance expenses -140

Unrealised changes in value of derivatives 27

Profit before tax 228

2015SEK millions

Individual & Family

Personal Assistance

Elderly Care

Other Nordics Other Group

Net revenue – external income 1,902 2,689 585 416 0 5,593

Other revenue 0 0 0 0 62 62

Operating revenue 1,902 2,689 585 416 62 5,655

Profit before depreciation/amorti-sation and other operating expenses 251 188 -17 24 -14 431

Depreciation/amortisa-tion -29 -5 -5 -5 -3 -46

Goodwill impairment 0 0 -36 0 0 -36

Other operating expenses -1 0 0 -33 -4 -37

Operating profit 221 182 -58 -13 -20 312

Finance income 1

Finance expenses -172

Unrealised changes in value of derivatives 7

Profit before tax 149

Significant non-cash items other than depreciation and amortisation

Capital losses - - - 32 - 32

Capital gain on property - - - - 62 62

Breakdown of revenue

Revenue by service:2016 2015

Individual & Family 3,036 2,287

Personal Assistance 2,746 2,722

Elderly Care 580 585

Other - 62

Operating revenue 6,362 5,655

Revenue by geographic area:

Group 2016 2015

Sweden 5,438 5,238

Finland 227 -Norway 697 416

Total 6,362 5,655

Non-current assets* by geographic area

Group 2016 2015

Sweden 2,704 2,556

Finland 327 -Norway 477 237

Total 3,508 2,793

* Non-current assets do not include financial instruments, deferred tax assets and assets relating to post-employment benefits.

Note G4 Other revenue and other operating expenses

Other revenue

2016 2015

Gain on sale of property - 62

Total - 62

Refers to the sale of 43 properties in 2015.

Other operating expenses2016 2015

Loss on sale of subsidiary - 32

Acquisition costs 16 4

Other 40 1

Total 57 37

Sale and leasebackOn 2 November 2015, Humana entered into a sale and leaseback agreement with Hemfosa, involving the sale of a number of subsidiaries with ownership of 43 of Humana’s properties. In connection with the sale, Humana entered into an agreement for rental of the properties for continuing operations (residential care and group homes). Takeover of the shares and properties took place on 30 November 2015. The agreed underlying value of the sold property portfolio totalled SEK 258.5 million. The share transfer agreement contains customary rep-resentations and warranties about the companies and properties. The warranty period is 15 months from the date of possession. The initial lease term for the lease agreements is 12-15 years.

Villa SkaarOn 10 June 2015, Humana entered into an agreement with Norsk Eldreomsorg AS regarding the sale of Villa Skaar AS. Villa Skaar’s operation was Humana’s only nursing home for adults in Norway. Villa Skaar contributed SEK 19 million to income and SEK 1 million to operating profit in 2015.

Divested companies’ net assets on disposal

Property companies

Villa Skaar Total

Goodwill 0 44 44

Non-current assets 181 1 182

Trade and other receivables 0 5 5

Cash and cash equivalents 0 6 6

Trade and other payables -3 -7 -9

Effect of disposal on individual assets and liabilities

178 49 227

Consideration 250 16 266

Less assets/liabilities above -178 -49 -227

Transaction costs -10 0 -10

Gain/loss on sale 62 -32 30

Consideration received 250 16 266

Cash and cash equivalents in divested compa-nies 0 -6 -6

Effect on cash and cash equivalents 250 11 261

Notes



Note G5 AcquisitionsHumana has acquired 7 (7 in 2015) businesses during the year, continuing its expansion in Other Nordics and Individual & Family. The acquisitions mainly enable Humana to broaden its operations in Norway and expand into Finland. Humana has acquired 100% of the shares in all of the companies.

GoodwillThe goodwill resulting from the acquisitions in 2015 and 2016 relates to employ-ee expertise in treatment methods, establishment of market position, the synergies expected to arise when the entities are integrated with the rest of the Group, and the underlying profitability of the acquired businesses.

Acquisitions completed in 2016:Kvaefjord Opplevelse og Avlastning AS, KOA Gruppen (Other Nordics) May 2016• one of the largest providers of individual and family care and special services

housing (HOT) in Norway.Arjessa Oy (Other Nordics) May 2016• leading individual and family care provider in Finland.

Other acquisitionsNygårds Vård Gotland AB (I&F) April 2016• provides accommodation with special services for adults with mentaldisabilities.Kilen Akut Behandlingshem AB (I&F) September 2016• specialises in young people with psychosocial problems.

FUGA Omsorg AB (I&F) September 2016• provides development-oriented daily activities for individuals with learning dis-

abilities, autism or Asperger syndrome.Platea AB (I&F) November 2016• runs residential care homes for younger children (ages 0-12) and their families.Pienryhmäkoti Puolenhehtaarin Metsä Oy (Other Nordics) December 2016• provides psychosocial care and treatment for children and young people.

Contingent considerationContingent considerations were included in the acquisitions of KOA and Platea. The contingent portion of the consideration for KOA is performance-based, with a maximum payment of SEK 40 million. The fair value of the contingent consider-ation was calculated at SEK 18 million on the acquisition date. The acquisition of Platea also included a performance-based contingent consideration, with a maxi-mum payment of SEK 4 million.

Acquisition costsAcquisition costs of SEK 16 million (SEK 4 million in 2015) refer to consulting and legal fees, mainly for financial and legal due diligence in connection with acquisi-tions. These are recognised as other operating expenses in the income statement.

Receivables acquiredNo bad debts were acquired in any of the years.

Acquisitions after the reporting dateSkellefteå Stöd och Behandling AB (Individual & Family) was acquired in January 2017.

Net assets in acquired companies at date of acquisition

2016 SEK millions KOA Arjessa Other* Total

Non-current assets 40 48 13 100

Trade and other receivables 44 58 9 112

Cash and cash equivalents 42 23 13 78

Interest-bearing liabilities -9 -38 -5 -52

Trade and other payables -58 -74 -10 -142

Deferred tax liability 0 0 -1 -1

Net identifiable assets and liabilities 60 17 19 95

Goodwill 166 255 41 463

Consideration

Cash and cash equivalents 205 270 57 532

Contingent consideration 18 1 4 23

Total paid 223 271 61 555

Effect on cash and cash equivalents

Cash consideration paid 205 270 57 532

Cash and cash equivalents in acquired entities -42 -23 -13 -78

Total effect on cash and cash equivalents 163 247 44 454

Settlement of contingent considerations attributable to acquisitions in prior years - - 19 19

Total effect on cash and cash equivalents 163 247 63 473

Effect on operating revenue and profit in 2016

Operating revenue 195 227 20 442

Operating profit 33 18 2 53

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

Humana’s acquisitions in 2016 increased consolidated revenue by SEK 442 million and operating profit for the year by SEK 53 million. If the acquisitions had been con-ducted on 1 January 2016, company management estimates that consolidated revenue would have been SEK 6,723 million (SEK 361 million higher), and profit for the year would have been SEK 202 million (SEK 32 million higher).


Acquisitions completed in 2015:Dedicare Assistanse AS April 2015 (Norway)• Personal assistance in Norway. The acquisition brought geographic expansion

and the establishment of an assistance operation in Norway. Orana Vård och Omsorg Holding July 2015 (I&F)• Residential care homes specifically for young girls with severe psychiatric prob-lems.Oasen HVB & Skola November 2015 (I&F)• Residential care home specialising in psychosocial problems – mainly disruptive

behaviour disorders – and confirmed or suspected neuropsychiatric problems.Off.clinic November 2015 (I&F)• Residential care home specialising in sexual behavioural problems and trauma/

PTSD, and focusing on young people involved in sexual self-harming.Familjestödsgruppen i Stockholm December 2015 (I&F)• Family home in the Stockholm area.

Other acquisitionsSalboheds Gruppboende July 2015 (I&F)• Group home for students in need of special support.Ramlösa Social Utveckling November 2015 (I&F)• Family home for adults and LARO (medication-assisted treatment for opiate

dependence) clinic specialising in comorbidity and or psychosocial problems.

Contingent considerationA contingent consideration was included in the acquisition agreement for Familjestödsgruppen. The contingent portion of the consideration is perfor-mance-based, with a maximum payment of SEK 8 million. The fair value of the contingent consideration was estimated at SEK 8 million on the acquisition date.

Notes

Net assets in acquired companies at date of acquisition

2015 SEK millions Dedicare Orana Oasen Off.ClinicFamiljestöds-

gruppen Other Total

Non-current assets 6 12 17 15 2 13 64

Trade and other receivables 9 5 8 4 8 5 39

Cash and cash equivalents 7 3 0 1 2 9 22

Interest-bearing liabilities 0 -5 -3 -7 -1 -4 -20

Trade and other payables -12 -5 -1 -3 -6 -12 -40

Deferred tax liability 0 0 -1 -1 0 0 -2

Net identifiable assets and liabilities 10 11 20 9 5 10 64

Goodwill 22 14 7 24 43 9 120

Consideration

Cash and cash equivalents 32 25 26 15 40 19 158

Contingent consideration - - - 18 8 - 26

Total paid 32 25 26 33 48 19 184

Effect on cash and cash equivalents

Cash consideration paid 32 25 26 15 40 19 158

Cash and cash equivalents in acquired entities -7 -3 0 -1 -2 -9 -22

Total effect on cash and cash equivalents 25 22 26 14 38 10 135

Settlement of contingent considerations attributable to acquisitions in prior years - - - - - - 6

Exchange differences 0 - - - - - 0

Total effect on cash and cash equivalents - - - - - - 141

Effect on operating revenue and profit 2015

Operating revenue 33 19 10 6 6 18 92

Operating profit/loss 4 2 1 0 0 3 10

Humana’s acquisitions in 2015 contributed SEK 92 million to consolidated revenue and SEK 10 million to operating profit. If the acquisitions had been conducted on 1 January 2015, company management estimates that consolidated revenue would have been SEK 5,868 million (SEK 213 million higher), and profit for the year would have been SEK 137 million (SEK 23 million higher).



Note G6 Other external expenses

SEK millions 2016 2015

Direct operating expenses* 254 221

Purchased services 80 64

Premises and property costs 279 200

IT expenses 81 68

Marketing expenses 25 24

Other expenses 244 217

Total other external expenses 963 794

* Direct operating expenses refer to the purchase of food, activities and expenses for clients etc.

Operating leases – Group as lessee The Group conducts operations in properties that are held under operating leas-es throughout the country. Future minimum lease payments under operating leas-es:


Within 1 year 168 137

1-5 years 589 587

After 5 years 642 729

Lease payments for the year 193 133

The leases have remaining terms of 2 months to 25 years (2 months to 25 years).

Note G7 Employees, personnel costs and remuneration of senior executives

Personnel costsExpenses recognised as employee benefits are distributed as follows:


Salaries and benefits 3,663 3,283

Pension costs, defined contribution plans 170 131

Social security contributions 1,059 919

Other personnel costs 72 96

Total 4,964 4,430

Average number of employees Average number

of employees

Men, %2016 2016

Sweden 8,993 30Norway 659 44Finland 260 41Total 9,912 32

Average number of employees

Men, %

2015 2015Sweden 8,761 30Norway 393 45Total 9,154 31

Pension benefit obligationsThe majority of salaried employees in Sweden are covered by ITP1. A small num-ber of salaried employees are covered by the ITP plan’s defined benefit retirement and survivor pension, which is secured through insurance with Alecta. The premi-um for the defined benefit retirement and family pension is individually calculated and is dependent on factors that include salary, previously earned pension and expected remaining period of service. Expected fees for the next reporting period for ITP 2 insurance policies from Alecta total SEK 31 million (SEK 26 million in 2015).

The collective funding ratio is the market value of Alecta’s assets as a percent-age of insurance commitments calculated according to Alecta’s actuarial meth-ods and assumptions, which are not consistent with IAS 19. The collective funding ratio is normally allowed to vary between 125 and 155 percent. If Alecta’s collec-tive funding ratio falls below 125 percent or exceeds 155 percent, action should be taken to ensure the funding ratio returns to the normal range. If the ratio is low, one measure that can be taken is to raise the premium of new contracts and reduce existing benefits. If the ratio is high, one measure that can be taken is to introduce premium reductions. Alecta’s preliminary collective funding ratio for 2016 was 149 percent (153 percent in 2015).

The Alecta premiums are determined by assumptions about interest rates, lon-gevity, operating costs and yield tax, and are calculated so that payment of a con-stant premium until the retirement date suffices for the entire target benefit, which is based on the insured’s current pensionable salary and which must be earned.

There is no set of rules for how deficits that may arise are to be handled, but the losses should primarily be covered by Alecta’s collective solvency capital, and thus should not lead to increased costs through higher contractual premiums. There are also no rules for how any surplus or deficit would be distributed in the event of liquidation of the plan or a company’s withdrawal from the plan.

The Group also has certain pension commitments that are secured through endowment insurance, which is pledged in favour of the beneficiaries. None of the commitments concern senior executives. The pension provision is based on the value of the endowment insurance policy and therefore corresponds to the value of the assets in the endowment insurance policy at any given time. The obli-gation is recognised as a defined contribution plan, as Humana is not obliged to make contributions and the beneficiaries bear the entire risk. At the reporting date, the value of assets in the endowment insurance was SEK 3.6 million (3.6 in 2015). No new payments are made in respect of these pension obligations.


The Group has an agreement with CEO Rasmus Nerman to the effect that in the event of involuntary or voluntary termination of employment, the period of notice is six (6) months. In the event of termination by the Company, an additional remu-neration of six (6) fixed monthly salaries shall be paid at the end of the notice peri-od. Pension is payable in accordance with the ITP1 plan and the Company does not have any additional retirement benefit obligations.

Annual General Meeting’s guidelines on remuneration of senior executives On 15 February, an Extraordinary General Meeting adopted the following guide-lines on remuneration of senior executives. The guidelines cover remuneration of the CEO and other members of Group management.

Remuneration of members of Group management shall consist of a fixed sala-ry, any variable salary, retirement benefits and other benefits. The combined remuneration shall be in line with the going rate in the market and competitive. It shall also be commensurate with the individual’s performance and responsibility, and growth in the value of Humana’s share generated for shareholders.

Payment of variable cash salary shall be subject to the achievement of defined and measurable targets, and shall be capped to 30 percent of the individual’s annual fixed salary. In special cases, agreements may be reached on remunera-tion of a non-recurring nature, provided such remuneration does not exceed an

Notes

Remuneration of the Board of Directors and Group management

2016. Salaries and benefits by type of remuneration per Board member and to Group management:

SEK thousandsSalaries and other

benefits Bonus Other Pension Total

Board of Directors*

Maria Nilsson** 386 386

Per Båtelson, Chairman** 749 749

Ulrika Östlund 307 307

Helen Fasth Gillstedt** 517 517

Per Granath 252 252

Simon Lindfors** 348 348

Total, Board 2,560 - - - 2,560

Rasmus Nerman, President and CEO 2,711 583 1,031 4,325

Others (8 individuals) 12,366 1,520 2,798 16,684

Total, Group management 15,077 2,103 3,829 21,009

Total, Group 17,637 2,103 - 3,829 23,569

* Pursuant to an AGM resolution, Board members Wojciech Goc and Lloyd Perry do not receive directors’ fees. ** Gross salary includes invoiced VAT.

2015. Salaries and benefits by type of remuneration per Board member and to Group management:

SEK thousandsSalaries and other

benefits Bonus Other** Pension Total

Board of Directors*

Maria Nilsson*** 316 316

Per Båtelson, Chairman*** 541 541

Ulrika Östlund 253 253

Helen Fasth Gillstedt*** 394 394

Simon Lindfors*** 33 33

Total, Board 1,537 0 0 0 1,537

Per Granath, President and CEO 3,145 900 3,638 2,305 9,988

Others (8 individuals) 11,785 1,787 0 4,071 17,643

Total, Group management 14,930 2,687 3,638 6,375 27,631

Total, Group 16,467 2,687 3,638 6,375 29,168

* Pursuant to an AGM resolution, Board members Per Granath, Simon Lindfors, Wojciech Goc and Lloyd Perry did not receive directors’ fees. Simon Lindfors was paid a fee for service on the Group’s audit committee.

** Per Granath terminated his contract as CEO on 22 December 2015. Other remuneration of SEK 3,638 thousand referred to termination benefits and mileage (excl. social security contributions and pension).

*** Gross salary includes invoiced VAT.

amount corresponding to the individual’s annual fixed salary and maximum vari-able cash salary, and is not paid more than once per year and per individual.

Retirement benefits shall be defined contribution arrangements. The notice period shall be six months for both the Company and the senior executive. When the period of employment exceeds five years, the notice period for the Company increases to twelve months. Termination benefits may be payable to senior execu-tives who have served more than five years, but for a maximum amount corre-sponding to six months’ salary. Termination benefit agreements are made sepa-rately following a decision by the Remuneration Committee.

Humana has established a warrant programme for eight senior executives in Group management, comprising a total of 1,440,420 warrants entitling holders to subscribe for the same number of new Humana shares. The market value amounts to approximately SEK 5.5 million and in the event of full subscription, dilution will be about 2.6 percent of the total number of Humana shares. The war-rants have been issued in three series with different maturities. See also Note G11 Earnings per share.

Gender distribution in Board of Directors and Group managementThe Board of Directors consists of 5 (5) men and 3 (3) women.Group management consists of 4 (5) men and 5 (3) women.



Note G8 Auditors’ fees


KPMG AB

- audit services 7 4

- tax advisory services 1 0

- other services 1 0

Total 9 4

Audit services consist of the auditor’s work associated with the statutory audit, while auditing assistance includes various types of quality assurance services. Other services are services other than audit services or tax advisory services.

Note G9 Finance income and expensesFinance income:


Interest income from cash and cash equivalents 0 1

Remeasurement of contingent considerations 0 0

Exchange gain 11 0

Total finance income 11 1

Finance expenses:Interest expenses for borrowing at amortised cost:


Bank loans* 127 160

Subordinated loans 0 2

Finance leases 1 2

Exchange loss 12 7

Total finance expenses 140 172

* Interest expense for bank loans includes SEK 42 (43) million relating to the recognition of previously accrued loan costs in connection with the refinancing in 2015 and 2016.

Note G10 Income taxThe following components are included in tax expense:


Current tax expense (+)/tax income (-):

Tax expense for the year 42 26

Adjustment of tax relating to prior years 5 -1

46 25

Deferred tax expense (+)/tax income (-):

Property, plant and equipment -1 -1

Derivatives 6 2

Tax allocation reserve 7 9

Other temporary differences 0 0

Total deferred tax expense 12 10

Recognised tax 58 35


Reconciliation of effective tax

Recognised profit before tax 228 149

Tax at applicable tax rate (22%) 50 33

Tax effect of:Non-deductible expenses 7 18

Non-taxable income 0 -14

Adjustment of tax relating to prior years 5 -1

Increase in losses carryforwards for which no correspond-ing deferred tax was recognised - 0

Standard interest on tax allocation reserve 0 0

Difference in tax rate between Parent Company and for-eign subsidiaries 2 0

Other -6 -2

Recognised tax 58 35

Non-deductible costs are essentially acquisition costs.

Deferred tax liability (+)/tax asset (-)

Property, plant and equipment 0 1

Derivatives -2 -8

Untaxed reserves, tax allocation reserves 80 73

Total deferred tax liability 78 66

The change in deferred tax liability of SEK 12 million consists of a deferred tax expense of SEK 12 million (SEK 10 million for 2015) recognised in the income statement and a deferred tax liability of SEK 1 million (SEK 2 million in 2015) in acquired companies.

Unrecognised deferred tax assetsLoss carryforwards and deductible temporary differences for which deferred tax is not recognised in the balance sheet amount to SEK 13 million (SEK 13 million in 2015), corresponding to a deferred tax asset of SEK 3 million (SEK 3 million in 2015).

Deferred tax assets arising from these items are not recognised, as they are subject to Group contribution restrictions and under prevailing legislation cannot be utilised as long as the operation is run in the legal entity.

Note G11 Earnings per share


Profit for the year attributable to Parent Company share-holders 170 114

Less return on preference shares -22 -86

Profit for the year after return on preference shares 148 28

Earnings per ordinary share, basic and diluted, SEK 2.87 0.61

Number of ordinary shares, average 51,514,870 45,881,685

The preference shares, which consisted of 7 Class C shares, were converted into Class B shares in connection with the IPO.

Instruments that could have future dilutive effectsIn 2016, Humana established a warrant programme for eight senior executives, comprising three series of warrants with different maturities, with exercise prices (SEK 74.40, 77.50 and 80.60 per share) that exceeded the average ordinary share price (72.24 per share). These warrants therefore do not have any dilutive effects and are excluded from the diluted earnings per share calculation. If the share price exceeds the exercise price in the future, the warrants will have dilutive effects. The warrant programme comprises a total of 1,440,420 warrants entitling holders to subscribe for the same number of new Humana shares. If the maximum amount is subscribed for, dilution will be about 2.6 percent of the total number of Humana shares.

In 2016, the shareholders also adopted the introduction of an incentive pro-gramme for 187 of Humana’s key employees. This programme has been established in 2017. At full allotment in 2020, dilution will be 106,000 shares, 0.2 percent.


Note G12 GoodwillGoodwillSEK millions 2016 2015

Accumulated cost at start of year 2,584 2,565

Acquisition of subsidiaries 463 120

Disposal of subsidiaries - -44

Impairment for the year - -36

Exchange differences 42 -21

At end of year 3,089 2,584

Impairment testingGoodwill is allocated to cash-generating units for impairment testing as follows:

SEK millions 31/12/2016 31/12/2015

Personal Assistance 964 964

Individual & Family 1,416 1,388

Elderly Care 8 8

Norway 422 223

Finland 278 -

Total 3,089 2,584

The value of goodwill is tested annually for impairment. The annual impairment test is performed mainly at the segment level, as goodwill is monitored at this level, by calculating the recoverable amount, which consists of value in use. For the Elderly Care and Other Nordics segments, annual goodwill impairment test-ing is performed at the following levels: Elderly Care excl. Home Care Service and Other Nordics, Finland separately, and Norway divided into the KOA acqui-sition and Other. When there are indications that an individual cash-generating unit is permanently impaired, the test is performed by calculating the value in use for the specific cash-generating unit.

Value in use is based on cash flow calculations that are in turn based on specif-ic financial plans determined by management for the next three years, which are then extrapolated using the estimated growth rates for another two years. The cash flows calculated thereafter were based on an annual growth rate according to the assumptions stated below. The estimated cash flows were then discounted to present value using a discount rate as shown below.

The key assumptions in the forecasts and the methods used to estimate values are set out below. The key assumptions and methods used are the same for all cash generating units.

Key assumptions in calculation Method for estimating value

Growth The growth rate during the forecast period is based on specific plans for the next three years based on industry data and man-agement estimates from previous experience. The growth rate after the forecast period is in line with cost trends in the industry.

Operating margin The operating margin was forecast from historical results and expectations of future margins based on previous experience.

Discount rate The discount rate is obtained through a weighted average cost of capital for the industry and reflects current market assess-ments of the time value of money and estimated specific risks in each unit.

AssumptionsLong-term

growthPost-tax

discount ratePre-tax

discount rate

Individual & Family 2.0% (2.0%) 7.5% (8.1%) 9.6% (10.4%)

Personal Assistance 1.0% (1.4%) 7.5% (8.1%) 9.6% (10.4%)

Elderly Care 2.0% (2.0%) 7.5% (8.1%) 9.6% (10.4%)

Norway 2.0% (2.0%) 7.5% (7.9%) 10.0% (10.2%)

Finland 2.0% (-) 7.6% (-) 9.5% (-)

ImpairmentImpairment testing for Humana Home Care Service in 2015 resulted in a write-down of the goodwill item in its entirety. The write-down of SEK 36 million was an effect of increasingly difficult market conditions that led management to decide on early termination of contracts. The carrying amount prior to the impairment testing was SEK 66 million.

Note G13 Other intangible assets

2016

Systems development and licences

Customer relationships Other Total

Accumulated cost

At start of year 17 7 2 25

Acquisitions of subsid-iaries 0 - 7 7

Investments - - 2 2

Exchange differences - 1 0 1

Disposals - - - 0

At end of year 17 8 10 34

Accumulated amorti-sation

At start of year -16 -1 0 -17

Acquisitions of subsid-iaries 0 0 0 0

Exchange differences - - 0 0

Disposals - - - 0

Amortisation for the year -1 -2 -1 -4

At end of year -16 -3 -2 -21

Carrying amount 1 5 8 13

None of the costs for systems development and licences are internally generated.

2015

Systems development and licences

Customer relationships Other Total

Accumulated cost

At start of year 18 - - 18

Investments 0 8 2 10

Exchange differences - -1 - -1

Disposals -1 - - -1

At end of year 17 7 2 25

Accumulated amorti-sation

At start of year -11 - - -11

Exchange differences - 0 - 0

Disposals 0 - - 0

Amortisation for the year -5 -1 0 -6

At end of year -16 -1 0 -17

Carrying amount 1 6 1 9

Notes



Note G14 Property, plant and equipment

2016Land and buildings

Improvements to third-party

propertyFinance

leases Equipment Total

Accumulated cost

At start of year 83 36 103 55 276

Acquisitions of subsid-iaries 47 12 0 28 87

Investments 67 41 41 35 184

Disposals/sales -1 0 -36 -10 -47

Reclassifications -3 -1 0 5 1

Exchange differences 1 0 0 0 0

At end of year 194 89 108 113 502

Accumulated depre-ciation

At start of year -17 -8 -29 -23 -76

Acquisitions of subsid-iaries

Disposals/sales 1 0 19 7 27

Reclassifications 1 0 0 -3 -2

Exchange differences -1 0 0 0 -1

Depreciation for the year -4 -3 -22 -17 -46

At end of year -20 -11 -31 -36 -99

Carrying amount 174 78 76 77 405

2015Land and buildings

Improvements to third-party

propertyFinance

leases Equipment Total

Accumulated cost

At start of year 165 28 95 61 348

Acquisitions of subsid-iaries 56 1 0 4 61

Investments 31 8 38 7 84

Disposals/sales -183 -4 -30 -7 -225

Reclassifications 15 3 0 -9 9

Exchange differences -1 0 0 -1 -2

At end of year 83 36 103 55 276

Accumulated depre-ciation

At start of year -10 -5 -20 -18 -54

Disposals/sales 0 0 15 5 20

Reclassifications -2 - - -2 -3

Exchange differences 0 0 0 0 1

Depreciation for the year -5 -2 -23 -9 -40

At end of year -17 -8 -29 -23 -76

Carrying amount 66 28 74 32 200

Finance leasesFuture minimum lease payments are as follows:

Minimum lease payments 31 Dec 2016

Within 1 year

1–5 years

After 5 years Total

Present value

Lease payments, cars 31 44 0 75 72

Lease costs during the reporting period amounted to SEK 31 million, and were related to minimum lease payments. The leases have terms ranging from 12 to 36 months.

Minimum lease payments 31 Dec 2015

Within 1 year

1–5 years

After 5 years Total

Present value

Lease payments, cars 35 39 0 73 69

Lease costs during the reporting period amounted to SEK 40 million, and were related to minimum lease payments. The leases have terms ranging from 12 to 36 months.

Note G15 Trade receivables 31/12/2016 31/12/2015

Trade receivables, gross 527 445

Reserve for customer losses -5 -5

Total 523 440

Receivables not due 449 379

Past due 1-30 days 48 41

Past due 31-60 days 11 9

Past due > 60 days 19 16

527 445

Humana’s customers consist mainly of state, municipal and county council entities in Sweden, Norway and Finland. The Group is not exposed to any significant credit risks relative to any individual counterparty or group of counterparties. Based on historical information, management believes that trade receivables that have not fallen due for payment or are not impaired have good credit quality.

Note G16 Prepaid expenses and accrued income 31/12/2016 31/12/2015

Assistance allowance receivables 346 -

Prepaid rents 32 20

Other 23 8

Total 401 28

Assistance allowance from Försäkringskassan, which was previously paid monthly in advance, is paid monthly in arrears with effect from October 2016.

Note G17 Cash and cash equivalentsCash and cash equivalents include the following:

31/12/2016 31/12/2015

Cash 1 1

Bank balances 464 500

Total 465 501

Cash and cash equivalents consist of cash and demand deposits with banks and corresponding institutions.


Note G18 Equity

Share capital At the start of the year, share capital consisted of 664,800 Class A shares, 354,793 Class B shares and 7 Class C shares for a total of 1,019,600 shares. An EGM held on 15 February 2016 adopted a 45:1 split, after which the number of shares increased to 29,916,000 Class A shares 15,965,685 Class B shares and 315 Class C shares. The total number of shares after the split was 45,882,000. All shares were subsequently converted into B shares. In connection with the IPO, 7,258,064 new shares were issued at a price of SEK 62.

2016 2015

Number of shares

At start of year 1,019,600 1,019,600

Split 45:1 44,862,400 -

New share issue 7,258,064 -

At end of year 53,140,064 1,019,600

Paid-up subscribed sharesNumber of

shares

Votes per share Number of

votes

Share capital, B shares 53,140,064 0.022222 1,180,879

Other paid-in capitalAmounts received for issued shares and warrants over and above what has been added to share capital are included in the item “Other paid-in capital”. See also Note G11.

ReservesThe translation reserve includes all exchange differences arising on translation of foreign operations that have prepared their financial statements in a currency other than the Group’s presentation currency.

Note G19 Interest-bearing liabilities

Current 31/12/2016 31/12/2015

Bank loans 642 88

Finance lease liabilities 35 36

Total carrying amount 677 125

Non-current 31/12/2016 31/12/2015

Bank loans 1,364 1,513

Finance lease liabilities 42 37

Total carrying amount 1,405 1,550

After 5 years 0 1,058

Borrowing is in SEK, NOK and EUR. SEK 1,793 million of the bank loans for 2016 relates to the Parent Company.

Bank loan terms and conditionsHumana entered into a loan agreement with DNB Sweden AB and Skandinaviska Enskilda Banken AB (publ) in March 2016. Under the loan agreement, the lenders have undertaken to provide credit facilities amounting to SEK 2,200 million for a term of 5 years. The agreement contains the customary covenants (ratios), which are reported regularly to the lenders (net debt to EBITDA and interest cover ratio). The credit facilities are not secured, but are subject to the usual commitments, warranties and negative covenants, including restrictions on pledging the Company's assets, restrictions on debt in subsidiaries (apart from Humana Group Holding AB) and restrictions on disposals and acquisitions where the total annual amount exceeds a total company value of SEK 500 million, and obligations regarding trade sanctions and anti-corruption. See also Notes G21 and G22.

Note G20 Accrued expenses and deferred income

SEK millions 31/12/2016 31/12/2015

Accrued salaries 218 212

Accrued holiday pay 339 291

Accrued interest expenses 6 20

Accrued pensions 59 58

Other 77 62

Total 698 643

Note G21 Financial instruments and risk management

31/12/2016Loans and

receivablesCarrying amount Fair value

Financial assets


Other receivables 6 6 6

Accrued income 367 367 367

Cash and cash equiva-lents 465 465 465

Total 1,360 1,360 1,360

Financial liabilities

Financial assets/liabilities at fair value through

profit or lossOther lia-

bilitiesCarrying amount Fair value

Bank loans 2,006 2,006 2,006

Derivatives 10 10 10

Finance lease liabilities 76 76 76

Trade payables 103 103 103

Other current liabilities 12 12 12

Accrued expenses 698 698 698

Liability for contingent considerations 28 28 28

Total 38 2,895 2,933 2,933

31/12/2015Loans and

receivablesCarrying amount Fair value

Financial assets


Other receivables 19 19 19

Accrued income 7 7 7

Cash and cash equiva-lents 501 501 501

966 966 966

Financial liabilities

Financial assets/liabilities at fair value through

profit or lossOther lia-

bilitiesCarrying amount Fair value

Bank loans 1,602 1,602 1,602

Derivatives 38 38 38

Finance lease liabilities 73 73 73

Trade payables 79 79 79

Other current liabilities 16 16 16

Accrued expenses 643 643 643

Liability for contingent consideration 26 26 26

64 2,413 2,477 2,477

The carrying amounts of trade receivables, other receivables, cash and cash equivalents, trade payables and other liabilities are a reasonable approximation of their fair values.

Notes



Financial instruments at fair valueWhen determining the fair value of an asset or liability, the Group uses observ-able data as far as possible. Fair value measurement is based on the fair value hierarchy, which categorises inputs into different levels as follows:• Level 1 – inputs that are quoted prices in active markets for identical instruments• Level 2 – inputs other than those in Level 1 that are directly or indirectly observable market data• Level 3 – inputs that are not observable in the market

31/12/2016 Level 1 Level 2 Level 3 Total

Liabilities

Derivatives 10 10

Liability for contingent con-sideration 28 28

Fair value 0 10 28 38

31/12/2015 Level 1 Level 2 Level 3 Total

Liabilities

Derivatives 38 38

Liability for contingent con-sideration 26 26

Fair value 0 38 26 64

Transfers between levelsThere were no transfers between levels in 2016 or 2015.

Reconciliation of financial instruments measured in level 3The table below shows a reconciliation between the opening and closing balanc-es for financial instruments measured in Level 3.


Contingent consideration

Opening balance 26 6

Cost of acquisition 20 26

Reversed to income statement 0 0

Settled during the year -19 -6

Closing balance 28 26

Measurement methods and inputsThe tables below show the methods used for fair value measurement in Levels 2 and 3, and non-observable inputs.

Financial instruments at fair value through profit or loss

Type Measurement method

Significant non-observ-able inputs

Connection between sig-nificant non-observable inputs and fair value cal-culation

Contingent consideration

EBITDA multiples: The measurement model calculates the value of the contingent consider-ation based on likely scenarios of future EBITDA outcomes using agreed multiples.

Forecast EBITDA

The estimated fair value would increase (decrease) if: EBITDA was higher (lower)

Interest rate swaps and interest rate options

The fair value of interest rate swaps and interest options has been calculated by dis-counting estimated future cash flows under the contract terms and conditions based on the market rate for similar instruments on the reporting date.

Sensitivity analysisThe maximum outstanding amount for contingent considerations that can be paid is SEK 48 million. The contingent considerations are performance-based.

Financial instruments not measured at fair value

TypeMeasurement

method

Significant non-observable

inputsMeasurement

level

Other financial liabilities*Discounted cash

flows N/A 2

* Other financial liabilities refer to bank loans and finance lease liabilities.

Risks associated with financial instrumentsIn the course of its operations, the Group is exposed to different types of financial risk. • Liquidity and financing risk • Credit risk• Interest rate risk• Currency risk

The Group's financial policy for financial risk management has been formulated by the Board and provides a framework of guidelines and rules in the form of a risk mandate and limits for financing activities. Responsibility for the Group’s financial transactions and risks is managed centrally by the CFO in consultation with the Board’s finance committee. The overall goal of the finance function is to provide cost-effective financing and minimise adverse effects of market risks on the Group’s earnings.

Liquidity and financing riskLiquidity risk is the risk of the Group encountering problems in meeting its obliga-tions associated with financial liabilities. The CFO manages liquidity risks central-ly for the entire Group. Liquidity requirements are monitored regularly and when reviewing Humana’s financing needs. The Group’s policy is to minimise borrow-ing needs by balancing surplus and deficit liquidity within the Group and to achieve financing flexibility through agreements for additional available credit. To facilitate liquidity planning and control, the Group has credit facilities (bank over-draft facilities) and a cash pool.

Humana’s liquidity is negatively affected by Försäkringskassan’s decision to introduce payment in arrears, a departure from its previous policy of advance payment within Personal Assistance. Payment in arrears was introduced on 1 October 2016 and this had an adverse effect of about SEK 300 million on Humana’s working capital in the fourth quarter.

Specification of available liquidity: 2016 2015

Unutilised overdraft facility - 100

Cash 465 501

Total 465 601

The Group’s financial liabilities, which are shown in Note G19, amounted to SEK 2,082 (1,675) million at year-end, comprising current liabilities of SEK 677 (125) million and non-current liabilities of SEK 1,405 (1,550) million.

Maturity analysis for financial liabilities

2016 <3 months3-12

months 2-5 years > 5 years Total

Bank loans 50 592 1,364 - 2,006

Interest on bank loans 11 32 124 - 167

Derivatives 8 3 - - 10

Finance lease liabilities 9 26 42 - 76

Trade payables 103 - - - 103

Liability for contingent consideration 24 4 - - 28

Total 205 656 1,529 - 2,390

Note 21 cont’d


Maturity analysis for financial liabilities

2015 <3 months3-12

months 2-5 years > 5 years Total

Bank loans 51 32 279 1,277 1,639

Interest on bank loans 18 52 256 117 443

Derivatives 7 21 9 - 38

Finance lease liabilities 10 29 35 - 73

Trade payables 79 - - - 79

Liability for contingent consideration 18 - 6 3 26

Total 182 134 585 1,396 2,298

Credit riskCredit risk refers to exposure to receivables in the form of investments of surplus liquidity, derivatives, and trade receivables. Surplus liquidity is invested in deposit accounts, and derivatives are only entered into with the major Nordic corporate banks. Most of the Group’s trade receivables are from state, municipal and coun-ty council entities, which are considered to have good credit quality. Cash and cash equivalents are only invested in banks with high credit ratings. The risk of customer losses is therefore considered to be minimal.

Maximum exposure to credit risk 2016 2015

Trade receivables 523 440

Assistance allowance receivables 346 -

Other receivables 6 19

Cash and cash equivalents 465 501

Total 1,340 959

Interest-rate riskThe main market risk affecting Humana is interest rate risk, which can result in fair value and cash flow changes. Fixed-rate periods are a significant factor affecting interest rate risk.

The Group’s interest rate risk arises mainly through long-term borrowing and is managed by the CFO. Derivative instruments (interest rate swap contracts) are used to manage interest rate risk. The Group’s loan agreement carries variable interest, with 3-month fixed-interest periods, which has been hedged against a fixed interest rate for 50% of the liability for 3 years. This has been achieved through interest rate swaps and interest options under which Humana receives variable interest and pays fixed interest to the swap counterparties. These instru-ments will be reviewed in 2017.

A 1 percentage point increase in interest rates at the closing date would affect interest expenses by SEK 13 (6) million, including interest rate derivatives.

Currency riskAs the Group operates in Sweden, Norway and Finland, it is exposed to currency risks from exposure to the Norwegian krone (NOK) and the euro (EUR). The Group’s earnings are affected by translation of Norwegian and Finnish subsidiar-ies’ income statements at the average exchange rate for the financial year. If a Norwegian or Finnish subsidiary’s local currency changes in relation to SEK, the Group’s reported net revenue and earnings would change when translated to SEK. Currency risk also arises through future business transactions, reported assets and liabilities, and net investments in foreign operations. NOK and EUR exposure has therefore been partly financed through borrowing in NOK and EUR.

Net assets in NOK amount to SEK 220 (79) million, including goodwill. A 5 percentage point change in the exchange rate would have an effect of SEK 4 (-1) million on the income statement and SEK 7 (4) million on consolidated compre-hensive income at the reporting date. Net assets in EUR amount to SEK -2 (-) mil-lion, including goodwill. A 5 percentage point change in the exchange rate would have an effect of SEK 1 (-) million on the income statement and SEK 0 (-) million on consolidated comprehensive income at the reporting date.

Capital managementThe Group’s policy is to maintain a good financial position, thereby helping to maintaining the confidence of investors, lenders and the market, and providing a solid foundation for continuing development of business operations while also generating a satisfactory long-term return for shareholders. The Board aims to achieve a balance between a potential higher return on equity from a high debt to equity ratio and the advantages and security associated with a strong capital base. The objective is to continue to generate returns for shareholders and value for other stakeholders.

Neither the Parent Company nor any of the subsidiaries are subject to external capital requirements (see also Note G19).

Notes

Note G22 Pledged assets and contingent liabilities


Pledged assets for bank loans

Shares in subsidiaries - 1,686*

Floating charges - 30

Property mortgages 3 3

Pledged assets - -

Other 30 0

Contingent liabilities None None

*Shares in subsidiaries constitute the value of net assets for the subsidiaries in which shares were pledged in 2015. See note G19.

Note G23 Related party transactionsThe Group’s key personnel consists of the Board of Directors, Group manage-ment and the CEO, through ownership of Humana and through their roles as senior executives. Related parties also include the principal owner Air Syndication S.C.A., which is represented on the Board by Lloyd Perry and Wojciech Goc.

Related party transactions are based on market conditions.

Remuneration of key personnel Remuneration of key personnel is shown in Note G7.

Outstanding promissory notes were settled in full, including outstanding interest, in July 2015. The total cash payment to related parties was SEK 10,079 thousand (SEK 424 thousand to Air Syndication S.C.A, SEK 9,655 thousand to the Board and CEO).

Preference sharesPreference shares were converted into ordinary shares in connection with the IPO.



Note G24 Companies included in these financial statements

Humana AB is the Parent Company of the Group, which includes subsidiaries as listed below. All subsidiaries are wholly owned and have financial years that correspond with the Parent Company’s financial year.

Company name Number of shares Registered officeShare of equity,

%

AB Salboheds Gruppboende, 556754-3912 1,000 Sala 100%

Adventum Specialpedagogik AB, 556387-6753 1,000 Borlänge 100%

Adventum Vård AB, 556330-3030 1,000 Borlänge 100%

Amelius Holmsund AB, 559020-1728 500 Sigtuna 100%

Arjessa Oy, 2367998-4 11,211,785 Helsinki, Finland 100%

Askelmerkki Oy, 2373748-6 250 Turku, Finland 100%

Asumispalvelut Arjessa Oy, 2728060-4 1,000 Senäjoki, Finland 100%

Baggium Vård & Behandling AB, 556747-5230 1,000 Gothenburg 100%

Bakkan Bokollektiv AS, 978712290 34 Harstad, Norway 100%

Balanshem AB, 556733-8099 1,000 Höör 100%

Barrebacken AB, 556610-6760 108 Stockholm 100%

Behandlingshemmet Källtorp AB, 556668-5979 1,000 Stockholm 100%

Birkelund Barnevernssenter AS, 988145009 275 Eidsvoll, Norway 100%

Björkvik-Ringsjöhemmet AB, 556435-1889 1,500 Stockholm 100%

Björkviks Vårdhem AB, 556257-3575 2,000 Stockholm 100%

Björntorps HVB-hem AB, 556740-6219 1,000 Stockholm 100%

Cureum AB, 556681-8661 821 Örebro 100%

Davidsbo Fastigheter AB, 556787-3327 1,000 Norberg 100%

Davidsbo Invest AB, 556806-2698 500 Norberg 100%

Davidsbogård AB, 556709-4296 1,000 Norberg 100%

Ekonomibyrån i Wermland AB, 556521-4573 1,000 Filipstad 100%

Fabriken Förändringskonsulterna i Skaraborg AB, 556650-8544 1,000 Stockholm 100%

Familjeforum konsult i Skåne AB, 556687-4227 1,000 Stockholm 100%

Familjeforum Lund AB, 556589-3764 1,000 Stockholm 100%

Familjestödsgruppen i Stockholm AB, 556699-8182 1,000 Tyresö 100%

Familjevårdskonsulenterna i Sverige AB, 556733-7349 1,000 Örebro 100%

Fuga Omsorg AB, 556897-4371 5,000 Stockholm 100%

Habiliteket AB, 556484-2416 1,000 Täby 100%

Hallandshem AB, 556699-6129 1,000 Kungsbacka 100%

Humana AS, 997915038 1,000 Tonsberg, Norway 100%

Humana Assistans AB, 556605-3996 100,000 Örebro 100%

Human Care Assistanse AS, 914 597 811 3,956 Stjordal, Norway 100%

Humana Ekeliden AB, 556891-0508 50,000 Örebro 100%

Humana Group AB, 556697-0249 1,478,571 Örebro 100%

Humana Group Holding AB, 556730-0453 1,428,570 Stockholm 100%

Humana Hemtjänst AB, 556919-2718 50,000 Stockholm 100%

Humana Holding AB, 556645-2206 1,000 Örebro 100%

Humana Holding AS, 996808335 252,000 Lier, Norway 100%

Humana Omsorg AB, 556749-0007 1,000 Stockholm 100%

Humlans HVB AB, 556641-8165 3,000 Ockelbo 100%

HVB Lappetorp AB, 556525-0247 1,020 Trosa 100%

Hyvinvointipalvelut Arjessa Oy, 1744507-3 240 Lohja, Finland 100%

Häggesta 10:1 AB, 556992-5638 100 Stockholm 100%

INOM Innovativ Omsorg i Norden AB, 556782-9105 3,524,259 Stockholm 100%

INOM Innovativ Omsorg i Sverige AB, 556739-6725 1,000 Stockholm 100%

Istriana AB, 559020-2452 1,000 Lund 100%

Jokilaakson Perhekodit Oy, 1741579-8 20 Ylivieska, Finland 100%

JOWE AB, 556644-6281 100 Stockholm 100%

KBT Mälardalen AB, 556718-7025 1,000 Stockholm 100%

Kiinteistö Oy Namika, 2446601-6 1,000 Lahti, Finland 100%

Kilen Akut Behandlingshem AB, 556620-9549 1,000 Skövde 100%

KOA Helse og Omsorg AS, 991069550 300 Narvik, Norway 100%

KOA Ungdomstiltak AS, 890821502 500 Narvik, Norway 100%

KOA Psykisk Helse AS, 994627112 1,540 Narvik, Norway 100%

K-rehab AB, 556766-2720 6,000 Sandviken 100%


Company name Number of shares Registered officeShare of equity,

%

Kvaefjord Opplevelse og Avlastning AS, 888 031 812 9,492 Harstad, Norway 100%

Lastensuojeluyksikkö Leppälintu Oy, 2364613-8 1,000 Kauhajoki, Finland 100%

Lastensuojeluyksikkö Pihakoivu Ky, 1991926-0 - Ylistaro, Finland 100%

Lunna Gård AB, 556586-2371 1,000 Stockholm 100%

Löft AS, 982767458 16,920 Tonsberg, Norway 100%

Namikan Pienryhmäkoti Oy, 2461106-8 1,000 Lahti, Finland 100%

Neuropsyk i Bollnäs AB, 556543-1516 1,000,000 Stockholm 100%

Nordic Care AB, 556658-8710 1,000 Örebro 100%

Norrbärke Sjukhem AB, 556564-9778 2,500 Stockholm 100%

Nuorisopsykiatrinen Asumiskoti Puro Oy, 1744507-3 240 Vähäkyrö, Vaasa, Finland 100%

Nuorisokoti Valokki Oy, 2284728-8 1,250 Jalasjärvi, Finland 100%

Nygårds Vård Gotland AB, 556417-0511 2,000 Gotland 100%

Oasen Hvb & Skola AB, 556420-9608 5,000 Aneby 100%

Oasen Ungdomscenter AB, 556686-2313 1,000 Aneby 100%

Oasen Utbildningscenter AB, 556650-1796 1,000 Aneby 100%

Off.Clinic AB, 556625-9429 1,000 Kristianstad 100%

Omsorgsbasen AS, 997289730 100 Steinkjaer, Norway 100%

Orana AB, 556353-3966 1,000 Kristianstad 100%

Orana Kristianstad AB, 556714-8878 1,000 Kristianstad 100%

Orana Vård & Omsorg Holding AB, 559012-0159 50,000 Kristianstad 100%

Partnergruppen Svenska AB, 556177-0362 10,000 Stockholm 100%

Perhetalo Arjessa Oy, 2487220-9 1,000 Helsinki, Finland 100%

Pienkoti Aura Oy, 1853882-9 10 Jyväskylä, Finland 100%

Pienryhmäkoti Puolenhehtaarin Metsä Oy (PHM), 2166211-8 270 Lohja, Finland 100%

Platea AB, 556697-9729 1,500 Hagfors 100%

Pienryhmäkoti Arjen Sydän Oy, 2179372-4 130 Siuntio, Finland 100%

Plus Assistans AB, 556665-9149 1,000 Örebro 100%

Prompting AB, 556606-5990 200 Stockholm 100%

Ramlösa Social Utveckling AB, 556266-5520 1,000 Helsingborg 100%

Rehabiliteringsbolaget i Mälardalen AB, 556755-5049 1,000 Örebro 100%

Rengsjö Vårdcenter AB, 556383-1857 1,000 Stockholm 100%

Riihenaika Oy, 1875571-9 800 Helsinki, Finland 100%

Ryhmäkodit Arjessa Oy, 2284729-6 1,250 Seinäjoki, Finland 100%

Sociala tjänster Sverige AB, 556658-1277 5,000 Stockholm 100%

Storsjögårdens HVB AB, 556335-5780 1,000 Gävle 100%

Södertörns familjevård AB, 556573-0511 1,000 Stockholm 100%

Tiangruppen AB, 556223-5145 2,500 Uppsala 100%

Tibble gård ungdomshem AB, 556632-1757 1,000 Stockholm 100%

TILTAK FOR UNGDOM - AGDER AS, 989649582 1,000 Kristiansand, Norway 100%

TILTAKSGRUPPEN AS, 980110125 200,000 Bergen, Norway 100%

Ungdomshemmet Hajstorp AB, 556618-0369 1,600 Töreboda 100%

Vassbo Behandlingshem AB, 556449-1602 1,000 Uddevalla 100%

Vidablick AB, 556679-3179 1,000 Helsingborg 100%

Wikmansgården AB, 556167-4275 1,000 Stockholm 100%

Våre Hjem AS, 980399699 1,000 Trondheim, Norway 100%

Note G25 Events after the reporting dateSkellefteå Stöd och Behandling AB (Individual & Family) was acquired in January 2017. Humana intends to open its fourth elderly housing unit under own manage-ment in 2018.

Notes



Accounting policies

GA1 Changes in accounting policiesA number of new and amended IFRSs are not effective until future annual periods and have not been applied early in the preparation of these financial statements. There are no plans for early application of new and amended standards which are effective in future annual periods.

GA2 Significant accounting policies The accounting policies described below have been applied consistently to all periods presented in the Group’s financial statements, with some exceptions, which are described in more detail. The Group’s accounting policies have been consistently applied by the Group companies.

New IFRSs not yet in effect A number of new and amended IFRSs are not effective until future annual periods and have not been applied early in the preparation of these financial statements. There are no plans for early application of new and amended standards which are effective in future annual periods.

IFRS 9 Financial Instruments will replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 contains new requirements for classifica-tion and measurement of financial instruments, a forward-looking impairment (expected loss) model and simplified conditions for hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018 and earlier application is permitted provided the EU adopts the standard. The EU intends to adopt the standard in the first half of 2016. IFRS 9 is not expected to have any sig-nificant impact on Humana’s financial reporting.

In January 2016 the International Accounting Standards Board (IASB) decided on a new standard for the accounting of leases, IFRS 16 Leases, effective 1 January 2019. The European Financial Reporting Advisory Group has not yet announced when the standard is expected to be adopted by the EU, after which it can be applied by Humana.

Under IFRS 16 Leases, a lessee recognises all leased assets and related liabili-ties in the balance sheet and recognises depreciation of these assets and interest costs linked to the related liabilities in the income statement, that is, in the same way that finance leases are recognised under the current standard. This differs from the current method, in which operating leases are recognised outside the balance sheet with information on the liability and lease payments are recognised as an expense over the lease term on a straight-line basis. IFRS 16 will thus affect Humana in that the operating leases described in Note G6 will be recognised in the balance sheet and lease payments, currently reported under other external expenses, will be replaced by a depreciation of the balance sheet assets and interest expense related to the financial liabilities.With effect from 2018, IFRS 15 Revenue from Contracts with Customers replaces existing IFRS standards related to revenue recognition, such as IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programmes. Humana does not plan to adopt IFRS 15 in advance. IFRS 15 is based on revenue being recognised when control of the product or service is transferred to the cus-tomer, which differs from the existing standard based on the transfer of risks and rewards. IFRS 15 introduces new ways of determining how and when revenue should be recognised, which means new approaches from the current methods of revenue recognition.

An evaluation of the effects of application of IFRS 15 on Humana's financial reporting is in progress. It has not yet been possible to assess the monetary effects, other than at the overall level described below. The assessments of the effects described below are based on information currently known or estimated. Decisions on transition methods will be made when the analysis of IFRS 15 has reached a phase that provides a more complete basis than at present.

The preliminary assessments of the effects on different types of revenue are described below.

Humana companies perform assistance services at customers’ premises, and provide accommodation in the areas of elderly care, residential care homes, tem-porary and regular family homes, special housing and assisted living homes. Based on the assessments to date, overall recognition of revenue is not expected to be affected. Finally, as IFRS 15 contains increased disclosure requirements regarding revenue, this will expand the content of the notes.

Other new and amended IFRSs with future application are not expected to have any material effect on the Company's financial statements.

ClassificationNon-current assets and liabilities are essentially amounts that are expected to be recovered or paid more than twelve months after the reporting date. Current

assets and liabilities are essentially amounts that are expected to be recovered or paid within twelve months of the reporting date.

Segment reportingHumana has four business areas, which are also reported as four segments: Individual & Family, Personal Assistance, Elderly Care and Other Nordics. Sales and operating profit for each segment are reported after allocation of seg-ment-specific costs, but not including costs for central functions. The Group’s segment reporting corresponds to the internal reporting to the chief operating decision maker. However, the CEO and CFO only monitor the Group’s total assets, not assets by segment. See Note G3 for a more detailed description of the breakdown and presentation of operating segments.

Basis of consolidation and business combinationsSubsidiariesThe consolidated financial statements include the Parent Company Humana AB and its subsidiaries. Subsidiaries are entities over which the Parent Company has control. Control exists when the Parent Company has exposure to variable returns from its holding in an entity and has the ability to affect the returns through power over the entity.

A subsidiary is consolidated from the date on which the Parent Company obtains control until such control ceases.

The assets and liabilities of Humana’s foreign subsidiaries are translated at the closing rate. All income statement items are translated at the average rate for the year. Translation differences are recognised directly in consolidated equity.

Business combinationsHumana recognises business combinations in accordance with the acquisition method from the date on which control is obtained. The consideration paid in connection with an acquisition is recognised at the acquisition-date fair value, as are the acquired assets and liabilities. The difference between the purchase con-sideration and the fair value of the acquired assets and liabilities is recognised as goodwill. Goodwill is subject to annual impairment testing. See also Note G5. In bargain purchases, which are acquisitions where the value of the net assets exceeds the purchase consideration paid, the difference is recognised immediate-ly in the income statement. Acquisition costs are expensed as incurred.

Contingent considerations are recognised at fair value on the date of acquisi-tion and contingent considerations that are financial liabilities are remeasured at each reporting date with changes in value recognised under financial items.

The consideration paid in connection with an acquisition does not include pay-ments related to settlement of a pre-existing relationship. This type of settlement is recognised in profit or loss.

RevenueRevenue is recognised when the services are performed. Health and social care services are largely provided under monthly invoicing agreements. Compensation is based on the number of users, care days, assistance hours, resi-dential places, home care visits and similar services performed by the Group.

Personnel costsShort-term benefitsEmployee benefits are recognised as an expense when the services have been performed. A liability for the expected cost of bonus payments is recognised when the Group has a legal or constructive obligation to make such payments as a result of employees having provided the services in question and when the amount can be measured reliably.

Termination benefitsTermination benefits are recognised at the earlier of the following: when the Company can no longer withdraw the offer of the benefits or when the Company recognises restructuring costs. Benefits expected to be settled after twelve months are recognised at their present value.

Pension benefit obligationsHumana has various pension plans which are classified as either defined contri-bution or defined benefit plans. A defined contribution pension plan is a plan under which the Group’s obligation is limited to the fixed contributions paid to the insurer in question. Pension premiums under defined contribution plans are rec-ognised as personnel costs in the income statement as they fall due.

A defined benefit pension plan is a plan that is not based on defined contribu-tions. Humana’s defined benefit obligations for retirement benefits and family pensions for salaried employees in Sweden (ITP2) are covered by insurance with Alecta. In accordance with Statement UFR 10 issued by the Swedish Financial


Reporting Board, this is a multi-employer defined benefit plan. Like other Swedish companies, the Group has not had access to sufficient information to enable it to report this plan as a defined benefit plan. Consequently, the ITP pension plan, which is insured through Alecta, is reported as a defined contribution plan.

The Group has certain pension obligations that are covered by endowment insurance. The pension provision includes a special payroll tax and corresponds to the value of the assets in the endowment insurance at any given time.

Finance income and expensesFinance income consists of interest income and, where applicable, dividend income, as well as gains on the remeasurement or disposal of financial instru-ments.

Finance expenses consist of interest charges on loans, including accrued trans-action costs, losses on changes in value or disposal of financial instruments.

Exchange gains and losses are recognised on a gross basis. Interest income and expenses are reported using the effective interest method.

Dividends are recognised in the income statement when the right to receive pay-ment of a dividend has been established.

LeasesOperating leasesOperating lease costs are recognised in profit or loss on a straight-line basis over the lease term. Benefits received in connection with the signing of a lease are rec-ognised in the income statement as a reduction of lease payments on a straight-line basis over the lease term. Contingent rents are recognised as an expense in the periods in which they arise.

Finance leasesFinance leases are reported in the balance sheet under non-current assets, which are depreciated in accordance with the principles for property, plant and equip-ment, and financial liabilities. The lease payments are apportioned between the finance charge and the repayment of the outstanding lease obligation. The finance charge is allocated over the lease term in such a way as to produce a con-stant periodic rate of interest on the remaining balance of the liability for each period. Contingent rents are recognised as an expense in the periods in which they arise.

Accounting for sale and leaseback transactionsA sale and leaseback transaction (SLB) is the sale of an asset under a purchase agreement that results in a subsequent lease of the same asset with the original owner as lessee. These transactions are accounted for on the basis of how the lease transaction is classified. This assessment follows the customary principles for classification of leases.

If a sale and leaseback transaction results in a finance lease, any excess of pro-ceeds over the carrying amount (capital gain) is not recognised directly in the sell-er's income statement but is amortised over the lease term.

If a sale and leaseback transaction results in an operating lease, any excess of proceeds over the carrying amount (capital gain) is recognised in the period of the sale, provided the transaction is based on fair value. The Group has deter-mined that all SLB transactions have been or will be conducted at arm’s length at a price equal to fair value.

Income attributable to sale and leaseback transactions is recognised as income on the handover date unless the risks and rewards have been transferred to the buyer on an earlier occasion. Control of the asset may have been trans-ferred before the handover date, in which case the property sale is recognised as revenue on that earlier date.

TaxesIncome tax consists of current tax and deferred tax. Income taxes are recognised in the income statement, unless the underlying transaction is recognised in other comprehensive income or in equity, in which case the associated tax effect is rec-ognised in other comprehensive income or in equity.

Current tax is the amount of income taxes payable or recoverable in respect of the taxable profit or loss for the current year, and is calculated using tax rates that have been enacted or substantively enacted at the reporting date, including any adjustments relating to prior periods.

Deferred tax is accounted for using the balance-sheet liability method. A deferred tax liability is recognised for temporary differences between the carrying amounts of assets and liabilities and their corresponding tax bases. Temporary differences are not taken into account in goodwill on consolidation nor for the dif-ference resulting from the initial recognition of assets and liabilities that are not business combinations, and that at the time of the transaction affect neither rec-ognised nor taxable earnings. The measurement of deferred tax is based on how

the underlying assets and liabilities are expected to be recovered or settled. Deferred tax liabilities and assets are measured using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date.

Deferred tax assets on temporary differences and deferred tax assets arising from the carry-forward of unused tax losses are only recognised to the extent that it is probable that they can be utilised. The carrying amounts of deferred tax assets are reviewed and reduced to the extent that it is no longer probable that the deferred tax asset can be utilised.

Intangible assetsGoodwillIn a business combination, goodwill arises when the consideration paid exceeds the fair value of identifiable net assets in the acquired entity. Goodwill is not amortised, but is tested for impairment testing. See the section on impairment below. See also Note G12.

When the Group adopted IFRS, it was decided not to apply IFRS retrospectively to goodwill arising from acquisitions prior to 1 January 2012. Consequently, the carrying amount on that date represents the Group's cost of acquisition after impairment testing.

Other intangible assetsWhen a business is acquired, the company assesses the extent to which there are identifiable intangible assets to be reported separately from goodwill, such as customer relationships, trademarks and customer contracts. In addition, Humana reports capitalised expenditure on system development and licences as an asset.

Other intangible assets are recognised at cost less accumulated amortisation (see below) and impairment (see accounting policy).

AmortisationAmortisation is recognised in profit or loss on a straight-line basis over the intan-gible asset's useful life, unless it has an indefinite useful life. Useful lives are reviewed at least annually. Goodwill is tested for impairment annually and as soon as there are indications that the asset in question has decreased in value. Intangible assets with finite useful lives are amortised from when they are avail-able for use. The estimated useful lives are:

– system development and licences 5–7 years– customer relationships 5–7 years

Property, plant and equipmentProperty, plant and equipment, consisting primarily of owner-occupied proper-ties, is recognised at cost less accumulated depreciation and impairment. Property, plant and equipment with sub-components that have different useful lives are treated as separate components of property, plant and equipment.

The cost of financial leases is the lower of the leased asset's fair value and the present value of the minimum lease payments at the inception of the lease.

Gains or losses on the disposal or retirement of an asset are recognised in the income statement under other operating income/expenses.

Subsequent costsSubsequent costs are capitalised only if it is probable that future economic bene-fits associated with the cost will flow to the company. All other subsequent costs are recognised as an expense in the period in which they arise.

DepreciationDepreciation is applied on a straight-line basis over the useful life of the asset. Leased assets are also depreciated over their estimated useful lives or over the agreed lease term if this is shorter. Land is not depreciated.Estimated useful lives:

The following main groups of components have been identified and form the basis of depreciation of buildings:– Building frame 40–100 years– Supplementary structures, interior walls etc. 20–40 years– Installations: heating, electricity, plumbing, ventilation etc. 25–40 years– Exterior surfaces: façades, roof etc. 20–70 years– Interior surfaces, machinery etc. 10–25 years– Equipment 5–10 years– Leasehold Contract period

Depreciation methods, residual values and useful lives are reviewed at each year-end.

Notes



ImpairmentThe carrying amounts of the Group's assets are assessed at each reporting date to determine if there is any indication of impairment.

Impairment of property, plant and equipment and intangible assets If there is an indication of impairment, the asset's recoverable amount is mea-sured (see below). The recoverable amount is calculated annually for goodwill, other intangible assets with indefinite useful lives and intangible assets not yet ready for use. If an asset does not generate independent cash inflows and its fair value less costs to sell cannot be used, it is tested for impairment as part of the cash-generating unit to which it belongs, i.e. the smallest identifiable group of assets which generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

An impairment loss is recognised when the recoverable amount of an asset or a cash-generating unit (group of units) is less than its carrying amount. An impair-ment loss is recognised as an expense in profit for the year. Impairment losses rec-ognised for a cash-generating unit are initially allocated to goodwill. They are then allocated to the other assets of the unit pro rata on the basis of each asset's carrying amount.

The recoverable amount is the higher of the asset's fair value less costs to sell and its value in use. In measuring value in use, cash flows are discounted using a discount rate that reflects the risk-free rate of interest and the risks specific to the asset.

Reversal of impairment lossesImpairment of assets accounted for under IAS 36 is reversed if there is an indica-tion that the impairment no longer exists and there has been a change in the assumptions on which the calculation of recoverable amount was based. However, goodwill impairment is never reversed. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation where applicable, had no impairment loss been recognised.

Earnings per shareCalculation of basic and diluted earnings per share is based on profit/loss for the year, adjusted for interest on preference shares, and the weighted average num-ber of ordinary shares outstanding during the year.

ProvisionsA provision differs from other liabilities as there is uncertainty about the timing or amount required to settle the provision. A provision is recognised when there is a present obligation (legal or constructive) as a result of a past event and it is prob-able that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

Provisions are recognised at the best estimate of the expenditure required to settle the present obligation at the reporting date.

Onerous contractsA provision for onerous contracts is recognised when the benefits the Group expects to receive from a contract are lower than the unavoidable costs of meet-ing its obligations under the contract.

Financial instrumentsFinancial instruments reported under assets in the balance sheet are primarily cash and cash equivalents, derivatives and trade receivables. Financial instru-ments reported under liabilities include trade payables, loans and derivatives.

A financial asset or liability is recognised in the balance sheet when the compa-ny becomes a party to the contractual provisions of the instrument. A receivable is recognised when the company has performed and there is a contractual obliga-tion for the counterparty to pay, even if an invoice has not yet been sent. Trade receivables are recognised when an invoice has been sent. A liability is rec-ognised when the counterparty has performed and there is a contractual obliga-tion to pay, even if an invoice has not yet been received. Trade payables are rec-ognised on receipt of the invoice.

A financial asset is derecognised when the rights to receive benefits have been realised, expired or the Company loses control over them. A financial liability is derecognised when the contractual obligation is discharged or extinguished in some other way.

A financial asset and a financial liability may be offset when, and only when, there is a legally enforceable right to set off the amounts and there is an intention to settle the items on a net basis.

Purchases and sales of financial assets are recognised on the trade date, which is date on which the company commits itself to purchase or sell the asset.

Financial assets at fair value through profit or lossThis category consists of derivative instruments (interest rate swaps and interest rate options) that are included in the financial assets held for trading sub-catego-ry. Financial assets in this category are measured at fair value, with changes in fair value recognised in profit or loss.

Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determin-able payments that are not quoted in an active market. These assets are mea-sured at amortised cost. Amortised cost is determined using the effective interest method calculated on the date of acquisition. Trade receivables are recognised at the amounts expected to be received, i.e., less an allowance for doubtful receiv-ables.

Financial liabilities at fair value through profit or lossThis category consists of financial liabilities held for trading, including the Group’s derivatives, and contingent considerations, which are also recognised in this category. Changes in fair value are recognised in profit or loss.

Other financial liabilitiesBorrowings and other financial liabilities such as trade payables and utilised over-draft facilities are included in this category. These liabilities are measured at amortised cost.

Impairment of loans and receivables recognised at amortised cost is reversed if the previous indication of impairment no longer exists and full payment from the customer is expected.

Impairment of financial assetsAt each reporting date, the Company assesses whether there is objective evi-dence that a financial asset or group of assets is impaired. Objective evidence consists of observable events that have occurred and adversely affect the ability to recover the cost of the asset, and a significant or prolonged decline in the fair value of an investment in a financial instrument classified as an available-for-sale financial asset.

The company classifies trade receivables as doubtful when they are 90 or more days past due Impairment of receivables is established by reference to historical experience of customer defaults on similar receivables.

Contingent liabilitiesA contingent liability is recognised when a possible obligation arises from past events whose existence will be confirmed only by the occurrence or non-occur-rence of one or more uncertain future events outside the Group's control, or when there is an obligation which is not recognised as a liability or provision because it is not probable that an outflow of resources will be required to settle the obliga-tion or the amount cannot be measured reliably.


Notes to the Parent Company financial statements

Note PA1 Parent Company’s accounting policiesThe Parent Company’s annual financial statements have been prepared in accor-dance with the Swedish Annual Accounts Act (1995:1554) and the Swedish Financial Reporting Board’s recommendation RFR 2 Accounting for Legal Entities. The Swedish Financial Reporting Board's issued statements for listed enterprises have also been applied. RFR 2 requires the Parent Company, as a legal entity, to prepare its annual financial statements in compliance with all IFRS and IFRIC interpretations adopted by the EU, to the extent that such application does not conflict with the Swedish Annual Accounts Act and Pension Obligations Vesting Act and taking into account the relationship between tax expense (income) and accounting profit. The recommendation also specifies exceptions from and addi-tions to IFRS reporting.

Differences between the Group’s and the Parent Company’s accountingpoliciesDifferences between the Group's and the Parent Company's accounting policies are described below. The accounting policies described below have been applied consistently to all periods presented in the Parent Company's financial statements.

Shares in subsidiariesShares in subsidiaries are recognised in the Parent Company using the cost model. This means that transaction costs are included in the carrying amount of the holdings in subsidiaries. In the consolidated accounts, transaction costs attributable to subsidiaries are recognised directly in the income statement as they arise.

Financial instruments and hedge accountingBecause of the relationship between tax expense (income) and accounting profit, the Parent Company does not apply the rules on financial instruments and hedge accounting contained in IAS 39.

The Parent Company's non-current financial assets are carried at cost less impairment losses, while its current financial assets are measured using the "lower value" principle. The cost of interest-bearing instruments is adjusted for the accrued difference between the amount originally paid, net of transaction costs, and the amount paid at maturity (premium or discount).

Income tax The Parent Company’s effective tax rate is 22 percent, which corresponds to the nominal tax rate.

Note P1 Parent Company’s transactions with Group companies

Sales to Group companies amounted to 100 percent in 2016 (100 percent in 2015). Purchases from Group companies amounted to 0 percent in 2016 (0 per-cent in 2015).

Note P2 Information on auditors’ fees and cost reimbursement

Auditors’ fees2016 2015

KPMG AB

- audit services 1 1

- tax advisory services 0 0

Total 1 1

Audit services consist of the auditor’s work associated with the statutory audit, while auditing assistance includes various types of quality assurance services. Other services are services other than audit services or tax advisory services.

Note P3 Equipment31/12/2016 31/12/2015

Opening cost 0 2

Investments - 0

Disposals/sales - -2

Closing accumulated cost 0 0

Opening depreciation 0 -1

Disposals/sales - 1

Scheduled depreciation for the year - 0

Closing accumulated depreciation - 0

Closing scheduled residual value 0 0

Note P4 Shares in subsidiaries31/12/2016 31/12/2015

Opening cost 1,623 1,623

Closing accumulated cost 1,623 1,623

Carrying amount

Company name 31/12/2016 31/12/2015

Humana Group Holding AB, 556730-0453 1,623 1,623

Note P5 Untaxed reserves31/12/2016 31/12/2015

Allocation reserve, tax year 2011 - 19

Allocation reserve, tax year 2012 19 19




Allocation reserve, tax year 2016 20 -

Total 171 170

Note P6 Non-current liabilities31/12/2016 31/12/2015

Non-current liabilities due for payment 1-5 years after the reporting date: 1,364 0

Non-current liabilities due for payment more than 5 years after the reporting date: - 470

Subordinated loans from shareholders - 0

Total 1,354 470

See Note G18 for loan terms and conditions and Note G20 for financial risk man-agement.

Note P7 Accrued expenses and deferred income31/12/2016 31/12/2015

Accrued interest 1 4

Other items 2 1

Total 3 5

Notes



Note P8 Proposed distribution of profits The Board of Directorsproposes that the profits available to the AGM

SEK 2016

Retained earnings 1,476,932,773

Profit for the year 53,823,142

Total 1,530,755,915

be distributed as follows:

Dividend of SEK 0.50 per share (total 53,140,064 shares) 26,570,032

Carried forward 1,504,185,883

Total 1,530,755,915

The consolidated and Parent Company income statements and balance sheets will be presented for adoption at the Annual General Meeting on 18 May 2017.

The Board of Directors and the CEO confirm that the annual accounts have been prepared in accordance with generally accepted accounting standards in Sweden and that the consolidated accounts have been prepared in accordance with the international accounting standards referred to in European Parliament and Council Regulation (EC) no. 1606/2002 of 19 July 2002 on the application of international financial reporting standards. Theannual accounts and consolidated accounts provide a true and fair view of the financial position and financial performance of the Parent Company and the Group. The Board of Directors’ Report for the Parent Company and the Group provides a true and fair overview of the development of the opera-tions, financial position and financial performance of the Parent Company and Group, and describes material risks and uncertainties faced by the Parent Company and Group companies.

Stockholm, 6 April 2017

Per Båtelson Helen Fasth Gillstedt Wojciech Goc Chairman of the Board Board member Board member

Per Granath Simon Lindfors Maria Nilsson Board member Board member Board member

Lloyd Perry Ulrika Östlund Board member Board member

Rasmus NermanPresident and CEO

Our audit report was submitted on06 April 2017

KPMG AB

Petra LindströmAuthorised Public Accountant


Audit report

To the General Meeting of Shareholders of Humana AB, corporate identity no. 556760-8475

Report on the annual accounts and consolidated accounts

OpinionsWe have audited the annual accounts and consolidated accounts for Humana AB for the year 2016. The Parent Company’s annual accounts and the consolidated accounts are included in this docu-ment on pages 52–92.

In our opinion, the annual accounts have been prepared in ac-cordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the Parent Company as of 31 December 2016 and its financial performance and cash flows for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared inaccordance with the Annual Accounts Act and present fairly, in all material re-spects, the financial position of the Group at 31 December 2016 and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Stan-dards (IFRS), as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistentwith the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the general meeting of share-holders adopt the income statements and balance sheets for the Parent Company and for the Group.

Basis for opinions We conducted the audit in accordance with International Stan-dards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under these standards are further described in the Auditor’s Responsibilities section. We are inde-pendent of the Parent Company and the Group in accordance with professional ethics for accountants in Sweden and have other-wise fulfilled our ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is suffi-cient and appropriate to provide a basis for our opinions.

Key audit mattersKey audit matters are those matters that, in our professional judge-ment, were of most significance in our audit of the annual ac-counts and consolidated accounts of the current period. These matters were addressed in the context of our audit of the annual accounts and consolidated accounts as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters.

Measurement of goodwillSee Notes G12 Goodwill and G2 General accounting policies, including the section Accounting estimates, and the accounting policies on pages 74, 80 and 89 of the annual and consolidated accounts for detailed information and descriptions of the matter.

Description of key audit matterThe Group’s goodwill amounted to SEK 3,089 million at 31 December 2016.

Goodwill is tested annually for impairment. Annual impairment testing is of significance to the audit as it involves a significant element of judgement from the Group, including assumptions about the future performance of the business and market conditions.

Another important assumption is the discount rate to be used to reflect market assessments of the specific risks that the business faces.

Response in the auditWe have examined whether the impairment tests performed were prepared in accordance with the methods prescribed by IAS 36 Impairment of Assets.

We have also evaluated the Group’s assumptions about future cash flows, such as sales growth and operating margin development, and the discount rate. This has been done by, among other things, obtaining and evaluating written docu-mentation and checking assumptions in the impairment testing against plans. We have also evaluated the Group’s historical forecast performance and challenged assumptions about future growth and margins. Where appropriate, assumptions have been checked against external market data.

We have also assessed the content of the information about impairment tests performed, as provided in the annual and consolidated accounts.

Acquisitions of Arjessa Oy and Kvaeford Opplevelse og Avlastning ASSee Notes G5 Acquisitions and G2 General accounting policies, including the section Accounting estimates, and the accounting policies on pages 74, 76 and 89 of the annual and consolidated accounts for detailed information and descriptions of the matter.

Description of key audit matterIn May, Humana acquired 100% of the shares in Arjessa Oy for a purchase price of SEK 271 million and Kvaeford Opplevelse og Avlastning AS for a purchase price of SEK 223 million.

Acquisitions require the preparation of an acquisition analysis, in which acquired assets and liabilities are identified and their fair values are measured at the acquisition date. This requires assessments of the assets to be recognised in the balance sheet – intangible assets can be particularly difficult to assess – and what values they should be assigned in the consolidated accounts. These assess-ments affect the Group’s future earnings, partly depending on whether deprecia-ble or non-depreciable assets are recognised.

Response in the auditWe have analysed prepared acquisition analyses in order to assess whether they have been prepared using established methods. We have involved our valuation specialists, who have experience in acquisition-related valuations, in our work.

A key element of our work has been to assess whether all intangible assets have been included. This assessment has been based on factors such as our under-standing of the business of the acquired companies, and reports prepared by external consultants who assisted the Group in the acquisition process.

We have also assessed the content of the information presented in the annual report’s disclosures on corporate acquisitions.

Other



Information other than the annual accounts and consolidated accounts This document also contains information other than the annual accounts and consolidated accounts, which is presented on pages 1-59 and 96-99. The Board of Directors and the Managing Direc-tor are responsible for this other information.

Our opinion on the annual accounts and consolidated ac-counts does not cover this other information and we do not ex-press any form of assurance or conclusion regarding this other in-formation.

In connection with our audit of the annual accounts and con-solidated accounts, our responsibility is to read the information identified above and consider whether the information is materi-ally inconsistent with the annual accounts and consolidated ac-counts. In this procedure, we also take into account our knowledge otherwise obtained in the audit and assess whether the informa-tion appears to be materially misstated.

If, based on the work performed concerning this information, we conclude that there is a material misstatement of this other in-formation, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated ac-counts and for ensuring that they give a fair presentation in accor-dance with the Annual Accounts Act and, concerning the consoli-dated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also re-sponsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated ac-counts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts and consolidated accounts, the Board of Directors and the Managing Director are responsible for the assessment of the Company’s and the Group’s ability to continue as a going concern. They disclose, as applicable, matters related to the going concern and use of the going concern basis of accounting. The going concern basis of accounting is, however, not applied if the Board of Directors and the Managing Director in-tend to liquidate the Company, cease operations, or have no realis-tic alternative but to do so.

The Board’s Audit Committee shall, without prejudice to the Board’s responsibilities and tasks in general, among other things, oversee the company’s financial reporting process.

Auditor’s responsibility Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable as-surance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material mis-statement when it exists. Misstatements can arise from fraud or er-ror and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic deci-sions of users made on the basis of these annual accounts and con-solidated accounts.

As part of an audit in accordance with ISAs, we exercise profes-sional judgement and maintain professional scepticism through-out the audit. We also:

– identify and assess the risks of material misstatement of the an-nual accounts and consolidated accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and ap-propriate to provide a basis for our opinions. The risk of not de-tecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collu-sion, forgery, intentional omissions, misrepresentations, or the override of internal control.

– obtain an understanding of the Company’s internal control rel-evant to our audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of ex-pressing an opinion on the effectiveness of the internal control.

– evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclo-sures made by the Board of Directors and the Managing Direc-tor.

– draw a conclusion on the appropriateness of the Board of Di-rectors’ and the Managing Director’s use of the going concern basis of accounting in preparing the annual accounts and con-solidated accounts. We also draw a conclusion, based on the au-dit evidence obtained, as to whether any material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s and the Group’s ability to continue as a going concern. If we conclude that a material uncertainty ex-ists, we are required to draw attention in our auditor’s report to the related disclosures in the annual accounts and consolidated accounts or, if such disclosures are inadequate, to modify our opinion about the annual accounts and consolidated accounts. Our conclusions are based on the audit evidence obtained up to the date of our audit report. However, future events or condi-tions may cause a company and a group to cease to continue as a going concern.

– evaluate the overall presentation, structure and content of the annual accounts and consolidated accounts, including the dis-closures, and whether the annual accounts and consolidated ac-counts represent the underlying transactions and events in a manner that achieves fair presentation.

– obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated accounts. We are responsible for the direction, supervision and perfor-mance of the Group audit. We remain solely responsible for our opinions.

We must inform the Board of Directors of, among other matters, the planned scope and timing of the audit. We must also inform them of significant audit findings during our audit, including any significant deficiencies in internal control that we identified.We must also provide the Board with a statement that we have complied with relevant ethical requirements regarding indepen-dence, and communicate to them all relationships and other mat-ters that may be reasonably thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Board of Directors, we


determine those matters that were of most significance in the audit of the annual accounts and consolidated accounts, including the most important assessed risks of material misstatement, and these are there-fore the key audit matters. We describe these matters in the auditor’s report unless law or regulation precludes disclosure of the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in the auditor’s report because the ad-verse consequences of doing so would reasonably be expected to out-weigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

Opinions

In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of Humana AB for the fi-nancial year 2016 and the proposed appropriations of the Compa-ny’s profit or loss.

We recommend to the general meeting that the profit be appro-priated in accordance with the proposal in the statutory administra-tion report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.

Basis for opinionsWe conducted the audit in accordance with generally accepted au-diting standards in Sweden. Our responsibilities in this regard are further described in the Auditor’s Responsibilities section. We are independent of the Parent Company and the Group in accordance with professional ethics for accountants in Sweden and have other-wise fulfilled our ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is suffi-cient and appropriate to provide a basis for our opinions.

Responsibilities of the Board of Directors and the Managing Director

The Board is responsible for the proposal concerning appropria-tions of the Company’s profit or loss. Proposing a dividend in-cludes an assessment of whether the dividend is justifiable consid-ering the requirements that the nature, scope and risks of the Company’s and the Group’s operations place on the size of the Par-ent Company’s and the Group’s equity, consolidation require-ments, liquidity and position in general.

The Board of Directors is responsible for the Company’s or-ganisation and the administration of its affairs. This includes, among other things, continuous assessment of the Company’s and the Group’s financial situation and ensuring that the Company’s organisation is designed so that accounting, management of assets and the Company’s financial affairs are otherwise controlled in a reassuring manner.

The Managing Director shall manage the ongoing administra-tion according to the Board of Directors’ guidelines and instruc-tions, and, among other matters, shall take measures that are nec-essary to handle the Company’s accounting in accordance with law and to conduct the management of assets in a reassuring manner.

Auditor’s responsibility

Our objective for the audit of the administration, and therefore our opinion regarding discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect has:

– undertaken any action or been guilty of any omission which could give rise to liability to the Company; or

– in any other way acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

Our objective for the audit of the proposed appropriations of the Company’s profit or loss, and therefore our opinion regarding same, is to assess with a reasonable degree of assurance whether the proposal is in accordance with the Companies Act.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally ac-cepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the Company, or that the proposed appropriations of the Company’s profit or loss are not in accordance with the Companies Act.

As part of an audit in accordance with generally accepted au-diting standards in Sweden, we exercise professional judgement and maintain professional scepticism throughout the audit. The examination of the administration and the proposed appropria-tions of the Company’s profit or loss is based primarily on the au-dit of the accounts. Additional audit procedures performed are based on our professional judgement, with a starting point in risk and materiality. This means that we focus the examination on such actions, areas and relationships that are material for operations and where deviations and violations would have particular importance for the Company’s situation. We examine and test decisions under-taken, support for decisions, actions taken and other circum-stances that are relevant to our opinion concerning discharge from liability. As a basis for our opinion concerning the Board of Direc-tors’ proposed appropriations of the Company's profit or loss, we have examined the Board's explanatory statement, and a selection of the evidence in order to assess whether the proposal is in accor-dance with the Companies Act.

Stockholm, 6 April 2017 KPMG AB Petra Lindström Authorised Public Accountant

Other



Financial definitions

Reconciliation with IFRS financial statementsIn the financial reports that Humana issues, there are alternative performance measures specified that complement the measure-ments defined or specified in the applicable financial reporting rules. Alternative perfor-mance measures are indicated when, in their context, they provide clearer or more detailed information than the measurements defined in the applicable financial reporting rules. The alternative performance measures are derived from the Company’s consolidat-ed financial statements and are not IFRS measures.

Return on capital employed (%)

Operating profit and finance income di-vided by total capital employed multiplied by 100.

EBITDAOperating profit before depreciation, amorti-sation and impairment, including IPO costs.

Equity per ordinary shareEquity attributable to Parent Company shareholders divided by the number of shares at the end of period after redemp-tion, repurchase and new share issue.

Average number of ordinary sharesCalculated as the average number of ordinary shares outstanding on a daily basis after redemption and repurchase.

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

Adjusted EBITDAOperating profit before depreciation, amortisation and impairment, adjusted for items affecting comparability.

Adjusted operating profitOperating profit adjusted for items affecting comparability.

Average number of full-time employeesAverage number of full-time employees during the year.

Average number of customersAverage number of customers during the year.

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

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

Earnings per ordinary share for the periodProfit for the period attributable to Parent Company shareholders less the period’s share of the adopted dividend for prefer-ence shares divided by the average number of ordinary shares.

Interest-bearing net debtBorrowing excluding interest rate deriva-tives less cash and cash equivalents and in-terest-bearing assets.

Interest-bearing net debt/EBITDAInterest-bearing net debt divided by EBITDA.

Operating profitProfit before financial items and tax.

Operating margin (%)Operating profit divided by operating revenue multiplied by 100.

Equity/assets ratio (%)Equity including non-controlling interests divided by total assets multiplied by 100.

Capital employedTotal assets less non-interest-bearing liabilities.

INTENT

Return on capital employedIndicates the operating return on the capi-tal that owners and lenders have made available. The intent is to show consoli-dated returns, regardless of the financing. Adjusted operating profit and adjusted EBITDACalculated as operating profit adjusted for items affecting comparability. Adjustment for items affecting comparability is made to facilitate a fair comparison between two comparable periods and to show the under-lying trend in operating activities excluding non-recurring items.

Operating cash flowCalculated as operating profit including changes in depreciation/amortisation/im-pairment, working capital and investments in other assets (net). The exclusion of cash flow from acquisitions and financing facili-tates an analysis of cash flow generation in operating activities.

Interest-bearing net debtNet debt is used as a simple way to illustrate and assess the Group’s ability to meet finan-cial commitments.

Interest-bearing net debt/EBITDAIndicates consolidated debt in relation to EBITDA. Used to illustrate the Group’s ability to meet financial commitments.

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


Reconciliation with IFRS financial statements

Jan-Dec 2016

Jan-Dec 2015

Adjusted operating profit


Impairment of goodwill Humana Hemtjänst - 36

IPO costs 40 -

Other non-recurring items - -9

Adjusted operating profit 369 340

Adjusted EBITDA


Depreciation 50 46


IPO costs 40 -

Other non-recurring items - -9

Adjusted EBITDA 419 386

Organic revenue growth

Revenue, base 5,481 5,022

Revenue, organic growth 69 43

Total organic growth 1.3% 0.8%

Operating cash flow, SEK millions


Depreciation 50 46


Change in working capital -372 38

Investments in other non-current assets, net -142 -42

Operating cash flow, SEK millions -134 389

31 Dec 2016

31 Dec 2015

Interest-bearing net debt, SEK millions

Non-current interest-bearing liabilities 1,405 1,550

Current interest-bearing liabilities 687 125

Cash and cash equivalents -465 -501


Adjusted EBITDA 12 months 419 386

Interest-bearing net debt/Adjusted EBITDA, 12 months, times 3.9× 3.0×

Return on capital employed, %


Deferred tax liabilities -78 -66

Trade payables -103 -79

Other current liabilities -960 -925

Capital employed 3,818 2,768


Finance income 11 1

Total 341 313

Return on capital employed, % 8.9% 11.3%

Equity/assets ratio, %

Equity attributable to Parent Company shareholders 1,726 1,093


Equity/assets ratio, % 34.8% 28.5%

Other



Four-year overviewKey ratios and per-share dataNote that the tables and calculations below have not been audited, unless otherwise stated

Key ratios 2016

2015

2014

2013

Net revenue, SEK million1) 6,362 5,593 5,065 3,489

Growth, % 13.7 10.4 45.2 17.0

Organic growth, % 1.3 0.8 7.9 7.6

Acquisitive growth, % 12.4 9.6 37.2 9.4

EBITDA, SEK million 379 394 339 231

EBITDA margin, % 6.0 7.0 6.7 6.6

Adjusted EBITDA, SEK million 419 386 367 231

Adjusted EBITDA margin, % 6.6 6.9 7.2 6.6

Operating profit (EBIT), SEK million1) 329 312 307 218

Operating margin, % 5.2 5.6 6.1 6.2

Adjusted operating profit, SEK million 369 340 335 218

Adjusted operating margin, % 5.8 6.1 6.6 6.2

Profit for the year, SEK million1) 170 114 115 179

Change in working capital, SEK million -372 38 18 57

Acquisition of intangible assets and property, plant and equipment, SEK million1) -143 -46 -46 -24

Operating cash flow, SEK millions -134 389 310 264

Cash flow generation, % -35.3 98.7 91.4 114.3

Equity1) 1,726 1,093 986 853

Interest-bearing net debt, SEK millions 1,628 1,174 1,484 355

Interest-bearing net debt/EBITDA, 12 months, times 4.3 3.0 4.4 1.5

Interest-bearing net debt/adjusted EBITDA, 12 months, times 3.9 3.0 4.0 1.5

Equity/assets ratio, % 34.8 28.5 27.0 38.9

Return on capital employed, 12 months, % 8.9 11.3 11.4 14.6

Average number of customers 8,361 7,262 7,324 4,198

Average number of full-time employees1) 9,912 9,154 8,619 6,374

Full-time employees at end of year 10,091 9,231 8,773 7,215

Per-share data 2016 2015 2014 2013

Remeasured earnings per share2) 2.87 0.61 0.84 2.46

Remeasured equity per share2) 32.48 23.82 21.50 18.60

1) Information derived from Humana’s audited consolidated accounts.2) 2013 and 2014 restated for the number of ordinary shares (45,882,000) relating to the split (45:1) registered with the Swedish Companies Registration Office on 7 March 2016.


Definitions of sector termsBufdir Children, Youth and Family Directorate. The Norwegian central body for the admin-istration and operation of childcare services.

Bufetat Children, Youth and Family Affairs. Bufetat is under the auspices of the Norwegian Children, Equality and Inclusion Department. Bufetat is divided into five regional offices and is responsible for opera-tions and services related to child and family care.

Humana Academy Humana’s internal training activities.

HOT Act on Municipal Health and Care Services. Norwegian law regulating the care of chil-dren, young people and adults with physical and mental disabilities.

HSL The Healthcare Act

HVB Residential care home

IVO Health and Social Care Inspectorate

Lex MariaNotification requirement for a healthcare provider to inform IVO of a patient having suffered, or being at risk of suffering, serious injury or illness during healthcare.

Lex SarahNotification requirement for a care provider to inform IVO of abuse and significant risks of abuse within the scope of the SoL and LSS acts.

LSS Act concerning Support and Service for Persons with Certain Functional Impairments

LOU Public Procurement Act

LOV Act on System of Choice in the Public Sector

Neuropsychiatric problemsProblems associated with functional impair-ments, such as ADHD, ASD/Asperger syn-drome, Tourette’s syndrome and language disorders. The different diagnoses are closely related and it is common for the same person to have several diagnoses.

CSI Customer satisfaction index

ESI Employee satisfaction index

Psychosocial problemsProblems and life situations that arise when there is interaction between psychological and social conditions.

BreakdownWhen a social authority placement of a young person in care outside the home suddenly has to be interrupted due to a deci-sion from either the social services, the par-ents, the young person or the caregiver.

ComorbidityComorbidity means that a person has two or more conditions and/or disabilities at the same time.

SiS Swedish National Board of Institutional Care

SoL The Social Services Act

Dynamic care Humana’s name for a combination of vari-ous measures and forms of care that are adapted dynamically to customer needs.

Core values Humana’s ethical and moral platform

Other

Production: Humana and Narva Photos: Anders J Larsson and Mia Kaasalainen, Håkan Flank and Viktor FalkLayout and original: Narva Print: TMG Sthlm

A good life.No matter who you are.

Humana ABWarfvinges väg 39, 7th fl.112 51 Stockholm, SwedenTelephone (switchboard): +46 (0)8 599 299 00www.humana.se

Everyone is entitled to a good life. Yes, everyone.

NARVA