Inside information: Profit warning - Terveystalo raises its profitability guidance for 2024 and provides preliminary information on revenue and profitability for the second quarter of 2024

Terveystalo Plc, inside information 11 July 2024 at 08:00 EEST

The implementation of Terveystalo's profit improvement program has progressed faster during the first half of the year than originally expected, and Terveystalo raises its profitability guidance for 2024.  The guidance for revenue remains unchanged.

- Our profit improvement measures have had a faster impact than expected and our profitability strengthened even during the seasonally lower demand in the summer. The fifth consecutive quarter of profit improvement and Q2 results underline that the turnaround objectives set twenty months ago have been reached and the improvement is sustainable. Visibility for the rest of the year has also improved. I want to thank all our employees for their excellent work. Our results are generated through your work," commented Ville Iho, President and CEO of Terveystalo.

New guidance for 2024:

Terveystalo expects its full-year 2024 revenue to grow (2023: EUR 1,286 million) and adjusted EBITA to be 11.5–12.5 percent of revenue (2023: 9.8 percent).

The estimates are based on the second quarter of 2024 projections for inflation, consumer demand and employment, and normal morbidity. The performance improvement program has significantly exceeded its initial target and the measures are having an impact faster than previously estimated.  The estimates include an annual decrease of approximately EUR 10 million in revenue in the Portfolio Businesses segment's outsourcing business. The Sweden segment's revenue is expected to decline due to macro weakness and the exchange rate is expected to remain stable. The increase in the VAT rate in Finland does not significantly impact the 2024 result. The estimates do not include material acquisitions or divestments.

Previous guidance for 2024, published on 26.4.2024:

Terveystalo expects its full-year 2024 revenue to grow (2023: EUR 1,286 million) and adjusted EBITA to be 10.5–11.5 percent of revenue (2023: 9.8 percent).

The estimates are based on the first quarter of 2024 projections for inflation, consumer demand and employment, normal morbidity, and a predictable labour market in Finland. The estimates include the impact of the successful completion of the profit improvement program and an annual decrease of approximately EUR 10 million in revenue in the Portfolio Businesses segment's outsourcing business. The Sweden segment's revenue is expected to decline due to macro weakness and the exchange rate is expected to remain stable. The possible increase in the VAT rate in Finland is not expected to have a significant impact on the 2024 result. The estimates do not include material acquisitions or divestments.

Preliminary data on revenue and profitability for the second quarter of 2024

Based on unaudited data, second-quarter revenue was approximately EUR 340 million, and adjusted EBITA was approximately EUR 42 million and 12.5% of revenue. Adjustments amounted to approximately EUR 10 million, including a one-off item of approximately EUR 6 million related to renovation and maintenance liabilities in a single location over a period of more than ten years.

Terveystalo will publish its half-year financial report for 2024 on Wednesday, 17 July 2024.

Helsinki 11 July 2024

Terveystalo Plc
Board of Directors

Additional information for investors and analysts:

Kati Kaksonen,
Vice President, Communications, Investor Relations and Sustainability
Tel. 010 345 2034
[email protected]

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