Terveystalo Group interim report 1 January – 31 March 2021
REVENUE INCREASED AND RESULT IMPROVED CLEARLY, DRIVEN BY CORPORATE CUSTOMERS
Terveystalo Plc, interim report, 29 April 2021 at 9:00 EEST
This release is a summary of Terveystalo's interim report 1 January – 31 March 2021. The full release is attached to this stock exchange release and is available on our website at: https://www.terveystalo.com/en/investors/Financial-information/.
January–March 2021 in brief
- Revenue increased by 8.3% year-on-year to EUR 278.7 (257.4) million.
- Adjusted1) earnings before interest, taxes, and amortization (EBITA) increased by 66.6% to EUR 38.2 (22.9) million, representing 13.7% (8.9%) of revenue.
- Adjusted items affecting comparability were EUR 0.1 (2.3) million.
- Profit for the period was EUR 23.9 (8.8) million.
- Earnings per share (EPS) were EUR 0.19 (0.07).
- Net debt/adjusted EBITDA1) was 2.7 (3.2).
- Cash flow from operating activities was EUR 31.1 (32.9) million.
- Digital appointments nearly doubled to 243,000 (124,000) appointments.
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.
CEO Ville Iho: A strong start to 2021
Terveystalo had a strong start to the year 2021. Our topline grew by 8.3% to EUR 278.7 million and in March, for the first time in Terveystalo's history, we exceeded our monthly revenue of EUR 100 million. During the review period, our business grew in all customer groups. Demand for COVID-19 related services remained strong and digital and well-being services continued to grow. Our profitability also improved significantly year-on-year, and adjusted EBITA increased by almost 67% to EUR 38.2 million. The Net Promoter Score of our appointments (NPS) continued to develop favorably and was all-time high at 84 (73 in December 2019).
The sales mix remained unusual during the first quarter. The underlying demand for health services and general practitioner (GP) visits remained well below normal level due to the decline in acute infections. However, the decline in physical appointments was partly offset by the continued expansion of remote services; the number of digital visits more than doubled year-on-year to about 243,000 visits. In well-being services, the demand for mental well-being, nutrition therapy and physiotherapy services was very strong.
The decline in infections related GP visits was also partly offset by growing demand in specialty care; the Focus special units launched in the beginning of this year had a positive start. We have brought together the best expertise in mental well-being, musculoskeletal disorders and issues related to the abdominal area into dedicated Focus-units. In addition to high medical quality, the goal of these centers of excellence is to make the services easily accessible and relevant to the customer. The new operating model will later expand to other specialties as well, where we see similar opportunities to create customer value and grow the business.
The closer relationship with the customer, emphasized in our strategy under the theme of Customer’s health partner, changes the tradition of healthcare from episodic treatment to a continuum of overall health. At the same time, it enables the growth of holistic well-being and health services in the consumer business. One example of new services offered through our platform is the launch of a strategic partnership with the Finnish health technology company Nightingale Health. With the agreement, we will develop new well-being services utilizing the blood analysis technology developed by Nightingale, which measures the prevention needs related to the body's well-being and health. Based on the collaboration, a new low-threshold subscription service will be built that supports and motivates lifestyle change.
The other focus area of our strategy, the smartest platform in the industry, is also moving forward with concrete steps. System-level care protocols guide and facilitate the work of a medical professional and serve as a basis for effective steering of customers. The implemented functionalities in customer steering and supply management have already reduced bottlenecks in supply, increased the level of self-service and improved booking conversion. There is still room for improvement, and we will continue to invest in our engine room.
The COVID-19 pandemic, in all its severity, has been a necessary stimulus for reforming of the entire health care system. While the acute crisis will ease as vaccine coverage rises, COVID-19 will be part of the everyday healthcare for some time to come, in some shape or form. At the same time, trends related to well-being, lifestyle diseases, continuous measurement, and disease prevention are intensifying.
After the initial shock and management of the pandemic, the crisis enters its third phase; aftercare and sustainable renewal. Our most important task is still to provide measured quality care at a reasonable cost - whether it is promoting well-being, preventing diseases or treating them. We can invest in new solutions and quickly upgrade our operations to meet changing customer needs. Healthcare is, for good reason, a conservative industry, but technology offers unprecedented opportunities for service development. With our investments, we improve the productivity of operations and the value of our services to the customer. Our actions encourage the renewal of all healthcare to improve people's quality of life and well-being. As a forerunner in the industry, we are also the best possible partner for the public sector.
We at Terveystalo work towards a future where more and more people have fast and unhindered access to healthcare and well-being services.
Towards a better tomorrow,
Ville Iho
Outlook
- In the short term, the market environment is still uncertain because of the changes in consumer behavior resulting from the COVID-19 pandemic, and predicting demand is challenging in the short term. Demand for coronavirus testing is expected to remain high throughout the first half of 2021 and to decrease to a lower level during the third quarter, and demand for healthcare services in general is expected to grow clearly year-on-year.
- Demand from corporate customers for preventive and statutory occupational health services is expected to develop positively. The recovery of demand for acute and non-urgent medical care is uncertain, owing to a reduction in general morbidity and the measures to restrict the pandemic. Significant changes in the employment rate may be reflected in the underlying demand.
- Overall demand from private customers is expected develop positively, and to increase clearly year-on-year. However, there may be considerable differences between specialties and geographical areas in the short term because of variation in general morbidity and pandemic-related area-specific restrictive measures. Demand for remote services is expected to continue to increase. Significant changes in consumer confidence may be reflected in the underlying demand.
- Stable demand from the public sector is expected to continue in occupational health, service sales, and staffing services. Revenue from outsourcing business will decrease slightly, following the planned expiry of outsourcing contracts.
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
Overall demand for services varies greatly in the short term, owing to variation in general morbidity and pandemic-related area-specific restrictive measures. During the first quarter of 2021, the services provided by Terveystalo were characterized by various COVID-19-related services as well as well-being and digital services. Demand for the latter increased significantly compared with the reference period.
The company’s liquidity and financing situation has remained strong. During the review period, the company fulfilled the covenant requirement included in the financing agreement that depicts relative indebtedness. Because of the prevailing uncertainty, Terveystalo continues the increased reporting of explanatory financial information on the company’s liquidity, assets, and liabilities as well as the maturity of loans in Note 12.
The company estimates that, in addition to the direct impacts of the crisis, changes in the employment rate and consumer confidence may be reflected in the underlying demand even after the acute phase has passed. Nevertheless, the company estimates that its diverse customer base and service offering will mitigate the impacts on its business from any changes in demand for individual services or in individual customer relationships.
| Key figures | ||||
| Terveystalo Group, EUR million | 1-3/ 2021 |
1-3/ 2020 |
Change, % | 2020 |
| Revenue | 278.7 | 257.4 | 8.3 | 986.4 |
| Adjusted EBITDA, * 1) | 53.3 | 38.2 | 39.6 | 162.8 |
| EBITDA 1) | 53.2 | 35.9 | 48.3 | 158.3 |
| Adjusted EBITA, * 1) | 38.2 | 22.9 | 66.6 | 101.9 |
| Adjusted EBITA margin, % *1) | 13.7 | 8.9 | - | 10.3 |
| EBITA 1) | 38.0 | 20.6 | 84.7 | 97.4 |
| EBITA margin, % 1) | 13.6 | 8.0 | - | 9.9 |
| EBIT | 32.2 | 13.0 | 147.3 | 67.2 |
| Return on equity (ROE), % 1) | 10.6 | 8.4 | - | 8.2 |
| Equity ratio, % 1) | 42.0 | 40.5 | - | 42.1 |
| Earnings per share (EUR) | 0.19 | 0.07 | 171.4 | 0.36 |
| Net debt | 477.1 | 530.6 | -10.1 | 490.9 |
| Gearing, % 1) | 82.4 | 96.4 | - | 85.9 |
| Net debt/adjusted EBITDA (last 12 months) 1) | 2.7 | 3.2 | - | 3 |
| Total assets | 1, 381.7 | 1,361.3 | 1.5 | 1,361.0 |
| Adjusted EBITDA (last 12 months), excluding IFRS 16 *1) | 133.1 | 121.7 | 9.4 | 118.0 |
| Net debt, excluding IFRS 16 | 302.6 | 338.3 | -10.6 | 312.4 |
| Adjusted net debt/adjusted EBITDA (last 12 months), excluding IFRS 16*1) |
2.3 | 2.8 | - | 2.6 |
| Average personnel in person-years | 5,170 | 5,051 | 2.3 | 4,900 |
| Personnel (end of period) | 8,427 | 8,711 | -3.3 | 8,253 |
| Private practitioners (end of period) | 5,051 | 5,132 | -1.6 | 5,057 |
| Responsibility | ||||
| Quality index2) | 97.9 | 94.0 | 4.1 | 94.2 |
| Net Promoter Score (NPS), appointments | 84.0 | 73.8 | - | 82.8 |
*) 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.
Briefing
Terveystalo will arrange a webcast in English on its result on April 29, 2021, starting at 12:30 EEST.
You can watch the webcast online at: https://terveystalo.videosync.fi/2021-q1-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 is 28322439#
Helsinki, April 29, 2021
Terveystalo Plc
Board of Directors
For further information, please contact:
Ilkka Laurila, CFO
Tel. +358 30 633 1757
Kati Kaksonen, Vice President, Communications
Tel. +358 10 345 2034
Kati.kaksonen(at)terveystalo.com
Distribution:
Nasdaq Helsinki Oy
Main media
www.terveystalo.com
Terveystalo in brief
Terveystalo is Finland's largest health service company in terms of revenue and network, with the aim of empowering lifelong health and well-being and building a healthier society. The company provides comprehensive well-being, primary care and specialist care services to corporate and private customers, as well as the public sector. Terveystalo's digital appointment serves are available 24/7, regardless of time and place. In addition, the company offers health and well-being services in more than 300 locations throughout Finland.
In 2020, Terveystalo had 1.2 million individual customers. Some 6.9 million customer visits were made, of which more than a quarter took place in remote channels. Terveystalo employs more than 13,000 health and well-being professionals.
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