Terveystalo Group Financial Statement Bulletin 2021: Record year – Growing as a stronger company

 Terveystalo Plc, Financial Statement Bulletin 10 February, 2022 at 09:00 EET 

This release is a summary of Terveystalo's Financial Statement Bulletin 2021. The full release is attached to this stock exchange release and is available on our website at:

https://www.terveystalo.com/en/company/investors/reports-and-presentations/

October–December 2021 in brief

•          Revenue increased by 17.1% year-on-year to EUR 327.5 (279.7) million.

•          Adjusted1) earnings before interest, taxes, and amortization (EBITA) increased by 6.6% to EUR 41.9 (39.3) million, representing 12.8% (14.0%) of revenue. The growth of costs impaired relative profitability year-on-year.

•          Adjustments, items affecting comparability were EUR 1.0 (0.8) million.

•          Profit for the period was EUR 25.8 (22.4) million.

•          Earnings per share (EPS) were EUR 0.20 (0.18).

•          Cash flow from operating activities was EUR 86.1 (66.3) million.

•          Terveystalo now owns 100% of Feelgood Svenska AB. Feelgood belongs to the Sweden and others segment, the revenue of which was EUR 23.4 million and EBITA EUR 2.4 million.

January–December 2021 in brief

•          Revenue increased by 17.1% year-on-year to EUR 1,154.6 (986.4) million.

•          Adjusted1) earnings before interest, taxes, and amortization (EBITA) increased by 38.4% to EUR 141.0 (101.9) million, representing 12.2% (10.3%) of revenue.

•          Adjustments, items affecting comparability were EUR 4.3 (4.5) million.

•          Profit for the period was EUR 80.4 (45.8) million.

•          Earnings per share (EPS) were EUR 0.63 (0.36).

•          Net debt/adjusted EBITDA was 2.5 (3.0).

•          Cash flow from operating activities was EUR 195.2 (143.7) million.

•          The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.28 (0.26) per share be distributed for 2021 and the dividend payment would happen 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, net gains and losses on the sale of assets, strategic projects and other items affecting comparability.

Ville Iho, CEO: Record year on many fronts

 Terveystalo finished the year 2021 strongly. We saw the good underlying demand situation continue, despite a new Omicron surge in December. Terveystalo’ s fourth quarter revenue increased by 17.1% year-on-year to EUR 327.5 (279.7) million. Record high Covid-19 testing activity compensated for continued supply bottlenecks throughout the period as well as slightly lower demand at the end of the quarter. Shortages in the supply of physical appointments were, for the most part, compensated by our further successful ramping up of Terveystalo’ s digital offering. The number of digital visits continued to grow reaching once again all-time highs. To open the supply bottlenecks, we continue to leverage our number one employer position in recruiting as well as further boosting our digital channels.

Our profitability remained strong as adjusted EBITA increased by 6.6% to EUR 41.9 (39.3) million and accounted for 12.8% (14.0%) of revenue in the fourth quarter. The relative margin reflected changes in the sales mix and the lower margin Swedish business. For the full year, adjusted EBITA reached EUR 141.0 million, representing 12.2% (10.3%) of revenue. Earnings per share increased strongly by 76% to EUR 0.63, driven by strong topline growth and operating leverage, flat depreciations and amortizations and a decrease in financing expenses.

Amid Covid-19 turbulence, our core business has performed well and has grown stronger. In 2021, Terveystalo broke records on many fronts as we reached all our financial targets, won market share, further improved customer satisfaction, and kept our leading position as the most attractive employer in the industry. Revenue, EBITA, EBITA margin, number of digital visits, Net Promoter Score (NPS) and Employee Net Promoter Score (eNPS) all reached all-time highs. I want to extend my warmest thanks to all Terveystalo employees for their dedication and hard work to reach our common goals.

We are even more excited looking forward as we see more opportunities for growth. Demand drivers for our core business are strong, driven by several factors such as backlog of care and growing interest in health and well-being. Our successful entry to the Swedish health care market with the Feelgood acquisition was an important step in expanding our addressable market beyond the boundaries of our traditional market. We have already successfully accelerated our growth in Sweden, and we see a strong growth funnel going forward both organically and through acquisitions.

We can also see exciting opportunities in digital, an area where we have been investing in consistently. Digital health is already an important part of our business with 1 million appointments a year and 1.7 million registered users in our platform. There is also a clear synergy potential in using our digital capabilities across the markets, and, in addition, we see in-bound demand for our top-notch capabilities, which we can commercialize. Our target is to further accelerate the growth of our digital business.

We at Terveystalo feel confident that our strategy implementation is on the right track, and through our entry into new markets possibilities for value creating capital allocation have improved. The Board of Directors proposes for the Annual General Meeting that a dividend of EUR 0.28 per share is distributed, corresponding 44% of the net profit for 2021. Thanks to our strong balance sheet, we are well positioned to invest in growth. 

We have a clear purpose and in our core markets we are a leading private healthcare service provider, playing a key role in the sector and in people’s lives. We are committed to our vision to use data and our Nordic expertise to create a world with fewer sick days and more healthy, happy years.

Toward a better tomorrow,

Ville Iho

Outlook

• The market environment has normalized and the demand for health services is broad based and strong. However, growth is restricted by supply.
• The demand for services related to COVID-19 is expected to remain good. However, predicting the volume is difficult. The overall demand for health services is expected to remain at a high level. The demand for digital services is expected to continue to grow.
• Demand from corporate customers for preventive and statutory occupational health services is expected to develop favorably. Demand for medical care is strong. Significant changes in the employment rate may be reflected in the underlying demand.
• Overall demand is expected to remain strong in the private customer segment. Significant changes in consumer confidence may be reflected in the underlying demand.
• Demand from the public sector is expected to remain strong in occupational health, service sales, and staffing services. Revenue from the outsourcing business is expected to remain stable.
• Demand in the Swedish occupational health market is expected to develop favorably due to pent-up demand in the wake of the pandemic. However, the spreading of the Omicron variant and new restrictions have resulted in uncertainty of demand in the short term. 

These views are based on the expected development of demand for Terveystalo’ s services within the next six months, compared with the past six months.

The impacts of COVID-19 and the measures taken by Terveystalo

During 2021, Terveystalo’ s service production was again characterized by various COVID-19-related services as well as well-being and digital services, which saw substantial year-on-year growth in demand.
The company’s liquidity and financing situation remained strong. During the review period, the company fulfilled the covenant requirement included in the financing agreement that reflects relative indebtedness. Terveystalo continues the increased reporting of explanatory financial information on the company’s assets and liabilities as well as the maturity of loans in Note 13.
 

Key figures

*) Adjustments are material items outside the ordinary course of business, associated with acquisition-related expenses, restructuring-related expenses, gain on sale of assets, strategic projects, and other items affecting comparability.
1) Alternative performance measure. In addition to the IFRS figures, Terveystalo presents additional, alternative performance indicators which the company monitors internally and which provide the company management, investors, stock market analysts, and other stakeholders with important additional information concerning the company’s financial performance, financial position, and cash flows. These performance indicators should not be reviewed separate from the IFRS figures and they should not be considered to replace the IFRS figures.
2) The quality index consists of seven effectiveness indicators that describe the clinical and experienced quality, access to care, and the proportion of preventive care.
3) Amount of mixed waste (metric tons) relative to total revenue (100 million)

Briefing
Terveystalo will arrange a webcast in English on its result on 10 February 2022, starting at 10:30 EET.
You can watch the webcast online at: https://terveystalo.videosync.fi/2021-q4-results

To ask questions, please join the telephone conference 5–10 minutes prior to the start time using your local number:
Finland: +358 981 710 310,
Sweden: +46 856 642 651,
UK: +44 33 3300 0804,
US: +1 631 913 1422.
If you are calling from another location, please use any of the numbers above. The Participant Passcode: 68763028#

Helsinki, 9 February 2022
Terveystalo Plc
Board of Directors

For further information, please contact:
Ilkka Laurila, CFO
Tel. +358 30 633 1757
 

Kati Kaksonen, Vice President, Communications, IR & CR
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 health care service provider in Finland in terms of revenue and network. Terveystalo is also a leading occupational health provider in the Nordic region. We offer a wide variety of primary health care, specialized care, and well-being services for corporate and private customers and the public sector. Terveystalo’ s digital services are available 24/7, regardless of time and place. Health and well-being services are also provided by Terveystalo’ s over 360 clinics across Finland. In Sweden, we offer occupational health services at 120 clinics. Terveystalo is listed on the Helsinki Stock Exchange and has a predominantly Finnish ownership.

In 2021, Terveystalo had approximately 1.3 million individual customers in Finland and the number of customer appointments was approximately 8 million, with more than a quarter of these taking place via remote channels. Terveystalo employs over 15,500 healthcare and well-being professionals. Terveystalo is a Key Flag company and member of Association for Finnish Work. www.terveystalo.com

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