Terveystalo Oy Class A · OMXHEX:TTALO
Terveystalo Oy Class A — Non-Deal Roadshow (November 2020)
43 slides from Terveystalo Oy Class A's roadshow presentation, November 2020
Slide 1: Terveystalo - Leading Nordic platform for health and wellbeing
Terveystalo - Leading Nordic platform for health and wellbeing November 2020
Slide 2: Terveystalo as an investment – platform for growth in health and wellbeing
Terveystalo as an investment – platform for growth in health and wellbeing 1 2 3 4 5 Strong market Industry leader Preferred Strong platform Further profit growth drivers in private with growth improvement healthcare place to work opportunities potential An aging population and a high incidence of O
Slide 3: The Finnish healthcare market - unique characteristics incubate unique capabilities
1 The Finnish healthcare market - unique characteristics incubate unique capabilities Private provision market is an established and …Supported by a number of factors growing component of the Finnish market Long Tradition of 40% Private Provision of of all primary care outpatient visits in Finland a
Slide 4: Finnish healthcare - attractive market with structural growth drivers
1 Finnish healthcare - attractive market with structural growth drivers Finnish healthcare service market total, €bn Structural demand drivers % Change in Proportion of Population Aged 60+ Years 2000-2015(1) 15 14.5 2 800 13.9 14.2 9,9 14 +4.3% 13.4 13.5 7,3 12.8 2 600 13 4,8 12.2 World’s 2nd 3,5 2,
Slide 5: Finnish occupational health – A unique system with a strong incentive for employers
1 Finnish occupational health – A unique system with a strong incentive for employers to invest in preventive care Occupational health is linked to statutory pension Occupational health = risk based, preventive system – employers are incentivized to invest in OH in population health management order
Slide 6: Terveystalo today is the leading healthcare platform in Finland
2 Terveystalo today is the leading healthcare platform in Finland with well balanced business Integrated care chains across physical and digital platform Jan-Sep 2020 Revenue 1,031 by payor group, % EUR Mill. revenue in 2019 11.2% Adjusted EBITA margin in 2019 300 Clinics across Finland 7 terveystal
Slide 7: Terveystalo's platform business model matches customers with private practitioners
2 Terveystalo’s platform business model matches customers with private practitioners and integrates episodes into effective care chains Terveystalo platform with data driven care models Personnel Excel in customer Integrate experience & care chains, engagement optimize availability of right experts
Slide 8: Despite our small home market, we are already a large player in digital health
2 Despite our small home market, we are already a large player in digital health – Over 0.5 million digital visits in 2020 Digital visits per capita, Digital visits, home market thousand 0.049 885 270 0.010 Visits Visits outside US Visits per capita, H1/ 2020 US visits per H1/2020 capita, H1/ 2020 H
Slide 9: Our platform works: We have grown profitably with industry leading margins
2 Our platform works: We have grown profitably with industry leading margins, outpacing market growth significantly 23% pa. Adj. EBITA growth between ‘14-’19 Terveystalo’s traditional addressable market 2010-2019E, €bn Total market +2.1% 3.6 3.7 160 1 031 1 100 3.5 3.5 3.5 3.3 Revenue 1 000 0.7 0.7
Slide 10: …while improving the performance of our platform
2 …while improving the performance of our platform 7 sec +9% NPS 83 24/7 Delivering on M&A High customer satisfaction Improving access to care synergies Projected cost synergies Net Promoter Score at all time GP Chat 24/7 with an average exceeded by 9% on average in high waiting time of 7 seconds ac
Slide 11: Terveystalo is the preferred place to work for professionals
3 Terveystalo is the preferred place to work for professionals Terveystalo has been chosen as the most attractive employer among doctors and healthcare students for 7 years in a row thanks to development oriented company culture & commitment to quality 88% of employees are satisfied with Terveystalo
Slide 12: We have further opportunities for growth in health and wellbeing
4 We have further opportunities for growth in health and wellbeing Market and share growth Grow share of wallet Continued M&A The smartest platform The customer’s health Selective M&A in the industry partner Opportunity: increase Opportunity: Expand to new Opportunity: Further conversion, profit per
Slide 13: Our scalable platform is built for private business but can be leveraged for the public market
4 Our scalable platform is built for private business but can be leveraged for the public market as well Terveystalo scalable platform Public outsourcing & staffing • Market leader with ~EUR 800 Mill. sales • Market #1-3 with ~EUR 200 Mill. sales Operating • Terveystalo clinics and 24/7 digital plat
Slide 14: Our strategy
Our strategy Our Vision is to empower lifelong health and well-being. And therefore we fight for a healthier life, every day. Values Human being in the center We take responsibility for the health and well-being of our fellow human beings, for the opportunity to live a good life. We work together to
Slide 15: Our strategic target: The profitability leader in the Nordic region
5 Our strategic target: The profitability leader in the Nordic region in private health services AT LEAST 5% REVENUE GROWTH AND 12-13% ADJUSTED EBITA The smartest The customer’s platform in the Selective M&A Operating leverage health partner industry • Grow share: • Grow market and share of • Scale
Slide 16: Profitable growth based on operating leverage and ability to cross sell
5 Profitable growth has been based on two key value drivers of our platform: operating leverage and ability to cross sell Operating leverage is a key driver Ability to cross sell and grow in value of profitability improvement adding services across the care chain Terveystalo’s business has significa
Slide 17: Operating leverage continues to drive profitability
5 Operating leverage continues to drive profitability Existing infrastructure with significant capacity Significant Share of Fixed Costs % of Revenue Capacity Digital health services Key driver of Appointment Variable profitability Rooms costs Materials and services 46% improvement Imaging a
Slide 18: Continued selective M&A in three categories
5 Continued selective M&A in three categories Strengthening Growing market Growth in specialties scalable capabilities share in adjacencies Internationally scalable Cost synergies & scale Growth in new services capabilities that support our Segments where we have a Niche players in specialized strat
Slide 19: Strong track record in accelerating growth and creating value through M&A
5 Strong track record in accelerating growth and creating value through M&A in our platform Projected cost synergies exceeded by 9% in healthcare acquisitions,(1 significantly reducing pre-synergy acquisition multiples(2 from ~13x EBITDA to post ~6x EBITDA 1) Comparing budgeted expected cost synergi
Slide 20: Strategic growth drivers for our platform
5 Strategic growth drivers for our platform THE SMARTEST PLATFORM THE CUSTOMER’S IN THE INDUSTRY HEALTH PARTNER Bypassing New bottlenecks & services prioritization ~€ 50 Mill. >€ 20 Mill. New Higher customers conversion More visits ~€ 40 % ~€ 30-100 Mill. Mill. ~€ 25-40 Mill. Higher Higher Increase
Slide 21: Strong cash flow funds our growth, further investments and supports increasing dividend
Strong cash flow funds our growth, further investments and supports increasing dividend 174 Dividend 40 distribution at Operating cash flow least 40% of IFRS 16 impact earnings 101 Free cash flow Investments to 70 generation growth 60 65 134 58 M&A to support strategy execution 2014 2015 2016 2017 2
Slide 22: The share of intangible investments continues to grow
The share of intangible investments continues to grow investment level stable at ~4% of revenue Gross capex, M€ and %- of revenue 45 45 4,2 4,3 4,5 4,0 4,1 40 40 4,0 35 18 3,5 29 30 18 30 3,0 25 5 2,5 10 20 2,0 16 19 15 14 1,5 15 10 1,0 5 6 7 7 0,5 3 0 2 2 1 1 0,0 2017 2018 2019 Q2.2020 LTM Intangib
Slide 23: Strong financial position and capacity for continued growth investments
Strong financial position and capacity for continued growth investments Leverage ratio below target Operational efficiency is reflected in the Net debt/adjusted EBITDA (last 12 months)* continuous decline of net working capital 3,8 3,4 6 3,1 6 8 2,8 5 90 102 83 70 -42 -51 -58 -117 -86 -147 -165 -177
Slide 24: Terveystalo Q3 2020: Revenue increased and profitability improved
Terveystalo Q3 2020: Revenue increased and profitability improved in the third quarter
Slide 25: Terveystalo Q3 2020 in numbers
Terveystalo Q3 2020 in numbers Adjusted Revenue EBITA Net profit +3% +27% +54% Lorem ipsum dolor sit amet, consectetuer Lorem ipsum dolor sit amet, consectetuer Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh adipiscing elit, sed diam nonummy nibh adipiscing elit, sed
Slide 26: COVID-19 impact on revenue
COVID-19 impact on revenue • The duration and magnitude of the effects will strongly depend on the evolution of the epidemic situation and its effects on consumer behavior and employment • A diverse customer base and range of services together with good preparedness of the organization enable scalin
Slide 27: Q3 revenue returned to growth
Q3 revenue returned to growth Q3 revenue by payor group, M€ • Q3 revenue increased y-o-y due to strong sales from private and corporate customers and Terveystalo +3% platform* revenue grew by 7.3% 250 234 240 +14% • Public revenue declined primarily due to the 14 16 expiration of outsourcing contrac
Slide 28: COVID-19 impact on business
COVID-19 impact on business Q1 Q2 H2 • Extensive restrictions on movement and • Restrictions on the movement and assembly assembly of people were in full force from 13 March to • Limitations of non-emergency oral health 14 May 2020. • Regional recommendations according to the Regulatory care and non
Slide 29: We responded quickly to demand by scaling up services and creating new ones
We responded quickly to demand by scaling up services and creating new ones
Slide 30: Digital channels are growing in popularity
Digital channels are growing in popularity https://avoinraportointi.terveystalo.com 31 terveystalo.com 31
Slide 31: Revenue returned to growth, profitability improved
Revenue returned to growth, profitability improved Revenue. Adjusted EBITDA * **. % Adjusted EBITA* **. M€ and % 300 30 35 30 270,3 32,4 32,3 267,8 30,9 258,6 257,4 250 234,0 240,2 25 30 27,1 25 25,9 209,2 19,2 25 24,4 197,9 22,9 200 17,9 17,7 20 20 16,4 17,0 160,3 15,8 20 14,8 150 15 13,7 12,9 15 1
Slide 32: Investments in digital services increased IT costs, PPE procurement increases costs of materials
Investments in digital services increased IT costs, PPE procurement increases costs of materials M€ 4-9/2020 4-9/2019 Change. % 1-9/2020 1-9/2019 Change. % 2019 Revenue 240.2 234.0 2.6 706.7 760.4 -7.1 1 030.7 Other operating income 0.5 0.6 -12.2 2.0 1.4 44.1 2.1 Purchase of materials -7.4 -6.9 8.3
Slide 33: Liquidity at a good level
Liquidity at a good level m€ 30.9.2020 30.9.2020 31.12.2019 • Cash and cash equivalents EUR 64.8 mill. (42.4). ASSETS • Total assets EUR 1,351.0 mill. (1,358.8). Property. plant and equipment 68.5 68.6 69.5 Right of use assets 172.3 192.6 193.2 • Equity attributable to owners of the parent company w
Slide 34: Indebtedness below target
Indebtedness below target Net debt/adjusted EBITDA Operational efficiency is reflected in the (last 12 months)* negative net working capital 4,6 150 4,1 6 6 6 6 6 8 3,8 100 8 3,5 3,4 3,4 5 3,1 3,2 50 110 101 101 102 100 83 99 73 0 -33 -58 -59 -58 -52 -50 -70 -73 -86 -174 -176 -166 -165 -179 -177 -15
Slide 35: The share of intangible investments continue to grow (excluding M&A)
The share of intangible investments continue to grow (excluding M&A) Gross capex. M€ and %- of revenue Net capex. M€ and %- of revenue 44 4,5 45 4,4 4,3 4,3 4,3 4,3 4,2 4,3 50 46 4,1 4,5 45 4,1 4,5 45 3,9 41 39 3,9 3,7 41 4,0 40 3,7 38 8 38 4,0 40 11 4 40 38 38 3,5 35 5 3,5 19 12 18 30 14 31 16 3,0
Slide 36: Outlook
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 tests increased strongly in the third quarter of the year and is expected to rem
Slide 37: Appendix
Appendix Terveystalo
Slide 38: Key Figures
Key Figures 7–9/ 7–9/ 1–9/ 1–9/ Terveystalo Group. EUR million Change. % Change. % 2019 2020 2019 2020 2019 Revenue 240.2 234.0 2.6 706.7 760.4 -7.1 1 030.7 Adjusted EBITDA * 1) 46.1 39.8 15.8 108.3 128.5 -15.8 176.3 Adjusted EBITDA. % * 1) 19.2 17.0 - 15.3 16.9 - 17.1 EBITDA 1) 45.5 38.6 18.0 104.6
Slide 39: Key Figures
Key Figures Terveystalo Group. EUR million 7–9/ 7–9/ Change. 1–9/ 1–9/ Change. % 2019 2020 2019 % 2020 2019 Average personnel in person-years – – – 5,023 4,861 3.3 4,943 Personnel (end of period) – – – 8,226 7,262 13.3 8,685 Private practitioners (end of period) – – – 5,210 5,082 2.5 5,068 Net Promo
Slide 40: Our platform works: ~200 acquisition targets successfully integrated
Our platform works: ~200 acquisition targets successfully integrated Acquisition Acquisition of Pulssi Acquired by EQT Expansion into Acquisition of Attendo Dental Services of Diacor health care Launch of Oma Terveys Online Acquisition of ODL Platform Personalize Automate & • Significant investments
Slide 41: The smartest platform in the industry meets customer expectations in a scalable way
4 The smartest platform in the industry meets customer expectations in a scalable way Physician appointments Other professionals Customer System layers optimize who, what Laboratory with a and when Imaging need What does the customer need and how channel channel Digital Digital acute is their need?
Slide 42: Our service offering for public sector
Our service offering for public sector – tailored according to growing customer needs Resources Expertise Public sector Specialty care Staffing Service Sales (Full) outsourcing occupational health outsourcing • Personnel service • Fee for service, including: • Service agreements, or • Provision of a
Slide 43: For common good: Our Sustainability approach
For common good: Our Sustainability approach 1. We work towards a future where more and more people have access to sustainable healthcare solutions for prevention and well-being 2. We minimize our environmental impact in all activities and products 3. We create positive impacts on society and promot