Terveystalo Oy Class A ((FI:TTALO)) has held its Q3 earnings call. Read on for the main highlights of the call.
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In the latest earnings call, Terveystalo Oy Class A presented a mixed performance, reflecting both positive and challenging aspects. The company reported significant progress in margin improvement, digital investments, and consumer business gains. However, these were offset by revenue challenges and issues within the occupational health care segment. The management emphasized their commitment to addressing these challenges while leveraging growth opportunities in the consumer and digital segments.
Positive Margin Development
The earnings call highlighted a positive development in the adjusted EBIT margin, marking it as the second-best Q3 in the group’s history. Despite facing revenue headwinds, efficiency improvements contributed to strong operating cash flow and positive EPS development, showcasing the company’s resilience in maintaining profitability.
Sweden Turnaround Progress
The Sweden segment demonstrated continuous improvement in efficiency and profitability. The management expressed optimism about positive volume development in the upcoming year, signaling a promising turnaround in this market.
Strong Consumer Business Growth
Terveystalo’s consumer-driven business, particularly in insurance and out-of-pocket services, showed robust growth. The brand preference reached an all-time high, indicating strong market acceptance and consumer trust in their services.
Digital Investments
Significant investments in digital capabilities were emphasized as a key driver for efficiency and growth. The company is exploring new initiatives, including AI-supported health services, which are expected to enhance service delivery and operational efficiency.
Revenue Headwinds
The company faced a 5% decline in top-line revenue, with adjusted EBIT slightly down. This was attributed to challenges in occupational health care and low consumer confidence, which impacted overall revenue performance.
Challenges in Occupational Health Care
The occupational health care segment experienced lower volumes due to a decrease in connected employees, narrower contract scopes, and reduced service use, presenting a significant challenge for the company.
Swedish Market Softness
Despite improvements, the Swedish market remains muted, with the segment not yet achieving the desired profitability levels. The company is focused on strategies to enhance market performance.
Public Sector Slowdown
The public business sector saw slow buying activity, contributing to lower volumes. This slowdown posed additional challenges to the company’s revenue growth.
Forward-Looking Guidance
Terveystalo’s guidance for the future focuses on margin improvement despite a 5% revenue decline. The company aims to achieve an adjusted EBIT between EUR 155 million and EUR 165 million for the fiscal year. Emphasis was placed on a comprehensive program to revitalize the occupational health sector and continued growth potential in the consumer-driven and insurance segments. Strategic investments in digital capabilities and selective M&A are expected to drive future growth, with significant improvement anticipated in 2026.
In conclusion, Terveystalo’s earnings call presented a balanced view of achievements and challenges. While the company made notable strides in margin development and consumer business growth, it faces revenue headwinds and challenges in occupational health care. The management’s forward-looking guidance suggests a strategic focus on digital investments and market stabilization, with a positive outlook for future growth.