Pihlajalinna Financial Statements Release 1 Jan–31 Dec 2021 (12 months)

Report this content

Pihlajalinna Plc                  Financial Statements Release           18 February 2022 at 8:00

Pihlajalinna Financial Statements Release 1 Jan–31 Dec 2021 (12 months)

Revenue continued to increase, Pihlajalinna and Pohjola Hospital were combined

This financial statements release is unaudited. The comparison figures in brackets refer to the corresponding period in the previous year. Pihlajalinna has changed its accounting policies and begun to retrospectively apply, effective from 1 January 2020, the IFRS Interpretations Committee’s Agenda Decision published in April 2021 regarding the recognition of configuration or customisation costs in a cloud computing arrangement (Software as a Service, SaaS).

A brief look at October–December:

  • Revenue amounted to EUR 154.7 (137.2) million – an increase of EUR 17.5 million, or 12.8 per cent
  • Adjusted* EBITDA was EUR 14.9 (15.8) million – a decrease of -5.6 per cent
  • Profitability was reduced by the increased costs of specialised care under complete outsourcing agreements
  • Adjusted* EBIT was EUR 6.0 (7.3) million – a decrease of -17.7 per cent
  • Adjusted* EBITA before the amortisation and impairment of intangible assets was EUR 7.8 (9.0) million – a decrease of -12.5 per cent
  • Earnings per share (EPS) was EUR 0.19 (0.15)
  • Revenue from services related to COVID-19** amounted to EUR 10.1 (7.4) million – an increase of EUR 2.7 million.
  • The acquisition of Työterveys Virta Oy on 1 April 2021 increased revenue by EUR 3.6 million, or 2.6 per cent.
  • Customer volumes grew by approximately 17 per cent year-on-year, with remote services representing 39 per cent of all appointments (excluding municipal outsourcing arrangements and COVID-19 testing).

A brief look at January–December:

  • Revenue amounted to EUR 577.8 (508.7) million – an increase of EUR 69.1 million, or 13.6 per cent
  • Adjusted* EBITDA was EUR 65.3 (54.8) million – an increase of 19.3 per cent
  • Adjusted* EBIT was EUR 30.3 (20.9) million – an increase of 45.2 per cent
  • Adjusted* EBITA before the amortisation and impairment of intangible assets was EUR 37.3 (27.4) million – an increase of 36.1 per cent
  • Earnings per share (EPS) was EUR 0.89 (0.38)
  • Revenue from services related to COVID-19** amounted to EUR 38.9 (11.4) million – an increase of EUR 27.5 million.
  • The acquisition of Työterveys Virta Oy on 1 April 2021 increased revenue by EUR 11.0 million, or 2.2 per cent.
  • Customer volumes grew by approximately 9 per cent year-on-year, with remote services representing 39 per cent of all appointments (excluding municipal outsourcing arrangements and COVID-19 testing).
  • Pihlajalinna and Pohjola Hospital were combined on 1 February 2022. The acquisition is an important element of Pihlajalinna’s growth strategy, and it strengthens Pihlajalinna’s service portfolio in all health care specialities. The business combination also enables the geographical expansion of the service network, especially in the Helsinki Metropolitan Area and other growth centers. Growth potential is further strengthened by the new five-year service agreement signed with Pohjola Insurance in connection with the deal.

* The definition of adjustment items has changed: in addition to the former definition, adjustment items include costs of business acquisitions and costs recognised in relation to the IFRS Interpretations Committee’s new Agenda Decision regarding cloud services, and reversals of depreciation

** COVID-19 services include COVID-19 testing, sample collection, vaccination and other potential services that are directly related to managing the COVID-19 pandemic.

10–12/2021 10–12/2020 1–12/2021 1–12/2020
3 months 3 months 12 months 12 months
Revenue, EUR million 154.7 137.2 577.8 508.7
EBITDA, EUR million 14.5 15.1 62.6 52.2
EBITDA, % 9.4 11.0 10.8 10.3
Adjusted EBITDA, EUR million* 14.9 15.8 65.3 54.8
Adjusted EBITDA, %* 9.6 11.5 11.3 10.8
Operating profit (EBIT), EUR million 5.6 6.8 27.9 18.1
Operating profit (EBIT), % 3.6 4.9 4.8 3.6
Adjusted operating profit (EBIT), EUR million* 6.0 7.3 30.3 20.9
Adjusted operating profit (EBIT), %* 3.9 5.3 5.3 4.1
Adjusted operating profit before the amortisation and impairment of intangible assets (EBITA), EUR million* 7.8 9.0 37.3 27.4
Adjusted operating profit before the amortisation and impairment of intangible assets (EBITA), %* 5.1 6.5 6.5 5.4
Profit before tax (EBT), EUR million 4.6 5.7 24.2 13.7
Earnings per share (EPS), EUR 0.19 0.15 0.89 0.38
Equity per share, EUR 5.27 4.82
Dividend per share, EUR 0.30 0.20
Return on capital employed (ROCE), % 8.8 5.7
Return on equity (ROE), % 16.1 8.1
Equity ratio, % 26.9 25.9
Gearing, % 158.8 170.6
Interest-bearing net debt, EUR million 194.7 194.8
Net debt/adjusted EBITDA, 12 months* 3.0 3.6
Gross investments, EUR million 7.4 5.5 44.8 25.4
Cash flow from operating activities, EUR million 24.8 18.5 56.9 46.9
Cash flow after investments, EUR million 19.0 16.7 24.9 42.8
Average number of personnel (FTE) 4,746 4,308
Personnel at the end of the period (NOE) 6,297 5,550
Practitioners at the end of the period 1,070 1,056
Combined weighted NPS for services (entire Group) 72.5 70.4
eNPS (entire Group) 1.0 -4.3

* Significant transactions that are not part of the normal course of business, are related to business acquisition costs (IFRS 3), are infrequently occurring events or valuation items that do not affect cash flow are treated as adjustment items affecting comparability between review periods. According to Pihlajalinna’s definition, such items include, for example, restructuring measures, impairment of assets and the remeasurement of previous assets held by subsidiaries, the costs of closing down businesses and business locations, gains and losses on the sale of businesses, costs arising from operational restructuring and the integration of acquired businesses, costs related to the termination of employment relationships as well as fines and corresponding compensation payments. In addition, Pihlajalinna presents costs according to the IFRS Interpretations Committee’s new Agenda Decision concerning cloud computing arrangements, and reversals of amortisation, as adjustment items. Adjusted operating profit before the amortisation and impairment of intangible assets (EBITA) is presented as a new alternative performance measure.

EBITDA adjustments amounted to EUR 0.3 (0.7) million for the quarter and EUR 2.7 (2.6) million for the financial year. Adjustments to operating profit amounted to EUR 0.4 (0.6) million for the quarter and EUR 2.4 (2.8) million for the financial year.

** Assets acquired via leases are regarded as equal to assets acquired by the Group itself, meaning that right-of-use assets pursuant to IFRS 16 are included in gross investments.

Pihlajalinna’s outlook for 2022

Pihlajalinna’s full year consolidated revenue is expected to increase substantially, and full year adjusted operating profit before the amortisation and impairment of intangible assets (EBITA) is expected to be on a par with 2021. Due to Pohjola Hospital integration and potential efficiency improvement plans in municipal companies, the first half of the year will be below the bar of the previous year.

The acquisition of Pohjola Hospital will increase consolidated revenue by at least EUR 50 million in the financial year 2022. Revenue from COVID-19 services is expected to decline from the level of 2021. In 2022, Pihlajalinna will focus on the integration of Pohjola Hospital operations to be a seamless part of its Medical Center for All of Finland -concept. Maintaining profitability on a par with 2021 will require success in increasing supply, realization of the planned synergies of the acquisition, and successfull implementation of potential efficiency improvements in municipal companies.

Joni Aaltonen, CEO of Pihlajalinna:

Growth in the fourth quarter was strong. Revenue increased by 12.8 per cent to EUR 154.7 (137.2) million. Profitability was weighed down in the final quarter by the higher costs of total outsourcing arrangements, which led to adjusted EBITA declining by 12.5 per cent to EUR 7.8 (9.0) million.

Negotiations concerning compensation of the increased expenses with municipal clients have not led into the desired outcomes by the end of the financial year. Negotiations are still ongoing with Parkano and Mänttä-Vilppula. The district court hearing with the City of Jämsä concerning the price adjustment provision in the service agreement, increased expenses due to authority requirements and the financing of the investements of the hospital districts has begun. Negotiations with the Kuusiokunnat joint municipal social and health authority concerning adjustments to the annual price reached a settlement in June 2021.

Nationwide COVID-19 testing reached another peak late in the year, and COVID-19 services accounted for a significant share of revenue during the fourth quarter. The customer volumes of Pihlajalinna private clinics increased by 17 per cent year-on-year and were 9 per cent higher compared to 2019 level. Some 39 per cent of all customer appointments, excluding municipal outsourcing and COVID-19 testing, took place via remote services. The volume of surgical services grew by 34 per cent.

The sales of occupational healthcare services continued to see strong growth, and Pihlajalinna has also been successful in terms of customer retention. The key drivers of growth are digital services, competitive pricing and successful acquisitions. The number of people within the scope of Pihlajalinna occupational healthcare services was approximately 240,000 at the end of the financial year. Due to new contracts starting 2022 we expect this number to increase to 250,000. The proportion of preventive activities in occupational healthcare services grew in line with targets, increasing by over 6 per cent year-on-year.

Disability is a significant problem in society. Disability is most commonly caused by mental health and musculoskeletal disorders. An anonymic analysis of Pihlajalinna occupational health care visits was used to evaluate the extention of the problem in Finland in terms of mental health issues. The rate of sickness-related absences caused by reasons related to mental health per 1,000 employees have increased by 24 per cent compared to last year. Correlation to the pre-pandemic period in 2019, the increase is as high as 36 per cent. Due to the seriousness of the situation, we launched the Pihlajalinna Mental Care (Mielen Huoli), a remote mental care helpline service in early 2021 to provide with assistance and treatment for mental health issues at an early stage. Our goal is effective prevention and early intervention to avoid extended disability and human suffering.

In the early summer, we launched the Pihlajalinna Exercise Referral (Liikuntalähete) as part of our new service selection. The exercise referral is a comprehensive service that improves the customer’s quality of life and is produced in partnership with our fitness centers. The foundation for this service concept lies in the scientific evidence on the benefits of physical activity on wellbeing and health. Timely intervention in musculoskeletal disorders through physiotherapy, occupational physiotherapy, and – where necessary – surgical treatment, also reduces sickness-related absences and costs.

According to the Finnish Institute for Health and Welfare statistics, at the end of November 2021, a total of 150,392 people (31 December 2020: 141,469) were waiting for access to care at hospitals operated by the hospital districts. Of these, 9,539 (7,617) people, or 6.3 (5.4) per cent, had waited for access to non-urgent specialised care for more than six months. In specialised care, congestion is highest in surgery and psychiatry. Our job at Pihlajalinna is to provide people with a channel through which they can access the service they need without a delay. The most effective solution for working through the waiting lists for treatment is increased purchasing from private-sector service providers.

In the coming years, Finnish healthcare will face significant reforms. Concrete progress will be seen in the national reform of healthcare and social services when the councils in charge of the wellbeing services counties become operational on 1 March 2022. Private sector has developed new service models and care paths to ensure high quality care and quick access to treatment in all circumstances. Pihlajalinna is a pioneer on this transition with a proved track record. We expect the development of digital services to continue to significantly improve Pihlajalinna’s competitiveness. Where necessary, we have the agility and capacity to adapt to quick changes. Pihlajalinna will engage in close cooperation with the future wellbeing services counties.

At the beginning of July, we announced our intention to acquire the entire share capital of Pohjola Hospital Ltd. The transaction was approved by the Finnish Competition and Consumer Authority at the beginning of 2022 and completed on 1 February 2022. In connection with the acquisition, we also signed a new five-year service agreement with Pohjola Insurance. The acquisition not only improves the availability of our services and our service portfolio, but also expands the provision especially in the orthopedic services. Pohjola Hospital is known for its high-quality expertise in orthopedics and hand surgery.

Following the acquisition of Pohjola Hospital, we have further refined our strategy and long-term targets. We expect the customer flow through insurance companies to significantly grow Pihlajalinna business operations. Growth will also be accelerated by the national reform of social and healthcare services as well as the growing popularity of medical insurance.

Our goal is to expand our network of operating locations and our range of specialized care services, especially in the Helsinki Metropolitan Area and other growth centers. Pihlajalinna will strengthen its network of private clinics by opening new clinics in Lahti, Espoo and Vantaa in early 2022.

We are seeking revenue growth of EUR 250 million by the end of 2025, using 2021 as the baseline. One third of the growth is expected to arise from the public sector and the rest two thirds from corporate and private customers. The long-term target for adjusted operating profit before the amortisation and impairment of intangible assets (EBITA) is over 9 per cent of revenue. The long-term target for net debt is less than 3x adjusted EBITDA. In the beginning of strategy period due to Pohjola Hospital acquisition the net debt will decline close to to 5. Pihlajalinna aims to distribute each financial year at least one-third of its profits to shareholders as dividends or capital repayment.

Pihlajalinna is publishing its first sustainability report according to GRI-standard (Global Reporting Initiative), with topics being the economical value of the company to the society among others. Open and transparent communication is critical for Pihlajalinna, when it comes to tax responsibility. Reporting our tax footprint in connection with the annual report is already an established practice since 2016. The Group pays all its taxes to Finland. The Group has also a significant local impact in various areas of the country, especially on those, where Pihlajalinna is responsible of the total outsourcing of public social and healthcare services.

Pihlajalinna’s tax footprint describes the tax and other tax related income the society accrues through the Group’s business operations. On 2021 the society gained EUR 131,9 (110,4) million from Pihlajalinna. 

Pihlajalinna’s financial reporting in 2022

Financial statements and Board of Directors’ report: no later than in week 12
Interim report January–March: Thursday, 5 May 2022

Half-year financial report January–June: Friday, 12 August 2022
Interim report January–September: Friday, 4 November 2022

Pihlajalinna Plc’s Annual General Meeting is scheduled for Wednesday, 13 April 2022.


Pihlajalinna will hold a briefing for analysts and the media on Friday, 18 February 2022 at 10:00 a.m. The event will be held remotely.

Helsinki, 17 February 2022
The Board of Directors of Pihlajalinna Plc

Further information

Joni Aaltonen, CEO, +358 40 524 7270
Tarja Rantala, CFO, +358 40 774 9290


Nasdaq Helsinki
Major media


Pihlajalinna in brief

20-year-old Pihlajalinna (Nasdaq Helsinki: PIHLIS) is one of the leading private providers of social, healthcare and wellbeing services. The Group provides services to private individuals, companies, insurance companies and public sector entities, such as municipalities and joint municipal authorities, across Finland. The Group provides general practitioner and specialised care services, occupational healthcare and dental care services, residential services and wellbeing services, for example. The Group, in cooperation with the public sector, offers social and healthcare service provision models to public sector entities with the aim of providing high-quality services for public pay healthcare customers.