Good morning, everybody, and welcome to Terveystalo's Q3 results call and webcast. My name is Kati Kaksonen. I'm responsible for Terveystalo's investor relations, sustainability, and communications. Today, as usual, we'll have a short presentation by our CEO, Ville Iho, and our CFO, Juuso Pajunen, and we'll follow that with a Q&A. We'll take questions both from the phone lines as well as through the webcast. Without further ado, over to you, Ville. Thank you. Diving into Q3 key highlights. The main headlines for this quarter can be seen here. Margin improvement, which is of course the most important takeaway for this quarter, is progressing well and is progressing as planned. The key contributor for the margin improvement, obviously, is our profit improvement program, which is on track and will deliver the targets ahead of schedule, which is a very good place to be right now. The organization has worked hard, and we are overachieving against the targets set earlier. Of course, we are now working against worsening macro, and we need that overachievement. Looking at our agenda, looking at different businesses, different segments, and customer groups we are working with, we can be confident that with our Alpha agenda, profit improvement agenda, and our versatile customer base and diverse service portfolio, we can progress also during worsening macro environment and headwind. Key numbers from this Q3. Slight uptake in our revenue. Most importantly, of course, the EBITA is progressing as planned against the target of 12% in 2025. Again, we can say that we are at plan comfortably. NPS customer satisfaction all-time high, so the latest number is 86.3. Given any service industry, any service, this level is world-class. We have been improving our profitability, but as you can see, at the same time, we have been investing into the services, into the products, and our customers are more satisfied with Terveystalo than ever before. Same can be said of our professionals. We are again voted as number 1 workplace in healthcare in Finland, which of course, going forward is extremely important for continuing to improve our supply to grow our business. Good numbers and very good place to be here today. Looking at our business segments, the workhorse for the profit improvement obviously is Healthcare Services boosted by our profit improvement program. Now nice uptake in the profitability in Healthcare Services. Portfolio Businesses also improving. There you have a little bit more diversified picture looking at its business. There, for example, you can see some softening in consumer-related services. Overall, they are also Portfolio Businesses, and the businesses under that portfolio are making good progress. Sweden, during Q3, had a slow start from summer season and holiday season, and that can be seen in the numbers. Of course, we'll work hard on Sweden with the Swedish team to face that headwind, but also to diversify the business portfolio so that it will be more resilient as we are in Finland with more versatile service portfolio. As said, Profit Improvement Program is progressing as a steam train. We are ahead of our schedule. We'll achieve the targets ahead of schedule, and the financial target of 12% in 2025 is at sight. The macro environment, as everybody knows, is not the most positive, not in Finland, nor in Sweden. We have, as said, versatile customer demand. We have versatile service portfolio. The most volatile and sensitive customer segment in our services obviously is consumers, and consumer-driven businesses are mostly impacted. For our main business with the consumers, the positive balancing factor will be that Kela reimbursement levels will be increased during next year. In the consumer segment with the low consumer confidence, there's no reason for Terveystalo to be negative going into next year. Kela reimbursement uptake is a positive news for this fairly sensitive part of the business and will support the growth of Terveystalo going into next year and also profit improvement. All in all, we can take one step back, look at the situation one year ago. It has been a steady improvement for Terveystalo, and we are here with great confidence saying that we are on track and we'll deliver our targets. On the side of financial progress, as said our customers are extremely happy with our services. We continue investing in integrated care, impactful healthcare with digital, with processes, and also bringing new technology in healthcare. For Terveystalo, this is not testing, this is not piloting. This is not sort of sugarcoating something tiny to make headlines and stories. We are doing this already in scale today. For example, our AI-driven symptom tracker is in scale in use for close to half a million people already in Finland. Same will apply for Nightingale Health, which will be implemented for our B2B customers step by step. In scale, new technology, value-adding services for our customers and continuous improvement. End-to-end services which are fluent and work in physical and digital alike. With that one, over to Juuso. Good. Thank you, Ville, and good morning all. Let's talk about Terveystalo financial performance. I'm Juuso Pajunen, the CFO of the group. If we look executive summary, we continue on the strong profit development. We are improving our profits, adjusted EBITA by almost 70%, that's coming from the improved sales mix and the progress of the Profit Improvement Program. We have the top line growing. It's mainly driven by the successful pricing and the sales mix, but we have some underlying volume growth also in there. From the headwind perspective, we have the COVID tests, some 40,000 tests compared to previous year Q3 not being done anymore. Then we have the ending of outsourcing contracts and the weak Swedish crown that are having a negative impact on the revenue. With this type of a performance and macro looking ahead, we are happy to reiterate our guidance for 2023, which remains unchanged and saying that we will grow in the top line perspective. The adjusted EBITA percentage will be between 9.1%-10.1%. If we take couple of steps deeper and we start thinking about the revenues, what has happened if we start from the Healthcare Services? We have a really solid growth in the appointments. We are going forward both with our pricing and on the sales mix perspective. The diagnostics, despite looking negative, we need to remember that we had the 40,000 COVID tests that we don't have this year anymore. Actually the underlying diagnostic has been recovering really well, and we are continuously approaching the pre-COVID levels also on the relative terms. The appointment mix is different compared to 2019, and we had the delay in the flu season, which is also visible both in the appointment perspective but also in the diagnostics and in the care parts. All other services are continuing positive growth. This includes imaging, it includes the operations and so on. Healthcare Finland, despite the loss of COVID and despite having one working day less, is showing a solid growth forward. If we look Portfolio Businesses, we have the biggest impact in here is coming from the outsourcing contracts. This is mainly coming from the ending contracts, but we also do see changes in the contract structures such as the specialty care that has been earlier within a contract. In some contracts, it is not there anymore. It is a pass-through item for us, it doesn't come with a profit impact, but it means that we don't have the cost and we don't have the income, which is visible on this one. If we look everything else underneath there, we have the staffing that continues on a normal cycle, normal pace, normal revenues, normal profitabilities. What we do see in the other part we have in the dental and to certain extent in the massage services, we do see that now the weakening consumer demand, or consumer confidence is impacting the demand of these type of services. We don't see it elsewhere, but we do note that there is the weakening macro that is impacting some parts of the portfolio. If we look Sweden, we had a slow start after the holiday period. Basically, when we are talking about preventive healthcare, which is mainly driven by the corporate clients or basically only driven by the corporate clients. When the clients come back later on the vacation and our people follows that type of vacation pattern, it has had a negative impact. Sweden is having a weaker macro. Both of those ones have impacted negatively, but the EUR 2.1 million is mainly driven by the weak Swedish krona. I remind you, like always, this is a translation difference. The amount of Swedish krona translates in a different number to EUR due to the almost 12 SEK per krona current FX rates. With all of this one, with one day less lost COVID sales, we are delivering adjusted or underlying organic growth of 6%, give or take. I think that within a normalizing seasonality quarter, we are getting to a right direction. If we look the revenues a bit further in a timeline, we have the 1.5% growth. Our adjusted EBITA is 7.5% compared to 4.5% previous year. Now on a rolling 12-month basis, we are at 9%, which is a clear improvement and a steady improvement. If we look to Q2, if we look to Q1, we have actually been walking the talk. We have been implementing our Profit Improvement Program, and you can see the results clearly in our bottom line. We are one percentage point ahead from the lowest point, and we have been continuously been able to bring it further forward. If we take a little bit look on what has happened from EUR 12.5 million to EUR 21.1 million, almost a 70% improvement in the numbers. The big machine Healthcare Services has improved EUR 5 million. The sales mix that was impacting positively in the top line is contributing heavily on the profit improvement. The pricing actions we have taken have been overcompensating the inflation impact. We have been successful not only in the price increase perspective, but also the pricing structure and channel leadership or channeling of our clients. We clearly see the Profit Improvement Program with a positive impact. At the same time, the cost control has continued. If we look the whole group and the personal expenses, we are below previous year Q3 numbers. We have been able to progress in all fronts when it comes to Healthcare Services. Portfolio Businesses are basically flat in absolute terms. In the relative terms, it has a 0.4 percentage points improvement compared to previous year. The main factor in here is that the outsourcing contracts, we are diminishing in revenues. They are not highly profit-making either. The other part of the business is doing quite well. The inflation hits here in a different manner due to mainly the outsourcing contracts. If we look the Swedish part, EBITDA is decreasing slightly, and this is driven by the slow start post-summer and the weakening macro in there. At the moment, the weakening macro, as far as we understand, continues in the coming quarters. If we look a bit on the segment other, almost EUR 4 million improvement. The segment other is a result of a conscious decision to have the IFRS adjustments included in this one. Basically it would not be totally unfair to allocate material part of this EUR 3.8 million first to Portfolio Businesses and some part of that one back to Healthcare Services. In our current structure, the IFRS adjustments are included in here, and this one is correlating into what you saw in Q3 2022 report, where there was a red column public minus four. A big component is related on that part. We do not operate in that type of a segment structure anymore, and we have now a clear, far better reporting structure. This type of IFRS adjustment have been, at the moment, carried in the segment other. Basically we have the strong performance in Healthcare Services. We have the portfolio's relative profitability is improving, and we have the FX headwinds in Sweden, including the slow start after summer. All in all, operationally, we are improving quite well. If we look our CapEx, we have now stabilized on the rolling 12 months basis into the EUR 48 million. We are now somewhat on par CapEx and depreciation levels from the same topics, and we are slightly below 4% in relation to revenue. I think Ville demonstrated quite well in his technology part or last slide that what we are doing, we are improving our offering. We are bringing in world-class AI products, digitalization, but at the same time, we are investing in the machinery, we are investing into the premises, and that is visible throughout our operations. If we then look a bit on the balance sheet, we have continued solid balance sheet and our credit profile is good. We have delivered a strong cash flow, EUR 174 million on rolling basis. In Q3 especially, we had positive net working capital development. If you recall the Q2 results call and the presentation, we had some delays in recovering our accounts receivables, especially from public sector. Now that ketchup bottle is open again, and we have been able to normalize our accounts receivables levels, which is visible then in our cash flow. At the same time, the net debt to EBITDA is at 3.1, including the IFRS 16. If we take a bit deeper look on that one, our interest-bearing debt is continuously going down, supported by solid operating cash flow. At the same time, our IFRS 16 liabilities have been going up and most likely continue on that path. We are in a phase in our operations and in our lease portfolio that we are evaluating which ones to take further in which pace. In the current real estate market condition, it is a good moment to go through your real estate portfolio to renew your lease agreements. At the moment, we have a positive momentum for our perspective on that part. We will continue on those efforts looking forward also. Then a positive note, if we look our debt portfolio, we have alongside with the Q3 release, we are telling that we have renewed our term loans, EUR 135 million with a minor maturity point in 2023, but material maturity points in late 2024. We have renewed those ones with the three-year agreements forward. Now we don't have maturity points or any kind of material maturity points in 2024. We have a very solid, very stable debt portfolio that supports our agenda. That is very good to note. At the same time, we have renewed our revolving credit facility on EUR 40 million. That works, of course, as a backup for any kind of growth initiatives we may have. Solid cash flow, strong balance sheet, and a good credit profile with no maturity points in the coming 12 to 18 months, or at least no material maturity points. This is a good base to go forward with our agenda. With all of this one, 70% improvement in Q3 profitability, 6% underlying organic growth. We are happy to reiterate our guidance. It is a 9.1 and 10.1 range. It has been the same since we initiated the guidance, and it is fair to say that our current assumption is in the middle of the range. The estimates are based on the same expectations as earlier. Solid development on our profit improvement program, that the consumer demand is not materially weakening, or the consumer confidence doesn't materially weaken the healthcare services demand, and that the employment levels continue to be on the reasonable levels at the moment. At the same time, it doesn't include any material changes in the public sector behavior, and it's fair to say that the current known changes Ville also presented on the Kela, are expected to impact 2024 forward. We are not expecting a material impact on Q4 when it comes to the public sector behavior. Finally, any M&A, as normal, is excluded from these figures. With these ones, I once again reiterate our guidance. We have a strong momentum, especially in our profit improvement program. We will grow in the revenues, and we will deliver 9.1 to 10.1 percentage point EBITA, adjusted EBITA this year. With this, once, thank you. Thanks, Juuso. I think that we are now ready for Q&A. Do we have any questions from the phone lines? If you wish to ask a question, please dial *5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial *5 again on your telephone keypad. The next question comes from Anssi Raussi from SEB. Please go ahead. Thank you, hi all, also thank you for the presentation. I have three questions, I go one by one. The first one is about your profit improvement program. You mentioned that the adjusted EBITDA impact of the profit improvement program was EUR 23 million in the first three quarters of this year, and at the same time, your EBITDA improved roughly EUR 10 million-EUR 11 million. Basically, your underlying EBITDA decreased by 16% from the last year if you exclude the profit improvement program. What I'm trying to understand here is that, is this underlying trend something we should expect in the coming quarters as well, or how should we think about this? How much of this actual EUR 10 million-EUR 11 million EBITDA improvement would have been achieved even without this profit improvement program? Thanks. Okay, if I start with the answer. Of course, looking at the numbers, you need to remember the COVID tests, 40,000 COVID tests. If you adjust the EUR 12.9 million EBITDA from previous year and you take the COVID test, some 40,000 out, you see that the baseline is significantly below. The underlying operations were also improving, excluding the COVID, quite clearly actually. On the continuation of that one, I think that there's similar amount of COVID tests in Q4 2022 also included in the figures. That one you need to, of course, take down from the baseline and then start building up the change bridge as you see best. That is pretty clear, at least in my opinion. Can you remind me on the second question? No, I was just thinking about it. Yeah. No, go ahead, Anssi. Anssi is only starting, no second question yet. No, I think. Yeah. Yeah. That was the first one. Thanks. The second one is about Sweden, of course, we saw that the profitability was not there where you would have liked it to be, I guess. What about the coming quarters and the big picture here? What are your plans regarding Sweden going forward? Well, if I start from a helicopter perspective, when we went into the Swedish market, the plan, as stated very clearly many times, has been all along that we'll diversify the portfolio outside of the current occupational healthcare sphere. That is still the strategy. We are not there yet, that's why, as Juuso also described in his presentation, the portfolio in Sweden is more sensitive to macro changes and special impact during this quarter was the slow start from the summer season. Macro is what macro is. Of course, we'll fight against that one with normal measures. There will be some added focus jointly into the current business with the Swedish team, long-term target is to diversify the business portfolio in Sweden. Make it, of course, more profitable, also more resilient to different changes in the macro landscape. Yes. If we look forward, as far as I understand, Swedish macro continues to be weak on Q4. Maybe a reminder that in Q3, we had one working day less, and in Q4, there will be one working day less. In a heavily corporate business model driven by working days, it is normally 1.5, 1.6 percentage points of the total quarterly working time when you have that one less. Those two headwinds we will have in any case in Sweden, at least in the quarter four. Also if we reflect the Swedish results from quarter three day per week, not within our ambition, but if you adjust it for that seasonality, we can still see that on year-to-date basis, we are making progress. Not on the pace we would like to, not on an absolute level that we should be, but we are making progress. We have an agenda, and we will continue on that one. Okay. Understand. Maybe just if you think about the current macro environment in Sweden, do you think that it is offering you some opportunities in terms of M&A, or is it so that maybe you have to first fix your profitability and build the base of so-called how do you see? If I start again. I think we have a solid model for occupational healthcare preventive services in Sweden. Swedish team is doing very good job in there. There's not so many tricks that you can do to improve that core business in current structure. Macro, as I said, is impacting that one more than our Finnish business. There will be a drive to diversify the portfolio. As per to your question, yes, the M&A market is interesting for us in Sweden, and we can see from the valuations that there are opportunities. Of course, a lot of things need to come together whenever you are making an acquisition, but it is in our agenda. Okay. Thank you. That's all from me. Thanks, Anssi. Do we have any further questions from the floor? The next question comes from Sami Sarkamies from Danske Bank. Please go ahead. Hi. I have three questions. I will take this one by one. Starting from seasonality, you didn't say anything about this regarding Q4. Are you expecting a normal seasonality, and what would be normal in your case? Yes, I think that from seasonality perspective, one component in Q4 that is good to remember is that Q4 is pretty much the most volatile quarter if you look the past data. The volatility is driven from unknown factors, so how flu season comes, and that one is not yet ongoing, so it is very difficult to estimate what type of a flu season we are getting. Normally, that starts in November and then continues up to February. That one we are expecting with the current information, normal flu season. The second part is coming from calendar, where we do know that we have one working day less compared to previous year. Obviously the second part of the calendar impact is coming, which working day you are missing. Mondays are, let's say from revenue perspective, better working days to have, and Fridays missing then is a different thing. That one we do know, and we are expecting it impacting negatively compared to previous year with the one-day impact. Couple of million EUR less revenue, and then you can calculate some kind of a margin out of that one, and you get that calendar seasonality impact compared to previous year bridges. If I continue a little bit, as Juuso said, the volatility comes from the fact that during Q3, it's a peak season for acute care, especially for respiratory infections and care-related. Those what we can say today that we have supply in place. We are ready to meet that big demand better than last year. It's very difficult to estimate what type of, as Juuso said, flu season we'll get there at the end of the day. Okay, thanks. Moving on to macro, which you talked about perhaps more than in the previous quarters. Let's recap what have been your own observations so far and what are you assuming, thinking about Q4 and next year? Yes. Well, from our perspective, of course, macro needs to be mentioned because this is a fairly dire season for Finland, also for Sweden. Against that one, as I said in the presentation, we do have versatile business portfolio, customer portfolio, and we are able to row against the wind even in more negative macro. That will be supported, as I said in my part, by Kela reimbursement, especially with the consumers, that's going to, in a way, hedge the consumer demand against worsening consumer confidence, as said by Juuso earlier. We are not isolated in this environment, and it, in a way, warrants a comment also from our part. Yeah, I have nothing further to add to that one. You think about your business in Finland, have you seen softening demand both at private and corporate segments? Corporate is very solid, very stable. What we have done willingly is that we have, in a way, discontinued some of the unprofitable contracts, and that can be seen in the volumes. As I said, that's per our will and design. For consumers, we don't see any decline. It's fairly flattish. From a seasonality point of view, you see some more volatility. As said, based also on the Kela reimbursement renewal, I'm not worried about that segment either. There are some smaller segments where, as we saw also during COVID, the consumer confidence is impacting fairly fast. Dental care, massage therapies in our services are typically those kind of businesses where one can see a softening of the demand. We are able to, in a way, tackle that one with the profitability measures. As per to your question, there are a couple of smaller segments where you can actually see what's happening outside Terveystalo. Nothing to add on that one either. Okay. Then finally, regarding outsourcing contracts, I think we have earlier given a number on the headwind for this year. How is that looking at the moment? Do you expect more to come next year? Basically, we have the slide in the appendix. We put it back after previous year-ended questions. Our current best estimate is that 2024 looks flattish, and then we have the EUR 20 million decline. At the same time, I would encourage you to read carefully the news because as you see from our peer group, Pihlajalinna and Mehiläinen, it's a far bigger topic for them, and they have been disclosing what is happening in their portfolio. Also in this one, we are not living in an isolated world, and public sector is continuously looking to this direction to evaluate what to do with various types of contracts. Okay. I don't have any further questions. The next question comes from Joni Sandvall from Nordea. Please go ahead. Thanks. Maybe I start with the public sector demand. Have you seen any pickup, and what are your expectations actually for 2024? Yes, very good question. We estimated earlier that we'll see some sort of practical new applications of private-public cooperation during H2 this year. There are some small elements moving actually in the pipeline. What you can see today is that the sales pipeline for the public segment grew nicely up until post-summer. Now it has basically stalled, and the reason for that is simply the fact that healthcare districts are running out of money. They are trying to not buy. It's not going to be sustainable. We all know that one. The care deficit is growing in uncontrolled way. The progress is not as fast as we thought it would be for this year. For next year, one can still say that we expect that market to come alive. Care deficit is growing. As I said, it's on record high level, and people need their services. Okay, thanks. Maybe continuing with your 12% EBITDA margin target in 2025. I think, Juuso, you mentioned that you are now tracking towards the midpoint of the margin guidance, and given the prolonged inflation, do you need some additional actions to actually reach the target? Could you give us some roadmap towards this 12% target? Yes. Basically, I can reiterate what we have been discussing earlier. We are very confident on reaching that target. We have now shown 9.1%-10.1% guidance this year, and midpoint obviously is 9.6% on that part. We do know and we have reported the run rate achievements. We will obviously update you after the year has gone so that you have capability to evaluate the 2024 better. At the moment, above EUR 50 million, above EUR 30 million profit impact means that there's some EUR 20 million at least for the next year on the run rate improvements. That at the EUR 1.3 billion-EUR 1.4 billion revenue obviously translates already a material improvement for next year. At the same time, we have a roadmap including similar type of items that we have today within our Profit Improvement Program to bridge the final gap for 2025. Obviously pricing sales mix is one topic on that one, and the continued operational improvement and efficiency items will be the other part of that. Okay, thanks. That's clear. Last question from my side. Sales are now up 2% after three quarters. How should we read your guidance of revenue to grow? Does this 2% growth reflect your guidance? Yes, I would iterate what I have said earlier after Q1 and after Q2, that grow would probably mean something in that direction. As you know, the headwinds on the outsourcing contracts and so on, and then the positives that we have demonstrated on the underlying organic growth. What can I say? I reiterate what I have said in previous quarters, that this is the ballpark we are talking about. Okay, thanks. That's all from me. Thanks, Joni. I think that we don't have any further questions from the phone lines. There are no more questions at this time, I hand the conference back to the speakers. Thank you. We'll move on to questions through the webcast. Ronnie has sent a question on the weakening purchasing power of the consumer. We've already talked about it, so I won't go into that again. A question on the diagnostics, on the underlying basis. What are the factors behind the fact that we are still below the pre-COVID levels in the diagnostics volumes? If you two could talk about a little bit of that. What we have been able to achieve over last couple of quarters, basically after Q3 last year, is that in digital channels we are clearly improving in diagnostics. The care paths are closer to care guidelines in our digital channels. Also, the flow steering or channel steering has improved so that the brick-and-mortar is winning a little bit more than digital channel. Respiratory infections, talking about flu season coming up, there in this type of short-term needs, we have been improving also clearly. Where we are not seeing yet the improvement is chronic diseases. That's an area where the organization is currently working hard to get that one back on track and to care guidelines, which we are always talking about when we are talking about diagnostics. We are not inventing any diagnostics by ourselves. We are basing all of our actions on care guidelines. A minor note on the Q3 was the fact that the flu season started a bit. Absolutely It started a couple of weeks later. Yeah, that relates back to the fact that that's the part that we have been able to fix, but we did not have the load. Yes. We've already talked about the Sweden a bit, but maybe just to reiterate, how do we see the weaker demand environment in Sweden impacting the outlook for the end of the year and next year? Or was there some timing specific issues on this quarter alone? Well, the timing specific issue is long holiday season. I don't know why Swedes are enjoying the summer so much. I guess the weather was good or something, but it was a very slow start, especially in August. That's specific. The macro, of course, we need to fight against and find measures to still improve the business. Yeah, I think we have covered this question quite well. Actually, Swedes have two weeks more vacation than we have in Finland. Lucky them. All right. Maybe just reflecting on the overall macro a bit. A question from Iiris Theman, Carnegie Investment Bank. If we look at the history, how has the sales developed in a softer market environment in general, in Healthcare Services in particular? Healthcare Services, when we are talking about full healthcare, has been really defensive and resilient against macro shifts. We are not expecting that one to change. Yeah. Good. A reminder, if you're following the webcast, please send your questions. We still have a couple of minutes left. While we wait for new questions, maybe just a reflection on we started the profit improvement program from a quite different note a year ago. If you reflect a bit on the past 12 months, where do you see that we have made the biggest improvements and what are the biggest successes so far? I think it has been a fairly 360 overhaul of what we are doing in many parts of Healthcare Services. We have better structure, better transparency, better accountability, clear targets, clear roles. On top of that one, of course, we have the Alpha program, a profit improvement program, which is boosting the speed of the improvements. They are said many times today, we are ahead of schedule. Organization has met the challenge very nicely and they are delivering. Going forward, we can more and more base our actions and improvements on the normal business structure rather than Alpha program. One needs to remember also that this has not only been profit improvement during last year. Of course, that's significant and that's most important change. We have invested in our services. As I said in the presentation, the customers are more pleased with our services than ever before. We are bringing in the market totally new type of services, totally new type of ways to deliver Healthcare Services, and we are doing that one in scale, not tiny bits. Good. We don't have any further questions from the webcast, over to you, Juuso. Any final words or closing words? No, I would like to thank you all attending this situation or this event, however you want to call it, and wish you a pleasant fall time and reiterate we are confident what we are doing, we are confident with our guidance, and we are confident with our 2025 12% target. Thank you. Thanks. Thank you.