Chemed (CHE) 43rd Annual J.P. Morgan Healthcare Conference 2025 summary

Company history and business structure

• Originated from a 1971 spinoff, evolving through acquisitions and divestitures to focus on two main businesses: Roto-Rooter and VITAS Healthcare.

• Maintained both businesses for over 20 years, emphasizing transparency and value creation for shareholders.

• Both businesses are market leaders with strong cash flow and have driven significant shareholder returns.

• Over 21 years, adjusted net income grew 10.8% for VITAS, 14.4% for Roto-Rooter, and 21.7% for the parent, mainly through organic growth.

• Returned $2.5 billion to shareholders via dividends and buybacks, with no current debt and $200 million in cash.

Roto-Rooter performance and outlook

• Experienced a pandemic-driven surge, followed by weaker performance in 2023–2024 due to demand normalization.

• Long-term outlook remains optimistic, expecting a return to 4%-6% annual growth.

• Generates strong cash flow, supporting other business initiatives and share repurchases.

• No leverage on the balance sheet, allowing flexibility in capital allocation.

VITAS Healthcare: operational and financial highlights

• Patient census declined during the pandemic due to later referrals, but demand for hospice services remained strong.

• Refocused on organizational culture and retention, launching a successful recruiting and retention program in 2022–2023.

• Shifted admissions mix from hospital-based to broader community sources, improving resilience.

• Achieved net growth of over 1,000 clinicians post-program, supporting sustainable patient volume increases.

• Patient census grew from a low of 17,180 in August 2022 to over 22,000 by Q3 2024, mostly organically.