XHEL:TTALO ESEF Annual Report
Terveystalo Oyj (XHEL:TTALO)
ESEF Annual Report
2024-02-22
For: 2023-12-31
View Original
Added on
September 25, 2026
TERVEYSTALO PLC
Report of the Board of Directors and consolidated financial statements 31 December 2023
(Unofficial translation)
2
Terveystalo Group’s Report of the Board of Directors and Consolidated Financial Statements 31 December
2023
Report of the Board of the Directors
Calculation of financial ratios and alternative performance measures ..................................................................... 37
Reconciliation of alternative performance measures ............................................................................................... 39
Consolidated financial statements, IFRS
Consolidated statement of comprehensive income .................................................................................................. 42
Consolidated statement of financial position ............................................................................................................ 43
Consolidated statement of cash flows ...................................................................................................................... 44
Consolidated statement of changes in equity ........................................................................................................... 45
1. Corporate information ........................................................................................................................................... 46
2. Accounting policies for the consolidated financial statements ............................................................................. 46
3. Business combination ........................................................................................................................................... 58
4. Segment information............................................................................................................................................. 61
5. Revenue ............................................................................................................................................................... 62
6. Other operating income ........................................................................................................................................ 64
7. Material and services ............................................................................................................................................ 64
8. Employee benefit expenses ................................................................................................................................. 64
9. Depreciation, amortization and impairment .......................................................................................................... 65
10. Other operating expenses .................................................................................................................................. 65
11. Financial income and expenses ......................................................................................................................... 66
12. Taxes .................................................................................................................................................................. 66
13. Earnings per share ............................................................................................................................................. 69
14. Tangible assets ................................................................................................................................................... 70
15. Intangible assets ................................................................................................................................................. 73
16. Impairment testing of cash-generating units including goodwill ......................................................................... 74
17. Investment properties ......................................................................................................................................... 76
18. Associated companies ........................................................................................................................................ 77
19. Share-based payments ...................................................................................................................................... 77
20. Financial assets and liabilities – carrying amount, fair value and fair value hierarchy ....................................... 80
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21. Financial risks ..................................................................................................................................................... 81
22. Trade and other receivables and contract assets .............................................................................................. 84
23. Cash and cash equivalents ................................................................................................................................ 85
24. Share capital and invested non-restricted equity reserve .................................................................................. 86
25. Financial liabilities ............................................................................................................................................... 87
26. Trade and other payables ................................................................................................................................... 88
27. Provisions ........................................................................................................................................................... 88
28. Defined benefit plans .......................................................................................................................................... 89
29. Collateral and contingent liabilities ..................................................................................................................... 90
30. Related party transactions .................................................................................................................................. 90
31. Group companies ............................................................................................................................................... 94
32. Subsequent events ............................................................................................................................................. 96
Parent company’s financial statements, FAS
Parent company’s statement of income ................................................................................................................... 97
Parent company’s statement of financial position .................................................................................................... 98
Parent company’s statement of cash flows .............................................................................................................. 99
Parent company’s accounting policies and measurement and recognition principles and methods ....................... 99
Notes to the parent company’s financial statements .............................................................................................. 100
Signatures to the financial statements and Board of Director’s report
4
Report of the Board of Directors
Operating environment
Target markets
In 2023, demand for healthcare services in Finland continued to be strong. Seasonal variations in demand and booking rates normalised
compared to the exceptional comparison period. Demand for basic laboratory services largely normalised to pre-pandemic levels. As the
pandemic receded, customer visits were focused on brick-and-mortar as the demand for COVID-19 testing, digital services, and remote
appointments declined materially year-on-year.
Demand from corporate and insurance customers remained strong. In the public-pay market, staffing services saw continued strong
demand. In the second half of the year, demand for out-of-pocket dental care services and massage services was dampened by weaker
consumer confidence and purchasing power. The public-pay private-provision market is yet to see a broader increase in demand and new,
smaller tenders have been limited to digital services.
In Sweden, increased economic uncertainty during the second half of the year affected the demand for organisation and leadership
consultation and harmful use rehabilitation services, which are more sensitive to macroeconomic changes.
Terveystalo continued to invest in the recruitment of professionals throughout the year and was successful in steadily increasing supply. To
strengthen supply, development efforts were increasingly shifted towards solutions that enhance the work and productivity of
professionals.
A tight labour market and inflation created increasing pressure on operating costs, including wages, throughout 2023. The overall
employment remains decent. However, significant changes could affect the demand for occupational health services in Finland.
The long-term growth prospects for Terveystalo’s addressable markets in Finland and Sweden are solid; the underlying demand is strong,
and megatrends, such as the ageing population, digitalisation of healthcare, and lengthening queues in public healthcare, support growth in
the future. As the most preferred employer, Terveystalo is well-positioned to drive growth going forward, supported by its strong market
position.
The impacts of inflation
Despite the stabilised inflation, some procurement categories had continued cost pressure. Terveystalo has actively negotiated with its
suppliers to limit the impact of inflation on costs. Electricity prices levelled off from the comparison period.
One of the key areas of the profit improvement program is to fight inflation and reduce costs in selected product and service categories.
A tight labour market, and continued inflation put upward pressure on wages in healthcare services. In the private healthcare sector, a two-
year collective agreement is binding for the duration of 1 May 2022 - 30 April 2024, which applies to Terveystalo's largest group of
employees, nurses. In 2022, salary increases were 2.0 percent from 1 October 2022 onwards, and for 2023, the increases were in total 2.95
percent and came into effect on 1 November 2023. In addition, the agreed, one-time instalment of 450 euros was paid in June 2023. In
other professions, wage inflation is also present. The large majority of the physicians who work in Terveystalo are private practitioners
(approximately 96 percent), who are not in employment with the company.
Terveystalo implements commercial initiatives to mitigate the effect of inflation as a part of the profit improvement program. The
successful pricing actions impact both 2023 and 2024 financials.
5
The treatment queues and regulatory environment in Finland
The contraction of non-urgent care during COVID-19 restrictions resulted in a significant treatment gap for other illnesses. Treatment
queues for specialised care have continued to grow. In August 2023, close to 178,000 patients were waiting for access to public provision of
non-urgent specialised medical care according to Finnish Institute for Health and Welfare (THL). Of those patients, more than 30,500 (17.2
percent) had been waiting for more than half a year to get treatment. In August 2023, the number of patients who had been waiting for
more than half a year for treatment had grown by 9,400 from April 2023.
The responsibility for the organisation of social and healthcare services was transferred to the 21 wellbeing services counties and the City of
Helsinki at the beginning of 2023. The wellbeing services county councils decide on the service strategies, principles of the service network,
service level of emergency services, budget and financial planning of the well-being services county, and appointment of members to
governing bodies. The wellbeing services counties have launched smaller tenders for example digital service solutions, but no decisions on
larger tenders from the private sector have so far been made.
The government program published in the summer of 2023 aims to increase cooperation between private and public healthcare and to
improve the effectiveness and cost-efficiency of the healthcare system. As a first concrete measure, the government decided to raise Kela
reimbursements. The new Kela reimbursements came into effect on 1 January 2024 (
https://www.kela.fi/medical -expenses
). In total, Kela
compensations will be increased by 500 million between 2024 and 2027, of which the state's financial contribution is 335 million. The aim of
increasing the reimbursements is to shorten the treatment queues in primary care. The measures of the government program are
estimated to support the growth of demand for private service production and will bring new opportunities for the implementation of
publicly funded and privately provided services.
Impact of the global political situation and conflicts
The direct impacts of political tensions and conflicts, such as the war in Ukraine, have been minimal to Terveystalo. The company does not
have business operations in or with Ukraine, Israel, or countries that are subject to sanctions. The indirect financial impact arises from high
inflation and potential disruptions in the supply chain and financial markets. The indirect economic impacts are visible in weakened
consumer confidence and purchasing power. The impacts may also have a delayed economic impact through declining employment, which
could negatively impact the demand for Terveystalo’s services.
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Guidance for 2024
Terveystalo estimates its revenue for 2024 to grow (2023: EUR 1,286 million) and its adjusted EBITA margin to be between 10.1 and 11.5
percent (9.8 percent in 2023).
The estimates are based on the end of 2023 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 estimates do not
include significant acquisitions or divestments.
Financial targets
Terveystalo’s financial targets are:
●
annual revenue growth of at least 5 percent through organic growth and acquisitions
●
an adjusted EBITA margin of at least 12 percent in 2025
●
net debt/adjusted EBITDA ratio of 3.5x or less
However, indebtedness may temporarily exceed the target level, such as in conjunction with acquisitions.
●
to distribute a minimum of 40 percent of net profit as dividends annually
However, the dividend proposal must consider Terveystalo’s long-term development potential and financial position.
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Key figures
Terveystalo Group, MEUR
2023
2022
2021
Revenue
1,286.4
1,259.1
1,154.6
Adjusted EBITDA, *
1)
200.2
178.0
206.1
Adjusted EBITDA, % *
1)
15.6
14.1
17.8
EBITDA
1)
179.2
168.8
201.8
EBITDA, %
1)
13.9
13.4
17.5
Adjusted EBITA *
1)
125.6
105.2
141.0
Adjusted EBITA, % *
1)
9.8
8.4
12.2
EBITA
1)
104.4
95.9
136.7
EBITA, %
1)
8.1
7.6
11.8
Adjusted operating profit (EBIT) *
1)
93.1
73.4
114.4
Adjusted operating profit (EBIT), % *
1)
7.2
5.8
9.9
Operating profit (EBIT)
-14.7
33.9
110.1
Operating profit (EBIT), %
-1.1
2.7
9.5
Return on equity (ROE), %
1)
-7.6
4.1
13.6
Equity ratio, %
1)
36.5
40.2
42.2
Earnings per share, EUR
-0.33
0.19
0.63
Net debt
598.1
566.6
519.0
Gearing, %
1)
116.0
95.7
85.2
Net debt/Adjusted EBITDA
1)
3.0
3.2
2.5
Total assets
1,419.5
1,479.4
1,448.6
Average personnel FTE
6,426
6,552
5,643
Personnel (end of period)
9,824
10,933
9,805
Private practitioners (end of period)
6,092
5,928
5,754
Adjusted EBITDA, excluding IFRS 16 *
1)
142.8
122.2
156.9
Net debt, excluding IFRS 16
379.0
386.8
340.6
Net debt/Adjusted EBITDA, excluding IFRS 16 *
1)
2.7
3.2
2.2
* Adjustments are material items outside the ordinary course of business, and these relate to acquisition -related expenses, restructuring-related expenses, gain / losses on sale of assets (net),
impairment losses, strategic projects and other items affecting comparability.
1)
the company monitors internally, and they provide management, investors, securities analysts and other parties significant additional information related to the company's results of operations,
financial position and cash flows. These should not be considered in isolation or as a substitute to the measures under IFRS.
Share
-
related key figures
Share-related key figures
2023
2022
2021
Equity per share, EUR
4.1
4.7
4.8
Earnings per share, EUR
-0.33
0.19
0.63
Dividend per share, EUR
0.30
0.28
0.28
Dividend payout ratio, %
190.9 %*
145.0 %
44.3 %
* In 2023, the dividend payout ratio of adjusted earnings per share (0.47 EUR) was 63.8 percent.
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Financial development
Revenue
The Group’s revenue for 2023
increased by 2.2 percent year-on-year and amounted to EUR 1,286.4 (1,259.1) million. The Healthcare
Services segment revenue increased by 5.7 percent and was EUR 948.6 (897.8) million. The revenue increase was mainly driven by
improved sales mix and successful pricing actions.
Visits to laboratory services decreased substantially year-on-year as COVID testing decreased. A total of approximately 6,800 (335,000)
COVID-19 tests were performed
1)
. Revenue from other laboratory services increased year-on-year. Revenue from surgical operations and
imaging services grew year-on-year.
The Portfolio Businesses segment revenue decreased by 8.1 percent million due to expired outsourcing contracts and was EUR 267.2
(290.7) million. The revenue from Sweden decreased by 0.4 percent and came to EUR 92.5 (92.8) million. Without the currency effect, the
revenue grew by 7.2 percent. Acquisitions increased revenue in Sweden by approximately EUR 4.6 million.
1) Excludes sample collection services
Revenue, MEUR
2023
2022
Change, percent
Healthcare Services
948.6
897.8
5.7
Portfolio Businesses
267.2
290.7
-8.1
Sweden
92.5
92.8
-0.4
Eliminations
-21.8
-22.2
-1.7
Total
1,286.4
1,259.1
2.2
Financial performance and cash flow
The Group’s adjusted earnings for 2023
EUR 125.6 (105.2) million, representing 9.8 (8.4) percent of revenue. Profitability improved in all business areas. Profitability was
strengthened by normalization of the sales mix, successful pricing actions, and the progress of the profit improvement program.
Adjusted EBITA, MEUR
2023
2022
Change,
Healthcare Services
109.0
99.2
9.9
Portfolio Businesses
8.7
3.5
149.4
Sweden
3.7
2.6
42.5
Other
4.2
-0.1
>200.0
Total
125.6
105.2
19.4
Section Other reported figures mainly consist of parent company expenses, unallocated Group level adjustments, and provisions.
Material expenses and service purchasing increased by 2.0 percent year-on-year and amounted to EUR 536.2 (525.7) million. Employee
benefit expenses decreased by 1.8 percent year-on-year and amounted to EUR 447.0 (455.0) million due to the actions of the profit
improvement program, lower sick leaves, and terminated outsourcing contracts. The decrease was partially offset by recruitment and salary
increases. Other operating expenses increased by 14.2 percent to EUR 128.2 (112.3) million mainly due to advisory fees of the profit
improvement program, as well as higher costs related to rents and premises.
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The Group’s adjusted EBITDA increased by 12.5 percent year-on-year to EUR 200.2 (178.0) million. Adjusted EBIT amounted to EUR 93.1
(73.4) million. Operating result (EBIT) came to EUR -14.7 (33.9) million. The operating result was weakened by EUR 84.6 million write-offs
related to goodwill and to purchase price allocations relating to public outsourcing customer relationships within the Portfolio Businesses.
In the comparison period, impairment of other intangible assets EUR 28.9 million decreased the operating profit.
Net financing costs increased to EUR 24.2 (2.9) million due to the increased interest rate, as well as the increase in the fair value of interest
rate hedges during the comparison period. The result before tax was EUR -38.9 (30.9) million. Income taxes were EUR -3.3 (6.5) million. The
result for the reporting period amounted to EUR -42.2 (24.4) million, and earnings per share were EUR -0.33 (0.19).
Cash flow from operating activities increased to EUR 158.0 (140.9) million due to improved profitability and timing differences in corporate
tax payments. Growth was dampened by growth in working capital employed.
Cash flow from investing activities decreased to EUR -44.2 (-93.9) million. The change from the comparison period mainly consisted of a
decrease in M&A activities and investments in intangible assets.
Cash flow from financing activities amounted to EUR -116.2 (-44.6) million.
The change from the comparison period was mainly due to
refinancing and increased net financial expenses during the reporting period.
Profit improvement programs
During the fourth quarter of 2022, Terveystalo launched a profit improvement program, which aims for an inflation-adjusted, annualised
(run-rate) EBITA improvement of at least EUR 50 million by the end of 2024. The program progressed well, and the overall target was
exceeded ahead of schedule. The measures implemented by the end of the reporting period are estimated to have an annual run-rate
impact of over EUR 60 million on profitability. The adjusted EBITA impact of the program during the fourth quarter was approximately EUR
13 million and during 2023 EUR 37 million.
During the fourth quarter of 2022, a profit improvement program was launched in Sweden targeting a structural change in the profitability
in 2025.
The total costs related to the programs in 2022–2024 are estimated to be EUR 30-35 million. The costs are related to restructuring and
advisory fees. Advisory fees are tied to the results achieved by the programs. The costs of the programs are treated as items affecting
comparability. The costs of the programs, treated as items affecting comparability, were EUR 5.3 million during the fourth quarter and EUR
21.7 million during 2023.
Financial position
Terveystalo’s liquidity position is good. Cash and cash equivalents at the end of the reporting period amounted to EUR 37.7 (40.2) million.
The total assets of the Group amounted to EUR 1,419.5 (1,479.4) million.
Equity attributable to owners of the parent company totalled EUR 515.4 (592.0) million.
Gearing (including lease liabilities) was 116.0 (97.7) percent and net debt amounted to EUR 598.1 (566.6)
million. The increase in net debt is
mainly due to lease liabilities. Net debt, excluding IFRS 16 (lease liabilities) amounted to EUR 379.0 (386.8) million. The average maturity of
Terveystalo's financial loans was 3.0 (2.3) years at the end of the fourth quarter of 2023, and the weighted average interest rate for the
quarter was 4.8 (1.2) percent. During the reporting period, the company fulfilled the covenant requirement included in its financing
agreements reflecting relative indebtedness.
During the reporting period, the company signed an agreement for a long-term loan of EUR 135 million linked to sustainability targets and
refinanced the current revolving credit facility. The loan is a bullet loan, and the maturity of the loan is three years supplemented by an
extension option of one year. EUR 125 million of the loan was withdrawn and used to refinance bank loans maturing during 2023 and 2024.
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In connection with the refinancing, the company agreed on the refinancing of a EUR 40 million revolving credit facility maturing in 2024. The
maturity of the syndicated credit revolving facility is three years supplemented by an extension option of one year.
During the second quarter of 2023, Terveystalo issued senior unsecured sustainability-linked notes in the aggregate principal amount of
EUR 100 million. The notes will mature on 1 June 2028 and carry initially a fixed annual interest of 5.375 percent. The notes were listed on
the official list maintained by Nasdaq Helsinki Ltd on 5 June 2023.
At the end of the reporting period, the unused part of credit based on financing agreements and bank accounts with a credit facility
amounted to EUR 98.0 (99.6) million.
Return on equity for financial year was -7.6 (4.1) percent. The equity ratio was 36.5 (40.2) percent. In accordance with the 2023 Annual
General Meeting’s decision, a dividend of EUR 0.28 per share has been paid based on the balance sheet adopted for the fiscal year ending
31 December 2022. The dividend was paid in two instalments. The first dividend instalment was paid to shareholders on 3 April 2023 and
the second dividend instalment on 9 October 2023.
Seasonal variation and the impact of the number of business days
Terveystalo’s revenue from corporate and private customers has typically been lower during the vacation seasons, particularly in the
summer months. The number of business days influences the revenue and earnings development, particularly when comparing quarterly
performance. There was 251 (253) working days in 2023. In 2024, there are 252 working days. Because of the seasonal nature of business,
the required net working capital varies during the year. Variation is caused by the timing of pension and VAT payments, vacation pay
obligations, and service fees related to occupational healthcare, etc.
Number of working days by quarter
2022
2023
2024
Q1
63
64
63
Q2
61
60
61
Q3
66
65
66
Q4
63
62
62
Full year
253
251
252
Investments and acquisitions
Net investments* in 2023, including M&A, amounted to EUR 43.9 (94.1) million. The Group’s net capital expenditure, excluding M&A,
amounted to EUR 40.2 (60.0) million. The investments consisted mainly of investments in digital application and service development, IT
system projects, medical equipment, and network. The relative share of intangible investments in gross investments decreased year-on-
year.
During the second quarter, Terveystalo subsidiary, Feelgood Svenska AB, entered into agreements for two acquisitions. Feelgood acquired
Växjö Hälsoforum and Quality Care's operations, of which the former was finalised during the third quarter and the latter during the fourth
quarter.
* Net investments do not include increases in right-of-use assets related to leases for business premises. Net investments include the acquisition of non-controlling interests.
Development expenses
Capitalised development expenses in 2023 were EUR 23.2 (16.4) million and were included in other intangible assets.
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Personnel
The number of Terveystalo’s employed staff on 31 December 2023 in Finland was 8,950 (10 100), in Sweden 874 (833) and in total 9,824
(10,933). In FTEs, the average number of personnel in Finland was 5,596 (5,865), in Sweden 829 (687) and in total 6,426 (6,552). The
number of private practitioners in Finland was 5,987 (5,822), in Sweden 105 (106) and in total 6,092 (5,928). The number of employees in
Finland was affected by a reduction in the number of employees working in COVID -19 related services, the measures of the profit
improvement program and the termination of outsourcing contracts.
Reporting segments
Starting from 1 January 2023, Terveystalo has changed its financial reporting structure to better highlight the performance of Terveystalo's
businesses. The new reporting structure reflects Terveystalo's new operating model and is aligned with the way the company’s
management follows the operational performance of Terveystalo's businesses. Terveystalo Group comprises of three reporting segments:
Healthcare Services, Portfolio Businesses, and Sweden.
Healthcare Services
Healthcare Services business segment offers customers in Finland integrated care paths from preventive occupational health services to
primary care services and to different fields of specialized care, diagnostic, and day surgery. In Healthcare Services, Terveystalo aims for
industry-leading profitability and the best care outcomes.
Key figures
2023
2022
Change, %
Revenue, MEUR
948.6
897.8
5.7
EBITA, MEUR
107.1
93.8
14.2
EBITA, %
11.3 %
10.4 %
0.8 %-p.
Adjusted EBITA, MEUR
109.0
99.2
9.9
Adjusted EBITA, % of revenue
11.5 %
11.0 %
0.4 %-p.
The revenue from Healthcare Services for 2023
The revenue from corporate customers increased by 7.9 percent to EUR 564.0 (522.9) million. Revenue from preventive occupational health
services
1)
services dropped year-on-year. The revenue from consumers increased by 6.4 percent to EUR 296.1 (278.4) million. Revenue increased
especially due to higher sales from services produced for insurance companies. The revenue from public sector customers decreased by 8.3
percent to EUR 88.5 (96.4) million due to terminated contracts and ending of COVID -related services sales. Revenue from services provided
for municipal occupational health customers grew due to successful pricing actions.
The revenue from appointment services increased by 11.2 percent to EUR 618.3 (556.3) million mainly due to improved customer mix and
successful pricing actions. The number of physical appointments increased slightly year-on-year. The number of remote appointments
decreased by 19.0 percent due to the COVID-related digital visits during the comparison period. Revenue from diagnostics services
(laboratory and imaging) decreased by 8.2 percent and was EUR 229.6 (250.0) million. The number of laboratory visits decreased clearly
from the comparison period when there was a high number of COVID tests done. Excluding COVID testing, the number of laboratory visits
increased from the comparison period. The revenue from other services increased by 10.0 percent and was EUR 100.7 (91.5) million driven
by surgical operations.
1) The statutory task of occupational healthcare is to prevent work-related adverse health effects. Preventive services include, for example, workplace surveys to examine the
conditions and exposures at the workplace; health examinations; suggested measures to improve work conditions and to promote the employees’ ability to work; guidance and
12
counselling; participation in the planning and implementation of measures that maintain work ability; promotion of coping at work and, when necessary, referrals to rehabilitation
in case of reduced work ability; guidance in first aid preparedness at the workplace; and assessment and monitoring of the quality and impact of occupational healthcare activities.
Healthcare Services, revenue by customer groups, and services
Revenue, MEUR
2023
2022
Change, %
By customer
Corporate
564.0
522.9
7.9
Consumer
296.1
278.4
6.4
Public sector
88.5
96.4
-8.3
By service
Appointments
618.3
556.3
11.2
Diagnostics
229.6
250.0
-8.2
Other
100.7
91.5
10.0
Corporate customers
municipal occupational healthcare customers, which are included in the public sector customer group. The company provides statutory occupational health services and other
occupational health and well-being services for corporate customers of all sizes.
Consumer customers
customers themselves or by their insurance companies.
The services offered to
public sector
the public sector. Outsourcing and staffing services are included in Portfolio Businesses,
Healthcare Services, number of visits
Visits
2023
2022
Change, %
Appointments
6,069,111
6,351,339
-4.4
Physical appointments
4,750,619
4,723,915
0.6
Remote appointments
1,318,492
1,627,424
-19.0
Diagnostics
1,285,980
1,460,908
-12.0
Other
48,984
41,278
18.7
Total
7,404,075
7,853,525
-5.7
In 2023
,
adjusted earnings before interest, taxes, amortization, and impairment losses (EBITA)
EUR 109.0 (99.2) million, representing 11.5 (11.0) percent of revenue. The drop in COVID-19 testing volumes had a negative impact on
profitability, whereas successful pricing actions and improved sales mix in non-COVID-related services strengthened the profitability. The
profit improvement program targeting at least 50-million-euro annualised (run-rate) EBITA improvement by the end of 2024, progressed
well and the overall target was exceeded ahead of schedule. The measures implemented by the end of the reporting period are estimated
to have an annual run-rate impact of over EUR 60 million on profitability. The adjusted EBITA impact of the program during 2023 was EUR
37 million.
Portfolio Businesses
The Portfolio Businesses segment consists of business areas that aim for independent value creation utilising Terveystalo’s capabilities
according to their needs. Portfolio Businesses include public sector outsourcing, staffing services, and dental care, as well as other businesses
such as public sector digital services, rehabilitation, child welfare, and massage services, as well as interpretation services.
13
Key figures
2023
2022
Change, %
Revenue, MEUR
267.2
290.7
-8.1
EBITA, MEUR
8.3
2.0
>200.0
EBITA, %
3.1 %
0.7 %
2.4 %-p.
Adjusted EBITA, MEUR
8.7
3.5
149.4
Adjusted EBITA, % of revenue
3.3 %
1.2 %
2.1 %-p.
Portfolio Businesses, revenue by services
Revenue, MEUR
2023
2022
Change, %
Outsourcing services
91.1
118.7
-23.3
Staffing services
84.7
84.1
0.6
Dental care
54.5
52.2
4.3
Other
36.9
35.6
3.7
Total
267.2
290.7
-8.1
In the Portfolio Businesses, revenue in 2023
decreased by 8.1 percent and amounted to EUR 267.2 (290.7) million. Revenue from
outsourcing services decreased by 23.3 percent due to terminated outsourcing contracts and amounted to EUR 91.1 (118.7) million.
Revenue from staffing services increased by 0.6 percent driven by growth in the demand for specialised care and amounted to EUR 84.7
(84.1) million. Higher demand for specialist care services had a positive impact on revenue. Revenue from nurse staffing decreased due to a
decrease in COVID-related services year-on-year. Revenue from dental care increased by 4.3 percent and amounted to EUR 54.5 (52.2)
million. Revenue from other services increased by 3.7 percent and amounted to EUR 36.9 (35.6) million.
In 2023
,
adjusted earnings before interest, taxes, amortization, and impairment losses (EBITA)
representing 3.3 (1.2) percent of revenue. Termination of low-margin outsourcing contracts, successful pricing actions, cost cutting, as well
as increased demand improved profitability year-on-year. Higher costs of specialised care in outsourcing services, as well as inflation
impacted negatively.
14
Sweden
The Sweden segment consists of Feelgood subsidiaries’ operations in Sweden, which are focused on occupational health and consultation for
organisational management and harmful use. In Sweden, Terveystalo aims for profitable growth in the medium and long term.
Key figures
2023
2022
Change, %
Revenue, MEUR
92.5
92.8
-0.4
EBITA, MEUR
2.1
1.9
10.1
EBITA, %
2.3 %
2.0 %
0.2 %-p.
Adjusted EBITA, MEUR
3.7
2.6
42.5
Adjusted EBITA, % of revenue
4.0 %
2.8 %
1.2 %-p.
In the Sweden segment, revenue in 2023
Swedish krona from the comparison period had a negative impact on revenue. Without the currency effect, the revenue grew by 7.2
percent. Demand was at a good level during the first half of the year, particularly in organisational leadership consultation and harmful use
rehabilitation services. During the third quarter, the demand for preventive occupational health services started to pick up slower after the
holiday period than the previous year. During the second half of the year, the increased economic uncertainty affected the demand for
services, which are sensitive to macroeconomic changes. Acquisitions increased revenue in Sweden by approximately EUR 4.6 million.
In 2023
,
adjusted earnings before interest, taxes, amortization, and impairment losses (EBITA)
million, representing 4.0 (2.8) percent of revenue. Profitability was strengthened by increased operational efficiency. During the fourth
quarter, a profit improvement program was launched in the business area targeting a structural change in the profitability in 2025.
Statement of non-financial information
Terveystalo is the largest private health care service provider in Finland in terms of revenue and network and a leading occupational health
provider in the Nordic region. Terveystalo employs in total over 15,500 health and well-being professionals. The company is listed on the
Helsinki Stock Exchange and has predominantly Finnish ownership. In 2023, Terveystalo had 1.2 million individual customers in Finland and
some 7.6 million customer visits were made.
Terveystalo’s mission is to fight for a healthier life by focusing on meaningful matters. Terveystalo’s strategy is to deliver integrated, data-
driven outpatient and preventive care with best-in-class care outcomes and people experience. The key targets are to reach industry-
leading profitability and to have a net positive impact on society. Terveystalo’s values constitute the foundation for all Terveystalo’s
operations.
Terveystalo reports on its sustainability work as part of the Annual Report. This section summarizes the key themes, targets, and results.
The double materiality assessment conducted in 2023 serves as the foundation for Terveystalo’s sustainability efforts and the specifies the
information included in sustainability reporting. Terveystalo’s material sustainability themes are related to Terveystalo’s consumers and end
users, own workforce and ethical business conduct. In addition, Terveystal o promotes sustainable consumption and climate action.
Terveystalo’s sustainability efforts are guided by the company’s Code of Conduct, values, and strategic goals as well as the material
sustainability themes based on the double materiality assessment. Terveystalo is committed to the UN Guiding Principles on Business and
Human Rights, the conventions of the International Labour Organisation (ILO), and the Ten Principles of the UN Global Compact.
Terveystalo’s systematic sustainability management aims to ensure that the company achieves its sustainability targets. The continuous
improvement model ensures that Terveystalo’s services will continue to create value for customers in the future.
15
The most significant risks related to material sustainability themes are assessed and mitigated as part of the company's overall risk
management process.
There is a constant shortage of educated professionals in the industry, while the need for and demand for healthcare services continues to
grow. The main sustainability risks are related to the availability of health care professionals and thus access to care. The company mitigates
these risks by, among other things, automating routine tasks, using technology, and allocating resources according to the need for care. In
addition, the company continues to strengthen its position as the most attractive workplace in the industry by developing, among other
things, multi-professional cooperation, and leadership.
Terveystalo believes it can leverage its position as the most attractive employer in
the industry to grow faster than the market.
Good health and well-being
The core of Terveystalo’s operations and the company’s key positive impact is the provision of appropriate, high-quality, effective, and safe
care for all customers. Terveystalo is a pioneer in data-driven integrated care. The company uses data to support care and target effective
prevention and continuously measures the effectiveness of care and the benefits to the customer. The company's integrated care model
provides fast access to care, links the differ ent stages of care into seamless multi-professional and multi-channel care paths, and actively
guides the patient, supporting continuity of care throughout the care paths. Terveystalo’s digital solutions play a key role in integrated care
paths and their development.
Quality is managed at all levels of the organisation
Quality is managed on all levels of the organisation. The quality system ensures fast access to care and patient safety, a high-quality and
continuously evolving customer experience, data protection and security, compliance, and continuous improvement of the effectiveness of care.
Terveystalo’s operations are guided by the company’s operating policy, quality policy, internal control and risk management policy, self-auditing
program, Code of Conduct, and data protection and information security policy. The harmonised processes and procedures that ensure patient safety
and high-quality care are documented in Terveystalo’s integrated management system. Policies and procedures on the data protection of patient
data are documented in the Data Protection Handbook for patient care. Terveystalo’s operations are also guided by the ISO 9001:2015 quality
management system, the Current Care Guidelines and
the laws and regulations governing the industry and the operations of private service providers,
and customer agreements.
Targets for quality and effectiveness of care
Terveystalo has defined three key targets to promote the achievement of Terveystalo’s quality objectives. Two of the targets are also
included in the sustainability -linked financing framework published in 2023.
Effective care for mental health issues
Mental health issues are among the three most common diagnosis categories in Terveystalo and are a significant cause of human suffering,
related sickness absences, and early retirement in Finland. Providing appropriate and effective treatment for mental health problems is one
of the priorities of Terveystalo's medical quality development. Patients who receive brief psychotherapy recover faster than those given
only sick leave and/or medication. Patients who go through brief psychotherapy also have fewer sickness absences. Terveystalo aims to
increase the use of brief psychotherapy in occupational healthcare in the treatment of people diagnosed with depression or anxiety
disorders. When more patients receive care at an early stage, resources for long-term rehabilitative psychotherapy are freed up for those
who need it due to the severity of their condition. Terveystalo has systematically developed mental health care paths and increased the
proportion of patients referred to brief psychotherapy.
Terveystalo’s target is to increase the share of occupational healthcare patients diagnosed with anxiety or depression and who are referred
to brief psychotherapy to 25 percent by 2026. In 2023, the share of occupational health patients referred to brief psychotherapy was 12.6
(8.5) percent of all occupational health patients diagnosed with anxiety or depression. Total number of diagnoses of depression and anxiety
in occupational health was 87,335 (80,702). The results achieved in 2023 were in line with the target.
16
Excellent customer experience
NPS (Net Promoter Score) is Terveystalo’s most important indicator of the quality of the customer experience. Terveystalo aims to stand out
by providing an excellent experience in all customer encounters. The company develops its services by listening to customers and utilising
new technology. NPS expresses the share of Terveystalo’s patients who would recommend Terveystalo’s services to others. Terveystalo’s
NPS is exceptionally high compared to the industry average (38), and maintaining this performance requires a continuous effort.
Terveystalo’s target is to maintain a customer satisfaction score (NPS) of at least 83. In 2023, the NPS for appointments was 84.8 (82.7).
Effective care at every visit
Terveystalo uses PEI indicator (Patient Enablement Instrument) to measure the appointment -specific effectiveness of care. PEI measures
the customer’s perception of coping with their illness or condition after an appointment, i.e. whether the customer feels that they can cope
with their symptom or illness much better, better, same as before, or worse after the appointment (on a scale of 1–4). The aim of collecting
individual customer feedback is to improve both the customer experience and the professional experience. The PEI indicator is commonly
used in primary healthcare, and it has been selected by the Finnish Institute for Health and Welfare (THL) as one of the key indicators for
measuring the effectiveness of Finnish healthcare in the future.
Terveystalo’s target is to maintain an appointment-specific PEI index of at least 2.9. In 2023, the PEI index was 2.9 (2.9). Approximately 60
percent of Terveystalo's customers feel they cope better or much better with their illness after an appointment.
Target
Indicator (KPI)
Scope of application
Target level
Target year
Baseline
2023
2022
2021
Increase the share of
occupational healthcare
patients diagnosed with
anxiety or depression
and who are referred to
brief psychotherapy to
25% by 2026 1)
The share of
occupational
healthcare patients
diagnosed with
anxiety or
depression and who
are referred to brief
psychotherapy
Occupational
healthcare customers
in Finland
25%
2026
2022
12.6%
8.5%
6.2%
Maintain a customer
satisfaction score (NPS)
of at least 83 2)
NPS (Net Promoter
Score) for
appointments
Terveystalo’s
customers, who have
visited appointments
in Finland
At least 83
Continuous
2022
84.8
82.7
83.0
Maintain an
appointment-specific
PEI index 3) of at least
2.9
PEI index (Patient
Enablement
Instrument)
Terveystalo’s
customers, who have
visited doctor’s
appointments in
Finland
At least 2.9
Continuous
2022
2.9
2.9
-
1) Occupational healthcare patients with a diagnosis of depression or anxiety and who are referred to brief psychotherapy / Occupational healthcare patients with a diagnosis of
depression or anxiety.
2) NPS measures the individual patient's experience of the service received shortly after the service experience. The patient is asked to assess how likely (on a scale of 0–10) they are
to recommend Terveystalo’s services. The Net Promoter Score is calculated by subtracting the share of those who gave a score of 0–6 (detractors) from the share of those gave a
score of 9–10 (promoters).
3) The PEI index (Patient Enablement Instrument) is used to measure whether the customer feels that they are able to cope with their symptom or illness much better, better, same
as before, or worse after the appointment. The scale is 1–4.
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In addition to the aforementioned targets, Terveystalo continuously measures its clinical, experienced and process results based on
international best practices and publishes its continuously updated quality indicators on its
website
. The progress against the quality targets
is monitored by Terveystalo’s Quality Steering Group on a quarterly basis.
Responsible work
Competent and committed personnel form the foundation for Terveystalo’s operations. There are shortages of competent professionals in
many places, and the most significant risks in the line of operation related to personnel are related to the availability and retention of
competent professionals. A key strategic goal for Terveystalo is to ensure that the company has enough health and well-being professionals
to meet the growing demand and achieve its strategic targets. Terveystalo aims to be the best and most attractive employer in its industry.
Terveystalo’s attractiveness as an employer and the occupational well-being and job satisfaction of the people who work at Terveystalo
constitute the foundation for all operations. Terveystalo strives to strengthen its attractiveness as a workplace by providing professionals
with interesting and meaningful work, competitive pay, diverse career, and development opportunities, and ensuring that professionals can
work smoothly and focus on meaningful matters. Equality, fairness and non-discrimination are core principles. In 2023, Terveystalo was
rated by industry professionals as the most popular employer in Finland for the fourth consecutive time.
1) Universum employer survey 2023
At the end of 2023, Terveystalo had 8,950 (10,100) employees and 5,987 (5,822) independent private practitioners in its operations in
Finland. In Sweden, Terveystalo’s subsidiary Feelgood had 874 (833) employees and 105 (106) private practitioners. The number of
employees in Finland was affected by a reduction in the number of employees working in COVID-19 related services, the measures of the
profit improvement program and the termination of outsourcing contracts.
Terveystalo’s operating principles concerning human resources management
Terveystalo has drawn up operating principles for managing material impacts on its personnel. Terveystalo’s Code of Conduct includes key
principles concerning equality, fairness and non-discrimination. In accordance with Finnish law, Terveystalo respects the right of its
employees to be members of trade unions or similar advocacy organisations and participate in their activities.
Terveystalo also respects the
collective bargaining rights of employees. Eighty percent of Terveystalo’s employees in Finland are covered by collective labour agreements.
In Sweden, the corresponding figure is 100 percent.
Terveystalo’s work community development plan includes targets and actions for developing and maintaining professional competence and
promoting occupational well-being. The development plan also includes Terveystalo’s equality and non-discrimination plan. Pay equality is
assessed and promoted as part of the work community development plan. Gender, for example, cannot be a factor that influences pay.
Terveystalo’s working group on equality became operational at the beginning of 2023. Its aim is to promote equality in Terveystalo’s work
communities and customer encounters.
One of the areas of Terveystalo’s people strategy is the development of meaningful and competitive incentive and remuneration models
that strengthen the performance and commitment of professionals and Terveystalo’s attractiveness as an employer. Terveystalo’s
remuneration principles are set out in the remuneration policy and are based on performance, fairness and competitiveness. The aim is to
ensure that Terveystalo is an attractive employer for motivated and skilled professionals. Remuneration must support the achievement of
Terveystalo’s strategic targets, incentivise behaviour that is consistent with Terveystalo’s values, and reward excellent performance.
Terveystalo’s goal is to be the best and most attractive employer in its industry
Terveystalo’s goal is to be the best and most attractive employer in its industry for all professionals. The professional survey is one of
Terveystalo’s most important tools for improving internal procedures and supervisor work. The survey is aimed at all of Terve ystalo’s
professionals, including private practitioners. In the survey, the employee Net Promoter Score (eNPS) is used as a key indica tor of well-being
and coping at work. The eNPS figure indicates the proportion of the employees and private practitioners who would recommend
Terveystalo as a workplace to others. In the 2023 professional survey, the eNPS recommendation index was 19 (28). In 2023, Terveystalo
18
implemented changes to its operating model and streamlined organisational structures in connection with a profit improvement program.
These changes had a negative impact on the eNPS. Terveystalo’s long-term strengths include well-functioning work communities, effective
cooperation and good team leadership. These were perceived increasingly positively. The willingness to continue working at Terveystalo
also remained at a good level. The target is for the eNPS indicator to be at least 25 in 2025.
Target
Indicator (KPI)
Scope of
application
Target
level
Target
year
Base
year
2023
2022
Being the industry’s
best and most
attractive employer
Employee Net
Promoter Score
(eNPS)
Terveystalo’s
employees and
private
practitioners
25
2025
2022
28
The employee Net Promoter Score (eNPS) indicates the proportion of the personnel and private practitioners who would recommend Terveystalo as a
workplace to others.
Well-being and strong work communities
The core of Terveystalo’s people strategy is to build strong work communities with a humanely efficient working culture where people have
high job satisfaction and their work is smooth and productive. To achieve this, Terveystalo looks after the health and safety of the personnel
by providing occupational health services that exceed the legal requirements and by continuously developing the safety culture in work
communities. Nurturing a healthy work-life balance is part of a humanely efficient working culture. Terveystalo’s work communities are
equal, non-discriminatory, and diverse. Good and effective supervisory work is a key factor in performance and job satisfaction, and it is
strengthened by supporting and training supervisors.
Occupational safety
The occupational safety of Terveystalo’s personnel in Finland is developed and managed at the Group level, taking company-specific and
business-specific differences into account. The different levels of the organisation know and recognize their responsibilities concerning
ensuring occupational safety in compliance with Finnish legislation. Terveystalo’s goal is to be a safer working environment every day.
The development of occupational safety at Terveystalo is focused on the identification, prevention, and mitigation of health hazards and
adverse health impacts arising from working conditions, as well as protecting and promoting the safety, work ability, and health of
employees. An annual action plan is drawn up for the development of occupational safety. In 2023, the goal was to develop the
systematic management of occupational safety at the individual, unit, business, and Group levels by, for example, clarifying
responsibilities related to occupational safety, ensuring careful orientation training, and increasing occupational safety management
through supervisory work. A new operating model for the risk assessment of work tasks was introduced in 2023.
All occupational accidents and commuting accidents at Terveystalo are reported and investigated. The operational safety is further
developed with the help of safety observations. Terveystalo has not had any occupational accidents or commuting accidents resulting in
death or severe injury for years. The accident frequency in Finland in 2023 was 20 (18).
In Sweden (Feelgood), occupational health and safety are organised following the Swedish legislation. The certified ISO 45001
occupational health and safety system guides the operations. The number of accidents in Sweden in 2023 was 16 (13).
Occupational healthcare
Occupational healthcare plays a key role in the identification of health risk factors and the prevention of illnesses. In Finland, Terveystalo’s
occupational healthcare and occupational safety are organised on a company-specific and regional basis in accordance with Finnish
legislation. According to the law, the employer shall arrange occupational healthcare at its own expense to prevent and control health
risks and problems related to work and working conditions and to protect and promote the safety, working capacity, and health of
employees.
In addition to the statutory requirements, Terveystalo provides its employees in Finland with a comprehensive range of primary
19
healthcare, speciali sed care, and well -being services, such as occupational physiotherapy and services that support mental well-being.
Short-term psychotherapy is also a part of Terveystalo’s occupational health services.
Terveystalo itself provides occupational healthcare services to its personnel throughout Finland. Terveystalo’s occupational health
services are certified under ISO 9001:2015 quality certificate .
In the occupational health services, significant focus is placed on maintaining the personnel’s work ability and the treatment of illnesses.
Sickness absences among the personnel decreased from the previous year, and the sickness absence rate in Finland was 4.0 (5.2) percent
of hours worked.
In Sweden (Feelgood), occupational healthcare is organised in accordance with Swedish legislation. Operations are certified by ISO 45001
occupational health and safety system. In Sweden, the sickness absence rate was 4.8 (5.5) in 2023.
Work-life balance
A healthy work-life balance supports the well-being, productivity, and job satisfaction of the personnel. As an employer, Terveystalo strives
to support its personnel in reconciling work and private life. All Terveystalo employees are entitled to statutory leave. In 2023, the share of
employees taking statutory leave was 7.4 percent of all employees, of whom 8.1 percent were women and 4.2 percent men. Work at
Terveystalo is flexible and location-independent. Work goals and effectiveness determine the where and how the work is performed.
Professional growth and focusing on meaningful matters
Terveystalo offers its employees and private practitioners high-quality training in various areas. Skills development aims at strong and up-
to-date professional skills and excellent leadership.
In 2023, Terveystalo organised training in Finland on average 11.7 hours per employee.
In addition to internal training, Terveystalo cooperates in research and education with several universities and promotes youth employment
through trainee programs.
To enable smooth and efficient way of working for professionals, the structures, tools, and processes are continuously developed. In 2023,
all of Terveystalo’s occupational health customers were given access to the Symptom Assessment tool, a CE-marked medical device that
makes the use of occupational healthcare services smoother in the event of illness. The Symptom Assessment tool supports the work of
healthcare professionals by taking care of certain routine tasks on the professional’s behalf, allowing them to allocate more time to
customer encounters.
Ethical business conduct
Ethical, responsible and compliant conduct of business is essential in Terveystalo’s operations. Terveystalo’s operations are guided by the
legislation governing the sector and private healthcare services, as well as the regulations and requirements established by the authorities.
In addition, the work of healthcare professionals is guided by their own ethical codes of conduct.
The Code of Conduct provides a framework that helps ensure compliance with Terveystalo’s values and internal guidelines as well as
applicable legislation. The Code of Conduct also reflects Terveystalo’s commitments to its key stakeholders. Terveystalo is committed to
promoting ethical business practices and requires that all the company’s operations are conducted in compliance with the applicable laws
and regulations. In addition to compliance with legislation and Terveystalo’s Code of Conduct, Terveystalo is committed to the UN Guiding
Principles on Business and Human Rights, the conventions of the International Labour Organisation (ILO) and the Ten Principles of the UN
Global Compact. Terveystalo continuously develops its compliance program and the related processes and controls to ensure that they
correspond to the changes in the operating environment.
Terveystalo’s Code of Conduct comprises Terveystalo’s key principles regarding anti-bribery and anti-corruption, compliance with fair
competition and environmental requirements, ensuring privacy and patient safety, employee equality, non-discrimination, and the freedom
of association, as well as the reporting of misconduct, among other things.
Terveystalo Group also expects its suppliers to observe high standards of sustainable business concerning ethical, social and environmental
perspectives, as well as occupational health and safety. Each year, Terveystalo purchases services, materials, and supplies for its clinics from
20
approximately 5,000 suppliers. Of these, the 190 largest suppliers account for about 80 percent of total purchasing expenditure. The largest
procurement categories are subcontracted services, such as cleaning, consulting, and laboratory services, ICT procurement, renting of
business premises, pharmaceutical products, and healthcare supplies and equipment.
Terveystalo Group’s Supplier Code of Conduct sets out the minimum requirements that all suppliers and partners need to satisfy to engage
in business with Terveystalo and its subsidiaries. All Terveystalo’s contract suppliers and suppliers participating in tendering processes are
required to accept Terveystalo’s Supplier Code of Conduct. Terveystalo’s Supplier Code of Conduct was updated in 2023. The Supplier Code
of Conduct is available on the Terveystalo website.
One important aspect of Terveystalo’s culture of doing the right thing is that everyone who acts on behalf of or with Terveys talo, and
every customer, partner and supplier, feels that they can freely report any suspicions of misconduct and trust that Terveystalo will take
appropriate measures to investigate any actions that are or are suspected of violating the Code of Conduct. Terveystalo has online
training on the Code of Conduct aimed at everyone in the organisation. The training includes instructions on highlighting and reporting
misconduct. Actual or suspected violations of the Code of Conduct must be reported to the supervisor, the supervisor’s supervisor, or
Terveystalo’s Legal & Compliance department. Suspected misconduct can also be reported via Terveystalo’s reporting channel (WhistleB),
which is open to everyone. In 2023, Terveystalo received a total of 13 (19) reports through the reporting channel. Of the reports received
in 2023 whose investigation has been completed, a violation of the Code of Conduct was observed in two instances, which led to a
disciplinary process. For certain reports received late in the year, the investigations are still ongoing. The findings from the reports and
completed investigations have been taken into consideration in the development of Terveystalo’s processes.
Respecting human rights
Terveystalo does not tolerate any form of discrimination, harassment, bullying, racism, or inappropriate treatment, nor does Terveystalo
condone the use of child labour, any form of forced labour or other human rights violations in its own operations or its value chain or supply
chain. Terveystalo respects the human rights set out in the UN Declaration of Human Rights as well as the workers’ rights defined by the
International Labour Organisation (ILO) and related international conventions. The company is committed to the UN Global Compact
initiative and its principles pertaining to human rights and labour rights. Terveystalo’s service providers, suppliers and other partners are
expected to observe the same principles and respect internationally recognised human rights. Human rights principles are included in
Terveystalo’s Code of Conduct and Supplier Code of Conduct.
Targets related to ethical business
Terveystalo measures the realisation of ethical and responsible business at Terveystalo and in its value and supply chain.
Everyone at Terveystalo is required to observe the Code of Conduct, regardless of their business unit or role in the company. The target is
for all Terveystalo employees to have completed Terveystalo’s training on the Code of Conduct and correct action. In 2023, 72 (69) percent
of Terveystalo’s employees in permanent, full-time employment relationship completed the training. The figures include Terveystalo’s
Finnish operations.
Contractual suppliers and suppliers participating in tendering processes must approve Terveystalo’s Supplier Code of Conduct, which
includes guidelines and requirements pertaining to anti-corruption and bribery, human rights, fundamental rights at work, occupational
health and safety, taxation, and environmental responsibility. The target is for 100 percent of Terveystalo’s key suppliers to have approved
the Supplier Code of Conduct. At the end of 2023, 81 (80) percent of key suppliers representing 80 percent of Terveystalo’s total
procurement for operations in Finland had approved the Supplier Code of Conduct. The figures include Terveystalo’s Finnish operations.
Target
Indicator (KPI)
Scope of application
Target level
Target year
2023
2022
All employees have
completed training on the
Code of Conduct and
correct action
Percentage of
employees in
permanent, full-time
employment
relationship who
have completed
the training relative
Terveystalo’s Finnish
operations
100%
Continuous
72%
1)
69%
1)
21
to all employees in
permanent, full-time
employment
relationship 1)
Key suppliers accounting
for over 80% of total
procurement have
approved the Supplier
Code of Conduct
Percentage of
suppliers who
have approved the
Supplier Code of
Conduct 2)
Terveystalo’s Finnish
operations
100%
Continuous
81%
80%
1)
The figures are not comparable due to the training completion periods not being of equal length and due to change in the group of personnel whose course completions are
reported. The new compliance course was introduced and moved to a new online platform in spring 2023. The figures for 2023 only include completions after the course was
revised and only completions of
employees in permanent, full-time employment relationship in Finnish operations. The figures for 2022 also include course completions that
took place in the second half of 2021 and, in addition to course completions of employees in permanent, full-time employment relationship, also course completions of other
employees in Finnish operations.
2)
Terveystalo measures the share of suppliers who have approved the Supplier Code of Conduct from Terveystalo’s key suppliers representing approximately 80 percent of the
total procurement expenditure of Terveystalo’s operations in Finland. The procurement expenditure does not include expenses related to fees paid to private practitioners,
purchases for operations in Sweden, one-off purchases or purchases of low significance.
22
Anti-corruption and anti-bribery
In the area of anti-corruption and anti-bribery, Terveystalo complies with the law and other applicable regulations and guidelines.
Terveystalo is also committed to the UN Global Compact initiative and its anti-corruption principles. Terveystalo’s operations are guided by
the Code of Conduct, which includes anti-corruption and anti-bribery guidelines regarding, for example, giving and accepting gifts and
hospitality as well as the avoidance of conflicts of interest.
All of Terveystalo’s contract suppliers and suppliers participating in tendering processes are required to accept Terveystalo’s Supplier Code
of Conduct, which includes anti-corruption and anti-bribery guidelines and requirements, among other things.
According to Terveystalo’s Code of Conduct gifts or other benefits that could affect business decisions or have considerable personal or
financial value are not given or accepted in Terveystalo. Terveystalo’s Code of Conduct dictates that the company does not support political
activities. Terveystalo does not make financial contributions to political parties or organisations, directly or indirectly, nor does Terveystalo
fund the election campaigns of individual candidates.
Observed or suspected misconduct related to the Code of Conduct, can be reported anonymously at
http://www.report.whistleb.com/en/terveystalo
.
No cases of corruption or bribery were reported in 2023. Terveystalo continues to develop its anti-corruption and anti-bribery compliance
program and related processes to reflect the changes in its operating environment.
Ensuring patient data protection and information security
The protection of privacy and data protection is the responsibility of everyone working at Terveystalo and everyone working on behalf of
Terveystalo. The company pays special attention to the appropriate and legally compliant processing of personal data. Terveystalo provides
its personnel with training and instructions on the processing of personal data and emphasises the confidentiality and protection of patient
data. Terveystalo introduced a revised online data protection course for all employees in the fall of 2023.
At Terveystalo, patient data is stored in information security-certified patient information systems. Terveystalo’s patient information
systems in Finland are category A systems and they have undergone information security certification following the regulations related to
providing Kanta services. In addition, Terveystalo’s data protection and information security are regularly audited under the ISO 9001:2015
certification, both internally and by an external party.
Terveystalo applies the appropriate physical, technical and administrative protection measures to protect data from misuse. These
measures include, among other things, control and filtering of network traffic, use of encryption techniques and secure data centres,
appropriate access control, controlled granting of access rights and supervising their use, issuing instructions to personnel participating in
personal data processing, and risk management related to the planning, implementation, and maintenance of services. Terveystalo chooses
its subcontractors carefully and uses agreements and other arrangements to ensure that they process data in compliance with the law and
good data protection practices.
Terveystalo creates value for its stakeholders
Responsible business is also financially profitable and sustainable. Terveystalo creates value for its customers, society, and our shareholders
by continuously developing the clinical, operational, and experienced quality of its services, enabling faster access to care, reducing sickness
absences, and employing directly and indirectly more than 15,500 professionals. The most significant cash flows from Terveystalo’s
operations consist of revenue from service sales, purchases from suppliers of goods and services, salaries paid to our personnel, fees paid to
private practitioners, taxes, investments, and dividends paid to the shareholders.
In 2023, Terveystalo’s revenue and other operating income totalled EUR 1,290.6 (1,261.8) million. The goods, materials, and services
purchased from suppliers amounted to EUR 536.2 (525.7) million. Salaries and remuneration amounted to EUR 375.7 (381.5) million. Net
financial expenses to creditors amounted to EUR 24.2 (2.9) million. Dividends paid to our shareholders in 2023 based on the results of the
previous fiscal year amounted to EUR 35.4 (35.4) million. Terveystalo invested a total of EUR 40.2 (58.5) million to business development.
23
In 2023, Terveystalo’s tax footprint totalled EUR 212.1 (235.7) million. The tax footprint is an indicator of the total tax revenue and tax -like
charges generated for society by Terveystalo’s business activities. In addition, Terveystalo paid a total of EUR 380.1 (340.6) million in fees to
private practitioners, who pay their individual taxes separately. The taxes paid by private practitioners are not included in Terveystalo’s tax
footprint.
Sustainable consumption and climate action
Terveystalo is committed to the targets agreed upon in international climate summits for the mitigation of climate change. Terveystalo’s
goal is zero emissions from its operations in 2030. The conservation and sustainable use of natural resources in Terveystalo’s supply chains
are promoted by minimising the generation of waste in all of Terveystalo’s operations and forwarding all waste to be recovered. Digital
services enable simultaneously improving access to care and reducing customers’ travel times and the emissions generated by travel.
Based on the results of the 2023 double materiality assessment, climate change is not one of Terveystalo’s material sustainability topics.
This is because Terveystalo’s carbon footprint is not significant due to the nature of its operations. The service sector is considered to be
low in emissions due to its low energy intensity. The impacts of climate change and adaptation to climate change do not present significant
risks or opportunities to Terveystalo’s business or strategy. However, for the sake of transparency and the continuity of reporting,
Terveystalo reports key information on its environmental impacts.
Terveystalo’s environmental policy
Terveystalo Group’s environmental policy describes the environmental principles that all employees, managers, officials, board members,
consultants and other personnel working under the management of Terveystalo Group are expected to follow.
Terveystalo operates in line with the principles of sustainable development to reduce and eliminate environmental risks. In addition to
being committed to the Group’s environmental policy, Terveystalo is committed to full compliance with the applicable legislation, the
regulations issued by the authorities, industry operating practices that ensure occupational safety and patient safety, and the continuous
improvement of environmentally friendly operating practices.
Adverse environmental impacts are prevented by, for example, reducing energy consumption and transitioning to carbon-neutral energy,
reducing the volume of waste created in operations and increasing our recycling rate, optimising the life cycle of healthcare equipment,
taking environmental perspectives into account in the travel and car policy, as well as developing digital services. In addition, adverse
environmental impacts are prevented by planned pharmaceutical services, taking environmental perspectives into account in centralised
procurement with efficient inventory management and by taking sustainable development and environmental perspectives into account in
network and business premises projects.
Terveystalo’s environmental program covers all clinics in Finland and its appropriateness is evaluated in quality management and
environmental management system audits. Terveystalo’s environmental management system is certified under the ISO 14001 standard.
The standard provides a framework for the continuous development of processes and practices that minimise negative environmental
impacts. In 2023, ISO 14001:2015 environmental certification was expanded to cover all of the units in Terveystalo’s medical clinic network
in Finland. Some of the Feelgood operating locations in Sweden are also ISO 14001:2015 certified.
Zero emissions from own operations 2023
Terveystalo’s goal is to reduce its carbon footprint so that its own operations will generate zero emissions in 2030. A further goal is to
reduce direct and indirect CO
2
consumption, the goal is for green electricity to account for 100 percent of purchased electricity. In addition, the company aims to minimise
the generation of waste and ensure the recycling and recovery of waste in all its operations.
24
Target
Indicator (KPI)
Scope of application
Target
level
Target
year
Base
year
level
Base year
2023
2022
2021
Zero emissions from
own operations 2030 1)
Reduction of direct
(Scope 1) and indirect
(Scope 2) greenhouse
gas emissions
compared to 2018
Finnish and Swedish
operations
-100 %
2030
6,316.8
2018
-56 %
-76 %
-89 %
Reduce direct and
indirect CO
2
(Scope 1 and Scope 2)
by 80% by 2025 (using
2018 as the baseline)
Direct (Scope 1) and
indirect (Scope 2)
greenhouse gas
emissions, tCO2
Finnish and Swedish
operations
-80 %
2025
6,316.8
2018
2755,4
1 544,1
664,0
Purchase 100% green
electricity by 2025 2)
Share of green
electricity of all
purchased electricity,
%
Finnish and Swedish
operations
100 %
2025
62 %
2020
70 %
72 %
89 %
Minimise waste in all
operations and forward
all waste to be
recovered
The recovery rate of
waste generated at
Terveystalo units, % 3)
Finnish operations
100 %
2025
99 %
2020
100 %
100 %
100 %
The recycling rate of
waste generated at
Terveystalo units, % 3)
Finnish operations
100 %
2025
61 %
2020
68 %
67 %
64 %
1) Scope 2 emissions are market-based. The market-based Scope 2 emission calculation takes into account the green electricity guarantees of origin purchased by Terveystalo, which
in 2023 covered approximately 70 (72) percent of the electricity consumption. The emissions of the remaining purchased electricity have been calculated using the residual mix
emission factors for Finland and Sweden (AIB, European Residual Mixes). Finland's residual emission factor increased by 83% from 2022 due to a higher share of fossil fuels in the
residual mix (Finland's residual emission factor in 2022 was 0.285 kgCO2e/kWh and in 2023 0.5208 kgCO2e/kWh). The market -based Scope 2 emissions for 2022 have been
recalculated for Finland, because Terveystalo purchased the green electricity guarantee of origin for the period 1 September - 31 December 2022 at the beginning of 2023. From
2022 onwards, the figures for energy use and carbon footprint also include the Swedish operations. The figures for 2021 include only the Finnish operations.
2) In units where Terveystalo purchases electricity itself.
3) Excludes waste fractions that cannot be recycled or recovered under any circumstances, such as hazardous waste.
Terveystalos’s carbon footprint
In 2023, Terveystalo’s carbon footprint in Finland from Scope 1 and 2 emissions (market-based) was 2,716.0 (1,401.9) tCO
2
e. In
Sweden, Feelgood’s Scope 1 and 2 emissions totalled 39.4 (142.2) tCO
2
e. Terveystalo’s carbon footprint consists mainly of the
production of the electricity consumed by properties, emissions generated by transport and travel as well as the waste generated in
hospitals and clinics. The emissions generated by Terveystalo’s operations are reduced, for example, by increasingly transitioning to
green electricity and prioritizing low-emission vehicles. Terveystalo develops the measurement of its impacts throughout the value
chain and works with its key suppliers to reduce the emissions generated by the value chain.
Terveystalo reports the direct (Scope 1) and indirect (Scope 2) greenhouse gas emissions arising from its operations – and part of its
indirect Scope 3 emissions – in accordance with the GHG Protocol. Emissions from Swedish operations have been reported starting
from 2022.
25
Scope 1
As Terveystalo does not, for the most part, own or control the properties at which it operates, the greenhouse gas emissions mostly
consist of the emissions from the fleet of cars controlled by Terveystalo and the trucks used for imaging operations. The emissions
arising from the company’s own driving and driving under its direct control are calculated based on fuel consumption. In 2023, Scope
1 CO
2
2
e. In Sweden, Scope 1 emissions were 18.2 (39.9) tCO
2
e.
Scope 2
Indirect Scope 2 greenhouse gas emissions arise from the production of electricity purchased by Terveystalo and the production of
district heating consumed at properties controlled by Terveystalo. In 2023, a total of 16,171 (15,841) MWh of electricity was
purchased for the properties controlled by Terveystalo in Finland. The company’s electricity portfolio (electricity purchased for
properties) has been zero-CO
2
green electricity since the beginning of 2020. Zero CO
2
consumption year 2023 totalled 11,220 (11,395)) MWh, which corresponds to approximately 69 (72)
percent
of the electricity
consumption of the company’s operations in Finland. The amount of electricity purchased to properties not included in the
electricity portfolio totalled 4,951 (4,447) MWh, which corresponds to 2,578.5 (1,267.4) tCO
2
e (market-based). The growth in the
market-based Scope 2 emissions is mainly due to an 83 percent increase in the Finland's residual emission factor used in the
emissions calculation from the comparison period1). The amount of purchased electricity outside the electricity portfolio in Finland
increased by approximately 11 percent, which also affected the Scope 2 emissions growth from the comparison period. In Swedish
operations, 2,081 (1,328) MWh of electricity was purchased for properties controlled by Feelgood, of which approximately 74
percent (67 percent) was zero CO
2
(102.3) tCO
2
e. Terveystalo’s target is for green electricity to account for 100 percent of purchased electricity by 2025.
1) Scope 2 emissions are market-based. The market-based Scope 2 emission calculation takes into account the green electricity guarantees of origin purchased by Terveystalo, which
in 2023 covered approximately 70 (72) percent of the electricity consumption. The emissions of the remaining purchased electricity have been calculated using the residual mix
emission factors for Finland and Sweden (AIB, European Residual Mixes). Finland's residual emission factor increased by 83 percent from 2022 due to a higher share of fossil fuels in
the residual mix (Finland's residual emission factor in 2022 was 0.285 kgCO2e/kWh and in 2023 0.5208 kgCO2e/kWh). The market -based Scope 2 emissions for 2022 have been
recalculated for Finland, because Terveystalo purchased the green electricity guarantee of origin for the period 1 September - 31 December 2022 at the beginning of 2023.
Scope 3
For indirect Scope 3 emissions, Terveystalo reports emissions arising from work-related travel by employees and emissions from the
waste generated by the company’s operations.
Terveystalo aims to avoid unnecessary work-related travel by encouraging to favour remote meetings whenever possible.
Terveystalo’s personnel in Finland flew a total of 0.8 (0.7) million kilometres in work-related travel, corresponding to 85.5 (84.1)
tCO
2
e. Reimbursable work-related travel by Terveystalo’s personnel in Finland totalled 2.7 (2.6) million kilometres, corresponding to
448.2 (440.8) tCO
2
e. Terveystalo encourages its personnel to choose low-emissions vehicles as company cars. The average emissions
of the company cars used by Terveystalo in Finland amount to 64 (72) gCO
2
e/km. In Sweden, work-related travel by air generated
60.8 (45.1) tCO
2
e in emissions. The total emissions from work-related travel by the personnel in Sweden amounted to 260.4 (262.6)
tCO
2
e.
Terveystalo’s goal is to minimise mixed waste in all of Terveystalo’s operations and forward as large a share of waste as possible to
be recovered. The indirect emissions arising from waste in Finland amounted to 42.6 (41.7) tCO
2
e. In Sweden, the amount of waste
generated and emissions from waste are very low since waste is mainly generated in offices. The emissions arising from waste in
Sweden totalled 3.4 (2.1) tCO
2
e.
Terveystalo’s CO
2
(Scope 1 and 2, market-based) relative to revenue was 2.1 (1.2) gCO
2
e/EUR. Relative to the number of employees, the emissions
intensity was 0.4 (0.2) tCO
2
e. The figures also include Terveystalo’s operations in Sweden.
26
EU taxonomy reporting
The EU taxonomy is a classification system for sustainable finance that establishes criteria for determining environmentally sustainable
business. The regulation, which entered into force in July 2020, lays the foundations for the EU's taxonomy by setting out the general
conditions that economic activity must meet to be classified as environmentally sustainable. The regulation sets out six environmental
objectives: climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition
to a circular economy, prevention and reduction of pollution, and protection and restoration of biodiversity and ecosystems. Economic
activities that contribute to one of these objectives without harming others can be considered environmentally sustainable under certain
criteria. Large companies must report the share of sustainable business in their business in accordance with taxonomy criteria.
At present, EU taxonomy mainly concerns the economic activities that play the most important role in achieving the environmental
objectives. As a result, many industries, such as health care services, are almost completely excluded from the scope of the current
taxonomy.
Terveystalo has determined its taxonomic eligibility by examining its activities in relation to the economic activities listed in the taxonomy.
Only one of Terveystalo’ s businesses is classified in taxonomy (12.1 Residential care activities).
After this, Terveystalo has evaluated the taxonomy alignment of the operation. The activity is classified as aligned with the taxonomy if the
taxonomy's criteria are met: 1. The activity essentially supports the achievement of at least one environmental goal, 2. it does not have
significant adverse effects from the perspective of other environmental goals, and 3. the activity complies with the minimum social
safeguards defined in the taxonomy (Minimum safeguards). Based on this assessment, Terveystalo's activities listed in the taxonomy (12.1
Residential care activities) cannot be considered taxonomy -aligned, because the activities, due to their nature, do not target or support the
achievement of the taxonomy's environmental objectives.
As a result of the assessment, the significance of Terveystalo’ s taxonomic functions is negligible in terms of indicators. The key figures are
the share of taxonomy-eligible and taxonomy -aligned operations (percent) in terms of revenue, operating costs, and investments.
According to the company's estimate, one percent of Terveystalo’s revenue, operating costs and investments are eligible with the current
taxonomy and 99 percent are non-eligible. The share of revenue is calculated by dividing the revenue from child welfare services
(taxonomy-eligible activity) by the Group's total consolidated revenue. The share of investments (CapEX) is calculated by dividing the
investments made in child welfare services during the year (renovation of apartments, investments in machinery and equipment) by the net
investments of the company, excluding acquisitions. The share of operating expenditure (OpEx) is calculated by dividing the operating
expenditure for child welfare services by the total operating expenditure of the group (excluding depreciation and amortisation).
Furthermore, zero percent of Terveystalo’s revenue, operating costs and investments are taxonomy-aligned, and 100 percent are non-
taxonomy-aligned. The evaluation according to the EU-taxonomy classification system described above has been performed through an
internal assessment by representatives of the Sustainability and Finance organisation.
27
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities 2023
1 January - 31 December 2023
2023
Substantial contribution criteria
DNSH criteria (“Does Not Significantly
Harm”)
Economic Activities (1)
Code
(2)
Turnover (3)
Propor
tion of
turnov
er,
year N
(4)
Climate Change Mitigation (5)
Climate Change Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biodiversity (10)
Climate Change Mitigation (11)
Climate Change Adaptation (12)
Water (13)
Pollution (14)
Circular
Economy (15)
Biodiversity (16)
Minimum Safeguards (17)
Proportion of Taxonomy
-
aligned (A.1.) or
-
eligible (A.2.) turnover, year N
-
1 (18)
Category enabling a
ctivity (19)
Category transitional activity (20)
MEUR
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/
N
Y/
N
Y/
N
Y/N
Y/N
%
E
T
A TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy -aligned)
Turnover of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
Of which enabling
Of which transitional
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy -aligned activities)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Child welfare services
CCA
12.1
1 %
1 %
Turnover of Taxonomy -eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
1 %
1 %
A Turnover of Taxonomy -eligible
activities (A1.+A.2)
B TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy -non-eligible
activities
99 %
99 %
TOTAL
100 %
100
%
28
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities 2023
1 January - 31 December
2023
2023
Substantial contribution criteria
DNSH criteria (“Does Not Significantly Harm”)
Economic Activities (1)
Code
(2)
Cap
Ex
(3)
Proportion of CapEx, year N (4)
Climate Change Mitigation (5)
Climate Change Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biod
iversity (10)
Climate Change Mitigation (11)
Climate Change Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards (17)
Proportion of Taxonomy
-
aligned (A.1.) or
-
eligible
(A.2.)
CapEx, year N
-
1 (18)
Categ
ory enabling activity (19)
Category transitional activity (20)
MEU
R
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy -aligned)
CapEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
Of which enabling
Of which transitional
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy -aligned activities)
KEL;
E/KEL
KEL;
E/KEL
KEL;
E/KEL
KEL;
E/KEL
KEL;
E/KEL
KEL;
E/KEL
Child welfare services
CCA
12.1
0
0 %
1 %
-
CapEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
(A.2)
0
0 %
1 %
A. CapEx of Taxonomy-eligible
activities (A1.+A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible
activities
40
100
%
99 %
TOTAL
40
100
%
100
%
29
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities 2023
1 January - 31
December 2023
2023
Substantial contribution criteria
DNSH criteria (“Does Not Significantly Harm”)
Economic Activities (1)
Code
(2)
OpE
x (3)
Proporti
on of
OpEx,
year N
(4)
Climate Change Mitigation (5)
Climate Change Adaptation (6)
Water (7)
Pollution (8)
Circ
ular Economy (9)
Biodiversity (10)
Climate Change Mitigation (11)
Climate Change Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards (17)
Proportion of Taxonomy
-
aligned (A.1.) or
-
eligible
(A.2.)
OpEx, year N
-
1 (18)
Category enabling activity (19)
Category transitional activity (20)
MEU
R
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy -aligned)
OpEx of environmentally
sustainable activities (Taxonomy-
aligned) (A.1)
Of which enabling
Of which transitional
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy -aligned activities)
KEL;
E/KEL
KEL;
E/KEL
KEL;
E/KEL
KEL;
E/KEL
KEL;
E/KEL
KEL;
E/KEL
Child welfare services
CCA
12.1
10
1 %
1 %
OpEx of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
10
1 %
1 %
A OpEx of Taxonomy-eligible
activities (A1.+A.2)
B TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible
activities
1101
99 %
99 %
TOTAL
100 %
100
%
30
Form 1: Nuclear power and fossil gas related activities
Nuclear power-related activities
1.
The undertaking carries out or finances research, development, demonstration and
deployment of innovative power generation facilities that produce energy through a
nuclear reaction with minimum waste in the fuel cycle, or has responsibilities related to
such activities.
NO
2.
The undertaking carries out or finances the construction and safe operation of new
nuclear installations for the production of electricity or process heat, including for district
heating or industrial processes such as hydrogen production, and the improvement of
their safety, using the best available technology, or has responsibilities relating to such
activities.
NO
3.
The undertaking carries out or finances the safe operation of existing nuclear installations
for the production of electricity or process heat, including for district heating or industrial
processes such as the production of hydrogen from nuclear energy, and the improvement
of their safety, or has responsibilities relating to such operations.
NO
Fossil gas related activities
4.
The undertaking carries out or finances the construction or operation of electricity
generation plants using fossil gaseous fuels, or has liabilities related to such activities.
NO
5.
The undertaking carries out, finances or has responsibilities for the construction,
rehabilitation and operation of combined heat or cooling and power plants using fossil
gaseous fuels.
NO
6.
The undertaking undertakes, finances or has responsibilities for the construction,
rehabilitation and operation of heating or cooling plants using fossil gaseous fuels.
NO
Shares and shareholders
Terveystalo Plc has one share series (TTALO), which is listed on Nasdaq Helsinki Ltd. At the end of 2023, Terveystalo’s market value was EUR
983 (794) million and the closing price was EUR 7.74 (6.25). During 2023, the highest price of Terveystalo’s share was EUR 8.53 (11.94), the
lowest price was EUR 6.43 (6.06), and the average price was EUR 7.50 (9.41). A total of 20.6 (29.5) million shares were traded. At the end of
the reporting period, the number of Terveystalo shares registered in the Trade Register was 127,036,531 (127,036,531). The total number
of shareholders was 34,025 (30,938) at the end of 2023. Terveystalo and its subsidiaries hold 480,230 (488,536) own shares for reward
purposes, corresponding to 0.4 percent of all outstanding shares.
31
The largest registered shareholders on 31 December 2023
Name
Number of shares
% of shares
Votes
% of votes
Varma Mutual Pension Insurance Company
17.44
17.44
Rettig Group AB
16.65
16.65
Pohjola Insurance Ltd
8.29
8.29
Hartwall Capital
6.48
6.48
OP Life Assurance Company Ltd
5.63
5.63
Skandinaviska Enskilda Banken AB
4.51
4.51
Ilmarinen Mutual Pension Insurance Company
4.03
4.03
Local Tapiola Mutual Insurance Company
2.05
2.05
Elo Mutual Pension Insurance Company
1.97
1.97
Evli Finnish Small Cap Fund
1.55
1.55
Ten largest in total
The list is based on the register of shareholdings maintained by Euroclear, and it does not include nominee-registered shares.
Distribution of ownership 31 December 2023
Number of shares
Number of
shareholders
% of
shareholders
Number of
securities
% of
securities
Number of
votes
% of
votes
1–100
15,740
46.26
701,279
0.55
701,279
0.55
101–500
12,677
37.26
3,188,040
2.51
3,188,040
2.51
501–1,000
2,927
8.60
2,246,249
1.77
2,246,249
1.77
1,001–5,000
2,156
6.34
4,431,586
3.49
4,431,586
3.49
5,001–10,000
241
0.71
1,763,531
1.39
1,763,531
1.39
10,001–50,000
206
0.61
4,627,671
3.64
4,627,671
3.64
50,001–100,000
27
0.08
2,109,499
1.66
2,109,499
1.66
100,001–500,000
29
0.09
6,428,528
5.06
6,428,528
5.06
500,001–
22
0.06
101,540,148
79.93
101,540,148
79.93
Total
34,025
100.00
127,036,531
100.00
127,036,531
100.00
of which nominee-
registered
11
0.03
9,214,087
7.25
9,214,087
7.25
Non-transferred, total
0
0
0
0
0
In general account
0
0
0
0
In special accounts, total
0
0
0
0
Total issued
127,036,531
100.00
127,036,531
100.00
32
Shareholder groups, 31 December 2023
Shareholders by sector
Number of shares
% of shares
Households
13,337,151
11.32
Public entities
31,236,163
26.51
Financial and insurance institutions
30,372,798
25.78
Companies
17,898,422
15.19
Non-profit institutions
3,747,089
3.18
Foreign owners
21,230,821
18.02
Total
117,822,444
100.00
Nominee-registered
9,214,087
7.25
Management shareholding, 31 December 2023
Name
Position
Number of
shares
% of shares
% of votes
Kari Kauniskangas
Chairman of the Board of Directors
21,802
0.02 %
0.02 %
Matts Rosenberg
Member of the Board of Directors
14,498
0.01 %
0.01 %
Carola Lemne
Member of the Board of Directors
5,126
0.00 %
0.00 %
Kristian Pullola
Member of the Board of Directors
8,207
0.01 %
0.01 %
Katri Viippola
Member of the Board of Directors
11,453
0.01 %
0.01 %
Ari Lehtoranta
Member of the Board of Directors
6,504
0.01 %
0.01 %
Sofia Hasselberg
Member of the Board of Directors
2,499
0.00 %
0.00 %
Ville Iho
President and CEO
13,306
0.01 %
0.01 %
Juuso Pajunen
Chief Financial Officer
19,000
0.01 %
0.01 %
Petri Bono
Chief Medical Officer
2,087
0.00 %
0.00 %
Henri Mäenalanen
Interim Executive Vice President, Healthcare Services
2,230
0.00 %
0.00 %
Stefan Kullgren
Executive Vice President of the Swedish Business Area
0
0.00 %
0.00 %
Ilari Richard
Senior Vice President, Digital Services
3,134
0.00 %
0.00 %
Mikko Tainio
Senior Vice President, Portfolio Businesses
5,596
0.00 %
0.00 %
Minttu Sinisalo
Senior Vice President, Human Resources
1,400
0.00 %
0.00 %
Management shareholding in total
116,842
0.09 %
0.00 %
Number of shares total
127,036,531
100.00 %
100.00 %
Notifications of major shareholdings
During 2023, Terveystalo Plc did not receive any notifications pursuant to Chapter 9, Section 5 of the Finnish Securities Markets Act.
The Board’s authorizations
The Board has been authorized to resolve the repurchase and/or on the acceptance as pledge of the company’s own shares using the
unrestricted equity of the Company. The authorization covers a maximum of 12,703,653 own shares in total, which corresponds to
approximately 10 percent of all shares in the Company.
The Board has also been authorized to resolve the issuance of shares and special rights entitling to shares as referred to in Chapter 10,
Section 1 of the Finnish Companies Act. The authorization covers a maximum of 12,703,653 own shares in total, which corresponds to
approximately 10 percent of all shares in the Company. Authorizations were not used during the financial period.
33
Dividend Policy and distribution of profits for 2023 proposed by the Board
The objective of Terveystalo’s Dividend Policy is to distribute a minimum of 40 percent of earnings per share in dividends. The current
financial performance, development potential, financial position, and capital requirements are taken into account. In 2023, earnings per
share were EUR -0.33 (0.19).
The parent company’s distributable funds totalled EUR 535.9 (530.8) million, of which EUR 40,5 (23,7) million is result for the financial year.
The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0,30 (0.28) per share totaling EUR 38.0 (35.4) million
be paid based on the balance sheet adopted for the financial year ended 31 December 2023. The dividend would be paid in two
installments as follows:
The first dividend installment of EUR 0.15 per share would be paid to the shareholders who are registered in the shareholders' register of
the Company maintained by Euroclear Finland Ltd on the record date of the first dividend installment on 28 March 2024. The Board of
Directors proposes that the first dividend installment would be paid on 8 April 2024.
The second dividend installment of EUR 0.15 per share would be paid to shareholders who are registered in the shareholders' register of the
Company maintained by Euroclear Finland Ltd on the record date of the second dividend installment on 9 October 2024. The Board of
Directors proposes that the second dividend installment would be paid on 16 October 2024. The Board of Directors also proposes that the
Annual General Meeting would authorize the Board of Directors to resolve, if necessary, on a new record date and date of payment for the
second dividend installment should the rules of Euroclear Finland Ltd or statutes applicable to the Finnish book-entry system change or
otherwise so require.
No substantial changes have occurred in the company’s financial position since the end of the financial year. The company’s liquidity is good
and, in the Board’s opinion, will not be jeopardized by the proposed distribution of profits.
Decisions of the Annual General Meeting 2023 and the first Board meeting
The Annual General Meeting of Terveystalo Plc was held on 23 March 2023 in Helsinki, Finland. The Annual General Meeting adopted the
financial statements for the fiscal year 2022 and discharged the members of the Board of Directors and the CEO from liability. The Annual
General Meeting approved the remuneration report for governing bodies.
The Annual General Meeting decided, in accordance with the proposal of the Board of Directors, that a dividend of EUR 0.28 per share
(totalling approximately EUR 35.4 million with the current number of shares) be paid based on the balance sheet adopted for the fiscal year
ended 31 December 2022.
The dividend was paid in two instalments as follows:
●
The first dividend instalment of EUR 0.14 per share was paid to shareholders who are registered in the shareholders' register of
the Company maintained by Euroclear Finland Oy on the record date of the first dividend instalment 27 March 2023. The first
dividend instalment was paid to shareholders on 3 April 2023.
●
The second dividend instalment of EUR 0.14 per share was paid to shareholders who are registered in the shareholders' register of
the Company maintained by Euroclear Finland Oy on the record date of the second dividend instalment 2 October 2023. The
second dividend instalment was paid on 9 October 2023. The Annual General Meeting authorized the Board of Directors to
resolve, if necessary, on a new record date and date of payment for the second dividend instalment should the rules of Euroclear
Finland Oy or statutes applicable to the Finnish book-entry system change or otherwise so require.
The number of members of the Board of Directors was confirmed to be seven (7). Kari Kauniskangas, Carola Lemne, Kristian Pullola, Matts
Rosenberg, and Katri Viippola were re-elected as members of the Board, and Sofia Hasselberg and Ari Lehtoranta were elected as new
members of the Board for a term that ends at the end of the Annual General Meeting 2024.
KPMG Oy Ab was re-elected as the Company's auditor. KPMG Oy Ab has notified that Henrik Holmbom, APA, would be acting as the
principal auditor.
As proposed by the Board of Directors, the Annual General Meeting resolved to authorize the Board of Directors to resolve on the
repurchase and/or on the acceptance as pledge of the Company's own shares using the unrestricted equity of the Company. The
34
authorization covers a maximum of 12,703,653 shares, which corresponds to approximately 10 percent of all shares in the Company. In
addition, as proposed by the Board of Directors, the Annual General Meeting resolved to authorize the Board of Directors to decide on the
issuance of shares and the issuance of special rights entitling to shares referred to in Chapter 10, Section 1 of the Companies Act. The
authorization covers a maximum of 12,703,653 shares, which corresponds to approximately 10 percent of all shares in the Company. These
authorizations are effective until the end of the next Annual General Meeting, however no longer than until 30 June 2024.
As proposed by the Board of Directors, the Annual General Meeting resolved to authorize the Board of Directors to decide on donations in a
total maximum of EUR 150,000 for charitable or corresponding purposes. In addition, the Annual General Meeting resolved to authorize the
Board of Directors to decide on the donation recipients, purposes of use, and other terms of the donations. The authorization will remain
effective until the end of the next Annual General Meeting 2024, however no longer than for a period of 18 months from the date of the
resolution of the Annual General Meeting.
In its organizing meeting, the new Board of Directors Terveystalo's Board of Directors elected Kari Kauniskangas as Chairman of the Board
and Matts Rosenberg as Vice Chairman of the Board. Kristian Pullola was elected Chairman of the Audit Committee and Matts Rosenberg,
Katri Viippola and Sofia Hasselberg were elected members. Kari Kauniskangas was elected Chairman of the Remuneration Committee and
Carola Lemne and Ari Lehtoranta were elected members.
Changes in Terveystalo’s Executive Team
As of 1 January 2023, Terveystalo's organisation has consisted of three business areas: Healthcare Services, Portfolio Businesses, and
Sweden.
Ilari Richardt was appointed Senior Vice President of Digital Services and a member of the Executive Team as of 29 March 2023 as Kati Sulin
left the Company.
Henri Mäenalanen was appointed as the Chief Operating Officer of Terveystalo Healthcare Services as of 12 April 2023 as Siina Saksi left the
Company.
Terveystalo announced changes to the Executive Team on 31 October 2023. Sari Heinonen, b.1976, PhD, Marketing, was appointed
Executive Vice President of the Healthcare Services Business Area and a member of Terveystalo's Executive Team as of 5 February 2024.
Chief Operating Officer Henri Mäenalanen served as interim EVP of the Healthcare Services business area until Sari Heinonen took up her
position, after which he will took over the position of Executive Vice President of Portfolio Businesses. Stefan Kullgren, who started as
Executive Vice President of the Swedish Business Area and CEO of Feelgood AB on 1 October 2023, was appointed as a member of
Terveystalo's Executive Team as of 1 November 2023.
In addition to the above-mentioned executives, Terveystalo's Executive team includes Petri Bono, Chief Medical Officer, Juuso Pajunen,
Chief Financial Officer and Minttu Sinisalo, Senior Vice President of People and Careers. All the above report to President, and CEO Ville Iho.
Corporate governance
Terveystalo Plc’s Corporate Governance Statement, Remuneration Policy, and Remuneration Report for 2023 will be published as part of
the Annual Report 22 February 2024.
Events after the end of the reporting period
Terveys talo's Board of Directors has approved a new performance period covering the years 2024-2026 of the long-term
share-based incentive plan for key personnel
Terveystalo Plc's Board of Directors has approved a new performance period covering the years 2024-2026 of the long-term share-based
incentive plan for key personnel. The purpose of the program is to align the objectives of shareholders and key personnel to increase the
company's value in the long term, and to commit key personnel to implementing Terveystalo's strategy by offering them a competitive,
share-based incentive program.
The Performance Share Plan is based on a rolling 3-year performance period structure, with a new performance period starting at the
beginning of each year if so decided by the Board. The Board decides on the participants, performance measures, and targets as well as
35
earning opportunities on an annual basis. Terveystalo published the establishment of the program and its main terms in a stock exchange
release on 3 December 2020.
Performance Period 2024-2026 of the Performance Share Plan (PSP)
During the performance period 2024-2026, the participants are awarded for successful shareholder value creation. The performance
indicators based on which share rewards may be paid to 90 percent of the participants are absolute and relative (compared to the OMX HKI
benchmark CAP GI index) Total Shareholder Return. For 10 percent of the participants, the value creation is measured by EBITA (adjusted
earnings before interest, taxes, and amortization) of the business area or independent business that they lead.
Terveystalo's Board of Directors confirms the total amount of shares earned after the end of the performance period. The share rewards
that may be paid based on the 2024–2026 earning period will be paid in Terveystalo Plc shares after the end of the performance period,
provided that the performance targets set for the program by the Board are achieved. The maximum number of shares to be paid based on
this plan is 640,000 shares. Taxes and tax-like payments to the recipient are deducted from the reward, after which the remaining net
amount is paid to the participants in shares.
No more than approximately 75 people selected by the Board are eligible to participate in the program, including members of Terveystalo's
Executive Team.
Terveystalo applies a share ownership requirement to the members of the Executive Team. Each member of the Executive Team is expected
to retain at least 50 percent of the net shares received under the long-term incentive plan until his or her shareholding in Terveystalo is at
least equal to his or her annual gross base salary.
Performance Period 2024-2026 of the Restricted Share Plan (RSP)
The purpose of the Restricted Share Plan is to function as a supplementary structure for separately selected key personnel of Terveystalo in
special situations.
The share rewards will be paid in Terveystalo Plc shares after the end of the performance period, provided that the individual participants
are still employed by Terveystalo. The maximum number of shares to be paid based on this plan is 64,000 shares.
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.
36
●
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 and risks related to the company’s business are described in more detail on the company’s website and in
the company’s Annual Review.
Annual General Meeting in 2024
Terveystalo Plc's Annual General Meeting (AGM) is planned to be held on Tuesday 26 March 2024. The meeting will be convened by the
company's Board of Directors separately at a later date.
Terveystalo Plc
Board of Directors
37
Calculation of financial ratios and alternative performance measures
Financial ratios
Earnings per share, (EUR)
=
Profit for the period attributable to owners of the parent company
Average number of shares during the period
Terveystalo presents alternative performance measures as additional information to the financial measures defined in IFRS. Those are
performance measures that the company monitors internally and they provide significant additional information related to the company's results of
operations, financial position and cash flows to the management, investors, securities analysts and other parties. These should not be considered
in isolation or as a substitute to the measures under IFRS.
Alternative performance measures to the statement of financial position
The company presents the following alternative performance measures to the statement of financial position as they are, in the company's view,
useful indicators of the company's ability to obtain financing and service its debt.
Return on equity, %
=
Profit/loss for the period (LTM)
x 100%
Equity (including non-controlling interest) (average)
Equity ratio, %
=
Equity (including non-controlling interest)
x 100%
Total assets - advances received
Gearing, %
=
Interest-bearing liabilities - interest-bearing receivables and cash and cash
equivalents
x 100%
Equity
Net debt/Adjusted EBITDA (LTM) *
=
Interest-bearing liabilities - interest-bearing receivables and cash and cash
equivalents
Adjusted EBITDA (LTM)
Net debt/Adjusted EBITDA (LTM), excluding
IFRS 16 *
=
Interest-bearing liabilities excluding lease liabilities - interest-bearing receivables
and cash and cash equivalents
Adjusted EBITDA (LTM), excluding IFRS 16
Alternative performance measures to the statement of income
The company presents the following alternative performance measures to the statement of income, as in the company's view, they increase
understanding of the company's results of operations. In addition, the adjusted alternative performance measures are widely used by analysts,
investors and other parties and facilitates comparability between periods.
Adjusted EBITDA*
=
Earnings Before Interest, Taxes, Depreciation, Amortisation, Impairment losses
and adjustments
38
Adjusted EBITDA, %*
=
Earnings Before Interest, Taxes, Depreciation, Amortisation, Impairment losses
and adjustments
x 100%
Revenue
Adjusted EBITA*
=
Earnings Before Interest, Taxes, Amortisation, Impairment losses and adjustments
Adjusted EBITA, %*
=
Earnings Before Interest, Taxes, Amortisation, Impairment losses and
adjustments
x 100%
Revenue
Adjusted operating profit (EBIT)*
=
Earnings Before Interest, Taxes and Share of profits in associated companies,
and adjustments
Adjusted operating profit (EBIT), %*
=
Earnings Before Interest, Taxes and Share of profits in associated companies,
and adjustments
x 100%
Revenue
EBITDA
=
Earnings Before Interest, Taxes, Depreciation and Amortisation and Impairment losses
EBITDA, %
=
Earnings Before Interest, Taxes, Depreciation and Amortisation and Impairment
losses
x 100%
Revenue
EBITA
=
Earnings Before Interest, Taxes, Amortisation and Impairment losses
EBITA, %
=
Earnings Before Interest, Taxes, Amortisation and Impairment losses
x 100%
Revenue
Operating profit (EBIT)
=
Earnings Before Interest, Taxes and Share of profits in associated companies
Operating profit (EBIT), %
=
Earnings Before Interest, Taxes and Share of profits in associated companies
x 100%
Revenue
Adjusted EBITDA, excluding IFRS 16 *
=
Earnings Before Interest, Taxes, Depreciation, Amortisation, Impairment losses
and adjustments, excluding IFRS 16 lease adjustments
* Adjustments are material items outside the ordinary course of business and these relate to acquisition-related expenses, restructuring-related
expenses, gains and losses on sale of assets (net), impairment losses, strategic projects and other items affecting comparability.
39
Reconciliation of alternative performance measures
Return on equity, %
2023
2022
2021
Net income
-42.2
24.4
80.4
Equity (including non-controlling interest) (average)
553.7
600.4
590.1
Return on equity, %
-7.6
4.1
13.6
Equity ratio, %
2023
2022
2021
Equity (including non-controlling interest)
515.4
592.0
608.9
Total assets
1,419.5
1,479.4
1,448.6
Advances received
6.4
7.1
6.1
Equity ratio, %
36.5
40.2
42.2
Gearing, %
2023
2022
2021
Interest-bearing liabilities
635.8
607.0
557.2
Interest-bearing receivables and cash and cash equivalents
37.7
40.4
38.2
Equity
515.4
178.0
608.9
Gearing, %
116.0
95.7
85.2
Net debt /Adjusted EBITDA
2023
2022
2021
Interest-bearing liabilities
635.8
607.0
557.2
Interest-bearing receivables and cash and cash equivalents
37.7
40.4
38.2
Adjusted EBITDA
200.2
178.0
206.1
Net debt / Adjusted EBITDA
3.0
3.2
2.5
Adjusted EBITDA, EUR mill.
2023
2022
2021
Net income
-42.2
24.4
80.4
Income tax expense
3.3
6.5
20.3
Share of profits in associated companies
0.0
0.1
0.3
Net finance expenses
24.2
2.9
9.0
Depreciation, amortisation and impairment losses
193.8
134.9
91.7
Adjustments*
21.1
9.2
4.3
Adjusted EBITDA
200.2
178.0
206.1
Adjusted EBITDA, %
2023
2022
2021
Adjusted EBITDA
200.2
178.0
206.1
Revenue
1,286.4
1,259.1
1,154.6
Adjusted EBITDA, %
15.6
14.1
17.8
.
Adjusted EBITA, EUR mill.
2023
2022
2021
40
Net income
-42.2
24.4
80.4
Income tax expense
3.3
6.5
20.3
Share of profits in associated companies
0.0
0.1
0.3
Net finance expenses
24.2
2.9
9.0
Amortisation and impairment losses
119.1
62.0
26.6
Adjustments*
21.2
9.2
4.3
Adjusted EBITA
125.6
105.2
141.0
Adjusted EBITA, %
2023
2022
2021
Adjusted EBITA
125.6
105.2
141.0
Revenue
1,286.4
1,259.1
1,154.6
Adjusted EBITA, %
9.8
8.4
12.2
Adjusted operating profit (EBIT), EUR mill.
2023
2022
2021
Net income
-42.2
24.4
80.4
Income tax expense
3.3
6.5
20.3
Share of profits in associated companies
0.0
0.1
0.3
Net finance expenses
24.2
2.9
9.0
Adjustments*
107.8
39.5
4.3
Adjusted EBIT
93.1
73.4
114.4
Adjusted operating profit (EBIT), %
2023
2022
2021
Adjusted EBIT
93.1
73.4
114.4
Revenue
1,286.4
1,259.1
1,154.6
Adjusted EBIT, %
7.2
5.8
9.9
EBITDA, EUR mill.
2023
2022
2021
Net income
-42.2
24.4
80.4
Income tax expense
3.3
6.5
20.3
Share of profits in associated companies
0.0
0.1
0.3
Net finance expenses
24.2
2.9
9.0
Depreciation, amortisation and impairment losses
193.8
134.9
91.7
EBITDA
179.2
168.8
201.8
EBITDA, %
2023
2022
2021
EBITDA
179.2
168.8
201.8
Revenue
1,286.4
1,259.1
1,154.6
EBITDA, %
13.9
13.4
17.5
EBITA, EUR mill.
2023
2022
2021
Net income
-42.2
24.4
80.4
Income tax expense
3.3
6.5
20.3
Share of profits in associated companies
0.0
0.1
0.3
Net finance expenses
24.2
2.9
9.0
Amortisation and impairment losses
119.1
62.0
26.6
EBITA
104.4
95.9
136.7
41
EBITA, %
2023
2022
2021
EBITA
104.4
95.9
136.7
Revenue
1,286.4
1,259.1
1,154.6
EBITA, %
8.1
7.6
11.8
Operating profit (EBIT), EUR mill.
2023
2022
2021
Net income
-42.2
24.4
80.4
Income tax expense
3.3
6.5
20.3
Share of profits in associated companies
0.0
0.1
0.3
Net finance expenses
24.2
2.9
9.0
EBIT
-14.7
33.9
110.1
Operating profit, (EBIT), %
2023
2022
2021
EBIT
-14.7
33.9
110.1
Revenue
1,286.4
1,259.1
1,154.6
EBIT, %
-1.1
2.7
9.5
Adjustments based on subject area* , EUR mill.
2023
2022
2021
Acquisition-related expenses
1)
-0.8
2.8
3.1
Restructuring-related expenses
2)
3.2
1.5
0.3
Impairment losses
80.8
30.3
-
Strategic projects and other items affecting to comparability
18.8
5.0
0.8
Adjustments
101.9
39.5
4.3
Adjustments based on account group* , EUR mill.
2023
2022
2021
Other operating income
-0.8
-0.1
-0.4
Personnel expenses
3.1
1.3
0.3
Other operating expenses
18.7
8.0
4.4
Depreciation and impairment
86.7
30.3
-
Deferred tax
-5.9
-
-
Adjustments
101.9
39.5
4.3
Adjusted EBITDA, excluding IFRS 16
2023
2022
2021
Net income
-42.2
24.4
80.4
Income tax expense
3.3
6.5
20.3
Share of profits in associated companies
0.0
0.1
0.3
Net finance expenses
24.2
2.9
9.0
Depreciation, amortisation and impairment losses
193.8
134.9
91.7
Adjustments*
21.1
9.2
4.3
IFRS 16 lease expense adjustment
-57.4
-55.8
-49.2
Adjusted EBITDA, excluding IFRS 16
142.8
122.2
156.9
Net debt/Adjusted EBITDA, excluding IFRS 16
2023
2022
2021
Interest-bearing liabilities
416.7
427.2
378.8
Interest-bearing receivables and cash and cash equivalents
37.7
40.4
38.2
42
Adjusted EBITDA
142.8
122.2
156.9
Net debt/Adjusted EBITDA, excluding IFRS 16
2.7
3.2
2.2
* Adjustments are material items outside the ordinary course of business, and these relate to acquisition-related expenses, restructuring-related
expenses, gain /losses on sale of assets (net), impairment losses, strategic projects and other items affecting comparability.
1)
Including transaction costs and expenses from integration of acquired businesses
2)
43
Consolidated financial statements, IFRS
Consolidated statement of comprehensive income
EUR mill.
Note
1.1.-31.12.2023
1.1.-31.12.2022
Revenue
4, 5
Other operating income
6
Materials and services
7
-536.2
-525.7
Employee benefit expenses
8
-447.0
-455.0
Depreciation, amortisation and impairment losses
9
-193.8
-134.9
Other operating expenses
10
-128.2
-112.3
Operating result
-14.7
Financial income
11
Financial expenses
11
-25.4
-10.4
Net finance expenses
-24.2
-2.9
Share of results in associated companies
-0.1
Result before taxes
-38.9
Income tax expense
12
-3.3
-6.5
Net income
-42.2
Profit attributable to
Owners of the parent company
-42.2
Non-controlling interests
Other comprehensive adjustments
Items that may be reclassified to profit or loss
-5.3
Items that will not be reclassified to profit or loss
28
-0.1
Other comprehensive income for the period, net of tax
-5.1
Total comprehensive income
-42.2
Total comprehensive income attributable to:
Owners of the parent company
-42.2
Non-controlling interest
Earnings per share for profit attributable to the shareholders of the parent
company, in euro
Basic earnings per share
13
-0.33
Diluted earnings per share
13
-0.33
The notes are an integral part of the Consolidated financial statements.
44
Consolidated statement of financial position
EUR mill.
Note
31 Dec
2023
31 Dec
2022
ASSETS
Non-current assets
Property, plant and equipment
14
Right-of-use assets
14
Goodwill
15, 16
Intangible assets
15
Investment properties
17
Investments in associates
18
Loan receivables
20
Deferred tax assets
12
Other non-current assets
20
Total non-current assets
Current assets
Inventories
Trade and other receivables
22
Current tax receivables
Cash and cash equivalents
23
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity attributable to equity holders of the Company
Share capital
Invested non-restricted equity reserve
Treasury shares
-15.7
-15.8
Translation differences
-5.2
-5.3
Retained earnings
Equity attributable to equity holders of the Company total
Non-controlling interest
TOTAL EQUITY
Non-current liabilities
Non-current financial liabilities
20, 21, 25
Non-current lease liabilities
14, 21, 25
Deferred tax liabilities
12
Provisions
27
Other liabilities
Total non-current liabilities
Current liabilities
Current financial liabilities
20, 21, 25
Current lease liabilities
14, 21, 25
Current tax liabilities
Provisions
27
Trade and other payables
26
Total current liabilities
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
The notes are an integral part of the consolidated financial statements.
45
Consolidated statement of cash flows
EUR mill.
Note
1.1.-31.12.2023
1.1.-31.12.2022
Cash flows from operating activities
Profit before income taxes
-38.9
Adjustments for
Non-cash transactions
9
27
-2.1
-6.7
-4.1
Gains and Losses on sale of property, plant, equipment and other changes
-0.2
-0.3
Net finance expenses
11
Changes in working capital
-8.7
-0.5
-0.2
Interests received
Income taxes paid
-6.6
-26.0
Net cash from operating activities
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired
3
-4.0
-34.9
Acquisition of property, plant and equipment
-24.6
-30.2
Acquisition of intangible assets
-16.4
-29.0
Proceeds from the disposal of associates
Sale of business operation, net of cash disposed of
Acquisition of business operations, net of cash acquired
3
-0.3
-0.7
Proceeds from sale of property, plant and equipment
Dividends received
Net cash from investing activities
-44.2
-93.9
Cash flows from financing activities
Acquisition of non-controlling interests
3
-0.1
-0,0
Proceeds from non-current borrowings
25
Repayment of non-current borrowings
25
-210.0
-40.0
Proceeds from current borrowings
25
Repayment of current borrowings
25
-47.1
-116.7
Payment of lease liabilities
25
-50.9
-49.3
Payment of hire purchase liabilities
25
-4.3
-5.3
Interests and other financial expenses paid
-19.9
-8.4
Dividends paid
-35.4
-35.4
Net cash from financing activities
-116.2
-44.6
Net change in cash and cash equivalents
-2.4
Cash and cash equivalents at 1 January
Exchange rate differences
-0.1
-0.3
Cash and cash equivalents at 31 December
The notes are an integral part of these Consolidated financial statements.
46
Consolidated statement of changes in equity
EUR mill.
Share
capital
Invested
non-
restricted
equity
reserve
Treasury
shares
Retained
earnings
Translation
differences
Total
Non-
controlling
interests
Total
equity
Equity 1 Jan 2023
-15.8
-5.3
Comprehensive income
Net income
-42.2
-42.2
-42.2
Other comprehensive income
-0.1
Transactions with owners
-35.4
-35.4
-35.4
Transactions with non-controlling
interests
Transactions with non-controlling
interest
-0,0
-0,0
Other
Other corrections*
-0.4
-0.4
-0.4
Equity 31 Dec 2023
-15.7
-5.2
* Correction to previous financial years figures.
EUR mill.
Share
capital
Invested
non-
restricted
equity
reserve
Treasury
shares
Retained
earnings
Translation
differences
Total
Non-
controlling
interests
Total
equity
Equity 1 Jan 2022
-18.0
-0.8
Comprehensive income
Net income
Other comprehensive income
-0.5
-4.5
-5.1
-5.1
Transactions with owners
Share-based payments
-3.0
-0.8
-0.8
Dividends
-35.4
-35.4
-35.4
Transactions with non-controlling
interests
Transactions with non-controlling
interest
Equity 31 Dec 2022
-15.8
-5.3
47
COMPANY INFORMATION
Name of reporting entity or other means of identification
Country of incorporation
Legal form of entity
Domicile of entity
Address of entity's registered office
Principal place of business
Finland and Sweden
Description of nature of entitys operations and principal activities
Name of parent entity
1. Corporate information
Terveystalo Plc is a Finnish public limited liability company organised under the laws of Finland and domiciled in
Helsinki, Finland. The parent company, Terveystalo Plc, is listed on the Nasdaq Helsinki. Terveystalo Group (“the
Group”, “Terveystalo”) consists of the parent company and 24 subsidiaries. More information on subsidiaries is
presented in note 31. A copy of the consolidated financial statements is available at the Group’s website
www.terveystalo.com
, from Terveystalo Oyj / Corporate Communications, Jaakonkatu 3, 00100 Helsinki, Finland, or
via e-mail at [email protected].
Terveystalo is a leading private healthcare service provider in Finland and leading occupational health provider in
Nordic region. The company offers general practice and specialist medical care, diagnostic services, outpatient
surgery, dental services and other adjacent services to corporate, private and public sector customers.
In its meeting on 13 February 2024, the Board of Directors of Terveystalo Plc approved the publishing of these
consolidated financial statements.
According to the Finnish Limited Liability Companies Act, shareholders have the right to approve or reject the
financial statements in the Annual General Meeting held after the publication of the financial statements. The
Annual General Meeting also has the right to make a decision to amend the financial statements.
2. Accounting policies for the consolidated financial statements
2.1 Basis of preparation
The consolidated financial statements of Terveystalo have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union. The consolidated financial statements have been
prepared in compliance with the IAS and IFRS standards as well as the SIC and IFRIC interpretations in force on 31
December 2023. The consolidated financial statements also comply with the regulations of Finnish accounting and
company legislation complementing the IFRSs.
The consolidated financial statements are presented in millions of euro and have been prepared under the historical
cost basis, unless otherwise stated in the accounting principles. All figures presented have been rounded, and
consequently the sum of individual figures may deviate from the presented aggregate figure.
2.2 Application of new and amended IFRSs and new IFRIC agenda decisions
48
New and amended standards applied in the financial year 2023
The Group has applied as from 1 January 2023 the following new and amended standards that have come into
effect:
●
Disclosure
of Accounting Policies
: The amendments clarify the application of
materiality to disclosure of accounting policies.
●
Definition of Accounting Estimates
: The amendments clarify how companies
should distinguish changes in accounting policies from changes in accounting estimates, with a primary
focus on the definition of and clarifications on accounting estimates.
●
Deferred Tax related to Assets and Liabilities arising from a Single Transaction
:
The amendments narrow the initial recognition exemption (IRE) and clarify that the exemption does not
apply to transactions such as leases and decommissioning obligations which give rise to equal and
offsetting temporary differences.
●
International Tax Reform — Pillar Two Model Rules
: The amendments give relief
from accounting for deferred taxes arising from the OECD’s (Organisation for Economic Co-operation and
Development) international tax reform and require new disclosures to compensate for the potential loss of
information resulting from the relief.
The impacts of the above-mentioned amendments on Terveystalo’s consolidated financial statements have not
been significant.
New and amended standards applied in the financial year 2023 that have no impact on Terveystalo’s consolidated
financial statements:
●
Insurance Contracts
, including
Amendments Initial Application of IFRS 17 and IFRS 9 –
Comparative Information
Adoption of new and amended standards and interpretations applicable in future financial years
At the publication day of this Group consolidated financial statements, Terveystalo has not applied following new
and amended standards and interpretations that are effective in future periods:
●
Lease Liability in a Sale and Leaseback
on or after 1 January 2024, early application is permitted)
●
Classification of Liabilities as Current or Non-current Date; Classification of
Liabilities as Current or Non-current – Deferral of Effective Date; Non-current Liabilities with Covenants*
(effective for financial years beginning on or after 1 January 2024, early application is permitted)
●
Supplier Finance Arrangements
* (effective for financial years
beginning on or after 1 January 2024, early application is permitted)
●
Sale or Contribution of Assets between an Investor and its Associate
or Joint Venture
* (available for optional adoption, effective date deferred indefinitely)
The impact on above-mentioned standards and amendments on Terveystalo’s consolidated financial statements
are not expected to be significant.
New and amended standards and interpretations applicable in future financial years that are not expected to have
impact on Terveystalo’s consolidated financial statements:
●
Lack of Exchangeability*
January 2025, early application is permitted)
* = not yet endorsed for use by the European Union as of 31 December 2023.
49
2.3 Critical accounting estimates and judgements
The preparation of the financial statements requires management to make certain estimates and assumptions that
are based on management's best view of the circumstances prevailing at the reporting date, prior experience and
assumptions about future events related, among other things, to the expected development of the Group's
economic environment in terms of sales and cost level. However, it is possible that the realised outcomes differ
from the estimates and assumptions used in the financial statements. In addition, the application of the accounting
policies requires judgement, especially when the current IFRS standards have alternative accounting, valuation and
presentation methods.
The Group monitors the realisation of the estimates and assumptions and changes in the underlying factors on a
regular basis together with the operating units by using several internal and external information sources. Changes
in estimates or assumptions are recogni sed in the period when the estimate or assumption is revised, and in the
future periods if the change affects the subsequent periods.
The most important issues requiring management’s judgement are presented below:
Lease contracts
Terveystalo’s lease contracts include both termination and extension options. Group uses the options in managing
lease contracts to ensure the flexible use of premises in the Group’s businesses. Management uses judgement to
determine the use of termination and extension options and assesses the lease termination dates and lease terms.
Based on management’s judgement, the termination options which relate to perpetual lease contracts for premises
that are significant will not be used and such lease contracts are recognised as long-term lease contracts.
Provisions
The most significant provisions in the statement of financial position relate mainly to loss-making contracts.
Management makes estimates mainly concerning the total loss of the loss-making contracts.
The critical accounting estimates are presented below:
Intangible assets in connection with business combinations
IFRS 3 requires the acquirer to recognise intangible assets separately from goodwill, if certain criteria are met.
Recognising intangible assets separately at fair value requires management to estimate the expected future cash
flows. Management has used available market information when possible in determining the fair values. If no
market information of the asset has been available, the measurement of the intangible asset is based on the
historical yield of the asset and the planned use in operations. The valuations are based on discounted cash flows
and estimated disposal or replacement prices, and the valuation requires management to make estimates of the
future use of the asset and impact on the company’s financial position.
Management believes that the used estimates and assumptions are reasonable for measurement of fair values. In
addition, the Group’s property, plant and equipment and intangible assets are assessed to determine whether there
is any indication of impairment at least at each reporting date.
The valuation of contingent considerations
Management makes discretionary decisions and estimates when determining the valuation of deferred contingent
considerations in business combinations. Judgement is applied especially when estimating the expected amount of
50
payments and is based on potential scenarios for future returns, amounts paid under different scenarios and the
probability of each scenario.
Impairment testing
Impairment testing for cash -generating units to which goodwill has been allocated is carried out at least annually.
Besides goodwill, the Group has no other intangible assets with an indefinite useful life. The recoverable amounts of
cash generating units are estimated based on the calculations of their value in use. Preparation of these
calculations requires use of estimates. Even though management believes that the used estimates and
assumptions are appropriate, the estimated recoverable amounts may differ from the actual results.
2.4 Principles of consolidation
Subsidiaries
The consolidated financial statements include the parent company Terveystalo Plc and all its subsidiaries where
over 50 percent of the voting rights are controlled by the parent company or the parent company otherwise controls
the company. The Group controls an entity when it is exposed to, or has rights to variable returns from its
involvement with the entity, and has the ability to affect those returns through its power over the entity.
The subsidiaries are included in the consolidated financial statements starting from the date on which control
commences until the date on which control ceases.
All subsidiaries are consolidated by using the acquisition method. The consideration transferred for the acquisition
of a subsidiary comprise assets transferred, liabilities incurred, and the equity interests issued by the Group
measured at fair value. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at fair value at the acquisition date. On an acquisition-by-acquisition basis,
non-controlling interest in the acquiree is measured either at fair value or at value which equals the proportional
share of the non-controlling interest in the identifiable net assets acquired.
All acquisition costs, except costs related to issue of debt or equity securities, are recognised as an expense as
incurred. Transactions treated separately from the acquisition are recognised through the income statement and are
not included in the consideration transferred. Any contingent consideration is measured at fair value and it is
classified either as a liability or equity. Contingent consideration classified as a liability is measured at fair value at
the end of reporting period and the resulting profit or loss is recognised in the statement of income. Contingent
consideration classified as equity is not remeasured.
If the Group gains control in stages in the acquiree, the existing interest will be measured at fair value through profit
or loss.
Goodwill arising from an acquisition is recognised as the excess of the aggregate of the consideration transferred,
the amount of non-controlling interests in the acquiree and previously held equity interest in the acquiree over the
fair value of the Group’s share of the identifiable net assets acquired. If the consideration transferred is less than the
fair value of the net assets of the subsidiary acquired, the resulting gain is recognised in profit or loss.
Intra-group transactions, receivables, liabilities and unrealised gains, as well as the distribution of profits within the
Group are eliminated in the preparation of the consolidated financial statements. Accounting policies of subsidiaries
have been aligned where necessary to correspond to the Group’s principles.
Transactions with non-controlling interests that do not result in the loss of control are treated as equity transactions
– in other words, as transactions with owners when they are acting as owners. The difference between the fair
value of the consideration paid or received and the book value of the portion of the net assets acquired or disposed
is recognised in equity.
When the Group ceases to have control or significant influence, any retained interest in the entity is measured at
fair value through profit or loss.
51
Associates
Associates are entities over which the Group has significant influence. Significant influence generally arises when
the Group holds over 20 percent of the voting rights, or otherwise has significant influence, but no control over the
entity.
Associates are consolidated using the equity method. They are initially recognised at cost, which includes
transaction cost. If the Group’s share of the associated company’s losses exceeds the carrying amount of the
investment, the investment is recognised at zero value in the consolidated statement of financial position.
Recognition of further losses exceeding the carrying amount is discontinued, unless the Group has incurred legal or
constructive obligations on behalf of the associate.
Unrealised gains resulting from the transactions between the Group and associates are eliminated according to the
Group’s share of ownership. Goodwill relating to an associate is included in the carrying amount of the investment.
The Group’s share of the associated company’s profit or loss for the period is separately disclosed below net
finance expenses. Adjustments have been made when necessary to the associate’s accounting policies to align to
those of the Group.
At each reporting date, the Group reviews the carrying amounts of the investments in associates to determine
whether there is any objective indication of impairment. If any such evidence of impairment exists, then the
impairment loss is determined. An impairment loss is the amount by which the carrying amount of an investment in
associate exceeds its recoverable amount. An impairment loss is recognised in the statement of income.
If the Group’s ownership interest in an associate is reduced, but significant influence is retained, only the relative
portion of previously recognised amounts in other comprehensive income and the value of the investment in the
consolidated financial statements are recognised in the statement of income as part of the gain or loss.
2.5 Foreign currency transactions
The consolidated financial statements are presented in euros which is the functional and presentation currency of
the parent company. Transactions in foreign currencies are translated into respective functional currency at the
exchange rate prevailing on the transaction date. Gains and losses arising from transactions denominated in foreign
currency and from translation of monetary items are recogni sed in profit or loss as financial income or expenses.
The functional currency of the Feelgood subgroup is Swedish krona which differs from Group’s presentation
currency, and thus its statement of income, statement of cash flows and statement of financial position have been
translated into presentation currency as follows:
- Statement of income and statement of cashflows are translated at average exchange rates
- Statement of financial position is translated at the closing exchange rate at the reporting date
- All resulting exchange differences are recognised in other comprehensive income
2.6 Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
Depreciation is recognised on a straight-line basis over the estimated useful lives of items of property, plant and
equipment. Land is not depreciated.
The estimated useful lives are as follows:
Magnetic resonance imaging equipment
10 years
Buildings
10–40 years
Machinery and equipment
2–7 years
52
Improvements to office premises
3–10 years
Premises used in operations are depreciated on a straight-line basis over a 40-year depreciation period. Property,
plant and equipment also includes artwork which is not depreciated.
Gains and losses on the sale and disposal of property, plant and equipment are presented in other operating
income or other operating expenses.
Maintenance expenditure are not included in the carrying amounts of property, plant and equipment. When parts of
the magnetic resonance imaging equipment are replaced, the Group capitalises the replacement costs as a
separate item.
The residual values and useful lives of property, plant and equipment are reviewed at each reporting date.
2.7 Investment properties
Investment property refers to properties held by the Group in order to earn rental income or for capital appreciation
or both. Apartments, which are not used in business operations, are mainly accounted for as investment properties.
Investment properties are measured at acquisition cost and depreciated on a straight-line basis over a 40-year
depreciation period.
2.8 Goodwill and other intangible assets
Goodwill
Goodwill arising in a business combination is recognised as the excess of the aggregate of the consideration
transferred, the amount of non-controlling interests in the acquiree and previously held equity interest in acquiree
over the fair value of the Group’s share of the identifiable net assets acquired.
Goodwill is not amortised but tested for impairment annually. For impairment testing, goodwill is allocated to
cash-generating units or groups of cash-generating units. Goodwill is measured at cost less accumulated
impairment losses. An impairment loss in respect of goodwill is not reversed.
Gain or loss on disposed unit includes also the carrying amount of goodwill.
Intangible assets
Intangible assets include software and licenses, as well as acquired companies’ customer relationships, trademarks
and other intangible assets. Intangible assets are recognised initially at cost if the cost of the asset can be
measured reliably and if it is probable that the future economic benefits attributable to the asset will flow to the
Group.
Cloud computing arrangements which meet the definition of an intangible asset are recognized as intangible assets.
Configuration and customisation costs which do not meet the definition of an intangible asset and which are distinct
from the cloud computing arrangement, are recognised as an expense as the service is received. Configuration and
customisation costs which are not distinct from the cloud computing arrangement, are recognised as prepaid
expenses in the statement of financial position and expensed over the expected duration of the cloud computing
arrangement.
Intangible assets acquired in a business combination are recognised at fair value at the acquisition date separately
from goodwill if the assets meet the definition of an asset, are identifiable or rise from contractual or legal rights.
Intangible assets are measured at cost and amortised on a straight-line basis over the known or estimated useful
lives.
The Group has no intangible assets with indefinite useful life except for goodwill.
53
Amortisation periods used for intangible assets are as follows:
Immaterial rights
3–7 years
Software
3–5 years
Customer agreements and related customer relationships
3–12 years
Trademarks
20 years or shorter useful life
Other intangible assets
3–5 years
Research and development
Research expenditure are recognised as an expense as incurred in the statement of income. Development
expenditure are capitalised as intangible assets when certain capitalisation criteria are met. Development
expenditure that do not qualify for the capitalisation are recognised as an expense. The estimated useful lives of
capitalised development expenditure are 3–5 years.
2.9 Impairment
Tangible and intangible assets
At the end of each reporting period, the Group assesses whether there are any indications of impairment. If any
indications of an impairment exist, the recoverable amount of the asset is determined. For goodwill and intangible
assets not yet available for use, the recoverable amount is determined annually, irrespective of whether there is any
evidence of impairment. Evidence of impairment is assessed at the level of the Group’s cash-generating units, i.e at
the lowest unit level, which is largely independent of the other units and whose cash flows can be distinguished
from the cash flows of equivalent units.
The recoverable amount of an asset is the higher of its fair value less costs to sell or value-in-use. The value-in-use
is the amount of estimated future cash flows of an asset or cash generating unit discounted to present value. The
discount rate used is the pre-tax discount rate, which reflects the market view on the time value of money and
specific risks related to the asset.
An impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. The
impairment loss is recognised in the statement of income. If impairment loss is related to a cash generating unit, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the cash generating unit,
and then to reduce the carrying amounts of the other assets on a pro rata basis. The useful life of an asset, which is
subject to depreciation or amortisation, is reassessed when an impairment loss is recognised. The impairment loss
recognised for other assets than goodwill is reversed if there has been a change in estimates used to determine the
recoverable amount. The reversal of the impairment loss cannot exceed the carrying amount of the asset if
impairment loss had not been recognised. Impairment loss recognised for goodwill is not reversed.
Financial assets
At the end of each reporting period the Group evaluates indicators of potential impairment of a single financial asset
or a group of financial assets.
The Group recognises an expected credit loss for trade receivables and contract assets based on a simplified
approach. Expected credit loss rates have been calculated using historical information of actual impairment losses,
and the current conditions and the Group’s view of the economic conditions over the expected lives of the
receivables have been taken into account.
54
2.10 Leases
Group as a lessee
The Group assesses whether a contract is or contains a lease at the inception of a contract. A contract is or
contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for
consideration. A lessee recognises a right-of-use asset and a lease liability on statement of financial position at the
lease commencement date.
A lease term is determined as the non-cancellable period of a lease. The lease term includes periods covered by an
option to extend or terminate the lease, if the Group is reasonably certain to exercise the extension option or not to
exercise the termination option. Perpetual lease contracts related to significant premises are accounted for as long-
term lease contracts, as, according to management judgment, the termination options for such contracts will not be
used. The lease term for such contracts is determined based on the Group’s strategy and network plan.
The Group does not recognise short-term leases (a lease that has a lease term of 12 months or less) and leases for
which the underlying asset is of low value. The lease payments associated with such leases are expensed on a
straight-line basis.
Initially a right-of-use asset is measured at cost, which comprises the amount of the initial measurement of the lease
liability, any lease payments made at or before the commencement date, less any lease incentives, any initial direct
costs incurred by the Group, and an estimate of restoration costs to be incurred by the Group. If a lease contains
several lease components, they are accounted for separately.
Subsequently right-of-use assets are measured at cost less any accumulated depreciation and any accumulated
impairment losses and adjusted for any remeasurements of the lease liability. A right-of-use asset is depreciated
from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the
lease term. If the Group is reasonably certain to exercise the purchase option, the right-of-use asset is depreciated
over its useful life. The estimated useful lives of right-of-use assets are 1-16 years.
The book value and useful life of a right-of-use asset are reviewed where necessary but at least annually and an
impairment loss is recognised if there is a change in expectations of the future economic benefits.
A lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date. The Group uses an incremental borrowing rate as the discount rate. A lease liability includes
fixed payments, including in-substance fixed payments; variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement date; amounts expected to be payable under a
residual value guarantee, and the exercise price under a purchase option that Terveystalo is reasonably certain to
exercise.
Subsequently a lease liability is measured at amortised cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is a change in
the Terveystalo’s estimate of the amount expected to be payable under a residual value guarantee or if the Group
changes its assessment of whether it will exercise a purchase, extension or termination option. When a lease
liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-to-use
asset or is recorded in the statement of income if the carrying amount of the right-of-use asset has been reduced to
zero.
2.11 Financial assets and liabilities
Financial assets
55
The Group’s financial assets are classified at fair value through the statement of income or, at amortised cost.
Classification is based on the purpose of the acquisition of the item and is made upon initial recognition.
Financial assets at fair value through the statement of income comprise of derivate assets, non-quoted equity
instruments and loan receivables. Realised or unreali sed gains and losses arising from changes in fair values are
recognised in the statement of income in the period in which they are incurred.
Financial assets at amortised cost consist of trade receivables and other receivables. They are measured at
amortised cost and they are included in non-current assets unless the Group has an intention to hold the instrument
for less than 12 months from the reporting date, in which case they are included in current assets.
The Group has not had financial assets at fair value through other comprehensive income during the periods 2022
or 2023.
The financial asset is derecognised when the contractual rights to the cash flows expire, or the financial asset is
transferred to another party and the Group substantially transfers all the risks and rewards of ownership to another
party.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, bank deposits available on demand, and other short-term highly
liquid investments. Items included in cash and cash equivalents have original maturities of three months or less
from the acquisition date.
Financial liabilities
The Group’s financial liabilities are measured at fair value through the statement of income or at amortised cost.
Financial liabilities at fair value through the statement of income comprise derivative liabilities and contingent
considerations. Realised or unrealised gains and losses arising from changes in fair values are recognised the
statement of income in the period in which they are incurred.
Financial liabilities at amorti sed cost include loans from financial institutions, bonds, lease liabilities, hire purchase
liabilities and trade and other payables. They are initially recognised at fair value which is based on the
consideration received. Transaction costs are included in the initial amount recognised and subsequently the
financial liability is measured at amortised cost using the effective interest method.
Financial liabilities are included in non-current and current liabilities and they can be either interest-bearing or non-
interest-bearing. Financial liabilities are classified as current liabilities, unless the Group has an unconditional right
to postpone the payment of the liability to at least 12 months from the reporting date.
The Group has not had financial liabilities at fair value through other comprehensive income during the periods
2022 or 2023.
Financial liability is derecognised when the Group either settles the liability or has been legally discharged from the
obligation related to the liability either through a legal process or by the borrower.
2.12 Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is determined by
using FIFO (first in, first out) method. Net realisable value is the cost of inventory less obsolescence allowance.
2.13 Employee benefits
Pension benefits
56
Pension plans are classified as either defined contribution plans or defined benefit plans. In defined contribution
plans, the Group makes fixed contributions into the plan. The Group has no legal or constructive obligation to make
additional payments if the pension insurance company is unable to pay pension benefits earned by employees in
the reporting period or in previous periods. Contributions made into defined contribution plans are recognised
through profit or loss in the reporting period to which they relate.
A defined benefit plan is a pension plan under which the Group itself has the obligation to pay retirement benefits
and bears the risk of change in the value of plan liability and assets. The liability recognised on the statement of
financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at
the end of the reporting period less fair value of plan assets. The pension liability is presented in other non-current
liabilities in the statement of financial position. The defined benefit obligation is calculated annually by an
independent actuary using the projected unit credit method. The present value of the defined benefit obligation is
determined by discounting the estimated future cash outflows using interest rates of high-quality corporate or
government bonds with approximating terms to maturity and that are denominated in the currency in which the
benefits are expected to be paid.
Actuarial gains and losses related to remeasurements of a defined benefit plan are recognised directly in the other
comprehensive income. Interest and other expenses related to defined benefit plans are recognised directly in the
statement of income. If a plan is amended or curtailed, the portion of the changed benefit related to past service by
the employees, or the gain or loss on curtailment, is recognised directly in the statement of income when the plan
amendment or curtailment occurs.
Share-based payment transactions
The benefits granted in accordance with the incentive plan are measured at fair value at the grant date and are
expensed on a straight-line basis over the vesting period. The share-based payments settled with equity
instruments are not revalued subsequently, and cost from these arrangements is recognised as an increase in
equity. The cash-settled share-based incentives are valued at fair value at each reporting date until the settlement
date and recognised as a liability.
The expensed amount of the benefits is based on the Group’s estimate of the amount of benefits to be paid in
accordance with the fulfilment of service and performance-based vesting conditions at the end of the vesting period.
Market conditions are considered in determining the fair value of the benefit. Instead, the non-market criteria, like
profitability, are not considered in measuring the fair value of the benefit but are taken into account when estimating
the final amount of benefits. The estimate is updated at each reporting date and changes in estimates are recorded
through the statement of income
2.14 Provisions and contingent liabilities
A provision is recognised when the Group has a present legal or constructive obligation as a result of a past event,
and it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. Provisions are recognised at the present value of the
expenditure required to fulfil the obligation. If the obligation can be partially compensated by a third party, the
compensation is treated as a separate asset, but only when it is virtually certain that the compensation will be
received.
A provision is recognised for contracts when the unavoidable costs of meeting the obligations under the contract
exceed the economic benefits expected to be received under it.
A contingent liability is a possible obligation arising as a result of past events, and whose existence will be
confirmed only when an uncertain future event takes place, not wholly within control of the entity. Also, a present
obligation which probably does not require a cash settlement or on which the value cannot be reliably estimated is
considered as a contingent liability. Contingent liabilities are disclosed in the notes.
2.15 Revenue recognition
57
The Group’s revenue consists mainly of occupational healthcare services, general practice and clinic hospital
operations, dental services as well as diagnostic services. The Group also provides diverse primary healthcare,
special healthcare, child welfare and digital healthcare services for public sector as well as amongst other things,
massage and rehabilitation services. The Group’s customer contracts include primarily one performance obligation,
which is typically a single appointment, and the transaction prices are mainly fixed. In some cases, the transaction
price includes a variable consideration such as a discount or penalty. Possible variable considerations are assessed
at each reporting date and are allocated to one or more performance obligations. The terms of payment and
payment periods in customer contracts vary, but payment time is nonetheless clearly below one year.
Consequently, customer contracts do not include a significant financing component. Revenue is recognised to the
extent that the Group expects to be entitled to in exchange for the goods and services taking into account the terms
and conditions of the customer contracts and business practices.
Revenue from individual appointments is recognised at a point in time as the service has been completed. For long-
term contracts for predetermined services or a bundle of services, revenue is recognised as Terveystalo fulfils the
performance obligation by performing the promised service. The Group’s long-term contracts are assessed to
include a single performance obligation where the services provided by the Group are integrated into a single
bundle of services. The customer simultaneously receives and consumes the benefits from the service and,
consequently, the criteria for recognising revenue over time is met. For long-term contracts, Terveystalo measures
the progress towards complete satisfaction of the performance obligation by applying the input method, in which the
revenue is recognised based on time elapsed. The Group views that the used method best describes the transfer of
control for the services provided. Estimated costs and revenues will be re-assessed regularly during performing the
services. Revisions in profit estimates as well as projected potential losses on contracts are charged through the
statement of income in the period in which they become known. The Group has not incurred any substantial costs
for obtaining customer contracts.
Regarding private practitioners, Terveystalo acts as the principal and recognises revenue on a gross basis. Fees
related to purchasing these services are recognised in materials and services expenses.
2.16 Segment information
Terveystalo has changed its operating model that came into effect at the beginning of the year 2023, and, as a
result, the financial reporting structure to better highlight the performance of Terveystalo's businesses. The new
reporting structure reflects Terveystalo's new operating model and is aligned with the way the company’s chief
operating decision maker follows the operational performance of Terveystalo's businesses. Terveystalo Group
comprises of three operating segments that are reportable segments: Healthcare Services, Portfolio Businesses,
and Sweden. Monitoring of profitability is primarily based on operating segments. In addition, Terveystalo provides
disclosure on revenue for Healthcare Services on customer and service level and for Portfolio Businesses on
service level.
Terveystalo’s chief operating decision maker is the CEO who is monitoring the operating results of operating
segments for the purpose of assessing performance and making decisions about resource allocation. Key financial
performance measures of the segments comprise primarily revenue and segment adjusted earnings before interest,
taxes, amortisation and impairment (EBITA) . The evaluation of segment performance and allocation of resources is
primarily based on segment adjusted EBITA which the management estimates the most relevant measure for this
purpose.
Healthcare Services offers customers in Finland integrated care paths from preventive occupational health services
to primary care services and to different fields of specialized care, diagnostic, and day surgery. In Healthcare
Services, Terveystalo aims for industry-leading profitability and the best care outcomes.
The Portfolio Businesses segment consists of business areas that aim for independent value creation utilising
Terveystalo’s capabilities according to their needs. Portfolio Businesses include public sector outsourcing, staffing
services, and dental care, as well as other businesses such as public sector digital services, rehabilitation, child
welfare, and massage services, as well as sign language interpretation services.
58
The Sweden segment consists of Feelgood subsidiaries’ operations in Sweden, which are focused on occupational
health and consultation for organizational management and harmful use. In Sweden, Terveystalo aims for profitable
growth in the medium and long term.
In addition to operating segments, Terveystalo provides information for Other section. Other reported figures mainly
consist of parent company expenses as well as unallocated Group level adjustments and provisions.
2.17 Government grants
Government grants are presented in other operating income as far as they do not relate to acquired assets. Grants
are recognised when there is reasonable assurance that grants will be received, and the Group will comply with the
conditions associated with the grants.
2.18 Operating profit
IAS 1 standard does not define operating profit. The Group has defined it as follows: Operating profit is calculated
by adding other operating income to revenue, deducting costs related to materials and services, deducting costs
related to employee benefits, depreciation, amortisation and impairments as well as other operating expenses.
2.19
Earnings per share
Basic earnings per share is calculated by dividing profit or loss attributable to the shareholders of the parent
company by the weighted average number of shares outstanding during the financial period. The Group’s share-
based incentive plan has a dilution effect related to the earnings per share.
2.20 Income taxes
Income taxes primarily include current and deferred taxes. Tax related to items recognised directly in equity or in
other comprehensive income is also recognised in equity or in other comprehensive income. Current tax assets and
liabilities are measured at the amount expected to be received from or paid to taxation authorities, using the rates
and laws that have been enacted by the date of the statement of financial position. Income taxes include any
adjustment to tax in respect of previous years.
Deferred tax is recognised in respect of all temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts in taxation. Deferred tax is not recognised in the initial
recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit nor loss at the date of the transaction. Deferred tax is not recognised for non-tax-
deductible goodwill or for subsidiaries’ retained earnings to the extent that it is probable that the temporary
difference will not reverse in the foreseeable future. Deferred taxes relate primarily to the difference between the
book value and tax base of capitalised customer relationships and trademarks, and to provisions related primarily to
loss making contracts.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against
which they can be used and using the losses is considered probable.
Deferred taxes are calculated using tax rates enacted by the reporting date.
59
3. Business Combinations
During the year 2023, the Group has made one corporate acquisition and one business acquisition.
On 15 August 2023 Feelgood Företagshälsovård AB acquired 100 percent of the occupational health provider Växjö
Hälsoforum AB.
On 2
October 2023 Feelgood Sjukvård AB acquired the occupational health care business of Quality Care AB.
The following table summarises the acquisition date fair values of the consideration transferred as well as the
recognised amounts of assets acquired and liabilities assumed at the acquisition date. The statement of financial
position of acquired companies has been prepared in accordance with IFRS and Terveystalo’s accounting
principles in all material respect. The following table is preliminary, and the information has been consolidated,
because the acquisitions are not material individually.
Consideration transferred
EUR mill.
Purchase price, payable in cash
0.6
Contingent consideration
0.5
Total consideration transferred
1.0
Identifiable assets acquired and liabilities assumed
EUR mill.
Cash and cash equivalents
0.2
Intangible assets
0.1
Property, plant and equipment
0.0
Right-of-use assets
0.3
Trade and other receivables
0.1
Lease liabilities
-0.3
Trade and other payables
-0.3
Deferred tax liabilities
0.0
Total identifiable net assets acquired
0.0
Goodwill
1.0
As a result of these business combinations, a preliminary goodwill amounting to EUR 1.0 million was recognised.
The goodwill is attributable to skills of the workforce and synergies expected to be achieved. EUR 0.7 million of the
recognised goodwill is deductible in taxation. Cashflow impact of the acquisitions made during 2023 was EUR -0.3
million.
In these business combinations, the Group has acquired customer relationships. The fair value of customer
contracts and related customer relationships included in intangible assets has been determined on the basis of the
estimated duration of customer relationships and the discounted net cash flows from existing customer contracts.
The fair value of the acquired trade and other receivables amounted to EUR 0.1 million, for which the risk of
impairment has been deemed as non-significant.
The Group has incurred acquisition-related expenses of EUR 0.1 million related to consulting, valuation or
equivalent services. The expenses have been included in other operating expenses.
60
The contributed revenue recognised from the acquisitions during the year 2023 was EUR 0.4 million and loss was
EUR 0.0 million.
If the acquisition had occurred on 1 January 2023, management estimates that the Group’s consolidated revenue in
2023 would have been EUR 1,286.9 million and the consolidated result for the period would have been EUR -42.2
million.
61
Business Combinations 2022
During the year 2022, the Group has made 12 corporate acquisitions and 3 business acquisitions.
On 1 February 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the occupational health
provider Vantaan Työterveys Oy.
On 1 February 2022 Feelgood Företagshälsovård AB acquired 100 percent of the Swedish occupational health
provider Länshälsan Uppsala Ab.
On 31
March 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the physiotherapy service
provider Lapin Liikuntaklinikka Oy.
On 31
March 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the physiotherapy service
provider OMT Klinikka Kokkola Oy.
On 31
March 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the physiotherapy and
occupational therapy service provider Suomen Fysiogeriatria Oy and an indirect 100 percent ownership in its
subsidiaries Aktiivi-Fysioterapia Tampere Oy, Mimmin Terapia Oy and toi.minna Oy.
On 1
May 2022 Feelgood Företagshälsovård AB acquired 100 percent of the shares of the Swedish occupational
health provider Jobbhälsan i Norr AB.
On 1
May 2022 Feelgood Svenska AB acquired 100 percent of the shares of the Swedish addiction treatment
provider Nämndemansgården AB and its subsidiaries.
On 31
May 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the physiotherapy service
provider Into Te rveys Oy.
On 30
June 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the physiotherapy service
provider Kunnon Syke Oy.
On 31
August 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the therapy service provider
Ludus Oy Tutkimus- ja Kuntoutuspalvelut.
On 31
August 2022 Suomen Terveystalo Oy acquired the dental clinic business of Hammasrasti.
On 31
August 2022 Suomen Terveystalo Oy acquired the physiotherapy and therapy businesses of
FysioProfessionals.
On 30
September 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the physiotherapy service
provider Saimaan Urheilufysioterapia Oy.
On 30
September 2022 Suomen Terveystalo Oy acquired the dental clinic business of Hymyn Paikka.
On 31 October 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the chat and video
connection solution provider Somia Reality Oy.
The following table summarises the acquisition date fair values of the consideration transferred as well as the
recognised amounts of assets acquired and liabilities assumed at the acquisition date. The statement of financial
position of acquired companies has been prepared in accordance with IFRS and Terveystalo’s accounting
principles in all material respect. The information has been consolidated, because the acquisitions are not material
individually.
62
Consideration transferred
EUR mill.
Purchase price, payable in cash
37.8
Contingent consideration
5.1
Total consideration transferred
42.9
Identifiable assets acquired and liabilities assumed
EUR mill.
Cash and cash equivalents
4.4
Intangible assets
6.0
Property, plant and equipment
1.1
Right-of-use assets
4.4
Deferred tax assets
0.2
Inventories
0.2
Trade and other receivables
5.2
Financial liabilities
-0.5
Lease liabilities
-4.4
Trade and other payables
-6.2
Deferred tax liabilities
-1.1
Interest bearing liabilities
-0.1
Total identifiable net assets acquired
8.9
Goodwill
34.0
As a result of these business combinations, a preliminary goodwill amounting to EUR 34.0 million was recognized in
2022. In 2023, effect to goodwill arising from corporate acquisitions made in year 2022 was EUR 0.3 million. The
goodwill is attributable to skills of the workforce and synergies expected to be achieved. EUR 1.0 million of the
recognised goodwill is deductible in taxation. Cashflow impact of the acquisitions made during 2022 was EUR -32.9
million. In 2023, cash flow effect from corporate acquisitions made in year 2022 was EUR -4.0 million due to
adjustments to purchase prices and additional purchase prices paid.
In these business combinations, the Group has acquired customer relationships and technology -related intangible
assets. The fair value of customer contracts and related customer relationships included in other intangible assets
has been determined on the basis of the estimated duration of customer relationships and the discounted net cash
flows from existing customer contracts. The fair value of technology has been determined using the estimated
replacement cost.
The fair value of the acquired trade and other receivables amounted to EUR 5.2 million, for which the risk of
impairment has been deemed as non-significant.
The Group has incurred acquisition-related expenses of EUR 1.3 million related to transfer tax, consulting, valuation
or equivalent services. The expenses have been included in other operating expenses.
The contributed revenue recognised from the acquisitions during the year 2022 was EUR 18.3 million and loss was
EUR 1.0 million.
If the acquisition had occurred on 1 January 2022, management estimates that the Group’s consolidated revenue in
2022 would have been EUR 1 268.0 million and the consolidated result for the period would have been EUR 23.3
million.
63
4. Segment information
Terveystalo Group’s operating segments are Healthcare Services, Portfolio Businesses, and Sweden. These are
also reportable segments and operating segments are not aggregated.
Segment information
1.1.-31.12.2023
Healthcare
services
Portfolio
Businesse
s
Sweden
Segments
total
Other
Internal
eliminatio
ns
Total
EUR mill.
Revenue
Revenues from external customers
933.5
260.7
92.3
1,286.4
-
-
1,286.4
Revenues from transactions with other operating segments
of the same entity
15.1
6.5
0.2
21.8
-
-21.8
-
Total revenue
948.6
267.2
92.5
1,308.2
-
-21.8
1,286.4
Adjusted EBITA
109.0
8.7
3.7
121.4
4.2
-
125.6
Depreciations
5.9
1.0
6.9
13.8
60.9
-
74.6
1.1.-31.12.2022
Healthcare
services
Portfolio
Businesse
s
Sweden
Segments
total
Other
Internal
eliminatio
ns
Total
EUR mill.
Revenue
Revenues from external customers
882.5
284.0
92.6
1,259.1
-
-
1,259.1
Revenues from transactions with other operating segments
of the same entity
15.3
6.7
0.2
22.2
-
-22.2
-
Total revenue
897.8
290.7
92.8
1,281.3
-
-22.2
1,259.1
Adjusted EBITA
99.2
3.5
2.6
105.3
-0.1
-
105.2
Depreciations
5.6
0.9
6.6
13.1
59.7
-
72.8
Reconciliation of the total of the reportable segment's adjusted EBITA to the Group's profit before taxes
12/31/2023
12/31/2022
EUR mill.
Profit before taxes
-38.9
30.9
Share of profits in associated companies
0.0
0.1
Net finance expenses
24.2
2.9
64
Amortisation and impairment losses
119.1
62.0
Adjustments
21.2
9.2
Other
-4.2
0.1
Adjusted EBITA
121.4
105.3
Non-current assets by geographical areas
Non-current assets include property, plant and equipment, right-of-use assets, goodwill, other intangible assets,
investment properties and investments in associates.
EUR mill.
31 Dec
2023
31 Dec
2022
Finland
1,144.7
1,206.3
Sweden
75.3
74.8
Total
1,220.0
1,281.1
5. Revenue
The Group's distribution of revenue is based on three segments: Healthcare Services, Portfolio Businesses, and
Sweden. For more information on segments, refer to Note 4, Segment information. The revenue of Healthcare
Services is divided by services and customer groups. The revenue of Portfolio Businesses is divided by services.
Terveystalo offers its primary and outpatient secondary health care services to three distinct customer groups:
corporate customers, private customers, and public customers. The Group does not have customers whose
revenue exceeds 10 percent of the Group's total revenue.
Corporate customers constitute Terveystalo’s largest customer group. Terveystalo’s corporate customers consist of
the company’s occupational health care customers, excluding municipal occupational health care customers. The
company provides statutory occupational health services and other occupational health and well-being services for
corporate customers of all sizes.
Private customers include private individuals and families. The company’s strong brand, easy access to services
without long waiting times, leading service portfolio for private customers, families, and senior citizens, and
personalised digital services give Terveystalo a competitive edge over public health care services and encourage
customers to invest in their own health. Services for private customers are paid for either by the customers
themselves or by their insurance companies.
Terveystalo’s public customer group is made up of Finnish public sector organisations, such as municipalities,
municipal federations, and hospital districts, as well as municipal occupational health care customers. The services
offered to public sector customers include full and partial outsourcings, health care staffing services, specialised
care services, other health care services, as well as occupational health care services for municipalities, municipal
federations, and hospital districts.
Dissagregation of revenue
EUR mill.
1.1.-31.12.2023
1.1.-31.12.2022
Healthcare services
948.6
897.8
Portfolio Businesses
267.2
290.7
Sweden
92.5
92.8
Eliminations
-21.8
-22.2
Eliminations
1,286.4
1,259.1
65
Healthcare services, revenue
EUR mill.
1.1.-31.12.2023
1.1.-31.12.2022
By customer
Corporate
564.0
522.9
Consumer
296.1
278.4
Public sector
88.5
96.4
Total
948.6
897.8
By service
Appointments
618.3
556.3
Diagnostics
229.6
250.0
Other
100.7
91.5
Total
948.6
897.8
Portfolio Businesses, revenue
EUR mill.
1.1.-31.12.2023
1.1.-31.12.2022
Outsourcing services
91.1
118.7
Staffing services
84.7
84.1
Dental care
54.5
52.2
Other
36.9
35.6
Total
267.2
290.7
Timing of satisfying performance obligations
EUR mill.
1.1.-31.12.2023
1.1.-31.12.2022
At a point in time
1,192.9
1,134.4
Over time
93.5
124.6
Total
1,286.4
1,259.1
Balances in the statement of financial position
EUR mill.
31 Dec 2023
31 Dec 2022
Contract assets
10.2
12.8
Contract liabilities
8.8
10.3
The Group will satisfy performance obligations related to the contract liabilities within one
year.
6. Other operating income
EUR mill.
1.1.-31.12.2023
1.1.-31.12.2022
Rental income
0.9
1.1
Gains on sale of property, plant and equipment
0.2
0.3
Other items
3.1
1.2
Total
4.2
2.7
7. Materials and services
EUR mill.
1.1.-31.12.2023
1.1.-31.12.2022
Purchases of materials
-40.8
-44.1
66
Change in inventories
0.5
0.2
External services
-495.9
-481.8
Total
-536.2
-525.7
8. Employee benefit expenses
EUR mill.
1.1.-31.12.2023
1.1.-31.12.2022
Wages and salaries
-374.3
-379.5
Share-based payments
-1.4
-2.0
Pension expenses — defined contribution plans
-58.7
-61.0
Other social security costs
-12.6
-12.5
Total
-447.0
-455.0
Number of personnel at the end of the reporting period
9,824
10,933
9. Depreciation, amortisation and impairment
EUR mill.
1.1.-31.12.2023
1.1.-31.12.2022
Depreciation and amortization by asset type
Intangible assets
-4.7
-4.5
-9.4
-4.8
-18.2
-20.9
Total
-32.2
-30.1
Property, plant and equipment
-0,0
-0,0
-14.9
-14.6
-6.4
-5.9
Total
-21.3
-20.5
Right-of-use assets
-53.3
-52.4
Investment property
-0,0
-0,0
Depreciation and amortisation total
-107.0
-103.0
Impairment losses by asset groups
-57.3
-
-29.3
-
-0,0
-30.5
-0,0
-0.8
-0,0
-0.2
-0.2
-
-
-0.4
Impairment total
-86.9
-31.9
Total depreciation, amortisation and impairment losses
-193.8
-134.9
10. Other operating expenses
Specification of other operating expenses
67
EUR mill.
1.1.-31.12.2023
1.1.-31.12.2022
External services
-22.7
-3.7
Operating and maintenance expenses for premises and equipment
-25.1
-22.6
ICT expenses
-40.4
-39.7
Non-statutory personnel expenses
-7.4
-7.1
Leases and charges
-4.9
-5.1
Travel expenses
-6.9
-6.5
Marketing and communication
-8.7
-8.5
Acquisition-related expenses
-0.1
-1.6
Other costs
-12.0
-17.4
Total
-128.2
-112.3
Auditor's fees
In thousands of euro
1.1.-31.12.2023
1.1.-31.12.2022
Audit and auditor's statements based on laws and regulations
-481.1
-387.9
-11.0
-13.4
Total
-492.1
-401.4
Non audit services
-4.3
-2.8
-
-49.5
Total
-4.3
-52.3
Auditor's fees total
-496.4
-453.6
Auditor's fees have been presented excluding value-added tax. Non-audit services paid for the parent company’s auditor, KPMG Oy Ab, were
4 (52) thousand euros in total.
11. Financial income and expenses
EUR mill.
1.1.-31.12.2023
1.1.-31.12.2022
Interest income on loans and other receivables
1.2
0.3
Dividend income
0.0
0.0
Change in fair value of interest rate derivatives, no hedge accounting
-
7.1
Total financial income
1.2
7.5
Interest expense on loans from financial institutions
-14.3
-5.9
Interest expense on bonds
-3.2
-
Interest expenses on lease liabilities
-5.2
-3.9
Change in fair value of interest rate derivatives, no hedge accounting
-1.9
-
Other financial expenses
-0.9
-0.5
Total financial expenses
-25.4
-10.4
Net finance expenses
-24.2
-2.9
12. Taxes
68
Income taxes in the statement of income
EUR mill.
1.1.-31.12.2023
1.1.-31.12.2022
Current tax for the reporting year
-10.8
-8.3
Income taxes for previous periods
-0.1
0.0
Change in deferred taxes
7.6
1.8
Total income taxes
-3.3
-6.5
Reconciliation of the Group's tax rate to the Finnish tax rate
EUR mill.
1.1.-31.12.2023
1.1.-31.12.2022
Profit or loss before taxes
-38.9
30.9
Tax using the parent company's tax rate
7.8
-6.2
Tax rates in foreign jurisdictions
-0,0
-0,0
Tax exempt income
0.6
0.2
Non-deductible expenses
-11.7
-0.5
Share of profit in associated companies
0.0
-0,0
Recognition of previously unrecognised tax losses
0.2
0.2
Tax losses for which no deferred taxes are recognised
-0.2
-0.2
Taxes from previous periods
-0.1
0.0
Other
0.1
0.0
Total income taxes in the statement of income
-3.3
-6.5
Global minimum top-up tax (Pillar 2)
Terveystalo Group has assessed the impacts of Global minimum top-up tax (Pillar 2) regulation on the taxation of its Group
companies. Besides Finland, the Group has operations in Sweden and to a minor extent in Estonia. In Finland and in Sweden
effective tax rate is above global minimum top-up tax rate of 15%. Thefore the Group is not expecting to pay top tax due to Pillar 2
minimum top-up tax regulation.
The Group has applied a temporary mandatory relief from deferred tax accounting that arises from international tax reform
enforcement legislation.
12.2 Deferred tax assets and liabilities
Deferred tax assets 2023
EUR mill.
1 Jan 2023
Business
combinations
Recognised
in the
statement
of income
Translatio
n
difference
s
31 Dec 2023
Provisions
1.6
-
-0.4
-
1.2
Tax losses carried forward
1.8
-
-0.3
-
1.5
Leases
1.4
0.0
0.1
0.0
1.5
Interest rate derivatives
0.7
-
-0.7
-
0.0
Other temporary differences
2.1
-
-0.4
-
1.8
Total
7.7
0.0
-1.7
0.0
6.0
Deferred tax liabilities 2023
69
EUR mill.
1 Jan 2023
Business
combinations
Recognised
in the
statement
of income
Translatio
n
difference
s
31 Dec 2023
Reversal of goodwill amortisation
3.0
-
0.2
-
3.2
Business combinations
21.1
0.0
-9.3
-0,0
11.9
Depreciation difference
2.5
-
0.8
-
3.3
Loan withdrawal expense
0.1
-
0.1
-
0.2
Interest rate derivatives
2.0
-
-1.0
-
0.9
Other temporary differences
0.8
-
-0,0
-
0.8
Total
29.5
0.0
-9.2
-0,0
20.2
The Group has no material deductible temporary differences, unused tax losses or unused tax credits for
which no deferred tax asset has been recognised.
Deferred taxes from lease agreements
EUR mill.
1 Jan 2023
Business
combinations
Additions
Disposals
Recognised
in the
statement of
income
31 Dec
2023
Deferred tax asset
36.2
0.1
22.8
-3.5
-10.7
44.8
Deferred tax liability
-34.8
-0.1
-22.8
3.5
10.8
-43.3
Total
1.4
0.0
0.0
-0,0
0.1
1.5
Deferred tax assets 2022
EUR mill.
1 Jan 2022
Recognise
d in the
statement
of income
Translation
difference
31 Dec 2022
Provisions
1.5
0.1
-
1.6
Tax losses carried forward
0.0
1.8
-
1.8
Leases
1.4
0.0
-0,0
1.4
Interest rate derivatives
0.2
0.4
-
0.7
Other temporary differences
2.3
-0.2
-0,0
2.1
Total
5.4
2.0
-0,0
7.7
Deferred tax liabilities 2022
EUR mill.
1 Jan 2022
Business
combinations
Recognise
d in the
statement
of income
Translation
difference
31 Dec 2022
Reversal of goodwill amortisation
2.9
-
0.1
-
3.0
Business combinations
23.5
1.2
-3.4
-0.1
21.1
Depreciation difference
1.3
-
1.2
-
2.5
Loan withdrawal expense
0.1
-
-0,0
-
0.1
Interest rate derivatives
0.1
-
1.9
-
2.0
Other temporary differences
0.6
-
0.2
-0,0
0.8
70
Total
28.5
1.2
-0.1
-0.1
29.5
The Group has no material deductible temporary differences, unused tax losses or unused tax credits for
which no deferred tax asset has been recognised.
Deferred taxes from lease agreements
EUR mill.
1 Jan 2022
Business
combinations
Additions
Disposals
Recognised
in the
statement of
income
Translatio
n
difference
31 Dec
2022
Deferred tax asset
35.9
0.9
11.1
-1.1
-10.5
-0.1
36.2
Deferred tax liability
-34.5
-0.9
-11.1
1.1
10.5
0.1
-34.8
Total
1.4
0.0
0.0
0.0
0.0
-0,0
1.4
13. Earnings per share
1.1-31.12.2023
1.1-31.12.2022
Result attributable to the equity holders of the company, EUR mill.
-42.2
24.4
Weighted average number of outstanding shares, in thousands
126,555
126,508
Diluted average number of outstanding shares, in thousands
127,037
127,037
Basic earnings per share for result attributable to the equity holders of the company, EUR
-0.33
0.19
Diluted earnings per share for result attributable to the equity holders of the company,
EUR
-0.33
0.19
71
14. Tangible assets
14.1 Property, plant and
equipment
2023
Land and
water,
buildings and
constructions
Machinery
and
equipment
Improvement to
premises
Other tangible
assets and
advances paid
Total
EUR mill.
Acquisition cost 1 Jan 2023
2.3
165.1
64.4
4.2
236.0
Business combination
-
0.0
-
-
0.0
Additions
-
13.8
1.7
8.8
24.3
Disposals
-
-0.5
-0.1
-
-0.6
Translation differences
0.0
0.0
0.0
0.0
0.0
Transfers between items
-
1.2
10.6
-11.8
-
Acquisition cost 31 Dec 2023
2.3
179.7
76.6
1.1
259.7
Accumulated depreciation and impairment
losses 1 Jan 2023
-1.2
-117.1
-35.8
-
-154.0
Depreciation
-0,0
-14.9
-6.4
-
-21.3
Impairment losses
-
-0,0
-0,0
-
-0,0
Translation differences
-0,0
-0,0
-0,0
-
-0,0
Accumulated depreciation and impairment
losses 31 Dec 2023
-1.2
-132.1
-42.2
-
-175.5
Carrying amount 1 Jan 2023
1.2
47.9
28.7
4.2
82.0
Carrying amount 31 Dec 2023
1.2
47.5
34.5
1.1
84.2
.
2022
Land and
water,
buildings and
constructions
Machinery
and
equipment
Improvement to
premises
Other tangible
assets and
advances paid
Total
EUR mill.
Acquisition cost 1 Jan 2022
2.1
144.4
55.0
3.0
204.4
Business combination
0.2
0.4
0.5
0.0
1.1
Additions
-
20.0
4.9
6.1
31.0
Disposals
-
-0.4
-
-0,0
-0.4
Translation differences
-0,0
-0.2
-0,0
-0,0
-0.2
Transfers between items
-
1.0
4.0
-4.9
0.1
Acquisition cost 31 Dec 2022
2.3
165.1
64.4
4.2
236.0
Accumulated depreciation and impairment
losses 1 Jan 2022
-1.1
-101.7
-29.6
-
-132.4
Depreciation and impairment losses
-0,0
-14.6
-5.9
-
-20.6
Impairment losses
-
-0.8
-0.2
-
-1.0
Translation differences
0.0
0.1
0.0
-
0.1
Accumulated depreciation and impairment
losses 31 Dec 2022
-1.2
-117.1
-35.8
-
-154.0
Carrying amount 1 Jan 2022
1.0
42.6
25.4
2.9
72.0
Carrying amount 31 Dec 2022
1.2
47.9
28.7
4.2
82.0
72
14.2 Right of-use-assets
2023
Premises
Other right-of-
use assets
Total
EUR mill.
Acquisition cost 1 Jan 2023
331.7
41.5
373.1
Business combination
0.3
-
0.3
Additions
108.2
0.6
108.9
Disposals
-16.5
-1.2
-17.7
Translation differences
0.2
0.0
0.3
Acquisition cost 31 Dec 2023
424.0
40.9
464.9
Accumulated depreciation and impairment
losses 1 Jan 2023
-167.5
-31.8
-199.3
Depreciation for the reporting period
-50.2
-3.1
-53.3
Translation differences
-0.2
-0,0
-0.2
Accumulated depreciation and impairment
losses 31 Dec 2023
-217.9
-34.9
-252.8
Carrying amount 1 Jan 2023
164.2
9.7
173.9
Carrying amount 31 Dec 2023
206.1
6.0
212.1
2022
Premises
Other right-of-
use assets
Total
EUR mill.
Acquisition cost 1 Jan 2022
278.7
41.1
319.8
Business combination
4.4
-
4.4
Additions
54.5
0.8
55.3
Disposals
-4.7
-0.3
-5.0
Translation differences
-1.3
-
-1.3
Acquisition cost 31 Dec 2022
331.7
41.5
373.1
Accumulated depreciation and impairment
losses 1 Jan 2022
-119.0
-28.3
-147.3
Depreciation for the reporting period
-48.8
-3.5
-52.3
Translation differences
0.3
0.0
0.3
Accumulated depreciation and impairment
losses 31 Dec 2022
-167.5
-31.8
-199.3
Carrying amount 1 Jan 2022
159.7
12.7
172.5
Carrying amount 31 Dec 2022
164.2
9.7
173.9
14.3 Lease liabilities
2023
Premises
Other lease
liabilities
Total
EUR mill.
Non-current lease liabilities
166.8
5.8
172.6
Current lease liabilities
44.0
2.5
46.5
Total lease liabilities
210.8
8.3
219.1
The group has lease agreements that involve repair or renovation responsibilities related to the leased premises, which may result in changes to the
future rental level.
2022
Premises
Other lease
liabilities
Total
EUR mill.
Non-current lease liabilities
124.2
9.0
133.2
Current lease liabilities
43.7
2.8
46.5
Total lease liabilities
167.9
11.8
179.8
73
15. Intangible assets
2023
Goodwill
Customer
relationships
Trademarks
Other
intangible
assets and
advances
paid
Total
EUR mill.
Acquisition cost 1 Jan 2023
947.5
167.8
88.7
140.2
1,344.2
Business combination
1.3
0.1
-
-
1.4
Additions
-
-
-
16.3
16.3
Disposals
-0,2
-
-
-0,0
-0.2
Translation differences
0.1
0.0
0.0
0.1
0.2
Acquisition cost 31 Dec 2023
948.8
167.8
88.7
156.6
1,361.9
Accumulated amortisations and impairment losses 1 Jan
2023
-68.0
-117.5
-38.5
-95.6
-319.6
Amortisation
-
-9.4
-4.7
-18.2
-32.2
Impairment losses*
-57.3
-29.3
-
-0,0
-86.6
Translation differences
-
-0,0
-0,0
-0.1
-0.1
Accumulated amortisations and impairment losses 31
Dec 2023
-125.3
-156.2
-43.2
-113.9
-438.6
Carrying amount 1 Jan 2023
879.5
50.3
50.2
44.6
1,024.7
Carrying amount 31 Dec 2023
823.5
11.6
45.6
42.8
923.4
* As a result of the impairment test, EUR 55.3 million write-offs related to goodwill and EUR 29.3 million write-offs to purchase price allocations
relating to public outsourcing customer relationships within the Portfolio Businesses segment public payor CGU were made. The impaired goodwill
was recognised mainly in the acquisition of Attendo Healthcare Services in 2018. Customer relationship write-offs relate solely to the legacy
Outsourcing business, acquired in the Attendo transaction that is gradually being phased out. In addition during the year an EUR 2.0 million
impairment of goodwill made related to reorganisation of Portfolio businesses in connection to sale of business operations.
2022
Goodwill
Customer
relationships
Trademarks
Other
intangible
assets and
advances
paid
Total
EUR mill.
Acquisition cost 1 Jan 2022
916.6
166.5
88.8
111.0
1,282.9
Business combination
34.4
2.0
-
4.1
40.4
Additions
-
-
-
26.1
26.1
Reclassifications
-
-
-
-0.1
-0.1
Translation differences
-3.5
-0.7
-0.1
-0.9
-5.2
Acquisition cost 31 Dec 2022
947.5
167.8
88.7
140.2
1,344.2
Accumulated amortisations and impairment losses 1 Jan
2022
-68.0
-107.4
-33.7
-50.0
-259.1
Amortisation
-
-10.2
-4.8
-15.1
-30.1
Impairment losses*
-
-
-
-30.5
-30.5
Translation differences
-
0.1
0.0
0.1
0.2
Accumulated amortisations and impairment losses 31
Dec 2022
-68.0
-117.5
-38.5
-95.6
-319.6
Carrying amount 1 Jan 2022
848.6
59.1
55.1
61.0
1,023.8
Carrying amount 31 Dec 2022
879.5
50.3
50.2
44.6
1,024.7
* Includes approx. EUR 29 million impairment related to discontinued sub-projects of the basic IT system development.
Development expenditure
Other intangible assets include development expenditure as follows:
74
2023
EUR mill.
Acquisition cost 1 Jan 2023
34.5
Additions
12.4
Transfers from advance payments
10.8
Translation differences
0.1
Acquisition cost 31 Dec 2023
57.8
Accumulated amortisations and impairment losses 1 Jan 2023
-13.0
Amortisation and impairment losses
-12.2
Accumulated amortisations and impairment losses 31 Dec 2023
-25.2
Carrying amount 1 Jan 2023
21.6
Carrying amount 31 Dec 2023
32.6
2022
EUR mill.
Acquisition cost 1 Jan 2022
18.2
Business combination
0.1
Additions
6.8
Transfers from advance payments
9.6
Translation differences
-0.2
Acquisition cost 31 Dec 2022
34.5
Accumulated amortisations and impairment losses 1 Jan 2022
-5.2
Amortisation and impairment losses
-7.8
Accumulated amortisations and impairment losses 31 Dec 2022
-13.0
Carrying amount 1 Jan 2022
12.8
Carrying amount 31 Dec 2022
21.6
16. Impairment testing of cash-generating units including goodwill
Goodwill is not amortised but it is tested for impairment at least annually.
Terveystalo has changed its operating model that came into effect in 2023, and, as a result, the financial reporting
structure has changed. Previously cash-generating units were divided based on regions. The basis for impairment
testing in 2023 is, for the first time, the new management and reporting structure introduced at the beginning of the
year, where Terveystalo Group consists of three operating segments: Healthcare Services, Portfolio Businesses,
and Sweden. Healthcare Services and Sweden are also cash -generating units. The Portfolio Businesses segment
includes Public and Private payor cash-generating units. Comparison figures are not presented due to changed
reporting structure.
Healthcare Services and Sweden consist of units with their own budgets and performance measurement, and are
centrally managed. Portfolio Businesses are managed as a whole, they partly share resources and are centrally
managed, but cash flows generated, marketing functions and identifiable assets are different for Public and Private
payors.
As a result of the impairment test, the Group made EUR 55.3 million impairment related to goodwill in Portfolio
Businesses Public payor cash-generating unit. The impaired goodwill was recognised mainly in the acquisition of
Attendo Healthcare Services in 2018. After the impairment, the remaining goodwill related to Portfolio Businesses
Public payor cash-generating unit amounts to EUR 146.4 million in total.
Based on impairment testing calculations performed, there is no impairment needs to goodwill for other cash-
generating units. For those cash-generating units, recoverable amounts exceeded their carrying amounts.
75
Goodwill arising from business combinations has been allocated to cash-generating units as shown in the table
below.
.
31 Dec 2023
31 Dec 2023
EUR mill.
Goodwill
%
Impairment
Healthcare Services
603.6
73.3 %
-
Portfolio Businesses, Public payor
146.4
17.8 %
55.3
Portfolio Businesses, Private payor
29.1
3.5 %
-
Sweden
44.4
5.4 %
-
Total
823.5
100.0 %
55.3
In financial year 2023 there were four cash generating units in total. The recoverable amounts of the cash-
generating units are based on value-in-use calculations which have been calculated using discounted cash flow
projections. The key assumptions used in the calculations are terminal period revenue growth rate, profitability
(EBIT %) and the discount rate. The projections are based on the budgets and estimates for the years 2024–2027,
including the long-term growth, which have been approved by the management.
The assumptions used in impairment calculations in 2023
Healthcare
Services
Portfolio
Businesses,
Public payor
Portfolio
Businesses,
Private payor
Sweden
The length of impairment testing period
4 years
4 years
4 years
4 years
Terminal period revenue growth rate
2.0 %
2.0 %
2.0 %
2.0 %
Profitability (EBIT %) during the terminal period
13.2 %
5.3 %
6.2 %
5.2 %
Discount rate (Pre-tax WACC)
9.6 %
10.9 %
9.6 %
8.0 %
Discount rate (Post-tax WACC)
8.1 %
9.1 %
8.1 %
6.8 %
Revenue growth during the terminal period is based on a flat growth factor which corresponds to long-term target
inflation of the European Central Bank. Profitability during the terminal period is based on the assumed organic
growth under normal market situation, general development in health care services market and long-term estimates
by the Group’s management.
The discount rate used in impairment testing has been Pre-tax WACC of which the components are risk-free
interest rate, risk premiums, industry-specific beta, industry-specific cost of debt, and industry specific equity / debt
ratios.
Sensitivity analysis
The Group has assessed the sensitivity of the impairment testing to the effect of the most critical assumptions used
in the calculation. The table below shows the required change in a single assumption that the recoverable amount
would fall below the carrying amount.
Variable
2023
Terminal period revenue growth rate
Healthcare Services
Decrease over 17.1 percentage points
76
Portfolio Businesses, Public payor
Not applicable
Portfolio Businesses, Private payor
Decrease over 10.2 percentage points
Sweden
Decrease over 1.0 percentage points
Profitability (EBIT %) during the terminal period
Healthcare Services
Decrease over 10.6 percentage points
Portfolio Businesses, Public payor
Not applicable
Portfolio Businesses, Private payor
Decrease over 4.2 percentage points
Sweden
Decrease over 0.9 percentage points
Discount rate (Pre-tax WACC)
Healthcare Services
Increase over 14.3 percentage points
Portfolio Businesses, Public payor
Not applicable
Portfolio Businesses, Private payor
Increase over 8.9 percentage points
Sweden
Increase over 1.0 percentage points
When assessing the recoverable amounts of cash generating units, management believes that no reasonably
possible change in any of the key variables used would lead to a situation where the recoverable amount of the
units would fall below their carrying amount in Healthcare Services or Portfolio Businesses, Private payor cash-
generating units. In Portfolio Businesses, Public payor cash-generating unit the value in use is equivalent to book
value of assets at the time of impairment testing and in consequence sensitivity analysis does not apply to this
cash-generating unit.
According to the impairment testing, for Sweden cash-generating unit, changes in critical assumptions presented in
table above would lead to carrying amount of assets to be equivalent to recoverable amount. Sweden cash-
generating unit’s carrying amount of assets at the time of impairment testing was EUR 65.3 million.
17. Investment properties
Carrying amount of investment properties
EUR mill.
1.1-31.12.2023
1.1-31.12.2022
Carrying amount at the beginning of the period
0.5
0.5
Impairment
-0.2
-
Depreciation
-0.0
-0.0
Carrying amount at the end of the period
0.3
0.5
Income and expenses related to investment properties
EUR mill.
1.1-31.12.2023
1.1-31.12.2022
Rental income from investment properties
0.1
0.1
Operating expenses for investment properties
-0.0
-0.0
Total
0.0
0.1
77
Income and expenses relating to investment properties are presented based on the Group’s ownership in the
investment properties. There are no other contractual obligations related to investment properties.
Fair values of investment properties
Investment
m2
Value per m2 (In thousands of euro)
Total value (In thousands
of euro)
Koy Jyväskylän Väinönkatu 30
1,348
0.2
269
The value of Kiinteistö Oy Jyväskylän Väinönkatu has been determined based on the Group’s share of ownership
(16.81 %).
18. Associated companies
Terveystalo has the following associated companies which are all consolidated using the equity method. The Group has
no individually material associates.
Associated companies 31 Dec 2023
Domicile
Ownership
Voting rights
Terveyden Tuottajat Oy
Finland
0.0 %
48.2 %
Summarised financial information on associated companies
EUR mill.
2023
2022
Carrying amount
0.0
0.0
Group's share of total comprehensive income
0.0
-0.1
19. Share-based payments
Performance Share Plan 2021
Performance Share Plan is targeted to Terveystalo’s key employees. The long-term share-based payment plan is
based on a rolling three year performance period structure, with a new performance period starting each year, if so
decided by the Board. The Board decides on the participants, performance measures and targets as well as earning
opportunities on an annual basis. Rewards are conditional on the fulfilment of a three-year service condition and
performance conditions tied to financial targets that are set separately. The reward is granted as a gross number of
Terveystalo shares, including a cash portion for taxes and tax-related expenses arising from the reward to the
employee. The reward is settled as net shares. The plan is fully accounted for as an equity settled share-based
payment. Under the plan, three (3) performance periods 2021–2023, 2022–2024 and 2023-2025 have been
launched. The impact of the Performance Period 2021–2023 to the result for the period has been EUR 0.4 million
and the expected total cost of the plan is EUR 2.5 million. 37 persons are included in the Performance Period 2021–
2023 arrangement. The impact of the Performance Period 2022–2024 to the result for the period has been EUR 0.5
million and the expected total cost of the plan is EUR 1.9 million. 51 persons are included in the Performance
Period 2022–2024 arrangement. The impact of the Performance Period 2023–2025 to the result for the period has
been EUR 0.4 million and the expected total cost of the plan is EUR 1.6 million. 55 persons are included in the
Performance Period 2023–2025 arrangement.
Performance Share Plan 2021
2023-2025
2022-2024
2021-2023
Grant date
3 Apr 2023
1 Apr 2022
1 Apr 2021
Maximum number of share awards
640,000
683,085
642,000
Outstanding at 1 Jan 2023
-
577,864
486,556
Granted share awards during the period
582,000
-
-
Forfeited share awards during the period
49,000
121,890
94,000
78
Exercised share awards during the period
-
-
Outstanding at 31 Dec 2023
533,000
455,974
392,556
Fair value of the share award at grant date
6.6
9.2
12.6
End of the performance period
28 Feb 2026
28 Feb 2025
29 Feb 2024
End of the vesting period, expected
31 Mar 2026
31 Mar 2025
31 Mar 2024
Vesting conditions
Service
condition,
total
Shareholder
Return
(TSR)
Service
condition,
total
Shareholder
Return
(TSR)
Service condition,
total Shareholder
Return (TSR),
productivity and
digital sales
Exercised
In shares
and cash
In shares
and cash
In shares and cash
Bridge Plan
Bridge Plan is targeted for President and CEO. Rewards are conditional on the fulfilment of a two-year service
condition and performance conditions tied to financial targets that are set separately. The reward is granted as a
gross number of Terveystalo shares including a cash portion for taxes and tax-related expenses arising from the
reward to the employee. The reward is settled as net shares. The plan is fully accounted for as an equity settled
share-based payment. The plan ended during the year 2023 and in consequence, the shares earned were granted
according to realization of the plan’s conditional performance measures. The plan’s impact to the result for the
period has been EUR 0.0 million.
Bridge Plan
2021-2022
Grant date
24 May 2021
Maximum number of share awards
58,600
Outstanding at 1 Jan 2023
58,600
Granted share awards during the period
-
Forfeited share awards during the period
50,294
Exercised share awards during the period
8,306
Outstanding at 31 Dec 2023
-
Fair value of the share award at grant date
14.1
End of the performance period
28 Feb 2023
End of the vesting period
10 Mar 2023
Vesting conditions
Service condition, total Shareholder
Return (TSR), productivity and digital
sales
Exercised
In shares and cash
Restricted Share Plan
Restricted Share Plan offers individually selected employees an opportunity to earn a fixed number of shares after a
vesting period. Rewards are conditional on the fulfilment of a service condition during the vesting period. The
reward is granted as a gross number of Terveystalo shares, including a cash portion for taxes and tax-related
expenses arising from the reward to the employee. The reward is settled as net shares. The plan is fully accounted
for as an equity settled share-based payment. Three (3) vesting periods have been launched in the plan. At the
reporting period end, twelve (12) persons were included in the arrangement. The impact to the result of the vesting
periods 2021–2023, 2022–2024 and 2023-2025 has been EUR 0. 1 million and the expected total cost of the plan is
EUR 0.4 million.
Restricted Share Plan
2023-2025
2022-2024
2021-2023
Grant date
3 Apr 2023
22 Jun 2022
15 Apr 2021
Maximum number of share awards
64,000
68,309
64,200
Outstanding at 1 Jan 2023
-
3,000
7,000
Granted share awards during the period
29,000
6,000
-
79
Forfeited share awards during the period
-
-
-
Exercised share awards during the period
-
-
-
Outstanding at 31 Dec 2023
29,000
9,000
7,000
Fair value of the share award at grant date
6,6
9.5
11.2
End of the performance period
28 Feb 2026
28 Feb 2025
29 Feb 2024
End of the vesting period, expected
31 Mar 2026
31 Mar 2025
31 Mar 2024
Vesting conditions
Service
condition
Service
condition
Service condition
Exercised
In shares and
cash
In shares and
cash
In shares and cash
20. Financial assets and liabilities – carrying amount, fair values and fair value hierarchy
EUR mill. 31 Dec 2023
Financial assets
and liabilities at
fair value
Financial assets and
liabilities at
amortised cost
Carrying
amount
Fair value
Fair value
hierarchy
Financial assets
Non-current
0.0
-
0.0
0.0
Level 2
0.8
-
0.8
0.8
Level 3
Current
-
127.6
127.6
127.6
-
37.7
37.7
37.7
4.8
-
4.8
4.8
Level 2
Total
5.6
165.3
170.8
170.8
Financial liabilities
Non-current
-
294.0
294.0
294.0
Level 2
-
99.1
99.1
102.7
Level 1
-
1.3
1.3
1.3
Level 2
3.3
-
3.3
3.3
Level 3
Current
-
19.8
19.8
19.8
Level 2
-
2.5
2.5
2.5
Level 2
-
49.5
49.5
49.5
2.6
-
2.6
2.6
Level 3
0.1
-
0.1
0.1
Level 2
Total
6.0
466.2
472.2
475.7
Financial assets and liabilities classified at fair value hierarchy level 3 consist of unquoted equity investments and contingent
considerations from business combinations. The measurement of unquoted equity investments is based on the managements estimate
of future cash flows arising from the investments and the measurement of contingent considerations is based on the amounts specified
in purchase agreements and the management estimate on whether the consideration will be realised. The effect on earnings arising
from the changes of fair values of financial assets and liabilities classified at fair value hierarchy level 3 has been EUR 1,6 million
(2022: EUR -2,4 million).
80
Terveystalo issued a senior unsecured sustainability-linked bonds in the aggregate principal amount of EUR 100 million. Bonds will
mature on 1 June 2028 and carry initially a fixed annual interest of 5.375 per cent. Nasdaq Helsinki admitted the Bonds to trading on
the official list of Nasdaq Helsinki on 5 June 2023.
EUR mill. 31 Dec 2022
Financial assets
and liabilities at
fair value
Financial assets and
liabilities at
amortised cost
Carrying
amount
Fair value
Fair value
hierarchy
Financial assets
Non-current
0.3
-
0.3
0.3
Level 2
0.8
-
0.8
0.8
Level 3
Current
-
106.9
106.9
106.9
-
12.8
12.8
12.8
-
40.2
40.2
40.2
9.9
-
9.9
9.9
Level 2
Total
11.0
159.9
170.9
170.9
Financial liabilities
Non-current
-
379.2
379.2
379.2
-
3.9
3.9
3.9
Level 2
5.6
-
5.6
5.6
Level 3
Current
-
40.0
40.0
40.0
-
4.2
4.2
4.2
-
49.0
49.0
49.0
5.0
-
5.0
5.0
Level 3
3.4
-
3.4
3.4
Level 2
Total
14.0
476.2
490.2
490.2
.
21. Financial risks
21.1 Financial risk management
The Group is exposed to various financial risks in its normal business activities. The objective of the Group’s risk
management is to minimise the negative effects of changes in the financial markets on the Group’s result and
valuation. The Group’s main financial risks are interest rate risk, credit risk and liquidity risk. The Group’s risk
management principles are approved by the Board of Directors and the Group’s financial department is responsible
for the implementation of the principles. The Group’s financial department identifies and assesses risks and
acquires instruments needed to hedge against them.
21.2 Interest rate risk and currency risk
The Group’s interest rate risk arises from its loans from financial institutions issued at a floating rate. In 2023, the
Group’s average interest rate for loans from financial institutions has been 4.0
percent (2022: 1.2 percent). If the
interests would have been one percentage point higher it would have caused an increase of EUR 4.1 million in
interest expenses during the year 2023. (2022: EUR 3.9 million).
81
The Group does not apply hedge accounting according to IFRS 9. The Group’s subsidiaries have the following open
interest rate derivative contracts at the reporting date:
●
rate and receives variable interest on EUR 30.0, 50.0 and 50.0 million loan capital.
●
interest on EUR 15.0 and 25.0 million loan capital.
Besides Finland, the Group has operations in Sweden and to a minor extent in Estonia and is thereby exposed to
currency risk arising from Swedish krona. As billing and purchasing of the Group companies is conducted in the
local currency, the transaction risk exposure for Terveystalo is insignificant. During the year 2023, the Group
incurred foreign exchange change of EUR 0.0 million (2022: EUR -0.1 million). However, the group is exposed to
exchange rate translation differences, which are booked in other comprehensive income that may be reclassified as
profit or loss.
21.3 Credit risk
The majority of the Group’s incoming cash flows are payments from established institutions, public sector and
companies with appropriate credit rating. However, the Group’s trade receivables include credit risk. Credit risk is
managed mainly by monitoring the customer’s credit rating on a regular basis and by co-operating with collection
agencies. In addition, the Group’s customers include private people whose invoicing is primarily carried out in
connection with the rendering of services.
The Group has no major customer specific risk concentrations and its credit risk is diversified. Credit risk is
managed by monitoring the amount, maturity distribution and turnover of trade receivables. Credit risk is also
monitored on a client by client basis.
The Group’s maximum credit risk is equal to the carrying amount of financial assets at the reporting date. The
maturity distribution of the Group’s trade receivables is disclosed in note 22
Trade and other receivables
.
21.4 Refinancing risk and Liquidity risk
The group aims to ensure sufficient liquidity through efficient cash management and adequate credit limits.
Refinancing risk is managed through a balanced portfolio that includes loans with sufficiently long maturities. The
Group aims to assess and monitor continuously the amount of funding required by business operations, in order to
ensure sufficient liquidity to finance its operations, to repay maturing loans as well as to carry out investments and
acquisitions of companies according to the growth strategy.
The Group’s cash and cash equivalents comprise cash in bank accounts, cash in hand and cash payments not yet
recorded into the Group’s bank accounts (cash in transit) at the reporting date.
The Group manages liquidity risk by monitoring unused liquidity reserves and forecasting future cash flows.
The Group has an overdraft facility and undrawn credit facilities, of which EUR 98.0 million remained unused at the
reporting date (2022: EUR 99.6 million).
The Group has EUR 412.1 million of bank loans. Uncertainty in financial markets may cause the cost of financing
needed for the group’s business operations to rise or become more difficult to obtain. The Group may not
necessarily obtain financing on competitive terms or at all, and it may not be able to fulfill its obligations according to
the financing arrangements.
The table below presents a contractual maturity analysis of financial liabilities. The cash flow figures are
undiscounted and they include both interest payments and repayments of principals. Interest payments which are
based on variable rates have been presented using variable rates as of the end of the reporting date.
82
Maturity analysis of liquidity risk
31 Dec 2023
EUR mill.
Carrying amount
Contractual cash
flows
1 year
1–2 years
2–5 years
Over 5 years
Loans from financial institutions
313.8
331.6
15.8
137.0
167.6
11.2
Bonds
99.1
124.5
5.4
5.4
113.6
-
Lease liabilities
219.1
226.5
51.5
47.4
83.8
43.9
Hire purchase liabilities
3.8
3.8
2.6
1.2
0.1
-
Trade payables
49.5
49.5
49.5
-
-
-
Interest rate derivatives
0.1
0.4
0.3
0.4
-0.4
-
Total
688.6
728.6
122.5
188.8
362.1
55.1
31 Dec 2022
EUR mill.
Carrying amount
Contractual cash
flows
1 year
1–2 years
2–5 years
Over 5 years
Loans from financial institutions
419.2
446.9
52.3
220.3
151.5
22.5
Lease liabilities
179.8
191.9
49.9
43.2
74.8
24.0
Hire purchase liabilities
8.0
8.2
4.3
2.6
1.3
-
Trade payables
49.0
49.0
49.0
-
-
-
Interest rate derivatives
3.4
2.9
0.1
1.9
0.9
-
Total
659.4
698.5
155.6
267.9
228.5
46.4
.
21.5 Capital management
The objective of the Group’s capital management is to support business operations and to ensure competitive
operating conditions with optimal capital structure, as well as to enable the implementation of the strategy.
In addition to operative cash flows, the capital structure is managed by potential share issues, acquisition of
treasury shares by increase or repayment of financial liabilities, possible conversions between equity and financial
liabilities, as well as through operative decisions on investments and growth and potential disposals of assets in
order to reduce liabilities.
The development of the Group’s capital structure is monitored, amongst other things, with the following: change in
net debt, ratio of net debt to operating margin, and the cash flow forecast.
The Group’s net debt to equity ratio (gearing) was 116,0 percent at the reporting date (2022: 95.7 percent). The
ratio is calculated by dividing interest -bearing net debt with equity. The net debt includes interest-bearing liabilities
less interest-bearing receivables and cash and cash equivalents. The Group’s interest-bearing liabilities were EUR
635.8 million at the reporting date (2022: EUR 607.0 million). A significant part of the interest-bearing liabilities
consists of loans from financial institutions.
The Group’s loan agreements include a covenant, based on which creditors can demand an immediate repayment
of the loans if a certain covenant limit is breached. The covenant relates to the ratio between EBITDA and net debt.
The Group has met all covenant terms and conditions during the reporting period and at the reporting date.
22. Trade and other receivables and contract assets
Carrying amounts of trade and other receivables and contract assets
83
EUR mill.
2023
2022
Non-current
Loan receivables
0.0
0.3
Total non-current receivables
0.0
0.3
Current
Trade receivables
117.4
106.9
Other receivables
2.3
2.1
Prepaid expenses
8.4
6.5
Derivative assets
4.8
9.9
Contract assets
10.2
12.8
Total
143.1
138.4
Specification of prepaid expenses
EUR mill.
2023
2022
Personnel related prepaid expenses
0.0
0.0
Other prepaid expenses
8.4
6.5
Total
8.4
6.5
During the reporting period the Group has recognised final credit losses and expected credit losses on trade
receivables and contract assets through the statement of income totaling EUR 2.1 million (2022: EUR 1.9 million).
Impairment loss provision is based on a simplified approach. Estimated impairment loss rates have been calculated
using historical information of actual impairment losses, and the current conditions and the Group’s view of the
economic conditions over the expected lives of the receivables have been taken into account.
Based on the Group’s view, the carrying amount of trade receivables corresponds to the maximum credit risk if the
contractual parties are unable to meet their obligations related to trade receivables.
The fair value of other receivables and prepaid expenses corresponds with their carrying amount.
Ageing of trade receivables and recognised credit losses
2023
EUR mill.
Trade receivables and
contract assets total
Expected credit loss
Recognised expected
credit loss
Carrying amount
Contract assets
10.2
0.0 %
-0,0
10.2
Not past due
101.9
-0.1 %
-0.1
101.8
Past due
10.4
-0.4 %
-0,0
10.3
2.4
-1.3 %
-0,0
2.4
1.8
-8.4 %
-0.2
1.6
3.0
-61.3 %
-1.8
1.1
Total
129.7
-2.1
127.6
84
Information about credit risk related to trade receivables is stated in note 21 Financial risks.
Ageing of trade receivables and recognised credit losses
2022
EUR mill.
Trade receivables total
Expected credit loss
Recognised expected
credit loss
Carrying amount
Contract assets
12.8
0.0 %
-0,0
12.8
Not past due
95.0
-0.1 %
-0.1
95.0
Past due
7.3
-0.4 %
-0,0
7.3
2.3
-1.2 %
-0,0
2.3
1.0
-5.9 %
-0.1
1.0
3.2
-55.5 %
-1.8
1.4
Total
121.6
-1.9
119.7
Information about credit risk related to trade receivables is stated in note 21 Financial risks.
23. Cash and cash equivalents
The Group’s cash and cash equivalents on 31 December 2023, amounting to EUR 37.7 million (2022: EUR
40.2 million) consist of cash in hand and bank as well as, cash payments on the bank settlement account at the
reporting date.
The carrying amounts in the statement of financial position correspond to the maximum amount of credit risk if the
contractual parties are unable to meet their obligations. However, no significant counterparty risks are associated
with cash and cash equivalents. The fair value of cash and cash equivalents correspond to their carrying amounts.
24. Share capital and invested non-restricted equity reserve
EUR mill.
Number of
outstanding
shares, 1,000
pcs
Number
of
treasury
shares,
1,000
pcs
Number
of shares
total,
1,000 pcs
Share capital
Invested non-
restricted equity
reserve
Treasury
shares
Total
1 Jan 2022
126,307
1,730
128,037
0.1
492.8
-18.0
474.9
Acquisition of treasury
shares
241
-241
-
-
-
2.2
2.2
Cancellation of treasury
shares
-
-1,000
-1,000
-
-
-
-
31 Dec 2022
126,548
489
127,037
0.1
492.8
-15.8
477.1
1 Jan 2023
126,548
489
127,037
0.1
492.8
-15.8
477.1
Acquisition of treasury
shares
8
-8
-
-
-
0.1
0.1
Cancellation of treasury
shares
-
-
-
-
-
-
-
85
31 Dec 2023
126,556
480
127,036
0.1
492.8
-15.7
477.2
Shares and share capital
On 31 December 2023, the amount of shares is 127,036,531 of which amount of outstanding shares is 126,556,301
and amount of treasury shares is 480,230.
The Company has a single share class. The shares have no nominal value. All shares issued have been paid in full.
Each share has one vote at the Annual General Meeting and equal rights to dividends and other distribution of
assets.
Terveystalo PLC’s share is listed on Nasdaq Helsinki Oy. The trading code is TTALO. Terveystalo PLC’s shares
belong to the book-entry system maintained by Euroclear Finland Oy.
Invested non-restricted equity reserve
Invested non-restricted equity reserve consists of other investments similar to equity and the subscription price of
shares to the extent that it has not been recorded in share capital according to specific resolution. According to the
current Finnish Companies Act subscription price of new shares is recogni sed in the share capital, unless it has not
been according to Issuance Resolution fully or partly recognised in invested non-restricted equity reserve.
Distributable funds
On 31 December 2023, the distributable funds of the parent company totalled EUR 535.9 million including the profit
of the financial period 2023 of EUR 40.5 million. The Board of Directors proposes to the Annual General Meeting
that a dividend of EUR
) per share totaling EUR
financial position adopted for the financial year ended 31 December 2023. The dividend would be paid in two
instalments as follows:
●
in the shareholders' register of the Company maintained by Euroclear Finland Ltd on the record date of the
first dividend installment on 28 March 2024. The Board of Directors proposes that the first dividend
installment would be paid on 8 April 2024.
●
in the shareholders' register of the Company maintained by Euroclear Finland Ltd on the record date of the
second dividend installment on 9 October 2024. The Board of Directors proposes that the second dividend
installment would be paid on 16 October 2024. The Board of Directors also proposes that the Annual
General Meeting would authorize the Board of Directors to resolve, if necessary, on a new record date and
date of payment for the second dividend installment should the rules of Euroclear Finland Ltd or statutes
applicable to the Finnish book-entry system change or otherwise so require.
The dividend proposed by the Board of Directors to the Annual General Meeting is not deducted from distributable
equity until approved by the Annual General Meeting of Shareholders.
No material changes have taken place in the company’s financial position since the end of the financial year. The
liquidity of the company is good and the proposed allocation of funds, in the view of the Board of Directors, does not
endanger the company's solvency.
25. Financial liabilities
Non-cash changes
86
EUR mill.
1 Jan 2023
Cash flows
Business
combinations
Other changes
Translation
differences
31 Dec 2023
Loans from financial institutions
419.2
-105.2
-
-0.2
-
313.8
Bonds
-
99.6
-
-0.5
-
99.1
Hire purchase liabilities
8.0
-4.3
-
-
-
3.8
Lease liabilities
179.8
-50.9
0.3
90.4
-0.5
219.1
Total
607.0
-60.8
0.3
89.7
-0.5
635.7
.
Non-cash changes
EUR mill.
1 Jan 2022
Cash flows
Business
combinations
Other changes
Translation
differences
31 Dec 2022
Loans from financial institutions
365.4
53.8
0.5
-0.2
-0.4
419.2
Hire purchase liabilities
13.3
-5.3
-
-
-
8.0
Lease liabilities
178.5
-49.3
4.4
46.2
-0,0
179.8
Total
557.2
-0.8
4.9
46.0
-0.4
607.0
The Group’s loan agreements include a covenant, based on which creditors can demand an immediate repayment
of the loans if a certain covenant limit is breached. The covenant relates to the ratio between EBITDA and net debt.
The Group has met all covenant terms and conditions during the reporting period and at the reporting date.
26. Trade and other payables
Carrying amounts of trade and other payables
EUR mill.
2023
2022
Trade payables
49.5
49.0
Other payables
80.1
81.9
Contract liabilities
8.8
10.3
Derivative liabilities
0.1
3.4
Accrued expenses
86.2
78.7
Total
224.7
223.2
Specification of other payables
EUR mill.
2023
2022
Doctor's fee liabilities
48.5
48.2
VAT liabilities
23.3
24.0
Other
8.3
9.7
Total
80.1
81.9
Specification of accrued expenses
EUR mill.
2023
2022
Personnel-related accrued expenses
74.0
71.4
87
Interest liabilities
6.3
1.5
Other
5.9
5.8
Total
86.2
78.7
27. Provisions
Carrying amounts of provisions
EUR mill.
2023
2022
Non-current provisions
2.8
8.3
Current provisions
3.3
3.2
Total
6.1
11.5
EUR mill.
2023
2022
Onerous contracts
4.1
7.1
Other provisions
2.0
4.4
Total
6.1
11.5
Changes in provisions during the financial year 2023
EUR mill.
Onerous
contracts
Other
provisions
Total
1 Jan 2023
7.1
4.4
11.5
Increase in provisions
1.1
0.9
2.1
Used provisions
-4.1
-3.4
-7.5
31 Dec 2023
4.1
2.0
6.1
Changes in provisions during the financial year 2022
EUR mill.
Onerous
contracts
Other
provisions
Total
1 Jan 2022
6.6
4.4
11.0
Increase in provisions
2.2
0.6
2.8
Used provisions
-1.7
-0.6
-2.3
31 Dec 2022
7.1
4.4
11.5
28. Defined benefit plans
The Group has defined benefit plans in Sweden in the Feelgood subgroup . These consists of PSA and PA -KL plans
which are closed and for which all the participants have either retired or left the Group. There are no assets related
to the Group’s defined benefit plans. The defined benefit plans determine the amount of pension to be paid and the
benefits to be paid for disability and at termination of employment. The benefits in these plans are usually based on
the length of employment and the level of final salary. The weighted average duration of the defined benefit
obligations was 7 years at the reporting date.
88
Summary of the impact of the defined benefit plans in the financial statements
EUR mill.
2023
2022
Present value of the defined benefit obligations
1.3
1.3
Expenses related to defined benefit plans
0.0
0.0
Remeasurements of defined benefit obligations
0.1
-0.2
Reconciliation of the defined benefit obligation
EUR mill.
2023
2022
1 Jan
1.3
1.7
Interest expense (+) / income (-)
0.1
0.0
Benefits paid
-0.1
-0.1
Remeasurement of the obligation
Actuarial gain (-) / loss (+) from change in financial assumptions
0.1
-0.2
Translation differences
0.0
-0.1
31 Dec
1.3
1.3
Applied actuarial assumptions
%
2023
2022
Discount rate
3.70
3.80
Inflation
1.70
1.90
The discount rate is determined based on the yield of Swedish housing market bonds which have a length that approximates the Group’s
pension obligations.
.
Sensitivity analysis of the relevant actuarial assumptions’ impact on defined benefit obligation
EUR mill.
2023
2022
0.5%-point increase in the principal assumption
Discount rate
-0,0
-0,0
Inflation
0.0
0.0
0.5%-point decrease in the principal assumption
Inflation
-0,0
-0,0
An external actuary has performed the sensitivity analysis for one variable at a time while holding all other variables constant and regardless
of the actual volatility of the given variable. Consequently, the purpose of the analysis is not to quantify expected change in the defined
benefit obligation but to illustrate the sensitivity of the value of the obligation to these variables.
.
29. Collateral and contingent liabilities
EUR mill.
31 Dec 2023
31 Dec 2022
Business mortgages
7.5
11.4
Total
7.5
11.4
89
Securities for own debts
Deposits
0.2
0.5
Guarantees
0.2
0.4
Total
0.4
0.9
As part of the normal development and maintenance of its branch and hospital network, the Group has entered into a 20-
year lease agreement with an estimated annual rent of EUR 3.5 million. The transfer of control of the lease property is
planned to take place in 2027.
30. Related party transactions
Group’s related parties
The Group’s related parties include the parent company as well as subsidiaries and associated companies. In
addition, related parties include also the members of the Board of Directors, Group management and the CEO as
well as their close family members and entities in which they have control or joint control.
The relationships of the parent company and the subsidiaries are disclosed in note 31
Group companies
.
Related party transactions
2023
Sales
Purchases
Receivables
Payables
Associated companies
0.6
9.7
0.2
0.8
Other related parties
0.0
-
-
-
Total
0.6
9.7
0.2
0.8
2022
Sales
Purchases
Receivables
Payables
Associated companies
0.6
10.6
0.3
1.0
Total
0.6
10.6
0.3
1.0
Compensation for the key management
Remuneration for CEO, in thousands of euro
2023
2022
Fixed pay
397.7
393.6
Other benefits
12.3
6.4
Short-term incentives
402.2
105.0
Share-based payments
348.1
546.9
Pensions (statutory)
133.4
82.9
Total
1,293.7
1,134.8
Renumeration for the CEO is presented on an accrual basis.
Remuneration to members of the Executive team
(excluding CEO), in thousands of euro
2023
2022
Fixed pay
1,348.3
1,638.5
Other benefits
28.7
28.1
90
Short-term incentives
606.7
146.1
Share-based payments
412.1
730.9
Termination benefits
226.3
305.9
Pensions (statutory)
330.7
301.6
Total
2,952.8
3,151.1
Renumeration to members of the Executive team is presented on an accrual basis.
Remuneration to Board of
Directors, in thousands of euro
2023
2022
Annual fee
settled in
cash
Annual fee
settled in
shares
Meeting
fees
Other
financial
benefits*
Annual fee
settled in
cash
Annual fee
settled in
shares
Meeting
fees
Other
financial
benefits*
Kari Kauniskangas (Chairman of
the board)
52.5
35.0
18.7
0.6
52.5
35.0
19.0
0.6
Kristian Pullola
31.2
20.8
11.7
0.3
31.2
20.8
14.2
0.3
Katri Viippola
24.9
16.6
13.7
0.3
24.9
16.6
15.5
0.3
Matts Rosenberg
31.2
20.8
12.4
0.3
31.2
20.8
10.4
0.3
Carola Lemne
24.9
16.6
18.0
0.3
24.9
16.6
14.7
0.3
Lehtoranta Ari**
24.9
16.6
8.5
0.3
-
-
-
-
Hasselberg Sofia**
24.9
16.6
15.4
0.3
-
-
-
-
Members of the Board of
Directors until 10 October 2022
Dag Andersson
-
-
-
-
41.5
0.0
13.8
0.0
Members of the Board until 7 April
2022
Niko Mokkila
-
-
-
-
0.0
0.0
3.8
0.0
Åse Aulie Michet
-
-
-
-
0.0
0.0
4.4
0.0
Tomas Von Rettig
-
-
-
-
0.0
0.0
5.1
0.0
Total
214.5
143.0
98.1
2.3
206.2
109.8
100.7
1.8
* Other financial benefits include transfer tax fees for the annual fees paid in shares.
** Member of the Board of Directors from 2023.
.
Bonus Scheme
The Company operates a bonus scheme, which is determined by the Board of Directors of the Company upon the
recommendation of the Remuneration Committee. The CEO and the members of the Executive Team are eligible to
participate in the bonus scheme in accordance with the Company’s bonus policy. Annual bonuses are payable
based on the attainment of key performance targets of the Company. The key performance targets of the CEO and
the Executive Team are based on the Company’s adjusted EBITA as well as the individual business and
performance targets. The individual business and performance targets are set by the manager of the participant in
the bonus scheme.
91
The Board of Directors of Terveystalo Plc has resolved on share-based incentive plans directed to the Group’s key
employees. More information on the share-based incentive plans is presented in note 19
Management holdings
Name
Position
31 Dec 2023
Kari Kauniskangas
Chairman of the Board of Directors
21,802
Matts Rosenberg
Member of the Board of Directors
14,498
Carola Lemne
Member of the Board of Directors
5,126
Kristian Pullola
Member of the Board of Directors
8,207
Katri Viippola
Member of the Board of Directors
11,453
Ari Lehtoranta
Member of the Board of Directors
6,504
Sofia Hasselberg
Member of the Board of Directors
2,499
Ville Iho
President and CEO
13,306
Juuso Pajunen
Chief Financial Officer
19,000
Petri Bono
Chief Medical Officer
2,087
Henri Mäenalanen
Interim Executive Vice President, Healthcare Services
2,230
Stefan Kullgren
Executive Vice President of the Swedish Business Area
-
Ilari Richard
Senior Vice President, Digital Services
3,134
Mikko Tainio
Senior Vice President, Portfolio Businesses
5,596
Minttu Sinisalo
Senior Vice President, Human Resources
1,400
31. Group companies
The Group’s parent company is Terveystalo Plc domiciled in Finland.
Subsidiaries as at 31 December 2023
Company name
Domicile
Group's share
Group's voting
rights
Alna Sverige AB
Sweden
100.0 %
100.0 %
EAM TTALO Holding Oy*
Finland
0.0 %
0.0 %
Feelgood Företagshälsa Dalarna AB
Sweden
100.0 %
100.0 %
Feelgood Företagshälsovård AB
Sweden
100.0 %
100.0 %
Feelgood Hälsoforum AB
Sweden
100.0 %
100.0 %
Feelgood Länshälsan AB
Sweden
100.0 %
100.0 %
Feelgood Sjukvård AB
Sweden
100.0 %
100.0 %
Feelgood Svenska AB
Sweden
100.0 %
100.0 %
Idavallen AB
Sweden
100.0 %
100.0 %
Länshälsan Skåne AB
Sweden
100.0 %
100.0 %
Medimar Scandinavia Ab
Finland
100.0 %
100.0 %
Nämndemansgården i Sverige AB
Sweden
100.0 %
100.0 %
Rela-hierojat Oy
Finland
100.0 %
100.0 %
Sauma Lastensuojelupalvelut Oy
Finland
100.0 %
100.0 %
92
Sivupersoona Oy
Finland
100.0 %
100.0 %
Suomen Hierojakoulut Oy
Finland
100.0 %
100.0 %
Suomen Terveystalo Oy
Finland
100.0 %
100.0 %
Terveystalo Estonia OÜ
Estonia
100.0 %
100.0 %
Terveystalo Healthcare Holding Oy
Finland
100.0 %
100.0 %
Terveystalo Healthcare Oy
Finland
100.0 %
100.0 %
Terveystalo Julkiset palvelut Oy
Finland
100.0 %
100.0 %
Terveystalo Kuntaturva Oy
Finland
100.0 %
100.0 %
Terveystalo Tactus Oy
Finland
100.0 %
100.0 %
TT Ålands Tandläkarna Ab
Finland
100.0 %
100.0 %
*Evli Asset Management holds the ownership and voting rights of EAM TTALO Holding Oy by legal terms, but according to the agreement
Terveystalo has control over the company and acts as the principal, whereas EAM is an agent through the holding company. Based on this
control arising from contractual terms, the holding company is consolidated into the Group's IFRS financial statements as a structured
entity.
Changes in the Group structure
Financial year 2023
The following mergers took place during the financial year 2023:
●
●
●
●
●
●
●
●
The following company’s operations have ceased during the financial year 2023:
●
●
Financial year 2022
The following mergers took place during the financial year 2022:
●
●
●
●
●
●
●
●
●
●
●
●
93
●
●
●
●
●
●
●
●
32. Subsequent events
Terveystalo's Board of Directors has approved a new performance period covering the years 2024-2026 of
the long-term share-based incentive plan for key personnel
Terveystalo Plc's Board of Directors has approved a new performance period covering the years 2024-2026 of the
long-term share-based incentive plan for key personnel. The purpose of the program is to align the objectives of
shareholders and key personnel to increase the company's value in the long term, and to commit key personnel to
implementing Terveystalo's strategy by offering them a competitive, share-based incentive program.
The Performance Share Plan is based on a rolling 3-year performance period structure, with a new performance
period starting at the beginning of each year if so decided by the Board. The Board decides on the participants,
performance measures, and targets as well as earning opportunities on an annual basis. Terveystalo published the
establishment of the program and its main terms in a stock exchange release on 3 December 2020.
Performance Period 2024-2026 of the Performance Share Plan (PSP)
During the performance period 2024-2026, the participants are awarded for successful shareholder value creation.
The performance indicators based on which share rewards may be paid to 90% of the participants are absolute and
relative (compared to the OMX HKI benchmark CAP GI index) Total Shareholder Return. For 10% of the
participants, the value creation is measured by EBITA (adjusted earnings before interest, taxes, and amortization)
of the business area or independent business that they lead.
Terveystalo's Board of Directors confirms the total amount of shares earned after the end of the performance
period. The share rewards that may be paid based on the 2024–2026 earning period will be paid in Terveystalo Plc
shares after the end of the performance period, provided that the performance targets set for the program by the
Board are achieved. The maximum number of shares to be paid based on this plan is 640,000 shares. Taxes and
tax-like payments to the recipient are deducted from the reward, after which the remaining net amount is paid to the
participants in shares.
No more than approximately seventy (75) people selected by the Board are eligible to participate in the program,
including members of Terveystalo's Executive Team.
Terveystalo applies a share ownership requirement to the members of the Executive Team. Each member of the
Executive Team is expected to retain at least 50 percent of the net shares received under the long-term incentive
plan until his or her shareholding in Terveystalo is at least equal to his or her annual gross base salary.
Performance Period 2024-2026 of the Restricted Share Plan (RSP)
The purpose of the Restricted Share Plan is to function as a supplementary structure for separately selected key
personnel of Terveystalo in special situations.
94
The share rewards will be paid in Terveystalo Plc shares after the end of the performance period, provided that the
individual participants are still employed by Terveystalo. The maximum number of shares to be paid based on this
plan is 64,000 shares.
95
Parent company's financial statement, FAS
Parent company’s income statement
EUR
Note
1.1.-31.12.2023
1.1.-31.12.2022
Revenue
1.1
11,487,798
1,622,050
Materials and supplies
-1,684
-1,851
Employee benefit expenses
-1,889,541
-1,446,798
-232,335
-128,348
-153,776
-21,741
Depreciation, amortisation and impairment losses
1.2
-18,227
-8,199
Other operating expenses
1.4
-20,555,877
-4,804,758
Operating loss
-11,363,642
-4,789,646
Financial income and expenses
1.5
3,194,991
1,629
-
10
-1,126,839
-10,753
-3,833,481
-215,450
Loss before appropriations and taxes
-13,128,972
-5,014,210
Appropriations
1.6
-16,959
-8,937
63,777,000
34,634,000
Taxes
-10,132,230
-5,952,627
Profit for the period
40,499,784
23,658,227
Parent company’s statement of financial position
EUR
Note
31 Dec 2023
31 Dec 2022
ASSETS
Non-current assets
Property, plant and equipment
2.1
86,887
60,753
96
Investments
2.2
516,818,244
516,818,244
Loan receivables from group companies
2.3
100,000,000
-
Total non-current assets
616,905,132
516,878,997
Current assets
2.3
87,022,736
41,133,012
2.4
1,030,499
603,637
Total current assets
88,053,235
41,736,649
TOTAL ASSETS
704,958,366
558,615,647
EUR
Note
31 Dec 2023
31 Dec 2022
EQUITY AND LIABILITIES
Equity
2.5
80,000
80,000
493,503,962
493,503,962
1,855,024
13,632,562
Profit for the period
40,499,784
23,658,227
Total equity
535,938,771
530,874,751
Appropriations
25,896
8,937
Total appropriations
25,896
8,937
Liabilities
2.6
Non-current liabilities
100,000,000
-
Current liabilities
2,296,985
1,541,585
56,730,930
25,190,668
35,585
25,159
9,930,200
974,548
Total liabilities
168,993,700
27,731,959
TOTAL EQUITY AND LIABILITIES
704,958,366
558,615,647
97
Parent company's statement of cash flows
EUR
1.1.-31.12.2023
1.1.-31.12.2022
Cash flows from operating activities
Profit for the period before income taxes
50,631,069
29,610,853
Adjustments
18,227
8,199
-60,564,902
-34,625,063
1,765,330
224,564
Change in working capital
-16,767,585
469,239
878,760
455,667
Taxes
-4,464,873
-10,546,536
Net cash from operating activities
-28,503,974
-14,403,077
Cash flows from investing activities
Acquisition of tangible and intangible assets
-44,361
-68,726
Granted loan receivables to subsidiary
-100,000,000
-
Net cash from investing activities
-100,044,361
-68,726
Cash flows from financial activities
Change in group bank account
31,521,429
-7,870,194
Proceeds of long-term borrowings
99,594,000
-
Received group contribution
34,634,000
58,000,000
Dividends paid
-35,435,764
-35,433,439
Interest and other financial expenses paid
-1,765,330
-224,564
Net cash from financial activities
128,548,335
14,471,803
Net change in cash and cash equivalents
-
-
Cash and cash equivalents at 1 January
-
-
Cash and cash equivalents at 31 December
-
-
Accounting policies of parent company’s financial statements
The financial statements of Terveystalo Oyj are prepared in accordance with Finnish Accounting Standards (FAS).
Measurement and recognition principles and methods
Holdings in group companies
The carrying amount of holdings in group companies consists of historical costs less impairments. If the estimated
future cash flows generated by a non-current asset are expected to be permanently lower than the balance of
carrying amount, an adjustment to the value must be made to write-down the difference as an expense. If the basis
for the impairment can no longer be justified at the reporting date, it is reversed.
Property, plant and equipment, and depreciation
98
The carrying amount of property, plant and equipment consists of historical costs less depreciation and other
deductions. Property, plant and equipment are depreciated using straight-line depreciation based on the expected
useful life of the asset.
The depreciation is based on the following expected useful lives:
Machinery and equipment: 5 years.
Notes to the statement of income
1.1 Revenue
EUR
2023
2022
Finland
11,455,589
1,593,045
Sweden
32,209
29,005
Total
11,487,798
1,622,050
1.2 Depreciation, amortisation and impairment losses
EUR
2023
2022
Depreciation
-18,227
-8,199
Total
-18,227
-8,199
1.3 Personnel
Average number of personnel during financial year
4
4
1.4 Other operating expenses
EUR
2023
2022
External services
-19,452,524
-3,535,145
ICT expenses
-36,242
-33,527
Non-statutory personnel expenses
-109,863
-126,093
Leases
-14,731
-13,121
Travel expenses
-51,977
-33,135
Marketing and communication
-201,761
-239,655
Other costs
-688,779
-824,083
Total
-20,555,877
-4,804,758
Auditor's fees
EUR
2023
2022
Audit and auditor's statements based on laws and regulations
-101,000
-76,000
Auditor's fees total
-101,000
-76,000
99
1.5 Financial income and expenses
EUR
2023
2022
Other interest and financial income
From group companies
3,194,991
1,629
From others
-
10
Total
3,194,991
1,639
Other interest and financial expenses
To group companies
-1,126,839
-10,753
To others
-3,833,481
-215,450
Total
-4,960,321
-226,203
1.6 Appropriations
EUR
2023
2022
Increase/decrease in depreciation in excess of plan
-16,959
-8,937
Group contributions received
63,777,000
34,634,000
Appropriations total
63,760,041
34,625,063
Notes to the statement of the financial position
2.1 Property, plant and equipment
Machinery and equipment
EUR
2023
2022
Acquisition cost 1 Jan
107,614
38,888
Additions
44,361
68,726
Acquisition cost 31 Dec
151,975
107,614
Accumulated depreciation and impairment losses 1 Jan
-46,861
-38,661
Depreciation for the period
-18,227
-8,199
Accumulated depreciation and impairment losses 31 Dec
-65,087
-46,861
Carrying amount 1 Jan
60,753
227
Carrying amount 31 Dec
86,887
60,753
2.2 Investments
Holdings in group companies
EUR
2023
2022
100
Acquisition cost 1 Jan
516,818,244
516,818,244
Acquisition cost 31 Dec
516,818,244
516,818,244
Carrying amount 1 Jan
516,818,244
516,818,244
Carrying amount 31 Dec
516,818,244
516,818,244
Parent company ownerships:
Holdings in group companies
2023
2022
Terveystalo Healthcare Holding Oy
100%
100%
2.3 Receivables from group companies
EUR
2023
2022
Loan receivables
100,000,000
-
Total
100,000,000
-
EUR
2023
2022
Non-current receivables
4,418,475
4,494,632
Trade receivables
827,512
586,503
Group contribution receivables
63,777,000
34,634,000
Prepayments and accrued income*
17,999,749
1,417,878
Total
87,022,736
41,133,012
* 2023 including rechargeable management fees EUR 14.8 million and interest receivables EUR 3.2 million
2.4 Prepayments and accrued income
EUR
2023
2022
VAT receivables
477,423
393,681
Prepayments and accrued income
553,076
209,957
Total
1,030,499
603,637
2.5 Changes in equity
Restricted equity
Share capital
EUR
2023
2022
At the beginning of the period
80,000
80,000
At the end of the period
80,000
80,000
Total restricted equity
80,000
80,000
Unrestricted equity
Invested non-restricted equity reserve
101
EUR
2023
2022
At the beginning of the period
493,503,962
493,503,962
At the end of the period
493,503,962
493,503,962
Retained earnings
EUR
2023
2022
Retained earnings at the beginning of the period
37,290,789
49,066,001
Dividends paid
-35,435,764
-35,433,439
Retained earnings at the end of the period
1,855,024
13,632,562
Net income
40,499,784
23,658,227
Total unrestricted equity
535,858,771
530,794,751
Total equity
535,938,771
530,874,751
Distributable equity
EUR
2023
2022
Invested non-restricted equity reserve
493,503,962
493,503,962
Retained earnings
1,855,024
13,632,562
Net income
40,499,784
23,658,227
Total
535,858,771
530,794,751
Shares and share capital
On 31 December 2023, the amount of shares is 127,036,531 of which 480,230 is held by EAM TTALO Holding Oy,
a company which is under the control of Terveystalo PLC.
The company has a single share class. The shares have no nominal value. All shares issued have been paid in full.
Each share has one vote at the Annual General Meeting and equal rights to dividends and other distribution of
assets.
Terveystalo PLC’s share is listed on Nasdaq Helsinki Oy. The trading code is TTALO. Terveystalo PLC’s shares
belong to the book-entry system maintained by Euroclear Finland Oy.
Invested non-restricted equity reserve
Invested non-restricted equity reserve consists of other investments similar to equity and the subscription price of
shares to the extent that it has not been recorded in share capital according to specific resolution. According to the
current Finnish Companies Act, subscription price of new shares is recognised in the share capital, unless it has not
been according to Issuance Resolution fully or partly recognised in invested non-restricted equity reserve.
2.6 Liabilities
2.6.1 Non-current liabilities
EUR
2023
2022
Bonds
100,000,000
-
102
Total
100,000,000
-
Terveystalo Plc issued senior unsecured sustainability-linked notes in the aggregate principal amount of EUR 100
million in June 2023. The Notes will mature on 1 June 2028 and carry initially a fixed annual interest of 5.375 per
cent. The notes were listed on the official list maintained by Nasdaq Helsinki Ltd on 5 June 2023.
2.6.2 Current liabilities
EUR
2023
2022
Trade payables
2,296,985
1,541,585
Other liabilities to group companies
56,730,930
25,190,668
Other liabilities
35,585
25,159
Accruals
9,930,200
974,548
Total
68,993,700
27,731,959
2.6.3 Liabilities to Group companies
EUR
2023
2022
Trade payables
265,918
-
Group bank account payables
56,440,316
24,918,886
Accruals and deferred income
24,697
271,781
Total
56,730,930
25,190,668
2.6.4 Accruals and deferred expenses
EUR
2023
2022
Personnel-related accrued expenses
841,720
271,105
Other
2,845,628
274,428
Interest liabilities
3,195,139
-
Income tax liability
3,047,713
429,014
Total
9,930,200
974,548
Other notes
3. Collateral and other contingent liabilities
EUR
2023
2022
Suretyship*
305,000,000
420,000,000
Guarantees
81,927
81,927
* Suretyship given by Terveystalo Oyj to subsidiaries financial institution loans.
103
Signatures to the financial statements and Board of Director’s report
Helsinki, 13 February 2024
Kari Kauniskangas Kristian Pullola
Chairman of the Board of Directors Member of the Board of Directors
Katri Viippola Matts Rosenberg
Member of the Board of Directors Member of the Board of Directors
Carola Lemne Ari Lehtoranta
Member of the Board of Directors Member of the Board of Directors
Sofia Hasselberg Ville Iho
Member of the Board of Directors President and CEO
AUDITORS NOTE
A report on the audit has been issued today.
Helsinki, 13 February 2024
KPMG Oy Ab
Audit firm
Henrik Holmbom
Authorised Public Accountant
This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding.
104
Auditor’s Report
To the Annual General Meeting of Terveystalo Plc
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Terveystalo Plc (business identity code 2575979-3) for the year ended
31 December 2023. The financial statements comprise the consolidated statement of financial position, statement
of comprehensive income, statement of changes in equity, statement of cash flows and notes, including material
accounting policy information, as well as the parent company’s balance sheet, income statement, statement of cash
flows and notes.
In our opinion
—
the consolidated financial statements give a true and fair view of the group’s financial position, financial
performance and cash flows in accordance with IFRS Accounting Standards as adopted by the EU
—
the financial statements give a true and fair view of the parent company’s financial performance and financial
position in accordance with the laws and regulations governing the preparation of financial statements in
Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good
auditing practice are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report.
We are independent of the parent company and of the group companies in accordance with the ethical
requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To our best knowledge and understanding, the non-audit services that we have provided to the parent company and
group companies are in compliance with laws and regulations applicable in Finland regarding these services, and
we have not provided any prohibited non-audit services referred to in Article 5(1) of EU regulation 537/2014. The
non-audit services that we have provided have been disclosed in note 10 to the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Materiality
The scope of our audit was influenced by our application of materiality. The materiality is determined based on our
professional judgement and is used to determine the nature, timing, and extent of our audit procedures and to
evaluate the effect of identified misstatements on the financial statements as a whole. The level of materiality we set
is based on our assessment of the magnitude of misstatements that, individually or in aggregate, could reasonably
be expected to have influence on the economic decisions of the users of the financial statements. We have also
taken into account misstatements that in our opinion are material for qualitative reasons for the users of the financial
statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. The significant risks of material misstatement referred to in the EU Regulation No 537/2014 point (c) of
Article 10(2) are included in the description of key audit matters below.
We have also addressed the risk of management override of internal controls. This includes consideration of
whether there was evidence of management bias that represented a risk of material misstatement due to fraud.
105
THE KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN THE
AUDIT
Valuation of Goodwill and acquisition related Intangible Assets (Accounting Principles for
the Consolidated Financial Statements and the Notes 3, 15 and 16)
—
At the year-end 2023 the goodwill
amounted to 824 M€ and accounted for 58
% of the consolidated total assets and for
160 % of the consolidated equity.
—
The acquisition-related recognised assets
for customer relationships and trademark
and at the year-end 2023 were in total 57
M€.
—
in 2023 Terveystalo has changed the
operational model and financial reporting
structure. Accordingly, the composition of
the cash-generating units changed and
goodwill was reallocated to the new cash-
generating units.
—
Terveystalo determines recoverable
amounts for impairment tests based on
value in use. Preparation of cash flow
projections underlying impairment tests
requires management judgments for
profitability, long-term growth rate and
discount rate.
—
As a result of the impairment tests, the
Group recognized a 55 M€ million
impairment related to goodwill and a 29 M€
impairment related to customer
relationships for the Portfolio Businesses
Public payor cash-generating unit.
—
Given the high level of management
judgment related to the forecasts used and
the significant carrying amounts involved,
valuation of goodwill and acquisition related
intangible assets is considered a key audit
matter.
—
We assessed the key assumptions used in
the impairment tests, such as profitability,
discount rate and long-term growth rate. To
analyse the forecasts, we applied
professional judgement in testing the key
assumptions and assessing the resulting
effects on the sensitivity analysis.
—
We assessed the appropriateness of the
assumptions used and the technical
accuracy of the calculations. This included a
comparison to external market and industry
forecasts.
—
In addition, we considered the
appropriateness of the disclosures in
respect of goodwill, impairment testing and
acquisition related intangible assets.
Revenue Recognition (Accounting Principles for the Consolidated Financial Statements and
the Note 5)
—
The consolidated revenue for 2023
amounted to 1.286 M€ million and consist
of numerous types of individual service
transactions and service combinations
—
As part of our audit procedures, we
evaluated the sales-related internal control
environment, as well as tested the key
controls. We also performed substantive
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generated to various customer and payer
groups in multiple business locations.
Volumes of sales transactions processed in
the IT systems are substantial and
Terveystalo also uses a number of service
pricing models and client contract
templates.
—
Given the variety and large number of sales
transactions, revenue recognition is
considered a key audit matter.
audit procedures.
—
We tested the processes to record sales
transactions as well as the sales pricing
and invoicing processes. We assessed the
appropriateness of the revenue recognition
for the sales transactions.
—
We evaluated the IT systems relevant for
revenue recognition.
—
We considered the appropriateness of the
disclosures presented for revenue in the
consolidated financial statements.
Responsibilities of the Board of Directors and the Managing Director (CEO) for the Financial Statements
The Board of Directors and the Managing Director (CEO) are responsible for the preparation of consolidated
financial statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the
EU, and of financial statements that give a true and fair view in accordance with the laws and regulations governing
the preparation of financial statements in Finland and comply with statutory requirements. The Board of Directors
and the Managing Director (CEO) are also responsible for such internal control as they determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the Board of Directors and the Managing Director (CEO) are responsible for
assessing the parent company’s and the group’s ability to continue as a going concern, disclosing, as applicable,
matters relating to going concern and using the going concern basis of accounting. The financial statements are
prepared using the going concern basis of accounting unless there is an intention to liquidate the parent company
or the group or cease operations, or there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
—
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
—
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
parent company’s or the group’s internal control.
—
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
—
Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s (CEO) use of the going
concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the parent company’s or the group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention
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in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the parent company or the group to cease
to continue as a going concern.
—
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events so that the financial
statements give a true and fair view.
—
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Other Reporting Requirements
Information on our audit engagement
We have acted as auditors appointed by the Annual General Meeting uninterrupted for twelve years. Terveystalo
Plc became a public interest entity on 13 October 2017.
Other Information
The Board of Directors and the Managing Director (CEO) are responsible for the other information. The other
information comprises the report of the Board of Directors and the information included in the Annual Report, but
does not include the financial statements and our auditor’s report thereon. We have obtained the report of the Board
of Directors prior to the date of this auditor’s report, and the Annual Report is expected to be made available to us
after that date. Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial
statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to
the report of the Board of Directors, our responsibility also includes considering whether the report of the Board of
Directors has been prepared in accordance with the applicable laws and regulations.
In our opinion, the information in the report of the Board of Directors is consistent with the information in the
financial statements and the report of the Board of Directors has been prepared in accordance with the applicable
laws and regulations.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
Helsinki, 13 February 2024
KPMG Oy Ab
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HENRINK HOLMBOM
Authorised Public Accountant, KHT
Independent Auditor’s Reasonable Assurance Report on
Terveystalo Plc’s ESEF Financial Statements
To the Board of Directors of Terveystalo Plc
We have undertaken a reasonable assurance engagement in respect of whether the consolidated financial
statements for the year ended 31 December, 2023 included in the digital financial statements
7437001AEZHLL3UEX093-2023-12-31-en.zip of Terveystalo Plc (Business ID 2575979-3) have been marked up
with iXBRL markups in accordance with the requirements of Article 4 of EU Delegated Regulation 2018/815 (ESEF
RTS).
The Responsibility of the Board of Directors and Managing Director
The Board of Directors and Managing Director are responsible for preparing the report of the Board of Directors and
financial statements (ESEF financial statements) that comply with the requirements of ESEF RTS. This
responsibility includes:
—
preparation of ESEF financial statements in XHTML format in accordance with Article 3 of the ESEF RTS
—
marking up the primary statements and the notes to the consolidated financial statements, and the company
identification data included in the ESEF financial statements with iXBRL tags in accordance with Article 4 of the
ESEF RTS; and
—
ensuring consistency between ESEF financial statements and audited financial statements.
The Board of Directors and the Managing Director are also responsible for such internal control as they deem
necessary to prepare the ESEF financial statements in accordance with the requirements of the ESEF RTS.
Auditor’s Independence and Quality Management
We are independent of the company in accordance with the ethical requirements applicable in Finland, which apply
to the engagement we have performed, and we have fulfilled our other ethical responsibilities in accordance with
these requirements.
The auditor applies International Standard on Quality Management ISQM 1, which requires the firm to design,
implement and operate a system of quality management including policies or procedures regarding compliance with
ethical requirements, professional standards and applicable legal and regulations requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our responsibility is to express an opinion on whether the marking up of
the consolidated financial statements included in the ESEF financial statements comply in all material respects with
the Article 4 of the ESEF RTS. We conducted our reasonable assurance engagement in accordance with
International Standard on Assurance Engagements 3000
.
The engagement involves procedures to obtain evidence whether;
—
the primary statements of the consolidated financial statements included in the ESEF financial statements are,
in all material respects, marked up with iXBRL tags in accordance with Article 4 of the ESEF RTS, and;
—
whether the notes to the consolidated financial statements and the company identification data included in the
ESEF financial statements data, have been marked up, in all material respects, with iXBRL tags in accordance
with Article 4 of the ESEF RTS; and
—
whether the ESEF financial statements and the audited financial statements are consistent with each other.
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The nature, timing and the extent of procedures selected depend on practitioner’s judgement. This includes the
assessment of the risks of material departures from the requirements set out in the ESEF RTS, whether due to
fraud or error.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the primary statements of the consolidated financial statements, the notes to the consolidated
financial statements and the company identification data included in the ESEF financial statements of Terveystalo
Plc identified as 7437001AEZHLL3UEX093-2023-12-31-en.zip for the year ended 31 December, 2023 are, in all
material respects, marked up in compliance with the ESEF Regulatory Technical Standard.
Our audit opinion on the audit of the consolidated financial statements of Terveystalo Plc for the year ended 31
December, 2023 is set out in our Auditor’s Report dated 13 February, 2024. In this report, we do not express any
audit opinion or other assurance conclusion on the consolidated financial statements.
Helsinki 21 February, 2024
KPMG OY AB
Henrik Holmbom
Authorised Public Accountant, KHT