Terveystalo Aktie

Hello, and welcome to Terveystalo's announcement webcast and investor call regarding the acquisition of Silmäasema. My name is Kati Kaksonen. I'm responsible for Investor Relations and Sustainability here at Terveystalo for 1 more week, and it is my pleasure to be here today for this announcement.

First, mandatory disclaimers regarding future references and then going into today's presenters. So today, our CEO, Ville Iho, will go through the strategic context of this acquisition and our newly updated strategy and financial targets and how Silmäasema fits into that strategy going forward.

Then we have Teppo Lindén, the CEO of Cor Group, Coronaria and Silmäasema presenting you Silmäasema as a company and a target and the new incoming active owner, namely Coronaria. Finally, our CFO, Juuso Pajunen, will go through the acquisition details and the value creation model of today's topic. But without further ado, over to you, Ville, on the updated strategy.

Thank you, Kati. So extremely happy and proud to stand here together with Teppo commenting on the major acquisition that we have announced today, Terveystalo and Silmäasema, 2 high-quality leading players in Finland in health care services will join forces to form an outpatient powerhouse, unique in European context and one of the leading health care services companies in Europe.

If we take 1 or 2 steps back and dial back to our strategic discussions that we have had since actually last summer, we have been for quite some time concentrating on our digital asset, optimizing what we have with technology and digital.

But one of the conclusions have been in our considerations and discussions that we -- first of all, we need to accelerate. And secondly, we need to open more growth opportunities and growth vectors to be able to fully leverage our technologies and assets and capabilities. There are in our renewed ARC strategy, a few major shifts that we are making against the whole strategy.

First of all, and key to this acquisition is the fact that we are accelerating growth. We are opening new growth opportunities, and that's reflected not only in what we are saying, but also in what we are doing and what type of targets we are setting for ourselves also to growth, profitability and dividend policy as well as leverage ratio. Those will be commented later in the presentation. That's number one.

Secondly, we see health care services as highly transformative industry as we speak. The progress has been fairly slow in this industry, which has been very conservative. But the bar is higher and higher and demand and ask from customers is really to match service models, ease of buying experience, which they are experiencing in other services and products.

So from traditional transactional services more and more to easy-to-use, easy-to-buy retail models. When we then move on to sort of core offering that we, as a health care services company are offering to our customers and patients, we have been very generalist type of a player in outpatient scheme.

Now what we are doing is focusing more -- both into the deep end so that really outpatient specialist services are getting more weight in our strategy. On the other hand, where we can transform services to digital algorithm-led services, we want to focus on that one as well. the middle of the road generalist services, which can be digitized or transformed into algorithm-led but are not transforming. That's the space we don't want to be in, in the future. So highly specialized, high-value specialist services, highly efficient, accessible digital algorithm-led services on the other hand. Customer engagement, how we reach out to our customers.

This goes hand-in-hand with the retail model thinking from reactive world to proactive active customer engagement, but also from a health care point of view, proactive services world. These are the shifts that we are now introducing into our strategy. And now when we look at today's announcement and transaction, actually, we can see that we are basically ticking all of the boxes.

When we think about Silmäasema, the leading ophthalmology and eye care player in Finland, they share same philosophy, same ideology around health care transformation. And they are -- they have been able to develop a lot of the models that we are discussing today already into their services.

The customer experience that Silmäasema is today able to offer is on the top, NPS high retail models are sort of what they are born and raised into customer engagement, wide audience, high reach into Finnish customers. is also what that Silmäasema has been able to play with for a long, long time. Silmäasema, on the other hand, is a specialist in eye care and competence that Silmäasema has been able to develop in purely medical specialist world is top notch, and we admire that part high. All in all, looking at the transaction.

So talking about growth, Silmäasema-Terveystalo combination from the day dot basically adds material scale in the Terveystalo journey and story. But more importantly, it opens up growth potential for the future. This is a unique combination with the capabilities that complement each other.

And with the model that Silmäasema has been able to develop and with the technology and data layers that Terveystalo is familiar in leveraging and driving, we can really transform the way health care services is produced and also consumed in the future. From Terveystalo's finances point of view, this is -- there's a high potential for value creation.

One of the important aspects of the transaction is that the revenue mix of Terveystalo will be more diversified and more healthy. So private pay out-of-pocket is the key for Silmäasema and now adding that one into Terveystalo's revenue mix, it's more even, more diversified, more resilient for the future. And of course, Silmäasema is in a rapidly growing market supported by megatrends. There's a perfect industrial logic in what we are doing.

As I said, these companies complement each other from a services portfolio point of view, from a customer mix point of view, from technology point of view and specialties point of view. At the same time, we are sharing the same view on the future where health care services and health care delivery models are going, more data-driven, more accessible, more retail-like, whilst at the same time, high quality, high investment into medical.

From team's point of view, of course, now we are talking about 2 top teams in Finland. This will be the strongest team in this city. And of course, that creates a strong base for reaching out to new markets as well. A couple of comments on Silmäasema before Teppo leads you into the details. Silmäasema has a unique model, combining eye care and ophthalmology into seamless service packages where customer, whenever he or she enters into Silmäasema store, he or she can be sure that the best possible option for a need will be presented and offered. So very holistic approach, very customer-centric approach, and it actually works. So looking at the numbers, which Teppo will comment in detail shortly, -- this model has really rocked the Finnish scene. It's unique in Europe, but looking at growth, profitability, customer experience, professional experience with all of the KPIs, this is a winner in this domain.

As said a couple of times already, this opens as maybe the most important aspect for both companies, high potential for future growth. And with that one, just a couple of comments on other stakeholders, customers and patients. We will serve roughly 2 million Finns initially.

So really vast customer base and versatile offering for these customers, whereby we are able to make the customer engagement and customer relationships over the span of time stronger and stronger and leverage more and more the high-quality versatile offering that we have in-house.

The model has ability to scale not only in Finland, but also outside Finnish borders. For employees of both companies, we are creating a powerhouse in outpatient health care. And for every stakeholder, a lot of new opportunities will open up. It's, of course, great to be a member of the winning team, learn from new colleagues, new professionals and get new opportunities for each and everyone's careers. So for all of the stakeholders, be it investor, current owner, customer patient or then employees, this is a perfect match, and we see great potential going forward and journey hopefully starts as soon as possible. With that one, over to you, Teppo.

Thank you, Ville. He almost told everything, but my name is Teppo Lindén. I'm the CEO of the Coronaria and Cor Group and CEO of Silmäasema since 2020 when we bought Silmäasema. Today, Silmäasema is #1 operator in private eye care, and we have today 20 private and 5 public eye care clinics or hospitals in Finland.

We have 350 eye doctors who are working as a consultant, and we have about 310,000 eye doctor visits and operation per year. What is different than in other European countries, our out-of-pocket share is over 90% when in Europe is normally between 10% and 20%.

We are also today, #1 optical chain in Finland. We have 155 stores in Finland and 10 in Estonia. We sell every year about 360,000 glasses and also other services. And there is also the out of the pocket share is almost 100%, it's 97% Silmäasema is in test area in eye care and optical side is #1 brand in Finland. And last 3 years, both sides is top of mind #1. And we have been, I think, 3 or 4 years, the most trusted optician in Finland. Our NPS and eNPS figures are very high.

In hospital service, almost 100, but not yet and optical stores, 77. The market size in Nordic and in Finland is growing about 4% per year. And it's kind of same in optical side and ophthalmology side. The people -- the age -- people are more and more older.

So the growth from the -- our customers are about 2/3 over the 50 years, and it drives growth and also the certain prevalence of certain eye conditions like AMD and glaucoma is growing because of the age. In Europe and also in Finland, we think that the eye care will go more and more towards the private side because of the AMD, the eye care is now the most outpatient visits in any specialty in Finland.

There is also a lot of development in products and different operation and services. And this is one of the main keys why the market is going up in future also. As we can see, I have been 6 years now in Silmäasema CEO. We have grown quite steadily, about 16% per year. And today, we are selling about EUR 50 for every Finnish people and it's quite unique in -- if we compare to other European countries.

We are very, very integrated model in optical and eye care side. It's a very unique model even in Europe. It's a main issue that when the customer comes to us, we can offer all the products, all the services for the customer or patient. So we don't have to select the best ones or not right ones to the customers. And this is the -- because we consider optical side also like a health care because it's sometimes for the customers, difficult to decide if there is some problem with the vision, if it's because of the health side or it's the optical side.

So every customer can trust when they come to us that they get the right choices for them. And we think that is the most important thing because our market share has grown rapidly higher.

We have a different kind of systems to work. But the main thing that we get all the services and products under the same roof. This is also a very cost-effective model, but -- the other important thing that the people are very easy to come to us. For example, we have 16 eye hospitals in the shopping malls. So in the front, we have optical store, then we have outpatient services and the back end, we have an operation theater. So it's very, very easy to come to us.

We have also 4 hospitals, which are independent, 35 optical stores with eye clinics and 104 optical stores with the eye doctor services. We work also together with the public side. So we have one hospital in Pasila in Helsinki, which are only for the public patients.

And we also work as a white label in public hospitals. So in totally, we offer all the services to Finland, even in the public side. This is quite a simple model of how we -- our customers go. So the main thing when they come to Silmäasema, it's easy to go other services inside the same roof. For example, our surgery customers, about 2/3 comes from the optical side.

So it's not -- normally, it's mainly marketing based, but we are -- like the guidance is much more different than our competitors. In future, there is one middle of screen, it's Ophthalmic screening. It means that in future, we can screen from the bottom of the eye, different metabolic diseases. In the same time, when the customer comes to our premises, we can take photo from the fundus and you can screen, for example, neurological diseases, heart diseases, even ADHD. So we think in the future, the optical store and eye care will be a kind of gate of the health screening. So together, because we are #1 in Europe to integrate optical side and eye care side. We believe that we go even further to add health services in the same customer.

So it takes a couple of years, but things are getting going very fast forward, and we think this is the future. As my background, I'm a medical doctor and orthopedic surgeon since 20 years, know a lot of patients, but more than like a CEO. I'm one of the founder of Cor Group since almost 40 years ago.

We started the business like a medical student from 0 and now our parent company's turnover is almost EUR 0.5 billion. We have about 5,000 employees with consultants. And we are very keen to make things inside the health care and well-being.

We have also -- in Coronaria, we are biggest in rehabilitation in Finland. Silmäasema, you already know and Liikku kuntokeskus, it's the biggest chain. We have from to -- we have now about 80 roles. And we have a biggest owner of the Nightingale Health, which big customer is Terveystalo. And in AI side, we have owner -- part owner of Costolabs, which are also some business with Terveystalo. So we have many things together earlier also. And in 10 years, we have grown from about a little bit over EUR 100 million to almost EUR 300 million. Thank you.

Thank you, Teppo. And with that one, we invite Juuso Pajunen, CFO, to go through numbers, structures and business.

Thank you, Ville. Thank you, Teppo. So let's talk about transaction overview and the value creation. But before we jump into the details of the deal, let's put the strategic context in the back of our heads again.

So Ville explained Terveystalo's growth strategy. We have updated our strategy, and we will go for further growth. And we will -- with the joining forces with Silmäasema, we will create a leading European outpatient care platform. Then if we look on Silmäasema, it is a growing platform. It has a really strong long and sustainable growth track with very high margins and cash generation. And this is something when Teppo explained on that how in the future, you can -- from the different type of eye diagnostics, you can basically have further and further other diseases like ADHD or such diagnosed. So there is a very clear growth platform and very strong, not overlapping synergistic platform for us to take.

Then when we take the ownership component, as Teppo explained, he has been 40 years living, breathing, building health care. And now Coronaria would become the largest shareholder of Terveystalo.

So with all of this one, we are generating a strategically growing synergistic, not overlapping entity that is a leading European outpatient care platform with growth opportunities with an anchor investor.

And within this context, let's start evaluating the transaction and the value creation. So if we look on the details, basically, we have 2 components in the purchase price. We have a cash and debt-free enterprise value of EUR 574 million and EUR 275 million of that one is cash. Any adjustments based on net debt positions and those ones will be made to the cash component. Then we have 36.5 million new Terveystalo shares that are issued to the sellers if the Extraordinary General Meeting approves the deal on last of June. obviously subject for closing, and that one will be the timing of that one. The value of those shares at the Friday ending price would be around EUR 300 million.

The whole deal is subject to competition authority and then Terveystalo EGM approvals. We would foresee that the process would take roughly to the end of '26 or then first quarter in '27. And then once we get the approvals and we can complete the deal, Silmäasema would be a new business segment, would continue under its own brand and as reported as a segment under Terveystalo.

And with this deal, Coronaria would become the largest shareholder in Terveystalo, having a long and successful track record with health care assets. So the industrial logic for the acquisition is that if we look this one, Silmäasema has roughly 1 million annual customers.

When we combine that one with Terveystalo, we have a total of roughly 2 million customers. And like Teppo and Ville explained on the total structure and synergy with those customers, we can provide more and more health -- when the entry point to optician comes and we can offer Terveystalo's wide health care offering, all of the specialties that we have, we can provide better health, more health to all of those patients and customers. Silmäasema as such is a market leader. It is a strong growing company in a segment that is structurally growing.

So the aging of the population, advancement of the diagnostic tools, all of that one is supporting the continued structural growth, which Silmäasema has a strong track record. Then when we combine that one to the customer mix, basically, Terveystalo and Silmäasema together has a wider complementary customer mix, which is also more stable.

So we have a diversification of the customer mix and the payer mix in our benefit. Then looking Silmäasema's business model, like Teppo explained, it is unique. We have seen that some of the bigger ones are now trying to do that one, such as Essilor. Silmäasema has done it for a long time.

They are the champion of this business model. And with this business model, we have a proven and scalable growth engine that works also outside of Finland. So basically, with that type of a scalable platform, we can also then unlock further international expansion and larger opportunities when we go forward. And if we look at the numbers, joining forces with Silmäasema, we would be roughly EUR 1.5 billion company, calculating 25 to 25 numbers. Our combined EBITDA 20%, combined EBIT margin, 12.5% -- it is very important to note that when we are looking at these numbers, Silmäasema has been growing rapidly.

It's good to note that between '23 to '25, if you take those growth numbers, roughly 2/3 have been organic growth and 1/3 has been acquisition-related growth. This is an organic growth with bolt-on opportunities.

And stable cash flow, strong EBITDA, strong EBIT, all of those ones and even stronger EBITDA and EBIT margins than Terveystalo.

So with all of that one, we have a really good combined motor. Then if we look to balance sheet side, good to note, all of the numbers are IFRS 16 numbers. The EV is IFRS 16 EV. When we take the net debt position, EUR 783 million then including also IFRS debt of Silmäasema, our leverage ratio is around 2.7 on a pro forma basis at '25. On Terveystalo side, this is excluding Hohde. But if you add back the debt on that one, we are slightly below 3x. And with our updated financial targets, our balance sheet is strong, and we are capable of continuing the bolt-on journey immediately when the transaction close. So we have an entity that has a new growth vector with strong growth track record, industry benchmark plus EBITDA margins, very strong EBIT margins, stable cash flow and healthy balance sheet. Then if we look a bit deeper on our private -- on our customer segments or payer segments, we see that Terveystalo comes from occupational health, consumer insurance payers, and then we have the portfolio businesses and Sweden.

When we combine that one to Silmäasema, where slightly over half is optical retail and slightly below half is ophthalmology. When we combine these ones, we have a segment that is 17% of Terveystalo revenues, and this diversifies our customer base more and more towards private pay out-of-pocket revenue customers. We are -- with this transaction, we are more and more dominantly private pay company.

On the synergy potential, first of all, it's very good to understand that we have 2 sources of synergies. We have the cost synergies, which are roughly 70% of the total and direct revenue synergies, which are then the rest. The total synergies are estimated to have an annual run-rate of around EUR 11 million to EUR 15 million. The cost synergies are coming from the network optimization, like you heard from Teppo, 155 locations with optical retail stores with ophthalmology health and ophthalmology clinics. Then with Terveystalo over 350 locations, there's a clear synergy potential on these ones. Then when we go to procurement efficiencies, we have also those ones. And then we need to remember Terveystalo.

Terveystalo is a digital champion. You have heard those of you who are familiar with Terveystalo investor meetings. We have Ella, our digital platform. We have the new occupational health platform. We have application which has more than 2.7 million downloads with all of those ones, all of that CapEx in digital, we can spread wider together with Silmäasema.

And when we combine then the champion of Silmäasema on the out-of-pocket consumer market, this is a very strong combination, generating also CapEx synergies. Then if we look at the direct revenue synergies, we have the cross-selling from Silmäasema eye retail offering to Terveystalo customer base, but this is now the short-term view.

We are evaluating that cost synergies come in 18 months and the direct revenue synergies come in 3 years. But actually, the strategic rationale looks way beyond that one. And you see the plus further material revenue upside through product cross and upselling opportunities. When we have the hearts of the consumers, we have easy access. We have the developments, as Teppo explained on the eye health care that you can diagnose more and more of the diseases, and we can provide better and better services and more and more health to the consumers and the patients.

This is the strategic part of that one. This one goes beyond the 3 years, and it's not included in the current calculations. So all in all, what do we have? We have a highly synergistic and value-creating transaction, and it has a strong support from our shareholders. Looking at the EPS after the first full year following the completion of the transaction, this is EPS enhancing.

And if we then look on the valuation, this is now including estimated synergies at 11.5x. This is now the middle point of the synergy, EUR 11 million to EUR 15 million range. backward-looking multiple 11.5x, including synergies. It's really good to understand that going to forward-looking multiples already in the first year, we are below Terveystalo multiples with the synergies included. So growing high-margin, high-quality asset and still next 12 months basis, we are below our own valuation. Then -- based on this one, there's a strong, strong value creation and roughly 60% of our shareholders already support the transaction and have subject for certain customary conditions agreed to vote in favor of the share issue at the EGM.

So we have a strong support and strong value creation in front of us. Then what comes to the rest of the funding, we have committed debt financing in place from our current partner banks to cater the EUR 275 million cash component of the deal.

With that one, what's going to happen next? So basically, today, we have signed and announced the transaction, joining forces with Silmäasema. Next step is the Extraordinary General Meeting that will take place 3 weeks from now, last of June.

Then already at the same time, we are going forward for the regulatory approvals. And obviously, we start integration planning within the boundaries set by the regulations. And we would expect that the regulatory approvals would take until end of this year, Q1 '27. And after that one, we could start the full integration execution and the synergy realization, full potential of the synergies within 3 years. But as I said, this is a long-term strategic journey, which will continue far beyond that 3 years. So with that said, let's hand it over back to Ville for wrap-up and then there's some questions.

Thank you, Juuso. So still summarizing, dialing back, first of all, to our renewed strategy and renewed targets. Value creation story of Terveystalo is updated. As I said initially, we are now accelerating our growth. Earnings growth target will be 10% adjusted EPS growth per annum. We are creating possibilities for higher growth by slightly adjusting our leverage target to be 3.0x max net debt to adjusted EBITDA and also a payout ratio. Dividend payout ratio is updated to be at least 50%. So with these ones and looking at the growth opportunities and the potential that the combined entities of Terveystalo and Silmäasema form after closing, the value creation story is really, really compelling for our current and new owners.

Then recapping still the case. As Juuso explained, this is whenever you are looking at a transaction, of course, you calculate the synergies and you calculate the ratios and calculate who is paying what. In short and midterm, this makes a ton of sense. These are highly complementing entities and synergy potential is really, really high. But that's, as Juuso also said, this is only the beginning. This is about creating a winner in fast transforming health care outpatient world, where we can jointly now after closing, leverage unique assets, unique capabilities. We have the data. We have the reach, the vast customer base. We have our digital assets, as Juuso explained. We have the philosophy of using that data in medical services and in commercial terms.

Silmäasema comes with additional customer base, same philosophy, high medical quality customer services design, which are not historical health care services rather future retail type of health care services models, high customer satisfaction, high competence in medical. And combined these 2 assets, we are able to become a European winner and take the health care services to the next level, which is needed.

Maybe last but not least, as Juuso said, Coronaria will become the largest shareholder in Terveystalo, and that further strengthens the combination. Then it's sort of 360 unique and powerful combination where owners, management, these new 2 teams join forces and take this new entity to the future and to the next level. Finally, expected closing. Of course, we are eager to start, but there are some milestones that needs still to be tackled. So EGM for sure, but then the competition authority process and expected closing is by the end of this year or at latest Q1 2027.

So with that one, I guess it's time for Q&A.

Thanks, Ville. We are now ready for your questions. Do we have any questions from the phone lines?

[Operator Instructions] The next question comes from Joni Sandvall from Nordea.

Two questions from my side. Firstly, on the strategic focus, I think there is a material change there. What actually triggered the change? Was it this acquisition or your strategic rethinking behind? And maybe also if you can give any comment because now you are clearly focusing more becoming more specialized service providers. So does this mean some larger changes on your occupational health and public side offering?

Thanks Very, very good question. So we have been renewing our strategy or started the first discussions around that one last summer. So 1 year -- since it's 1 year and the trigger -- main trigger has been that what we see around us and what we see in Healthcare Services is that the transformation that has been long coming is actually accelerating. And by staying put in our current service portfolio and only sort of optimizing that one, our conclusion was that it's not going to yield material value creation in the future. So we -- the conclusion clearly was that we need to open new growth vectors. And then sort of after that one and partly concurrently, we ended up discussing with Silmäasema.

This is not the first time actually we are entertaining a thought. We have been having our sort of lunch meetings over the years and sort of a little bit spot on how would it look like if we would join forces. But now after our strategic pivot or shift, it was more timely to warm up those discussions again. And maybe the one testament of the perfect combination is that this final transaction push or acquisition process has been really, really speedy considering the size and complexity of the deal. So that's sort of the sequence of events.

Then regarding the services, and as you asked, will we become only sort of a specialist services provider? No, that's not the point. We will partly concentrate on high-value specialist health care services, eye care as an example, dentistry as another example, where still sort of physician-led hybrid care models will be the key for our customer value, patient value and also commercial value. Then there's a growing space where you can digitize and transform traditional health care services or health care packages into algorithm-led digital services. And that is -- that has been our focus point earlier also and continues to be the focus point. But there's a part in the middle where traditionally services where we now have ability to digitize and transform into algorithm-led has been served in very traditional non-efficient manner. And that's a space where we don't want to be in the future.

And the second question, maybe combined to you and Teppo about incentivizing key employees here. So how this has been made in Silmäasema until now and how you aim to do it within Terveystalo going forward?

Maybe if you can start with Silmäasema.

We have an option program in Silmäasema, which will end in closing.

Yes. Yes. I think, of course, we will -- it's early days and what type of incentive models our new main owner will then be pushing. We'll discuss and see about that. But I would say that the main incentive for key professionals and professionals in general is to be part of a winning team and winning journey. The opportunities that we are now able to open are really, really exciting. And we are not only looking at current service portfolio and current markets, we are looking way beyond.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers.

Thank you. We have a couple of questions from the webcast. Just as a reminder, if you want to send in your questions, there's a couple of minutes time, so we'll take them from here. Well, you talked about the strategy pivot and what was behind the thinking on shifting the strategy, but was there any conclusions regarding the old strategy and how that didn't fit the current world and the development that we see going forward?

Well, when the world is transforming, this industry is transforming, speed is accelerating. Of course, you need to be agile as well. And we made clear conclusions around where we are, where we need to be with the value creation. We scanned the opportunities and now we have updated and now we are very happy today be here and now sort of not only the updated strategy, but first major, major milestone in executing that strategy.

Thanks. And then there was a question regarding the value creation, but I believe that we covered that thoroughly already. Then a question regarding the role of portfolio businesses going forward. Are we still interested in, for example, growing the outsourcing services?

Well, first of all, after the closing, Silmäasema will be new business segment and business unit in Terveystalo Group. So brand will continue, model will continue and develop and eye care services today in Terveystalo will be integrated to this new entity. So that's number one. Then there's a portfolio businesses and health care services in Sweden and also in the future, Dental. Portfolio businesses, as I said, have a strong foothold in Dental. Dental will be run independently in the future on a side of Silmäasema.

And what's left then in portfolio businesses is the public business staffing and outsourcing services. That totally depends on the market development. So we are where market needs us to be. Coronaria is serving public side. When there's a chance to complement key offering and core business with the public business, we will do it. But it needs to be value creating not only for us, but also for the customer.

Exactly. And after completion, we will gain a new strategic owner and the obvious question is whether there will be changes in the Board composition after the completion?

Well, it's clear that the main owner will have a strong role going forward. And it's, of course, not up to management to decide what type of a Board composition we will have. But it's evident that Coronaria as the main owner will have a key role in also Board work. And that has been the intent and that's the expectation that we are now looking forward.

And then finally, we have talked about the world and the market and the health care space changing. But can you just a little bit elaborate in concrete terms, what kind of changes are we seeing and what that means in the service models?

Well, there are several different trajectories that we are seeing in the health care services domain being able to transform, sort of, I wouldn't say bulk services within the health care space because they are highly professional services, but services that can be digitized, can be made more efficient with the help of algorithms, AI, fully digital engagement. They will grow in scale, and they will replace partly traditional [ GP ] level services. That's one area where we want to be a leader.

Then Teppo actually explained in his presentation, the role of new diagnostics and data. And that's one of the key data not only commercial data, but medical data in new forms and shapes will become more accessible. And then these entry points of customers and entry points of data will be big opportunities for us. And we have the traditional to utilize leverage data in our occupational health care services and more and more in the individual services. And that's going to be one of the key transformation.

So it's from sort of transactional reactive services to sort of active scanning and enriching the data layers and being more and more relevant and more often for our customers and patients. Then, of course, there will be developments in more specialized services sort of supported by new technology and ways of working and equipment. But if I would need to name one key driver, it is the data and ability to use data commercially, medically and sort of create value for patients and customers in totally new form.

Thanks. With that, I think it's time to wrap up this session. Thank you for joining us. Sorry, did you want to...

Roni?

Present the question, ready now?

Yes, if that's possible. Sure. Roni Peuranheimo from Inderes Oyj. So maybe Juuso first talked about the Silmäasema organic growth that 2/3 came from organic growth, which years was it? And how has it been from 2020?

Yes. So basically, I was referring to period starting from '23 and ending to '25. If we start from 2020, then the journey is a bit different because it includes the Coronaria merger. So you have the Silmäasema that was acquired from the stock exchange and then the Coronaria ophthalmology services. So then Teppo may correct, but I think it's around 50-50 during that period.

Including the Coronaria's.

All right. Terveystalo has small eye health or eye hospital business. So maybe how much track record you have in your current eye health business in revenue synergies or like customers flowing between traditional health care and eye health?

So yes, we have some ophthalmology, some also eye hospitals in our portfolio at the moment, most recently the acquired Pilke. Pilke, that was closed at the end of previous year or 1st of January this year. We have some experience on that one, but ophthalmology has been fairly small niche within our total amount of specialties. And with this Silmäasema joining forces, obviously, then we have a lot more scale to prove those synergies.

Yes, if I continue, just as Juuso said, the current eye care conversions are not the right benchmark when we are assessing future revenue synergies potential in Silmäasema/Terveystalo combination because, as Juuso said, the eye care business for Terveystalo has been smallish and sort of local. Better benchmark is actually what we have already done even prior to [ Hohde ] deal from occupational health care to dental services, sort of similar type of case. And if you then, then apply those numbers, even by still stating that it's early days, it's really compelling picture.

All right. Then Teppo talked about [indiscernible] screening and diagnosing other diseases from the [indiscernible]. So I think this has been talked quite a bit in the health care for a long time. So what's the expected time line? This is reality?

It's already reality because of the AI has FDA proven already. But it's -- as we all know that it's coming more and more possibilities. And I think it's in a couple of years more how the customers think is it okay to screen metabolic disease when you are going to buy glasses. But I think that diagnostic side or medical side, it's not the problem. It's like a behavioral thing more.

Yes, I fully agree. And that's really one of the key aspects of this combination and transaction and the ideology behind this one. So we don't only have the technology and we don't only have sort of supply there. We also have a philosophy and track record in turning possibilities into actual service packages and demand. Silmäasema is a prime example, doing something which sort of should not have been possible, and its track record is great. And this is the key, changing the services, service offering, making them easy to buy, easy to use, easy to understand and then really changing the behavior of our consumers and patients.

Then maybe one more. Your base case revenue synergies are quite modest. So maybe why? And are you able to quantify how much revenue potential is in the very optimistic scenario? So how big delta is this?

Well, basically, like you. Is my microphone, dropped? So basically, like you saw from the slide, we have EUR 11 million to EUR 15 million is the published synergies. And yes, it is always clear that within these type of cases, you have a low case, you have a base case and you have a full potential case. We would not go to discuss the full potential case, but it is clear that we have upside, especially when it comes to the revenue synergies.

And like we stated then below the picture that we have this plus component, and that is the material long-term synergies like Teppo explained, that there's a behavioral change required, the capabilities are there. And those ones will generate further strategic opportunities. But going into giving numbers, we gave the EUR 11 million to EUR 15 million, and that's something that you need to leave for now.

Yes, still dialing back to sort of, as you said, modest revenue synergies there. We have used basically the numbers that we have already track record on -- in the way I explained earlier.

And taken a conservative view already on the current regarding dental, for example.

So it's -- so there's delta.

Yes. All right. One more actually about the strategic shift of moving from transactional services to retail. So is this related only to the kind of like expected synergies? Or does this affect also the old stand-alone Terveystalo?

Yes, it will also impact our current services. And what we mean by that is traditional health care services model has been that basically since 2000 years that the patient queues in the front of physician's door is sort of called in and then sort of a journey with a lot of surprises start. You don't know what you get, you don't know what you expect, you don't know what you pay. And shifting that model more and more to packages where you can -- where you have more transparencies in the services, included, not included, pricing, easier to buy, easier to use, easier to understand and also additional transparency on what's really happening and being offered to you is a key.

So in that sense, the services, they are still health care services, but they are more retail like and retail is a benchmark in this sense. Also, when we think about how we engage with our customers, health care has been very hesitant in selling stuff, and 4 good reasons because there's always a question, are we pushing for something which is not necessary. Teppo explained in the earlier presentation nicely that Silmäasema model is a prime example on how you actually are able to come about that challenge.

So it's not selling, it's offering the best possible alternative for a customer in each and every access point and in each and every step. We present the alternatives in clear language, clear pricing and then it's up to the empowered customers to do the right calls, of course, with very, very safe steering by professional. So that's the retail world that we are talking about.

Thanks, Roni. With that, I think that we are now actually ready to conclude this webcast and conference call. Thank you for joining us today. If you have any further questions, do contact us, and have a good day.

Thank you.

Thank you.

Good morning, everybody, and welcome to Terveystalo's First Quarter 2026 Results Call and Webcast. My name is Kati Kaksonen. I'm responsible for Investor Relations and Sustainability here at Terveystalo.

As usual, I will go through the results with our CEO, Ville Iho; and our CFO, Juuso Pajunen. And after the presentation, you will have time for your questions.

Without further ado, over to you, Ville.

Thank you, Kati, and good morning. Let's dive into it.

So Terveystalo first quarter, during the first quarter, the market was even more negative than we expected going into the year. That was then clearly reflected into our revenue line, which came clearly down. And despite the adjustment measures that we did, especially in our operations, to adjust the ops to lower demand, there was a drop through to our adjusted EBIT, which was at EUR 34 million. Quality across the operations and services [ highest ] standard even improving, which is, of course, a positive sign of very professional and robust organization, delivering in any circumstances.

If one then dives a little bit deeper in what's happening in Healthcare Services market, it is the market that is exceptionally negative this time around. We have not seen this type of a dip since the start of COVID. And basically, all of the segments, regardless of what data you look, all of the segments and services are roughly minus 5% to minus 10% down. The positive thing and silver lining with this one is that we are seeing a market bottoming out. So according to our judgment, and that's reflected also in our plans and actions, the bottom has been passed. And now the market shall start gradually slowly, but steadily grow from a low level.

In our own operations, we have been, as we have reported earlier, we have been suffering from lower connected employees number. And that one as well, we see bottoming out. So going forward, now the number has been stable throughout the quarter and now looking at the sales funnel activities, looking at the renewals, looking at new opportunities, looking at win rates, we can with confidence say that we start turning this one into positive going into H2. Of course, the progress will not be rapid because this is B2B business and turning agreements around will take a while. But anyways, market and our own portfolio has bottomed out and now we can start developing on from this new base.

The negative market environment was present in all of our 3 P&Ls, Healthcare Services, Portfolio Business and Sweden, a little bit different reasons and different levers into that one. But bottom line was that the market conditions were very, very tough during quarter 1 '26. Despite that one, of course, the absolute result level and profitability we achieved was high, and we can be pleased with our own ops. But now the eyes need to be fixed on growth going forward.

Market will not give -- even though it starts gradually improving, it will not give anything for free. We still focus and concentrate on our own agenda. It is very much geared to boost growth in all of our segments. In Healthcare Services, we'll concentrate in occupational health care, a turnaround program and transforming that one to higher value for our customers and growth. We are renewing our offering for insurance customers and companies and intensifying cooperation with the insurance companies. We are focusing in segments that are growing in our traditional integrated care.

One prime example is seniors where we have captured big markets in Kela 65 and Kela 65 continues developing positively for us. And of course, on top of this one, we are seeking drastic improvements in efficiency with our digital agenda in traditional operations in a digital 10X and also in prevention.

In Portfolio Business, of course, a positive move from our side. This is dental growth. Actually, Dental has been a sort of a light or positive glimpse during quarter 1. It has -- the market conditions have been fairly good, and the team has done very good work in improving the business. And with the Hohde deal, the platform will be ever stronger and an integration of that platform, Juuso will comment on the phasing and timing of that one later in the presentation.

We are actively engaging with healthcare counties. It is evident that they are very low with their purchases still. But at one point, that market will activate and we want to capture our fair share and even more from that one.

In Sweden, market conditions have been tough. Now the efficiency is there, and we are operationally improving. Now the focus is in commercial actions and getting the revenue line in with the higher operating leverage and improving through that one, profitability.

A cycle is a cycle, and it's clearly very, very negative at the present, but we need to look beyond this cycle. As I said, market will start gradually improving. But every time a strong cycle goes through an industry, some things change permanently. And that one, coupled with accelerating speed of technology development will mean that we need to be even speedier than the transformation of this industry, and we need to invest in all of the 3 modalities in Healthcare Services delivery.

In integrated care, we are investing in Ella. We are making the life of our professionals easier, smoother, more efficient, and we are giving more time for professionals with the patients.

In digital health care retail, we are improving the customer engagement call centers. We are investing in digital 10X and AI-assisted appointments and efficiency potential in this modality is huge.

We are also starting to invest in prevention at scale, so digital engagement through digital and based on data proactive, active engagement with our customers being relevant when they need actively guiding them through their lifelong health journey and are looking for new growth in this emerging new market. We have the dry powder, we have the agenda, and we have the speed in executing in all of these 3 buckets.

Two landmark milestones in this development during Q1. Terveystalo launched its new novel occupational health care digital platform for its first clients. This one is next level compared to current platforms in the marketplace. It's developed jointly with our joint venture, MedHelp, and it's now live, and it's used by the first paying customers. Early feedback from the market is very positive. We continue scaling this one rapidly throughout the year. And as I said, this is next level, this is future, and this will give way more value for our customers and better insights in their own personnel than before. This is a big step in our main business.

In digital 10X, we have introduced AI-assisted appointments, and we are scaling that one. Also during the year, the efficiency potential in this modality is huge. We are also scaling volumes so that we can -- with our intelligent steering engines can steer more volumes in the digital modalities. At the same time, we are improving traditional physician-led integrated care. And there, the prime tool is Ella, which we have launched. It's the user interface for our physicians. And already now, we have gained some 30% efficiency improvement with the new platform.

And at the same time, we have been able to give more time to physicians and patients. As said, we continue to scale this one up during the year. Within next 12 months, this is going to bypass any present platforms in the marketplace and will be a clear and powerful asset for Terveystalo. So market has been negative. It has bottomed out. We have agenda for growth. We continue investing. We continue accelerating our technology journey.

And with that one, over to Juuso.

Thank you, Ville. So good morning all. I'm Juuso Pajunen, CFO of Terveystalo. Let's go to the topic numbers.

So first of all, if we look at the key numbers from first quarter, it is clear to say that the relative numbers are big. We see negative on everything else, excluding the NPS of appointments, which is improving and is a stellar 88. But outside of that one, each and every number is negative, and the market has been weaker than anticipated.

But let's go through then a number by number, what we are talking about. But before we go to that one, it is good to note that if we look at absolute numbers, these are still quite robust figures. Our Q1 is materially above our average Q1 if we come to relative profitability. If we look in absolute EBITDA terms, this is the third best quarter ever in absolute EBITDA or EBIT, either way you want to look at. So in absolute terms, we are fairly strong. But in relative terms, we are absolutely disappointed and obviously, we'll work on to get forward.

If we then look the group, we know that our big ticket component is the headwinds in the revenue. We also know that the mega trends are there. And in mid- to long-term, they will support, support the growth. But as stated, the market sentiment at the moment is exceptionally weak. If we then look on different segments, we will go a bit further into details. But in the Healthcare Services, the big thing is occupational health in the portfolios, it is the public sector. Sweden, we are now evening out. Then if we look on the group level and think about positives in here, our efficiency is strong. No matter how you view it in an exceptionally big market, we have been able to adjust our operations towards the lower demand, and we will continue to do that one. So all in all, with the efficiency, we will get forward.

If we then look on the EPS impacting adjustment items, we have EUR 7 million of these ones. It is slightly more than I would like to see in there. But if we double-click those ones, we have a EUR 1 million related to divestment of child welfare, which was a strategic move, and we have now closed that deal at the end of January. We have EUR 1 million related to reevaluation of the values in the real estate assets. We are doing investments in those ones, and this is something that, when you reevaluate, this will take place.

And then finally, EUR 1 million related to restructuring. It's good to note that structural restructurings, items that impact us in the future, not the demand-facing restructurings. And then finally, we have EUR 4 million in the strategic projects, which we have been communicating earlier that we have and we have guided how much annually is coming. This is slightly front heavy now facing a bit more in Q1 than I was anticipating. So all in all, then we end up in the reported EBIT of EUR 26.6 million.

If we then go deeper into the Healthcare Services, margins are on a historically good level. So if we take any period of time and if we look at the Q1s of the history, the actual EBITDA and EBIT margins are solid. But obviously, they are coming materially down. So we come into the discussion of relative weakness and absolute weakness.

And then if we look further where this is coming, this is coming from demand. The visit growth is minus 9.6%, and then everything else is basically flat. The visit growth, we will double click that one on the next slide. But basically, low morbidity impacts us through 2 different parts. We have the less appointments and weaker mix as the diagnostics are lesser than in a higher upper respiratory disease situation.

And then obviously, the occupational health care has been contributing to that one. At the same time, as said, we are continuously adjusting for the lower demand, and we have also, during April, announced statutory negotiations towards the demand situation. And however, of these ones, once again, in absolute terms, we are in a good place, and we will continue to invest, for example, digital transformation like Ville explained.

Then looking on the patient visits. We have -- the same factors we have been now going through in a couple of different quarters. We have the seasonality. We do know that we have some 43,000 fewer upper respiratory diseases than previous year. This is part of normal variation and changes annually. This is the lowest prevalence since the COVID pandemic if we take on the curves. Then if we look on the occupational health, it is very good to note, like Ville said, that we are now minus 5% in the connected employees, but it is now bottoming out or has bottomed out.

Then the underlying impacts in there are still the same. We have the macro and macro component where there is less employees. And then in the dire times, employers are spending less into employee well-being. And then we have the actional part where we have the ongoing strong program to address this one. But at the same time, the connected employees and the large account sales cycles are longer. So we are getting back on growth in the second half of this year.

Public sector has been now bottoming out like we see that this is not -- it's a minuscule bar in the chart. And consumer is having positive momentum in the total supported by the Kela 65 and general tendencies are there. If we then take a segue with that one to the portfolios, we already now see that in the consumer part, the dental business has been actually the best performing in relative terms of our businesses. They are basically flat while other modalities have been clearly down. This is a positive and then hopefully reflecting the future demand environment also.

We have then good to note that in the portfolio numbers, we have the divestment of child welfare. It's visible in the bar order in here. Outsourcing is down 50%. This one, we have known. The contracts are expiring and ending. Staffing is still having negative momentum in the welfare -- wellbeing county market, but also that one is now little by little stabilizing out.

Dental, as said, positive in relative terms in the performance. And we have announced the Hohde acquisition. That one is progressing well in a very good and positive dialogue with the authorities. And we are expecting the closing in the second half. And now based on the current visibility, it looks like it will be rather third quarter than fourth quarter. But obviously, in these processes, there are variables that are beyond our control. But as said, solid positive dialogue with the authorities. And if I would need to guess, it would be rather in Q3 closing than in Q4 closing.

Moving to Sweden. We are having a weak market. It is a continued weak market and Sweden as an export-oriented nation is also having their share of the market environment. At the same time, it's good to note that our efficiency is in place. We have the EBITA margin is now improving, absolute numbers, 50% up, give or take, almost 60%. Obviously, within our scale, that is peanuts in the total absolute numbers. But it's signaling that we are going to the right direction.

If we then look beyond the efficiency, our next battle in here is the growth. And we already now see that our connected employees are increasing. But at the same time, the behavior is similar by the employers as in Finland. So their behavior is dampened by the weak macro. But we have the means and the tools for growth in here. And we are confident that this will improve as we have iterated many times earlier.

When talking about investments, we continue our investment cycle. We are now at EUR 56 million on the LTM. I think that it's good to highlight from here that what we are doing is facing the real world. It is in production, it is in use. Our brightest investments, Ella, it's the user interface for professionals. It's already live. We have been rolling it out to wider user groups with improved functionalities, and we are seeing continuous growth on the usage rate. So this is live. This is not something that happens at the back office and then one day comes somewhere. We are doing this one. The same applies to our joint venture, MedHelp. We have in March rolled out this to customers. We have paying customers on this one, and we are continuing this one. So what we are doing is already now impacting us positively.

If we then look on the balance sheet, we continue to have a positive balance sheet position. Our net debt to EBITDA is at 2.4. It has been increasing due to weak cash flow in Q1 and reduced profitability in Q1. But if we double-click that one, we are in a good component. And on the cash flow perspective, it is good to note that in our cash -- how our cash operates. First of all, we are a negative net working capital company, which is obviously positive from a balance sheet perspective. But when the revenues decline, our cash flow also weakens because we don't actually release net working capital, we increase it. So that one is impacting us negatively.

Then the second component on the cash flow is that if we -- if you look on the taxes paid now in Q1, we paid taxes from the record profits of '25, and that is having a negative impact on the cash flow. So all in all, our balance sheet is strong. We can continue to invest. We are not limited by the balance sheet. But at the same time, we are working on the cash flow and the key component in there is going back on growth.

Then before going to guidance, let's take a quick view on the market environment. First of all, if we look at the red arrows, they are all pointing down. This is weaker than we originally expected in February. We have had negative momentum through all payer groups. And then we have had incidents in the world that are also impacting, for example, the consumer confidence that Ville was showing, now referring especially to the Iranian war. So the market environment in Q1 has been exceptionally weak. However, then if we look on the next 12 months and we look further the outlook, actually, the arrows are the same we had in February. And based on the data we have, we believe that the bottom has been seen. We do know that public sector both in Portfolio Businesses and Healthcare Services is on a lower level. They are still having stickiness in the system, but little by little, it will improve over time.

If we then look at the consumer market, we have the dental, is already performing well. As stated in relative terms, it was the best performing payer group and discipline. And then looking forward, we have the Kela 65. We have recently heard the news on the widening of the scope of Kela 65 and widening the scope of the services within Kela 65, which are positive. Insurance market continues to be in a positive momentum.

And then we have Sweden, which still is having positive macro forecast slightly coming down compared to their February post Iranian war, but they are still positive. So if we look at the market momentum, we believe that the market will improve. Then at the same time, we do know that this is tilting towards second half and the latter part of that one. So if we think about the developments, Q2 will definitely be difficult, Q3 is always seasonally low, and then Q4 is the place where we would see the impact.

And with these ones, we reiterate our guidance. We expect full year '26 adjusted EBIT to be EUR 135 million to EUR 165 million. The estimates are based on the gradually improving demand environment as explained earlier and normalization of the upper respiratory infections in the second half. And as stated profitability in the first half is expected to be below the first half of '25. Then further to that one, it is good to note that our scenarios at the moment are pointing rather below midpoint than above midpoint of our guidance.

So all in all, we have a difficult first half, but we have a strong, robust and efficient motor, and we are investing in the future. So we are confident that we are also delivering with those investments.

With these words, thank you, and let's go to Q&A.

Thanks, Juuso. We are ready now for your questions. Do we have any questions from the phone lines?

[Operator Instructions] The next question comes from Iiris Theman from DNB Carnegie.

I have a couple of questions. So if I -- I'll ask them one by one. So firstly, what data indicates that the market has bottomed out? Can you explain that?

Over to you, Juuso.

Yes. So basically, it depends how you look at on the market perspective. We obviously continuously follow up our different type of data points, consumer behavior, visits on different intervals, on days, on weeks and those ones. And at least our internal data is indicating that we have now bottomed out. Then you saw from Ville basically the connected employees perspective. Ville mentioned already in the call that it has been now stabilizing and gradually with the pipeline looking that we can capture going forward. But on the external markets, we are especially referring to our own internal data.

Yes. And I think it's important to note that now we are talking about sequential improvement. So market has -- if one a little bit cuts the corners, market has reset to post-inflation new normal. And now from that base, it starts slowly but steadily grow.

Okay. And why did you keep your full year guidance even if your scenarios are pointing below the midpoint?

Well, we have actually discussed this topic also earlier that when we are within the range and we see that both ends of the range are something within plausible scenarios, then we don't change it. So that is how we have behaved earlier, and that is how we continue to behave earlier.

Okay. And can you still go through the drivers that will contribute to reaching the midpoint of the full year guidance, which implies basically only a 4% EBIT decline?

Yes. So first of all, I iterated that we are likely to be rather below midpoint than above midpoint. So then it is up to you to decide on that one. But basically, the drivers that are pushing or that are impacting our guidance. And obviously, you need to put your own finger in the air, how you take them within your estimates. But we have the upper respiratory diseases, we have the consumer confidence and a general corporate behavior that we are expecting to improve from the current rock bottom. And then we are also confident that we have bottomed out in the connected employees and that we are getting forward with those ones in the second half.

So these are the key drivers if we look our market. And then, of course, the public sector behavior is expected to have bottomed out at the moment.

And then a question regarding portfolio businesses. The margin decreased significantly from Q4 and Q1 last year. So is this a one-off or a level that we should expect for the coming quarters?

Well, all in all, portfolios is also facing a negative demand environment, especially from the public sector. And then it is good to note that now the outsourcing contracts have been also value contributing and decline in those ones will not anymore deliver margin expansion, but declining revenues is negative for us in the total perspective. So we are expecting improved performance in portfolios and also now sequential improvement, as Ville explained, for the full year.

Yes. So question, obviously, is warranted -- but if one looks at our plan and also our internal forecast, so we are not expecting as a drastic drop for upcoming quarters as you see during quarter 1, as you said. So we are looking for -- realistically looking for a gradual improvement from a lower base.

Okay. But basically, the margin decrease is that related to -- mainly to outsourcing business?

There are impacts. It is mainly related to the public sector. But basically, the overall market environment has been weak. So that has been contributing throughout.

Okay. And my final question is related to the Finnish government's budget proposal that was just released. So is there anything negative or positive that you would like to highlight regarding private health care service providers?

Well, if anything clearly positive, expansion of Kela 65, obviously, is a highly welcomed initiative from our point of view. We have been investing in this segment. So user segment seniors. We have been investing in Kela 65 and now expanding the scope of the service to do more diagnostics and also allowing higher frequency of use will most probably increase the number of users and also frequency of use. So that's welcome news.

[Operator Instructions]

Can you hear me?

We hear you fine. Can you hear us?

Okay. Four questions. I'll take this one by one. You're calling first half to be down from last year, but how should we think about the second quarter relative to last year, given your comments regarding the market having bottomed out during the latter part of Q1.

The next question comes from Sami Sarkamies.

Thank you, Sami. We identified you...

There's some stickiness online.

But basically, we don't guide per quarter, but it is clear that quarter 2 will be also weak, but what we think about is sequential improvement in total. So at the moment, it is not against comparables as weak as quarter 1 was.

Okay. And then on connected employees, we're expecting this to start growing sequentially in the second half of the year. Have you already won these deals? And how are front book prices looking relative to your current backlog prices?

Very good question. So deals are won and equally lost all the time. So then the real question forecasting forward is the funnel, how much renewals you have and how much new opportunities you have. And then against that one win rates. And then, of course, you have the packages and scopes and price levels. So what we are seeing now is a clear improvement in the new opportunities funnel. So new opportunities bucket increasing all the time and applying sort of average win rate to that one, we see a clear increase from that source.

On the other hand, renewals from our existing customer base, that bucket is shrinking and renewal win rates are improving and really, really high. So just mathematically, looking forward, we can sort of, with confidence, expect growth. It's not going to be sort of early on rapid and skyrocketing, but it starts to grow. And of course, we want to accelerate it over time.

Then looking at the scopes when these bids enter this tender space and comparing those ones with our current portfolio, the price levels are higher than existing ones. But then you need to, of course, do the full cycle of negotiations and go over the finish line. And only then you see what is the final package and what is the final price level on those agreements. But all in all, this is forward-looking picture, is positive, finally bottomed out and now looking forward and progressing to more positive.

Okay. Then I may have missed, but did you give any commentary regarding cash flow in Q1? It was quite a bit below last year level. So what are you expecting for the full year?

Yes. So basically, what I iterated on the balance sheet slide was that, first of all, cash flow was negatively impacted by the profitability. Then the second component is that we paid taxes from the record year previous year. So all-time high profits lead to all-time high taxes, obviously. And then the third component is that our net working capital is structurally negative, which means that decline in revenue impacts negatively our cash flow. And these are the 3 components. And obviously, taxes, we don't pay twice, but the growth component is very important for us for the cash recovery when we are going forward.

Okay. And then my final question is on Hohde acquisition. Are you expecting to see any remedies from competition authorities? And what is your thinking on timing for closing when you sort of announced the deal at the year-end?

Yes. So I also iterated that one on the portfolio slide. But basically, first of all, we don't comment the ongoing process from the content perspective. So that one we don't state at here. But on the closing, we have stated that the closing is expected to happen on the second half based on the dialogue so far that we have had with the authorities, we believe that it's rather in Q3 than in Q4. So we have a positive constructive dialogue continuously ongoing.

Yes. And maybe still, even though you said we don't comment the content, I can say that against the assumptions going in with what the process indicates and what is our current view on the sort of deal perimeter and the final package, I would say it's rational. It's rather on slightly more positive than we thought going in.

There are no more questions at this time. So I hand the conference back to the speakers.

Thank you. We covered some of the questions from the webcast audience already earlier, but there are a few left. So maybe starting from the cost structure and the adjustment made. What specific actions did we take? And what actions are we still implementing going forward?

So we are -- of course, we are adjusting as agile company should -- for the lower demand and lower volumes, especially in our sort of customer-facing activities in our operations. We have scaled down almost according to the lower volume in our ops in Healthcare Services, where the volumes were down by 11%, we were able to adjust FTEs by 10%. So that's a very, very good and sort of robust achievement by ops team. Then we are -- one needs to note and remember that at the same time, we are also investing. So we are increasing resources in product, customer service, sales, account management-related activities, especially in occupational health care, but also in consumer and insurance-related activities.

But all in all, we have been able to adjust nicely. Looking forward, of course, we are -- given the negative cycle, we are using this window as an opportunity also to look at the overhead and look at some structures. We have a separate program related to applying AI in the back-office functions, and that has started. But that's not really now in the scope when we are adjusting for the lower volume. But during next 12 months, you will hear more about this project Nova also.

Thanks, Ville. Then let's talk about the outsourcing in the Portfolio Businesses where we have seen the revenue decrease for quite some time. What does the remaining outsourcing portfolio look like? And do we expect further planned reductions beyond '26?

Yes. So basically, if we look at the numbers in '25, the outsourcing delivering revenue of EUR 55 million, give or take. And we have already in our guidance stated that we are expecting roughly EUR 20 million -- we are expecting EUR 20 million reduction in the outsourcing portfolio revenues in '26. And currently, we are very clearly going towards that one.

And then beyond '26 is a...

Beyond '26, that remaining -- roughly EUR 30 million portfolio will continue shrinking year-on-year.

Yes. Exactly...

And then we are, of course, talking about legacy outsourcing deals, and that's the focus for that sort of sliding curve. We are, of course, interested in partnerships with the health care counties and we are engaging actively. Right now, sort of the sales funnel for larger outsourcing type of -- new type of deals is fairly thin, but sort of engagement is active. And I would say, also according to our sort of data and interviews, some 50% of the counties are interested in increasing their purchases from private sector. But as we have seen, it's very difficult to put a date on when that starts to grow.

Yes. And it should be noted that the remaining legacy contracts are on a higher end in the margin as well. So getting healthier from that perspective as well.

Then a question on the connected employees in the occupational health. We have seen a decrease for a few quarters for now. Can we just reiterate the reasons behind the decreases? And what are the sort of consequences from? For example, last year, we had some negative media coverage and had that impact...

Yes, it's a very, very good question. It's a combination of a couple of things. When we went into our profitability improvement program in late '23, one of the activities that we were adjusting back then was our very low price level in our main business, occupational health care. So the market was sort of had bypassed us in pricing for quite some time. And hence, the gap was way too large to operate with adequate profitability in this business. We did the increases in 2 steps. And in hindsight, I guess we could have done it a little bit more smoother so that maybe 3 steps would have been the better option.

That sort of latter price increase, coupled with the negative media coverage related to billing was a negative trigger point for sort of many companies and additional tendering. Since then, of course, it has been rectified and trust is back. But we saw the damage last year. But as said, the important thing is that after negative development and cycle, now it's bottomed out and forward-looking funnel looks positive.

Exactly. Then the last question is related to the cooperation with the insurance companies. We have talked about intensifying our cooperation and sort of next generation of insurance partnerships. And what's the plan there?

First of all, we are doing fine with insurance companies. So actually, looking at the market view, even though the absolute volume in use of insurance coverage for health care spend, all in all, for all of the operators, is negative at the moment. Our market share has been improving. So we are gaining in that market, even though -- even that one is in negative cycle currently. So what we are doing there, of course, we are, in a way, putting ourselves in insurance company shoes and looking at what they are facing, what type of problems they are seeing, how they want our operations to serve the end customer, but also then what type of transparency we want and need to give them related to effectiveness of our care chain and fluency of our care chains and cost level.

And we are building that sort of more active engagement all the time and getting positive feedback from that front. So we -- with our capabilities, excellent capabilities, we can be a better partner for insurance companies, guiding and steering the customers and patients to right modality of service, right care chain, measuring the care chain effectiveness, being very precise in billing and also give transparency on that one and also provide more transparency on sort of a full scope of the population on those contracts. So there are many things that we are doing and continue to do to further improve our relationship.

Thanks. With that, we don't have any questions left. So any closing words first from you, Juuso and Ville.

No, thank you. We will continue pushing for '26.

Absolutely. It's a tough environment, but of course, we are tougher and now see forward building on a lower base, but with a very, very positive view.

Thank you. And on a personal note, this is my last quarter with Terveystalo. It's been a pleasure working with you guys for the last almost 9 years. I have full faith in this company and the team, and I believe that Terveystalo will come through as a winner from this cycle and from this industry transformation. Thanks. Have a great rest of the day and weekend.

Good morning, everybody, and welcome to Terveystalo's Q4 and Full Year 2025 Results Call and Webcast. As usual, we'll go through the results with our CEO, Ville Iho; and our CFO, Juuso Pajunen, and we'll follow that with a Q&A. My name is Kati Kaksonen, I'm responsible for Investor Relations and Sustainability here at Terveystalo. We'll take the questions via the phone lines first and then follow with questions via the webcast at the end of the presentation.

Without further ado, over to you, Ville.

Thanks, Kati, and good morning from cold and beautiful Helsinki. Let's dive into Terveystalo results 2025. It's again time to take a couple of steps back and look at how we performed last year. Sort of the big headline here is profitability and efficiency. If one looks at our performance, financial performance, we are delivering all-time high profitability. And as you can see later, across all of the segments, they are improving.

If one looks at profitability, things are great. If one looks at quality of our services, things are great. On the other hand, of course, you can see that we are living in a market, which is not favorable. But that only underlines the efficiency of our operational and financial engine. We are able to produce robust results even during headwinds. Healthcare Services is post-cyclical industry. And now we can see in our services -- frequency of use of services, we can see a decline even though number of customers served during the year was the same as during 2024. But strong financials, declining revenue due to macro and post-cyclical nature of our business, very strong improving quality.

Double-clicking into the performance of our 3 different P&Ls. Healthcare Services improving with a declining revenue, Portfolio Businesses improving with declining revenue and Sweden improving with declining revenue. All of these signaling the same story. Market is difficult, but we have been able, through our actions, to improve operating leverage, efficiency, improve our engines. And as you can see from a longer trend, clearly, the best results ever produced by Terveystalo, thanks to dedicated, focused work in our operations.

Given the circumstances, the focus of our actions are, of course, tilt more and more towards customer and growth. In headlines, the agenda is intact, and we concentrate in Healthcare Services, of course, still in digital transformation, getting even more efficiency, productivity into our processes. But as I said, even more focus in customer value, generating growth through all of the segments, consumers, Kela 65 and insurance customers are focus areas where we are gaining ground.

Occupational health care, we are investing heavily in renewing our products and services. We have 2-year program started last year, and we will invest EUR 20 million in products and services and renew those. And once the market turns, of course, we are stronger than ever.

In Portfolio Businesses, we have said that we will fix the profitability and then we step into the growth. And from the results, you can see that we have delivered the profitability turnaround. And as you saw from our actions before year-end, we signed the deal on acquisition of Hohde in dental services. So we are really delivering on growth as well going forward. We are investing into that one.

Sweden, similar kind of story. We have -- through our program, we have fixed the profitability. We are pleased with the results. Against very difficult market, we have improved the profitability. And now we are ready to invest and grow that part of the business as well.

Hohde deal is a major milestone for Portfolio Businesses and specifically to dental. In our earlier CMD, we said that dental is part of our core offering. We will invest into that one. We will grow that one. We will double the business with -- while doubling the profitability. And this is a major milestone in that journey, not surprising, but a very logical one. The joint combination of Terveystalo Dental and Hohde will be a really, really strong and high-quality player, generating ever more value for our customers, for our corporate customers and consumer customers alike. And we are, of course, very excited and proud of this step.

We have been leading digital transformation in outpatient care for quite some time, and we continue on that journey. If one looks at this transformation in a little bit more structured way, we can distinguish 3 different modalities that we continue investing in. So we have a more traditional hybrid integrated care continuum, which is still going to be physician-led. And there, we invest in better integration, higher efficiency, better toolkit for professional and better customer experience and patient experience for our customer.

There, we have just launched a major new platform for professionals called Ella. So that's our professional interface whereby they are able to process appointments and care continuums in higher quality, higher efficiency manner. The info and data is more structured and steps logical and transparent, when a patient is moving from one step to another in care continuum. This will be further enhanced this Ella platform and scale during this year. But we can already see tangible results in -- after the launch.

In the middle part, we are talking about algorithm-led digital health retail modality. And there, really the automation and no touch, very low click type of operation is the key. So when you enter into our services, you come from web app, then you are engaging with automated AI-assisted care and patient steering engine, then you are steered either to a traditional modality or to digital appointments either to more traditional chat type of service, which we will make more and more efficient or just recently launched semi-automated AI-assisted appointment modality where actually the target is that the whole appointment chain can be processed by a professional at the end of the development by single click. And this is really fast, really available service area, which we will further invest into. We have fast development pace in the area and investments yield results.

Final domain in the transformation is insight-centric proactive care, where best example in our implementations now is MedHelp platform, which we will introduce during Q1 for occupational health customers, clever insights, clever use of data, activation of patients and customers in right time and situations and getting -- making a major step from reactive traditional health care modality into proactive insight-driven.

The semi-automated appointment is exciting stuff. As I said, we just launched a couple of weeks back, this new chain of appointment activity from patient point of view. As I said, you enter into the services through -- typically through a app. Then you are engaging with the AI-assisted care steering engine, then that's directing you into -- if the diagnosis scenario is relevant, it will guide you into AI-assisted appointment cycle, where actually at the end of the development, when we are developing this one during this year further, professional is able to approve the diagnosis only by single click.

And then you get your diagnosis, you get your guidance to whatever is the right action to do at the end of the cycle. Really exciting, complementing our already really efficient digital platform and providing us a direction to the future and further potential for better customer value, higher availability of services and at the same time, higher efficiency and profitability.

With that one, over to Juuso.

Thank you, Ville. So let's talk about our financial performance. Obviously, it's already 100 minutes old report, so you know the numbers by heart. So let's start actually from the journey.

Three years ago, I was standing here first time on telling quarterly results of '24 -- '22. And at that point of time, we had annual EBITA percentage of 8.4% and we thought that we are brave when we say that by '25, we will reach 12% EBITA. Actually, we reached that one already 1 year ahead of time, delivering 12.8% in '24. And this year, '25, we are delivering 14%. And now everything you see in these numbers, what comes to efficiency signal and proves that point that we have made a sustainable strong change in our operating model, and we are as efficient as one can be.

And with Ville's description on the customer journey, one-click customer journey, we can still improve our efficiency. So where we are today is that in quarter 4, we are in all efficiency metrics strong. We have improved our EBIT. We have improved our margins. We have improved our EPS. We have not done that at the cost of our client satisfaction. Our appointment NPS is 87.6, which is extremely strong. Our medical quality indicator [ PEI ] is at all-time highs also. So we are efficient, we are impactful, and we are delivering financials. But at the same time, it is fair to say that we have revenue headwinds.

Let's go through those ones a bit more in detail when we go on to the segment level. But all in all, quarter 4 highlights, we are strong, we are efficient, but we have market headwinds, and we will address those ones.

If we then look on the whole group, we have positive margin development. So like I explained, we have the strength especially in our efficiency metrics. The revenue was under pressure in all segments, and we'll go then through on the segment levels. What we have in the megatrends is basic or in our trends. We have the outsourcing portfolio. We have the occupational health visits and the connected customers. So all of that one is actually a continuation already from Q3.

Then when we are looking at the adjustment items, we had EUR 12.7 million. It is good to understand that majority of these ones are related on our efficiency actions, on our ongoing projects where we have taken an extra push in Q4. And a material part of those ones are consulting fees that are based on success. So they wouldn't be here unless we have been successful. And thus, of course, when the consulting assignments have now, especially in Sweden and material parts ended, we are in a positive place on that one.

Then on top of that one, we had a write-off related to divestment of child welfare services. That one has actually now closed in 1st of February. So it will be totally out from our numbers starting 1st of February '26 onwards. That is a noncash related impairment. And then on top of that one, we had a tax dispute that contributed to these ones. So one-offs pushing our reported EBIT lower, but still also that metric is in a strong place.

If we then go deeper and we start looking at Healthcare Services. So here, margin improvement, clear. Annual margin improvement, also strong, but we have the headwinds in the revenues. Visits are 7.6% down when adjusted for the 1 working day more in the calendar. And then we have other impacts slightly positive. But all in all, the revenue is 5% down. We will go a bit deeper into the visits and the volume growth in the following slide. But all in all, we have a strong plan, but we are also a post-cyclical company and post-cyclical by the industry logic. So we are just now under pressure, but with the efficiency that we have in our platform, we will turn this one around and with all of the actions we have in place. And the underlying megatrends have not gone anywhere. So this is by nature, seasonal and macro-driven.

So as a post-cyclical company, the trends are continuing. We can split it now into different buckets. We have the seasonality. This is roughly 70,000 fewer upper respiratory infections during the quarter, and that has now continued in January and in February. So the current flu season is weaker than in ages. That one contributes a certain amount. We can't impact that one. It comes and it goes. Then we have the macro level item, which basically means that as a post-cyclical company, the macro catches us later.

So companies -- when you have a continued sluggish macroeconomic environment, companies tend to invest less in their people, but they started -- that's the final place where you want to cut on your investments. That's why it hits us a bit later than in some other industries. And that one we can work on. We can concentrate on client value, we can concentrate on delivering highest possible impact with an efficient motor, but we can't hide away the fact that when companies start reducing their investments at one point of time, it also impacts us.

But we have a clear action plan, both on how we capture back the growth irrespective of the macroeconomic environment and then how we utilize our efficient motor when we capture that growth. So we are in a positive place in that one from a plan perspective, and we are confident that we deliver on that one.

The public sector has been now remembering that we talk about the Healthcare Services, where the capacity sales is a minor part of the total offering. It has been in a weak position for a long time because of the wellbeing counties, first setting them up, then chasing costs. But now the environment starts to stabilize little by little, and we have seen some positive signals. But at the same time, it is still fairly unpredictable market on which I come later on the coming slides.

And then we have the positive momentum from the consumer. We have both the insurance market, where the number of insured continues to grow slightly, but also we have a strong market share and really appreciate offering for the insurance companies. And then the Kela 65 has produced positive volume growth and continues to deliver positive volume growth for '26. So all in all, we know what is happening. We have our action plan, and we will deliver according to that action plan.

Then if we look Portfolio Businesses, we have a clear profitability improvement that has continued. We also -- it's good to acknowledge that previous year Q4 was a difficult one. And now we are obviously clearly improving on that one. The revenue was contracting because of the outsourcing contracts according to plan. It's also good to note that we have been very solid in steering those contracts and running those contracts, and they have now started to deliver also profits, which have been contributing Q4 results.

Staffing, this trend is still partly of our own selections earlier, but at the same time, the market continues to do difficult. We have seen some positives in the total market environment, and we have been gaining market, but wellbeing counties are still in the cycle, where they are evaluating how they operate in the future.

Dental and the private continues to be the positive part of this story. We have been able to grow the top line, grow the bottom line, and we are trending the right direction. And then you have seen our investment in Hohde.

If we then look on Sweden, the market continues -- continue to be difficult. It's good to note that the operational efficiency is improving. We are ramping up on the EBITA percentages. We have on the EBIT percentages slightly declined on a noncash related impairment item, actually positive impairment from previous year Q4. So all in all, we are in plan. We are delivering. We are bringing the efficiency up, which we have done. And now we are in a place where we can start to utilize also this platform in an efficient manner and start ramping up the revenues. And the pipeline there is strong for the future. So we are confident on Sweden. But obviously, then the market conditions and the employment levels continue to be challenged also in the Swedish market.

If we then talk about investments, I think that in here, what is happening is exactly what we have told. We have said that we are ramping up our investments in digital, and we are also doing physical investments. On the digital part, Ville explained about Ella, about the one-click journey. Those are a couple of the highlights. We have the MedHelp cooperation that we launched last year in the second half is now starting to deliver actual output during Q1 in '26. So what is important to note that when we do an investment, the investment cycle is fairly short from start of the investment to actual use of the digital asset is happening.

Ella, it is the UI for the professionals. It's already in use by hundreds of doctors and the next phase rollouts are now happening actually as we speak. MedHelp, we have now -- we are now in a status where we have started to introduce it to our clients, and we are in the first rollout in Q1. So also this one is progressing. It is not a promise in the future. It is an action today. And that one, we will continue. We will continue in investing both organic and inorganic growth also in the future. And now with the M&A agenda, we have the Hohde transaction, a couple of smaller bolt-ons and so on. And then on the focus part, we divested the child welfare.

That leads to cash flow. I have nothing new to say on this topic, but would have not been repeated for the past 12 quarters or whatever. We continue to deliver cash. Whatever we do in the bottom line, we do in the bank accounts also. EUR 207 million cash flow, slightly soft. There's a timing component on the accounts payables. Last day of the year was now a banking day, and we are responsible towards our vendors who are -- most of them are small and we pay on due dates. Pushing one day forward, those payments would have made actually a visible number change on this number, but that's not how we operate.

Leverage 2.1 continues to be all-time low. When we want to invest, we can invest. We have the powder in our leverage ratios. And once again, referring back to Hohde that one is under the competition authority approval, so not yet visible in the leverage ratio until we gain approval and then we both get the business on to our end and hand over the money to sellers.

Looking back on our financial targets. We have 3 targets. EPS growth, 10% per year. We also told that '25 will be clearly better than that 10%. We are now at 0.73, 29% up. Net debt to EBITDA being below 2.5, but can trail above it when an M&A occurs, we are 2.1. And then the leverage dividend -- attractive dividends, at least 80% of the net result, EUR 0.64 proposed by the Board of Directors, meaning 88% of the net profits as a total and 33% handsome growth on the dividend for year, assuming, of course, that AGM approves it. And so we do what we promised to do. We have delivered on each of these metrics once again.

Then before going into the guidance, it is good to have a few words on the demand environment. When we talk about this picture, what we are saying is that the demand environment is anticipated to improve gradually by the end of '26. So the '25 arrows describe where we are starting the journey this year and '26 is like a balance sheet item. The arrows are describing where we expect to land at the end of this year. So what is happening now is that if we look public sector, it is yellow, and at the same time, we have continuous modest positives. We have some big ones. We do know that there's some big ones in the tender pipeline. There was one that we [indiscernible] won in Q4 last year.

But at the same time, the predictability is fairly low. wellbeing counties are now polarizing and how they start to behave is always -- has been always difficult to predict. And for that reason, we are in the yellow part on that one. But still, I need to highlight that there are lots of positive big signals around there that could merit further positives in the future.

Consumer market, we have a positive situation, maybe a bit more in dental. And in the total consumer market for '26, we are still positive. This is mainly contributing the Kela 65 and related.

In insurance, it is a market where insurance penetration slightly grows still. At the same time, insurance companies are getting better and better on steering their customers and impacting the market. So it is a positive market. But at the same time, last time, the dynamics was the dark green arrow upwards. So we think that, that momentum is not as strong as it was earlier.

When it comes to occupational health, we have a strong plan. We had a difficult '25. We are addressing all of our issues. We are confident that we are getting into growth. But now the market will remain challenged during '26 in total.

And Sweden, we are seeing that the improvement for '26 is in the pipeline.

So with this type of market dynamics, we come to our guidance. Our guidance for '26 is EUR 135 million to EUR 165 million of adjusted EBIT, '25 EUR 156 million. So basically, we are guiding a corridor, where we have room to improve, but also based on the market conditions, we can be weaker than this year. The estimates are basically built on a gradually improving market environment or demand environment.

We already know as a fact that first half upper respiratory diseases will be clearly below previous year. You have seen how it behaved in Q4. You can go to see our open data sources to see how January, February up to week 7 have been behaving or up to week 6 at the moment, have been behaving. So we know as a fact that it will be a difficult flu season for the first half of the year. And then we are expecting for the second half normalization. So with all of that one, it means that our first half will be below '25 due to the market environment, due to the upper respiratory diseases. But when we go forward, then we are seeing gradually improving markets.

Portfolio Businesses will continue to reduce by some EUR 20 million on the revenues on an annual basis. And then finally, our guidance is not including material acquisitions. That includes Hohde transaction also. We do not know when it closes, and it's not included in these numbers.

So with all of this one, I think we are going for a, in absolute terms, solid '26. But of course, in relative terms, there are also scenarios where we can be weaker than in '25.

With these ones, let's invite Kati back on to the stage and let's start the Q&A.

Thanks, Juuso. I think that we are now ready for questions. Do we have any questions from the phone lines?

[Operator Instructions] The next question comes from Sami Sarkamies from Danske Bank Markets.

I have a couple of questions. We'll be taking this one by one. Firstly, starting from the outlook for this year. First question would be that why do you expect first half to be down from last year in terms of profits? I guess market conditions were pretty difficult already in the second half last year, but we didn't see profitability falling below the comparable period. So why is first half more challenging than second half last year?

Well, if I start and Ville can complement. So if we look at the current status, we do know that the upper respiratory diseases are clearly below Q1 '25, which was clearly above average. So at the moment, that one is already a material visible and known headwind. Then the second component is that if we look our connected employees and the behavior of the employers, the connected employees continue to be some 4% down compared to Q1 '25, and that one contributes to difficulties in H1. And then the current macroeconomic environment, at least for January has not materially improved from the Q4 last year. So the employers are still clearly in the cost saving mode. So with all of these ones and against a very strong first half in '25, this is our expectation that in EBIT perspective, we will be below previous year.

And then -- yes. The only thing I would add is sort of summing up all of the dynamics in the market. What we see today is frequency of use of the services is down basically in all of the segments. So that is the main contributor. It's cyclical and then it's sort of upper respiratory morbidity type of impact. And it will, of course, turn around, but what we see today in the market is negative, especially against Q1 last year.

Okay. And my second question regarding outlook would be, can you elaborate on the key uncertainties because we are looking at a pretty wide guidance range for this year?

Yes. So basically, when we look the guidance and its parameters, the one component is kind of gradually improving demand environment. So the different type of variables in there is that what is the -- in the economic outlook, what will be the status of Finland and obviously, to a certain degree, Sweden's economy, how the employment behaves and how that one impacts on the employers' behavior. So that is one component.

Then the consumer purchase power is the second component, which is relevant for us in our private out-of-pocket segments. So these ones put different type of scenarios in the table. In the positive momentum, as you know, we are efficient 20% EBITDA company. We can leverage the positive momentum in a very strong manner, but also if the current trend and the sluggish environment continues, it catches also us. So this is the clear external component. Then the second one is the seasonality related to upper respiratory diseases. That one, obviously, nobody knows how next August starts and how that one behaves in real life. So only way to predict is assuming regression to mean.

Yes. Maybe still to add, if one looks at us being a little bit negative on Q4, if one flips that one around, once the revenue and frequency of use of services come back, as Juuso said, operating leverage and efficiency is on such a high level that, of course, then it will really yield. But as sort of a very simple answer, it is the demand and specifically frequency of use of services, which is the -- it's not unknown, but that will then dictate on which end of the spectrum we will end in our guidance.

So the lower end of the guidance range that would assume basically no recovery in Finnish macro, consumers not consuming and then, let's say, weak flu season during the second half of this year?

Yes, that's a fair interpretation.

Then you mentioned that you're still having 4% lower connected employees. I think that was also the case 6 months ago. So there's been no progress on that front. Can you elaborate on why you haven't been able to improve your market position even though that has probably been one of the key targets?

Well, if I start, I would say that the -- first of all, as I said, there's a 2-year program whereby we are investing EUR 20 million into our products and services, and we are making good progress in that program. One needs to understand the dynamics, how companies are making decisions and how long those processes are. So even though the operations, our commercial actions and our products have partly been upgraded, partly been already renewed, it takes some time until we can see that one in, first of all, connected employees use of services and profitability in that segment. But I'm really pleased in how [ Laura ] and our new team is now taking the challenge and pushing us forward.

We have tangible things that we have already been able to deliver to our customers and with good response. During Q1, we'll have sort of best in the industry platform delivered to our customers in occupational health care. We have been able to -- a little bit history, last year was difficult from many angles. We had billing issues, et cetera, et cetera. We have been able to rectify those. And with all of these sort of soft points, we are or will be very soon clearly the market leader. And over time, the demand will be there.

Okay. Then I wanted to touch on the one-off costs you had in Q4, EUR 30 million. I think you were not supposed to have this anymore after sort of the Alpha program. I understood that these are mostly related to Sweden, which doesn't generate any results at the moment. So can you elaborate on what kind of return on investment we will see this year if you have paid about EUR 10 million as sort of consulting success fees related to Sweden?

No, let's first kind of correct. Sweden is by far not EUR 10 million on that one. You will see actually the final page of the report, you see also the adjustment items per segment. We have EUR 3.5 million in Sweden for Q4 and EUR 5.6 million on the full '25. So that is just to be clear that Q4 numbers, we have a component in Sweden. We took an extra push that included roughly 40 employees. In the admin part, we have digitalized, centralized and taken a huge leap in the admin part in Sweden, and that has yielded both a success fee component and a restructuring component. That was above our expectation, but that one will also basically improve our competitive advantage or competitiveness in the market and make us very, very efficient on that one. So I think that is a money well spent when we show that we can make money in Sweden.

Then for Sweden to reach its full potential, it will require also positive development in the top line that for the full potential is definitely needed. Then if we look on the other adjustment items, we have an impairment related to divestment of child welfare roughly EUR 4 million. And then we had a tax dispute that is in the ballpark of EUR 2 million. And that is visible above EBITA because it has been seen as a cost -- operating cost on our profitability.

So with all of those ones, Sweden program has ended. We have a minor program ongoing in the portfolios. And then we have the program Ville has in -- stating continuous 2-year program in occupational health competitiveness. That one is the occupational health program we have been talking about in Q3 and/or actually maybe already after Q2 release. And that one will continue. That is the only kind of worth mentioning program when we are going to '26 and '27.

My final question would be on the dividend proposal. You're raising the payout ratio from 84% to 88%, even though we may be looking at a down year when it comes to earnings. What is the logic here? Because you're also doing M&A. So why you're sort of upping the payout ratio?

Well, if we look now the numbers, so basically, first of all, we are confident for '26, we are confident for our future. We have a balance sheet that is clearly below our leverage target, even if you assume that would have happened already on 1st of January this year. So first of all, we have a capability to do so. We have one of our financial targets as an attractive dividend to our owners. It doesn't limit our growth opportunities. And at the same time, now if you look the child welfare, it is accounting-wise negative, but cash flow-wise, positive. And if you just kind of calculate from there, I think 88% is totally merited.

Yes, maybe just to complement, it's very much, as Juuso said, down to confidence. So now we are talking about headwinds in the market. One needs to remember that the underlying megatrends in our business, combined with the efficiency that we have been able to build into the machine over time will generate improving profits. And this is 1 year in a chain of years with positive outlook.

The next question comes from Anssi Raussi from SEB.

I have a few questions left. I have to continue on Sami's question about the outlook for 2026. So of course, we have been discussing about your operational improvement throughout 2025 and your Q4 EBITA and EBIT grew quite significantly year-over-year. So then if we think about '26 and your comments about improving market towards the end of the year, so is the missing piece here pricing? Or -- because, of course, you have been talking about defending or gaining volumes in 2026 and that being maybe the most important focus area.

So maybe if I start, the current market environment is not such that pricing or hefty price increases would be a topic in our toolbox. So that -- the competitive environment is such that pricing will be clearly in a different place compared to '23, '24 where we had also kind of high inflation or post high inflation environment. So that you could, in your narrative argue that, that is some kind of a missing piece in the total.

Then what comes to the Q4 year-on-year improvement, it's good to note that in Q4 previous year, we had the onetime bonuses that we paid to all employees. We had the collateral labor agreement component also coming to all employees. So our Q4 '24 was not in a way as weak as it looked like from outset. So if we take an operational performance, we had a strong performance in Q4 '25, but you shouldn't take just kind of a comparison Q4 '24 to Q4 '25 without taking that mental adjustment, then you see that we didn't take any more that significant leap as the numbers indicate.

And maybe just to add on that. So the volume remains to be the key component. So in the first half, we're not going to be seeing improving numbers in the volumes because of the reasons that we already discussed. So the -- increasing the connected employees within the occupational health care will take some time. That will not be visible in the first Q1, especially. And then we have the other volume drivers at the moment going against us. But we do expect those trends, especially the connected employees to gradually then increase towards the end of the year. So that's the operating leverage driver there.

Those are good clarifications. Maybe I continue on diagnostics, which volumes declined. I think it was almost 12% in Q4, which is clearly more than the number of physical appointments. So of course, you mentioned your customers being in savings mode maybe right now, but is this only due to occupational health care customers downgrading their service packages? Or was there also something else relating to your own operations?

Yes. That's part of the answer, which you mentioned. Then looking at just sort of diagnosis mix when we are lacking a certain part of our upper respiratory diagnosis, and then, for example, MRI scans are less. So there are sort of clear logical explanations looking at sort of a core mix of the service needs that impact the volumes in diagnostics.

I didn't fully capture your number logic. So just a reminder that we were basically workday adjusted 7.6% down. And even if you take that workdays in there, it was 1.6 positive. So we are, give or take, 6% down while the revenues are 5% down. So actually, we have a positive pricing/mix component in Healthcare Services. Then if we look the total group revenues and you compare that one to the visits, then you are kind of combining 2 different topics that are not fully in sync. In total -- in the total group numbers, we have the reduction in staffing, which is not visit related and the reduction in outsourcing business, which is not visit related. And then we have the reduction in Sweden where we don't record the visits either. So you need to be a bit careful when you are taking those bridges.

Okay. Yes, I was just looking at this number of diagnostics in Q4 year-over-year now. I think --

Yes.

-- but yes, that's clear. And maybe final question and a simple one on your guidance as you guide EBIT. So could you give us an assumption how depreciation and especially amortization will develop in '26 compared to '25?

Well, basically, if we look on the amortization, obviously, we don't guide those numbers. If I hint you on the mathematics, you can go to balance sheet. You have seen that we have increased our investments, especially in digital items. Those ones will gradually hit the amortization in the income statement in the coming years. So you can fairly easily take the notes and you can see there the increases, decreases and you can from there deduct. But obviously, increased investment base will mean at one point of time, increased amortization.

Yes, try to see some Excel then.

Yes, let's take it offline. I can show you some Excel skills.

[Operator Instructions] The next question comes from Joni Sandvall from Nordea.

A couple of questions left for me. Maybe a question on the EUR 20 million investment that you are taking to address the changing needs of customers. So how much OpEx base is going to increase because of these actions in '26 and '27?

So basically, let's put that one that the EUR 20 million is a collection of investments already made and investments coming. It includes, for example, the MedHelp investment that you see directly from our balance sheet also and then it is a further pipeline that we are doing. So I think that the proper view is once again to take on our tangibles, take the balance sheet, see the increases in there. And in our depreciation and amortization description, I think we say that the amortizations are 3- to 5-year period depending on the asset we are generating. So then you can from there evaluate the OpEx impact coming into the future or the amortization impact coming there in the future.

And then if we take a look on the total OpEx, obviously, these investments would be investments unless they improved our revenue or reduced our cost base. And all of these ones are positive investments as such. Of course, then the quality improvement is an important factor and so on. But in the end, the idea of investment is to contribute in our profitability in the future.

Yes. Then the second question on the Hohde acquisition. How confident you are actually of the approval of this from the market authority, given it consolidates the market quite a lot.

Of course, we -- it's not in our hands, but maybe we can say that we made a very, very thorough analysis on the competitive landscape and what type of overlaps we have based on different experts and sources. And we are very confident in our plan. But then again, not in our hands, it's authority who makes the call.

Yes, I think that Ville explain it through. Then of course, if you want to make your own assessment, it's fairly easy to look at the market dynamics, you see that we will -- even by doubling the revenues, we will be #2 in the market and our market share wouldn't probably start with #2. So from that perspective, of course, when you look at the total process, you can evaluate yourself how confident you are, but we are confident.

Yes. And that specific reason was one of the drivers us to start investing into this area. We saw that with our sort of average market share as high as it is, dental services is very good, a nice complement to our existing services and there we have room to grow, as Juuso explained in market share numbers.

Okay. I believe we don't have any further questions from the phone lines, but please we'll take one from the audience now.

Yes. Roni Peuranheimo from Inderes Oyj. Maybe about the insurance customers still, the growth rate declined here a little bit, and you see that the demand isn't as strong as it was earlier. So maybe what's behind this? I think it went from dark green to lighter green.

Yes. We take a couple of steps back. First of all, the insurance coverage continues to grow, which is positive. So the underlying element for growth are there for the future. Then as we equally know, insurance companies with the health insurances, they have been struggling with their profitability. They have implemented certain kind of steering mechanisms, which you also alluded to and gates and guardrails in how they are then sort of allowing services to steering guiding services for their customers.

And all in all, even though we can be pleased with our own progress and our sort of success in gaining market share, the overall market reacts to a couple of years of very high morbidity and certain type of services sort of gain through insurances and this whole sort of equation and combination yields to sort of a flattish development during sort of first part of the year and then the recovery in the second.

All right. Then about the public market, you had there the yellow or flat demand and you mentioned that you see some positives. So is there also some clear possible negative drivers in '26?

Yes. I think that in the total, the difficulty with public sector is to predict it at the moment. I think that I've been standing throughout the 3 years here quite many times saying that now it opens up. And at the same time, it has not opened up. There are so many things that are not in our hands and the predictability makes it a bit difficult. So we have positive signals. You may have seen us winning a process with Hohde in December with a positive revenue impact and so on, and we are gaining -- winning contracts. But at the same time, wellbeing counties are polarizing at the moment. There are those like Pirha who went for the big outsourcing that unfortunately, Pihlajalinna won and who are willing to take progressive measures jointly with public sector -- private sector. And then at the same time, there are those ones who are still very cautious. And how that dynamic plays out is simply difficult to predict. But we are positive in the total opening up, and we are confident that it will happen, but putting a timeline on that one is the reason why it is on yellow.

Yes. And back to your point, is there a downside? We are starting from such a low demand and very passive buying behavior. So it is quite difficult to see further downside in this business.

All right. Then one more about the occupational health care. You emphasized the post-cyclical nature and given that the Finnish unemployment the macro still weakened last year. So -- and you also mentioned that you anticipate growing connected employees. So maybe talk a little bit about how much the growth is in your own control versus the macro and maybe about your sales pipeline at the moment.

So if we start from sort of dynamics, as I said earlier, there's a lag in how we see the numbers against our actions, specifically in this segment. And I'm pleased with the progress of our program. Our win rates have been improving already during Q4, Laura and the team and the commercial team in there, they are doing a good job. What we cannot so much impact is frequency of use and the scopes of the services, which will then follow more the cyclical nature of this one.

Now the companies have been in saving mode. They are also in a situation where you have a great supply of employees in almost all of the industries. So they are not sort of under pressure to improve the benefits for their employees. And this is cyclical, and we have seen this one happening many times. When the things -- when things turn, of course, this will turn as well. So a lot of this one is in our own hands, specifically when we think about the number of connected employees, use of the services more on the corporate side and more cyclical.

Thanks, Roni. We still have a couple of minutes time, so I'm going to be a bit selective on the questions that we have received from the webcast.

Maybe let's talk a little bit about the drivers and the dynamics in the Healthcare Services. Could we please open up a little bit the drivers of the high profitability in the current Healthcare Services segment? And is that improvement sustainable in the longer term?

Now we need to split that one into 2 different components. Is the improvement sustainable, meaning that can we improve quarter-by-quarter or year-on-year like we did from Q4 '24 to Q4 '25? No, we can't. In Q4 '24, we had in the underlying numbers, the onetime items, or the onetime bonuses that I referred earlier. And that one makes the improvement slightly better looking than it in real life is.

Then on absolute level, we are in a positive place. We have a huge operating leverage. So from that perspective, when we get back on growth, when we get the yields on our occupational health projects that one will contribute to our profitability also. So there's 2 different answers, but the operating leverage is the key when you are looking to future. We have much to gain in this segment.

Yes. And as I said earlier in the presentation and comments, exactly as Juuso said, we have been able to improve profitability against lower revenue line, very, very weak macro. Operating leverage has been improving, strengthening the efficiencies there. So that will then yield improving results once we get the revenue line in order. That's very clear. And in that sense, it is sustainable, again, coming back to the fact that underlying megatrends are positive for demand of the Healthcare Services.

Then finally, a couple of words on the M&A landscape. Do we see any activity beyond the current ongoing transactions? And what are the most attractive segments that we are currently looking at?

If I start and Ville can complement. I think that the M&A market activity has been gradually increasing throughout '25. It was very low in '23, '24, maybe especially in '24. And now we see that the market starts to be active. You can view it from different angles. There's IPO activity in Helsinki. There's transactions happening throughout Nordics and Europe little by little. So now there starts to be a market and little by little, of course, then you can start picking that what are the value-creating opportunities you want to capture. We have been continuously stating in our agenda that we have selective agenda in portfolios.

Well, now we have obviously the Hohde in there, which will be hopefully close during this year. And then we have stated that in Sweden, for example, gaining scale and gaining efficiency -- after gaining efficiency, gaining scale would make sense. So that has been the other place that we have highlighted that we could look. And then obviously, in Healthcare Services, we are always checking out the smaller bolt-ons that would complement our white spots like we did in ophthalmology when we acquired Pilke in December.

Thanks. With that, any last words before we close the webcast Ville?

So again, great quality, great efficiency, great profitability, market under pressure, underlying trends supporting long-term growth with sustainable improvement agenda with us. So looking positively forward into H2 this year and specifically '27.

Thanks. With that, have a great rest of the day and/or upcoming weekend. Thanks for joining.

Thank you.

Thank you.

Good morning, everybody, and welcome to Terveystalo's Q3 Results Call and Webcast. My name is Kati Kaksonen. I'm responsible for Investor Relations and Sustainability here at Terveystalo.

As usual, we'll go through the result highlights with our CEO, Ville Iho; and our CFO, Juuso Pajunen. And after the presentation, you will have a chance to ask questions. I will take the questions from the phone lines, as well as through the webcast, after the presentation.

Without further ado, over to you, Ville.

Thank you, Kati, and good morning from my behalf. Let's dive directly into Q3 highlights. As you can see from the numbers, this quarter 3 was a quarter of margin improvement amid a revenue headwind. So the EBIT -- adjusted EBIT margin developed positively; very strong operating cash flow; EPS developing positively as expected; very high NPS, taking all-time highs all the time; but then with a decline of some 5% top line, adjusted EBIT in absolute terms slightly down.

Double-clicking into different P&Ls and their role in the business, how they are contributing and continue contributing in the future, starting from Sweden. Just as a reminder, Sweden is in a phase still of turnaround. We have been adamant in the fact that we continue focusing only on turnaround and profitability improvement. Sweden is getting -- our Sweden team is getting the results. The underlying efficiency is continuously improving. The results continue to improve. The market being fairly muted at this stage still, we are not making proper profits yet. But looking at next year, volume development looks positive, and we start making results, and then it's time to focus on growth.

Portfolio Businesses, quite the same story. The profitability turnaround has for large parts happened. Some minor fixes in smaller businesses, but the bigger businesses are doing fine and developing positively. Now, it's time to grow, and we are eyeing specifically in 2 different segments, as we have said before, dental and then opening public market.

Healthcare Services, our biggest business, margin on a very, very high level, really strong, starting from a very strong position. Now, our eyes and focus turn into volume growth, and we continue to boost that one with selective specialties-driven M&A, and then investments in digital delivery and capabilities.

Further double-clicking into the strategic agenda, as I said, Sweden profitability improvement program, [ Gamma ], almost done and dusted. Efficiency in all-time high level. Now, looking at organic and potentially inorganic growth there on a solid base. Portfolio Businesses, as I said, profitability improvement done and dusted. Now, organic growth in dental and also inorganic growth in dental and public partnership being relevant in the opening market when health care counties are actually starting buying, where we have seen positive signs already.

Inside Healthcare Services, we are seeing very strong development in our consumer-driven businesses. We continue boosting that one, Kela 65 being a prime example of sort of a positive drive. Also in insurance business, our position continues to be strong and developing nicely; out-of-pocket in good place and developing positively against the low morbidity. We have reorganized our operations and our delivery model so that there's clearly separate brick-and-mortar delivery through our health care services or hospital network, and then, now, forcefully and decisively scaling up the digital health 10x, where we are eyeing at major leaps in efficiency, in transactions, more intellect in our patient and customer steering, and then finally, truly scaling up truly digital health care services, tech-based services, nurse services and in very near future also, AI-supported health services.

Among all the positive developments, the challenge currently, which we'll further discuss is in occupational health care. We know exactly where we are. We know how to turn around the negative development. There we have a program called [indiscernible], led by new SVP, Occupational Health care or Corporate Health, Laura Karotie, and that one will be discussed in more detail. So, all in all, agenda, very clear, sort of 9 out of 10 moving very fast to the positive territory, more focus needed for occupational health care, which will be fixed.

Looking at the volume development and our sort of view on markets in near term, next 12 months, starting from the smallest, Sweden, as we have communicated many times, the market has been very soft. Swedish economy has driven the demand for occupational health care services very low. Now, looking forward, both the market seems to be picking up. Sweden economy is doing better next year. But more importantly, looking at our internal view on the sales funnel, commercial activities, sales funnel looks positive. And when we are able to do, in next year, more volume on higher operating leverage, of course, then we'll start making money.

Portfolio Businesses, public business, as all know, has been very, very slow in buying. Health care counties are only sort of picking up the buying activities. What we see in large tenders and also in smaller tenders is increased activity. And looking at the next 12 months, we see the market developing positively. Same goes with the consumer business. It has been fairly muted due to low confidence of consumers. We have seen already some positive signs, specifically in the dental services, which typically is the most sensitive for consumer behavior, and we expect the positive drive and vibe to continue for next 12 months.

In public business, when we jump over to Healthcare Services, in public services produced by health care services units, it has come down and it has brought -- or contributed to lower volumes in Healthcare Services. We see that one bottoming out, and next 12 months should be more positive. Consumer business, even though our own position has been strengthening, has been fairly flat due to low morbidity. But with the sort of normalized view on that one, our strong drive in Kela 65 and insurance business, we see that one developing positively also going forward. Insurance business, equally, it has actually been the growth driver inside Healthcare Services, continues to be so. Number of insured persons in Finland continues to slowly pick up, and use of services is on a high level.

Occupational health care, finally, so we'll double-click on the development, what has contributed to lower volumes in Q3, but very shortly, it's number of connected employees, sort of thinner scopes in the agreements by the corporate clients, and then inside those agreement scopes, lower use of services. All of these are slightly negative from our business point of view. It's been negative. It's going to stabilize. But specifically, number of connected employees will not be sort of turned around in 1 quarter. We'll turn that one around, but it will take a couple of quarters to get to -- again to all-time highs.

If we dive deeper into this phenomena, as you can see, and it's good to remember the phases that we have seen in the development over the last couple of years and quarters. In '22 and '23, in the number of connected employees, we were pushing all-time highs. At the same time, as you remember, the profitability of this business was really, really low. And we struggled with the low contribution to rest of the business and hence, the Alpha program. With the Alpha program, we totally turned around the profitability of not only occupational health care, but the company.

With that one, of course, the -- some of the less profitable agreements went out. And now, we see also some unintended tail effects of the Alpha period. Now what we are doing is, of course, we are rebalancing products, pricing, offering, and it's not going to be either or. It's going to be both, so both profitability and volumes.

Occupational health care, as I said, is the biggest focus area in our agenda currently. It will be turned around with our program. It's a comprehensive exercise of renewing, partly even transforming sales and account management, our product offering to become more relevant and according to expectations by ever-demanding customers. And then, finally, digital front renewal, which we now can accelerate and fast track with our MedHelp joint venture. And our customers will see tangible results already from Q1 onwards on this area.

Positive thing -- a very, very positive thing in our portfolio is consumer side, so combined insurance, Kela 65, out-of-pocket area. Our brand is doing fine. And that's, of course, one of the basic building blocks for boosting this business. We are the most preferred brand when we look at the brand preference development. We have been so. But now, we are all-time high. Also, in top of mind, the company, health care services company that Finnish consumers think about them when they wake up in the morning, that's now Terveystalo for the first time. And that itself gives a very solid base for further improvement in this business. We have invested heavily in services. We invested heavily in digital engagement with our consumer customers. We have invested in Kela 65. And in that particular new segment, we are a clear leader in that developing market.

Finally, Juuso will explain in detail the strength of our finances, the profitability, cash flow and balance sheet. We continue increasing our investments in our digital capabilities. It's an ever-increasing value driver in our business model. And we have some key focus points and developments in that digital ecosystem. For the professionals, we have launched the Ella user interface and digital front door and continue scaling that one up. And that's going to bring tangible efficiency improvements during next year in our sort of traditional brick-and-mortar appointment activities.

For individual care, looking at -- looking from a customer's point of view, as I said, it's very much in the core of our 10x agenda. We are making leaps in efficiency, in transactions related to our incoming traffic and customer contacts. We are going to further improve the leading capabilities that we today already have in patient steering and customer steering. And then, finally, we'll make efficiency leaps in text-based appointments, text-based digital appointments, nurse services and introduce first AI-supported health services in very near future.

In occupational health, as I said already, we are now in a very good position to migrate our occupational health capabilities, digital capabilities into new MedHelp environment. It's best-in-class in Europe. And our customers, as I said, they will see tangible results and fully a new view and sort of better control on their own people, own organization, sick leaves, workability, starting from Q1 next year when we start deploying new system to first customers. All in all, we are, in this digital journey, in very strong, very good place. Our architecture is where it should be. Our initiatives, projects create value, not in years, but rather in months, and we are confident in investing more and getting more yield out of the digital engine.

With that one, over to you, Juuso.

Thank you, Ville. So good morning, all. I'm Juuso Pajunen, CFO of Terveystalo, and let's talk about the financial performance in the third quarter. So first of all, if we look at the whole group, we have the positive margin development continued despite the revenue headwinds. This was, in relative terms, the second best Q3 during the group's history, and the best one was during the COVID times. So what I want to highlight is that our efficiency is in place, our machine is ticking. But also having said that one, we do know that we can't be happy on the growth and especially the revenue development when it comes to occupational health care.

So if we look at the big picture, portfolios in Sweden improved both in relative and absolute profitability, while they are still facing anticipated negative growth. So portfolios in the outsourcing businesses in Sweden, we are still coming from the efficiency hunt and now going for the growth mode. And then, with Healthcare Services, we have the strong margin, but the headwinds in the occupational health and the morbidity have been pushing the growth negative, like Ville also explained a bit on the occupational health part.

So then, if we look first on the Healthcare Services, I will double-click in the next slide on the growth, especially what comes to visit growth. So let's park that question. But all in all, the performance, what comes to the relative profitability, it was really solid. We had the decline in revenues, headwind in the markets. And despite those ones, we were able, through solid cost control and our flexible operating model, to keep our profitability in a good place, especially remembering that this is the low season Q3. And for the growth, we have a strong plan. And in the longer perspective, I still remind you that the megatrends will continue to support our long-term outlook when it comes to the growth.

So then, let's see the visits. Let's address the elephant in the room. So basically, we can split our visits growth. So now, we are talking about the volume. We can split it into different type of buckets. First of all, we have the morbidity. So, that one is basically seasonal. We have no control over that one. And we had plenty fewer visits compared to previous year. And this is part of normal seasonal variation, and it changes annually. We have -- then if we go into the occupational health care, we have different factors behind the decline. We have basically macro-driven components. So the general employment in Finland is lower than earlier, and we have a sluggish economy, and that one also then impacts on the employers' behavior. So basically, they are implementing cost reduction initiatives due to own economic pressures and push, and that one impacts on our demand also. So, a concrete example on that one would be narrowing down the contract scopes on what they offer to their employees.

Then we have the third component, which goes into more on what we have done ourselves. As Ville explained, how our profit improvement program has been progressing and how the -- despite having very high amount of connected employees, our occupational health business was not super profitable. Now, we have very efficient machine, profitable business, and we need to load further volume on that one and get then the benefit of the operating leverage. And for that part, we have a solid strong program ongoing, like Ville mentioned. The name is [indiscernible]. And we are confident that by implementing that program, we will address the weaknesses we have had, and we would expect to see growth in the number of connected employees in the coming year.

In public sector, especially the capacity sales, which is a minor part in the Healthcare Services segment, but it is in a very low level due to the wellbeing county setups and all of that one. But now we have seen that the sales pipeline is opening up and the market is little by little finding its form. And then, we have the positive momentum, Kela 65 consumer insurance market where we have been growing, and we have been able to capture positive momentum. And that one, we will obviously continue pushing. The experiences from Kela 65 are very positive from the patient perspective and also from our perspective. So with all of this one, there are various factors impacting our growth, and we will address especially the occupational health part decisively when going forward.

Then if we go into the Portfolio Businesses, we have clear improvement in profitability. We have been able to improve the EBIT margins continuously, 2.2 percentage points up compared to previous year. And then, we have the momentum in especially public sector business. Outsourcing, we have been guiding you that it will most likely decline EUR 30 million this year, and we are on that trend, on that pattern and continuing on that one. On staffing, we started to have revenue headwinds during roughly a year ago, and now those ones are stabilizing out. And part of that one was also our own selection on how we address the market. But now little by little, the positives are coming, markets are opening up. Wellbeing counties are more and more capable of also buying and willing to buy. So this market momentum is little by little turning. And then, we have the consumer part that is growing. It is performing positively, and we will obviously continue to push on that part. So solid performance improvement in the portfolios when it comes to profitability.

Then in Sweden, we are also improving both absolute EBIT and relative EBIT. We are still showing heftily negative numbers in a very seasonally low quarter. So Q3 is always difficult and weak in Sweden due to how the offering behaves during vacation period. In here, what I'm really proud is that our efficiency continues to ramp up. We have -- we continuously see, on our KPIs, positive development what comes to occupancy rates, but also we start to see that one on a monthly gross margin levels going up. So we are now getting into an efficiency place, and we will load further volumes on top of that one. We have a solid sales pipeline that supports us getting back on track and on heftily numbers. So program is in plan. Improvements are now continuously more visible also in the backward-looking income statement, and we will push forward. However, there is a weak market environment still in Sweden as a totality. So the macro has not recovered yet to the full extent. But despite macro, we are able to push Sweden back to good numbers in the coming year.

Then, if we look at our investments, we've been continuously investing in technology. We have been stating since the Capital Markets Day last year that we will land somewhere between 4% to 5% of revenues in the longer perspective on the investments. Now, we are at 3.4%. We are heavy in digital. We have been talking about Ella, our professional user interface and related flows. You have seen, during the quarter, investments in MedHelp, the joint venture, which will be the digital front door in our occupational health. And then, some may have seen that we have deepening our collaboration with Gosta in the artificial intelligence and ambient scribing, further improving our tools. We have a good momentum. We have solid technology road map, and we have capability to invest. So we will continue on doing on that one. And then, in inorganic growth, the market is there, and we are evaluating different type of opportunities.

And for those opportunities, we had a solid quarter for cash flow. We are now in the green bucket again. As was the negative part normal seasonality, so is this one. Our cash profile has not materially changed, and there is no reason to believe it materially changes either, so normal volatility. We are the Swiss clock we have been. We tick, tick, tick cash. And then, our leverage ratios, 2.1 at the moment, so we have powder to continue investing. So positive financial position, and we can definitely do organic and inorganic investments.

Then, if we look for our guidance, basically this is unchanged. So despite some market headwinds, we reiterate our guidance after the second best third quarter ever. So we are expecting our adjusted EBIT to be between EUR 155 million and EUR 165 million. These are based on the current demand environment, employment levels and morbidity rates. So normal disclaimers, nothing new on that one. What is good to note maybe that the implied range for Q4 seems highish compared to previous year Q4. But then, you need to look back on your notes and remember that in previous year Q4, we had especially personnel-related items that we don't have this quarter -- this year in Q4. So the baseline adjusting needs to be a bit taken to understand our Q4 performance. So all in all, I'm happy to reiterate our guidance, EUR 155 million to EUR 165 million in total.

With these words, let's invite Kati on stage and let's have a Q&A.

Thanks, Juuso. I think we are ready to take questions from the phone lines.

[Operator Instructions] The next question comes from Anssi Raussi from SEB.

Maybe I'll start with your guidance as you mentioned that as the last item here. So you already said that there were some special items in your comparison period. But how should we think about underlying assumptions here? Like, does it require any improvement in the market sentiment or something you are not seeing yet to reach your lower end of the guidance range?

I think that's a very relevant question. So, at the moment, the guidance is based on the current market environment and the current morbidity rates. So it already factors in, like always when issuing the guidance, everything we know up to yesterday evening. So the current guidance assumes lowish morbidity rates and the occupational health market in the conditions we know at the moment.

Got it. That's clear then. And maybe the second question about your occupational health care. So I think you said that maybe you lost some connected employees due to your profit improvement program. So do you think that it's possible to increase the number of employees or connected employees without sacrificing some of your profitability gains in this program?

Yes. Again, a good question. So, as I said during the presentation, it is not going to be either or, so either volume or profitability. It's going to be both going forward. It requires some balancing in our sort of offering and pricing, but we are not going to sacrifice the profitability just for the sake of absolute volume.

Okay. So maybe continuing on that one. So when we look at your -- of course, you showed your appointment volumes and the impact of prices. So how should we think about the pricing going forward in the coming quarters or years?

So, of course, the cycle is very much different than it was, let's say, 2, 3 years ago. The pressure on the -- contracts pressure on prices is, of course, higher post inflation cycle. And we should not -- or you should not expect as sort of a rapid price development going forward. Now, it's more on the how we package our products, what is the mix in our sort of agreement portfolio, and how efficient are we under the hood in delivering those services. And then, final component is the volume. So the growth cannot be, for example, next year, driven so much by the price increases as we have seen during last -- or past 2 years.

There are no more questions at this time. So I hand the conference back to the speakers.

All right. It's a busy results day today. I think there are some 30 companies today. There's one question in the webcast currently from DNB Carnegie from Iiris; 2 parts. Regarding the plan to address the revenue headwind, can we talk about when do we actually expect to see these measures to become visible in the top line and whether we plan to provide any financial estimates of the sales or earnings impact of those actions?

If I start, like I actually hinted a bit, or not even hinted, written out loud in the bridge that we would expect the connected employees' impact to be visible in '26. And that's obviously coming from the nature that if you today win something before it's visible and the connected employees are part of our portfolio, that, especially in the big cases, is a matter of months rather than anything else. So we would expect on '26 the impact. And at the moment, obviously, our financial guidance relates to Q4 and full year '25, and we will come back for the total guidance for '26 along with Q4 publication.

Yes. Again, the only caveat is sort of with what Juuso said, this is that -- as I said before, we are not hunting the volume with the price of profitability. So it is going to be both profitability and revenue and also volumes. So we are not repeating the mistakes that the company did some 6, 7 -- or 5, 6, 7 years ago.

Maybe then, continuing on that one, a follow-up question from Iiris. We talked about an update to our product offering in the occupational health to make it more relevant for our customers. Can we give some examples on what that means in practical terms and where we expect to see the largest positive impact?

It's down to the segmentation of different needs amongst our customers. Of course, we are serving 30,000 -- roughly 30,000 different companies in Finland. And there's a wide spectrum of different type of needs and appetites also to pay for the services. Now, when we are talking about sort of transforming or renewing the products, typically, it concerns the sort of customers who are more sort of keen on looking at the price and value for money type of sort of comparisons. And there, we do have strong means inside the company to steer the services across our vast network.

We have not used them to the full extent. So what I mean is that if there's a company whose main focus is to get things to a certain level and then look at the spend after that one, we have means to serve that type of customer. If there's a customer that wants to maximize the services to the employees, then we can serve that type of customer. If there's a product, which is priced with a fixed contract, we have means to control both the profitability, delivery and cost for that type of customers. And that type of steering capabilities will be sort of utilized to full extent now going forward. So we have the flexibility. We have different type of delivery models, and we are also renewing sort of commercial packaging of these type of different models.

Yes. And of course, MedHelp is a concrete example of the value increase that we can show to our customers in a relatively short term as well.

Absolutely. It's going to be the next level.

Good. Then, a question on the public outsourcing tenders and the outlook there. Besides the tender of Pirkanmaa wellbeing services county, which was won by our peer yesterday, are there any larger tenders opening up at the moment?

Well, there's one other which we know of. And then, I think what's going to happen is that health care counties are watching very closely each other. And when somebody is opening a path, then the rest will follow, specifically if there's a successful implementation of a certain model. So we believe that this is only a first step, this [ Pirka ], and congrats to Pihlajalinna for good competition and a nice win in there.

Yes, indeed. Then maybe a question to both of you. Can we talk about the M&A pipeline? How does it look at the moment?

Yes, if I start, so basically, it is fair to say that M&A opportunities are now little by little emerging in different type of segments. And we are, as we have said, happy to do disciplined M&A when we see an opportunity to fill a blank, whether it's a technology bank, offering blank or other blank. So, that market is little by little activating, and we are and we will be active in that one.

Yes. There's -- just looking from sort of a short history perspective, where we have been and where we are now and potentially will be, the activity on our desk is way higher than it has been for 5 years or so -- 5, 6 years, sort of post-COVID or during COVID times. This is sort of an all-time high activity. And there are sort of real potentials out there. Of course, you always need to get to the -- get over the sort of finish line to get something materialized. But the funnel is there, and it's strongest that it has ever been during my term in Terveystalo.

Yes, definitely signs of picking up there. Then a couple of questions from Matti Kaurola, OP. We mentioned that the insurance business is growing fast. Are there any possibilities to take more market share from other players in that segment?

Well, I would say, it's not growing fast. It's growing steadily. So it's -- coverage of insurances in Finland has been developing positively, and then use of services have been developing positively. We have gained market share over the 2 last years. And then, further gaining market share, of course, requires also new means and new type of value creation for insurance companies. I think we have a strong plan there, which we continue implementing. The bigger moves, in my view, will happen only in 2027. Next year will be more like a steady progress in this segment.

Of course, we have a clear attack plan for 2027 to deepen the cooperation with the insurance companies. Then, maybe continuing on the outsourcing market and the well-being services counties, how do we look at the public outsourcing market in general in the future? Is it attractive? And is it a part of our core offering and our business going forward?

Well, we explicitly said earlier that we are interested in this new type of outsourcing deals. We were part of [ Pirka tender ]. And one can say looking now in hindsight, the competition and the outcome that each and every out of 3 main players were on the ball in sort of pricing and offering the package. So very close margins who won and who did not win. When it comes to profitability, of course, this would have not been sort of the richest agreement, but still value-creating, EPS enhancing, which is the key for our business model. So when this type of tenders come to the market, we are interested.

Indeed. At the moment, we don't -- we have one more question from the phone lines. Let's take it now.

The next question comes from Anssi Raussi from SEB.

One follow-up from me. So you also mentioned these somewhat extraordinary costs last year in Q4 and that there were some one-offs related to employee expenses. But can you remind us like what kind of amount we are talking about that you consider one-offs in Q4 last year?

Yes. So basically, compared to baseline in last year, if you go into the details, you remember that we paid EUR 500 per employee to all employees an extra bonus. And based on the CLA, there was EUR 500 per employee fall all under CLA. So that's the personnel expenses I referred to. And then, if you go into a bit deeper, you see that there was a bit of accelerated amortizations and depreciations in the income statement in Q4 last year. So, that one you need to put your finger into yourself, but normally, forecasting depreciation and amortization is not super difficult.

Thanks. With that, I believe we don't have any further questions on the phone lines or from the webcast. So any closing words? Over to you, Ville.

Well, as discussed earlier, a quarter of improving margins with revenue headwind; strong agenda to further accelerate the areas where we are progressing well and to tackle the headwind in occupational health care; investments with the dry powder provided by [indiscernible], used more and more to digital offering, where the agenda is -- strong architecture is there and delivering tangible results.

Great. With that, we thank you for your time and have a great rest of the week.

Thank you.

Thank you.

Good morning, everybody, and welcome to Terveystalo's Q2 Results Call and Webcast. My name is Kati Kaksonen. I'm responsible for Terveystalo's Investor Relations and Sustainability. As usual, present -- our CEO, Ville Iho; and our CFO, Juuso Pajunen, will present the results, followed by Q&A. We'll take questions, both via the phone lines as well as from the webcast after the presentation.

Without further ado, over to you, Ville.

Thank you, Kati. So let's dive straight to the key highlights of Q2. So Terveystalo profitability journey continues. Q2 '25 was all-time high in absolute profitability. EBIT of EUR 36.7 million and relative profitability, with EBIT margin of 11.4%. This was done even with slightly lower revenue than previous year. Basically all of the KPIs that we are reporting on a very high level, except for the revenue, and that one, we'll discuss in depth later.

The story throughout 3 different businesses and segments is actually very constant. Profitability journey continues. Starting from the smallest one, Sweden execution of turnaround program continues as per plan and is delivering. The turnaround will happen during this year. It's still in negative numbers, but what we are seeing inside the tent, so to speak, is way higher efficiency and profitability improving with lower revenue. Also looking forward, Sweden sales funnel and commercial activities are looking promising. So we will get there.

Portfolio Businesses story continues. Revenue is coming down specifically due to the terminated contracts and some softness in staffing market, but profitability continues developing in a positive way. Also, looking forward, looking at the market opportunities, things are looking bright, and that will be commented just in a minute.

Within Healthcare Services, in our core business, also profitability journey continues. We came down slightly with the revenue, but all-time high profitability in absolute terms and in relative terms. Strategic KPIs in good shape. We acknowledge the revenue organic growth did not materialize during Q2, but we have ample opportunities to grow our business going forward, and that's going to be the story line for the next slide.

So if we dive deeper in -- first of all, into H1 and then look forward how the businesses are tracking and what is the outlook in different markets. Again, if we start from the smallest business, Sweden, we have commented a turnaround journey, efficiency is improving, profitability is improving even with lower revenue. But now looking at the market opportunities and active sales funnel, even mathematically, we can see that revenue is bound to grow going forward. And we are expecting that the next year will be stronger with a stronger top line and turnaround activities being finalized.

In Portfolio Businesses, we have already seen heightened activities in consumer-driven businesses, dental and massage. And now we have also explicit and implicit indications from public system that activity in their buying of our services will increase going forward. So outlook, from a revenue point of view, brighter than we have seen during the last 2 years, so to speak.

Then in the core business, Healthcare Services, during H1, as per forecasted, public business went down. But consumer and insurance business was a good news story. So these combined -- it is always a combination. They were tracking nicely upwards. We were gaining, and we increased the business. Looking forward, the trend will continue and will be further strengthened by Kela 65 pilot that I'll discuss later during the presentation. So consumer-driven business is looking good going forward.

Then we acknowledge that the softness that was not forecasted in our plan was in occupational health. And that's specifically in the buying behavior lower buying activities in our existing customers than we saw during Q1. That's partly seasonal, but it's due to the pressure on different companies with their own finances, and we are taking action on that front. That's going to be a high focus going forward after summer break during H2.

But all in all, looking at the revenue picture and market opportunities, there's, as I said, ample opportunities to grow. This will be further supported by fairly active M&A market, where we are also taking action.

Kela 65, it's an exciting new model. We have, of course, as a backbone public system in Finland, we have mature occupational health care and insurance market, but to make sure that there's access to services for all of the segments, new innovation is needed, and Kela 65 is a positive push to improve access to care for people who typically fall out from a workforce and a fallout from occupational health care services.

Under this scheme, citizens over 65 can use private services with the same fee as they would be using public services. And the expected volumes in this trial will be material, and Terveystalo position to capture its fair share of the market is very good. Looking at the consumer preference in this segment, Terveystalo is #1 choice. And we are all in this pilot. And it's going to support H2 revenue.

We acknowledge that there was a softness in occupational health care during Q2. We are taking action. We are investing heavily in customer-facing solutions as we speak. In technology front, we hope that we will be able to disclose some exciting news in the area in the coming -- during the coming weeks. We will design our services to cater for change market demands and customer expectations, and we will improve transparency so that buying is easier and paying is more understandable and traceable.

Technology continues to be a cornerstone of our development agenda. We have made good progress already with the efficiency in digital services. And that journey will actually accelerate going forward. We are seeing that the whole journey from customer recognition, customer data, patient guidance to digital or physical channels and improving brick-and-mortar efficiency and specifically digital efficiency will allow us to improve efficiency material and also to develop services for our customers with lower price points and, at the same time, higher margin.

So customer steering, customer recognition, customer data, heightened efficiency in the services regardless of the modality will be the key. And H2, we are in a position to make some exciting launches in this area. Architecture is there. Capability is there. And as Juuso will explain later, our ability to invest into this area is there.

With that one, I'll welcome CFO, Juuso Pajunen, to the stage.

Thank you, Ville, and good morning to all of you. My name is Juuso Pajunen. I will present our Q2 numbers to all of you.

So let's start from the group level. I think that it's very good to note, and I'm really happy to state that this is the all-time best second quarter in absolute EBIT and in relative EBIT. And if you look on the EBIT numbers, all of our segments improved. So we have relative profitability improvement and absolute profitability improvement in Healthcare Services, in Portfolio Businesses, in Sweden and even in the reconciliation items. So we are solid, efficient, lean and mean machine when we look how we can digest the revenues.

But then we do know and do acknowledge that we had headwinds in the revenues, and the total volumes did not meet our ambitions like Ville explained. But then it's still very good to remember that we have the megatrends that support us. If we look shorter term, we have the Kela 65. We have the gradual opening of the public market, and we have a solid plan when it comes to the occupational health. And all of this one is tied up with our very strong digital capabilities and the digital transition that is happening at the moment. So record strong second quarter when it comes to profitability and revenues to follow.

Then if we take a bit deeper look under the hood and go to the segment. So we have Healthcare Services, we have the profitability increasing, both in relative terms and in absolute terms when we are looking about the adjusted EBIT. We do note that especially in the consumer market, we have growth. If you look by decision-maker, if you look by payer, then it is captured by the insurance as a payer. So we have a positive momentum in there. We are growing. And we need to remember that all of this one happens despite 1 working day less.

Then if we look our biggest customer group, we have occupational health, which was negative. Also, this one was burdened by 1 working day less, and the volumes were -- or the revenues were down by roughly 2.5%. This is coming from less connected employees. So this is, give or take, the same amount as we had in Q1. But like Ville explained, the buying behavior of our clients has changed mainly due to weak macro and increased cost consciousness. But these are topics that we are addressing at the moment, and we are confident that we are getting forward like we have always delivered on our initiatives.

So all of this one, if we think about, once again, looking forward, we are in a positive place, when it comes to outlook. It's supported by digitalization, Kela 65 and then also the reviving demand, especially in the public sector, of course, depending how you define our Kela 65.

Then if we look portfolios, we have a clear improvement in profitability also in here. We have the termination of low-margin outsourcing contracts. We have an improved operational efficiency. And those ones are, in total, leading to 3.2 percentage points increase in the adjusted EBIT margin and EUR 1 million more in the adjusted EBIT in absolute terms.

If you then look on the different market segments, we have the public market. Outsourcings have been weak as expected. There's normal volatility on the contract volumes. So there's a bit more contract volume loss than we have maybe anticipated. But there's nothing specific in that one. We have the staffing market that has been declining partly to our own tendering selection earlier. And then the market has been weak when well-being counties have been ramping their operations up and establishing themselves.

It's good to note that in both of these material segments within portfolio, we see positive movement. There are a couple of bigger outsourcing or partnership contracts coming to be tendered now in the second half. And we have the staffing market, little by little, coming back. As an actual fact, we have just won Itä-Uusimaa, own doctor services for elderly people. And this just highlights that, little by little, also this market is revitalizing.

And then if we look at the private demand, this echoes what is happening in the Healthcare Services. We have a positive trend continued in the dental especially.

Then going for Sweden. Also in here, EBIT is up a bit. EBIT margin is up, and we are progressing in our profit improvement program as planned. Second quarter was burdened by 1 working day less, and also the timing of the public holidays or bank holidays was such that it incentivized people to stay Friday also off the office. So the calendar impact is a bit heavier, especially in Sweden compared to other regions.

But despite these, we are improving the profitability, which basically highlights that we are reaching a point where we can state that we are efficient. We have clear operational KPIs such as utilization or occupancy rates that are now on levels that we have never seen in Feelgood earlier. And this one highlights that once we start loading the volumes into the machine, and we move forward, it will yield results as we have been saying for the past 18 months.

So all in all, we start to see the improvement and with an efficient machine, it will come through the whole income statement in the future.

Our investments, there's nothing new in here. We continue to invest in organic. We continue to do disciplined M&A. During the quarter, we have made 2 smaller M&As in the mental health part and then in the dental part. But at the same time, it's good to note, like Ville has also explained and said, that technology is the place where we have our eyes on, whether it is organic, but it could be also inorganic. So we will accelerate our technology agenda when we are going forward. And the EUR 42 million, 3.2% of the revenues, is still below the levels we have been seeing for the past year or so.

Looking at cash flow and the net debt position. We have a strong leverage ratio. Net debt to EBITDA is strong. It's developing positively. And remembering that in second quarter, we paid out half of our annual dividends. And if you remember, the annual dividends are materially higher than they were in previous year. So we continue to have lots of powder in our balance sheet.

And if we look at operating cash flow, it is a tad bit soft. We have normal seasonality in the net working capital. We had some bigger outflows during the first half, mainly taxes in the first quarter and then in the accounts payable side for the second quarter that don't increase the cash flow into the levels that our profitability immediately would indicate. But that's normal seasonality. And we are in a nice position, especially when it comes to accounts payables that we can -- due to our very stable and predictable environment, we can accept earlier cash flows every now and then when we get the financial benefit for that one. So this type of behavior creates a bit of volatility on the cash flow, but it's chosen volatility.

So all in all, we have a strong balance sheet. We are in a positive place when it comes to cash generation, and it has minor volatility, as you can see from the stability of the crash.

Then let's go to the guidance. So first of all, I think that when we are now clarifying our guidance structure, it's a natural step on our journey within how we guide the investor community. We have started from EBITDA percentage and growth, and then we have basically changed our financial targets to be EPS. And now what we are taking is the final step on that structure that instead of guiding profit and growth separately, we are guiding profit growth, so absolute EBIT. And we think that this is the best proxy for the EPS development on an operational level.

And with that one, our guidance is stating that our full year '25 adjusted EBIT is expected to be between EUR 155 million and EUR 165 million. And then if you are mathematically oriented, you quite quickly grasped that this is, in material parts, same guidance as we have issued earlier, but we have narrowed the range. So this is a clarification on the earlier guidance and removing one mathematical rehearsal from the analyst Excels other market participant Excels in that sense.

Basically, the assumptions behind the guidance remain the same, excluding that we are expecting that the portfolios in the outsourcing operations, we'll lose EUR 30 million instead of EUR 25 million.

Then if we take a bit wider look and we look for the H2 and we think about where we are standing, we are in a position where 5 out of 6 KPIs are ticking in the right direction. We have the cultural ones, employee engagement, indicating that our people are happy is on a high level. We have the client satisfaction in place. We have the medical quality in place. We have the operational efficiency and cash flow in place, whether you look at EBIT margins or leverage ratios, and now we have all of our eyes on growth, which you understand that the market is coming back. We have the megatrends supporting and we have positive underlying momentum in those ones.

So with this one, I'm happy with our all-time high Q2, and iterating our guidance, our full year EBIT will be EUR 155 million to EUR 165 million.

With these ones, let's jump to questions, Kati.

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

[Operator Instructions] The next question comes from Iiris Theman from DNB.

Thanks for taking my questions. I'll ask these one by one. So firstly, regarding your volumes in Healthcare Services, those were down by 6% year-over-year. So are there any drivers in H2 that could basically reverse this trend? Or do you expect a recovery more likely next year?

So if I start, actually, I went through the revenue split in Healthcare Services presentation. The big lever -- positive big lever is Kela 65 and continuing trend in insurance business. That has been positive for quite some time. Then within occupational health care that was discussed in detail, the Q2 softness was partly from buying behavior, and that's something that could reverse, especially when we think about typical Q2 when companies are buying preventive services, it typically is more sickness related services, which are not sort of controlled so much by a payer. So that depends more on the average morbidity rates that we'll see during H2. But there are positive things that will boost the revenue during H2. We will work on the occupational health care segment.

Okay. And then regarding your guidance, so you are no longer providing sales guidance. So does this imply that you are not expecting growth this year, given that your H1 sales were down by 3%?

No, basically, you shouldn't take any kind of guidance from non-guidance. So to be specific, this is a natural step on that we have been continuously highlighting after the CMD that we are doing everything that enhances our EPS. And from that perspective, we have taken our guidance to be on absolute EBIT. Then nobody needs to guess percentages on percentages, and it is absolutely clearer way of doing that one. But you shouldn't take any kind of notion that we would have feelings about where the revenues are going. This slide that we have now on the screen pretty much described the growth drivers. And to me, at least, it looks fairly green if you look the next 12 months.

Okay. And probably still regarding sales headwinds that you mentioned in the report. So did you anticipate this level of headwind?

So as I think I said in the presentation, there were maybe -- majority of this one was forecasted in Sweden. We anticipated negative trend. But the buying behavior with the existing customers were slightly lower than -- buying activity was slightly lower than we expected due to negative macro still in Sweden, in Portfolio Businesses equally. Most of this one was forecasted, some softness in the staffing business, but there, we see a sort of a reversing trend already. In Healthcare Services, the only sort of nonforecasted thing was that within the existing customers, the buying behavior was slightly more passive than it has been during typical Q2.

And probably one question still if I may. So regarding ASP, it was up 5% even though comparison figure was quite high. So what is basically driving ASP? Can you explain which customer groups? And is this a good proxy for the rest of the year?

By ASP, do you refer to average sales price?

Yes, in Healthcare Services.

Yes. So basically, our average sales price is always a bit volatile depending on the structure of who buys and what buys. So I think that we have -- it is clear that year-on-year, we have higher sales prices than we had in '24. And as we have stated since CMD that you can't bank on that we will continuously increase the prices in that type of level. So at the moment, the best proxy is to look sales mix from previous year and adjusted with kind of known price escalations.

The next question comes from Anssi Raussi from SEB.

Yes. A few questions left. And if I start with the occupational health care, which was, of course, clearly weak in Finland. So you mentioned this corporate customers' buying behavior as one reason. So was it more about customers buying less services or tenders in the services included in contracts? Or did you actually lose some corporate customers?

It's actually -- sort of for full transparency, it's a combination of different things. So we are down with the contracted employees by 4% since last year. It has not changed throughout the year this year. But buying activity has come down. The 4% is a combination of sort of the market shrinking slightly. Depending on the source, the employed personnel within our segments has shrinked from 1% to 2%. So that's part of that one.

But then we have lost some agreements. We have been very -- throughout the profitability journey, we have been very prudent and strict with our pricing and protected profitability rather than volume. And with the sort of post-inflation environment, of course, companies are more and more cost conscious and are looking at the price more and more. So there, we will most likely see -- or do some changes to our policies, but we have that room because we -- the profitabilities or the margins are going up all the time.

Then the buying behavior as such is a combination of sort of a scope within the contract. There's a slight change and volatility in that, but nothing material. It's more like activity. So within the pressures of -- on different companies to the macro, that's pressing the buying activity down -- did so during Q2.

Okay. And if we look at -- you mentioned that the next 12 months, you expect flattish trend in occupational health. So I guess, of course, you have some kind of outlook there, internal outlook, but is it more about the number of working days? Or is this flattish expectation working day adjusted expectation to say?

Well, this is more like -- we are not guiding as such with -- this is more like anecdotal view on how the market is tracking in our terms. So don't take this one too sort of mathematically. And we are not adding new numbers to our guidance. But what would -- this is stating is that we don't expect sort of new changes to the market during H2. Of course, we are taking action, and we have some new tools kicking in early in H2.

Okay. Got it. And maybe one question regarding this Kela 65. So how should we think about the margin impact? So how is the pricing in these services from your point of view, if we compare to your typical business and services?

Yes, it's a combination of sort of appointment price and margin and then diagnostics, and diagnostics prices are low in our sort of spectrum. It's -- they are not lower than in some of the lowest corporate contracts, but they are low. And of course, it's going to be the combination of these 2. But actually, the margin contribution will be clearly positive. It's a new inflow of customers, and especially the appointment price allows us to get healthy margins from these new customers.

[Operator Instructions] The next question comes from Sami Sarkamies from Danske Bank Markets.

I would still like to go back to some of the topics discussed earlier in the call. Related to previous discussion, you said that you're down 4% in contracted employees within occupational health care. Was this the case already in Q1? Or was this change during the first half of the year?

Yes, it was the situation coming into this year. And there's always volatility. There's outgoing and incoming customers, but really, the starting point is the same as where we are today.

Okay. So this is not explaining the sequential change within occupational health care?

Not from Q1 to Q2. No, the buying behavior and morbidity rate is the explanation.

Okay. And then if we think about Q2, you're talking about changed buying behavior. Is that purely related to preventive services?

Buying behavior as such, with the sickness-related services cannot be controlled. So when people are sick, then they are sick. Preventive services are, of course, of a different nature. Then sickness-related services are, of course, related to scope of the services. And within certain agreements, there are some changes in the scope as well, but they are -- against the big picture, they are not material.

Okay. So most of the softness was in preventive, but also some in sickness-related services? Hello?

Yes. We just confirmed what you said.

So I understood it right.

Yes.

Yes.

Okay. Good. And then there were some bad publicity during Q2 regarding some over-invoicing cases. Did Q2, to any extent, suffer from those, for example, from any compensation payments? I mean any onetime impacts from those cases impacting Q2 negatively?

No, no, not from that angle. We can see a sort of building behavior change. Also, there's sort of inherent additional control amongst the professionals, and because the billing behavior is always a distribution and some self-control was imposed maybe too much during Q2. So that's something that we can see in the numbers, but nothing related to sort of any one-offs or compare sales.

Okay. And then finally, regarding operating cash flow, quite a bit lower than a year ago, the first half of the year. Can you still give the main reasons for that? And what are you expecting in the full year relative to last year?

Yes. I think that already last year when we closed Q4, we reminded that we had an exceptionally strong Q1 and a strong Q4 in total. So we had a solid cash quarter in those ones, and the timing meant that the total cash flow was quite high for '24. So this needs to be always bear in mind when you look at comparables.

And what comes to Q4, I think the LTM trends and those ones are fairly good place is calculate EBIT and calculate operating cash flows and see those trends, how they move a bit back and forth. But we don't guide cash flows, so this is just a tool to evaluate.

Then if we look first half on this year, so in Q1, we had tax payments that you see very transparently in our cash flow statement, that we basically paid '24 taxes out in '25, which is quite natural when you have a material profit improvement in place. Then the taxes come a bit after the improvement. Then otherwise, if we look Q2, we have, on the positive note, our accounts receivables have been decreasing basically because we had 1 banking day more. So the last of June was Monday. Then we have accounts payables that have been -- we have been paying more out money to our vendors due to timing of the invoices, which is also normal volatility. So these ones go to different direction.

Then I referred a bit on my slide for this topic on that. Sometimes, especially when it comes to IT services and software, you get fairly good payment terms if you are willing to commit to a term and pay beforehand. And these type of items, with our very stable and predictable business, we like to utilize. And that's why if you look at our balance sheet, you see that we sum up accounts receivables and other receivables, you see that there's actually increase. So we have taken a benefit, which is EPS enhancing due to very low interest rate levels in these type of agreements.

So that is the final component why you see that we have a receivable in balance sheet related to tools and software that we tend to use also in the future.

Okay. And then finally, if we look at the revenue development, it's down 3% in first half. Are you expecting a stronger second half? And what would be the main levers?

Yes. So if we reiterate what I said also earlier that if we look forward, first of all, in the longer perspective, we have the megatrends. We do know how aging and all of that one is happening. Then if you look early on the second half and we look at this picture that Ville through carefully. So we see that public sector is little by little opening up. So we do see that in the short end, staffing, for example, we now have tenders, we have won tenders, and it looks like that this market is coming little a little back. Those ones will happen on time to support also second half.

The bigger outsourcing contract will not have an impact in the second half. Those are, by nature, longer agreements. And if we've been -- the service provision will not start this year. Then if we look otherwise, we have the consumer insurance market. You have seen the plan. We have been talking about the occupational health. So then on this one, the biggest component is basically Kela 65 that, as said, Kela is expecting 1 million visits, and we are confident that with our top of mind and preferences, we have our share of that one. So these ones will support growth also in second half.

There are no more questions at this time. So I hand the conference back to the speakers.

Thank you. Maybe going back to the occupational health care, there is a question from Joni Sandvall from Nordea. Can you please clarify what actions are we taking on the occupational health care to boost top line development?

There are several -- it's actually a program that we have embarked into. A lot has to do with the digital development, specifically providing new type of services to SMEs where we are not so strong today, additional transparency for larger customers and easier buying, easier tracking, easier tracing, easier impact reporting. And all in all, sort of improved and enhanced efficiency in our services.

We have a solid agenda to be implemented, and we are sort of full throttle on with this one from August onwards. And yes, we hopefully have some sort of supporting news coming up in the coming weeks for the specific segment and technology.

Great. Thank you. Then maybe over to you, Juuso, just a question on the Easter timing and how does that explain the differences in turnover. Easter does tend to happen every year, but it was -- timing was a bit different.

Yes, of course. So we are in a business where a number of working days impacts our revenues. When people are not working occupational health or when you don't have a working day, you have far less population who use our services. So every working day less reduces our revenues, and that's purely natural.

And now Easter was timed differently than previous year, which led to having 1 working day less in the quarter. And then you can also think about that, especially in Sweden, which I highlighted, that when these bank holidays or national holidays occur also impact people's behavior. So for example, this year, 1st of May was Thursday, and everyone who works in professional services or kind of white collar job understands that, that Friday was probably half a day or even increased holiday absence day, meaning that people are away. And all of that one then impacts on how occupational health services especially are used. So it's, in the end, simple mathematics.

Thank you. SO then over to Ville, could you open a little bit more about the upcoming technological changes? And what's the sort of potential impact and time line to P&L impact regarding this one?

So the fundamentals that we have in place are there. Also, architecture-wise, we are where we should be. We are actively implementing and executing. So this is not a sort of dreaming type of scenario. We will have launches in our core service ERP called Ella during H2, which will boost productivity in our brick-and-mortar. It has already boosted productivity in text-based services, in chats. And that one, on that basis, the journey will continue, adding more modules, more automation, more AI into that core ERP. And potentially is that's going to be combined with even more intelligent and more comprehensive customer steering engine. Now we are good in steering customers when they are coming in from certain segments through certain agreement. But we are making this one comprehensive.

So through whatever channel you come from, be it physical or be it call center, be it booking engine, the customers steering logic will be the same, and through intelligent customer steering, the right channel, right service from the first activity onwards, we can lower the cost and improve the sort of a solution rate and time to solution for our customers. We -- with this one, we can also be active in customers steering. As we know, in digital services, we have a higher potential for efficiency than within brick-and-mortar. And that shift is going to change over time.

As to the timing, as I said, there will be launches throughout this year. The journey has started. We can see already improving efficiency and continue next year. And then really, the journey is endless, but we are not talking about sort of a 5-year hockey stick. We build on existing platform and keep on delivering.

Anything that you want to add, Juuso?

No, I think that was very comprehensive.

Great. At the moment, we don't have any further questions from the webcast. So maybe final words? Over to you, starting from Juuso.

Yes. As stated, we have recorded record-high Q2. What comes to EBIT, what comes to relative EBIT, we are really proud on that one, and we will continue delivering. And as you heard, we have also headwinds, but we are fully capable to steer this boat in different wind directions.

Yes. Efficiency and profitability journey continues in all of the segments. Specifically positive thing is that since, I guess, decades, there will be a new element kicking into the private health care, which is Kela 65. It's not a silver bullet, but it's a very strong indication that this market continues developing and continues providing opportunities for Terveystalo.

Great. With that, thank you for your time, and have a nice rest of the week.

Thank you.

Thank you.