Terveystalo Oy Class A · OMXHEX:TTALO
Terveystalo Oy Class A — FY2023 Earnings Presentation
24 slides from Terveystalo Oy Class A's earnings presentation, February 2024
Slide 1: Terveystalo Group Q4 & Full Year 2023 Results
Terveystalo Group Q4 & Full Year 2023 Results VILLE IHO, PRESIDENT & CEO JUUSO PAJUNEN, CFO 1
Slide 2: Welcome
Welcome AGENDA TODAY Ville Iho, President & CEO • FY 2023 Financial & operational highlights • Dividend proposal • Medical quality highlight Juuso Pajunen, CFO • Q4 Financial performance analysis • 2023 progress against financial targets • Outlook & Guidance 2 FOOTER
Slide 3: In 2023, we made determined progress towards our strategic and financial goals
In 2023, we made determined progress towards our strategic and financial goals Profitability and operational efficiency strengthened across our business segments The profit improvement program and a clear organisational structure deliver excellent results and create a strong basis for the future Str
Slide 4: Strong performance on all fronts in 2023
Strong performance on all fronts in 2023 Q4 2023 Revenue (EUR) FY 2023 Revenue (EUR) The preferred choice by customers and professionals 342.4 Mill. 1,286.4 Mill. +2% y-o-y, +2% y-o-y, underlying organic +4% underlying organic +6% CONTINUED HIGH CUSTOMER SATISFACTION Q4 2023 Adj. EBITA margin FY 202
Slide 5: Continued margin recovery across segments in 2023
Continued margin recovery across segments in 2023 Healthcare Portfolio Sweden services businesses +6% 0%* -8% 949 291 93 93 898 267 11,5% 11,0% 4,0% 3,3% 2,8% 1,2% 2022 2023 2022 2023 2022 2023 Revenue Adj. EBITA margin Revenue Adj. EBITA margin Revenue Adj. EBITA margin THE HEALTHCARE SERVICES SEGM
Slide 6: The profit improvement program exceeded the initial target and delivered ~EUR 60 million run-rate impact
The profit improvement program exceeded the initial target and delivered ~EUR 60 million run-rate impact ahead of schedule EUR 37 MILLION ADJUSTED EBITA IMPACT IN 2023, INITIATIVES CONTINUE IN 2024 Commercial Operations Management system Productivity Organisational structure Pricing and management s
Slide 7: We target an increase in total shareholder return
We target an increase in total shareholder return INCREASE IN DIVIDEND PROPOSED THE PROPOSED DIVIDEND PAY-OUT IS 64% OF THE ADJUSTED NET PROFIT • Our financial position is strong, and we are 0,30 advancing with a clear agenda towards our 0,30 72% 0,28 0,28 financial target of an EBITA margin of 12%
Slide 8: We turn our focus on pockets of growth where we can benefit from our operating leverage
Clinical Quality We turn our focus on pockets of growth where Highlight we can benefit from our operating leverage SLEEP IS A CASE EXAMPLE OF A MEDICAL SPECIALTY WHERE WE CAN SCALE OUR MEDICAL EXCELLENCE AND INTEGRATED CARE MODEL The demand for sleep medicine is growing rapidly Our high-quality, evi
Slide 9: Financial performance
Financial performance Juuso Pajunen, CFO 9 FOOTER
Slide 10: Continued margin recovery in Q4
Continued margin recovery in Q4 Underlying organic topline growth of 4% driven by stronger sales mix and successful pricing actions Adj. EBITA +33% and 11.5% of revenue, strong contribution from efficiency gains enabled by profit improvement program, supported by improved sales mix We progress towar
Slide 11: Q4: Improved sales mix, pricing, planned contraction of the outsourcing portfolio and weak SEK impacted revenue
Q4: Improved sales mix, pricing, planned contraction of the outsourcing portfolio and weak SEK impacted revenue Healthcare services Portfolio businesses 1,9 2,6 5,7 0,2 1,0 342,4 14,5 0,4 1,0 334,8 Increased • Improved customer and • Outsourcing declined due to the macro service mix combined with pl
Slide 12: Q4: Strong profit development in Healthcare services and Portfolio businesses
Q4: Strong profit development in Healthcare services and Portfolio businesses Adj. EBITA(MEUR) • In Healthcare services, EBITA was impacted by: +33% • Improved efficiency throughout services due to the 39,5 0,6 0,1 profit improvement program 3,8 • Strong sales mix improvement, 6,8 29,7 despite the l
Slide 13: Q4: Sales mix improved in Finland, market and FX headwinds in Sweden
Q4: Sales mix improved in Finland, market and FX headwinds in Sweden Healthcare services Portfolio businesses Sweden Revenue (MEUR), Adj. EBITA % Revenue (MEUR), Adj. EBITA % Revenue (MEUR), Adj. EBITA % -4%* +6% 28 -9% 300 12,7% 14 80 74 10 30 10,9% 12 239 255 27 70 67 8 250 10,6% 12 25 9,0% 10 60
Slide 14: 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 3,8 176 174 158 3,1 3,2 150 152 3,0 3,0 141 143 2,5 2018 2019 2020 2021 2022 2023 -48 -48 -48 -41 -54 -59 -58 -58 -53 • The increase i
Slide 15: Strong performance in 2023, on track to reach a 12% EBITA margin in 2025
Strong performance in 2023, on track to reach a 12% EBITA margin in 2025 FINANCIAL TARGETS STRONG PERFORMANCE IN 2023 Growth 2% Revenue growth • At least 5% annual revenue growth 6% underlying organic growth Profitability 9.8% adjusted EBITA margin • An adjusted EBITA margin of at least 12% in 2025
Slide 16: Guidance for 2024
Guidance for 2024 • Terveystalo estimates its revenue for 2024 to grow (2023: EUR 1,286 million) and its adjusted EBITA margin to be between 10.1% and 11.5% (9.8% in 2023). • The estimates are based on the end of 2023 projections for inflation, consumer demand and employment, normal morbidity, and a
Slide 17: We have a clear roadmap to reach our EBITA margin target of 12% in 2025
We have a clear roadmap to reach our EBITA margin target of 12% in 2025 Target >12% Guidance of 10.1%-11.5% Sales mix, Reduced weight structural on outsourcing, Finalization of profit margin efficiency gains improvement program and improvement in consumer efficiency gains business 2024 Healthcare Se
Slide 18: Terveystalo
Terveystalo MEANINGFUL MATTERS
Slide 19: Appendix
Appendix Terveystalo
Slide 20: The outsourcing contract portfolio shrinks as old contracts expire or are terminated
The outsourcing contract portfolio shrinks as old contracts expire or are terminated CONTRACT VALUE, OUTSOURCING CONTRACTS, M€¹ 120 80 70 50 30 10 10 2022 2023 2024 2025 2026 2027 2028 20 1) ROUNDED FIGURES
Slide 21: Revenue + 2% and adj. EBITA +33% y-o-y
Revenue + 2% and adj. EBITA +33% y-o-y REVENUE, MEUR AND ADJUSTED EBITDA*-% ADJUSTED EBITA*, MEUR AND % +2.3% 334.8 341.1 342.4 +33.2 327.5 329.7 322.4 41.9 318.2 39.3 38.9 39.5 38.2 279.7 278.7 275.3 273.1 276.4 280.5 36.5 31.5 19.5 19.1 29.5 29.7 17.8 18.1 17.2 28.5 16.4 17.0 16.2 24.1 14.4 14.6 1
Slide 22: The profit improvement program had a P&L impact of EUR 13 Mill. in Q4 and EUR 37 Mill. FY 2023
The profit improvement program had a P&L impact of EUR 13 Mill. in Q4 and EUR 37 Mill. FY 2023 M€ 10-12/2023 10-12/2022 Change % 2023 2022 Change % Revenue 342,4 334,8 2,3 1 286,4 1 259,1 2,2 Other operating income 1,1 1,0 17,8 4,2 2,7 56,1 Purchase of materials -12,4 -11,7 5,5 -40,8 -44,1 -7,5 Chan
Slide 23: CAPEX on declining trend
CAPEX on declining trend 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 48 3,8 3,8 3,7 3,5 3,4 26 41 41 32 30 3,2 38 23 37 29 19 21 35 25 16 21 20 19 19 22 20 18 15 18 19 21 14 14 16 13 12 14 10 11 12 10 5 6 6 7 7 9 5 4 4 1 1 1 1 1 1 0 0 0 0 0 1 1 Q4/20 LTM
Slide 24: Key figures
Key figures Terveystalo Group, MEUR 10–12/ 10–12/ Change, % 2023 2022 Change, % 2023 2022 Revenue 342.4 334.8 2.3 1 286.4 1 259.1 2.2 Adjusted EBITA * 1) 39.5 29.7 33.2 125.6 105.2 19.4 Adjusted EBITA. % * 1) 11.5 8.9 - 9.8 8.4 - EBITA 1) 34.1 23.8 43.2 104.4 95.9 8.9 EBITA, % 1) 9.9 7.1 - 8.1 7.6 -