Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Terveystalo PLC (OHEL:TTALO, Financial) achieved a strong Q3 performance, with a 5% growth in revenue and an EBITA margin of 11.6%.
- The company reached its financial targets in profitability one year ahead of schedule, with a 12.3% EBITA margin over the last 12 months.
- Customer satisfaction and medical quality have been maintained at high levels, indicating robust operations and a strong company culture.
- The Finnish segments are delivering strong results, with healthcare services showing growth and improved margins.
- The company has a strong cash flow and a low net debt level, providing capacity for future investments in growth opportunities.
Negative Points
- The Swedish operations are still lagging behind, with the turnaround program progressing but not yet showing positive bottom-line results.
- Revenue in portfolio businesses is declining due to the termination of outsourcing contracts and challenges in the consumer market.
- The demand environment in Sweden remains weak, with some ended customer contracts impacting revenue.
- The company anticipates a challenging Q4, with one-time costs impacting performance, including a collateral labor agreement payment and a one-off payment to staff.
- The public sector revenue has been deliberately reduced as the company focuses on maintaining a healthy margin structure, leading to a decline in revenue from this segment.
Q & A Highlights
Q: How is the demand and growth picture in early Q4, considering the flu and influenza epidemics in Finland?
A: Juuso Pajunen, CFO, noted that the flu season started mid-August, resulting in approximately 2,000 more appointments per week for upper respiratory diseases. This trend continued into early October. Corporate and insurance customer demand remains positive, while consumer demand is slightly affected by economic conditions.
Q: Can you provide examples of growth-focused actions, or do we need to wait until the Capital Markets Day (CMD)?
A: Ville Iho, CEO, mentioned that while detailed plans will be shared at the CMD, they have already started targeted investments in their portfolio to accelerate growth. They have also reorganized their portfolio businesses and launched a new brand to prepare for future market opportunities.
Q: Are there any unusual trends in employee churn or employee Net Promoter Score (NPS)?
A: Ville Iho, CEO, stated that there are no dramatic changes in employee churn, with normal fluctuations observed. The supply of employees has been developing positively, and the company appreciates the team's efforts in maintaining high customer satisfaction.
Q: Regarding financial leverage, is the current low level a hint towards future acquisitions?
A: Ville Iho, CEO, clarified that the low financial leverage indicates they have the capacity for positive growth investments, both organic and inorganic, should opportunities arise. More details will be discussed at the CMD.
Q: What is the outlook for the Swedish market, and does a turnaround require macroeconomic improvements?
A: Ville Iho, CEO, acknowledged that Q4 will be challenging, but they expect sequential improvements. The Swedish macro environment is difficult, but their plan is designed to deliver satisfactory results even with lower revenues.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
