Terveystalo as an investment

The aging population and high rate of lifestyle diseases increase the demand for, and costs of, health care. People are also increasingly interested in investing in their health and well-being, which increases the demand for health services. In addition, public health care will continue to require the contribution of private health care providers to work through the treatment backlog and provide health care services efficiently and with high quality.  Treatment backlogs have been further increased by the COVID-19 pandemic.

The Finnish health care market grew at an average rate of 1.7% (CAGR) between 2016 and 2021. Terveystalo’s organic growth during the same period was three times as fast. Terveystalo’s target is annual revenue growth exceeding 5%.

Developing a scalable intelligent service platform is at the core of Terveystalo’s strategy. It consists of a physical network of clinics as well as digital services. The intelligent platform makes it possible to connect professionals with customers as efficiently as possible by providing the customer with the right service regardless of time, place, and channel, from the beginning to the end of the care path. In 2022, Terveystalo’s digital services had 2.5 million registered users. Terveystalo is in a strong position to take advantage of these capabilities also in other markets in a manner that creates value.  

Strategic and complementary acquisitions are an important component of Terveystalo’s growth strategy. Terveystalo has made over 200 acquisitions to expand its network of clinics as well as complement the range of services through expansion into new specialties and well-being services. Between 2015 and 2020, acquisitions and organic growth saw Terveystalo grow by approximately 14% (CAGR), which is ten times as high as the growth of the market. Terveystalo has strong competence in choosing acquisition targets and realizing synergies. For the major acquisitions made in 2017–2019, the synergies sought were exceeded by approximately 9% on average and these synergies saw the EV/EBITDA (LTM) multipliers of these acquisitions decrease from 13x to 6x. Good synergies have also been achieved with smaller acquisitions.

Terveystalo’s balance sheet is strong. Terveystalo’s target in terms of capital structure is a net debt/adjusted EBITDA ratio of at most 3.5 (2022: 3.2). The company may exceed its net debt target temporarily due to large acquisitions. Terveystalo’s strong balance sheet and cash flow return on investment enable the development and growth of business, both organically and through acquisitions. Terveystalo has distributed stable dividends, with the target of the dividend policy being to distribute at least 40% of the net profit for each financial period to shareholders (145% for 2022).

Terveystalo is the largest private health care provider in Finland and the clear market leader in occupational health in the Nordic region. The acquisition of Feelgood represents an important step in Terveystalo’s expansion and growth outside Finland. Our goal is to grow in the Swedish occupational health market both organically and through additional acquisitions. In the longer term, we see potential not only in the good growth opportunities in the Swedish occupational health market but also in expanding to other nearby occupational health markets and expanding the range of services in Sweden toward more integrated care chains.

For several years, surveys have shown that Terveystalo is the most attractive employer in its industry among both professionals and students.

The ability to attract and retain health care professionals is very important for Terveystalo’s growth and the execution of the company’s strategy. Terveystalo invests heavily in well-being at work, company culture and competence. Maintaining the company’s position as the most attractive employer in its industry is a core element of Terveystalo’s strategy.