Terveystalo Group half-year report 1 January – 30 June 2020


Terveystalo Plc, half-year report, 6 August 2020 at 9:00 EEST

This release is a summary of Terveystalo's half-year report 1 January – 30 June 2020. The full release is attached to this stock exchange release and is available on our website at: https://www.terveystalo.com/en/investors/Financial-information/.

April–June 2020 in brief

  • Revenue decreased by 19.1 percent year-on-year to EUR 209.2 million (258.6).
  • Adjusted1) earnings before interest, taxes, and amortization (EBITA) decreased by 66.0 percent to EUR 8.8 million (25.9), representing 4.2 (10.0) percent of revenue.
  • Adjusted items affecting comparability were EUR 0.8 million (2.2).
  • Profit for the period was EUR -1.5 million (10.3).
  • Earnings per share (EPS) were EUR -0.01 (0.08).
  • Cash flow from operating activities was EUR 35.9 million (48.6).

January–June 2020 in brief

  • Revenue decreased by 11.4 percent year-on-year to EUR 466.5 million (526.4).
  • Adjusted1) earnings before interest, taxes, and amortization (EBITA) decreased by 45.6 percent to EUR 31.7 million (58.3), representing 6.8 (11.1) percent of revenue.
  • Adjusted items affecting comparability were EUR 3.1 million (2.9).
  • Profit for the period was EUR 7.3 million (27.6).
  • Earnings per share (EPS) were EUR 0.06 (0.22).
  • Net debt/adjusted EBITDA1)2) was 3.4 (4.1)
  • Cash flow from operating activities was EUR 68.8 million (97.7).

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, net gains and losses on sale of assets, strategic projects, and other items affecting comparability.
  2. The reference period includes only six months of Attendo Health Services’ result.

Ville Iho, CEO: An exceptional quarter challenged the entire industry, Terveystalo passed the test well
As expected, operations in the second quarter were dominated by the management of the emergency situation created by the Covid-19 pandemic. As we indicated in our report on the first quarter, our revenue from corporate and private customer groups declined by 30 percent in April. All operations had to be heavily adjusted throughout the quarter due to the pandemic situation, containment measures, and their impact on demand. When the pandemic subsided, the restrictions were gradually lifted in May–June and demand recovered in line with our expectations. Demand has continued to recover in July, and for private customers we have already reached last year's revenue levels.

In the second quarter, demand decreased due to Covid-19 impact on both non-acute care and acute illness. The decline was particularly strong in doctor visits related to various infections and lifestyle diseases such as cardiovascular disease. In addition, oral health activities had to be severely curtailed. The decline in demand related to long-term illnesses, oral health, and general non-acute care is largely pent up demand that, according to our customer service data, has begun to subside; since July, non-acute care bookings for the fall have begun to grow rapidly.

The crisis has been challenging for the whole industry. However, Terveystalo has been successful in managing the situation medically, customer service wise and financially. Early on in the crisis, we began to take measures to safeguard our profitability and cash flow. We froze our external service purchasing, re-evaluated investment needs, and closed down smaller units based on demand. We also adjusted the number of employees per unit and per service according to reduced demand through temporary lay-offs. Our financing position has remained strong throughout the crisis. To ensure flexibility in all scenarios, we agreed on EUR 40 million in additional financing in June. Although demand is now recovering as expected, the development of the pandemic has been exceptionally difficult to predict. If necessary, we are prepared to continue mitigation measures should demand again decline in the fall.

Operationally, we focused on matching supply as accurately as possible with rapidly changing demand. We established more than 40 Covid-19 testing units, built testing capacity and strengthened our supply in remote service channels. Our digital capability enabled us to swiftly respond to totally new level of demand for our remote services; the number of remote appointments peaked at 11,000 per day during the quarter, and our customers were able to contact a physician via chat within seconds. More than 30,000 coronavirus tests have been carried out, with the results being available in 1.5 days on average. In May, we also launched the most accurate antibody test in the market in cooperation with Synlab. We will also introduce a quick test to the autumn flu season to better manage the pandemic. We are well prepared to serve our customers in the fall, regardless of what it may bring.

Our operations during the crisis strengthened our customers 'confidence and our customer satisfaction rose to new records from one month to the next, with the Net Promoter Score (NPS) at 83 in June (73 in December 2019). Despite being at the heart of the Covid-19 pandemic, Terveystalo professionals remained healthy. We responded quickly to new demand and we created entirely new service solutions related to the COVID-19 strategy, from risk assessment to testing and tracing to enable a quick return to normal for our customers and society as a whole. I am proud and grateful for the commitment, capacity for renewal, and determination that Terveystalo’s employees have shown during this time.

In the midst of the crisis, we worked on our strategy for 2021–2025. COVID-19 has not changed the trend of people being increasingly interested in investing in their well-being. We see growth potential particularly in services that support comprehensive well-being and lifelong health. One of our three strategic focus areas will be to develop health partnerships with our customers. We are building a model for supporting our customers and keeping in touch with them, anticipating their needs, and providing comprehensive well-being services. Our other focus area is the development of the most intelligent service model in our industry, one that will enable us to provide our customers with the right service regardless of time, place, and channel, from the beginning of the treatment path to its end. Expansion through acquisitions remains to be our third focus area.

While our strategy is not reliant on the development of the publicly funded market or policy decisions concerning social and health services, the industry-leading competencies that are at the core of our strategy would also serve public buyers and expanding our role within the Finnish healthcare would improve the whole system. We will provide more information on our strategy and its implementation at our Capital Markets Day to be organized in Helsinki on 2 September 2020.

My first half year as Terveystalo’s CEO has been eventful to say the least. I knew I was coming to an interesting world and this spring has offered an intensive course on different aspects of the industry. The exceptional circumstances have underscored the importance of healthcare as an industry and the significance of our work for society as a whole. The past six months have also reinforced my view of Terveystalo as a company with great potential and Terveystalo employees as a professional, hard-working and value driven team. While Terveystalo is already a leading player in its industry, there are still many opportunities for us to bring in best practices from other industries and drive the continued development of the healthcare sector. We will keep fighting for a healthier life.

Towards a better tomorrow,
Ville Iho


  • In the short term, the market environment is still uncertain due to the changes in consumer behavior related to the COVID-19 pandemic, and predicting demand is challenging in the short term. For demand to recover to the normal level in the second half of 2020, it would be necessary that no significant restrictions are imposed and that consumer behavior would return to normal. In July 2020, revenue from corporate customers declined only by approximately 3 percent and revenue from private customers grew already by approximately 9 percent year-on-year.
  • In the corporate customer segment, for demand to recover to the normal level depends on no significant restrictions on movement being imposed and the resumption of more normal daily life at workplaces. The recovery of the demand for acute medical care and non acute care is uncertain but demand for preventive and statutory occupational health services will normalize. The demand for remote services will increase considerably. Significant changes in the employment rate may be reflected in the underlying demand.
  • In the private customer segment, the pent-up demand accumulated during the crisis is expected to release gradually and the normalization of overall demand is expected, provided that significant restrictions — particularly on movement — are avoided. The recovery of the demand for acute and non-acute medical care is uncertain. The demand for remote services will increase considerably. Significant changes in consumer confidence may be reflected in the underlying demand.
  • Normalization of public sector demand is expected in occupational health, service sales and staffing services.

These views are based on the expected development of demand for Terveystalo’s services within the next six months, compared with the past six months.


The impacts of COVID-19 and the measures taken by Terveystalo

To minimize the impacts of the pandemic, Terveystalo has adjusted its operations to the exceptional circumstances and safeguarded the cash flow and profitability of the business by, for example, freezing service purchasing, re-evaluating investment needs, postponing the payment of dividends to the third quarter, freezing replacement recruitment and temporarily laying off employees in positions where work has temporarily decreased and/or the company’s conditions for providing work have temporarily decreased. The full-time temporary lay-off notices given concerned approximately 576 persons (12 856 calendar days in total) during the review period, and part-time lay-off notices concerned approximately 1 342 persons. At the end of June, 118 employees were temporarily laid off full-time and approximately 829 employees were temporarily laid off part-time.  The company has also negotiated new payment terms with suppliers and lessors and made demand-based decisions on the closure of oral health units as well as some smaller clinics and occupational health units. Opening hours have also been reduced to correspond to local needs.

Due to the uncertainty in the economic operating environment, the credit loss risk of trade receivables and the impairment risk of assets were assessed in light of the changed market outlook and latest forecasts in connection with the financial reporting on the second quarter. Terveystalo’s analysis did not give any indications of asset impairment that would call for additional impairment testing. The risk of credit losses related to trade receivables was not found to have increased significantly and it was determined that there is no need to change the credit loss recognition principles.

The company’s liquidity and financing situation has remained strong even in the exceptional circumstances. During the quarter, Terveystalo also agreed on additional financing of EUR 40 million.  Due to the prevailing uncertainty, Terveystalo has increased the notes on financing in its reporting on the second quarter. More information on the company’s liquidity, assets, and liabilities as well as the maturity of loans is provided in Note 12.

The company estimates that, in addition to the direct impacts of the crisis, changes in the employment rate and consumer confidence may be reflected in the underlying demand even after the acute stage of the crisis has passed. Nevertheless, the company estimates that its diverse customer base and service selection will mitigate the impacts on its business from any changes in demand for individual services or in individual customer relationships.


Key figures

Terveystalo Group, EUR million

Change, % 1–6/
Change, % 2019
Revenue 209.2 258.6 -19.1 466.5 526.4 -11.4 1,030.7
Adjusted EBITDA * 1) 24.0 40.9 -41.4 62.2 88.7 -29.9 176.3
Adjusted EBITDA, % * 1) 11.5 15.8 13.3 16.9 17.1
EBITDA 1) 23.2 38.7 -40.2 59.1 85.8 -31.2 171.2
EBITDA, % 1) 11.1 15.0 12.7 16.3 16.6
Adjusted earnings before interest, taxes and amortization (EBITA) * 1) 8.8 25.9 -66.0 31.7 58.3 -45.6 115.1
Adjusted EBITA, % *1) 4.2 10.0 6.8 11.1 11.2
EBITA 1) 8.0 23.7 -66.2 28.6 55.4 -48.4 110.0
EBITA, % 1) 3.8 9.2 6.1 10.5 10.7
Adjusted EBIT * 1) 1.3 18.8 -93.2 16.6 44.5 -62.6 86.5
Adjusted EBIT, %  * 1) 0.6 7.3 3.6 8.4 8.4
EBIT 0.5 16.7 -97.1 13.5 41.6 -67.5 81.4
EBIT, % 0.2 6.4 2.9 7.9 7.9
Return on equity (ROE), % 1) 6.3 10.5 10.3
Equity ratio, % 1) 38.8 37.8 39.9
Earnings per share (EUR) -0.01 0.08 0.06 0.22 0.43
Gearing, % 1) 95.7 111.4 101.3
Net debt/adjusted EBITDA (last 12 months) 1) 2) 3.4 4.1 3.1
Total assets 1,373.6 1,361.3 0.9 1,359.3
Average personnel in person-years 5,000 4,791 4.4 4,943
Personnel (end of period) 8,079 7,165 12.8 8,685
Private practitioners (end of period) 5,203 5,000 4.1 5,068
Net Promoter Score (NPS), appointments 82.8 71.8 72.5
Employee Net Promoter Score (eNPS) 19 29 9
Mixed waste intensity3) 5.06 5.05 0.2 4.85

*) Adjustments are material items outside the ordinary course of business, associated with acquisition-related expenses, restructuring-related expenses, net gains and losses on sale of assets, strategic projects, and other items affecting comparability.

1) Alternative performance measure. In addition to the IFRS figures, Terveystalo presents additional, alternative performance indicators which the company monitors internally and which provide the company management, investors, stock market analysts, and other stakeholders with important additional information concerning the company’s financial performance, financial position, and cash flows. These performance indicators should not be reviewed separate from the IFRS figures and they should not be considered to replace the IFRS figures.

2) The reference period includes only six months of Attendo Health Services’ result.

3) Amount of mixed waste (metric tons) relative to total revenue (100 million)


Terveystalo will arrange a webcast in English on its result on August 6, 2020 starting at 11:00 EET.

You can watch the webcast online at: https://terveystalo.videosync.fi/2020-q2-results

To ask questions, please join the telephone conference 5–10 minutes prior to the start time using your local number (Finland: +358 981 710 310, Sweden: +46 856 642 651, UK: +44 33 3300 0804, US:
+1 631 913 1422. If you are calling from another location, please use any of the numbers above. The Participant Passcode is 69590726#.

Helsinki, August 6, 2020
Terveystalo Plc
Board of Directors

For further information, please contact:
Ilkka Laurila, CFO
Tel. +358 30 633 1757

Kati Kaksonen, Director of Investor Relations and Corporate Responsibility
+358 10 345 2034

Nasdaq Helsinki Oy
Main media