Terveystalo Oy Class A · OMXHEX:TTALO
Terveystalo Oy Class A — Q2 2022 Earnings Presentation
27 slides from Terveystalo Oy Class A's earnings presentation, Jul 19, 2022
Slide 1: Terveystalo Q2/2022 results
Terveystalo Q2/2022 results: Strong growth continued; margin pressure due to changes in operating environment VILLE IHO, PRESIDENT & CEO ILKKA LAURILA, CFO 19 JULY 2022 1 FOOTER
Slide 2: Strong growth continued; margin pressure due to changes in operating environment
Strong growth continued; margin pressure due to changes in operating environment Very strong underlying demand continued, sales mix challenging Strong demand, organic growth Revenue growth +15.6% y-o-y (Feelgood 9.2 %-points of the growth) restricted by supply challenges Supply challenges restricted
Slide 3: Revenue growth in double digits, share of digital continues to grow
Revenue growth in double digits, share of digital continues to grow GROWTH IN DIGITAL RECORD HIGH CUSTOMER CHANNELS CONTINUED, SATISFACTION +28% Y-ON-Y REVENUE GROWTH -18.2% y-o-y, CONTINUED, Adj. EBITA margin 7.6% BUT CONTINUES TO BE (10.7%) RESTRICTED BY SUPPLY CHALLENGES CHANGES IN SALEX MIX REVE
Slide 4: Priorities and acquisitions in Finland and Sweden
PRIORITIES AND ACQUISITIONS IN FINLAND PRIORITIES AND ACQUISITIONS IN SWEDEN We focus on: We focus on: 1) Strengthening scalable capabilities 1) Growing scale 2) Growing market share in adjacencies 2) Expanding the portfolio to new services and 3) Growth in new services payor groups Acquisitions in
Slide 5: We are working on multiple fronts to increase supply
We are working on multiple fronts to increase supply Terveystalo’s proprietary smart platform 1) Automating steps of digital Customers Terveystalo’s Smart system with advanced appointments to reduce the average digitalization steers the customers to the right service time 2) Recruiting digital only
Slide 6: Digital appointments improve productivity and access to care
Digital appointments improve productivity and access to care DIGITAL APPOINTMENTS IMPROVE NUMBER OF DIGITAL APPOINTMENTS PRODUCTIVITY CONTINUES TO GROW DIGITAL VISITS, Terveystalo offers 3 types of digital THOUSANDS appointments: 400 +117% 28% • Pre-booked video appointments 350 (31% of all digital
Slide 7: Tight labor markets put pressure on staff costs, Collective Labor Agreement reached with nurses
Tight labor markets put pressure on staff costs, Collective Labor Agreement reached with nurses CLA now in place with reasonable terms • In the agreement for the private healthcare service sector 1 May 2022 - 30 April 2024 salary increases were agreed for two years: o October 2022: 2.0% general sala
Slide 8: Expansion to Sweden offers more opportunities for capital allocation and growth
Expansion to Sweden offers more opportunities for capital allocation and growth MULTIPLE GROWTH AVENUES IN SWEDEN NEXT STEPS ❑ Organic and in-organic growth in occupational health ❑ Building the base for service portfolio ❑ Positive organic development, expansion 4 acquisitions completed so far ❑ Im
Slide 9: Financial performance
Financial performance ILKKA LAURILA, CFO 9 FOOTER
Slide 10: Strong growth continued; margin pressure due to changes in operating environment
Strong growth continued; margin pressure due to changes in operating environment Revenue growth +15.6% y-o-y (Feelgood 9.2 %-points of the growth) Q2/22 Adj. EBITA -18.2 % y-on-y to EUR 24.1 (29.5) million, Strong revenue growth, 7.6% (10.7%) of revenue profitability impacted by sales Profitability
Slide 11: Revenue growth continued in Q2
Revenue growth continued in Q2 Q2/2022 REVENUE BREAKDOWN, % Q2/2022 REVENUE BREAKDOWN, M€ +16% 8% 318 25 275 25 23 23 22 31 25% 40% 29 87 83 118 126 27% Q2/2021 Q2/2022 Corporate Public Corporate Outsourcing Service sales, OH and others Private Sweden and others Private Staffing Sweden and others Fe
Slide 12: Broad-based revenue growth in H1/22
Broad-based revenue growth in H1/22 1-6/2022 REVENUE BREAKDOWN, % 1-6/2022 REVENUE BREAKDOWN, M€ +17% 648 7% 47 554 53 46 46 43 63 25% 41% 59 173 165 241 265 27% 1-6/2021 1-6/2022 Corporate Public Corporate Outsourcing Service sales, OH and others Private Sweden and others Private Staffing Sweden an
Slide 13: Covid-19 testing volumes continued to decrease, as expected
Covid-19 testing volumes continued to decrease, as expected WEEKLY TESTING ACTIVITY 2022, 2021, 2020 Pcs 16000 • Testing activity has dropped during 2022 the summer 14000 • The development of testing activity 12000 during H2/22 is difficult to predict 10000 • Covid-19 tests have been replacing 2020
Slide 14: Profitability impacted by sales mix with larger share of appointments and increased costs
Profitability impacted by sales mix with larger share of appointments and increased costs REVENUE, MEUR AND ADJUSTED EBITDA*-% ADJUSTED EBITA*, MEUR AND % +16% -18% 327.5 329.7 318.2 41.9 39.3 38.2 38.9 270.3 279.7 278.7 275.3 273.1 267.8 258.6 257.4 240.2 32.4 32.3 30.9 31.5 234.0 19.2 19.5 19.1 29
Slide 15: Supply challenges, acquisitions and new business areas increased costs
Supply challenges. acquisitions (incl. Feelgood) and new business areas increased costs M€ 4-6/2022 4-6/2021 Change % 1-6/2022 1-6/2021 Change % 2021 Revenue 318.2 275.3 15.6 647.9 554.0 17.0 1 154.6 Other operating income 0.7 0.6 14.6 1.1 1.1 3.1 3.4 Purchase of materials -10.9 -8.4 30.6 -22.3 -17.
Slide 16: Strong trend in well-being and digital visits continued
Strong trend in well-being and digital visits continued WELL-BEING SALES, MEUR DIGITAL VISITS, THOUSANDS +52% +117% 35 400 28% 7% 30 350 25 300 250 20 200 15 150 10 100 5 50 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2019 2019 2019 2020 2020 2020 202
Slide 17: Strong cash flows together with solid balance sheet and credit profile
Strong cash flows together with solid balance sheet and credit profile OPERATING CASH FLOW (LTM), MEUR NET DEBT/ADJUSTED EBITDA (LTM) GROSS CAPEX (LTM), MEUR 250 6 195 189 5,2 200 175 176 157 153 5 145 144 142 150 127 4,2 4 3,8* 100 3,1 3 3 2,8 2,7 2,5 50 2 0 -50 1 -40 -38 -38 -35 -37 -41 -46 -48 -5
Slide 18: Disciplined financial strategy
Disciplined financial strategy NET DEBT, MEUR AND NET DEBT / ADJ. EBITDA (LTM) EQUITY RATIO, % AND GEARING, % 700 5 4,6 120% 4,5 109% 600 576 573 568 111% 4,1 548 557 108% 531 528 529 530 537 4 Gearing 510 519 100% 101% 491 477 96% 96% 96% 500 3,5 3,5 92% 3,4 3,4 86% 87% 87% 85% 85% 3,1 3,2 80% 82%
Slide 19: Financial targets and outlook
Financial targets and outlook Financial targets Outlook – The next 6 months vs. last 6 months Market • Demand for health services is very strong and broad based. However, growth is restricted by environment supply. Tight labor market and rising inflation create growing pressure on operating costs, i
Slide 20: Strong growth continued; margin pressure due to changes in operating environment
Strong growth continued; margin pressure due to changes in operating environment Very strong underlying demand continued, sales mix challenging Strong demand, organic growth Revenue growth +15.6% y-o-y (Feelgood 9.2 %-points of the growth) restricted by supply challenges Supply challenges restricted
Slide 21: Q&A
Q&A 21
Slide 22: Terveystalo: Kohti parempaa
Terveystala Kohti parempaa.
Slide 23: Appendix
Appendix Terveystalo
Slide 24: Feelgood has been consolidated since the end of June 2021
Feelgood has been consolidated since the end of June 2021 • In 2021, Terveystalo entered into a short-term financing agreement MEUR 30.6.2022 30.6.2021 of EUR 70 million, with the loan drawn in full in 2021. ASSETS • The financing agreement includes an option to postpone the repayment to 2023. The o
Slide 25: We continue to invest in our digital platform
We continue to invest in our digital platform GROSS CAPEX, MEUR AND %- OF REVENUE NET CAPEX, MEUR AND %- OF REVENUE 59 59 4,7 4,7 4,5 54 4,5 4,3 4,3 4,3 4,4 54 4,4 4 4,1 4,1 4,2 4,1 4,1 3,9 3,9 45 46 3,7 48 3,9 3,9 47 4 3,5 3,4 41 44 45 3,5 41 40 32 41 41 5 38 38 37 29 8 39 38 38 35 11 37 33,7 18 19
Slide 26: Key figures
Key figures Terveystalo Group, MEUR 4-6/ 4-6/ Change, % 1-6/ 1-6/ Change, % 2021 2022 2021 2022 2021 Revenue 318.2 275.3 15.6 647.9 554.0 17.0 1,154.6 Adjusted EBITDA. * 1) 42.4 45.0 -5.9 99.0 98.3 0.7 206.1 Adjusted EBITDA, % * 1) 13.3 16.4 - 15.3 17.8 - 17.8 EBITDA 1) 40.7 44.2 -7.8 96.7 97.4 -0.7
Slide 27: Feelgood AB – key figures
Feelgood AB – key figures SEK, thousand Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Revenue 204,393 213,110 138,429 220,230 208,448 185,825 125,102 204,733 193,469 206,243 EBITDA 24,371 28,626 -1,612 34,157 24,155 18,486 -464 38,926 20,775 27,167 EBIT 12,921 16,570 -13,704 21,594 11,