Terveystalo Oy Ord

forecasted in our plan was in occupational health, and that's specifically in the buying behavior, lower buying activities in our existing customers than we saw during Q1. That's partly seasonal, partly it's due to the pressure on different companies with their own finances, and we are taking action on that front. that's going to be high focus going forward after summer break during H2. But all in all, looking at the revenue picture and market opportunities, there's, as I said, ample opportunities to grow. This will be further supported by a fairly active M&A market, where we are also taking action. Kela65, it's an exciting new model. We have, of course, as a backbone public system in Finland, we have mature occupational health care and insurance market. But to make sure that there's access to services for all of the segments, new innovation is needed, and Kela65 is a positive model. a positive push to improve access to care for people who typically fall out from workforce and fall out from occupational health care services. Under this scheme, citizens over 65 can use private services with the same fee as they would be using public services. And the expected volumes in this trial will be material. And Terve Stalo's position to capture its fair share of the market is very good. Looking at the consumer preference in this segment, Terve Stalo is number one choice. And we are all in this pilot. And it's going to support H2 revenue. We acknowledge that there was a softness in occupational health care during Q2. We are taking action. We are investing heavily in customer-facing solutions as we speak. In technology front, we hope that we will be able to disclose some exciting news in Q2. in the area during the coming weeks, we will design our services to cater for changed market demands and customer expectations, and we will improve transparency so that buying is easier and paying is more understandable and traceable. Technology continues to be a cornerstone of our development agenda. We have made good progress already with the efficiency in digital services, and that journey will actually accelerate going forward. We are seeing that the the whole journey from customer recognition, customer data, patient guidance to digital or physical channels, and improving brick-and-mortar efficiency, and specifically the digital efficiency, will allow us to improve efficiency materially and also to improve develop services for our customers with lower price points and at the same time higher margin. So customer steering, customer recognition, customer data, heightened efficiency in the services, regardless of the modality, will be the key, and H2, we are in a position to make some exciting launches in this area. Architecture is there, capability is there, and as Juuso will explain later, our ability to invest into this area is there. With that one, I welcome CFO Juuso Pajonen to the stage.

Thank you, Ville. And good morning to all of you. My name is Jusuf Paivonen and I will present our Q2 numbers to all of you. So let's start from the group level. I think that it's very good to note and I'm really happy to state that this is the all-time best second quarter in absolute EBIT and in relative EBIT. And if you look on the EBIT numbers, all of our segments improved. So we have relative profitability improvement and absolute profitability improvement in healthcare services, in portfolio businesses, in Sweden, and even in the reconciliation items. So we are solid, efficient, lean and mean machine when we look how we can digest the revenues. But then we do know and do acknowledge that we had headwinds in the revenues and The total volumes did not meet our ambitions, like Ville explained. But then it's still very good to remember that we have the megatrends that support us. If we look shorter term, we have the Kela 65, we have the gradual opening of the public market, and we have a solid plan what comes to the occupational health. And all of this one is tied up with our very strong digital capabilities and the digital transition that is happening at the moment. So record strong second quarter what comes to profitability and revenues will follow. Then if we take a bit deeper look under the hood and go to the segments. So we have healthcare services, we have the profitability increasing both in relative terms and in absolute terms when we are looking about the adjusted EBIT. We do note that especially in the consumer market, we have growth. If you look by decision maker, if you look by payer, then it is captured by the insurance as a payer. So we have a positive momentum in there. growing, and we need to remember that all of this one happens despite one working day less. Then if we look at our biggest customer group, we have occupational health, which was negative. Also, this one was burdened by one working day less, and the volumes were or the revenues were down by roughly 2.5%. This is coming from less connected employees, so this is give or take the same amount as we had in Q1, but like Ville explained, the buying behavior of our clients has changed mainly due to weak macro and increased cost consciousness. But these are topics that we are addressing at the moment, and we are confident that we are getting forward like we have always delivered on our initiatives. So all of this one, if we think about once again looking forward, we are in a positive place what comes to Outlook. It's supported by digitalization, Kela 65, and then also the reviving demand, especially in the public sector, of course, depending how you define also Kela 65. Then if we look... portfolios we have a clear improvement in profitability also in here we have determination of low margin outsourcing contracts we have an improved operational efficiency and those ones are in total leading to 3.2 percentage points increase in the adjusted debit margin and a million euros more in the adjusted debit in absolute terms. If we then look on the different market segments, we have the public market. Outsourcings have been weak as expected. There's normal volatility on the contract volumes. So there's a bit more contract volume loss than we have maybe anticipated, but there's nothing specific in that one. We have the staffing market that has been declining, partly due to our own tendering selection earlier, and then the market has been weak. when well-being counties have been ramping their operations up and establishing themselves. It's good to note that in both of these material segments within portfolio, we see positive movement. There are a couple of bigger... And we have the staffing market little by little coming back. As an anecdotal fact, we have just won Itä-Uusimaa's own doctor services for elderly people. And this just highlights that little by little also this market... is revitalizing. And then if we look at the private demand, this echoes what is happening in the healthcare services. We have a positive trend continued in the dental especially. Then going for Sweden, also in here EBIT is up a bit. EBIT margin is up, and we are progressing in our profit improvement program as planned. Second quarter was burdened by one working day less, and also the timing of the public holidays or bank holidays was such that it incentivized people to stay Friday also off the office. So the calendar impact is a bit heavier, especially in Sweden compared to other regions. But despite this, we are improving the profitability, which basically highlights that we are reaching a point where we can state that we are efficient. We have clear operational KPIs, such as utilization occupancy rates that are now on levels that we have never seen in feel good earlier and this one highlights that once we start loading the volumes into the machine and we move forward it will yield results as we have been saying for the past 18 months so all in all we start to see the improvement and with the efficient machine it will come through the whole income statement in the future Investments, there's nothing new in here. We continue to invest in organic. We continue to do disciplined M&A. During the quarter, we have made two smaller M&As in the mental health part and then in the dental part. But at the same time, it's good to note, like Ville has also explained and said, that technology is the place where we have our eyes on whether it is organic, but it could be also inorganic. So we will accelerate our technology agenda when we are going forward. And the 42 million euros, 3.2% of the revenues, is still below the levels we have been saying for the past year or so. Looking at cash flow and net debt position, we have a strong leverage ratio. Net debt to EBITDA is strong. It's developing positively. And remembering that in second quarter, we paid out half of our annual dividends. And if you remember, the annual dividends are materially higher than they were in previous years. So we continue to have lots of powder in our balance sheet. Then if we look operating cash flow, it is a tad bit soft. We have normal seasonality in the networking capital. We had some bigger outflows during the first half, mainly taxes in the first quarter and then in the accounts payable side for the second quarter. that don't increase the cash flow into the levels that our profitability immediately would indicate. But that's normal seasonality. And we are in a nice position, especially when it comes to accounts payables, that we can, due to our very stable and predictable environment, we can accept earlier cash flows every now and then when we get a financial benefit for that one cash flow, but it's chosen volatility. So all in all, we have strong balance sheet. We are in a positive place what comes to cash generation, and it has minor volatility, as you can see from the stability of the graphs. Then let's go to the guidance. So first of all, I think that when we are Now clarifying our guidance structure, it's a natural step on our journey within how we guide the investor community. We have started from EBITDA percentage and growth and then we have targets to be EPS. And now what we are taking is the final step on that structure, that instead of guiding profit and growth separately, we are guiding profit growth. So absolute EBIT, and we think that this is the best proxy for the EPS development on an operational level. And with that one, our guidance is stating that that our full year 2025 adjusted EBIT is expected to be between 155 and 165 million. And then if you are mathematically oriented, you quite quickly grasp that this is in material parts, same guidance as we have issued earlier, but we have narrowed the range. So this is a clarification on the earlier guidance and removing one mathematical rehearsal from the analyst excels or other market participant excels in that sense. Basically, the assumptions behind the guidance remain the same, excluding that we are expecting that the portfolios in the outsourcing operations will lose 30 million instead of 25 million. Then if we take a bit wider look and we look for the H2 and we think about where we are standing, we are in a position where five out of six KPIs are ticking into the right direction. We have the cultural ones, employee engagement, indicating that our people are happy is on a high level. We have the client satisfaction in place. We have the medical quality in place. We have the operational efficiency and cash flow in place, whether you look at EBIT margins or leverage ratios. And now we have all of our eyes on growth, which you understand that the market is coming back. We have the megatrends supporting, and we have positive underlying momentum in those ones. So with these ones, I'm happy with our results. all-time high Q2 and iterating our guidance, our full year EBIT will be 155 to 165 million euros. With these ones, let's jump to questions. Kati.

Thanks, Juuso. Do we have any questions from the phone lines?