Terveystalo Oyj: Terveystalo Group Half-Year Report January-June 2025: Strong profitability continued, driven by operational efficiency

Terveystalo Plc, Half-Year Report 2025 17 July, 2025 at 09:00 EEST

This release is a summary of Terveystalo's Half-Year Report January-June 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/

April-June 2025 in brief

• Revenue decreased by 5.5 percent year-on-year to EUR 321.5 (340.1) million.
  There was one working day less than during the comparison period.
  The Healthcare Services segment revenue decreased by 1.6 percent to EUR 257.4 (261.4) million. The working-day adjusted revenue was flat year-on-year.
  Portfolio Businesses' revenue decreased by 21.8 percent to EUR 49.0 (62.7) million. The revenue from Sweden decreased by 7.3 percent and amounted to EUR 20.5 (22.1) million.
• Adjusted¹⁾ operating profit (EBIT) increased by 5.1 percent year-on-year to EUR 36.7 (34.9) million, representing 11.4 (10.3) percent of revenue.
  Improved operational efficiency and a more favourable service mix strengthened the adjusted EBIT of Healthcare Services. In Portfolio Businesses, adjusted EBIT increased from the comparison period, due to the termination of low margin outsourcing contracts and improved operational efficiency. In Sweden, adjusted EBIT improved slightly primarily due to improved operational efficiency.
• Items affecting comparability¹⁾ with a negative effect on EBIT were EUR 3.3 (10.4) million.
• Operating profit (EBIT) increased by 36.2 percent and amounted to EUR 33.4 (24.6) million.
• The result for the period was EUR 22.2 (14.3) million.
• Earnings per share (EPS) increased by 55.1 percent and amounted to EUR 0.18 (0.11).
• Cash flow from operating activities was EUR 40.5 (44.4) million.
• NPS (Net Promoter Score) for appointments was 86.8 (86.4). NPS for hospitals was 95.4 (95.2).

January-June 2025 in brief

• Revenue decreased by 3.2 percent year-on-year to EUR 668.5 (690.4) million.
  There were two working days less than during the comparison period. The revenue of the Healthcare Services segment increased by 1.6 percent to EUR 537.9 (529.4) million. The revenue of Portfolio Businesses decreased by 21.8 percent to EUR 99.6 (127.3) million. The revenue from Sweden decreased by 9.1 percent to EUR 41.0 (45.1) million.
• Adjusted¹⁾ operating profit (EBIT) increased by 12.6 percent year-on-year to EUR 84.5 (75.1) million, representing 12.6 (10.9) percent of revenue.
  Profitability strengthened in Healthcare Services and Portfolio businesses due to improved operational efficiency and commercial measures. Profitability in Sweden improved slightly, following the planned progress of the profit improvement programme.
• Items affecting comparability¹⁾ with a negative effect on EBIT were EUR 4.7 (14.8) million.
• The result for the period was EUR 55.6 (37.9) million.
• Earnings per share (EPS) increased by 46.5 percent and amounted to EUR 0.44 (0.30).
• Net debt/EBITDA was 2.2 (2.8).
• Net debt/adjusted EBITDA was 2.1 (2.5).
• Cash flow from operating activities was EUR 67.8 (93.5) million.

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, strategic projects, and other items affecting comparability. Adjustments related to the profit improvement programs were approximately EUR 3.0 (4.9) million during the second quarter and EUR 5.3 (9.4) million during January-June.}

President and CEO Ville Iho: Strong profitability development continued

Terveystalo's profitability continued to strengthen in the second quarter of 2025 and was the best ever in both relative and absolute terms, thanks to improved operational efficiency across the board. Profitability improved in all three business segments and adjusted operating profit (EBIT) increased by 5 percent to EUR 37 million and represented 11.4 percent of revenue. Earnings per share increased by 55 percent to EUR 0.18.

The improvement in operational efficiency continued to strengthen our profitability, despite revenue headwinds. In the Healthcare Services business area, insurance demand continued to strengthen, but development in occupational health was subdued. In addition to the shorter quarter in terms of working days than in the comparison period, this is due to, among other things, a decrease in the number of occupational health end users and a change in corporate customers' buying behaviour toward more cautious spending due to the uncertain macroeconomic situation. As expected, the revenue of the Portfolio Businesses decreased by more than twenty percent due to expired outsourcing contracts, a reduction in low margin staffing volumes, and the subdued market situation in general. There are signs of openings in the public market, and two partnerships of significant size will be put out to tender in early autumn. Demand for consumer-driven oral health services recovered, and the revenue of oral health services increased slightly. Revenue in Sweden also decreased due to contracts that expired in 2024 and the continued weak economic environment.

The strengthened operational foundation positions us well to advance the development of our services in all customer groups. We have a strong focus on customer-oriented product development and technology-driven reduction of production costs. After the inflation spike, volume will become the main growth driver in the healthcare services market. In occupational health, the focus is particularly on the effectiveness of preventive services, reducing production costs and streamlining business services for corporate customers. In insurance customers, we are looking for better integration of the customer journey between the insurance company and our services, and better management of claims costs through more efficient customer guidance. Our objective is to provide comprehensive and customised solutions for public healthcare. The development of digital services continues to be vigorous across all customer relationships.

In our largest customer segment, occupational health, our customers' needs evolve in response to shifts in financial circumstances, workplace dynamics, and broader trends within working life. We want to continue to be the most desirable partner for companies, and we are investing in the renewal of our services through a dedicated, multi-year program in which we improve the effectiveness, cost-effectiveness, and transparency of our services from the corporate customers' point of view. Medical leadership in occupational health will continue to be at the core of our services, but we see that technology can significantly improve the overall customer experience for all types of customers. We will share more about our technology investments in this area in the coming months.

In addition to public health care and a developed occupational health and insurance market, we still need new solutions in Finland to secure access to care. The freedom of choice pilot for people aged 65 and over, which will be launched in the autumn, is a socially significant initiative that, if successful, will improve the availability of health services, strengthen freedom of choice, and lighten the burden on public health care. In the freedom of choice pilot, people aged 65 and over can visit a private general practitioner of their choice participating in the pilot at the price of the public health care client fee. We will open up our entire extensive network of clinics to the freedom of choice pilot and invest in the provision of these services. We expect the pilot to bring significant new volumes to the Healthcare Services from September 2025 onwards.

When it comes to health, smooth access to treatment and high-quality, effective care are everything. Satisfied customers who feel that they are getting the help and care they need are the foundation of everything we do. At Terveystalo, we focus on health so that our customers can focus on other important things in life.

Meaningful matters,

Ville Iho

Guidance for 2025

Terveystalo clarifies the structure of its guidance and now provides a range for adjusted EBIT in euros instead of revenue and adjusted EBIT margin.

Terveystalo expects its full-year 2025 adjusted EBIT to be EUR 155-165 million (2024: EUR 140.5 million).

The estimates are based on a stable demand environment, employment levels, and typical morbidity rates. The estimates account for a decrease of approximately EUR 30 million in revenue within the Portfolio Businesses segment's outsourcing operations due to the ending of contracts. Profitability is expected to strengthen in all business segments. The estimates do not account for significant acquisitions or divestments.

Guidance for 2025 on 25 April 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 the 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	4-6/2025	4-6/2024	Change, %	1-6/2025	1-6/2024	Change, %	2024
Revenue	321.5	340.1	-5.5	668.5	690.4	-3.2	1,340.0
Adjusted EBITA * 1)	42.5	42.5	0.0	96.2	89.7	7.3	171.0
Adjusted EBITA, % * 1)	13.2	12.5	-	14.4	13.0	-	12.8
EBITA 1)	39.2	32.1	22.2	91.5	75.1	21.9	147.6
EBITA, % 1)	12.2	9.4	-	13.7	10.9	-	11.0
Adjusted operating profit (EBIT) * 1)	36.7	34.9	5.1	84.5	75.1	12.6	140.5
Adjusted operating profit (EBIT), % * 1)	11.4	10.3	-	12.6	10.9	-	10.5
Operating profit (EBIT)	33.4	24.6	36.2	79.8	60.3	32.5	116.1
Operating profit (EBIT), %	10.4	7.2	-	11.9	8.7	-	8.7
Return on equity (ROE) (LTM), % 1)	-	-	-	16.3	-4.5	-	13.5
Equity ratio, % 1)	-	-	-	39.0	36.9	-	39.4
Earnings per share, EUR	0.18	0.11	55.1	0.44	0.30	46.5	0.57
Weighted average number of shares outstanding, in thousands	126,655	126,605	-	126,638	126,605	-	126,597
Net debt 1)	-	-	-	519.4	569.8	-8.8	504.8
Gearing, % 1)	-	-	-	95.3	110.8	-	92.1
Net debt/EBITDA (LTM) 1)	-	-	-	2.2	2.8	-	2.3
Net debt/Adjusted EBITDA (LTM) * 1)	-	-	-	2.1	2.5	-	2.1
Average personnel, FTE2)	-	-	-	5,619	5,956	-5.7	5,841
Non-employees (end of period)3)	-	-	-	6,016	6,020	-0.1	6,015
Sustainability
PEI-index, %4)				70.4	70.0	0.6	69.2
Net Promoter Score (NPS), appointments				86.8	86.4	0.5	87.7
Net Promoter Score (NPS), hospitals				95.4	95.2	0.2	96.2
Engagement index5)				4.2	4.2	2.4	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 Recuror Oy, Veikkolan hammaslääkäriasema Oy, 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 result webcast and conference call in English on 17 July 2025, starting at 10:30 EEST. You can watch the webcast online at: https://terveystalo.events.inderes.com/q2-2025

Conference call:
You can access the teleconference by registering on the link below. After the registration you will be provided phone numbers and a conference ID to access the conference. https://palvelu.flik.fi/teleconference/?id=50051649
If you wish to ask a question, please, dial *5 on your telephone keypad to enter the queue.

Helsinki, 16 July 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