Terveystalo Oy Class A · OMXHEX:TTALO
Terveystalo Oy Class A — FY2018 Earnings Presentation
29 slides from Terveystalo Oy Class A's earnings presentation, Feb 15, 2019
Slide 1: Record Year, Strong Platform for Growth
RECORD YEAR, STRONG PLATFORM FOR GROWTH CEO Yrjö Närhinen CFO Ilkka Laurila terveystalo.com #terveystalo
Slide 2: 2018 Highlights
2018 HIGHLIGHTS Fifth year of robust growth Broad scale development across operations Further investments in digital services Preventive and well-being services grew at a record pace Double digit growth in public health care services terveystalo.com #terveystalo
Slide 3: Strong performance in all areas
Strong performance in all areas +57,1% +6% +4 %-p. 800 30 4 3,3 3,5 744,7 80 66,9 70,9 689,5 3 60 700 25 2 40 600 1 20 547,0 505,6 20 0 0 500 474,1 2017 2018 2017 2018 Physician appointments, millions NPS, appointments 400 15 11,8 +52% 10,0 10,4 10,6 300 8,8 +143% 10 1 000 1 000 200 170 200 660 150
Slide 4: Satisfied customers and professionals
Satisfied customers and professionals Appointments NPS 71 % Hospital services NPS 91 % 93 % of employees are satisfied with Terveystalo as a place of work The most desired employer © Terveystalo
Slide 5: Quality care produced in a responsible manner
Quality care produced in a resposible manner 5 © Terveystalo 2/15/2019
Slide 6: 2018 Growth in all customer groups
2018 Growth in all customer groups 2018 revenue per customer group, % 2018 revenue per customer group, M€ 11% +8% 800 745 35% 690 +27.6 % 700 81 64 600 +2.8 % 261 500 254 400 300 +8.2 % 54% 200 372 403 100 Corporate Private Public 0 2017 2018 Corporate Private Public 6 © Terveystalo
Slide 7: Strong profitability
Strong profitablity • Adjusted EBITDA* EUR 108.9 mill. (92.4) • Adjusted EBITA %* 11.8% of revenue (10.6%) • Net profit EUR 68.7 mill. (7.2) • EPS 0.54 euros (0.06), equity repayment proposal 0.20 euros (0.06) © Terveystalo *Alternative performance indicator
Slide 8: Market review
Market review • Steady demand in the corporate and private customer groups. • Increased clinic and hospital capacity in private health care has created intense competition, especially in Finland’s major cities, with the exception of the Helsinki metropolitan area. • Significant capacity growth has s
Slide 9: Outlook
Outlook • Employment and consumer confidence remain at a high level. • If the health care and social welfare reform is delayed, demand in public outsourcings is expected to grow. • Should the reform move forward it would enable private service providers to offer publicly funded health center service
Slide 10: Financial Performance
FINANCIAL PERFORMANCE CFO Ilkka Laurila terveystalo.com #terveystalo
Slide 11: Q4: revenue +4.2%
Q4: revenue +4.2% Q4 revenue per customer group, % Q4 revenue per customer group, M€ 11% +4% 198 200 190 34% 17 +27.1 % 22 150 67 -0.2 % 67 100 +3.3 % 55% 50 106 109 Corporate Private Public 0 Q4 2017 Q4 2018 Corporate Private Public 11 © Terveystalo
Slide 12: Profitability improved in every quarter y-o-y
Profitability improved in every quarter y-o-y Revenue, adjusted EBITDA*, % Adjusted EBITA*, M€ and % 27,1 25,6 197,5 197,9 23,9 200 189,9 189,0 30 183,6 19,8 20,2 160,5 155,4 160,3 25 150 16,9 20 14,8 13,7 15,6 16,4 12,6 13,0 14,8 15,3 12,3 12,4 100 13,5 12,5 15 10,7 12,0 11,2 9,2 9,2 8,0 10 50 5 0
Slide 13: Operating leverage is reflected in underlying margin performance
Operating leverage is reflected in underlying margin performance M€ 10-12/2018 10-12/2017 Change, % 2018 2017 Change, % Revenue 197.9 189.9 4.2 744.7 689.5 8.0 Other operating income 0.7 0.5 34.8 18.2 2.1 > 200.0 Materials and services -93.5 -89.1 5.0 -351.3 -324.3 8.3 Employee benefit expenses -50.
Slide 14: Attendo acquisition impact is reflected in the balance sheet
Attendo's health care operations acquisition impact is reflected in the balance sheet m€ 31.12.2018 31.12.2017 • Total assets of the Group amounted to 1,162.3 M€ ASSETS (902.3). The growth was mainly attributable to the allocation of the purchase price to intangible assets in Property, plant and equ
Slide 15: Financing of the Attendo acquisition increased net debt
Financing of the Attendo acquistion increased net debt, operational efficiency is reflected in the negative net working capital Net debt/ adjusted EBITDA (last 12 months) Net working capital 3,8 100 6 5 3,2 5 6 5 2,8 50 90 70 82 72 73 2,5 2,1 2,0 0 -32 -38 -33 -42 -51 -50 -147 -100 -117 -119 -115 -1
Slide 16: Investments (Excluding M&A)
Investments (Excluding M&A) Gross capex, M€ and %- of revenue Net capex, M€ and %- of revenue 35 4,2 4,3 4,3 4,5 35 4,2 4,3 4,5 31 31 3,9 4,0 31 4,0 29 29 30 4,0 29 29 3,6 3,7 4,0 30 30 28 6 7 27 5 3,5 3,5 25 8 10 25 14 3,0 13 14 10 3,0 11 20 2,5 20 2,5 16 17 17 2,0 2,0 15 15 15 15 1,5 1,5 10 10 1,0
Slide 17: Strong operating cash flow
Strong operating cash flow Operating cash flow Operating cash flow in total 38.6 M€ in total 100.6 M€ Q4 118 FY 2018 134 0 2 0 13 30 12 14 79 68 33 Cash at the Profit before Adjustments Changes in Other operating Cash at the Cash at the Profit before Adjustments Changes in Other operating Cash at th
Slide 18: IFRS 16 Leases – impact for financial year 2019
IFRS 16 Leases – the impact of standard for financial year 2019 • Terveystalo has decided to apply the IFRS 16 using the modified retrospective approach. • At this moment the estimated preliminary value of the discounted lease liability to be recognized at 1.1.2019 is EUR 202.5 million and the value
Slide 19: Financial reporting in 2019 and upcoming IR events
Financial reporting in 2019 and upcoming IR events Conferences and Financial reporting and AGM 2019 seminars • Annual Report 2018 on week 9, 2019 • AGM on Thursday, April 4, • Morgan Stanley European MedTech & Services Conference • Interim report for January–March 2019 on March 5, 2019, London Thurs
Slide 20: Q&A
Q&A terveystalo.com #terveystalo
Slide 21: Intangible assets: Attendo acquisition impact on goodwill
10. Intangible assets: Attendo acquisition had a significant Taxes impact on goodwill and customer relationships 2018 Goodwill Customer Trademarks relationships Other intangible assets and advances paid Total • Unused tax losses amounting to EUR 77.6 EUR Mill. million have been used during the finan
Slide 22: Attendo impact on leverage
Attendo impact on leverage 3,8 • The long-term and short-term loan raised to 3,2 finance the acquisition increased the reported net debt, while Attendo's EBITDA is not included in the reported figure. • Based on the illustrative aggregated financial information, Terveystalo would have had a prelimin
Slide 23: Key figures
Key figures EUR million 10-12/ 10-12/ Change, Change, 2018 2017 2018 2017 % % Revenue 197.9 189.9 4.2 744.7 689.5 8.0 Adjusted EBITDA* 32.5 29.1 11.9 108.9 92.4 17.9 Adjusted EBITDA, % * 16.4 15.3 - 14.6 13.4 - EBITDA* 26.6 24.8 7.2 116.6 68.2 70.9 EBITDA, % * 13.4 13.1 - 15.7 9.9 - Adjusted EBITA*
Slide 24: Q4 Cash flow
Q4 Cash flow Cash flow, investing Operating cash flow in total -235.1 M€ in total 38.6 M€ 0 Cash flow, financing 13 in total154.0 M€ 12 79 14 37 -13 -3 -237 170 0 2 Cash at the Profit before Adjustments Changes in Other Capex Disposals Other investing Loan Loan Interests Cash at the beginning income
Slide 25: 2018 Cash flow
2018 Cash flow Operating cash flow Cash flow, investing in total 100.6 M€ in total -224.4 M€ 2 0 30 Cash flow, financing in total 127.6 M€ 37 68 -20 -8 33 -8 -252 170 2 -7 26 Cash at the Profit before Adjustments Changes Other Capex Disposals Other Acquisition Loan Loan Interests Equity Cash at begi
Slide 26: Working days 2017-2019
Working days 2017-2019 Working days 1 2 3 4 5 6 7 8 9 10 11 12 FY • 2019 has the same number of working 2019 22 20 21 20 21 19 23 22 21 23 21 18 251 days as in 2018 and 2017 2018 22 20 21 20 21 20 22 23 20 23 22 17 251 • Q2/2019 has one working day less and 2017 21 20 23 18 21 21 21 23 21 22 22 18 2
Slide 27: Corporate customers: Growth in preventive and well-being services
Corporate customers: Growth in preventive and well-being services Q4 Revenue development • Revenue from corporate customers grew by 3.3 % +3% • Sales of preventive and well-being services 120 109 developed favorably. 106 100 • The number of OH end customers was flat. 80 • Growth in preventive servic
Slide 28: Revenue from private customers flat y-o-y
Revenue from private customers flat y-o-y Q4 Revenue development • Revenue for Q4 was flat y-o-y. 0% • Stable demand, improved patient steering 70 67 67 and increased number of appointments offered by other professionals compensated 60 for lower number of physician appointments. 50 • Growth in marke
Slide 29: Strong growth in revenue from public sector customers
Strong growth in revenue from public sector customers Q4 Revenue development • Q4 witnessed a strong growth in revenue from public customers, revenue grew by 27.1%. • The increase in revenue was particularly supported 25 +27% by new outsourcing contracts in Lumijoki and 22 Tervola, and specialized c