Terveystalo Oyj: Terveystalo Group Interim Report January-March 2025: Solid operational and financial performance in the first quarter

Terveystalo Plc, Interim Report 25 April 2025 at 09:00 EEST

This release is a summary of Terveystalo's Interim Report January - March 2025. The full release is attached to this stock exchange release and is available on our website at: https://www.terveystalo.com/en/company/investors/reports-and-presentations/

January-March 2025 in brief

• Revenue decreased by 0.9 percent year-on-year to EUR 346.9 (350.2) million.
  There was one working day less than during the comparison period.
  The Healthcare Services segment revenue increased by 4.7 percent and was EUR 280.6 (268.0) million. Portfolio Businesses revenue decreased by 21.7 percent and was EUR 50.6 (64.7) million. The revenue from Sweden decreased by 10.8 percent and amounted to EUR 20.6 (23.0) million.
• Adjusted¹⁾ operating profit (EBIT) increased by 19.2 percent year-on-year to EUR 47.8 (40.1) million, representing 13.8 (11.5) percent of revenue. Terveystalo has transitioned from using adjusted EBITA to adjusted EBIT as its primary key performance indicator for profitability.
  Stronger demand, improved operational efficiency, and a more favourable service mix strengthened the profitability of Healthcare Services. In Portfolio Businesses, adjusted EBIT decreased from the comparison period. However, the relative profitability (EBIT margin) slightly improved year-on-year. In Sweden, profitability slightly improved due to the measures of the profit improvement programme.
• Items affecting comparability¹⁾ with a negative effect on EBIT were EUR 1.5 (4.4) million.
• Operating profit (EBIT) increased by 29.9 percent and amounted to EUR 46.4 (35.7) million.
• The result for the period was EUR 33.4 (23.6) million.
• Earnings per share (EPS) increased by 41.4 percent and amounted to EUR 0.26 (0.19).
• Cash flow from operating activities was EUR 27.3 (49.2) million.
• NPS (Net Promoter Score) for appointments was 88.0 (86.4), NPS for hospitals was 95.4 (95.0).

The figures in parentheses refer to the corresponding period one year ago.

^{1) Adjustments are material items outside the ordinary course of business, associated with acquisition-related expenses, restructuring-related expenses, gains and losses on the sale of assets, impairment losses and other items affecting comparability. Adjustments related to the profit improvement programs were approximately EUR 2.2 (4.5) million during the first quarter of 2025.}

President and CEO Ville Iho: Good start to the year

Terveystalo delivered a solid first quarter of the year with strong operational performance, continued profitability improvement, and stable year-on-year consolidated revenue. Healthcare Services revenue increased by approximately five per cent, despite having one fewer working day compared to the previous year. In contrast, the revenue from Portfolio businesses declined by over twenty per cent due to planned outsourcing terminations, reduction of poorly profitable staffing service agreements, and a weak market demand environment. Nonetheless, consumer-driven dental health and massage services showed signs of recovery, with dental health services growing by around five per cent. Revenue in Sweden also decreased owing to contracts that expired in 2024 and the persistently weak macroeconomic conditions.

Profitability across all three business segments improved significantly, with adjusted operating profit (EBIT) increasing by 19 percent to EUR 48 million, representing 13.8 percent of revenue. The sustained high demand, bolstered by high morbidity rates, enhanced operational efficiency, and effective commercial strategies positively impacted the profitability of Healthcare Services. The relative profitability of the Portfolio businesses also experienced growth, attributed to diligent efforts. In Sweden, the turnaround met expectations despite the continued weak market environment, and the business's profitability slightly improved owing to the progress of the profit improvement programme as planned.

Our strategy execution yields positive outcomes across various indicators: high customer satisfaction and perceived treatment effectiveness reflect the superior quality of our healthcare services. The Net Promoter Score (NPS), a metric for customer satisfaction, has shown continued improvement in both appointments and hospitals, maintaining an excellent level. Medical quality has reached record levels, and the PEI index, which assesses perceived treatment effectiveness, has demonstrated significant progress. Additionally, the engagement index and availability of professionals have been robust.

Despite the heightened uncertainty of the macroeconomic environment, we remain confident in our model and our ability to further enhance efficiency and deliver value to our customers. In 2025, we are committing resources to organic growth through enhancements to our physical network and digital services. This year, we invest in state-of-the-art digital tools and equipment for industry professionals, as well as undertaking hospital and facility projects within the Healthcare Services segment. Our objective is to further enhance customer value, service quality, and operational efficiency.

Achieving growth is contingent upon the dedication of our professionals, whose efforts underpin our outstanding medical quality and customer satisfaction. These professionals engage with over 20,000 Finns daily across Finland. The foundation of healthcare is built on trust and the autonomy of professionals to deliver optimal care. At Terveystalo, our professionals conduct their work with ethical integrity, responsibility, and a patient-centric focus. Their commitment contributes significantly to health, value, and security within our society. We extend our gratitude to all our professionals who fight for healthier lives, ensuring fluent, caring, and effective healthcare services.

Timely access to treatment and high-quality, effective care are crucial for health. Ensuring that customers receive the necessary assistance and care is fundamental to our operations. At Terveystalo, we prioritise health, enabling our customers to concentrate on other meaningful matters of their lives.

Meaningful matters,

Ville Iho

Guidance for 2025

Terveystalo has updated the structure of the guidance and communicates expectations on revenue and adjusted EBIT margin (previously revenue and adjusted EBITA margin).

Terveystalo expects its full-year 2025 revenue to grow (2024: EUR 1,340 million) and adjusted EBIT to be 10.7-11.8 percent of revenue (2024: 10.5 percent).

The estimates are based on a stable demand environment, employment levels, and typical morbidity rates. The estimates account for a decrease of approximately EUR 25 million in revenue within the Portfolio Businesses segment's outsourcing operations due to ending of contracts. Profitability is expected to strengthen in all business segments. The estimates do not account for significant acquisitions or divestments.

Medium term financial targets

Profitable growth:

• EPS to grow on average by 10 percent p.a.
• We expect faster earnings per share growth in 2025, as fewer items affecting comparability are expected.

Moderate leverage ratio:

• Net debt to EBITDA not to exceed 2.5x
• Indebtedness may temporarily surpass the target level, particularly in conjunction with acquisitions.

Attractive dividends:

• At least 80 percent of net result to be distributed as dividends
• The dividend proposal must consider the company's long-term potential and financial status.

Key figures

MEUR unless stated otherwise	1-3/2025	1-3/2024	Change, %	2024
Revenue	346.9	350.2	-0.9	1,340.0
Adjusted EBITA * 1)	53.7	47.2	13.9	171.0
Adjusted EBITA, % * 1)	15.5	13.5	-	12.8
EBITA 1)	52.3	43.0	21.7	147.6
EBITA, % 1)	15.1	12.3	-	11.0
Adjusted operating profit (EBIT) * 1)	47.8	40.1	19.2	140.5
Adjusted operating profit (EBIT), % * 1)	13.8	11.5	-	10.5
Operating profit (EBIT)	46.4	35.7	29.9	116.1
Operating profit (EBIT), %	13.4	10.2	-	8.7
Return on equity (ROE) (LTM), % 1)	14.4	-5.9	-	13.5
Equity ratio, % 1)	41.5	34.7	-	39.4
Earnings per share, EUR	0.26	0.19	41.4	0.57
Weighted average number of shares outstanding, in thousands	126,622	126,605	-	126,597
Net debt 1)	497.3	564.9	-12.0	504.8
Gearing, % 1)	85.1	113.3	-	92.1
Net debt/EBITDA (LTM) 1)	2.2	2.9	-	2.3
Net debt/Adjusted EBITDA (LTM) * 1)	2.0	2.7	-	2.1
Average personnel, FTE2)	5,602	6,020	-6.9	5,841
Non-employees (end of period)3)	6,055	6,039	0.3	6,015
Sustainability
PEI-index,%4)	70.8	68.5	3.4	69.2
Net Promoter Score (NPS), appointments	88.0	86.4	1.9	87.7
Net Promoter Score (NPS), hospitals	95.4	95.0	0.4	96.2
Engagement index5)	-	-	-	4.2
* Adjustments are material items outside the ordinary course of business and these relate to acquisition-related expenses, restructuring-related expenses, gains and losses on sale of assets (net), impairment losses, strategic projects and other items affecting comparability.
1) Alternative performance measure. Terveystalo presents alternative performance measures as additional information to financial measures defined in IFRS. Those are performance measures that the company monitors internally and they provide management, investors, securities analysts and other parties significant additional information related to the company's results of operations, financial position and cash flows. These should not be considered in isolation or as a substitute to the measures under IFRS.
2) 2025 does not include Medimar Scandinavia Ab and Cityläkarna Mariehamn Ab. Financial year 2024 does not include Medimar Scandinavia Ab and the companies acquired during 2024 in Finland (SRK Group Oy, Suomen Radiologikeskus Oy, iRad Oy and Kajaanin Radiologikeskus Oy and Cityläkarna Mariehamn Ab).
3) Financial year 2024 does not include the companies acquired during 2024 in Finland (SRK Group Oy, Suomen Radiologikeskus Oy, iRad Oy and Kajaanin Radiologikeskus Oy and Cityläkarna Mariehamn Ab).
4) PEI index (Patient Enablement Instrument) is used to measure whether the patient feels that he is coping with his symptoms or illness much better, better, as before, or worse after the reception. The scale is 1-4. The PEI index is calculated by taking the percentage of patients who felt they are able to cope with their health condition better or much better and comparing it to the total number of respondents.
5) The engagement index for Terveystalo professionals is based on four questions from Terveystalo's annual professional survey. The results are used to calculate the index value, i.e. the average of the results. The questions concern supervisory work, the preconditions for success at work, work communities and commitment. The index is expressed on a scale of 1-5.

Result briefing

Terveystalo will arrange a webcast and a conference call in English on its result on Friday 25 April 2025 starting at 10:30 EEST. You can watch the webcast online at: https://terveystalo.events.inderes.com/q1-2025

You can access the teleconference by registering at the link below.
https://palvelu.flik.fi/teleconference/?id=50051648

After the registration, you will be provided phone numbers and a conference ID to access the conference.

Helsinki, 24 April 2025
Terveystalo Plc
Board of Directors

For further information, please contact:
CFO Juuso Pajunen
Tel. [phone]

Kati Kaksonen, Vice President, Investor Relations & Sustainability
Tel. [phone]
[e-mail]

Distribution:
Nasdaq Helsinki Oy
Main media
www.terveystalo.com

Terveystalo in brief

Terveystalo is the largest private healthcare service provider in Finland in terms of revenue and one of the leading occupational health providers in Finland and Sweden. We aim to create fluent, caring, and effective healthcare of the future. We offer comprehensive primary care, specialized care, and well-being services for corporates, private individuals, and public sector customers. Our digital services are accessible 24/7. We also offer our services in approximately 360 clinics, including 18 hospitals in Finland. In Sweden we offer occupational health services in approximately 140 units. Terveystalo is listed on the Helsinki Stock Exchange.

In 2024, Terveystalo served approximately 1.2 million individual customers in Finland, with around 7.6 million customer appointments. Terveystalo employs approximately 15,000 healthcare and other professionals. www.terveystalo.com