CEO review

President and CEO Ville Iho: Successful year of profitable growth

In 2024, we achieved strong results in a challenging macro environment. Our profitability target was reached ahead of schedule and our financial position is very strong. In addition to improved financial performance, customer satisfaction, professional engagement, and medical quality are also at record levels. Our revenue grew by 4 percent to EUR 1.34 billion in 2024, and adjusted EBITA was 12.8 percent of revenue. Earnings per share increased to EUR 0.57. The Board of Directors proposes to the Annual General Meeting a dividend of EUR 0.48 per share (in accordance with our updated dividend policy) in 2025.

The fourth quarter, which ended a successful 2024, was strong by all indicators. Our revenue increased by approximately 3 percent to EUR 354 million, and our profitability improved significantly from the comparison period. Adjusted EBITA increased by more than 19 percent to EUR 47 million, corresponding to 13.3 percent of revenue.

The Healthcare Services segment's good performance continued for the seventh quarter in a row. Brisk revenue growth, structurally improved profitability, and record-high customer satisfaction create a strong foundation for the current year and the next phase of the strategy. Following our profit improvement programme, we have accelerated investments in our physical network and digital services to support organic growth. Our objective is to consistently improve our service competitiveness, customer value, medical quality, and operational efficiency.

Revenue in the Portfolio businesses segment decreased in the fourth quarter due to the planned termination of loss-making outsourcing agreements, elimination of low margin staffing contracts, and weak consumer purchasing power. Non-recurring items related to personnel costs also weakened profitability. However, profitability for the full year improved thanks to determined work in difficult market conditions. The portfolio businesses are now on a stronger footing, and the risks of old contracts have been reduced. During the current strategy period, the segment aims to enhance profitability, pursue growth in various services, including dental health, and explore new opportunities in public markets.

Revenue from the Swedish business decreased in the fourth quarter due to expired contracts and weak demand caused by the macro environment. The market has been challenging for 18 months, but signs of recovery are emerging. In Sweden, the profitability programme initiated a year ago has led to cost adjustments and enhanced operational efficiency. The monthly financials already show an improvement in profitability. The programme will maintain its emphasis on enhancing operational efficiency while progressively expanding its focus on commercial activities. We anticipate that the impacts of the programme will become evident as a turnaround starting from early 2025, and the targeted SEK 120 million annual run-rate EBITA improvement to materialize during the year.

During the Capital Markets Day in December, we outlined our upcoming strategy phase and revised financial targets. Our strategy revolves around providing fluent, caring, and effective integrated care for our customers, ensuring their needs are met in the best possible way. By seamlessly integrating services across different stages of the care path and effectively using data, we aim to offer exceptional customer experience and medical quality. Over the next two years, we will significantly improve the efficiency of appointment processes and support functions through the integration of automation and AI. Our sustained investments in our digital platform will facilitate this integration, ensuring that our customers benefit from the most advanced technologies available.

A warm thank you to our customers and Terveystalo employees for a successful year 2024. Our company is stronger than ever, we have successfully reduced our risk profile and we have developed clear strategies to further enhance performance across our three business areas. Our focus remains on profitable growth, continuous improvement of service quality for our customers, and delivering shareholder value. We target a 10 percent EPS growth and aim to maintain a net debt to EBITDA ratio of a maximum of 2.5 times. In line with our commitment to our shareholders, we will distribute at least 80 percent of net profit as dividends.

Long-term trends such as the aging population, indicate the potential for growth in private healthcare, with favourable conditions for sustained value creation.

Meaningful matters,

Ville Iho