Terveystalo Oy Class A · OMXHEX:TTALO
Terveystalo Oy Class A — Q3 2018 Earnings Presentation
25 slides from Terveystalo Oy Class A's earnings presentation, October 2018
Slide 1: Q3 Result – Strong Earnings Trend Continued
Q3 RESULT – STRONG EARNINGS TREND CONTINUED CEO Yrjö Närhinen CFO Ilkka Laurila terveystalo.com #terveystalo
Slide 2: Q3 Highlights
Q3 HIGHLIGHTS Strong earnings trend continued Capacity growth in the market has stalled We strengthen our investments in digitalisation terveystalo.com #terveystalo
Slide 3: Growth Continued, Strong Earnings Trend
GROWTH CONTINUED, STRONG EARNINGS TREND • Revenue +3.2 % EUR 160.3 mill. (155.4) • Adjusted EBITDA* EUR 20.1 mill. (17.5) • Adjusted EBITA* margin 9.2% (8.0%) • Net result EUR 16.0 mill. (-6.9) • Net debt / Adjusted EBITDA * down from 4.5 to 2.0 terveystalo.com *Alternative performance measure #terv
Slide 4: Revenue +3.2%
Revenue +3.2% Q3 revenue by payor group, % Q3 revenue by payor group, M€ 12% +3% 180 155 160 35% 160 +31.8% 14 18 140 120 -1.2% 57 56 100 80 +1.3% 53% 60 40 84 86 20 0 Q3 2017 Q3 2018 Corporate Private Public Corporate Private Public 4 © Terveystalo
Slide 5: Steady demand in corporate customer group
Steady demand in corporate customer group Q3 Revenue development y-o-y • Revenue increased by 1.3%, no significant impact from acquisitions. +1% 90 84 86 • Sales of preventive OH services and wellbeing services developed favorably, the demand for 80 illness-related appointments decreased. 70 • No si
Slide 6: The increased capacity in the market is reflected in private customer sales
The increased capacity in the market is reflected in private customer sales Q3 Revenue development y-o-y • Revenue decreased by 1.2%, no significant effect from acquisitions. -1% • Demand growth was stable while the amount or private 60 57 56 services used by OH end customers was flat y-o-y. 50 • In
Slide 7: Record-breaking growth in revenue from public customers
Record-breaking growth in revenue from public customers Q3 Revenue development y-o-y • Record-breaking growth - revenue grew by 31.8% y-o-y. +32% 20 18 • The increase in revenue was particularly supported by new outsourcing contracts in Lumijoki and Kinnula and specialized care 15 14 outsourcing at
Slide 8: Market review
Market review • Strong demand continued, capacity growth has stalled. • Increased market capacity has intensified competition, especially in Finland’s major cities and is reflected in the development of private customer group sales. • The Government's proposal for the Social and health care reform w
Slide 9: Market outlook
Market outlook • Employment and consumer confidence remain at a high level in Finland, and the market environment is positive. • If the government’s Social and health care reform (the so-called Sote-reform) is delayed, demand for outsourcing and other services from the public sector is expected to g
Slide 10: Financial Performance
FINANCIAL PERFORMANCE CFO Ilkka Laurila terveystalo.com #terveystalo
Slide 11: Strong earnings trend continued
Strong earnings trend continued Revenue, adjusted EBITDA*, % Adjusted EBITA*, M€ and % 25.6 23.9 200 197.5 30 183.6 189.9 189.0 19.8 20.2 160.5 155.4 160.3 25 146.4 16.7 16.9 150 20 14.8 12.3 12.6 13.0 14.8 15.3 15.6 11.4 12.4 14.3 13.5 10.7 100 12.0 12.5 15 9.2 9.2 11.2 8.0 10 50 5 0 0 Q4 Q1 Q2 Q3
Slide 12: Operating leverage is reflected in underlying margin performance
Operating leverage is reflected in underlying margin performance M€ 7-9/2018 7-9/2017 Change, % 1-9/2018 1-9/2017 Change, % 2017 Revenue 160.3 155.4 3.2 546.8 499.6 9.4 689.5 Other operating income 8.8 0.7 > 200.0 17.5 1.6 > 200.0 2.1 Materials and services -76.1 -74.6 2.0 -257.8 -235.2 9.6 -324.3 E
Slide 13: Solvency further strengthened
Solvency further strengthened m€ 30.9.2018 30.9.2017 • Total assets amounted to EUR 937.4 million ASSETS (EUR 878.2 million). The growth was mainly due Property, plant and equipment 81.0 91.9 to the increase in cash and cash equivalents. Goodwill 585.0 583.1 • Equity attributable to owners of the pa
Slide 14: Leverage decreased, operational efficiency reflected in negative net working capital
Leverage decreased, operational efficiency is reflected in the negative net working capital Net debt/Adjusted EBITDA, LTM Net working capital 4.5 100 5 6 5 6 5 50 70 70 82 72 73 2.8 2.5 0 2.1 -32 -38 -33 2.0 -42 -53 -50 -100 -117 -119 -115 -111 -129 -150 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q3 20
Slide 15: Investments (Excluding M&A)
Investments (Excluding M&A) Gross capex, M€ and %- of revenue Net capex, M€ and %- of revenue 4.5 35 4.2 4.3 4.3 35 4.2 4.2 4.3 4.5 4.0 4.5 31 31 3.9 31 30 29 29 29 4.0 30 29 29 3.6 4.0 6 27 27 4 5 7 3.5 3.5 25 8 25 14 3.0 13 14 3.0 13 11 20 2.5 20 2.5 16 16 17 17 2.0 2.0 15 15 15 1.5 1.5 10 10 1.0
Slide 16: IFRS 16 Leases – the impact of standard in financial year 2019
IFRS 16 Leases – the impact of standard in financial year 2019 • Terveystalo is planning to apply the IFRS 16 using the modified retrospective approach. • At this moment the estimated preliminary value of the discounted lease liability to be recognised at 1.1.2019 is EUR 173 million and the value of
Slide 17: Financial reporting in 2019 and Q3 IR events and roadshows
Financial reporting in 2019 and Q3 IR events and roadshows Financial reporting in 2019 Q3 IR events and roadshows • Financial Statements Bulletin 2018 on Thursday, 14 February 2019 • Jefferies London Healthcare Conference • Annual Report 2018 during week 9 15 November • Interim Report January-March
Slide 18: Q&A
Q&A terveystalo.com #terveystalo
Slide 19: Public outsourcing contracts
Public outsourcing contracts Contract Contract Tender price • Tender price does not include potential price Contract Contract duration increases, customer fees and/or impact of commencement termination EUR pa. Kinnula 1.10.2017 30.9.2032 15 years 0 months 1,948,000 right of use of ICT, facilities an
Slide 20: Divestment of Ava Clinic
Divestment of Ava Clinic • Terveystalo Group divested the entire operation of Ava Clinic in Riga, Latvia in July. Ava Clinic provides gynecological services, obstetrician services, and infertility treatment. In 2017, the unit’s revenue was approximately EUR 3 million and net profit approximately EUR
Slide 21: Attendo impact on leverage
Attendo impact on leverage 3.5 • Terveystalo is financially well-prepared for the Transaction • Based on the illustrative aggregated 2.0 financial information, Terveystalo would have had a preliminary aggregated net debt of EUR 451 million with implied net debt to LTM EBITDA of 3.5x as of 30 Septemb
Slide 22: YTD Growth in all customer groups
YTD Growth in all customer groups Jan-Sep revenue by payor group, % Jan-Sep revenue by payor group, M€ 11% +9% 600 547 35% 500 +27.9 % 500 59 46 400 +3.8 % 194 187 300 +10.2 % 54% 200 266 293 100 0 1-9/2017 1-9/2018 Corporate Private Public Corporate Private Public 22 © Terveystalo
Slide 23: Key Figures
Key Figures EUR million 7–9/ 7–9/ Change, % 1–9/ 1–9/ Change, % 2018 2017 % 2018 2017 % 2017 Revenue 160.3 155.4 3.2 546.8 499.6 9.4 689.5 Adjusted EBITDA * 20.1 17.5 15.2 76.4 63.3 20.7 92.4 Adjusted EBITDA, % * 12.5 11.2 - 14.0 12.7 - 13.4 EBITDA * 27.6 7.6 > 200.0 90.0 43.4 107.3 68.2 EBITDA, % *
Slide 24: Q3 Cash Flow
Q3 Cash Flow Net cash flow from Net cash from operating activities investing activities Net cash from EUR 13.5 Mill. EUR 3.1 Mill. financing activities EUR -9.8 Mill. 1 0 -5 0 8 -7 17 -5 -2 79 -1 1 72 Cash at the Profit before Adjustments Changes in Other Capex Disposals Other investing acquisition
Slide 25: YTD Cash Flow
YTD Cash Flow Net cash from Net cash flow from investing activities Net cash from operating activities EUR 10.7 Mill. financing activities EUR 62.1 Mill. EUR -26.3 Mill. 0 -7 -11 18 0 -7 26 -5 -15 -8 79 54 33 Cash at the Profit before Adjustments Changes in Other Capex Disposals Other investing acqu