CEO review

President and CEO Ville Iho: Strong earnings growth continued, building a solid foundation for future value creation 

Terveystalo continued its strong development in the third quarter of 2024. Our revenue increased by approximately 5 percent to EUR 296 million, and our profitability improved significantly from the comparison period. Our profit improvement measures have also proven effective during seasonally lower demand. Adjusted EBITA increased by more than 62 percent to EUR 34 million, corresponding to 11.6 percent of revenue. Our earnings per share quadrupled year-on-year, reaching EUR 0.12.

The Healthcare services segment's excellent performance continued for the sixth quarter in a row. The segment's revenue grew by almost 11 percent year-on-year, reaching EUR 232 million in the third quarter. Strong supply, improved sales mix, successful commercial operations, and an early and strong flu season each contributed to revenue growth. Revenue grew in all customer groups. Growth and improved operational efficiency increased the segment's adjusted EBITA by 67 percent to EUR 34 million, representing approximately 15 percent of revenue. The foundations of our core business are solid and will continue to strengthen as we focus on profitable growth, operational efficiency, medical quality, and value-creating services for our customers.

Despite a 10% drop in revenue, Portfolio businesses saw a significant improvement in profitability. Adjusted EBITA rose by 70% year-on-year to about EUR 3 million, making up 6% of the segment's EUR 54 million revenue. Loss-making outsourcing deals have for the most part ended, and Staffing Services now selects customers more carefully to boost profitability. However, demand for oral health services remains subdued and sales in the restructured public market continue to progress slowly. Only digital services have seen new tenders. 

Revenue from the Swedish business decreased by approximately 10 percent year-on-year due to expired contracts and weakened demand and was EUR 14 million. The turnaround in profitability is being built systematically. The cost structure has been adjusted to meet demand, and in the next phase, we will focus on increasing operational efficiency and commercial activities. We expect a turnaround in profitability from the beginning of 2025 and the full run-rate effect to materialize during 2025.

Over the past 24 months, we have built a solid structure and foundation for future value creation. We have adjusted our guidance range for 2024 adjusted EBITA margin to 12-12.5% and we anticipate meeting our financial target for profitability one year earlier than planned.  At the same time, our medical quality and customer satisfaction are consistently high, thanks to the dedication and hard work of our employees and professionals. We aim to further develop integrated healthcare and provide more fluent, caring, and effective services for our customers. We will discuss the next stage of our strategy at our December Capital Markets Day.

Meaningful matters,

Ville Iho