Key points
- Revenue1 of £6.5bn was up 9% (2020: £5.9bn2) at constant exchange rates (CER) with year-on-year growth in the majority of our business lines.
- Underlying profit3before taxation of £238m, was up 38% at CER (2020: £172m) as the impacts of COVID-19 started to subside in some markets, with health provision and aged care performance returning towards more normal trading levels, offset by an increase in claims in our insurance businesses.
- Statutory profit before taxation of £295m was up 54% at actual exchange rates (AER) (2020: £191m).
- Solvency II capital coverage ratio4remains strong at 163% (FY 2020: 160%).
Performance review
These results reflect Bupa’s resilience and how well our teams have served our customers as our businesses navigate the pandemic. Although restrictions are generally being lifted around the world, we remain vigilant as the pandemic is not yet over.
Market performance (all at CER)
- Australia and New Zealand: Revenue increased by 6% to £2,549m largely due to strong customer retention and the 2020 premium rate deferral in health insurance, and improved customer volumes in our health provision business. Underlying profit increased to £144m, reflecting stronger health provision business performance, reduced losses in aged care and an improved result in health insurance.
- Europe and Latin America: Revenue grew by 14% to £2,016m and underlying profit was down 4% at £79m as growth in our insurance portfolio, improved health provision and aged care results, were offset by increased insurance claims following the disruption to supply seen in the first half of 2020.
- Bupa Global and UK: Revenue was up 9% to £1,660m. This was driven by higher health provision customer volumes; and the impact of the provision for the pledge we made to pass back any exceptional financial benefit ultimately arising from the pandemic to eligible customers (UK return of premium commitment) being lower than it was during the first half of 2020. Underlying profit was down 36% to £16m, as improved dental results were more than offset by higher year-on-year claims in Bupa Global, our International Private Medical Insurance (IPMI) business.
- Other businesses: Revenue was up 5% to £232m with higher revenue in our Health Services business in Hong Kong SAR. Underlying profit was down 16% to £27m predominantly reflecting the ongoing COVID-19 impacts on our associate business in India.
Financial position
- Solvency II capital coverage ratio of 163% (FY 2020: 160%).
- Leverage is 32.1% (FY 2020: 33.6%) when including IFRS 16 leases as liabilities. Excluding these liabilities, the leverage ratio is 25.0% (FY 2020: 26.3%).
- Net cash generated from operating activities was £482m, down £448m on prior year (2020: £930m) reflecting the delay in claims outflows in the insurance businesses in 2020 partly offset by the return towards more normal trading levels across provision and insurance businesses.
Operational highlights
- We launched a new Group Strategy
- We announced the appointment of James Lenton as Chief Financial Officer (CFO) and he is due to join Bupa in September 2021.
- We committed to the Science Based Targets Initiative (SBTi) to reduce our carbon emissions.
- With effect from 1 July, Bupa Hong Kong has been incorporated into the Australia and New Zealand Market Unit to form Bupa Asia Pacific. Also, from the same date, our associate business in India, Max Bupa, is being rebranded Niva Bupa and will be overseen by the Bupa Global and UK Market Unit.
Bupa Finance plc, a wholly owned subsidiary of Bupa, is required to publish its financial results as it has listed debt. Bupa Finance plc's 2021 half year financial results statement is available here.
Notes to editor
1 Revenues from associate businesses are excluded from reported figures. Customer numbers and economic share of post-tax profits from our associate businesses are included.
2 Balances have been restated for a gross up between other revenue and financial expense (included within central expenses and net interest margin) in relation to the remeasurement of imputed revenue and interest in respect of interest-free refundable accommodation deposits received by the Group as payment for aged care units in Bupa Villages and Aged Care Australia. Refer to Note 1.4 for further details.
3 Underlying profit is a non-GAAP financial measure. This means it is not comparable to other companies. Underlying profit reflects our trading performance and excludes a number of items included in statutory profit before taxation, to facilitate year-on-year comparison. These items include 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. A reconciliation to statutory profit before taxation can be found in the notes to the Condensed Consolidated Financial Statements.
4 The 2021 Solvency II capital coverage ratio is an estimate and unaudited.
Enquiries
Media
Rupert Gowrley (Corporate Affairs): [email protected]
Investors
Gareth Evans (Treasury): [email protected]
About Bupa Finance plc
Bupa Finance plc (the Company) is a company incorporated in England and Wales. The condensed consolidated half year financial statements comprise the financial results and position of the Company and its subsidiary companies (together referred to as the Group). The immediate and ultimate parent of the Company is The British United Provident Association Limited (the Parent), which is also the ultimate parent company of the Bupa Group (Bupa).
Bupa's purpose is helping people live longer, healthier, happier lives. With no shareholders, our customers are our focus. We reinvest profits into providing more and better healthcare for the benefit of current and future customers.
Health insurance accounts for the major part of our business with 18m customers and contributes 74% of revenue. We operate clinics, dental centres and hospitals in some markets. We run aged care businesses in the UK, Australia, New Zealand and Spain.
We directly employ around 83,000 people, principally in the UK, Australia, Spain, Chile, Poland, New Zealand, Hong Kong, Turkey, Brazil, the US, Middle East and Ireland. We also have associate businesses in Saudi Arabia and India.
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.
