CEO Ville Iho: Strong growth in revenue and profit compared to lockdown-influenced reference period

Terveystalo CEO Ville Iho

The demand for healthcare services continued to recover in the second quarter and the demand for appointments showed growth from the pre-pandemic period. In particular, visits from private customers increased. Booking rates for appointments have risen month by month. Terveystalo’s revenue for the second quarter grew by 32% compared to the weak reference period, to EUR 275.3 (209.2) million, and our business developed favorably in all customer groups. Services related to COVID-19 continued to increase revenue as COVID-19 testing volumes remained at a higher-than-anticipated level and vaccination volumes grew. Our profitability improved significantly from the previous year; adjusted EBITA increased to EUR 29.5 (8.8) million. The comparison period in 2020 was very challenging due to the first wave of COVID-19, which explains the exceptionally high growth rates for the past quarter. Revenue and EBITA both also increased compared to the comparison period in 2019; revenue by 6.5% and adjusted EBITA by 13.9%.

Trends driven by the corona pandemic were clearly reflected in the second-quarter sales mix. The number of appointments conducted via digital channels increased by 68% year-on-year to approximately 246,000 appointments. Revenue from well-being services increased by 41%, especially due to strong demand for mental well-being, nutrition therapy and physiotherapy services.  The share of laboratory services in the sales mix remained strong, while the low number of acute infections meant that the volume of general practitioners’ appointments remained substantially below normal.

Terveystalo is the clear market leader in occupational health services in the Nordics, and we have made long-term investments in occupational health processes, services and digital tools. The acquisition of Feelgood, which is one of the leading occupational healthcare companies in Sweden, represents a perfect first step for us in scaling our occupational healthcare capabilities beyond Finland’s borders. We completed the Feelgood acquisition process in early August and will now start working together on integration and drawing up a detailed business plan in Sweden. With an almost doubled customer base and our complementary occupational healthcare capabilities, we can create added value for our customers and professionals while also improving operational efficiency. Our goal is to develop the Swedish occupational healthcare market and grow both organically and through additional acquisitions. We also see potential for expanding the range of services in the Swedish market towards more integrated chains of care.

In the consumer business, we aim to accelerate our growth and further strengthen our leadership position. To accomplish these goals, we are developing a personalized and engaging customer experience and convenient use of services. Furthermore, we invest in the broad availability of leading expertise in our chosen specialties, and developing new service products that suit the various life stages of our customers. In May, we launched a strongly digital Children’s Terveystalo to serve families with children better, more comprehensively, and in an increasingly child-friendly manner. Remote appointments are a key element of the Children’s Terveystalo service package. The concept has been received very well by both families with children and pediatricians. Revenue of our  services for children increased significantly during the second quarter. We will expand the Children’s Terveystalo concept to 13 new units in the autumn in addition to the 6 units launched  earlier. On the consumer side, we have also invested heavily in the development and marketing of a personalized, digital service experience. The results of these efforts are reflected, among other things, in the growth of number of visits to terveystalo.com, the higher self-service rates in the booking phase, and in the improved conversion rate of services.

The Government’s proposal on the reform of social and healthcare services was approved by the Parliament at the end of June. Under the proposal, the responsibility for the organization of social and healthcare services will be transferred to the 21 well-being services counties to be established and the City of Helsinki. As a result of these reforms, some of Terveystalo’s outsourcing agreements for public services will need to be renegotiated so that the new contractual terms will enter into force at the beginning of 2026 at the latest. Furthermore, there will be restrictions on the subcontracting practices for public services produced as outsourced services, but these will not have a significant impact on Terveystalo. It is clear that there is demand in the publicly funded markets under the new SOTE model, services will adapt to the new legislation and high-quality supply will continue to find demand.

Indeed, we see a number of promising growth opportunities in public customer relationships that will enable us to leverage our expertise, customer insight, and extensive network. Terveystalo’s overall service sales have seen strong growth throughout the pandemic and cooperation with the public sector has become increasingly effective. The number of open tenders for outsourcing agreements is also currently at a good level.  We have been successful in several tenders, the latest of which is the launch of a partnership in the service production of Kannelmäki health center in Helsinki. This is the City of Helsinki’s first service purchase decision concerning a health center. Operations in Kannelmäki will start this fall. This represents a very important partnership for Terveystalo, which also enables us to pursue the development of our Health Center of the Future concept.

Our most important task is still to provide measured quality care at a reasonable cost - whether it is promoting well-being, preventing diseases or treating them. We can invest in new solutions and quickly upgrade our operations to meet changing customer needs. One important enabler for this is the ISO 13485 certificate we recently received for our software development as the first Finnish health service company. With our investments, we improve the productivity of operations and the value of our services to the customer. Our actions encourage the renewal of all healthcare to improve people's quality of life and well-being. As a forerunner in the industry, we are also the best possible partner for the public sector.

We at Terveystalo work towards a future where more and more people have fast and unhindered access to healthcare and well-being services.

Toward a better tomorrow,
Ville Iho

 

Terveystalo CEO Ville Iho

Ville Iho
Chief Executive Officer