Terveystalo Plc, Financial Statements Release, 14 February 2025 at 09:00 EET
This release is a summary of Terveystalo's Financial Statements Release 2024. The full release is attached to this stock exchange release and is available on Terveystalo's website at: https://www.terveystalo.com/en/company/investors/reports-and-presentations/.
October-December 2024 in brief
- Revenue increased by 3.4 percent year-on-year to EUR 353.9 (342.4) million.
There was the same number of working days as during the comparison period.
The Healthcare Services segment revenue increased by 10.4 percent and was EUR 281.3 (254.7) million. Portfolio Businesses revenue decreased by 15.8 percent and was EUR 56.7 (67.3) million. The revenue from Sweden decreased by 15.8 percent and amounted to EUR 22.4 (26.6) million. - Adjusted1) earnings before interest, taxes, amortization, and impairment losses (EBITA) increased by 19.1 percent year-on-year to EUR 47.1 (39.5) million, representing 13.3 (11.5) percent of revenue.
Improved operational efficiency, a more favourable service mix, and strengthened commercial execution strengthened the profitability of Healthcare Services. In Portfolio Businesses, profitability declined due to one-off personnel costs in the quarter. In Sweden, profitability declined due to terminated contracts and lower demand. - Items affecting comparability1) with a negative effect on EBITA were EUR 7.0 (5.5) million.
- The result for the period was EUR 19.0 (-64.1) million.
- Earnings per share (EPS) amounted to EUR 0.15 (-0.51).
- Cash flow from operating activities was EUR 88.8 (60.4) million.
- NPS (Net Promoter Score) for appointments was 87.7 (84.8). NPS for hospitals was 96.2 (94.5).
January-December 2024 in brief
- Revenue increased by 4.2 percent year-on-year to EUR 1,340.0 (1286.4) million.
The revenue of Healthcare Services segment increased by 9.9 percent to EUR 1042.8 (948.6) million. The revenue of Portfolio Businesses decreased by 10.7 percent to EUR 238.5 (267.2) million. The revenue from Sweden decreased by 11.6 percent to EUR 81.8 (92.5) million. - Adjusted1) earnings before interest, taxes, amortization, and impairment losses (EBITA) increased by 36.2 percent year-on-year to EUR 171.0 (125.6) million, representing 12.8 (9.8) percent of revenue.
- Profitability strengthened in Healthcare Services and Portfolio businesses due to improved operational efficiency, and commercial measures. In Sweden, profitability declined due to terminated contracts and lower demand. The profit improvement programme in Sweden has progressed as planned.
- Items affecting comparability1) with a negative effect on EBITA were EUR 23.5 (21.2) million.
- The result for the period was EUR 71.7 (-42.2) million.
- Earnings per share (EPS) amounted to EUR 0.57 (-0.33).
- Net debt/adjusted EBITDA was 2.1 (3.0).
- Cash flow from operating activities was EUR 223.7 (157.8) million.
- The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.48 (0.30) per share be distributed for 2024, and the dividend payment would be paid in two installments.
The figures in parentheses refer to the corresponding period one year ago.
1) Adjustments are material items outside the ordinary course of business, associated with acquisition-related expenses, restructuring-related expenses, gains and losses on the sale of assets, impairment losses, strategic projects, and other items affecting comparability. Adjustments related to the profit improvement programs were approximately EUR 7.3 (5.3) million during the fourth quarter and EUR 18.6 (21.7) million during January-December.
President and CEO Ville Iho: Successful year of profitable growth
In 2024, we achieved strong results in a challenging macro environment. Our profitability target was reached ahead of schedule and our financial position is very strong. In addition to improved financial performance, customer satisfaction, professional engagement, and medical quality are also at record levels. Our revenue grew by 4 percent to EUR 1.34 billion in 2024, and adjusted EBITA was 12.8 percent of revenue. Earnings per share increased to EUR 0.57. The Board of Directors proposes to the Annual General Meeting a dividend of EUR 0.48 per share (in accordance with our updated dividend policy) in 2025.
The fourth quarter, which ended a successful 2024, was strong by all indicators. Our revenue increased by approximately 3 percent to EUR 354 million, and our profitability improved significantly from the comparison period. Adjusted EBITA increased by more than 19 percent to EUR 47 million, corresponding to 13.3 percent of revenue.
The Healthcare Services segment's good performance continued for the seventh quarter in a row. Brisk revenue growth, structurally improved profitability, and record-high customer satisfaction create a strong foundation for the current year and the next phase of the strategy. Following our profit improvement programme, we have accelerated investments in our physical network and digital services to support organic growth. Our objective is to consistently improve our service competitiveness, customer value, medical quality, and operational efficiency.
Revenue in the Portfolio businesses segment decreased in the fourth quarter due to the planned termination of loss-making outsourcing agreements, elimination of low margin staffing contracts, and weak consumer purchasing power. Non-recurring items related to personnel costs also weakened profitability. However, profitability for the full year improved thanks to determined work in difficult market conditions. The portfolio businesses are now on a stronger footing, and the risks of old contracts have been reduced. During the current strategy period, the segment aims to enhance profitability, pursue growth in various services, including dental health, and explore new opportunities in public markets.
Revenue from the Swedish business decreased in the fourth quarter due to expired contracts and weak demand caused by the macro environment. The market has been challenging for 18 months, but signs of recovery are emerging. In Sweden, the profitability programme initiated a year ago has led to cost adjustments and enhanced operational efficiency. The monthly financials already show an improvement in profitability. The programme will maintain its emphasis on enhancing operational efficiency while progressively expanding its focus on commercial activities. We anticipate that the impacts of the programme will become evident as a turnaround starting from early 2025, and the targeted SEK 120 million annual run-rate EBITA improvement to materialize during the year.
During the Capital Markets Day in December, we outlined our upcoming strategy phase and revised financial targets. Our strategy revolves around providing fluent, caring, and effective integrated care for our customers, ensuring their needs are met in the best possible way. By seamlessly integrating services across different stages of the care path and effectively using data, we aim to offer exceptional customer experience and medical quality. Over the next two years, we will significantly improve the efficiency of appointment processes and support functions through the integration of automation and AI. Our sustained investments in our digital platform will facilitate this integration, ensuring that our customers benefit from the most advanced technologies available.
A warm thank you to our customers and Terveystalo employees for a successful year 2024. Our company is stronger than ever, we have successfully reduced our risk profile and we have developed clear strategies to further enhance performance across our three business areas. Our focus remains on profitable growth, continuous improvement of service quality for our customers, and delivering shareholder value. We target a 10 percent EPS growth and aim to maintain a net debt to EBITDA ratio of a maximum of 2.5 times. In line with our commitment to our shareholders, we will distribute at least 80 percent of net profit as dividends.
Long-term trends such as the aging population, indicate the potential for growth in private healthcare, with favourable conditions for sustained value creation.
Meaningful matters,
Ville Iho
Guidance for 2025
Terveystalo has updated the structure of the guidance and communicates expectations on revenue and adjusted EBIT margin (previously revenue and adjusted EBITA margin).
Terveystalo expects its full-year 2025 revenue to grow (2024: EUR 1,340 million) and adjusted EBIT to be 10.7-11.8 percent of revenue (2024: 10.5 percent).
The estimates are based on a stable demand environment, employment levels, and typical morbidity rates. the estimates account for a decrease of approximately EUR 25 million in revenue within the Portfolio Businesses segment's outsourcing operations due to ending of contracts. Profitability is expected to strengthen in all business segments. The estimates do not account for significant acquisitions or divestments.
Medium term financial targets
Profitable growth:
- EPS to grow on average by 10 percent p.a.
- We expect faster earnings per share growth in 2025, as fewer items affecting comparability are expected.
Moderate leverage ratio:
- Net debt to EBITDA not to exceed 2.5x
- Indebtedness may temporarily surpass the target level, particularly in conjunction with acquisitions.
Attractive dividends:
- At least 80 percent of net result to be distributed as dividends
- The dividend proposal must consider the company's long-term potential and financial status.
Financial targets until the end of 2024
Terveystalo's financial targets are:
- annual revenue growth of at least 5 percent through organic growth and acquisitions
- an adjusted EBITA margin of at least 12 percent in 2025
- net debt/adjusted EBITDA ratio of 3.5x or less
However, indebtedness may temporarily exceed the target level, such as in conjunction with acquisitions. - to distribute a minimum of 40 percent of net profit as dividends annually
However, the dividend proposal must consider Terveystalo's long-term development potential and financial position.
Key figures
| EUR mill. unless stated otherwise | 10-12/2024 | 10-12/2023 | Change, % | 2024 | 2023 | Change, % |
| Revenue | 353.9 | 342.4 | 3.4 | 1,340.0 | 1,286.4 | 4.2 |
| Adjusted EBITA * 1) | 47.1 | 39.5 | 19.1 | 171.0 | 125.6 | 36.2 |
| Adjusted EBITA, % * 1) | 13.3 | 11.5 | - | 12.8 | 9.8 | - |
| EBITA 1) | 40.0 | 34.1 | 17.5 | 147.6 | 104.4 | 41.3 |
| EBITA, % 1) | 11.3 | 9.9 | - | 11.0 | 8.1 | - |
| Adjusted operating profit (EBIT) * 1) | 38.4 | 31.2 | 23.1 | 140.5 | 93.1 | 50.8 |
| Adjusted operating profit (EBIT), % * 1) | 10.8 | 9.1 | - | 10.5 | 7.2 | - |
| Operating profit (EBIT) | 30.9 | -58.9 | 152.4 | 116.1 | -14.7 | >200,0 |
| Operating profit (EBIT), % | 8.7 | -17.2 | - | 8.7 | -1.1 | - |
| Return on equity (ROE) (LTM), % 1) | - | - | - | 13.5 | -7.6 | - |
| Equity ratio, % 1) | - | - | - | 39.4 | 36.5 | - |
| Earnings per share, EUR | 0.15 | -0.51 | 129.7 | 0.57 | -0.33 | >200,0 |
| Weighted average number of shares outstanding, in thousands | 126,605 | 126,556 | - | 126,597 | 126,555 | - |
| Net debt 1) | - | - | - | 504.8 | 598.1 | -15.6 |
| Gearing, % 1) | - | - | - | 92.1 | 116.0 | - |
| Net debt/EBITDA (LTM) * 1) | - | - | - | 2.3 | 3.3 | - |
| Net debt/Adjusted EBITDA (LTM) * 1) | - | - | - | 2.1 | 3.0 | - |
| Adjusted EBITDA (LTM), excluding IFRS 16 * 1) | - | - | - | 189.5 | 142.8 | 32.7 |
| Net debt, excluding IFRS 16 1) | - | - | - | 313.0 | 379.0 | -17.4 |
| Net debt/Adjusted EBITDA (LTM), excluding IFRS 16 * 1) | - | - | - | 1.7 | 2.7 | - |
| Average personnel, FTE2) | - | - | - | 5,841 | 6,426 | -9.1 |
| Non-employees (end of period)3) | - | - | - | 6,015 | 6,092 | -1.3 |
| Sustainability | ||||||
| PEI-index4) | 3.0 | 2.9 | 3.4 | |||
| Net Promoter Score (NPS), appointments | 87.7 | 84.8 | 3.4 | |||
| Net Promoter Score (NPS), hospitals | 96.2 | 94.5 | 1.8 | |||
| Engagement index5) | 4.2 | - | - | |||
| Employee Net Promoter Score (eNPS) | 14 | 19 | -26.3 | |||
| * Adjustments are material items outside the ordinary course of business and these relate to acquisition-related expenses, restructuring-related expenses, gains and losses on sale of assets (net), impairment losses, strategic projects and other items affecting comparability. | ||||||
| 1) Alternative performance measure. Terveystalo presents alternative performance measures as additional information to financial measures defined in IFRS. Those are performance measures that the company monitors internally and they provide management, investors, securities analysts and other parties significant additional information related to the company's results of operations, financial position and cash flows. These should not be considered in isolation or as a substitute to the measures under IFRS. | ||||||
| 2) Does not include Medimar Scandinavia AB and the companies acquired during 2024 in Finland (SRK Group Oy, Suomen Radiologikeskus Oy, iRad Oy and Kajaanin Radiologikeskus Oy and Cityläkarna Mariehamn Ab). | ||||||
| 3) Does not include the companies acquired during 2024 in Finland (SRK Group Oy, Suomen Radiologikeskus Oy, iRad Oy and Kajaanin Radiologikeskus Oy and Cityläkarna Mariehamn Ab). | ||||||
| 4) PEI index (Patient Enablement Instrument) is used to measure whether the patient feels that he is coping with his symptoms or illness much better, better, as before, or worse after the reception. The scale is 1-4. | ||||||
| 5) The engagement index for Terveystalo professionals is based on four questions from Terveystalo's annual professional survey. The results are used to calculate the index value, i.e. the average of the results. The questions concern supervisory work, the preconditions for success at work, work communities and commitment. The index is expressed on a scale of 1-5. | ||||||
Result briefing
Terveystalo will arrange a webcast and a conference call in English on its result on Friday 14 February 2025 starting at 10:30 EET. You can watch the webcast online at: https://terveystalo.events.inderes.com/q4-2024
You can access the teleconference by registering at the link below.
https://palvelu.flik.fi/teleconference/?id=50051647
After the registration, you will be provided phone numbers and a conference ID to access the conference.
Helsinki, 13 February 2025
Terveystalo Plc
Board of Directors
For further information, please contact:
CFO Juuso Pajunen
Tel. +358 40 584 9722
Kati Kaksonen, Vice President, Investor Relations & Sustainability
Tel. +358 10 345 2034
kati.kaksonen@terveystalo.com
Distribution:
Nasdaq Helsinki Oy
Main media
www.terveystalo.com
Terveystalo in brief
Terveystalo is the largest private healthcare service provider in Finland in terms of revenue and one of the leading occupational health providers in Finland and Sweden. We aim to create fluent, caring, and effective healthcare of the future. We offer comprehensive primary care, specialized care, and well-being services for corporates, private individuals, and public sector customers. Our digital services are accessible 24/7. We also offer our services in approximately 360 clinics, including 18 hospitals in Finland. In Sweden we offer occupational health services in approximately 140 units. Terveystalo is listed on the Helsinki Stock Exchange.
In 2024, Terveystalo served approximately 1.2 million individual customers in Finland, with around 7.6 million customer appointments. Terveystalo employs approximately 15,000 healthcare and other professionals. www.terveystalo.com
