Pihlajalinna is restructuring as well as reforming its segment reporting; codetermination negotiations have been completed

Pihlajalinna Plc           Stock exchange release               14 March 2018 at 8:10

Pihlajalinna is restructuring as well as reforming its segment reporting; codetermination negotiations have been completed

Pihlajalinna Plc's Board of Directors decided on 13 March 2018 to restructure Pihlajalinna Plc. The company is moving from a business-based structure to a geographical structure. The new organizational structure will enter into effect on 14 March 2018.

Pihlajalinna's new organizational structure has four geographical business areas: Mid-Finland, Southern Finland, Ostrobothnia and Northern Finland. Each business area is managed by a business director who is in charge of their area's business operations and service offering both for the private and the public sector.

The geographical business areas are Central Finland, Southern Finland, Ostrobothnia and Northern Finland.

  • Mid-Finland covers Pihlajalinna's business operations in the regions of Pirkanmaa, Satakunta, Kanta-Häme, Central Finland, South Savo, North Karelia and North Savo.
  • Southern Finland includes Pihlajanlinna's business operations in the regions of Uusimaa, South West Finland, Päijät-Häme, Kymenlaakso and South Karelia.
  • Ostrobothnia includes Pihlajalinna's business operations in the regions of Southern Ostrobothnia, Ostrobothnia and Central Ostrobothnia,
  • while Northern Finland includes Pihlajalinna's business operations in Northern Ostrobothnia, Kainuu and Lapland.

Pihlajalinna's segment reporting will also change due to the operational restructuring. In future, the operating segments will be the geographical business areas that are combined into one reportable segment.

Pihlajalinna will report its Group-level results as its segment data in 2018, while its Group-level results for 2017 will be presented as comparative data. Pihlajalinna will also report its revenue in 2018 based on business areas and customer groups according to the IFRS 15 requirements on disaggregation of revenue.

The customer groups are corporate customers, private customers and public-sector customers.

  • The Group’s corporate customer group consists of Pihlajalinna’s occupational healthcare customers, insurance company customers and other corporate contract customers with the exception of public sector occupational healthcare customers (municipalities, joint municipal authorities, churches, public administration and hospital districts).
  • The Group’s private customers are private individuals and privately insured customers.
  • The Group’s public-sector customer group consists of public sector organisations in Finland, such as municipalities, joint municipal authorities, hospital district and the public administration when purchasing social and healthcare outsourcing services, residential services, occupational healthcare services and staffing services.

Pihlajalinna will publish comparative data on revenue in accordance with the new reporting practice for the financial year that ended on 31 December 2017 prior to releasing the interim report for the first quarter of 2018.

Codetermination negotiations completed, personnel reductions approximately 27

In connection with the restructuring, Pihlajalinna conducted codetermination negotiations for production-related reasons and due to operational restructuring. The codetermination negotiations have been completed, and the staff reductions amount to approximately 27 after new positions have been offered to the employees. Additionally, 6 people resigned during the negotiations. Previously, the management estimated that the measures could lead to a personnel reduction of up to 50 people. The reductions will mainly affect the administration and the managerial and executive level. As a result of the restructuring, the cost savings amount to approximately EUR 2.8 million per year. The costs of terminating employment relationships related to the restructuring amount to approximately MEUR 0.6, and they will be treated as adjustment items affecting comparability between reporting periods in the first quarter of the financial year.

The codetermination negotiations affected approximately 240 persons in Pihlajalinna Plc's three subsidiaries: Pihlajalinna Lääkärikeskukset Oy, Pihlajalinna Terveys Oy and Pihlajalinna Tampere Oy. The codetermination negotiations did not include staff that work entirely in practical patient or care work or in Contact Center operations nor customer or service advisors at private clinics. Pihlajalinna Group employs approximately 4,800 people.

Pihlajalinna Plc

Further information:
Joni Aaltonen, CEO, +358 40 524 7270

Distribution:
Nasdaq Helsinki
Major media
investors.pihlajalinna.fi

Pihlajalinna in brief
Pihlajalinna is one of the leading private social and healthcare services providers in Finland. The company serves private individuals, businesses, insurance companies and public sector entities, such as municipalities and joint municipal authorities. In its private clinics and hospitals Pihlajalinna provides general practitioner services, specialised care, emergency and on-call services, a wide range of surgical services, occupational healthcare and dental care. In addition, the company offers innovative social and healthcare service provision models to public sector entities.

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