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.

• Open to strategic changes if they create or protect value.

Recent performance and operational highlights

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

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

• Adjusted EBITDA ex-cap for VITAS grew nearly 33% with over 200 basis points of margin expansion.

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

• Overall adjusted net income projected to increase 13–14% for the year.

Industry trends and growth drivers

• Hospice industry expected to see high single- to low double-digit volume growth over the next 10–20 years due to demographics.

• Earlier and broader access to hospice benefits can significantly increase Medicare Trust Fund savings.

• Florida serves as a model, with average hospice stays 40% higher than the national average due to greater awareness.

• Industry is still in early stages of expanding benefit awareness and access.

• Scaled providers with efficient workflows can extend Medicare dollars further.