CEO review
President and CEO Ville Iho: We are on track to reach our financial targets faster than anticipated
Terveystalo's second quarter of 2024 was record strong in terms of revenue and profitability, and the profit improvement program showed its strength especially in May-June. Revenue increased by approximately 6 percent to EUR 340 million and our profitability strengthened significantly year-on-year. Adjusted EBITA increased by nearly 50 percent to EUR 43 million, representing 12.5 percent of revenue. Earnings per share increased by 91 percent year-on-year to EUR 0.11. Our profit improvement measures have had an even faster impact than expected and clearly improved our profitability also during the seasonally lower demand in the summer. We have raised our guidance for 2024 on 11 July 2024: We expect our full-year 2024 adjusted EBITA to be 11.5–12.5 percent of revenue.
The Healthcare Services segment's excellent performance continued for the fifth quarter in a row. The segment's revenue grew by more than 11 percent year-on-year to EUR 261 million in the second quarter. In addition to a strong supply, revenue was boosted by a more favourable customer and service mix and successful commercial actions. Revenue growth and improved operational efficiency increased the segment's adjusted EBITA by 67 percent to EUR 39 million, representing 15 percent of revenue. After running the profit improvement program for 20 months, our core business is on a solid footing and continues to strengthen. We continue to focus on profitable growth through operational excellence and by delivering superior customer value.
The profitability of the Portfolio businesses also strengthened significantly. The segment's adjusted EBITA increased by almost 52 percent year-on-year to approximately EUR 3 million despite the decrease in revenue. EBITA margin was 5 percent. The segment's revenue decreased by approximately 9 percent to EUR 63 million. The planned contraction of the outsourcing agreement portfolio continued. Revenue was also reduced by the proactive customer selection of staffing services and the continued subdued demand for dental services. The sales pipeline in the public market continues to develop slowly, and new tenders have been seen mainly in digital services.
In Sweden, the revenue decreased by approximately 10 percent year-on-year due to expired contracts and weakened demand and was EUR 22 million. The turnaround of business operations is being built systematically. The cost structure has been adjusted to meet demand, and in the next phase, the program will focus on increasing operational efficiency and commercial activities. We expect the impact of the program to be visible as a turnaround from the beginning of 2025 and the full run-rate impact to take place during 2025.
Over the past twenty months, we have turned the company around and created a very strong foundation for its development in the coming years. We are on track to reach our financial targets faster than anticipated.
The profit improvement program has demanded a lot from Terveystalo's employees. Achieving the turnaround has also required hard measures, which has inevitably been reflected in our eNPS results. As the program reaches its final stretch, our agenda will also change, and in the future, our actions to drive profitability will be guided even more strongly by customer and personnel experience.
I would like to thank everyone at Terveystalo for their excellent work. Our results are created through your work.
Meaningful Matters,
Ville Iho
