Terveystalo Oy Class A · OMXHEX:TTALO
Terveystalo Oy Class A — Q3 2022 Earnings Presentation
25 slides from Terveystalo Oy Class A's earnings presentation, 2022
Slide 1: Unsatisfactory Q3, 50-million-euro annualized profit improvement program underway
Unsatisfactory Q3, 50-million-euro annualized profit improvement program underway to reach financial targets VILLE IHO, PRESIDENT & CEO MIKKO TAINIO, INTERIM CFO 1 FOOTER
Slide 2: 50-million-euro annualized profit improvement program underway to reach financial targets
50-million-euro annualized profit improvement program underway to reach financial targets and support long term value creation • Revenue +1.2% y-o-y (Finland -0.4%, Sweden +31.6 mainly due to acquisitions) • Adj. EBITA -60.4 % y-on-y to EUR 12.5 (31.5) million, 4.5% (11.5%) of revenue Unsatisfactory
Slide 3: Q3 revenue growth driven by Sweden
Q3 revenue growth driven by Sweden Q3/2022 REVENUE BREAKDOWN, % Q3/2022 REVENUE BREAKDOWN, M€ +1% 6% 273 276 14 18 23 22 21 21 26% 39% 29 30 79 77 108 109 28% Q3/2021 Q3/2022 Corporate Public Corporate Outsourcing Service sales, OH and others Private Sweden and others Private Staffing Sweden and oth
Slide 4: Q3 profitability significantly weakened due to changes in the sales mix and increased costs
Q3 profitability significantly weakened due to changes in the sales mix and increased costs Terveystalo Q3 adj. EBITA and Revenue M€ 35 - Staff sick leave days +25% vs. the normal 31 healthcare services level 30 (Clinic network) 10 1 25 5 4 20 4 15 4 12 0 0 10 Q3/2021 Change in Network Network Cost
Slide 5: The average price and margin decreased due to service, channel, and customer mix changes
The average price and margin decreased due to service, channel, and customer mix changes in healthcare services DIGITAL GROWS, AND STRENGTHENS SUPPLY STRONG DEMAND, SUPPLY IMPROVING BUT SHORTER CARE CHAINS WEAKEN BUT WEAKENS THE MARGINS IN THE CONSTRAINTS BLOCK HIGHER MARGIN THE MARGINS ** SHORT-TER
Slide 6: One-time write-down of EUR 29 million to other intangible assets weakened the Q3 result
One-time write-down of EUR 29 million to other intangible assets further weakened the Q3 result • The impairment loss was related to the long-standing basic IT systems reform project, which included the renewal of the patient record (EMR) system. • The development path of the EMR system has been red
Slide 7: New planned operating model and the Alpha program to strengthen long-term value creation
New planned operating model and the Alpha program to strengthen long-term value creation FULL ACCOUNTABILITY TO SUPPORT THE EFFICIENCY OF THE CORE BUSINESS AND STRENGTHEN THE INDEPENDENT VALUE CREATION OF PORTFOLIO BUSINESSES 7 FOOTER
Slide 8: The planned operating model enables efficiency of the core business & independence of Portfolio businesses
The planned operating model enables the efficiency of the core business & independence of the Portfolio businesses Healthcare Services Portfolio Businesses Sweden Market leading profitability Independent Growth mid to long term value creation Staffing Corporate sales Consumer sales Corporate sales I
Slide 9: New management structure with clear accountability
New management structure with clear accountability Ville Iho President & CEO Siina Saksi Marja-Leena Tuomola Mikko Tainio Joachim Morath COO CCO SVP CEO Operations Commercial Portfolio Businesses Feelgood Sweden Healthcare Services Healthcare Services o Outsourcing o Staffing o Digital Services (Pub
Slide 10: The Alpha program focuses on rapid profit improvement in our core
The Alpha program focuses on rapid profit improvement in our core and ensures reaching our target of 12-13% EBITA margin EUR 25-30 MILLION ONE-OFF COSTS ANNUALIZED EUR 50-MILL. RUN-RATE PROFIT IMPROVEMENT Most of the costs to incur in 2023 • EUR 20 mill. of the costs to incur before the end of 2023
Slide 11: Identified sources of profit improvement to meet €50M annualized run-rate net impact
Identified sources of profit improvement to meet €50M annualized run-rate net impact H2 2022 - 2024 PROGRAM NET IMPACT, AFTER INFLATION Mix, supply & growth €10-20M Margin improvement Total €15-20M > €50M Cost reductions €15-20M 1 Direct cost reductions 2 Margin improvement 3 Mix improvement, 2024 r
Slide 12: Main topics to drive EBITA impact across workstreams
Main topics to drive EBITA impact across workstreams 1 2 3 Cost reductions Margin improvement Mix, supply & growth Streamlined Operating Commercial optimization Customer steering, model incl. pricing care path continuity External spend Operational efficiency Doctor recruitment and optimization impro
Slide 13: Recap: €50M annualized profit improvement program
Recap: €50M annualized profit improvement program underway to reach financial targets and support long-term value creation The Alpha program focuses on a rapid turnaround in our core business, aiming for industry-leading profitability in healthcare services Strategy intact, new operating model Chang
Slide 14: Financial performance
Financial performance MIKKO TAINIO, INTERIM CFO 14 FOOTER
Slide 15: Q3 profitability significantly weakened due to changes in the sales mix and increased costs
Q3 profitability significantly weakened due to changes in the sales mix and increased costs REVENUE, MEUR AND ADJUSTED EBITDA*-% ADJUSTED EBITA*, MEUR AND % +1% -60% 329.7 327.5 318.2 41.9 278.7 39.3 38.2 38.9 270.3 279.7 275.3 273.1 276.4 257.4 240.2 32.3 30.9 31.5 234.0 19.2 19.5 19.1 29.5 17.0 17
Slide 16: Q3 profitability significantly weakened due to changes in the sales mix and increased costs
Q3 profitability significantly weakened due to changes in the sales mix and increased costs Terveystalo Q3 adj. EBITA and Revenue M€ 35 31 healthcare services 30 (Clinic network) 10 1 25 5 4 20 4 15 4 12 0 0 10 Q3/2021 Change in Network Network Cost Group Public Feelgood M&A Q3/2022 sales mix underl
Slide 17: Capex (excluding M&A) to decrease from H1 2022 level
Capex (excluding M&A) to decrease from H1 2022 level GROSS CAPEX, MEUR AND %- OF REVENUE 59 58 4,7 4,6 4,5 54 4,5 4,3 4,3 4,1 4,1 3,9 3,9 48 45 46 3,7 3,5 3,4 41 40 41 32 30 38 38 37 29 19 35 18 25 16 18 17 21 20 19 19 19 19 18 19 21 19 14 13 16 13 14 14 12 5 7 7 7 7 5 5 6 6 7 7 4 4 1 1 1 1 1 1 1 1
Slide 18: 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 250 6 5,2 195 189 200 175 176 5 157 153 150 4,2 145 144 142 3,8* 150 127 4 3,1 3 3,1 100 3 2,8 2,5 50 2 0 1 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/2
Slide 19: Sound fundamentals, medium term financial targets unchanged
Sound fundamentals, medium term financial targets unchanged FINANCIAL TARGETS OUTLOOK* • Demand for health services continues to be Growth strong. However, demand is focused on short care pathways and services growth of which is limited At least 5% annual growth in revenue by supply. • Tight labor m
Slide 20: Appendix
Appendix Terveystalo
Slide 21: Cuts to discretionary spending and Alpha program launched to combat cost increases
Cuts to discretionary spending and Alpha program launched to combat cost increases M€ 7-9/2022 7-9/2021 Change % 1-9/2022 1-9/2021 Change % 2021 Revenue 276.4 273.1 1.2 924.3 827.1 11.8 1 154.6 Other operating income 0.6 1.1 -43.6 1.7 2.2 -20.1 3.4 Purchase of materials -10.1 -7.3 38.1 -32.3 -24.4 3
Slide 22: Well-being and digital continued to grow
Well-being and digital continued to grow WELL-BEING SALES, MEUR DIGITAL VISITS, THOUSANDS +59% 35 +20% 400 19% 9% 30 350 25 300 250 20 200 15 150 10 100 5 50 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022
Slide 23: Disciplined financial strategy
Disciplined financial strategy NET DEBT, MEUR AND NET DEBT / ADJ. EBITDA (LTM) EQUITY RATIO, % AND GEARING, % 700 5 120% 4,6 4,5 600 576 573 568 581 109% 111% 108% 4,1 548 557 531 528 529 530 537 4 100% 101% 99% 510 519 Gearing 96% 96% 96% 491 477 92% 500 3,5 3,5 87% 87% 85% 85% 3,4 3,4 86% 3,2 80%
Slide 24: Key figures
Key figures Terveystalo Group, MEUR 7-9/ 7-9/ Change, % 1-9/ 1-9/ Change, % 2021 2022 2021 2022 2021 Revenue 276.4 273.1 1.2 924.3 827.1 11.8 1,154.6 Adjusted EBITDA. * 1) 30.9 48.6 -36.3 130.0 146.9 -11.5 206.1 Adjusted EBITDA, % * 1) 11.2 17.8 - 14.1 17.8 - 17.8 EBITDA 1) 29.9 46.2 -35.2 126.6 143
Slide 25: Feelgood AB – key figures
Feelgood AB – key figures SEK, thousand Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Revenue 204,393 213,110 138,429 220,230 208,448 185,825 125,102 204,733 193,469 206,243 EBITDA 24,371 28,626 -1,612 34,157 24,155 18,486 -464 38,926 20,775 27,167 EBIT 12,921 16,570 -13,704 21,594 11,