Terveystalo Oy Class A · OMXHEX:TTALO
Terveystalo Oy Class A — Q3 2023 Earnings Presentation
21 slides from Terveystalo Oy Class A's earnings presentation, Oct 27, 2023
Slide 1: Terveystalo Group Q3 2023 Results
Terveystalo Group Q3 2023 Results VILLE IHO, PRESIDENT & CEO JUUSO PAJUNEN, CFO
Slide 2: Welcome
Welcome AGENDA TODAY Ville Iho, President & CEO • Financial & operational highlights • Progress of the Profit improvement program Juuso Pajunen, CFO • Financial performance analysis • Progress against financial targets • Outlook & guidance 2 FOOTER
Slide 3: Profit improvement ahead of schedule and clearly visible in the third quarter results
Profit improvement ahead of schedule and clearly visible in the third quarter results Margin improvement is progressing well Profit improvement program is on track to deliver EUR 50 million run-rate impact ahead of schedule Our strong and diverse customer base, comprehensive service offering, and th
Slide 4: Strong Q3
Strong Q3 Q3 2023 Revenue (EUR) Record-strong customer satisfaction* 280.5 Mill. NPS 86 +1.5% y-o-y 3 month rolling Q3 2023 Adj. EBITA (EUR) Physical appointments** 21.1 Mill. 1.0 Mill. +69.7% y-o-y -0.9% y-o-y Q3 2023 EPS (EUR) #1 workplace for 0.03 healthcare professionals for the 4th year in a ro
Slide 5: Profit improvement program is on track to deliver EUR 50 million run-rate impact ahead of schedule
Profit improvement program is on track to deliver EUR 50 million run-rate impact ahead of schedule Set targets for each business segment Profit improvement program to deliver over EUR 30 Mill. adj. EBITA Healthcare Portfolio Sweden impact in 2023 services businesses €209 10% €61m 3% €16m -13% Q3 Rev
Slide 6: The Government decision to increase Kela reimbursement expected to support out-of-pocket consumer demand
The Government decision to increase Kela reimbursement expected to support out-of- pocket consumer demand 2024 onwards 142% 40 275% 94% • Kela reimbursements will be increased by EUR 500 million in 2024-2027. 213% 30 30 30 • EUR 134.2 million per year will be 25 allocated to the new Kela reimburseme
Slide 7: We continue to invest in technology, customer experience, and our products
Clinical Quality Highlight We continue to invest in technology, customer experience, and our products PIONEERING SOFTWARE AS A MEDICAL DEVICE AND INNOVATIVE CLINICAL TECHNOLOGY IN OCCUPATIONAL HEALTH PRODUCT OFFERING • Our symptom assessment tool guides our customers to the right specialist in the r
Slide 8: Financial performance
Financial performance Juuso Pajunen, CFO 8 FOOTER
Slide 9: Strong profit development continued
Strong profit development continued Topline growth driven by successful pricing, better sales mix and volume growth The planned ending of outsourcing contracts and weak SEK had a negative impact on revenue, Covid-19 testing in comparison period Adj. EBITA +69.7% Thanks to the improved sales mix, and
Slide 10: Pricing, better sales mix, ending of outsourcing contracts and weak SEK impacted revenue
Pricing, better sales mix, ending of outsourcing contracts and weak SEK impacted revenue Healthcare services Portfolio businesses • Slow start after the holiday period • Increased macro 3,6 uncertainty starting to impact 0,3 the demand for 8,5 preventive services • Weak SEK impacting 10,9 • Higher s
Slide 11: Revenue +1.5% and adj. EBITA +69.7% y-o-y
Revenue + 1.5% and adj. EBITA +69.7% y-o-y REVENUE, MEUR AND ADJUSTED EBITDA*-% ADJUSTED EBITA*, MEUR AND % +1.5% 327.5 329.7 334.8 341.1 318.2 322.4 41.9 +69.7% 39.3 38.9 38.2 279.7 278.7 275.3 273.1 276.4 280.5 36.5 240.2 31.5 30.9 19.2 19.5 19.1 29.5 29.7 17.8 18.1 17.2 28.5 16.4 16.2 24.1 14.4 1
Slide 12: The profitability improvement driven by Healthcare Services
The profitability improvement driven by Healthcare Services 21,1 Adj. EBITA(MEUR) • In Healthcare services, EBITA was impacted by: 3,8 • Sales mix developing positively while loss of COVID-test 0,0 0,1 revenues still impacting negatively 5,0 • Price increases compensated for the cost inflation impac
Slide 13: Strong performance in Healthcare services, expired contracts in Portfolios, and FX headwind in Sweden
Strong performance in Healthcare services, expired contracts in Portfolios, and FX headwind in Sweden Healthcare services Portfolio businesses Sweden Revenue (MEUR), Adj. EBITA % Revenue (MEUR), Adj. EBITA % Revenue (MEUR), Adj. EBITA % +7% -12% 69 -11%* 250 12 70 10 20 10 209 18 61 195 9,8% 60 16 2
Slide 14: Overall CAPEX on declining trend, more investments to premises and equipment
Overall CAPEX on declining trend, more investments to premises and equipment LTM GROSS CAPEX, MEUR AND %- OF REVENUE 59 58 58 4,7 4,6 4,6 54 4,5 53 4,1 4,2 48 48 3,9 3,9 48 3,8 3,8 3,7 3,5 3,4 26 41 32 30 38 38 23 37 29 19 21 35 25 17 21 20 19 19 22 20 18 15 18 19 21 13 14 16 13 12 14 10 11 12 7 5 6
Slide 15: We maintained strong cash flow, solid balance sheet and credit profile
We maintained strong cash flow, solid balance sheet and credit profile OPERATING CASH FLOW (LTM), MEUR NET DEBT/ADJUSTED EBITDA (LTM) GROSS CAPEX (LTM), MEUR 195 189 3,8 175 176 174 3,1 3,2 3,1 150 152 3,0 141 143 2,5 2018 2019 2020 2021 2022 Q3 2023 -41 -48 -48 -48 -54 -59 -58 -58 -53 • The increas
Slide 16: Strong fundamentals, guidance remains intact
Strong fundamentals, guidance remains intact FINANCIAL TARGETS GUIDANCE FOR 2023 • Terveystalo estimates its revenue for the full year 2023 to Growth grow (2022: EUR 1,259 million) and its adjusted EBITA at least 5% annual growth in revenue margin to be between 9.1% and 10.1% (8.4% in 2022). • Estim
Slide 17: terveystalo.com
Terveystalo MEANINGFUL MATTERS terveystalo.com
Slide 18: Appendix
Appendix Terveystalo
Slide 19: The outsourcing contract portfolio will shrink in the coming years as old contracts expire
The outsourcing contract portfolio will shrink in the coming years as old contracts expire CONTRACT VALUE EXCLUDING OPTIONS, OUTSOURCING CONTRACTS, M€¹ 120 Contracts 80 80 60 120 40 80 80 60 40 10 10 10 10 2022 2023 2024 2025 2026 2027 2028 19 1) ROUNDED FIGURES
Slide 20: Cuts to discretionary spending and profit improvement program combat cost increases
Cuts to discretionary spending and profit improvement program combat cost increases M€ 7-9/2023 7-9/2022 Change % 2022 Revenue 280.5 276.4 1.5 1,259.1 Other operating income 0.8 0.6 36.4 2.7 Purchase of materials -6.8 -10.1 -32.7 -44.1 Change in inventories 0.2 0.3 -40.6 0.2 External services -109.9
Slide 21: Key figures
Key figures Terveystalo Group, MEUR 7–9/ 7–9/ Change, % 1–9/ 1–9/ Change, % 2022 2023 2022 2023 2022 Revenue 280.5 276.4 1.5 944.0 924.3 2.1 1 259.1 Adjusted EBITA * 1) 21.1 12.5 69.7 86.1 75.5 14.0 105.2 Adjusted EBITA, % * 1) 7.5 4.5 - 9.1 8.2 - 8.4 EBITA 1) 18.4 11.4 60.7 70.4 72.2 -2.5 95.9 EBIT