From growth to profitability

Terveystalo has quickly grown into the largest healthcare sector company in Finland. While we continue growing, we focus on profitability. In our view, our profitability focused growth strategy benefits our customers and the healthcare professionals that work on our premises as well as our shareholders.

Terveystalo’s strategy is based on our values: expertise and caring. Based on these we offer healthcare services that benefit humans. Our main policies include innovative solutions, growth, uniform operating methods and utilization of Group synergies and having the right people on the right places.

We are the forerunner

We have often been the first healthcare provider in Finland to implement new treatment and research methods that have proven successful elsewhere in the world. Examples from the past year include balloon sidelining of sinuses and clinical breast imaging with a 3.0-tesla magnet.

Our services are always based on the benefits they bring to our customers. We strive to provide the best possible care and results using the most up-to-date expertise, and the latest technology made possible by rapidly developing medicine. Know-how and good service attitude as well as the right people in the right places are crucial success factors for our company. We want our customers to feel that they are receiving high-quality healthcare services.

We want to continue to be a forerunner and offer the best services. We ensure the high quality level of our services and continuous development of our expertise by, for instance, offering training to our personnel. We encourage our employees and the private entrepreneurs working within the Group to obtain further professional qualifications as well as to contribute to research and development in their chosen field. Terveystalo is authorized to offer training for occupational healthcare specialists and clinical physicists.

Utilization of synergy benefits

Suomen Terveystalo was founded in 2001. Since that time, the company has made over one hundred acquisitions to grow, according to its targets, into a national healthcare service chain. Now we are focusing on improving profitability. We initiated an integration program in the fall of 2007 and in connection with this we are developing our operations as one uniform Group.

The acquisition of Medivire Työterveyspalvelut in September 2007 represented significant growth for our Group. The number of clinics grew to over 150 and our geographical presence expanded so that we were operating in some 60 cities by late 2007. In the fall we initiated necessary operational restructuring. We will reduce overlaps and simplify our support and administrative services. Our aim is clear, uniform operating methods and efficient operation in the Group network.

We have estimated that the measures to improve our profitability will result in annual synergy benefits of EUR 3–5 million, which we are expecting will materialize from this year onwards. Benefits are generated from centralizing our occupational healthcare services into one business segment, dissolving overlaps in corporate functions and regional and unit-specific administration and support functions and the combining of offices and operations in different towns. Synergy benefits are also related to utilization of services produced within the Group.

In February 2008 we increased operational efficiency by divesting our central laboratory operations to Medix Laboratoriot. In laboratory diagnostics operations, we will focus on sample taking laboratory operations and related services close to the customer interface. We estimate that a strategic partnership with Medix Laboratoriot in mass analytics and special sample research operations will produce at least EUR 0.5 million in annual savings.

Market leadership obliges

We will continue to strive for growth both organically and through acquisitions. We see growth opportunities in cooperation with the public sector, in occupational healthcare and high-quality general practitioner and specialist services as well as in producing comprehensive solutions based on these.

We estimate that the growth in private healthcare services in Finland will continue to be faster than GDP growth and that the cooperation between private and public healthcare will expand and deepen. The demand for our services in all of our customer segments – which include private individuals, insurance companies, companies and corporations and the public sector – is affected by the quality and availability of these services. We constantly try to improve the availability of our services by increasing the offering and making them versatile. We are, in addition to other operating systems, also developing our electronic customer services. We are developing our quality system based on our SFS-EN ISO 9001:2000 quality certificate.

We rapidly grew into the largest private healthcare service company in Finland. Market leadership emphasizes responsibility in all of our operations both as a developer and provider of healthcare services as well as a producer and developer of these services as a public sector partner. We will do everything to continue deserving the trust placed in us.

The cooperation between public and private healthcare services is continuously seeking new forms and has a lot to offer Finnish society. This is nothing new, as private healthcare services has a longer history than public services both in Finland and abroad.

We at Terveystalo are proud to be involved in building higher effi ciency, better functionality and good results for Finnish healthcare. We will do our best to ensure that our customers benefit as much as possible from our services.

We changed our reporting structure from the beginning of 2008. In the future, we will report our operation as Occupational Healthcare segment, Clinics and Hospitals segment and Diagnostics segment.

I would like to thank our personnel, private entrepreneurs, cooperation partners and shareholders for their cooperation during an exciting 2007, a year during which we became a listed company, carried out the largest acquisition in our history and grew into the largest healthcare service company in Finland. This year, I hope that this good cooperation that benefits all of us will continue and deepen.

Martti Kiuru