Chemed (CHE) UBS Global Healthcare Conference 2024 summary

Company strategy and growth outlook

• Operates two leading service businesses with strong cash generation and low capital needs.

• Focuses on transparent reporting to allow shareholders to assess value of each segment.

• Has repurchased over $1 billion in stock, reducing shares outstanding from 27 million to 15 million.

• Roto-Rooter targets steady mid to high single-digit growth; VITAS aims for above-average growth over the next 3–5 years.

• Expansion strategies include acquisitions and obtaining Certificates of Need (CON) in key states.

Recent performance and operational highlights

• EPS guidance for the year was slightly reduced to $23–$23.15, but adjusted net income is expected to rise 13–14%.

• VITAS outperformed internal expectations, achieving nine quarters of sequential growth and serving over 22,000 patients daily.

• Completed an $85 million tuck-in acquisition that exceeded performance expectations.

• Roto-Rooter underperformed due to demand-side issues but is expected to return to growth equilibrium.

• Commercial segment of Roto-Rooter is showing sequential growth, with year-over-year growth expected in 2025.

Industry trends and strategic positioning

• Hospice industry is experiencing strong demographic tailwinds, with high single- to low double-digit volume growth projected nationally.

• Earlier access to hospice care can double Medicare Trust Fund savings and improve quality of care.

• Industry remains fragmented, offering opportunities for further consolidation and scale-driven efficiencies.

• Policy support for hospice is growing, with increased awareness and utilization post-pandemic.

• Florida is highlighted as a key growth market due to favorable demographics and regulatory environment.