Results in line with expectations.
Highlights
- Revenue1 £6.0bn, up 4% at constant exchange rates (CER)2 (2018: £5.8bn)
- IFRS profit before taxation £207m, down 19% at actual exchange rates (AER) (2018: £257m)
- Underlying profit3 before taxation £195m, down 21% at CER (2018: £248m)
- Solvency II capital coverage ratio4 of 165% (FY 2018: 191%)
Evelyn Bourke, Group CEO, commented: “We delivered positive results in a number of our businesses across Spain, Poland and Hong Kong, and in Bupa Global. These were more than offset by: the challenges we are experiencing in our Australian health insurance and aged care businesses; our ongoing investment in information technology to enhance security and digitise customer experience; and the impact of implementing the new accounting standard, IFRS 16: Leases.
“We have a strong financial position, enabling us to balance short-term profit delivery with long-term investment for sustainable growth. We are committed to growing sustainably, investing in the services we offer to our customers and tightly managing costs. We expect the operating environment to remain challenging in some of our markets in the near-term, especially in Australia and Chile. We are clear about the challenges we face and are confident that we have the right strategy to navigate them.”
Market Unit performance (CER)
- Australia and New Zealand: revenue down 1%; underlying profit declined 45%, mainly due to Australian health insurance and aged care businesses
- Europe and Latin America: revenue up 5%; underlying profit stable
- UK: revenue up 1%; underlying profit down 33%, mainly due to investment in information technology, performance in dental and the impact of IFRS 16
- International Markets: revenue up 17%; underlying profit up 67%
Other operational highlights
- Integration of Bupa Acıbadem Sigorta in Turkey, acquired in January, is on track
- Australian Defence Force (ADF) health contract commenced on 1 July, providing healthcare cover to 85,000 personnel
- Launched new mental health cover within consumer health insurance policies in the UK
- Developed Salud Conectada (Connected Health) programme in Spain, for hospital patients to be monitored remotely by medical professionals, using wearables, Big Data and Artificial Intelligence (AI)
- Associate business, Bupa Arabia, was reappointed as the health insurance provider for the Saudi Basic Industries Corporation (SABIC), effective from July
- New Irish insurer commenced trading activity in March to serve international private medical insurance customers living in the EU (but outside the UK and Ireland)
- Good progress across our corporate responsibility agenda, creating shared value for our customers, people and communities.
- Michael Hawker and Professor Melvin Samsom joined the Board as Non-Executive Directors
Financial position
- Net cash generated from operating activities was £389m, down £95m (20%) on prior year (2018: £484m)
- Bupa Finance plc senior debt ratings are unchanged at A3 (stable) by Moody’s and A- (stable) by Fitch
- Leverage ratio higher at 24.3% (FY 2018: 23.5%), and 31.9% when including the impact of IFRS 16 (FY 2018 Proforma5: 31.2%)
- Solvency II capital coverage ratio4 of 165% (FY 2018: 191%, FY 2018 Proforma6: 166%)
Read the full Group Interim statement.
Bupa Finance plc, a wholly owned subsidiary of Bupa, is required to publish an Interim Statement as it has listed debt. Bupa Finance plc's 2019 Interim Statement is available here.
Notes to editor
1 Revenues from our associate and joint venture businesses are excluded from our reported figures. Customer numbers and the appropriate share of profit from our associate and joint venture businesses are included in our reported figures.
2 All figures presented are at constant exchange rates (CER) unless otherwise stated. We use CER to compare trading performance in a consistent manner to the prior year. We have retranslated our 2018 results using 2019 average exchange rates.
3 Underlying profit is a non-GAAP financial measure which means it is not comparable to other companies. Underlying profit reflects our trading performance and excludes a number of items otherwise included in IFRS profit, to facilitate year-on-year comparison. These items include the impairment of intangible assets and goodwill arising on business combinations, as well as market movements such as gains or losses on foreign exchange, on return-seeking assets, on property revaluations and other material items not considered part of trading performance.
4 The 2019 Solvency II capital coverage ratio is an estimated value, and unaudited.
5 Leverage position for FY 2018 when including the impact of IFRS 16.
6 Solvency coverage position assessed for FY 2018 after taking into consideration the impact of IFRS 16 and the acquisition of Acıbadem Sigorta.
Enquiries
Media
Rupert Gowrley, Mar Soro (Corporate Affairs): +44 (0) 20 3855 0473
Investors
Gareth Evans (Treasury): +44 (0) 20 3314 1708
(Bupa 10252 LV)
About Bupa
Bupa's purpose is helping people live longer, healthier, happier lives and making a better world.
We are an international healthcare company serving over 31 million customers worldwide. With no shareholders, we reinvest profits into providing more and better healthcare for the benefit of current and future customers.
We directly employ around 85,000 people, principally in the UK, Australia, Spain, Chile, Poland, New Zealand, Hong Kong SAR, Turkey, Brazil, Mexico, the US, Middle East and Ireland. We also have associate businesses in Saudi Arabia and India.
