The most significant short-term risks and uncertainty factors

Terveystalo’s risk management is governed by the risk management policy approved by the Board. The policy defines goals, principles, organizations, responsibilities, and practices for risk management. The management of financial risks complies with the Group’s financing policy approved by Terveystalo’s Board.

The risks and uncertainty factors described below are considered to potentially have a significant impact on the company’s business operations, financial results, and outlook within the next 12 months. The list is not intended to be exhaustive. The order in which the risks are presented does not describe the magnitude of the impact of the risks' realization or the probability of their occurrence.

• Achieving the targeted financial effects of the launched profit improvement program is necessary to combat the impact of high inflation and to achieve the financial targets set by the company.
• The company’s business operations rely on its capacity to identify, recruit, and retain competent and professional healthcare professionals, employees, and executives. The increased supply of services and increased competition may affect the availability of healthcare professionals, particularly in major cities. Turnover in key employees involves the risk of losing knowledge and expertise.
• Weak general economic performance and high inflation in Finland and their effects on the financial circumstances of private individuals, employers, and public entities may adversely affect Terveystalo’s business and results of operations by decreasing the demand for Terveystalo’s services, as well as may adversely affect the availability of financing.
• The development and implementation of information system projects and services, service products, and operating models involve risks. The company develops new digital customer solutions, which increases the overall risk related to information systems. A failure in the development of digital systems may expose Terveystalo to potential technical faults and disturbances.
• The company may not be able to find suitable acquisition targets or expansion opportunities under favourable terms, and the integration of acquisition targets is not necessarily realized as planned.
• Terveystalo’s expansion to new geographical locations involves several risks, and failure to identify expansion opportunities, recruit new employees, and achieve estimated benefits may adversely affect Terveystalo’s business and the results of operations.
• The company’s business is very dependent on functioning information systems, data communication, and external service providers. Interruptions can result from hardware failure, software failure, or cyber threats. Long-lasting malfunction of information systems or payment transfers can lead to significant loss of sales and a decline in customer satisfaction.
• Endangered information security or privacy can lead to losses, claims for damages, and endanger reputation.
• Pandemics or epidemics and related restrictive measures may adversely affect the business operations of Terveystalo through, among other things, demand for certain healthcare services and challenges in the supply chain.
• Changes in the competitive landscape, new competitors entering the markets, and increasing price competition may have a negative impact on the company’s profitability and growth potential.
• Terveystalo is exposed to changes in demand for occupational healthcare services due to demographic trends, aging and shrinking working-age population.
• The Social Welfare and Healthcare Reform in Finland and its legal interpretations may have impacts on Terveystalo’s business and results of operations.
• Changes in compensation systems for healthcare services may adversely affect Terveystalo’s business, financial position, and results of operations.
• Failures or deficiencies in the operational risk management, medical quality, and internal control processes may result in failure of quality control, including medical quality, or otherwise adversely affect Terveystalo's profitability and reputation.
• Terveystalo’s operations could be subject to labour disruptions or disputes.
• The company is a party to and may become a party to, legal action or administrative procedures initiated by the authorities, patients, or third parties. According to the company’s opinion, its currently pending legal obligations and court cases are not significant in nature.

Risk management at Terveystalo is described in more detail here.