Good morning, everybody, and welcome to Terveystalo's Q1 2020 results call and webcast. My name is Kati Kaksonen, and I'm responsible for Terveystalo Communications, Investor Relations, and Sustainability. As usual, we'll have a short presentation prepared to you, presented by our CEO, Ville Iho and our CFO, Ilkka Laurila. After the presentation, we'll have time for your questions and we'll take questions, first from the audience, then through the phone lines and afterwards through the webcast. Please feel free to send in your questions for the presenters. Without further ado, I'll give over to Ville then. Thank you, Kati. Good morning on my behalf from sunny Helsinki. Very nice to know that it's been a while since we had also live audience in these events, and now we do have, which of course is very positive and manifests the fact that we are getting back to normal. That's also part of the storyline for Terveystalo and during Q1, shifting demand environment. Key headlines from the quarter. Demand continues a strong growth has been remarkable for Terveystalo platform, year-on-year growth over 18% and 10% of that one are from Finland and I would say for the material part, organic growth. COVID testing still active, but sliding down as expected. Core business is gaining scale. Growth has been good, and we have been gaining market share. As we discussed, especially during last quarter, opportunities for further growth and scaling up our business, they are developing nicely. We have a new market in Sweden, which is doing good. We have a digital platform which we have introduced first commercial application for. Key numbers from Q1, as said, 18% growth, which is really high and really satisfying to see that we are gaining strength and actually all of our businesses are growing nicely. Adjusted EBITA slightly up in absolute numbers year-on-year, margin slightly down year-on-year with the sales mix development. Digital appointments are still growing, almost 400,000 digital appointments during Q1, and that will be discussed later in the presentation. COVID testing, as said, are still active. Very good customer satisfaction numbers, which is very important going forward. Maybe the most clear manifestation of the demand environment is doctor booking rate, which is still abnormally high at that 94%. Supply, not demand, is limiting the growth of our business. We have not during last couple of quarters discussed so much M&A activities, but activity is high actually in that field. Our M&A strategy continues to be threefold. We are strengthening our scalable and core capabilities with bolt-ons, and we are scaling now our capabilities also to Sweden. We are growing in adjacencies and targeting areas where our market share is not high today. We have targeted some specialties and niche players which contribute to our capabilities. There's a list of conducted acquisitions during Q1, and as you can see, the activity has been high. Sweden, as I said, last time around, is looking good. Our strategy in Sweden is threefold and in three stages. We are strengthening the organic the occupational healthcare platform in Sweden with organic development, putting our scalable capabilities in the Swedish market, but also with acquisitions and acquisition funnel in that field looks good. At a later stage, hopefully not too far away from now, we are introducing new services to the portfolio, and most likely that's going to be conducted through acquisition. End game will be more coordinated healthcare portfolio, much like what we are running in Finland. Highlight from Sweden during Q1 was the acquisition, or let's say together with nice organic growth and improving profitability also was the acquisition of Nämndemansgården, which is a leading addiction treatment company in the Nordics. It's contributing nicely to revenue and service portfolio in our Swedish platform, some 15% growth with that one single acquisition. Digital, as said, continues to ramp up nicely. We are again during Q1 breaking records. Just as a reminder why we are doing this one, we are improving primary care and access to care and productivity with the digital healthcare. We are saving time for our professionals. We are saving time for our customers. We are increasing productivity of single care events, but at the same time we are improving capacity and maximum utilization rate throughout the network with going from location restricted services to network-wide digital services. As I said, what we are doing is we are transforming primary care. The traditional model is the one where physical GP is the gatekeeper for the rest of the services. We have introduced a hybrid model where digital is growing much faster than physical appointments. Also, what we are doing is introducing more intelligence in steering of the customers and matching in better way, in more efficient way, right customers to right services and right professionals. With this care chains, we are also introducing more pre-scripted care chains, which is also one key element for better customer value and productivity. Digital platform, we have a twofold short-term plan with that one. We are, as I said, we are scaling the capabilities into our Swedish platform. There's a clear plan how we are going to do that one during this year. Certain elements of our digital suite will be introduced to Swedish model, and that's going to be sort of a proof point for scalability of Terveystalo international digital expansion. At the same time, there's been a clear demand from public side to digital platforms and we have now, during Q1, introduced our digital remote platform, white label platform for our public services. With those highlights, I will now give over to CFO Ilkka Laurila. Ilkka, please. Thanks, Ville, and good morning on my behalf as well. Like usually, we'll then go through a couple of financial highlights in Q1 result. Like all Ville already highlighted, the strong growth continued in Q1. The revenue growth was at 18.3%, of which Feelfield goods share was at 8%. All the growth in Finland was almost organic, so quite nice growth level in Finland as well. Adjusted EBITDA grew at 2% versus comparison period with 11.8% relative profitability. If we compare those numbers to previous quarter, we were actually able to grow faster than in Q4. In Q4, the growth was at 17%. On the other hand, a slightly slower increase in adjusted EBITDA growth than in Q4 when it grew at 6% roughly speaking. We have also kept our disciplined financial strategy show that our balance sheet continues to strengthen, which then enables us to continue our investments in growth, especially when it comes to the digitalization, as well as obviously to catch M&A opportunities when they show. Good cash flow development as well from the operating activities at EUR 24.8 million. If you take a bit deeper look on the revenue development, on the left-hand side you can see the portfolio is nicely balanced, 43% of corporate, 26% followed by 26% and 25% from private and public customers. Sweden and other segment is now contributing 7% of the total revenue at Terveystalo. On the right-hand side, you can see that actually we were able to grow faster than in Q4 in all other customer groups than with the exception of private customers, in which still had a quite stable nice growth number even though slightly slower growth than in Q4. Very nice 30% growth in our largest customer groups in corporate segment. That's maybe a highlight in Q1. Nice growth numbers also in different public customer group services. Service sales combined with the occupational healthcare for the public customers again grew at 19%. That also includes those new services that Ville mentioned. Staffing, nice growth there as well, 12%. A few words about the COVID testing volumes. We still have quite nice volumes. You can see it's still on quite nice levels. Obviously we have been benefiting during the last two years or so from the COVID testing activities. Still on a quite nice level, coming down during the first quarter. We are still expecting that the volume in the following six months will continue a downward trend. I think we all understand that no one knows how the sort of what would be the pandemic situation when the autumn again comes, and that is something that we will see then later. From the public sources, we can also see that we have been able to gain market share also in these services and businesses. Relative to our local competitors, we have been able to sort of have higher volumes than, relatively speaking compared to their volumes. Couple of words on profitability before we go a bit deeper on the cost development. You can see a couple of sort of trends here maybe highlighting especially on the right-hand side. You can see that if our adjusted EBITDA margin was now at 11.8%, which is obviously lower than compared to 2021. If you take a bit longer view sort of of the profitability before the pandemic in Q1 2019, we are in almost same level in terms of relative profitability that we used to be before the pandemic level. It was 12.1% in Q1 2019. Even there we had a extremely high demand and good development in 2019. Now we are having that close to the same level of relative profitability, 11.8%. A couple of words on cost development. Starting from the top, if you take a look at the purchase of the materials, it increased more than the revenue development. Quite actually natural reasoning for that is that our surgery has actually developed quite nicely during Q1, and obviously it requires lots of expensive implants, et cetera, and that's why we faced the increased material expenses in Q1. On the employee benefit expenses, 33% growth in there. Roughly speaking, if you sort of split that growth, let's say that roughly 40% actually is coming from Sweden versus last year. One-third is coming from the public customer groups, mostly deriving from COVID testing as well as those new services which we have launched to the public customers, which Ville mentioned. Then the remaining one-third is coming from our underlying or our sort of core network health centers and clinic networks and hospitals. In there, the key drivers were one is sort of the high activity in the COVID testing, still even higher activity than a year ago. Then on the other hand, we like, I think, many Finnish companies faced quite heavily sick leaves during the Omicron wave, especially at the beginning of Q1 in January and partly in February as well. Now obviously, the situation is improving when it comes to the sick leaves as well. In other operating expenses and marketing et cetera, you can see that we are investing more now on marketing than a year ago in other operating expenses. That's a bunch of different kind of costs in there, like usually everything related to M&A and all that kind of admin related expenses, which increased quite a bit in Q1 as well. Overall you could say that quite, I would say, sort of natural reasoning for the cost increases, and that's why we are not so worried about the cost increases at this stage. There's a sort of logical reasons for those increases. Wellbeing sales, again, nice growth, 9% versus a year ago, 25% versus two years ago. Nice growth continues there. Like Ville already mentioned, even you could say, maybe a bit surprisingly, even though that we faced tough comps already with the digital visits still having 20% growth, it's a fantastic growth numbers I would say and tells something about the sort of our capabilities in there. Then on the other hand, how the sort of the customer behavior and the has also changed during the pandemic. It has, at least so far, showing plateauing development, but it continues to grow still with very high growth numbers. Couple of words regards to our financial development and our balance sheet, et cetera. If we take a bit longer view, you can see that actually our operating cash flow is developing quite nicely. Combined with the EBITDAR growth has actually resulted in the situation that our leverage ratio is now on that 3.6%, which is very strong number in our case. You can see the historical development in there. 2018 is somewhat distorted by the acquisition of Finnish Attendo's healthcare service business back in the days. Since then, it has continued to sort of going down and showing downward trend. We have kept the disciplined financial strategy and been able to sort of then continue investing organically to digital platform and inorganic growth avenue, especially in Swedish and other markets. That has resulted the situation that especially if you take a look at the left-hand side, even though that our net debt has actually remained rather stable during the last couple of years, with the improvement in operating cash flow and the adjusted EBITDA, our leverage ratio has gone down quite with a quite nice pace. So has also happened to our gearings, which is gearing number, which is now at 85%, and the equity ratio is also somewhat strengthening up to 43% now in Q1. That kind of concludes my financial section. I will hand over back to Ville regards the- Thank you, Ilkka. regards the outlook. Thank you, Ilkka. A couple of words around the outlook, maybe only highlighting the changes that we have made, since last time around. Obviously, COVID testing continues to decrease, for natural reasons. Of course, we can all be very happy about the pandemic finally seeing maybe the end date there. Consumer confidence for obvious reasons might take a hit. All in all, demand environment for Terveystalo services continues to be very strong, highlighting the fact that supply will be the restricting factor for growing our business for next couple of quarters. Maybe just summarizing the key highlights from Q1 once more. Really the highlights is a strong growth, a good development in core businesses. Sweden doing good, both organically and inorganically, and then digital scaling up really nicely. With that one, I think we'll go to Q&A. Thanks, Ville and Ilkka. I think that we could take questions from the audience. First, Jutta from SEB. Thank you. Jutta from SEB here. Three questions. First of all, on the supply issues you referred to, I assume it's the personnel, so a familiar topic. What can you do about that? How can you increase your supply still to meet that strong demand that you are seeing? Thanks. Yes, first of all, we are talking about personnel. We are talking about professionals. Rest of the services in further down in service chain or care path, we do have available capacity, be it labs, imaging or hospital services. We are of course recruiting. We are leveraging the number one employer position in this industry. It takes some time. It's one by one picks from the market. Of course, we are investing a lot in increasing the productivity of sort of a core care activities inside our system. Those are the activities. It's a tough undertaking, but I'm sure we'll manage. Maybe still adding on that one, so that obviously those small bolt-on acquisitions that we also do, those also contribute to the sort of supply bottlenecks. Because typically, in those acquired entities, the booking rates are typically, in most of the cases, are in a lower level compared to our case. Again, the acquisitions that we have made in Finland are small, practically speaking, but that is one way to also recruit new professionals to our ecosystem. Okay, thanks. The second question is on the profitability. Now you were down on EBITA roughly two percentage points. If you will split that, how much is the sort of sales mix slash COVID test effect, and how much is growth efforts? Because I would think that the growth efforts will presumably continue, whereas then the COVID change or shift in demand probably is something you can work on yourself. Without giving any sort of specific sort of split, I would say it's quite evenly balanced. The relative profitability decline is actually quite evenly balanced with, let's say, three components. Swedish business has a lower contribution, it goes without saying. Then on the other hand, the pricing of the COVID testing is coming down. That has another impact. New services, especially for those public customers which we mentioned. Then on the other hand, the really tough situation in Q1 with the sick leaves that had also impact and also the other COVID-related activities in Q1. We still had a quite big manning, especially at the beginning of Q1 when it comes to COVID vaccination, and obviously volumes with the COVID vaccinations are, like we all know, going down quite dramatically nowadays. Okay. Thanks. The last one, a classic one, but the Sote reform, any risks or opportunities you see there? Yeah, it's a classic, but it's always a very good question, a relevant question. Starting from the demand, I can still reiterate that demand is massive and it's piling up, so to speak. On the other hand, when these new districts are doing the sort of organizing work, their focus is not in buying new services. Basically, what they are doing is they try to figure out how to pay salaries for their new employees. Really, the organized basic things. Most probably we'll see a fairly sort of stable period from this moment on until the end of the year. Really the new innovations, services packages will then start emerging early next year. Saying that what happens next year is more of a risk or opportunity for your business? I would say it's definitely a opportunity. Okay. Definitely. Good. That's all. Thanks. Thanks, Jutta. Do we have any other questions from the audience at the moment? Nope. I think that we are then ready to take questions from the phone lines. Thank you. Our first question comes from Grace Lee from Jefferies. Please go ahead, your line is open. Hi, thank you for taking my question. I've got sort of three different questions to start. I will just split them and separate the question. Number one on Ukraine. Can you just give us a thought on, you mentioned about prolonged situation potential impact to Terveystalo's services demand. Can you just share your thoughts on the how you're sort of thinking at least, your thought process of scenarios, phasing of that, the likely impact magnitude to your services? You noted that demand impact, but is there potential some price impacts too as well? Thank you. If the phone line is not perfect, if I got the question right, it was around the impact of Ukraine on our demand and that forecast. I would say that there's obviously more uncertainty in the marketplace for every business right now. This is a situation which we have, during our generations, seen in Europe. Nobody can really predict where we end up with this one. In our case, core demand is really strong. As I said, we are not able to cater for all of the demand right now, especially on private side where we are spilling. And hence, the sort of immediate impact to our services should not be material. I don't know, Ilkka, if you want to. Well, yeah, especially the direct impact, it is very limited. We haven't yet faced any issues when it comes to the procurement or supply. We have a very professional procurement department which has already sort of prepared for all kinds of situations for the last two years. We haven't had any issues when it comes to medical equipments or healthcare supplies or anything like that. Then on the other hand, like Ville said, for the sales or for the top line, it's very limited. Actually, the one sort of minor impact is that we are sort of having a sort of privilege to provide services to Finnish immigration offices. We do health checkups and other healthcare services to those Ukrainians that are entering to Finland. On a longer-term impact. Thank you very much. If the situation prolongs, then of course the macro drivers that are related to employment and consumer confidence would have an impact, but that is the case for all companies operating in European markets. Thank you for that. Hopefully, you can hear me better. On the supply and wage and cost inflation in general, just maybe, one or two questions. About the pricing power you noted and then sort of offset those inflationary risks, that must depend obviously on the payer segment. Can you just share your sort of thoughts on how you can mitigate on one basis of the segment and how much you'll be able to offset the high inflation that we have been expecting and seeing already in 2022? On the certain material supply component shortages, is there any particular that you want to particularly highlight? Thank you. Again, if I got it corrected, our pricing power when it comes to our services is, well, Finnish system is quite unique in a way that we have full freedom for pricing our services, excluding a couple of outsourcing deals that we have with the public market. For private and corporates, we price our services as any business. Traditionally, Terveystalo's ability to increase prices when inflationary elements have been in place or even in normal years has been really good. We do have pricing power. In this demand environment, that shouldn't be a risk for Terveystalo. Ilkka on cost side and supplies, I think probably should. When it comes to the procurement, actually, I think we are quite lucky on that side for that reason that we have been able to have a at the year end and at the beginning of year quite long-term contracts with our key suppliers, so which is mitigating the inflationary impact for the costs. Obviously the wages are still under negotiation. Especially when it comes to the nurses, they are still under negotiation. The end result for that is still, as of today, unknown. For other expenses, during this year, we don't expect any major impact for our cost structure through the inflation. Maybe just as a reminder, most of our physicians are private practitioners, so there's no wage inflation pressures related to that employee group. Well, thank you. I do have a last question. Digital visits, the increase that you've seen in Q1, which is quite strong, what's this driving the growth of that? Is that from new potential customers or is it the existing customers coming back for more services? How would you split those two different impacts? That's my last question. Thank you. Yeah, I would say, they are not new customers. They are customers that are using Terveystalo services also in physical channels, but it's more efficient, more convenient for customers. Especially in this type of demand environment, the efficiency and productivity gain is really a nice contribution to our business as we speak. Good. Thanks. Do we have any other questions from the phone lines? Thank you. Our next question comes from Sami Sarkamies from Danske Bank. Please go ahead, your line is open. Okay. Hi. Thanks. Coming back to weak operating leverage in Q1 that was already discussed. You were saying that this was impacted by change in sales mix and extra costs. Could you please elaborate on what you mean by change in sales mix? And are you able to quantify any of the extra costs that you had in Q1? Maybe, yeah. That's one thing that I forgot to mention is that in Q1, the sales mix, like always in healthcare, it's a bit complex, but if you bear with me. Basically what happened in Q1, especially when we compare to last year Q1, we were facing especially high demand when it comes to the infections and sort of ear, nose, throat and eye infections and traveling related diseases already have picked up versus a year ago. Then on the other hand, this kind of classic private customer secondary care specialty doctor visits and demand like gynecologist, internal diseases, brain, circulatory systems, et cetera, demand for those services was actually slightly down in Q1. We were doing lots of primary care, acute care, and that kind of stuff. Typically, those classic private specialty care visits typically do have more referrals, relatively speaking, to diagnostics, meaning labs, imaging, as well as also to surgeries. That's the sort of. We have more than 50 medical specialties, but if you take a sort of deeper down, that's the sort of mix change that is happening at the moment. That is quite some different if we compare the situation in before the pandemic, when obviously the private demand actually sort of was more related to especially the specialist care visits and specialized doctors and that kind of stuff. That's the kind of mix. It's more appointments, it's more primary care at the moment. Yeah, just to add on that one, earlier, in one of the quarters we have, or maybe even multiple quarters, we have discussed the impact of COVID testing and we have said that all of our lab services and also imaging and even surgeries, they do have high margin. What Ilkka explained is, in a way, a situation where the normal referral flow, if you may, is not at normal level. At the same time the COVID related services are sliding down both in price and volume. In longer term there shouldn't be any reason why this shift for this referral flow would be permanent. The specialist care has been sort of the key service for private healthcare in Finland and Terveystalo, and I don't see any solution for the bottlenecks in public side from that angle. The question on the cost. Okay, that's very helpful. What about the cost? Cost. Costs. What was the question related to costs? The additional costs. Yeah, I said. Additional costs. Yeah, those were, yeah, related to those sort of new services, temp staffing because of the sick leaves, and actually higher number of the COVID testing versus year ago. Okay. I would ask a follow-up. Are you expecting operating leverage to improve already in the near term, or will that require more time? Well, if I may comment, I would say that most likely we don't have a crystal ball on that, but it will take some time because it's a sort of shifting demand environment that I described is also linked to the supply. If you think about the occupational healthcare customer, which is contracted client, they go to see occupational healthcare doctor or primary care GP doctor, and that is actually sort of eating into the capacity from the private customers. So that is sort of one of the elements that is driving that shifting mix is the supply-driven. Obviously most likely it will take more time than couple of months to sort of completely manage the supply issues that we have. Yeah, I would agree. The demand, as we have said many times, that is not the issue. Demand is there. It is strong, but in a way, fixing the supply issues and supply bottlenecks and really being able to steer flows also to higher margin businesses will be the key. It will not happen over one week or one month. It is historically speaking, the shifts that we have seen during COVID, they are I would say biggest that this industry has ever seen. In a way, recalibrating the system will take some time. Okay, thanks. Finally, would you be able to comment on your profitability in Sweden during Q1? Development has been positive. Let's put it this way. Yeah. The sort of the EBIT number or EBITDA numbers in the segment for Sweden is reported and, as you can see, it's improving, like the top line as well. Okay, thanks. Thank you. As a reminder to register for an audio question, please press zero followed by the one on your telephone keypad. Thank you. There appear to be no further audio questions. I'll return the conference back to you. Thank you. We have at least one question from the webcast. Could you remind us how much of the Finnish healthcare services are done by public and/or private operations? The split of provision in the Finnish system. Ilkka, do you remember the percentages by heart? Uh - Roughly 75% is. 75%. Yeah. Roughly 75% is public, sort of paid and public provision, and I think 17% is the sort of the private private, and the remaining is then publicly funded, privately provided. Private-private, this is a bit under 20% at the moment. Yeah. That is the split. In Finnish system, the private provision is abnormally high compared to other European countries and then again, private provision and a public funding part is abnormally low. Yeah. Typically we are talking about that segment when we are talking about opportunities in Sote reform. Yes, exactly. A question from Carnegie, Iiris Theman. Can you comment on what kind of wage increases is fair to expect? And a question to Ilkka. Can you provide any comments on why you are leaving the company? Maybe starting from the first questions on the wage increases. Yeah. As discussed earlier, when we think about our professionals, on doctor side, 90% are private practitioners, and hence, price or wage increases does not impact that part of the business. The biggest group in our portfolio which will be impacted is obviously nurses. If you have followed the discussion there, now the public contract or agreement is being negotiated. Under the arguments are out there. What they are looking for is higher than average salary increases and average has been in Finland roughly 2%. I think private side is in a better position. Still they most likely will be a higher than 2% increase for the nurse wages over the coming year and maybe two years. As again said, the pricing power that Terveystalo has provides a cushion for us when it comes to the profitability. Yeah. For the latter part of the question, there's no specific reason for that one. Next Monday will be my 10th anniversary at Terveystalo, and I just thought that 10 is a good number in school and why not in work life as well? That's the maybe only rational reason. This is not my last quarter result. I will stay here for the second quarter as well, so not sort of finished journey yet, but can already say that the last 10 years has been much more than I could have ever imagined when I joined Terveystalo. It has been a quite fantastic hell of a ride. Yes. We look forward to having you around at least one more quarter still and- Yeah. I will join to the AGM. I promised already to Ville that I will join to the AGM. I have a couple of tough questions in my pocket. Yeah. Looking forward to that one, obviously. Yes. On my behalf, even though this is not a time for goodbye, I of course want to thank Ilkka for great contribution for Terveystalo story. It is much of what we have today is Ilkka's legacy and it's been also these two years have been hell of a ride. As I said, for our internal audience, it's been 95% fun and 5% painful, and I think that's a good ratio for CFO. Thanks. I think that we don't have any further questions from the webcast or phone lines. Any other questions from the audience? One question, still from Olli, Inderes. Please go ahead. Yeah. Just repeating the question. What is the proportion of digital visits and how high can the proportion go in the future? Now, I'm asking the percentage of the quarter one, but, English, please. Sorry. In English. The ratio for Q1, I actually haven't calculated. The last year, if you recall, the numbers were such that we had 8 million appointments or visits altogether, and 1 million out of those were digital. Now we are still scaling up quite nicely. The ratio is improving. There are different sort of guesses where this will go, but in primary care, theoretically you could provide more than 50% of the services through digital. Maybe that sort of upper limit for that development. You still need needles in some services, so they will be physical. Thanks. I think that we have no further questions, so we thank you for your time, and have a nice weekend. Thank you. Thank you.