TERVEYSTALO PLC
Report of the Board of Directors and consolidated financial statements 31 December 2022
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Terveystalo Group’s Report of the Board of Directors and Consolidated Financial Statements 31 December
2022
Report of the Board of the Directors
Consolidated financial statements, IFRS
Consolidated statement of comprehensive income .................................................................................................. 32
Consolidated statement of financial position ............................................................................................................ 33
Consolidated statement of cash flows ...................................................................................................................... 34
Consolidated statement of changes in equity ........................................................................................................... 35
1. Corporate information ........................................................................................................................................... 36
2. Accounting policies for the consolidated financial statements ............................................................................. 36
3. Business combination ........................................................................................................................................... 49
4. Revenue ............................................................................................................................................................... 55
5. Segment information............................................................................................................................................. 56
6. Other operating income ........................................................................................................................................ 57
7. Material and services ............................................................................................................................................ 57
8. Employee benefit expenses ................................................................................................................................. 57
9. Depreciation, amortization and impairment .......................................................................................................... 58
10. Other operating expenses .................................................................................................................................. 58
11. Financial income and expenses ......................................................................................................................... 59
12. Taxes .................................................................................................................................................................. 60
13. Earnings per share ............................................................................................................................................. 62
14. Property, plant and equipment ........................................................................................................................... 63
15. Intangible assets ................................................................................................................................................. 66
16. Impairment testing of cash-generating units including goodwill ......................................................................... 68
17. Investment properties ......................................................................................................................................... 70
18. Associated companies ........................................................................................................................................ 70
19. Share-based payments ...................................................................................................................................... 71
20. Financial assets and liabilities – carrying amount, fair value and fair value hierarchy ....................................... 74
21. Financial risks ..................................................................................................................................................... 75
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22. Trade and other receivables and contract assets .............................................................................................. 78
23. Cash and cash equivalents ................................................................................................................................ 79
24. Share capital and invested non-restricted equity reserve .................................................................................. 80
25. Financial liabilities ............................................................................................................................................... 81
26. Trade and other payables ................................................................................................................................... 81
27. Provisions ........................................................................................................................................................... 82
28. Defined benefit plans .......................................................................................................................................... 84
29. Collateral and contingent liabilities ..................................................................................................................... 84
30. Related party transactions .................................................................................................................................. 85
31. Group companies ............................................................................................................................................... 88
32. Group’s key financial ratios ................................................................................................................................ 90
33. Calculation of financial ratios and alternative performance measures ............................................................... 91
34. Reconciliation of alternative performance measures ......................................................................................... 93
35. Subsequent events ............................................................................................................................................. 96
Parent company’s financial statements, FAS
Parent company’s statement of income ................................................................................................................... 97
Parent company’s statement of financial position .................................................................................................... 98
Parent company’s statement of cash flows .............................................................................................................. 99
Parent company’s accounting policies and measurement and recognition principles and methods ....................... 99
Notes to the parent company’s financial statements .............................................................................................. 100
Signatures to the financial statements and Board of Director’s report
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Operating environment
Target markets
Demand for health services was strong in Terveystalo’s target markets throughout the year. Nevertheless, the growth was tempered by the
lack of supply, which was also impacted by higher sickness absences compared to the comparison period. In Finland, the demand was more
focused on short care pathways. The demand for diagnostics and other services related to COVID-19 decreased significantly from the
comparison period due to a decline in COVID testing. In Sweden, the demand for occupational health services and particularly for
consultation for organizational management and harmful use was growing. The growth of demand for digital services and remote
appointments continued strong. The demand for mental health services and preventive well-being services continued to grow.
A tight labor market and high inflation create growing pressure on operating costs, including wages. The employment situation is strong,
but significant changes can affect the demand for occupational health services. The long-term growth prospects are good for Terveystalo’s
addressable markets in Finland and Sweden; underlying demand is strong, and we are well-positioned to drive growth going forward,
supported by our strong market position and reputation among industry professions of being a preferred employer.
The impacts of inflation
High inflation can be seen as upward pressure on prices in all procurement categories, and Terveystalo has actively negotiated with its
suppliers to limit the impact of inflation on costs. The rising price of electricity has a negative impact on operational costs. Due to
component shortages, delivery times have become longer in certain categories of products and materials, such as healthcare equipment.
Skill shortages, a tight labor market, and high inflation put pressure also on wages. The private healthcare sector concluded a two-year,
moderate salary agreement for the period 1 May 2022 to 30 April 2024. The first wage increase of 2.0% took effect on 1 October, 2022. The
wage increases in 2023 will be decided according to the wage increases in the reference sectors and the salary increase is at least 1.9%.
Commercial initiatives have been and will be undertaken to mitigate the effect of inflation as a part of Terveystalo’s profit improvement
program. The effects are visible in stages from the fourth quarter of 2022 onwards.
The treatment queues, Social and healthcare reform, and changes in the regulation
The contraction of non-urgent care in the private and public healthcare sectors during COVID-19 restrictions has resulted in a significant
treatment gap in other illnesses. According to the Finnish Institute for Health and Welfare (THL), over 150,000 patients were waiting for
access to non-urgent specialized care at the end of August 2022. Of those waiting for treatment, over 20,000 (9,500) had been waiting for
more than six months. The average waiting time for non-urgent care was 65 days in August 2022. The treatment queues continued to
lengthen also in Sweden. In November 2022, close to 150,000 people in Sweden were waiting for surgery or a procedure (www.skr.se).
Under the social and healthcare reform, the responsibility for the organization of social and healthcare services will be transferred to the 21
well-being services counties and the City of Helsinki. The well-being services county councils, elected in January 2022, will decide on the
well-being services county and service strategies, principles of the service network, service level of emergency services, budget and financial
planning of the well-being services county, and appointment of members to governing bodies. The term of office of the county council is
four years, commencing on March 1, 2022. In 2022, the new well-being services county councils have focused on administrative
organization. Decisions on new material service procurements from the private sector are expected in the first half of 2023 at the earliest.
As a result of the social welfare and healthcare reform, some of Terveystalo’s outsourcing agreements for public services will need to be
renegotiated so that the new contractual terms will enter into force at the beginning of 2026 at the latest. Furthermore, there will be
restrictions on the subcontracting practices for public services produced as outsourced services, but these are not expected to have a
significant impact on Terveystalo. The dismantling of the queues for non-urgent care in the public sector will require more extensive use of
private healthcare services in the aftercare of the pandemic.
Cuts to Kela reimbursements for private healthcare took effect on 1 January 2023. The changes are estimated to impact the demand for
general practitioners' and gynecologists’ appointments and imaging services. As consumers' general purchasing power weakens, the
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changes can also affect the use of other services. Cutting Kela reimbursements from private healthcare will most likely lengthen the queues
in public healthcare, make it more difficult to dismantle long treatment queues, increase the costs of the public sector, and make the work
of newly established well-being services counties more difficult.
The impacts of the war in Ukraine
The indirect impacts of the war in Ukraine on Terveystalo are assessed to be minimal, as Terveystalo does not have business operations in,
or with, countries that are subject to sanctions. Indirect impacts arise from supply chain disruptions, high inflation, and potential disruptions
in the financial markets. The indirect economic impacts are already visible in weakened consumer confidence and purchasing power. The
impacts may also have a delayed economic impact through declining employment, which could negatively impact the demand for
Terveystalo’s services.
Market outlook
●
Demand for health services continues to be strong. However, demand is focused on short care pathways and services, the growth
of which is limited by supply. A tight labor market and high inflation create growing pressure on operating costs, including wages.
●
The demand for Covid-19 related services is expected to decrease and the demand for digital services to continue strong.
●
Significant employment and consumer confidence changes may be reflected in demand.
These views are based on the expected development of demand for Terveystalo’s services within the next six months, compared with the
past six months.
Financial targets
Terveystalo’s financial targets are:
●
annual revenue growth of at least 5 percent through organic growth and acquisitions
●
adjusted EBITA margin of at least 12–13 percent in the medium to long term
●
net debt/adjusted EBITDA ratio 3.5x or less. However, indebtedness may temporarily exceed the target level, such as in
conjunction with acquisitions.
●
to distribute a minimum of 40 percent of net profit as dividends annually. However, the dividend proposal must take into account
Terveystalo’s long-term development potential and financial position.
Key figures
Terveystalo Group, EUR mill.
2022
2021
2020
Revenue
1,259.10
1,154.60
986.4
Adjusted EBITDA, *
1)
178.0
206.1
162.8
Adjusted EBITDA, % *
1)
14.1
17.8
16.5
EBITDA
1)
168.8
201.8
158.3
EBITDA, %
1)
13.4
17.5
16.1
Adjusted EBITA *
1)
105.2
141
101.9
Adjusted EBITA, % *
1)
8.4
12.2
10.3
EBITA
1)
95.9
136.7
97.4
EBITA, %
1)
7.6
11.8
9.9
Adjusted operating profit (EBIT) *
1)
73.4
114.4
71.6
Adjusted operating profit (EBIT), % *
1)
5.8
9.9
7.3
Operating profit (EBIT)
33.9
110.1
67.2
Operating profit (EBIT), %
2.7
9.5
6.8
Return on equity (ROE), %
1)
4.1
13.6
8.2
Equity ratio, %
1)
40.2
42.2
42.1
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Earnings per share (€)
0.19
0.63
0.36
Net debt
566.6
519
490.9
Gearing, %
1)
95.7
85.2
85.9
Net debt/Adjusted EBITDA
1)
3.2
2.5
3.0
Total assets
1,479.4
1,448.6
1 361.0
Average personnel FTE
6,552
5,643
4,900
Personnel (end of period)
10,933
9,805
8,253
Private practitioners (end of period)
5,928
5,754
5,057
Adjusted EBITDA, excluding IFRS 16 *
1)
122.2
156.9
118
Net debt, excluding IFRS 16
386.8
340.6
312.4
Net debt/Adjusted EBITDA, excluding IFRS 16 *
1)
3.2
2.2
2.6
* Adjustments are material items outside the ordinary course of business, and these relate to acquisition related expenses, restructuring related expenses, gain / losses on sale of
assets (net), impairment losses, strategic projects and other items affecting comparability.
1) Alternative performance measure. Terveystalo presents alternative performance measures as additional information to financial measures defined in IFRS. Those are performance
measures that the company monitors internally, and they provide management, investors, securities analysts and other parties with significant additional information related to the
company's results of operations, financial position and cash flows. These should not be considered in isolation or as substitute to the measures under IFRS.
The calculation formulas and principles for the key figures are presented in the Financial Statements.
Share related key figures
2022
2021
2020
Equity per share, EUR
4.7
4.8
4.5
Earnings per share (€)
0.19
0.63
0.36
Dividend per share, EUR
0.28
0.28
0.26
Dividend payout ratio, %
145.0
44.3
72.3
Revenue
Revenue for 2022
increased by 9.0% year-on-year and amounted to EUR 1 259.1 (1 154.6) million. The revenue in Finland increased by
4.3%. Acquisitions during the financial year 2022 increased revenue by approximately 18.3 million euros. The revenue of the Sweden and
others segment came to EUR 92.8 (36.9) million. The Swedish operations have been consolidated into Terveystalo’s reporting as of 1 July
2021.
Revenue from corporate customers increased by 6.2%. Revenue from preventive occupational health services as well as acute infection and
other illness-related appointments increased year-on-year. Revenue from private customers increased by 1.9%. Shorter care chains and
appointments were emphasized in the sales mix. There was strong growth in revenue from insurance companies. Revenue from public
sector customers increased by 4.1%. Revenue from service sales and occupational healthcare to public sector customers increased by 9.8%
mainly due to the occupational health business that increased through acquisitions and new agreements. Revenue from staffing services
grew 2.4% with demand being strong, but the shortage of physicians restricted the growth. Revenue from the outsourcing business
increased by 0.9% mainly driven by the child welfare services business.
The demand for general practitioners’ appointments was at a high level throughout the year, but the growth of revenue was restricted by
the limited supply of physicians. Appointments relating to various acute infections and ear, nose, and throat diseases grew substantially
year-on-year. Visits to laboratory services decreased substantially year-on-year as COVID testing decreased. A total of approximately
335,000 (500,000) COVID-19 tests were performed during the fourth quarter, a decrease of 33% year-on-year
1))
. During the year, acute
medical care and general practitioner services were emphasized in the sales mix. These involve fewer laboratory and diagnostic services
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than specialist medical services with longer care chains. Revenue from surgical operations grew substantially year-on-year. Revenue from
imaging services grew slightly year-on-year. Demand for well-being services remained strong, with revenue increasing by 9% to EUR 117.1
(107.9) million. The number of digital appointments
2)
grew by 29% to approximately 1.4 (1.0) million appointments. There were 253 (253)
working days in 2022.
1)
Excludes sample collection services
2)
MEUR
2022
2021
Change, %
Corporate customers
511.7
481.7
6.2
Private customers
339.4
333.2
1.9
Public sector customers
315.2
302.8
4.1
Outsourcing
122.2
121.1
0.9
Staffing services
89.8
87.6
2.4
Service sales, occupational health, and others
103.3
94.0
9.8
Finland in total
1 166.2
1 117.7
4.3
Sweden and others*
92.8
36.9
151.3
Total
1 259.1
1 154.6
9.0
* Consists of the Group’s business operations in Sweden, Estonia, and the Netherlands. Feelgood (Sweden) was consolidated on 1 July 2021. Estonia and the Netherlands did not
have a significant effect on revenue during the reporting period.
Revenue breakdown
Corporate customers
Corporate customers constitute Terveystalo’s largest customer group. Terveystalo’s corporate customers consist of the company’s
occupational health customers, excluding municipal occupational healthcare customers, which are included in the public sector customer
group. The company provides statutory occupational health services and other occupational health and well-being services for corporate
customers of all sizes. Terveystalo is the largest provider of occupational health services in Finland in terms of revenue and the number of
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end users. Terveystalo provides occupational healthcare services for over 27,000 companies in Finland, which have approximately 670,000
occupational health customers.
Revenue from corporate customers for 2022
occupational health services
1)
laboratory services declined substantially year-on-year as COVID-19 testing decreased. Approximately 265,000 (350,000) COVID-19 tests
were performed for corporate customers during the year, a decrease of 25% year-on-year. The average prices of tests decreased year-on-
year. The revenue from surgical operations and imaging services grew year-on-year. The revenue for well-being services
2)
approximately 10% year-on-year. The growth continued to be strongest in mental well-being services. Digital occupational health
appointments grew by 39% year-on-year and exceeded 1,100,000 (793,000) appointments. The number of end customers in occupational
healthcare increased year-on-year.
1)
The statutory task of occupational healthcare is to prevent work-related adverse health effects. Preventive services include, for example, workplace surveys to examine the
conditions and exposures at the workplace; health examinations; suggested measures to improve work conditions and to promote the employees’ ability to work; guidance and
counselling; participation in the planning and implementation of measures that maintain workability promotion of coping at work and, when necessary, referrals to rehabilitation in
case of reduced work ability; guidance in first aid preparedness at the workplace; and assessment and monitoring of the quality and impact of occupational healthcare activities.
2)
Well-being services include, for example, physiotherapy, mental well -being services (psychologists and psychotherapists), nutritional therapy, workability coaching, and massage
services.
Private customers
Private customers are Terveystalo’s second-largest customer group. Private customers include private individuals and families. The
company’s strong brand, easy access to services without long waiting times, extensive service portfolio for private customers, families, and
senior citizens, and personalized digital services give Terveystalo a competitive edge over other private operators and public healthcare
services and encourage customers to invest in their health. Services for private customers are paid for either by the customers themselves or
by their insurance companies.
Revenue from private sector customers
of appointments grew year-on-year. Short care chains, acute medical care, and general practitioner services were emphasized in the sales
mix during the year. The growth of revenue was restricted by limited supply. Appointments relating to various acute infections and ear,
nose, and throat diseases grew year-on-year. The revenue from specialist medical services in fields such as orthopedics, gynecology, and
dermatology grew year-on-year. The revenue from laboratory services declined substantially year-on-year as COVID-19 testing decreased.
Approximately 23,000 (86,000) COVID-19 tests were performed for private customers during the year, a decrease of 73% year-on-year. The
revenue from imaging services was flat year-on-year. The revenue from surgical operations grew substantially year-on-year due to strong
revenue from insurance companies. The revenue from well-being services, such as mental well-being and physical therapy services, grew
5% year-on-year. Demand for oral health services returned to growth during the second half of the year and revenue grew slightly year -on-
year. The number of digital appointments decreased by 22% year-on-year and was approximately 84,000 (108,000).
Public sector customers
Terveystalo’s s public sector customer group consists of Finnish public sector organizations. Terveystalo’s s broad nationwide platform,
digital offering, good reputation, and established brand, as well as its thorough expertise and experience in healthcare services throughout
the chain of care, make Terveystalo an attractive partner for the public sector. The services offered to public sector customers include full
and partial outsourcing, healthcare staffing services, specialized care services, other healthcare services as well as occupational health
services for municipalities, municipal federations, and hospital districts. Occupational health services covered approximately 90,000 persons.
Revenue from public sector customers for 2022
increased by 4.1% year-on-year and amounted to EUR 315.2 (302.8) million.
Revenue from the outsourcing business increased by 0.9% to EUR 122.2 (121.1) million. The revenue growth came mainly from the child
welfare services business.
Revenue from staffing services increased by 2.4% to EUR 89.8 (87.6) million. The demand for staffing services remained strong, but the
growth of revenue was restricted by the limited supply of physicians. The demand for nurse staffing services also remained strong, even
though the demand for services related to COVID-19 decreased.
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Revenue from service sales, as well as services provided for municipal occupational health customers and other public sector customers,
increased by 9.8% to EUR 103.3 (94.0) million mainly due to the occupational health business that increased through acquisitions and new
agreements. Sales of COVID-19-related services decreased year-on-year. Approximately 49,000 (65,000) COVID-19 tests
1)
for public sector customers during the year, a decrease of 26% year-on-year. In addition to testing, Terveystalo served as a partner to public
healthcare services in sample collection. Digital appointments grew by 38% to almost 184,000 (133,000) appointments. Revenue from well-
being services grew by 11% year-on-year.
1) Excludes sample collection services
Sweden and others
In 2021, Terveystalo expanded its operations to the Swedish market by acquiring Feelgood and becoming one of the leading occupational
health operators in Sweden. Terveystalo has approximately 780 employees in Sweden, serving customers digitally and in person at
approximately 155 locations. The company provides occupational health, management development, and substance abuse prevention
services as well as digital private healthcare and well-being services. Terveystalo serves approximately 8,300 corporate customers in Sweden
and has approximately 1.2 million employees covered by occupational health. In addition to Sweden, Terveystalo operates on a small scale in
Estonia and the Netherlands.
The external revenue of Sweden and others segment for 2022
amounted to EUR 92.8 (36.9) million.
Demand continued strong, particularly in consultation for organizational management and harmful use. Revenue increased mainly because
of acquisitions.
The Swedish operations were consolidated into Terveystalo’s reporting as of July 1, 2021.
Financial performance
The Group’s 2022
105.2 (141.0) million, representing 8.4% (12.2) of revenue. Profitability was reduced year-on-year due to the decline in COVID testing,
change in the sales mix towards a larger share of appointments, and increased costs. Material expenses and service purchases increased by
7.5% year-on-year and amounted to EUR 525.7 (488.9) million. Employee benefit expenses increased by 20.3% year-on-year and amounted
to EUR 455.0 (378.2) million. Expenses were increased by personnel costs attributable to acquisitions (including Feelgood). Personnel
expenses also increased due to substantially higher sickness absences compared to the comparison period, recruitment, and an increase in
appointment visits, as well as salary increases. Other operating expenses increased by 25.9% to EUR 112.3 (89.2) million mainly due to
acquisitions (including Feelgood), and higher costs related to IT, marketing, M&A, and premises.
Adjusted EBITDA decreased by 13.6% year-on-year to EUR 178.0 (206.1) million.
The adjusted operating profit (EBIT) amounted to EUR 73.4 (114.4) million. Operating profit (EBIT) came to EUR 33.9 (110.1) million.
Operating profit (EBIT) was significantly impacted by approximately EUR 29 million impairment loss relating to other intangible assets.
Terveystalo is modernizing its basic IT systems in stages. The basic IT syst em development project portfolio contains several sub-projects in
different stages of readiness, some of which were decided to be suspended. These projects are not expected to go into production as earlier
planned and related impairment was considered necessary. Other intangible assets capitalized in the balance sheet relating to these
projects have been impaired. The impairment loss has no effect on the company's cash flow or adjusted operating profit (EBIT).
Net financial expenses decreased to EUR 2.9 (9.0) million mainly due to an increase in the fair value of interest rate hedges. Profit before tax
was EUR 30.9 (100.7) million. Income tax expenses amounted to EUR 6.5 (20.3) million. Profit for the period was EUR 24.4 (80.4) million,
and earnings per share were EUR 0.19 (0.63).
Cash flow from operating activities decreased to EUR 140.9 (195.2) million. Lower profit, decrease in accounts payable and other working
capital-related payables and higher taxes paid had a negative effect on the cash flow from operating activities while the change in trade
receivables had a positive effect.
Cash flow from investing activities was EUR -93.9 (-108.1) million. The difference vs. the comparison period is mainly due to the fewer
acquisitions the effect of which was reduced by an increase in investments in tangible and intangible assets
.
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Cash flow from financing activities amounted to EUR -44.6 (-126.1) million. The change from the comparison period was mainly due to the
differences in withdrawals and repayments of long-term and short-term loans, related to e.g. the loan withdrawn from NIB, as well as
acquisitions of non-controlling interests and own shares during the comparison period.
In Sweden and others segment’s 2022
EUR 2.8 (0.8) million, representing 3.0 (2.1) % of revenue. Revenue growth improved profitability, while costs related to professional
resources and other activities, increased by inflation and rapid growth, had a negative impact on profitability.
Financial position
Terveystalo’s liquidity position is good. Cash and cash equivalents at the end of the financial period amounted to EUR 40.2 (38.1) million.
The total assets of the Group amounted to EUR 1,479.4 (1,448.6) million.
Equity attributable to owners of the parent company totaled EUR 592.0 (608.9) million. The decrease was mainly due to the payment of
dividends. The dividends paid by Terveystalo for the 2021 financial period totaled EUR 0.28 per share (or approximately EUR 35.4 million),
and they were paid in two equal tranches on 20 April 2022 and 19 October 2022.
Gearing (including lease liabilities) was 95.7% (85.2%) and net debt amounted to EUR 566.6 (519.0)
million.
The average maturity of Terveystalo's loans was 2.3 (2.0) years, and the average interest rate was 1.2 (1.0) percent at the end of 2022.
During the financial period, the company fulfilled the covenant requirement included in its financing agreements reflecting relative
indebtedness.
During the third quarter, the company signed an agreement for a long-term loan of EUR 120 million. The loan has been drawn and the
company’s short-term loan of EUR 70 million has been repaid during the fourth quarter. The loan is a bullet loan with a three-year maturity.
During the second quarter, The Nordic Investment Bank (NIB) and Terveystalo agreed on a long-term loan of EUR 50 million for financing
the company's investments in its digital healthcare services and applications during 2022-2025. The loan has been drawn in full by the end
of the review period.
During the first quarter, the company signed an agreement for a EUR 100 million domestic commercial paper program and issued its first
commercial papers under the program. During the second quarter, the company expanded the program to a EUR 200 million multi-bank
program. Under the program, the company may issue commercial papers with a maturity of less than one year.
During the first quarter, the company also signed a financing agreement that includes a credit facility of EUR 40 million and an uncommitted
credit facility of EUR 80 million.
At the end of the financial period, the unused part of credit based on financing agreements and bank accounts with a credit facility
amounted to EUR 99.6 (55.5) million.
Return on equity for the financial period was 4.1% (13.6%). The equity ratio was 40.2% (42.1%).
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Seasonal variation and the impact of the number of business days
Terveystalo’s revenue from corporate and private customers has typically been lower during the vacation seasons, particularly in July and
August. The number of business days influences the revenue and earnings development, particularly when comparing quarterly
performance. Because of the seasonal nature of business, the required net working capital varies during the year. Variation is caused by the
timing of pension and VAT payments, vacation pay obligations, and service fees related to occupational healthcare, etc.
Investments and acquisitions
Net investments* in January
–
December 2022, including M&A, amounted to EUR 94.1 (125.4) million. The Group’s net capital expenditure,
excluding M&A, amounted to EUR 60.0 (42.6) million. The investments consisted mainly of investments in digital application and service
development, IT system projects, medical equipment, and network. The relative share of intangible investments in gross investments
decreased year-on-year.
Terveystalo made several acquisitions to complement its business portfolio during 2022 by acquiring Vantaan Työterveys Oy, Suomen
Fysiogeriatria Oy and its subsidiaries (physiotherapy and occupational therapy), Lapin Liikuntaklinikka Oy (physiotherapy), OMT-Klinikka
Kokkola Oy (physiotherapy), Into Terveys Oy (physiotherapy) , Kunnon Syke Oy (physiotherapy) and FysioProfessionals Oy’s operations
(physiotherapy), Hammasrasti’s operations (oral health), Ludus Oy Tutkimus- ja Kuntoutuspalvelut (rehabilitation), Hymyn paikka Oy’s
operations (oral health), Saimaan Urheilufysioterapia Oy (physiotherapy) and Somia Reality Oy (chat and video connection solutions) in
Finland. In Sweden, Feelgood acquired Länshälsan Uppsala AB (occupational health), Nämndemansgården AB and its subsidiaries (addiction
treatment), and Jobbhälsan i Norr AB:n (occupational health).
* Net investments do not include increases in right-of-use assets related to leases for business premises. Net investments include the acquisition of non-controlling interests.
Development expenses
Capitalized development expenses in 2022 were EUR 16.4 (9.7) million and were included in other intangible assets.
Personnel
The number of Terveystalo’s employed staff on 31 December 2022 was 10,933 (9,805). In addition to acquisitions, the number of personnel
was increased through the recruitment of various healthcare professionals. In FTEs, the average number of personnel was 6,552 (5,643).
The number of private practitioners was 5,928 (5,754).
Personnel
2022
2021
Change, %
Average personnel, (FTEs*)
Finland
5,865
5,338
9.9
Sweden and others
687
305
125.2
Total
6,552
5,643
16.1
Personnel (end of period)
10,100
9,131
10.6
833
674
23.6
Total
10,933
9,805
11.5
Private practitioners (end of period)
5,822
5,644
3.2
106
110
-3.6
Total
5,928
5,754
3.0
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Profit improvement program and change in operating model
Terveystalo announced on 14 October 2022 that it strengthens the implementation of its growth strategy by launching a program to speed
up the achievement of strategic and financial goals. The program consists of strategic and operational initiatives to increase revenue and
improve profitability in line with the company's financial targets. Terveystalo’s financial targets are intact: The company is aiming for at
least 5 percent revenue growth and an adjusted EBITA margin of 12-13 percent.
To strengthen long-term value creation, focus on high medical quality, and the execution of the program, Terveystalo has changed its
operating model and organizational structure. The implemented changes clarify roles and responsibilities, strengthen the independent and
efficient management of separate businesses, and strengthen the implementation of intact care pathways and high-quality care.
The new organization came into force at the beginning of 2023, and it consists of three business areas: Healthcare Services, Portfolio
Businesses, and Feelgood Sweden. In Healthcare Services, Terveystalo targets high profitability and growth exceeding the market growth. In
Portfolio Businesses, the company aims for independent value creation. In Sweden, Terveystalo seeks strong growth in the medium term.
Program content and goals
The program aims for an inflation-adjusted, annualized (run-rate) EBITA improvement of at least 50 million euros by the end of 2024. Most
of the targeted benefits are estimated to be realized already in 2023.
The costs related to the program are estimated to be 25
–
30 million euros. The costs are related to restructuring and advisory fees.
Advisory fees are tied to the results achieved by the program. The costs of the program are treated as items affecting comparability.
The measures implemented by the end of 2022 are estimated to have an annual run-rate impact on the profitability of around 11 million
euros. The costs of the program treated as items affecting comparability were 4.9 million euros.
Related party information
Terveystalo Plc has provided a guarantee for the subsidiaries' financial institution loans.
Statement of non-financial information
Terveystalo is the largest private health care service provider in Finland in terms of revenue and network. Terveystalo is also a leading
occupational health provider in the Nordic region. The company offers a wide variety of primary health care, specialized care, and well-
being services for corporate and private customers and the public sector. Terveystalo’s digital services are available 24/7, regardless of time
and place. Health and well-being services are also provided by Terveystalo’s over 370 clinics across Finland. In Sweden, Terveystalo offers
occupational health services at 155 clinics. Terveystalo employs in total more than 16,800 health and well-being professionals. Terveystalo
is listed on the Helsinki Stock Exchange and has predominantly Finnish ownership. In 2022, Terveystalo had 1.3 million individual customers
in Finland and some 8.5 million customer visits were made, of which a quarter took place in remote channels.
Terveystalo reports on its sustainability work as part of the Annual Report
1)
. This section summarizes the key themes targets and results.
Terveystalo’s sustainability efforts are guided by the company Code of Conduct, values, and strategic goals as well as the sustainability
themes that are essential to Terveystalo stakeholders. The results of Terveystalo’s sustainability efforts are monitored regularly.
Terveystalo is committed to promoting the principles of the UN Global Compact initiative and sustainable development goals. The company
respects all internationally recognized human rights.
Terveystalo’s systematic sustainability management aims to ensure that the company achieves its sustainability targets. The continuous
improvement model ensures that Terveystalo’s services will continue to create value for customers in the future.
The most significant risks related to material sustainability themes are assessed and sought to be mitigated as part of the company's overall
risk management process. There is a constant shortage of educated professionals in the industry, while the need for and demand for health
and well-being services is growing. The main risks are related to the availability of health care professionals and thus the access to care. The
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aim is to mitigate these risks by, among other things, automating routine tasks, utilizing technology, and allocating resources according to
the need for care. In addition, the company continues to strive to strengthen its position as the most attractive workplace in the industry by
developing, among other things, multi-professional cooperation, and leadership.
The table below is a summary of the key aspects, targets, and achievements of Terveystalo’s sustainability efforts in its Finnish operations in
2022.
1)
Responsibility reporting does not include Feelgood figures unless otherwise stated.
Targets and achievements
GOOD HEALTH AND WELL-BEING
Area
Target
Indicator
Target
2022
2021
2020
SD
G
Quality index:
High clinical
and experienced quality,
access to care and preventive
care
Use of the WHO Surgical Safety
Checklist in over 99% of surgical
operations
Use of the WHO Surgical Safety
Checklist in surgical operations
> 99 %
98.9 %
99.8 %
97.8 %
3
Prescriptions for drugs affecting
the central nervous system in
relation to visits to a physician
below 3.5%
Prescriptions for drugs affecting
the central nervous system in
relation to visits to a physician
< 3.5 %
4.00 %
4.3 %
4.6 %
Duration of sickness absence
issued on the day of the
operation (median),
repair of the rotator cuff and
the anterior cruciate ligament
<28 days
Duration of sickness absence
issued on the day of the
operation (median),
repair of the rotator cuff and
the anterior cruciate ligament
< 28
30
32
36
Percentage of preventive work
of occupational health
appointments
over 60%
Percentage of preventive work
of occupational health
appointments
> 60 %
69.6 %
70.2 %
67.8 %
Days until next available
appointment, clinics (T3) below
1.00
T3, i.e. the third available
appointment
< 1.00
1.93
1.61
1.17
Appointment NPS over 74
Appointment NPS
> 74
82.7
83.0
82.8
eNPS
> 31
29
32
18
Quality index total
Quality index, %
100
92.2
94.6
94.2
Access to care, public services
Days until next available
appointment (T3) public
services < 7.00 for a physician,
< 1 for a nurse
T3, i.e. the third available
appointment with a physician
< 7,00
12.0
6.5
5.6
14
T3, i.e. the third available
appointment with a nurse
< 1
2
1
1
Patient safety
Reimbursed patient claims /
appointments with a physician
0.0016
0.0019
0.0021
Near misses/hazardous
incidents
56.9 %
50.0 %
57.0 %
The figures include Terveystalo's operations in Finland.
ETHICAL BUSINESS
Area
Target
Indicator
Target
2022
2021
2020
SD
G
Employees who have
completed orientation training
on the Code of
Conduct and
correct action
100% of our employees have
completed
the training
Percentage of employees who
have completed
the training relative to all
employees 1)
100 %
69.2 %
66.0 %
52.3 %
16
Suppliers
who have
approved
the Supplier
Code of Conduct
100% of our suppliers have
approved
the Supplier Code of Conduct
Percentage of suppliers who
have
approved the Supplier Code of
Conduct relative to all suppliers
(of suppliers
representing 80%
of total purchases)
100 %
80 %
80 %
80 %
1)
The training periods have been of different lengths. The figures for 2022 also include performances during the second half of 2021, which is why the
figures are not fully comparable.
The figures include Terveystalo's operations in Finland.
RESPONSIBLE WORK
Area
Target
Indicator
Target
2022
2021
2020
SD
G
Occupational safety
Accident rate below the sector
average
Accident rate
< 34
(sector
average)
15
20
25
8
Personnel’s well-being
Reducing sickness absences
Sickness absences
-
5.2 %
4.4 %
3.8 %
Employer recommended by
the personnel
Improving the employee
promoter score
eNPS
31 by
2025
29
32
18
The figures include Terveystalo's operations in Finland.
SUSTAINABLE ECONOMIC GROWTH
Area
Target
Indicator
Target
2022
2021
2020
SD
G
15
Tax footprint
We openly disclose our tax
footprint annually
Tax footprint, EUR million
-
253.7.
191.0
152.3
8
Revenue growth
Minimum annual growth 5%
Revenue growth, %
5 %
9.0 %
17.1 %
-4.3 %
The people we employ
We create jobs
Employee benefit expenses,
EUR million
-
455.0
378.2
310.2
SUSTAINABLE CONSUMPTION AND CLIMATE ACTION
Area
Target
Indicator
Target
2022
2021
2020
SD
G
Reducing the carbon footprint
Zero emissions from our own
operations in 2030.1) Between
2023 and 2030, we will
compensate for any remaining
greenhouse gas emissions by
investing in certified carbon
dioxide emission compensation
projects.
Reduction of direct (scope 1)
and indirect (scope 2)
greenhouse gas emissions
compared to 2018 (6,316.8
tCO2)
2030
-61 %
-89 %
-66 %
13
We will reduce direct and
indirect CO2 emissions (Scope 1
and Scope 2) by 80% by 2025
(using 2018 as the baseline)
Direct (scope 1) and indirect
(scope 2) greenhouse gas
emissions, tCO2
-80% by
2025
2,476.
3
664.0
2
165.4
Energy consumption
We will purchase 100% green
electricity by 2025 2)
Share of green electricity of all
purchased electricity, %
100% by
2025
50 %
89 %
62 %
Waste recovery 4)
We will minimize waste in all
our operations and forward all
waste to be recovered
The recovery rate of waste
generated at Terveystalo
units, % 3)
100% by
2025
100%
100 %
99 %
12
The recycling rate of waste
generated at Terveystalo
units, % 3)
100% by
2025
67%
64 %
61 %
Mixed waste intensity (mixed
waste [metric tons] relative to
total revenue [100 million])
Annual
reduction
5.8
6.4
6.0
1) Between 2023 and 2030, we will compensate for any remaining greenhouse gas emissions by investing in certified carbon dioxide emission compensation
projects. Our aim is to eventually discontinue compensation measures and to achieve zero emissions in our own operations by 2030. In 2022 emissions were
16
not compensated due to cost savings. The calculation of Scope 2 emissions is market-based. The exceptional electricity market disturbances forced Terveystalo
to change its electricity supplier in the middle of the year, and because of the high market price of electricity, no green electricity was purchased for the rest of
the year. The calculation of the market-based figure is based on the emission factor of the electricity purchased by Terveystalo in Finland, while the location-
based figure is calculated according to a factor based on the source distribution of local energy production. The amount of green electricity from the electricity
purchased in Sweden has been calculated according to the average share of green electricity in the Swedish market, since supplier-specific information is not
available. The energy consumption and carbon footprint figures for 2022 also include operations in Sweden. Comparison years only include Finland.
2) In the units where we purchase electricity ourselves.
3) Excludes waste fractions, such as hazardous waste, that cannot be recycled or recovered under any circumstances.
4) Includes Terveystalo's operations in Finland.
Good health and well-being
Quality is an inseparable part of Terveystalo’s corporate responsibility. The entire Terveystalo staff is responsible for ensuring that our
customers receive appropriate, effective, and safe high-quality care. The cornerstones of Terveystalo’s quality assurance system are patient
safety and the national legislation governing the industry. Quality comprises clinical, operational, customer, and professional experienced
quality. Our quality assurance system is a management system that provides a framework for managing quality and effectiveness at all
levels of the organization.
The strategic priority areas, joint processes, and measurability guide toward consistent high quality. Continuous improvement of operations
is an essential part of our quality efforts. The quality work aims to ensure the availability of our services, safeguard and improve patient
safety, provide an excellent and constantly improving customer experience, implement data protection and information security, comply
with recommendations, and develop the effectiveness of treatment. The quality steering group monitors the achievement of the quality
objectives quarterly using quality indicators.
PATIENT SAFETY IS THE FOUNDATION FOR QUALITY IN HEALTH CARE
Clinical quality is a key element of Terveystalo’s quality efforts that is continuously monitored and developed. Clinical quality refers to the
patient receiving the right treatment at the right time and in the right manner, and that treatment has no avoidable adverse effects.
Service quality, safety, customer orientation, and productivity are ensured through consistent operating methods, the continu ous training
of experts as well as modern premises and technology. Patient safety is managed by monitoring the number of procedures and clinic-
specific post-surgery infections, hazardous events, official requests for clarifications, and the decisions of the Patient Insurance Center,
among other measures. Terveystalo ensures the safety and effectiveness of the provided pharmacotherapy through medication plans,
operating guidelines, and a basic range of drugs. In 2022 reimbursed patient claims / appointments with a physician were 0.0016 (0.0019)
percent and near misses/hazardous incidents were 56.9 (50.0) percent.
Each year, the themes, priorities, and strategy of patient safety at Terveystalo are chosen by the Group’s patient safety team and
confirmed by the quality steering group. In 2022, the patient safety themes were unacknowledged laboratory results, drug maintenance
permits and drug treatment plans, faster identification, and notification of hazardous incidents, and sharing information on the handling
and actions related to hazardous incidents.
The clear structures and strategy of patient safety are aimed at effective cooperation to improve patient safety within clinics, throughout
the organization, with the supervisory authorities, and particularly in practical work with patients.
A good patient safety culture means an open atmosphere in which employees can highlight any shortcomings or hazards (near
misses/hazardous incidents) they observe in their work treating patients, without fear of sanctions or blame. Shortcomings and hazardous
incidents are addressed openly and carefully to ensure that the issue does not reoccur. In 2022, Terveystalo launched a new patient and
customer safety online course. The course is mandatory for all employees working with patient care and persons in positions with
responsibility for patient safety. The course is also recommended for private practitioners working in Terveystalo.
THE QUALITY INDEX MEASURES CLINICAL AND EXPERIENCED QUALITY
Terveystalo continuously develops its services, the quality, and effectiveness of provided care, and the service experience of customers.
Clinical, experienced, and process results are measured based on international best practices. Terveystalo uses a quality index that
consists of four components: high clinical quality, availability of care, preventive care, and experienced quality from the professional’s
perspective and the patient’s perspective. Terveystalo’s quality index is comprised of seven key indicators: use of the WHO Surgical Safety
Checklist in surgical operations, prescriptions for drugs affecting the central nervous system relative to the number of phys ician’s
17
appointments, duration of sickness absence issued on the day of operation for repair of the rotator cuff and the anterior cruciate
ligament, percentage of preventive work of occupational health appointments, availability of care as measured by T3 (the third available
appointment), Net Promoter Score (NPS) for appointments, employee Net Promoter Score (eNPS).
In 2022, Terveystalo continued to develop the quality and effectiveness of the reporting. Terveystalo publishes a set of quality indicators,
which is updated continuously
Use of the WHO Surgical Safety Checklist in surgical operations
Terveystalo performs surgeries in its network of 18 hospitals. The WHO Surgical Safety Checklist is systematically applied before the start
of each procedure. It is a standard list of questions to check safety issues relevant for the operation. In 2022, the WHO Surgical Safety
Checklist was used in 98.9 (99.8) percent of the operations performed.
Prescriptions for drugs affecting the central nervous system relative to the number of physician’s appointments
When used appropriately, drugs affecting the central nervous system are effective and necessary. However, because of their adverse
effects, their use requires careful discretion by a physician. Terveystalo has a special project aimed at promoting the safe use of drugs
affecting the central nervous system according to clinical guidelines in patient care. To harmonize prescription practices, detailed
guidelines for prescribing drugs affecting the central nervous system have been prepared based on legislation, Current Care Guidelines,
Smart to Avoid Recommendations, guidelines issued by the National Supervisory Authority for Welfare and Health, and operating models
proven in clinical work. In 2022, at Terveystalo clinics prescriptions for drugs affecting the central nervous system were written for 4.0
(4.3) percent of visits to a physician.
Duration of sickness absence issued on the day of operation for repair of the rotator cuff and the anterior cruciate ligament
Terveystalo’s surgical operations aim to provide swift high-quality care pursuant to care criteria to quickly restore the patient’s functional
capacity and ability to work. Terveystalo systematically develops the treatment chain for its surgery patients. The aim is to enable faster
recovery and return to work. Correctly prepared surgery implemented without delay as well as a plan for early rehabilitation and return to
work play a key role in this. The average length of sickness absence issued on the day of operation for surgical repair of the rotator cuff
and the anterior cruciate ligament was 30 (32) days in 2022.
Percentage of preventive work of occupational health appointments
Work not carried out is expensive for Finnish companies. Therefore, it pays to invest in work ability management through preventive
measures. Effective work ability management requires that organizations know what kinds of risks to work ability they manage. To
support management, Terveystalo surveys the organisation's health and work ability risks through targeted health examinations. As part
of occupational health examinations, an electronic, scientifically validated health survey is always carried out as a self -assessment of
employees. Based on the survey, possible risks related to health and work ability can be identified. With the survey, measures can be
targeted particularly to those with significant risks. In 2022, preventive work accounted for 69.6 (70.2) percent of Terveystalo's
occupational health check -ups.
Availability of care as measured by T3 (the third available appointment), clinics
Terveystalo continuously develops the availability of care by managing the balance between supply and demand as well as by developing
digital services and the work of professionals. The availability of care is measured by the T3 indicator, which is the number of days until the
third available non-urgent appointment at Terveystalo clinics. The T3 indicator for appointments with a physician was 1.93 (1.61) in 2022. In
addition to physical appointments, the availability of care is enhanced by digital general practitioner appointments available 24/7, with an
average waiting time of seconds. In addition, digital mental well-being services also lower the threshold for seeking treatment.
Net Promoter Score (NPS) for appointme nts
Terveystalo aims to stand out by providing an excellent experience in all customer encounters. The company develops its services by
listening to customers and utilizing technology. NPS (Net Promoter Score) is used as the most important indicator of customer
satisfaction. Terveystalo collects feedback with SMS and browser -based surveys and is continuously adding NPS measurements at new
customer encounter points. In 2022, the NPS for Terveystalo’s appointments was 82.7 (83.0). The NPS for hospital services remained at a
high level of 95.1 (94.7).
Employee Net Promoter Score (eNPS)
18
Terveystalo aims to be the most attractive workplace for professionals. The professional survey is one of Terveystalo’s most important
tools for improving internal procedures and supervisor work. The survey is aimed at all of Terveystalo’s professionals, including private
practitioners. In the employee survey, the employee Net Promoter Score (eNPS) is used as a key indicator of well-being and coping at
work. The eNPS figure indicates the proportion of employees and private practitioners who would recommend Terveystalo as a workplace
to others. In the 2022 professional survey, the eNPS recommendation index was 29 (32). Among the strengths of Terveystalo are the
activities of work communities and cooperation in teams, as well as the work of immediate supervisors. In the development of
professional experience, the aim is to nurture these identified strengths. The aim is to have an eNPS recommendation index of 31 by
2025. In 2022, the collection of personal customer feedback was started in addition to unit-specific feedback.
TERVEYSTALO’S CARE PATHWAYS SUPPORT THE CUSTOMER’S SELF-CARE
Science-based care guidance is developed at Terveystalo with the help of common care pathways. Care pathways are defined by
Terveystalo as ways of treating the disease or condition for which the customer has sought treatment based on the Current Care Guidelines
and other generally accepted treatment guidelines.
The aim is to support professionals and customers in designing and implementing more effective care by making the choices in accordance
with the care pathway easy in everyday life. Care pathways support the customer's self-care and care progress.
The first care pathways defined by Terveystalo were introduced in 2021. At the end of 2022, there were care pathways for the treatment of
non-specific lower back pain, depression and anxiety, insomnia, reflux, vitreous detachment, and children’s lower respiratory tract
infection, and a total of 360,000 care pathways were activated in the Terveystalo app.
EXCELLENT AVAILABILITY OF PRIMARY HEALTH SERVICES
Fast and timely access to care is one of the biggest challenges of Finnish primary health care. Terveystalo has developed health centres’
operating models over the longer term to ensure easy access to care. The goal is a health centre with no queues, one that maintains a
high level of clinical quality while delivering a good customer and employee experience.
Terveystalo's expertise includes all the service areas of public primary health care: health centre services, services for families with children
and the elderly, oral health services, and services for adults and special interest groups. Terveystalo has systematically improved the access
to care and quality of care and regularly monitors operational data at the health centres where services are provided by Terveystalo.
Terveystalo produced the health centre services of 16 municipal health centres in 2022. In 2022, the average T3 time (the third available
appointment) describing the availability of non-urgent appointments to a physician in our health centres was 12.0 (6.5) days and the T3
time to a nurse was 2.0 (1.0) days. The target is less than 7 days to see a physician and less than 1 day to see a nurse. The availability of
care was excellent nationwide at our health centres throughout the year. Queues for oral health care have also remained at a good level
in Terveystalo's 12 outsourced dental clinics. The average T3 time for non-urgent dentist appointments was 35 (35) days. NPS, which
measures the customer satisfaction of health centres was 80 (80).
Ethical business
Values and ethics are emphasized in Terveystalo’s work through the requirements of the sector. Terveystalo’s business is guided by
legislation governing the sector and private health care services as well as the requirements set by authorities. The work of healthcare
professionals is also guided by the ethical standards of professional groups. In addition, Terveystalo’s own Code of Conduct provides an
overarching guideline that is shared by everyone at Terveystalo. The Code of Conduct addresses a wide range of topics, including anti-
corruption and bribery, compliance with fair competition and environmental requirements, privacy protection, patient safety, employee
equality, non-discrimination, and freedom of association.
TRAINING TO COMPLY WITH THE CODE OF CONDUCT AND ETHICAL REQUIREMENTS
Terveystalo constantly develops its compliance program and the related processes and controls, so that they respond to changes in our
operating environment. During 2022, Terveystalo also strengthened its compliance resources.
Terveystalo has online training on ethical guidelines for everyone at the company. There are separate online training courses tailored for
those in administrative work and clinical work, taking into account their different operating environments. The online training was last
updated in the fall of 2021, and it is mandatory for all Terveystalo employees. Terveystalo is currently renewing the training package by,
among other things, improving the user experience of the learning platform and the interactivity of the training, as well as tailoring the
contents in a targeted manner. The new compliance training is planned to be introduced during 2023. The purpose of the courses is to
build an understanding of why compliance and ethical responsibility are important and how they are related to the day-to-day actions and
decisions of everyone at Terveystalo. A further goal of the training is to create a better understanding of key compliance themes related
19
to ethics, including fair competition, the avoidance of conflicts of interest, the prevention of bribery, data protection, and reporting
misconduct, as well as to further develop our compliance culture. In 2022, 9,031 Terveystalo employees (6,993 salaried employees, 2,038
private practitioners) completed the training and received a passing grade. The goal is that 100% of employees complete the Code of
Conduct training.
ANTI-CORRUPTION AND ANTI-BRIBERY
In the area of anti-corruption and anti-bribery, Terveystalo complies with the law and other applicable regulations. Terveystalo is also
committed to the UN Global Compact initiative and its anti-corruption principles. Terveystalo’s operations are also guided by the company’s
Code of Conduct. The prevention of corruption is included in Terveystalo’s Code of Conduct, which addresses the giving and accepting of
gifts and hospitality, sponsorships, accepting and making donations, understanding, and avoiding conflicts of interest as well as the rules
pertaining to lobbying. At Terveystalo, gifts or other benefits that could affect business decisions or have considerable personal or financial
value are not offered, given, requested, or accepted. Terveystalo does not make financial contributions to political parties or fund the
election campaigns of individual candidates. No incidents of corruption were reported in 2022. Terveystalo continues to develop its anti-
corruption and anti-bribery compliance program and related processes to reflect the changes that have occurred in our environment.
Terveystalo also works to ensure compliance with sanctions laws and regulations. In 2022, Terveystalo introduced new controls that
support third-party risk management.
RESPECTING HUMAN RIGHTS
Terveystalo does not tolerate any form of discrimination, harassment, bullying, racism, or inappropriate treatment, nor does Terveystalo
condone the use of child labour, any form of forced labour or other human rights violations in its own operations or its supply chain.
Terveystalo respects the human rights set out in the UN Declaration of Human Rights as well as the workers’ rights defined by the
International Labour Organization (ILO) and related international conventions. The company is committed to the UN Global Compact
initiative and its principles pertaining to human rights and labour rights. Terveystalo’s suppliers are also expected to comply with these
principles and respect internationally recognized human rights. Principles related to human rights are included in Terveystalo’s Code of
Conduct and Supplier Code of Conduct.
THE RESPONSIBILITY OF SUPPLIERS IS ENSURED BY THE SUPPLIER CODE OF CONDUCT
Each year, Terveystalo buys services, materials, and supplies for its clinics from approximately 4,000 suppliers. Consequently, the network
of service providers and suppliers of goods – and good supplier cooperat ion – play a key role in our operations. Terveystalo wants
contractual service providers and suppliers of goods to be aware of Terveystalo’s significant role in the society. Terveystalo also wants
suppliers to commit to taking responsibility for the economic, social, and environmental impacts of their operations. To ensure the
responsible conduct of suppliers, contractual suppliers and suppliers participating in tendering processes have to approve the Supplier
Code of Conduct, which includes guidelines and requirements pertaining to anti -corruption and bribery, human rights, fundamental rights
at work, occupational health and safety, taxation, and environmental responsibility. At the end of 2022, 80 (80) percent of suppliers
representing 80 percent of Tervey stalo’s total procurement volume had approved the Supplier Code of Conduct.
ENSURING DATA PROTECTION AND INFORMATION SECURITY FOR PATIENTS
Privacy protection is a core value for Terveystalo. At Terveystalo, everyone’s privacy is respected. Special attention is paid to the
appropriate and legally compliant processing of personal data. The company provides its personnel with training and instructions on the
processing of personal data and emphasizes the particular confidentiality and protection of patient data. The realization of data
protection is the responsibility of everyone who works for Terveystalo.
The digitalization of health care presents significant opportunities for improving the availability and effectiveness of care as well as the
early identification of risks. Terveystalo has made significant investments in the development of digital services and tools. As digital
services increase in importance and change the industry, the requirements concerning data protection and information security increase
accordingly.
Terveystalo stores patient information in information security-certified patient information systems. Terveystalo’s patient information
systems used in Finland are category A systems and they have undergone information security certification in accordance with the
regulations related to providing Kanta services. In addition, Terveystalo’s data protection and information security are regularly audited
internally and by a third party according to the ISO 9001:2015 certification.
20
Terveystalo applies the appropriate physical, technical, and administrative protection measures to protect data from misuse. These
measures include, among others, control and filtering of network traffic, use of encryption techniques and safe data centres, appropriate
access control, controlled granting of access rights and supervision of their use, giving instructions to staff participating in personal data
processing and risk management related to the planning, implementation, and maintenance of our services. Terveystalo chooses its
subcontractors carefully and uses agreements and other arrangements to ensure that they process data in compliance with the law and
good data protection practices.
Responsible work
Competent and committed personnel form the foundation for Terveystalo’s operations. There are shortages of competent professionals in
many places, and the most significant risks in the line of operation related to personnel are related to the availability and retention of
competent professionals. To manage these risks, the company offers diverse career and development opportunities in a wide range of jobs
and supports the well-being and work performance of its professionals. The objective is to be the most attractive employer in the industry
for physicians as well as other professionals. Equality, fairness, and non-discrimination are important principles that Terveystalo is
committed to observing.
At the end of 2022, Terveystalo's Finnish operations employed 10,100 (9,131) employees and 5,822 (5,644) independent private
practitioners. In 2021, Terveystalo expanded to Sweden with the acquisition of Feelgood, a local occupational health operator . In Sweden,
Terveystalo employed 833 (674) employees and 106 (110) private practitioners at the end of 2022.
Terveystalo’s goal is to be the best and most attractive employer in our industry. Terveystalo has worked systematically toward this goal
for several years, and studies show that Terveystalo is the most popular employer in the industry in Finland among professionals in the
field. One of the key indicators of well-being and coping at work in Terveystalo is the employee Net Promoter Score (eNPS) (which also
includes private practitioners). The eNPS figure indicates the proportion of our employees and private practitioners who would
recommend Terveystalo as a workplace to others. In the 2022 professional survey, the eNPS recommendation index was 29 (32). Among
the strengths of Terveystalo are the activities of work communities and cooperation in teams, as well as the work of immediate
supervisors. In the development of professional experience, the aim is to nurture these identified strengths. Terveystalo’s target is to have
an eNPS recommendation index of 31 by 2025.
THE HEALTH AND SAFETY OF EMPLOYEES
Permanent and fixed-term employees are covered by statutory insurance with respect to workplace accidents and occupational diseases. In
addition to observing the statutory requirements, Terveystalo provides a comprehensive range of primary healthcare, specialized
healthcare, and well-being services to employees, such as direct access to physiotherapy and digital services to support mental well-being.
Low-threshold services to support mental well-being provide employees with the opportunity to confidentially discuss anything they might
have on their minds. Brief psychotherapy is also included in Terveystalo’s occupational health services. Terveystalo aims to recognize
challenges related to work ability and occupational health at an early stage and seek solutions to these challenges through effective
cooperation with occupational health services. Terveystalo Occupational Healthcare provides occupational health services for personnel
throughout Finland. Terveystalo Occupational Healthcare holds the ISO 9001:2015 Quality System Certificate awarded by Labquality Oy. All
of our employed staff in Finland are covered by statutory pension security and parental leave benefits.
During the COVID-19 pandemic, occupational health has invested heavily in upholding the personnel's work ability and medical care in a
state of emergency. Sickness absences of personnel increased from the previous year, and the sickness absence percentage in Finland was
5.2 (4.4) percent of hours worked. In Sweden, the corresponding figure was 5.5 (4.0).
There were no fatal accidents or accidents leading to serious injuries at Terveystalo in 2022. Terveystalo’s accident frequency in Finland
was 15 (20) in 2022, which is clearly below the average in the health care industry (34).
COMPETENCE DEVELOPMENT
The systematic and business-driven development of our personnel is especially important for Terveystalo’s future success. Smooth work
and appropriate, responsible supervisory work ensure personnel’s well-being, which in turn benefits customers through better care and a
positive customer experience. Terveystalo provides professional training and opportunities for learning on the job. Terveystalo has
invested particularly in the development of leadership and supervisory work as well as supporting on-the-job self-study by increasing
online learning, for example.
The growth of digital health has been strong in recent years. Terveystalo has invested in training its personnel in the use of digital tools
and channels, as well as their use in customer work. Terveystalo provides training for physicians and nurses in the use of different types of
21
remote services.
In 2022, Terveystalo continued the development project aimed at streamlining the work of occupational health nurses and stren gthening
well-being at work. New operating models were implemented, which support a consistent quality of service for the customers and
strengthen work management and job satisfaction. According to the results of the professional survey, occupational health nurses' coping
at work has improved thanks to the new operating models.
In addition, training courses aimed at different professions and supporting professional development were organized during the year.
Terveystalo also trained its personnel on data protection and security, as well as on operations in compliance with requirements and
ethical guidelines. In 2022, the company organized training in Finland for a total of 69,733 (79,847) hours, which corresponds to 7.0 (8.7)
hours per employee.
In addition to internal training, Terveystalo engages in research and education cooperation with several universities and promotes youth
employment with trainee programs.
PROMOTING DIVERSITY, EQUALITY, AND NON-DISCRIMINATION
Terveystalo observes the principles of equality, fairness, and non-discrimination. At Terveystalo no one is discriminated based on race,
age, ethnic or national origin, nationality, language, religion, belief, opinions, health status, disability, sexual orientation, or other personal
reasons or circumstances. In recruitment, Terveystalo focuses on the person’s professional competence, the ability to take responsibility,
and the will to improve the company’s operations and themselves.
To realize these principles, Terveystalo Plc and its subsidiaries in Finland prepare company-specific personnel plans, training plans,
equality, and non-discrimination plans, and define targets for improvement.
In accordance with the diversity policy of the Board of Directors, the objective is to have a balanced gender distribution in the Board of
Directors. At the end of 2022, two of the five members of the Board of Directors were women. Four of the eight Management Group
members were women.
The remuneration of Terveystalo’s personnel is based on the principles of performance, equal treatment, and competitiveness. For jobs
that fall under collective agreements, such as nurses, the pay categories correspond to the classifications specified in the collective
agreements. Pay is also influenced by job-specific responsibility supplements and the employee’s years of experience. For senior salaried
employees, pay is determined based on the position and the demands of the job as well as other factors, including competence,
experience, performance, and results. The company -specific equality plans are focused on the equality of remuneration and are aimed at
promoting equal pay. Gender, for example, cannot be a factor that influences pay.
Sustainable economic growth
A responsible business is also financially profitable and sustainable. Terveystalo creates value for customers, society, and shareholders by
continuously developing the clinical, operational, and experienced quality of its work, enabling faster access to treatment, reducing sickness
absences, and employing, directly and indirectly, more than 16,800 people. Terveystalo is a significant employer, taxpayer, and provider of
health services in Finland.
Terveystalo creates economic added value not only for its customers but also for other key stakeholders, such as personnel, private
practitioners, material and service suppliers, and the society. Terveystalo’s most significant cash flows consist of revenue from service sales,
purchases from suppliers of goods and services, salaries paid to personnel, fees paid to private practitioners, taxes, investments, and
dividends paid to the shareholders.
In 2022, Terveystalo’ s revenue and other operating income totalled EUR 1,261.8 (1,158.0) million. The goods, materials and services
purchased from suppliers amounted to EUR 525.7 (488.9) million. Salaries and remuneration amounted to EUR 381.5 (315.9) million. Net
financial expenses to creditors amounted to EUR 2.9 (9.0) million. Dividends paid to our shareholders in 2022 based on the results of the
previous fiscal year amounted to EUR 35.4 (33.1) million. Terveystalo invested a total of EUR 58.5 (42.6) million to business development.
In 2022, Terveystalo’ s tax footprint totalled EUR 235.7 (191.0) million. In addition, a total of EUR 340.6 (316.3) million was paid to private
practitioners, who pay their individual taxes independently. Private practitioners' taxes are not included in Terveystalo’ s own tax footprint.
22
Sustainable consumption and climate action
Terveystalo is committed to the targets agreed upon in international climate summits for the mitigation of climate change. Terveystalo’s
goal is zero emissions from its own operations in 2030. The conservation and sustainable use of natural resources in Terveystalo’s supply
chains are promoted by reducing plastic consumption, recycling waste, increasing the efficiency of material management, and reducing the
number of small orders. Medical waste at Terveystalo’s units is also being reduced. Digital services enable simultaneously improving access
to care and reducing customers’ travel times and the emissions generated by travel.
In line with Terveystalo’s environmental policy, Terveystalo builds a sustainable relationship with the environment. The environmental
policy is guided by Terveystalo’s values and strategy, which the management and personnel have undertaken to comply with. Terveystalo
operates in line with the principles of sustainable development to reduce and eliminate environmental risks. Terveystalo complies with all
applicable laws, regulations, and procedures in place in the industry to ensure patient safety.
Terveystalo’s environmental goals are as follows:
●
Development of environmental management and awareness at all organizational levels
●
Identification, anticipation, and monitoring of direct and indirect environmental impacts
●
Reduction of environmental impacts in our day-to-day operations
●
Development of practices that promote sustainable development
Adverse environmental impacts are prevented by, for example:
●
reducing energy consumption and transitioning to carbon-neutral energy,
●
reducing the volume of waste created in our operations and increasing our recycling rate,
●
optimizing the life cycle of health care equipment, with due consideration for technological development,
●
taking environmental perspectives into account in our travel and car policy,
●
developing digital services,
●
by planning and implementing pharmaceutical services in an up-to-date manner,
●
taking environmental perspectives into account in centralized procurement and ensuring efficient inventory management, and
●
taking sustainable development and environmental perspectives into account in our network and business premises projects.
Terveystalo’s environmental program covers all clinics in Finland and its appropriateness is evaluated in quality management and
environmental management system audits. Some of the clinics are ISO 14001:2015 certified. Feelgood, Terveystalo’s subsidiary operating in
Sweden, also has ISO 14001:2015 Environmental Management System certification.
Terveystalo’s goal is to reduce the carbon footprint so that zero emissions in its own operations will be achieved in 2030. Between 2023 and
2030, any remaining greenhouse gas emissions will be compensated by investing in certified CO
2
is to eventually discontinue compensation measures and to achieve zero emissions in its own operations by 2030. A further goal is to reduce
direct and indirect CO
2
the target is for green electricity to account for 100 percent of the electricity purchased for Terveystalo’s operations. The recycling and
recovery of waste is another key theme in Terveystalo’s environmental responsibility, with the goal being to minimize waste in all
operations. The indicators used for this are the mixed waste intensity and the recovery rate and recycling rate of waste generated at
Terveystalo’s units.
In 2022, Terveystalo’s carbon footprint from Scope 1 and Scope 2 emissions (market-based) in Finland totalled 2,199.6 (644.0) metric tons of carbon
dioxide equivalent (tCO2e). Scope 2 emissions (market-based) from purchased electricity quadrupled from the previous year. This was due to the
exceptional electricity market disturbances, which forced Terveystalo to change its electricity supplier in the middle of the year, and because of the
high market price of electricity, no green electricity could be purchased for the rest of the year. In Sweden, Scope 1 and 2 emissions from Feelgood’s
operations totalled 276.7 tCO2e. Terveystalo’s carbon footprint consists mainly of the production of the electricity consumed by properties, emissions
generated by transport and travel as well as the waste generated in hospitals and clinics. The emissions generated by Terveystalo’s operations are
reduced, for example, by increasingly transitioning to green electricity and prioritizing low-emission vehicles.
Emissions
Terveystalo reports the direct (Scope 1) and indirect (Scope 2) greenhouse gas emissions arising from our operations – and part of our indirect Scope 3
emissions – in accordance with the GHG standard. The emissions from Swedish operations are reported for the first time for year 2022.
Scope 1
23
As the company does not, for the most part, own or control the properties at which it operates, the greenhouse gas emissions mostly consist of the
emissions from the company’s fleet of cars and the trucks used for imaging operations. The emissions arising from own driving and driving under the
company’s direct control are calculated based on fuel consumption. In 2022, Scope 1 CO2 emissions in Finland totalled 134,5 (245.5) metric tons of
carbon dioxide equivalent (tCO2e). In Sweden, Scope 1 emissions totalled 39,9 tCO2e.
Scope 2
Indirect Scope 2 greenhouse gas emissions arise from the production of electricity purchased by Terveystalo and the production of district heating
consumed at properties controlled by Terveystalo. In 2022, electricity purchases for properties controlled by Terveystalo totalled 15,841 (14,159)
MWh. Since January 2020, the company’s electricity portfolio (electricity purchased for properties) has been zero-CO2 green electricity. Zero-CO2
electricity purchased for 2022 in Finland totalled 7,730.4 (12,696) MWh, representing approximately 49 (89) percent of the company’s electricity
consumption in Finland. The remainder, 8,111 (1,499) MWh, corresponds to 2,199.6 (418.5) metric tons of CO2 equivalent (tCO2e, market-based).
The exceptional electricity market disturbances forced Terveystalo to change its electricity supplier in the middle of the year, and because of the high
market price of electricity, no green electricity was purchased for the rest of the year In Sweden electricity purchases for properties controlled by
Feelgood totalled 1,328.2 MWh, of which 67 percent was zero-CO2 green electricity. . As regards energy consumption, our target is for green
electricity to account for 100% of the electricity we purchase.
Scope 3
For indirect Scope 3 emissions, Terveystalo reports emissions arising from work-related travel by employees and waste created by the company’s
operations.
At Terveystalo unnecessary work-related travel is aimed to be avoided by encouraging the use of remote meetings whenever possible. In
2022, Terveystalo’s personnel in Finland flew a total of 0.7 (0.3) million kilometres in work-related travel, equalling 84.1 39.9) tCO2e. Regarding
reimbursable work-related travel, Terveystalo’s personnel in Finland travelled a total of 2.6 (1.9) million kilometres, equalling 440.8 (322.1) tCO2e.
Terveystalo encourage our personnel to choose low-emissions vehicles as company cars. The average emissions of the company cars used by the
Group in Finland amount to 72 (92) g CO2e/km. In Sweden, personnel is encouraged to use trains instead of flying and to prefer remote meetings
when possible. Terveystalo’s personnel in Sweden flew a total of 0.31 million kilometres, resulting in emissions of 45.1 tCO2e. A total of 262.6 tCO2e
were emitted from all the work-related trips of the Swedish personnel.
The indirect emissions arising from waste in Finland totalled 41.7 (36.6) tCO2e in 2022. In Sweden, emissions from waste are very low since the
amount of waste generated from operations is small and is mainly generated in offices. The emissions arising from waste in Sweden totalled 2.1
tCO2e.
Terveystalo’s CO2 emissions intensity is low due to the nature of the Group’s operations. In 2022, Terveystalo’s emissions intensity (Scope 1 and
Scope 2, market-based) relative to revenue amounted to 1.8 (0.6) gCO2e/EUR. Relative to the number of employees, the emissions intensity was 0.4
(0.12) tCO2e. Figures for 2022 also include operations in Sweden.
Waste
Terveystalo’s goal is to minimize mixed waste in all operations and forward as large a share of the waste as possible to be recovered. The
indicators used for this are the mixed waste intensity and the recovery rate and recycling rate of waste generated at Terveystalo’s units.
In 2022, the mixed waste intensity of Finnish operations was 5.8 (6.4), the recovery rate of waste 100%, and the recycling rate of waste
67%.
According to the company's assessment, there are no significant risks associated with environmental aspects due to the nature of the company's
operations.
EU taxonomy
The EU taxonomy is a classification system for sustainable finance that seeks to establish criteria for determining environmentally
sustainable business. The regulation, which entered into force in July 2020, lays the foundations for the EU's taxonomy by setting out the
general conditions that economic activity must meet to be classified as sustainable from climate perspective. Large companies must report
the share of sustainable business in their business in accordance with taxonomy criteria.
24
At present, EU taxonomy mainly concerns the economic activities that play the most important role in mitigating and adapting to climate
change. As a result, many industries, such as health care services, are almost completely excluded from the scope of the current taxonomy.
Terveystalo has determined its taxonomic eligibility by examining its activities in relation to the economic activities listed in the taxonomy
and their NACE codes. Only one of Terveystalo’ s businesses is classified in taxonomy (12.1 Residential care activities, NACE code Q87).
After this, Terveystalo has evaluated the taxonomy alignment of the operation. The activity is classified as aligned with the taxonomy if the
taxonomy's criteria are met: 1. The activity essentially supports the achievement of at least one environmental goal, 2. it does not have
significant adverse effects from the perspective of other environmental goals, and 3. the activity complies with the minimum social
safeguards defined in the taxonomy (Minimum safeguards). Based on this assessment, Terveystalo's activities listed in the taxonomy (12.1
Residential care activities) cannot be considered taxonomy -aligned, because the activities, due to their nature, do not target or support the
achievement of the taxonomy's environmental goals.
As a result of the assessment, it has been found that the significance of Terveystalo’ s taxonomic functions is negligible in terms of
indicators. The key figures are the share of taxonomy -eligible and taxonomy-aligned operations (percent) in terms of net sales, operating
costs, and investments. According to the company's estimate, 1 percent of Terveystalo’s revenue, operating costs and investments are
eligible with the current taxonomy and 99 percent are non-eligible. Furthermore, 0 percent of Terveystalo’s revenue, operating costs and
investments are taxonomy -aligned, and 100 percent are non-taxonomy-aligned.
Terveystalo strives to minimize the environmental impact of its operations and to promote the digitalisation of health care, but these
measures are not included in the current taxonomy. Terveystalo’s environmental sustainability is described in the Sustainability section of
Annual Report and in the Board of Directors' report.
25
Share of revenue, OPEX and CAPEX from services associated with Taxonomy eligible and aligned activities 2022
A. Taxonomy eligible economic activities
Code
Absolute
revenue,
MEUR
Share of
revenue, %
Absolute
CAPEX, MEUR
Share of
CAPEX, %
Absolute
OPEX, MEUR
Share of
OPEX, %
A.1 Environmentally sustainable (taxonomy
aligned) activities
-
0
0 %
0
0 %
0
0 %
A.2 Taxonomy eligible, but not
environmentally sustainable (other than
taxonomy aligned) activities
Residential care activities/Child welfare
12.1
11
1 %
1
1 %
10
1 %
Total A1+A2
B. Taxonomy non-eligible economic activities
Absolute
revenue,
MEUR
Share of
revenue, %
Absolute
CAPEX, MEUR
Share of
CAPEX, %
Absolute
OPEX, MEUR
Share of
OPEX, %
Taxonomy non-eligible economic activities
1248
99 %
57
99 %
1083
99 %
Total A+B
1 259
100 %
58
100 %
1093
100 %
Shares, shareholders, and Board authorizations
At the end of 2022, Terveystalo’s market value was EUR 794 (1,516) million and the closing price was EUR 6.25 (11.84). In 2022, the highest
price of Terveystalo’s share on Nasdaq Helsinki Ltd was EUR 11.94 (12.56), the lowest price was EUR 6.06 (10.10), and the average price was
EUR 9.41 (11.34). A total of 29.5 (32.0) million shares were traded in 2022. At the end of the reporting period, the number of Terveystalo
shares registered in the Trade Register was 127,036,531 (128,036,531). The following tables list the largest shareholders, distribution of
ownership, and owner groups.
The largest registered shareholders on 31 December 2022
Name
Number of shares
% of shares
Votes
% of votes
Varma Mutual Pension Insurance Company
22,151,945
17.44
22,151,945
17.44
Rettig Group AB
21,153,191
16.65
21,153,191
16.65
Pohjola Insurance Ltd
10,530,332
8.29
10,530,332
8.29
Hartwall Capital
8,231,690
6.48
8,231,690
6.48
OP Life Assurance Company Ltd
7,136,652
5.62
7,136,652
5.62
Ilmarinen Mutual Pension Insurance Company
5,736,817
4.52
5,736,817
4.52
Elo Mutual Pension Insurance Company
2,834,734
2.23
2,834,734
2.23
Local Tapiola Mutual Insurance Company
2,600,000
2.05
2,600,000
2.05
Åbo Akademi University Foundation
1,816,242
1.43
1,816,242
1.43
The State Pension Fund of Finland
1,300,000
1.02
1,300,000
1.02
Ten largest in total
83,491,603
65.72
83,491,603
65.72
The list is based on the register of shareholdings maintained by Euroclear, and it does not include nominee-registered shares.
According to its own notification and its custodian’s notification,
Lannebo Fonder
26
Distribution of ownership 31 December 2022
Number of shares
Number of
shareholders
% of
shareholders
Number of
securities
% of
securities
Number of
votes
% of
votes
1–100
14,173
45.81
660,697
0.52
660,697
0.52
101–500
11,739
37.94
2,969,880
2.34
2,969,880
2.34
501–1,000
2,670
8.63
2,066,923
1.63
2,066,923
1.63
1,001–5,000
1,909
6.17
3,970,022
3.13
3,970,022
3.13
5,001–10,000
199
0.64
1,432,937
1.13
1,432,937
1.13
10,001–50,000
171
0.55
3,793,301
2.99
3,793,301
2.99
50,001–100,000
25
0.08
1,914,641
1.51
1,914,641
1.51
100,001–500,000
33
0.11
7,715,245
6.07
7,715,245
6.07
500,001–
19
0.06
102,512,885
80.70
102,512,885
80.70
Total
30,938
100.00
127,036,531
100.00
127,036,531
100.00
of which nominee-
registered
12
0.04
13,244,454
10.43
13,244,454
10.43
Non-transferred, total
0
0
0
0
0
In general account
0
0
0
0
In special accounts, total
0
0
0
0
Total issued
127,036,531
100.00
127,036,531
100.00
Shareholder groups, 31 December 2022
Shareholders by sector
Number of shares
% of shares
Households
12,416,744
10.91
Public entities
32,304,419
28.39
Financial and insurance institutions
28,261,793
24.84
Companies
16,328,943
14.35
Non-profit institutions
3,256,792
2.86
Foreign owners
21,223,386
18.65
Total
113,792,077
100.00
Of which nominee-registered
13,244,454
10.43
Management shareholding, 31 December 2022
Name Position
Number of
shares
% of
shares
of votes %
Kari Kauniskangas
Chairman of the Board of Directors
16,532
0.01 %
0.01 %
Matts Rosenberg
Member of the Board of Directors
11,366
0.01 %
0.01 %
Carola Lemne
Member of the Board of Directors
2,627
0.00 %
0.00 %
Kristian Pullola
Member of the Board of Directors
5,075
0.00 %
0.00 %
Katri Viippola
Member of the Board of Directors
8,954
0.01 %
0.01 %
Ville Iho
President and CEO
5,000
0.00 %
0.00 %
Juuso Pajunen
Chief Financial Officer
12,000
0.01 %
0.01 %
Petri Bono
Chief Medical Officer
7,587
0.01 %
0.01 %
Siina Saksi
Chief Operating Officer, Healthcare Services
60,380
0.05 %
0.05 %
Marja-Leena Tuomola
Chief Commercial Officer, Healthcare Services
1,000
0.00 %
0.00 %
Kati Sulin
Senior Vice President, Digital Business
0
0.00 %
0.00 %
Mikko Tainio
Senior Vice President, Portfolio Businesses
518
0.00 %
0.00 %
Minttu Sinisalo
Senior Vice President, Human Resources
0
0.00 %
0.00 %
Management shareholding in total
131,039
0.10 %
0.10 %
Number of shares total
127,036,531
100 %
100 %
27
Notifications of major shareholdings
In 2022, Terveystalo Plc did not receive any notifications pursuant to Chapter 9, Section 5 of the Finnish Securities Markets Act.
The Board’s authorizations
The Board has been authorized to resolve the repurchase of the company’s own shares using the unrestricted equity of the company. The
authorization covers a maximum of 12,803,653 own shares in total, which corresponds to approximately 10 percent of the company’s
currently registered shares.
The Board has also been authorized to resolve the issuance of shares and special rights entitling to shares as referred to in Chapter 10,
Section 1 of the Finnish Companies Act. The authorization covers a maximum of 12,803,653 own shares in total, which corresponds to
approximately 10 percent of the company’s currently registered shares.
Authorizations were not used during the financial period.
Dividend Policy and distribution of profits for 2022 proposed by the Board
The objective of Terveystalo’s Dividend Policy is to distribute a minimum of 40 percent of earnings per share in dividends. The current
financial performance, development potential, financial position, and capital requirements are taken into account. In 2022, earnings per
share were EUR 0.19 (0.63).
The parent company’s distributable funds totaled EUR 530.8 (542.6) million, of which EUR 23.7 (43.8) million is profit for the financial year.
The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.28 (0.28) per share totaling EUR 35.4 (35.4) million
be paid based on the balance sheet adopted for the financial year ended 31 December 2022. The dividend would be paid in two
installments as follows:
The first dividend installment of EUR 0.14 per share would be paid to the shareholders who are registered in the shareholders' register of
the Company maintained by Euroclear Finland Ltd on the record date of the first dividend installment on 27 March 2023. The Board of
Directors proposes that the first dividend installment would be paid on 3 April 2023.
The second dividend installment of EUR 0.14 per share would be paid to shareholders who are registered in the shareholders' register of the
Company maintained by Euroclear Finland Ltd on the record date of the second dividend installment on 2 October 2023. The Board of
Directors proposes that the second dividend installment would be paid on 9 October 2023. The Board of Directors also proposes that the
Annual General Meeting would authorize the Board of Directors to resolve, if necessary, on a new record date and date of payment for the
second dividend installment should the rules of Euroclear Finland Ltd or statutes applicable to the Finnish book-entry system change or
otherwise so require.
No substantial changes have occurred in the company’s financial position since the end of the financial year. The company’s liquidity is good
and, in the Board’s opinion, will not be jeopardized by the proposed distribution of profits.
Decisions of the Annual General Meeting 2022 and the first Board meeting
The Annual General Meeting of Terveystalo Plc was held on 7 April 2022 in Helsinki, Finland. The Annual General Meeting adopted the
financial statements for the financial year 2021 and discharged the members of the Board of Directors and the CEO from liability. The
Annual General Meeting approved the remuneration report for governing bodies and decided to support the amended remuneration policy
for governing bodies which was presented to the Annual General Meeting.
The Annual General Meeting decided, in accordance with the proposal of the Board of Directors, that a dividend of EUR 0.28 per share
(totaling approximately EUR 35.6 million with the current number of shares) be paid based on the balance sheet adopted for the financial
year ended 31 December 2021. The dividend was paid in two installments as follows. The first dividend installment of EUR 0.14 per share
was paid to the shareholders who are registered in the shareholders' register of the Company maintained by Euroclear Finland Ltd on the
record date of the first dividend installment on 11 April 2022. The first dividend installment was paid on 20 April 2022. The second dividend
28
installment of EUR 0.14 per share was paid to shareholders who are registered in the shareholders' register of the Company maintained by
Euroclear Finland Ltd on the record date of the second dividend installment on 10 October 2022. The second dividend installment was paid
on 19 October 2022. The Annual General Meeting also authorized the Board of Directors to resolve, if necessary, on a new record date and
date of payment for the second dividend installment should the rules of Euroclear Finland Ltd or statutes applicable to the Finnish book-
entry system change or otherwise so require.
The number of members of the Board of Directors was confirmed to be six (6). Dag Andersson, Kari Kauniskangas, Kristian Pullola and Katri
Viippola were re-elected as members of the Board and Carola Lemne and Matts Rosenberg were elected as new members of the Board for
a term that ends at the end of the Annual General Meeting 2023.
KPMG Oy Ab was re-elected as the Company's auditor. KPMG Oy Ab has notified that Henrik Holmbom, APA, would be acting as the
principal auditor.
As proposed by the Board of Directors, the Annual General Meeting resolved to authorize the Board of Directors to resolve on the
repurchase and/or on the acceptance as pledge of the Company's own shares using the unrestricted equity of the Company. The
authorization covers a maximum of 12,803,653 shares, which corresponds to approximately 10% of all shares in the Company. In addition,
as proposed by the Board of Directors, the Annual General Meeting resolved to authorize the Board of Directors to decide on the issuance
of shares and the issuance of special rights entitling to shares referred to in Chapter 10, Section 1 of the Companies Act. The authorization
covers a maximum of 12,803,653 shares, which corresponds to approximately 10% of all shares in the Company. These authorizations are
effective until the end of the next Annual General Meeting, however no longer than until 30 June 2023.
As proposed by the Board of Directors, the Annual General Meeting resolved to authorize the Board of Directors to decide on donations in a
total maximum of EUR 150,000 for charitable or corresponding purposes. In addition, the Annual General Meeting resolved to authorize the
Board of Directors to decide on the donation recipients, purposes of use, and other terms of the donations. The authorization will remain
effective until the end of the next Annual General Meeting 2023, however no longer than for a period of 18 months from the date of the
resolution of the Annual General Meeting.
The new Board elected Kari Kauniskangas as Chairman of the Board and Matts Rosenberg as Vice Chairman of the Board. Kristian Pullola
was elected Chairman of the Audit Committee and Matts Rosenberg and Katri Viippola were elected members. Kari Kauniskangas was
elected Chairman of the Remuneration Committee and Dag Andersson and Carola Lemne were elected members of the Committee.
Change in the Board of Directors and Remuneration Committee
On 14 October, 2022, Terveystalo Oyj's Board of Directors elected Katri Viippola as a new member of the Remuneration Committee to
replace Dag Andersson, who passed away suddenly in September. Katri Viippola is independent of the company. The Remuneration
Committee is chaired by Kari Kauniskangas and Carola Lemne is the other member.
Information on the compliance with the Corporate Governance Code can be found in the Corporate Governance Statement.
Change i
n the charter and composition of Terveystalo’s Shareholders' Nomination Board
At its meeting held on 13 June 2022, the Shareholders' Nomination Board of Terveystalo Plc made a technical amendment to its charter.
From now on, a shareholder entitled to appoint a member to the Nomination Board is entitled to change his or her representative on the
Nomination Board even after the publication of the Nomination Board's proposals to the Annual General Meeting. The key parts of the
Nomination Board's charter are available at:
. Rettig Group announced that it will appoint Tomas von Rettig as its representative on the Nomination Board as of 13
June 2022. Prior to the change, Rettig Group was represented by Matts Rosenberg.
The composition of the Shareholders' Nomination Board of Terveystalo Plc included, after the change of the Board's term of office on 13
September 2022, Risto Murto from Varma Mutual Pension Insurance Company, Tomas von Rettig from Rettig Group, Timo Ritakallio from
Pohjola Insurance and Peter Therman from Hartwall Capital, as well as Kari Kauniskangas, Chairman of the Board of Directors of Terveystalo
Plc. The Nomination Board is chaired by Risto Murto.
29
Changes in Terveystalo’s Executive Team and operating model
Terveystalo announced on 14 October 2022 that it strengthens long-term value creation, customer focus, and the execution of the profit
improvement program announced on 14 October 2022, Terveystalo is planning to change its operating model and organizational structure.
The changes clarify roles and responsibilities, strengthen the independent and efficient management of separate businesses, and
strengthen the implementation of intact care pathways and high-quality care.
The new organization came into force at the beginning of 2023, and it consists of three business areas: Healthcare Services, Portfolio
Businesses, and Swedish business.
Changes in Terveystalo's Executive Team
With the new operating model and organizational changes, the responsibilities of the members of the management team changed as
follows:
•
Siina Saksi, Chief Operating Officer, Healthcare Services
The organization is responsible for the operational functions of Healthcare Services.
•
Marja-Leena Tuomola, Chief Commercial Officer, Healthcare Services
The organization is responsible for the commercial operations of Healthcare Services in all customer segments.
•
Mikko Tainio, Senior Vice President, Portfolio Businesses
Portfolio Businesses include outsourcing, staffing, digital services for the public sector, oral health, rehabilitation, child protection
as well as massage services and training. The change strengthens the independent development and management of these
businesses.
In addition to the above-mentioned executives, Terveystalo's new Executive team includes Chief Medical Officer Petri Bono, Chief Financial
Officer Juuso Pajunen (started 28 November 2022), Senior Vice President, Digital Business Kati Sulin, and Senior Vice President, People, and
Careers Minttu Sinisalo. All the above report to CEO Ville Iho. Elina Saviharju continues in her role as the General Counsel of Terveystalo.
In the new operating model, the role of the consumer business changes, and Veera Siivonen, Senior Vice President, Consumer Business
decided to leave the company after a very successful and productive career in the company.
Terveystalo will change the structure of its financial reporting in accordance with the new operating model and will publish the comparison
data of the new segments for 2022 before publishing the results of the first quarter of 2023.
Corporate governance
Terveystalo Plc’s Corporate Governance Statement, Remuneration Policy, and Remuneration Report for 2022 have been published as
separate documents from the Board of Directors' Report and as part of the Annual report on pages 71-95, and are also available on the
company's website.
Activities following the end of the reporting period
Terveystalo Plc's Board of Directors has approved a new performance period covering years 2023-2025 of the long-term share-based
incentive plan for key personnel
The Performance Share Plan is based on a rolling 3-year performance period structure, with a new performance period starting at the
beginning of each year if so decided by the Board. The Board decides on the participants, performance measures, and targets as well as
earning opportunities on an annual basis. The purpose of the program is to align the objectives of shareholders and key personnel to
increase the company's value in the long term, and to commit key personnel to implement Terveystalo's strategy by offering them a
competitive, share-based incentive program. The establishment of the program and its main terms were announced in a stock exchange
release published on 3 December 2020.
Performance Period 2023-2025 of the Performance Share Plan (PSP)
30
During the performance period 2023-2025, the performance indicators on the basis of which share rewards may be paid are absolute Total
Shareholder Return (TSR) and relative TSR (compared to the OMX HKI benchmark CAP GI index).
Terveystalo's Board of Directors confirms the total amount of shares earned after the end of the performance period. The share rewards
that may be paid based on the 2023–2025 earning period will be paid in Terveystalo Plc shares after the end of the performance period,
provided that the performance targets set for the program by the Board are achieved. The maximum number of shares to be paid based on
this plan is 640,000 shares. Taxes and tax-like payments to the recipient are deducted from the share reward, after which the remaining net
amount is paid to the participants in shares.
No more than approximately 70 people selected by the Board are eligible to participate in the program, including members of Terveystalo's
Executive Team.
Terveystalo applies a share ownership requirement to the members of the Executive Team. Each member of the Executive Team is expected
to retain at least 50 percent of the net shares received under the long-term incentive plan until his or her shareholding in Terveystalo is at
least equal to his or her annual gross base salary.
Performance Period 2023-2025 of the Restricted Share Plan (RSP)
The purpose of the Restricted Share Plan is to act as a supplementary structure for separately selected key personnel of Terveystalo in
special situations.
The share rewards will be paid in Terveystalo Plc shares after the end of the performance period, provided that the individual participants
are still employed by Terveystalo. The maximum number of shares to be paid based on this plan is 64,000 shares.
The most significant short
-
term risks and uncertainty factors
Terveystalo’s risk management is governed by the risk management policy approved by the Board. The policy defines goals, principles,
organizations, responsibilities, and practices for risk management. The management of financial risks complies with the Group’s financing
policy approved by Terveystalo’s Board.
The risks and uncertainty factors described below are considered to potentially have a significant impact on the company’s business
operations, financial results, and outlook within the next 12 months. The list is not intended to be exhaustive.
●
Achieving the targeted financial effects of the launched profit improvement program is necessary to combat the impact of high
inflation and to achieve the financial targets set by the company.
●
The company’s business operations rely on its capacity to identify, recruit, and retain competent and professional healthcare
professionals, employees, and executives. The increased supply of services and increased competition may affect the availability
of healthcare professionals, particularly in major cities. Turnover in key employees involves the risk of losing knowledge and
expertise.
●
Weak general economic performance and high inflation in Finland and their effects on the financial circumstances of private
individuals, employers, and public entities may adversely affect Terveystalo’s business and results of operations by decreasing the
demand for Terveystalo’s services, as well as may adversely affect the availability of financing.
●
The development and implementation of information system projects and services, service products, and operating models
involve risks. The company develops new digital customer solutions, which increases the overall risk related to information
systems. A failure in the development of digital systems may expose Terveystalo to potential technical faults and disturbances.
●
The company may not be able to find suitable acquisition targets or expansion opportunities under favorable terms, and the
integration of acquisition targets is not necessarily realized as planned.
●
Terveystalo’s expansion to new geographical locations involves several risks, and failure to identify expansion opportunities,
recruit new employees, and achieve estimated benefits may adversely affect Terveystalo’s business and the results of operations.
●
The company’s business is very dependent on functioning information systems, data communication, and external service
providers. Interruptions can result from hardware failure, software failure, or cyber threats. Long-lasting malfunction of
information systems or payment transfers can lead to significant loss of sales and a decline in customer satisfaction.
●
Endangered information security or privacy can lead to losses and claims for damages and endanger reputation.
31
●
The COVID-19 pandemic and other potential pandemics or epidemics and related restrictive measures may adversely affect the
business operations of Terveystalo through, among other things, demand for certain healthcare services and challenges in the
supply chain.
●
Changes in the competitive landscape, new competitors entering the markets, and increasing price competition may have a
negative impact on the company’s profitability and growth potential.
●
Terveystalo is exposed to changes in demand for occupational healthcare services due to demographic trends; aging and shrinking
working-age population.
●
The Social Welfare and Healthcare Reform in Finland and its legal interpretations may have impacts on Terveystalo’s business and
results of operations.
●
Changes in compensation systems for healthcare services may adversely affect Terveystalo’s business, financial position, and
results of operations.
●
Failures or deficiencies in the operational risk management, medical quality, and internal control processes may result in failure of
quality control, including medical quality, or otherwise adversely affect Terveystalo's profitability and reputation.
●
Terveystalo’s operations could be subject to labor disruptions or disputes.
●
The company is a party to and may become a party to, legal action or administrative procedures initiated by the authorities,
patients, or third parties.
According to the company’s opinion, its currently pending legal obligations and court cases are not
significant in nature.
Risk management at Terveystalo and risks related to the company’s business are described in more detail on the company’s website and in
the company’s Annual Review.
Annual General Meeting 2023
Terveystalo Plc's Annual General Meeting (AGM) is planned to be held on Thursday 23 March 2023.
Capital Markets Day 2023
Terveystalo will arrange Capital Markets Day on 10 May 2023 in Helsinki.
Terveystalo Plc
Board of Directors
32
Consolidated financial statements, IFRS
Consolidated statement of comprehensive income
EUR mill.
Note
1.1.-31.12.2022
1.1.-31.12.2021
Revenue
4, 5
Other operating income
6
Materials and services
7
-525,7
-488,9
Employee benefit expenses
8
-455,0
-378,2
Depreciation, amortization and impairment losses
9
-134,9
-91,7
Other operating expenses
10
-112,3
-89,2
Operating profit
Financial income
11
Financial expenses
11
-10,4
-9,9
Net finance expenses
-2,9
-9,0
Share of results in associated companies
-0,1
-0,3
Profit before taxes
Income tax expense
12
-6,5
-20,3
Profit for the period
Profit attributable to
Owners of the parent company
Non-controlling interests
Other comprehensive adjustments
Items that may be reclassified to profit or loss
-5,3
-0,8
Items that will not be reclassified to profit or loss
28
Other comprehensive income for the period, net of tax
-5,1
-0,6
Total comprehensive income
Total comprehensive income attributable to:
Owners of the parent company
Non-controlling interest
Earnings per share for profit attributable to the shareholders of the parent
company, in euro
Basic earnings per share
13
Diluted earnings per share
13
The notes are an integral part of the Consolidated financial statements.
33
Consolidated statement of financial position
EUR mill.
Note
31 Dec
2022
31 Dec
2021
ASSETS
Non-current assets
Property, plant and equipment
14
Right-of-use assets
14
Goodwill
15, 16
Other intangible assets
15
Investment properties
17
Investments in associates
18
Loan receivables
20
Deferred tax assets
12
Other non-current assets
20
Total non-current assets
Current assets
Inventories
Trade and other receivables
22
Cash and cash equivalents
23
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity attributable to equity holders of the Company
Share capital
Invested non-restricted equity reserve
Treasury shares
-15,8
-18,0
Retained earnings
Equity attributable to equity holders of the Company total
Non-controlling interest
TOTAL EQUITY
Non-current liabilities
Non-current financial liabilities
20, 21, 25
Non-current lease liabilities
14, 21, 25
Deferred tax liabilities
12
Provisions
27
Other liabilities
Total non-current liabilities
Current liabilities
Current financial liabilities
20, 21, 25
Current lease liabilities
14, 21, 25
Current tax liabilities
Provisions
27
Trade and other payables
26
Total current liabilities
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
The notes are an integral part of the consolidated financial statements.
34
Consolidated statement of cash flows
EUR mill.
Note
1.1.-31.12.2022
1.1.-31.12.2021
Cash flows from operating activities
Profit before income taxes
Adjustments for
Non-cash transactions
9
27
-4,1
Gains and Losses on sale of property, plant, equipment and other changes
-0,3
-0,1
Net finance expenses
11
Changes in working capital
-17,0
-0,2
Interests received
Income taxes paid
-26,0
-20,7
Net cash from operating activities
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired
3
-34,9
-65,3
Acquisition of property, plant and equipment
-30,2
-21,0
Acquisition of intangible assets
-29,0
-22,1
Proceeds from the disposal of associates
Proceeds from sale of financial assets
Acquisition of business operations, net of cash acquired
3
-0,7
-0,1
Proceeds from sale of property, plant and equipment
Dividends received
Net cash from investing activities
-93,9
-108,0
Cash flows from financing activities
Acquisition of non-controlling interests
3
-0,0
-12,7
Acquisition of treasury shares
24
-11,3
Proceeds from non-current borrowings
25
Repayment of non-current borrowings
25
-40,0
-41,9
Proceeds from current borrowings
25
Repayment of current borrowings
25
-116,7
-46,5
Payment of lease liabilities
25
-49,3
-42,4
Payment of hire purchase liabilities
25
-5,3
-5,9
Interests and other financial expenses paid
-8,4
-9,3
Dividends paid
-35,4
-33,1
Net cash from financing activities
-44,6
-126,1
Net change in cash and cash equivalents
-39,0
Cash and cash equivalents at 1 January
Exchange rate differences
-0,3
-0,1
Cash and cash equivalents at 31 December
The notes are an integral part of these Consolidated financial statements.
35
Consolidated statement of changes in equity
EUR mill.
Share
capital
Invested
non-
restricted
equity
reserve
Treasury
shares
Retained
earnings
Total
Non-
controlling
interests
Total
equity
Equity 1 Jan 2022
-18,0
Comprehensive income
Profit for the period
Other comprehensive income
-5,1
-5,1
-5,1
Transactions with owners
-3,0
-0,8
-0,8
-35,4
-35,4
-35,4
Transactions with non-controlling
interests
Transactions with non-controlling
interest
-
-
-
-
-
Equity 31 Dec 2022
-15,8
Accumulated translation differences on 31 December 2022 were EUR -5,3 million.
EUR mill.
Share
capital
Invested
non-
restricted
equity
reserve
Treasury
shares
Retained
earnings
Total
Non-
controlling
interests
Total
equity
Equity 1 Jan 2021
-6,7
Comprehensive income
Profit for the period
Other comprehensive income
-
-
-
-0,6
-0,6
-
-0,6
Transactions with owners
Acquisition of treasury shares
-
-
-11,3
-
-11,3
-
-11,3
Share-based payments
Dividends
-
-
-
-33,1
-33,1
-
-33,1
Transactions with non-controlling
interests
Non-controlling interest on acquisition
of subsidiary
-
-
-
-
-
Transactions with non-controlling
interest
-
-
-
-12,8
-12,7
Equity 31 Dec 2021
-18,0
The notes are an integral part of the consolidated financial statements.
36
COMPANY INFORMATION
Name of reporting entity or other means of identification
Country of incorporation
Legal form of entity
Domicile of entity
Address of entity's registered office
Principal place of business
Description of nature of entitys operations and principal activities
Name of parent entity
1. Corporate information
Terveystalo Plc is a Finnish public limited liability company organized under the laws of Finland and domiciled in
Helsinki, Finland. The parent company, Terveystalo Plc, is listed on the Nasdaq Helsinki. Terveystalo Group (“the
Group”, “Terveystalo”) consists of the parent company and 33 subsidiaries. More information on subsidiaries is
presented in note 31. A copy of the consolidated financial statements is available at the Group’s website
, from Terveystalo Oyj / Corporate Communications, Jaakonkatu 3, 00100 Helsinki, Finland, or
via e-mail at investors@terveystalo.com.
Terveystalo is a leading private healthcare service provider in Finland. The company offers general practice and
specialist medical care, diagnostic services, outpatient surgery, dental services and other adjacent services to
corporate, private and public sector customers.
In its meeting on 9 February 2023, the Board of Directors of Terveystalo Plc approved the publishing of these
consolidated financial statements.
According to the Finnish Limited Liability Companies Act, shareholders have the right to approve or reject the
financial statements in the Annual General Meeting held after the publication of the financial statements. The
Annual General Meeting also has the right to make a decision to amend the financial statements.
2. Accounting policies for the consolidated financial statements
2.1 Basis of preparation
The consolidated financial statements of Terveystalo have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union. The consolidated financial statements have been
prepared in compliance with the IAS and IFRS standards as well as the SIC and IFRIC interpretations in force on 31
December 2022. The consolidated financial statements also comply with the regulations of Finnish accounting and
company legislation complementing the IFRSs.
The consolidated financial statements are presented in millions of euro and have been prepared under the historical
cost basis, unless otherwise stated in the accounting principles. All figures presented have been rounded, and
consequently the sum of individual figures may deviate from the presented aggregate figure. Key figures have been
calculated using exact figures.
2.2 Application of new and amended IFRSs and new IFRIC agenda decisions
37
New and amended standards applied in the financial year 2022
The Group has applied as from 1 January 2022 the following new and amended standards that have come into
effect:
Amendments to IAS 37 –
Onerous Contracts
When an onerous contract is accounted for based on the costs of fulfilling the contract, the amendments clarify that
these costs comprise both the incremental costs and an allocation of other direct costs. The impacts of the
amendments on Terveystalo’s consolidated financial statements have not been significant.
Annual Improvements to IFRS Standards 2018–2020
IFRS 9: The amendment clarifies that – for the purpose of performing the ‘’10 per cent test’ for derecognition of
financial liabilities – in determining those fees paid net of fees received, a borrower includes only fees paid or
received between the borrower and the lender, including fees paid or received by either the borrower or lender on
the other’s behalf.
IFRS 1: The amendment simplifies the application of IFRS 1 for a subsidiary that becomes a first-time adopter later
than its parent.
IFRS 16: The amendment removes the illustration of payments from the lessor relating to leasehold improvements.
The example was not clear as to why such payments are not a lease incentive
.
IAS 41: The amendment removes the requirement to exclude cash flows for taxation when measuring fair value,
thereby aligning the fair value measurement requirements in IAS 41 with those in IFRS 13 Fair Value Measurement.
The annual improvements have no impacts on Terveystalo’s consolidated financial statements.
Amendments to IAS 16 –
Proceeds before Intended
Under the amendments, proceeds from selling items before the related item of PPE is available for use should be
recognized in profit or loss, together with the costs of producing those items. The amendments have no impacts on
Terveystalo’s consolidated financial statements.
Amendments to IFRS 3 –
Reference to the Conceptual Framework
The amendment updates a reference in IFRS 3 and made further amendments to avoid unintended consequences
of updating the reference. The impacts of the amendments on Terveystalo’s consolidated financial statements have
not been significant.
Adoption of new and amended standards and interpretations applicable in future financial years
* = not yet endorsed for use by the European Union as of 31 December 2022.
IFRS 17 Insurance Contracts
(to be applied from 1 January 2023)
The new standard for insurance contracts will help investors and others better understand insurers’ risk exposure,
profitability and financial position. This standard replaces the IFRS 4 standard. The impact of the standard on
Terveystalo’s consolidated financial statements is not expected to be significant.
Classification of Liabilities as Current or Non-current*
(effective for financial years
beginning on or after 1 January 2023, early application is permitted)
38
The amendments are to promote consistency in application and clarify the requirements on determining if a liability
is current or non-current. The impacts of the amendments on Terveystalo’s consolidated financial statements are
not expected to be significant.
Amendments to IAS 1 –
Disclosure of Accounting Policies
(effective for financial years beginning on or after 1
January 2023, early application is permitted)
The amendments clarify the application of materiality to disclosure of accounting policies to help companies provide
useful accounting policy disclosures. The impacts of the amendments on Terveystalo’s consolidated financial
statements are not expected to be significant.
Amendments to IAS 8 –
Definition of Accounting Estimates
January 2023, early application is permitted)
The amendments clarify how companies should distinguish changes in accounting policies from changes in
accounting estimates, with a primary focus on the definition of and clarifications on accounting estimates. The
impacts of the amendments on Ter veystalo’s consolidated financial statements are not expected to be significant.
Amendments to IAS 12 –
Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(effective for financial years beginning on or after 1 January 2023, early application is permitted)
The amendments narrow the initial recognition exemption (IRE) and clarify that the exemption does not apply to
transactions such as leases and decommissioning obligations which give rise to equal and offsetting temporary
differences. The impacts of the amendments on Terveystalo’s consolidated financial statements are not expected to
be significant.
Amendments to IFRS 17 –
Comparative Information
2023)
Amendment to IFRS 17 to alleviate mismatches in comparative information arising from the different transition
requirements of IFRS 9 and IFRS 17. The impacts of the amendments on Terveystalo’s consolidated financial
statements are not expected to be significant.
Amendments to IFRS 10 and IAS 28 –
Sale or Contribution of Assets between an Investor and its Associate
or Joint Venture
The amendments address the conflict between the existing guidance on consolidation and equity accounting and
require the full gain to be recognised when the assets transferred meet the definition of a ‘business’ under IFRS
3 Business Combinations.
2.3 Critical accounting estimates and judgements
The preparation of the financial statements requires management to make certain estimates and assumptions that
are based on management's best view of the circumstances prevailing at the reporting date, prior experience and
assumptions about future events related, among other things, to the expected development of the Group's
39
economic environment in terms of sales and cost level. However, it is possible that the realized outcomes differ
from the estimates and assumptions used in the financial statements. In addition, the application of the accounting
policies requires judgement, especially when the current IFRS standards have alternative accounting, valuation and
presentation methods.
The Group monitors the realization of the estimates and assumptions and changes in the underlying factors on a
regular basis together with the operating units by using several internal and external information sources. Changes
in estimates or assumptions are recognized in the period when the estimate or assumption is revised, and in the
future periods if the change affects the subsequent periods.
The critical issues requiring management’s judgement are presented below:
Intangible assets in connection with business combinations
IFRS 3 requires the acquirer to recognize intangible assets separately from goodwill, if certain criteria are met.
Recognizing intangible assets separately at fair value requires management to estimate the expected future cash
flows. Management has used available market information when possible in determining the fair values. If no
market information of the asset has been available, the measurement of the intangible asset is based on the
historical yield of the asset and the planned use in operations. The valuations are based on discounted cash flows
and estimated disposal or replacement prices, and the valuation requires management to make estimates of the
future use of the asset and impact on the company’s financial position.
Management believes that the used estimates and assumptions are reasonable for measurement of fair values. In
addition, the Group’s property, plant and equipment and intangible assets are assessed to determine whether there
is any indication of impairment at least at each reporting date.
The valuation of contingent considerations
Management makes discretionary decisions and estimates when determining the valuation of deferred contingent
considerations in business combinations. Judgement is applied especially when estimating the expected amount of
payments and is based on potential scenarios for future returns, amounts paid under different scenarios and the
probability of each scenario.
Lease contracts
Terveystalo’s lease contracts include both termination and extension options. Group uses the options in managing
lease contracts to ensure the flexible use of premises in the Group’s businesses. Management uses judgement to
determine the use of termination and extension options and assesses the lease termination dates and lease terms.
Based on management’s judgement, the termination options which relate to perpetual lease contracts for premises
that are significant will not be used and such lease contracts are recognized as long-term lease contracts.
Impairment testing
Impairment testing for cash -generating units to which goodwill has been allocated is carried out at least annually.
Besides goodwill, the Group has no other intangible assets with an indefinite useful life. The recoverable amounts of
cash generating units are estimated based on the calculations of their value in use. Preparation of these
calculations requires use of estimates. Even though management believes that the used estimates and
assumptions are appropriate, the estimated recoverable amounts may differ from the actual results.
Provisions
The most significant provisions in the statement of financial position relate mainly to loss-making contracts as well
as retirement obligations related to some leased premises. Management makes estimates mainly concerning the
total loss of the loss-making contracts.
40
2.4 Principles of consolidation
Subsidiaries
The consolidated financial statements include the parent company Terveystalo Plc and all its subsidiaries where
over 50 percent of the voting rights are controlled by the parent company or the parent company otherwise controls
the company. The Group controls an entity when it is exposed to, or has rights to variable returns from its
involvement with the entity, and has the ability to affect those returns through its power over the entity.
The subsidiaries are included in the consolidated financial statements starting from the date on which control
commences until the date on which control ceases.
All subsidiaries are consolidated by using the acquisition method. The consideration transferred for the acquisition
of a subsidiary comprise assets transferred, liabilities incurred, and the equity interests issued by the Group
measured at fair value. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at fair value at the acquisition date. On an acquisition-by-acquisition basis,
non-controlling interest in the acquiree is measured either at fair value or at value which equals the proportional
share of the non-controlling interest in the identifiable net assets acquired.
All acquisition costs, except costs related to issue of debt or equity securities, are recognized as an expense as
incurred. Transactions treated separately from the acquisition are recognized through the income statement and are
not included in the consideration transferred. Any contingent consideration is measured at fair value and it is
classified either as a liability or equity. Contingent consideration classified as a liability is measured at fair value at
the end of reporting period and the resulting profit or loss is recognized in the statement of income. Contingent
consideration classified as equity is not remeasured.
If the Group gains control in stages in the acquiree, the existing interest will be measured at fair value through profit
or loss.
Goodwill arising from an acquisition is recognized as the excess of the aggregate of the consideration transferred,
the amount of non-controlling interests in the acquiree and previously held equity interest in the acquiree over the
fair value of the Group’s share of the identifiable net assets acquired. If the consideration transferred is less than the
fair value of the net assets of the subsidiary acquired, the resulting gain is recognized in profit or loss.
Intra-group transactions, receivables, liabilities and unrealized gains, as well as the distribution of profits within the
Group are eliminated in the preparation of the consolidated financial statements. Accounting policies of subsidiaries
have been aligned where necessary to correspond to the Group’s principles.
Transactions with non-controlling interests that do not result in the loss of control are treated as equity transactions
– in other words, as transactions with owners when they are acting as owners. The difference between the fair
value of the consideration paid or received and the book value of the portion of the net assets acquired or disposed
is recognized in equity.
When the Group ceases to have control or significant influence, any retained interest in the entity is measured at
fair value through profit or loss.
Associates
Associates are entities over which the Group has significant influence. Significant influence generally arises when
the Group holds over 20 percent of the voting rights, or otherwise has significant influence, but no control over the
entity.
Associates are consolidated using the equity method. They are initially recognized at cost, which includes
transaction cost. If the Group’s share of the associated company’s losses exceeds the carrying amount of the
investment, the investment is recognized at zero value in the consolidated statement of financial position.
Recognition of further losses exceeding the carrying amount is discontinued, unless the Group has incurred legal or
constructive obligations on behalf of the associate.
41
Unrealized gains resulting from the transactions between the Group and associates are eliminated according to the
Group’s share of ownership. Goodwill relating to an associate is included in the carrying amount of the investment.
The Group’s share of the associated company’s profit or loss for the period is separately disclosed below net
finance expenses. Adjustments have been made when necessary to the associate’s accounting policies to align to
those of the Group.
At each reporting date, the Group reviews the carrying amounts of the investments in associates to determine
whether there is any objective indication of impairment. If any such evidence of impairment exists, then the
impairment loss is determined. An impairment loss is the amount by which the carrying amount of an investment in
associate exceeds its recoverable amount. An impairment loss is recognized in the statement of income.
If the Group’s ownership interest in an associate is reduced, but significant influence is retained, only the relative
portion of previously recognized amounts in other comprehensive income and the value of the investment in the
consolidated financial statements are recognized in the statement of income as part of the gain or loss.
2.5 Foreign currency transactions
The consolidated financial statements are presented in euros which is the functional and presentation currency of
the parent company. Transactions in foreign currencies are translated into respective functional currency at the
exchange rate prevailing on the transaction date. Gains and losses arising from transactions denominated in foreign
currency and from translation of monetary items are recog nized in profit or loss as financial income or expenses.
The functional currency of the Feelgood subgroup is Swedish krona which differs from Group’s presentation
currency, and thus its statement of income, statement of cash flows and statement of financial position have been
translated into presentation currency as follows:
- Statement of income and statement of cashflows are translated at average exchange rates
- Statement of financial position is translated at the closing exchange rate at the reporting date
- All resulting exchange differences are recognized in other comprehensive income
2.6 Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
Depreciation is recognized on a straight-line basis over the estimated useful lives of items of property, plant and
equipment. Land is not depreciated.
The estimated useful lives are as follows:
Magnetic resonance imaging equipment
10 years
Buildings
10–40 years
Machinery and equipment
2–7 years
Improvements to office premises
2–10 years
Right-of-use assets
1–16 years
Premises used in operations are depreciated on a straight-line basis over a 40-year depreciation period. Property,
plant and equipment also includes artwork which is not depreciated.
Right-of-use assets are depreciated over the shorter of the useful life or lease term. If the use of call option is
certain, right-of-use asset is depreciated over the useful life.
Gains and losses on the sale and disposal of property, plant and equipment are presented in other operating
income or other operating expenses.
42
Maintenance expenditure are not included in the carrying amounts of property, plant and equipment. When parts of
the magnetic resonance imaging equipment are replaced, the Group capitalizes the replacement costs as a
separate item.
The residual values and useful lives of property, plant and equipment are reviewed at each reporting date.
2.7 Investment properties
Investment property refers to properties held by the Group in order to earn rental income or for capital appreciation
or both. Apartments, which are not used in business operations, are mainly accounted for as investment properties.
Investment properties are measured at acquisition cost and depreciated on a straight-line basis over a 40-year
depreciation period.
2.8 Goodwill and other intangible assets
Goodwill
Goodwill arising in a business combination is recognised as the excess of the aggregate of the consideration
transferred, the amount of non-controlling interests in the acquiree and previously held equity interest in acquiree
over the fair value of the Group’s share of the identifiable net assets acquired.
Goodwill is not amortised but tested for impairment annually. For impairment testing, goodwill is allocated to
cash-generating units or groups of cash-generating units. Goodwill is measured at cost less accumulated
impairment losses. An impairment loss in respect of goodwill is not reversed.
Gain or loss on disposed unit includes also the carrying amount of goodwill.
Other intangible assets
Other intangible assets include software and licenses, as well as acquired companies’ customer relationships,
trademarks and other intangible assets. Intangible assets are recognised initially at cost if the cost of the asset can
be measured reliably and if it is probable that the future economic benefits attributable to the asset will flow to the
Group.
Cloud computing arrangements which meet the definition of an intangible asset are recognized as intangible assets.
Configuration and customisation costs which do not meet the definition of an intangible asset and which are distinct
from the cloud computing arrangement, are recognised as an expense as the service is received. Configuration and
customisation costs which are not distinct from the cloud computing arrangement, are recognised as prepaid
expenses in the statement of financial position and expensed over the expected duration of the cloud computing
arrangement.
Intangible assets acquired in a business combination are recognised at fair value at the acquisition date separately
from goodwill if the assets meet the definition of an asset, are identifiable or rise from contractual or legal rights.
Other intangible assets are measured at cost and amortised on a straight -line basis over the known or estimated
useful lives.
The Group has no intangible assets with indefinite useful life except for goodwill.
Amortisation periods used for intangible assets are as follows:
Immaterial rights
3–7 years
Other intangible assets
3–5 years
43
Software
5 years
Customer agreements and related customer relationships
2-12 years
Trademarks
20 years or shorter useful life
Research and development
Research expenditure are recognized as an expense as incurred in the statement of income. Development
expenditure are capitalized as intangible assets when certain capitalization criteria are met. Development
expenditure that do not qualify for the capitalization are recognized as an expense. The estimated useful lives of
capitalized development expenditure are 3–5 years.
2.9 Impairment
Tangible and intangible assets
At the end of each reporting period, the Group assesses whether there are any indications of impairment. If any
indications of an impairment exist, the recoverable amount of the asset is determined. For goodwill and intangible
assets not yet available for use, the recoverable amount is determined annually, irrespective of whether there is any
evidence of impairment. Evidence of impairment is assessed at the level of the Group’s operating segments , i.e at
the lowest unit level, which is largely independent of the other units and whose cash flows can be distinguished
from the cash flows of equivalent units.
The recoverable amount of an asset is the higher of its fair value less costs to sell or value in use. The value in use
is the amount of future cash flows of an asset or cash generating unit discounted to present value. The discount
rate used is the pre-tax discount rate which reflects the market view on the time value of money and specific risks
related to the asset.
An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.
The impairment loss is recognized in the statement of income. If impairment loss is related to a cash generating
unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the cash
generating unit, and then to reduce the carrying amounts of the other assets on a pro rata basis. The useful life of
an asset, which is subject to depreciation or amortization, is reassessed when an impairment loss is recognized.
The impairment loss recognized for other assets than goodwill is reversed if there has been a change in estimates
used to determine the recoverable amount. The reversal of the impairment loss cannot exceed the carrying amount
of the asset if impairment loss had not been recognized. Impairment loss recognized for goodwill is not reversed.
Financial assets
At the end of each reporting period the Group evaluates indicators of potential impairment of a single financial asset
or a group of financial assets.
The Group recognizes an expected credit loss for trade receivables and contract assets based on a simplified
approach. Expected credit loss rates have been calculated using historical information of actual impairment losses,
and the current conditions and the Group’s view of the economic conditions over the expected lives of the
receivables have been taken into account.
2.10 Leases
Group as a lessee
The Group assesses whether a contract is or contains a lease at the inception of a contract. A contract is or
contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for
44
consideration. A lessee recognizes a right-of-use asset and a lease liability on statement of financial position at the
lease commencement date.
A lease term is determined as the non-cancellable period of a lease. The lease term includes periods covered by an
option to extend or terminate the lease, if the Group is reasonably certain to exercise the extension option or not to
exercise the termination option. Perpetual lease contracts related to significant premises are accounted for as long-
term lease contracts, as, according to management judgment, the termination options for such contracts will not be
used. The lease term for such contracts is determined based on the Group’s strategy and network plan.
The Group does not recognize short-term leases (a lease that has a lease term of 12 months or less) and leases for
which the underlying asset is of low value. The lease payments associated with such leases are expensed on a
straight-line basis.
Initially a right-of-use asset is measured at cost, which comprises the amount of the initial measurement of the lease
liability, any lease payments made at or before the commencement date, less any lease incentives, any initial direct
costs incurred by the Group, and an estimate of restoration costs to be incurred by the Group. If a lease contains
several lease components, they are accounted for separately.
Subsequently right-of-use assets are measured at cost less any accumulated depreciation and any accumulated
impairment losses and adjusted for any remeasurements of the lease liability. A right-of-use asset is depreciated
from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the
lease term. If the Group is reasonably certain to exercise the purchase option, the right-of-use asset is depreciated
over its useful life.
The book value and useful life of a right-of-use asset are reviewed where necessary but at least annually and an
impairment loss is recognized if there is a change in expectations of the future economic benefits.
A lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date. The Group uses incremental borrowing rate as the discount rate. A lease liability includes
fixed payments, including in-substance fixed payments; variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement date; amounts expected to be payable under a
residual value guarantee, and the exercise price under a purchase option that Terveystalo is reasonably certain to
exercise.
Subsequently a lease liability is measured at amortized cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is a change in
the Terveystalo’s estimate of the amount expected to be payable under a residual value guarantee or if the Group
changes its assessment of whether it will exercise a purchase, extension or termination option. When a lease
liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-to-use
asset or is recorded in the statement of income if the carrying amount of the right-of-use asset has been reduced to
zero.
2.11 Financial assets and liabilities
Financial assets
The Group’s financial assets are classified at fair value through the statement of income or, at amortized cost.
Classification is based on the purpose of the acquisition of the item and is made upon initial recognition.
Financial assets at fair value through the statement of income comprise of derivate assets, non-quoted equity
instruments and loan receivables. Realized or unrealized gains and losses arising from changes in fair values are
recognized in the statement of income in the period in which they are incurred.
45
Financial assets at amortized cost consist of trade receivables and other receivables. They are measured at
amortized cost and they are included in non-current assets unless the Group has an intention to hold the instrument
for less than 12 months from the reporting date, in which case they are included in current assets.
The Group has not had financial assets at fair value through other comprehensive income during the periods 2021
or 2022.
Financial asset is derecognized when the contractual rights to the cash flows expire, or the financial asset is
transferred to another party and the Group substantially transfers all the risks and rewards of ownership to another
party.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, bank deposits available on demand, and other short-term highly
liquid investments. Items included in cash and cash equivalents have original maturities of three months or less
from the acquisition date.
Financial liabilities
The Group’s financial liabilities are measured at fair value through the statement of income or at amortized cost.
Financial liabilities at fair value through the statement of income comprise derivative liabilities and contingent
considerations. Realized or unrealized gains and losses arising from changes in fair values are recognized the
statement of income in the period in which they are incurred.
Financial liabilities at amortized cost include loans from financial institutions, lease liabilities, hire purchase liabilities
and trade and other payables. They are initially recognized at fair value which is based on the consideration
received. Transaction costs are included in the initial amount recognized and subsequently the financial liability is
measured at amortized cost using the effective interest method.
Financial liabilities are included in non-current and current liabilities and they can be either interest-bearing or non-
interest-bearing. Financial liabilities are classified as current liabilities, unless the Group has an unconditional right
to postpone the payment of the liability to at least 12 months from the reporting date.
The Group has not had financial liabilities at fair value through other comprehensive income during the periods
2021 or 2022.
Financial liability is derecognized when the Group either settles the liability or has been legally discharged from the
obligation related to the liability either through a legal process or by the borrower.
2.12 Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is determined by
using FIFO (first in, first out) method. Net realizable value is the cost of inventory less obsolescence allowance.
2.13 Employee benefits
Pension benefits
Pension plans are classified as either defined contribution plans or defined benefit plans. In defined contribution
plans, the Group makes fixed contributions into the plan. The Group has no legal or constructive obligation to make
additional payments if the pension insurance company is unable to pay pension benefits earned by employees in
the reporting period or in previous periods. Contributions made into defined contribution plans are recognized
through profit or loss in the reporting period to which they relate.
46
A defined benefit plan is a pension plan under which the Group itself has the obligation to pay retirement benefits
and bears the risk of change in the value of plan liability and assets. The liability recognized on the statement of
financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at
the end of the reporting period less fair value of plan assets. The pension liability is presented in other non-current
liabilities in the statement of financial position. The defined benefit obligation is calculated annually by an
independent actuary using the projected unit credit method. The present value of the defined benefit obligation is
determined by discounting the estimated future cash outflows using interest rates of high-quality corporate or
government bonds with approximating terms to maturity and that are denominated in the currency in which the
benefits are expected to be paid.
Actuarial gains and losses related to remeasurements of a defined benefit plan are recognized directly in the other
comprehensive income. Interest and other expenses related to defined benefit plans are recognized directly in the
statement of income. If a plan is amended or curtailed, the portion of the changed benefit related to past service by
the employees, or the gain or loss on curtailment, is recognized directly in the statement of income when the plan
amendment or curtailment occurs.
Share-based payment transactions
The benefits granted in accordance with the incentive plan are measured at fair value at the grant date and are
expensed on a straight-line basis over the vesting period. The share-based payments settled with equity
instruments are not revalued subsequently, and cost from these arrangements is recognized as an increase in
equity. The cash-settled share-based incentives are valued at fair value at each reporting date until the settlement
date and recognized as a liability.
The expensed amount of the benefits is based on the Group’s estimate of the amount of benefits to be paid in
accordance with the fulfilment of service and performance-based vesting conditions at the end of the vesting period.
Market conditions are considered in determining the fair value of the benefit. Instead, the non-market criteria, like
profitability, are not considered in measuring the fair value of the benefit but are taken into account when estimating
the final amount of benefits. The estimate is updated at each reporting date and changes in estimates are recorded
through the statement of income
2.14 Provisions and contingent liabilities
A provision is recognized when the Group has a present legal or constructive obligation as a result of a past event,
and it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. Provisions are recognized at the present value of the
expenditure required to fulfil the obligation. If the obligation can be partially compensated by a third party, the
compensation is treated as a separate asset, but only when it is virtually certain that the compensation will be
received.
A provision is recognized for contracts when the unavoidable costs of meeting the obligations under the contract
exceed the economic benefits expected to be received under it.
A contingent liability is a possible obligation arising as a result of past events, and whose existence will be
confirmed only when an uncertain future event takes place, not wholly within control of the entity. Also, a present
obligation which probably does not require a cash settlement or on which the value cannot be reliably estimated is
considered as a contingent liability. Contingent liabilities are disclosed in the notes.
2.15 Revenue recognition
The Group’s revenue consists mainly of occupational healthcare services, general practice and clinic hospital
operations, dental services as well as diagnostic services. The Group also provides diverse primary healthcare,
special healthcare and child welfare services for public sector as well as massage and rehabilitation services . The
Group’s customer contracts include primarily one performance obligation, which is typically a single appointment,
and the transaction prices are mainly fixed. In some cases, the transaction price includes a variable consideration
such as a discount or penalty. Possible variable considerations are assessed at each reporting date and are
allocated to one or more performance obligations. The terms of payment and payment periods in customer
47
contracts vary, but payment time is nonetheless clearly below one year. Consequently, customer contracts do not
include a significant financing component. Revenue is recognized to the extent that the Group expects to be entitled
to in exchange for the goods and services taking into account the terms and conditions of the customer contracts
and business practices.
Revenue from individual appointments is recognized at a point in time as the service has been completed. For long-
term contracts for predetermined services or a bundle of services, revenue is recognized as Terveystalo fulfils the
performance obligation by performing the promised service. The Group’s long-term contracts are assessed to
include a single performance obligation where the services provided by the Group are integrated into a single
bundle of services. The customer simultaneously receives and consumes the benefits from the service and,
consequently, the criteria for recognizing revenue over time is met. For long-term contracts, Terveystalo measures
the progress towards complete satisfaction of the performance obligation by applying the input method, in which the
revenue is recognized based on time elapsed. The Group views that the used method best describes the transfer of
control for the services provided. Estimated costs and revenues will be re-assessed regularly during performing the
services. Revisions in profit estimates as well as projected potential losses on contracts are charged through the
statement of income in the period in which they become known. The Group has not incurred any substantial costs
for obtaining customer contracts.
Regarding private practitioners, Terveystalo acts as the principal and recognizes revenue on a gross basis. Fees
related to purchasing these services are recognized in materials and services expenses.
2.16 Segment information
The Group’s business in Finland is divided into three regions which are the Group’s operating segments: Capital
region, Central Units and Regional Units. During 2021, a fourth operating segment, Sweden and other, was formed
in the Group due to the acquisition of Feelgood group. The operating segment consists of the Group’s operations in
Sweden, Estonia and the Netherlands. Monitoring of profitability is primarily based on geographical areas. In
addition to the regional structure, the Group functions include finance and administration, HR and legal, IT,
communication, marketing and investor relations, business development and digitalization, as well as medical
quality and service management. Terveystalo’s chief operating decision maker is the CEO.
2.17 Government grants
Government grants are presented in other operating income as far as they do not relate to acquired assets. Grants
are recognized when there is reasonable assurance that grants will be received, and the Group will comply with the
conditions associated with the grants.
2.18 Operating profit
IAS 1 standard does not define operating profit. The Group has defined it as follows: Operating profit is calculated
by adding other operating income to revenue, deducting costs related to materials and services, deducting costs
related to employee benefits, depreciation, amortization and impairments as well as other operating expenses.
2.19
Earnings per share
Basic earnings per share is calculated by dividing profit or loss attributable to the shareholders of the
parent company by the weighted average number of shares outstanding during the financial period. The Group’s
share-based incentive plan has a dilution effect related to the earnings per share.
2.20 Income taxes
Income taxes primarily include current and deferred taxes. Tax related to items recognized directly in equity or in
other comprehensive income is also recognized in equity or in other comprehensive income. Current tax assets and
liabilities are measured at the amount expected to be received from or paid to taxation authorities, using the rates
and laws that have been enacted by the date of the statement of financial position. Income taxes include any
adjustment to tax in respect of previous years.
48
Deferred tax is recognized in respect of all temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts in taxation. Deferred tax is not recognized in the initial
recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit nor loss at the date of the transaction. Deferred tax is not recognized for non-tax-
deductible goodwill or for subsidiaries’ retained earnings to the extent that it is probable that the temporary
difference will not reverse in the foreseeable future. Deferred taxes relate primarily to the difference between the
book value and tax base of capitalized customer relationships and trademarks, and to provisions related primarily to
loss making contracts.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against
which they can be used and using the losses is considered probable.
Deferred taxes are calculated using tax rates enacted by the reporting date.
3. Business Combinations
During the year 2022, the Group has made 12 corporate acquisitions and 3 business acquisitions.
On 1 February 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the occupational health
provider Vantaan Työtervey s Oy.
On 1 February 2022 Feelgood Företagshälsovård AB acquired 100 percent of the Swedish occupational health
provider Länshälsan Uppsala Ab.
On 31
March 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the physiotherapy service
provider Lapin Liikuntaklinikka Oy.
On 31
March 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the physiotherapy service
provider OMT Klinikka Kokkola Oy.
On 31
March 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the physiotherapy and
occupational therapy service provider Suomen Fysiogeriatria Oy and an indirect 100 percent ownership in its
subsidiaries Aktiivi-Fysioterapia Tampere Oy, Mimmin Terapia Oy and toi.minna Oy.
On 1
May 2022 Feelgood Företagshälsovård AB acquired 100 percent of the shares of the Swedish occupational
health provider Jobbhälsan i Norr AB.
On 1
May 2022 Feelgood Svenska AB acquired 100 percent of the shares of the Swedish addiction treatment
provider Nämndemansgården AB and its subsidiaries.
On 31
May 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the physiotherapy service
provider Into Terveys Oy.
On 30
June 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the physiotherapy service
provider Kunnon Syke Oy.
On 31
August 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the therapy service provider
Ludus Oy Tutkimus- ja Kuntoutuspalvelut.
On 31
August 2022 Suomen Terveystalo Oy acquired the dental clinic business of Hammasrasti.
On 31
August 2022 Suomen Terveystalo Oy acquired the physiotherapy and therapy businesses of
FysioProfessionals.
On 30
September 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the physiotherapy service
provider Saimaan Urheilufysioterapia Oy.
49
On 30
September 2022 Suomen Terveystalo Oy acquired the dental clinic business of Hymyn Paikka.
On 31 October 2022 Terveystalo Healthcare Oy acquired 100 percent of the shares of the chat and video
connection solution provider Somia Reality Oy.
The following table summarizes the acquisition date fair values of the consideration transferred as well as the
recognized amounts of assets acquired and liabilities assumed at the acquisition date. The statement of financial
position of acquired companies has been prepared in accordance with IFRS and Terveystalo’s accounting
principles in all material respect. The following table is partially preliminary, and the information has been
consolidated, because the acquisitions are not material individually.
Consideration transferred
EUR mill.
Purchase price, payable in cash
37,8
Contingent consideration
5,1
Total consideration transferred
42,9
Identifiable assets acquired and liabilities assumed
EUR mill.
Cash and cash equivalents
4,4
Intangible assets
6,0
Property, plant and equipment
1,1
Right-of-use assets
4,4
Deferred tax assets
0,2
Inventories
0,2
Trade and other receivables
5,2
Financial liabilities
-0,5
Lease liabilities
-4,4
Trade and other payables
-6,2
Deferred tax liabilities
-1,1
Interest bearing liabilities
-0,1
Total identifiable net assets acquired
8,9
Goodwill
34,0
As a result of these business combinations, a preliminary goodwill amounting to EUR 34.0 million was recognized.
The goodwill is attributable to skills of the workforce and synergies expected to be achieved. EUR 1.0 million of the
recognized goodwill is deductible in taxation. Cashflow impact of the acquisitions made during 2022 was EUR 32.9
million.
In these business combinations, the Group has acquired customer relationships and technology -related intangible
assets. The fair value of customer contracts and related customer relationships included in other intangible assets
has been determined on the basis of the estimated duration of customer relationships and the discounted net cash
flows from existing customer contracts. The fair value of technology has been determined using the estimated
replacement cost.
The fair value of the acquired trade and other receivables amounted to EUR 5.2 million, for which the risk of
impairment has been deemed as non-significant.
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The Group has incurred acquisition-related expenses of EUR 1.3 million related to transfer tax, consulting, valuation
or equivalent services. The expenses have been included in other operating expenses.
The contributed revenue recognized from the acquisitions during the year 2022 was EUR 18.3 million and loss was
EUR 1.0 million.
If the acquisition had occurred on 1 January 2022, management estimates that the Group’s consolidated revenue in
2022 would have been EUR 1 268.0 million and the consolidated result for the period would have been EUR 23.3
million.
51
Business combinations 2021
During the year 2021, the Group made ten corporate acquisitions and one business acquisitions. The acquisition of
Feelgood Svenska AB group is presented separately, whereas other smaller acquisitions are disclosed in
aggregate.
Acquisition of Feelgood Svenska AB group
On 14 June 2021 Terveystalo Healthcare Oy acquired 72.14 percent of the shares of Feelgood Svenska AB (publ)
which is the parent company of the Swedish Feelgood group. At the same time, Terveystalo Healthcare announced
a recommended mandatory cash offer for all the remaining shares of Feelgood for a consideration of SEK 5.70
(approximately EUR 0.57) in cash per share. The cash offer ended on 26 July 2021 and through the cash offer
Terveystalo ownership in Feelgoods shares and votes reached 97.42 percent. In August 2021, Terveystalo has
initiated a mandatory redemption procedure for the remaining shares in Feelgood, and Feelgood’s shares were
delisted from Nasdaq Stockholm on 6 August 2021.
Feelgood is one of Sweden’s leading healthcare companies. Feelgood employs approximately 700 employees who
serve customers both digitally and physically on 120 locations in Sweden. Feelgood offers services within
occupational healthcare, organization and leadership, substance abuse in the workplace, as well as digital private
healthcare and well-being services. Feelgood was listed on Nasdaq Stockholm. The acquisition is Terveystalo’s first
step in expanding its presence and services to the Swedish market. The deal brings together two industry leading
platforms that complement each other in terms of people, service offering and geographical network and provides
significant potential for value creation.
Immediately before obtaining control, Terveystalo Healthcare’s ownership in Feelgood was 2.8 percent. The
carrying amount of previous ownership corresponded to its fair value at the acquisition date and the business
combination achieved in stages did not have an impact on the profit and loss. Feelgood has been consolidated to
the Group’s financial statements from the end of June 2021 onwards.
The following tables summarize the consideration transferred, acquisition date fair values of the assets acquired
and liabilities assumed, non-controlling interest and the cash flow impact of the acquisition.
Consideration transferred
EUR mill.
Purchase price, payable in cash
47,2
Total consideration transferred
47,2
Identifiable assets acquired and liabilities assumed, non-controlling interest and goodwill
EUR mill.
Property, plant and equipment
2,0
Right-of-use assets
10,7
Other intangible assets
18,1
Deferred tax assets
0,1
Other non-current assets
0,1
Trade and other receivables
16,6
Cash and cash equivalents
2,7
Financial liabilities
-3,9
Lease liabilities
-9,9
Deferred tax liabilities
-3,7
Other non-current liabilities (pension obligations)
-1,9
52
Trade and other liabilities
-12,2
Total identifiable net assets acquired
18,6
Non-controlling interest
12,8
Goodwill
41,4
Cash flow impact of the acquisition
EUR mill.
Cash paid
47,2
Less: cash and cash equivalents acquired
-2,7
Cash flow impact at the acquisition date
44,5
Acquisition of non-controlling interests
12,7
Total cash flow impact of the acquisition
57,2
The non-controlling interest from the acquisition has been recognized at fair value. The fair value of the non-
controlling interest was determined based on the consideration of SEK 5.70 offered by Terveystalo Healthcare in
the cash offer and the number of shares held by the minority at the acquisition date.
After the acquisition date,
Terveystalo has acquired the remaining non-controlling interests and reached a 100 percent ownership in Feelgood
in December 2021. In 2022, no measurement period adjustments have been made to the Feelgood acquisition.
Customer relationships, trademarks and technology-related intangible assets were recognized in the determination
of fair values and the combined fair value of these assets was measured at EUR 18.0 million. A deferred tax liability
of EUR 3.7 million was recognized for the beforementioned assets. The fair values of customer relationships and
trademarks have been determined through the use of an income approach, which requires an estimate or forecast
of expected future cash flows. The fair value of technology has been determined using the estimated replacement
cost. The acquisition resulted in a goodwill amounting to EUR 41.4 million. The goodwill is attributable to skills of the
workforce and synergies expected to be achieved. The recognized goodwill is not deductible for tax purposes.
The fair value of the acquired trade and other receivables amounts to EUR 16.6 million, which materially
corresponds to their carrying amount and for which the risk of impairment has been deemed non-significant.
The Group incurred acquisition-related expenses of EUR 1.5 million related to consulting and valuation services.
The expenses have been included in other operating expenses in the consolidated statement of income.
The revenue recognized from the acquisition during the year 2021 was EUR 36.9 million and the impact to the
result of the period was EUR -0.7 million.
If the acquisition had occurred on 1 January 2021, management estimates that the Group’s consolidated revenue
during the year 2021 would have been EUR 1,194.1 million and the consolidated result for the period would have
been EUR 80.7 million.
Other acquisitions
On 28 February 2021 Terveystalo Healthcare Oy acquired 100 percent of the shares of the therapy service provider
Attentio Oy.
On 28 February 2021 Terveystalo Healthcare Oy acquired 100 percent of the shares of the dental clinic Espoon
Keskuksen Hammaslääkärit Oy.
On 31
March 2021 Terveystalo Healthcare Oy acquired 100 percent of the shares of the advanced child welfare
service provider Keltaisen Kartanon Kuntoutus Oy.
53
On 30 April 2021 Terveystalo Healthcare Oy acquired 100 percent of the shares of the medical clinic Helsinki
Hospital Oy.
On 31 August 2021 Terveystalo Healthcare Oy acquired 100 percent of the shares of the therapy service provider
Sivupersoona Oy.
On 31
August 2021 Suomen Terveystalo Oy acquired the business of Fysiopiste Mervi Nivukoski.
On 1 September 2021 Feelgood Företagshälsovård AB acquired 100 percent of the Swedish occupational health
provider Dalarnas Företagshälsa AB.
On 1
October 2021 Terveystalo Healthcare Oy acquired 100 percent of the shares of the advanced child welfare
service provider Hoitokoti Ankkuri Oy and an indirect 100 percent ownership in Ankkurin Huoltamo Oy, Jyväskylän
Lastensuojelupalvelut Oy, Terapiatelakka Oy ja Lastensuojelupalvelut Väylä Oy.
On 29 October Suomen Terveystalo Oy acquired 94 percent of the shares of the medical clinic Medimar
Skandinavia Ab. A non-controlling interest of EUR 15 thousand was recognized in the acquisition. The non-
controlling interest is measured based on the proportionate share of the acquired identifiable net assets.
On 30 November Terveystalo Healthcare Oy acquired 100 percent of the shares of the Suomen Hierojakoulut Oy.
The following table summarizes the acquisition date fair values of the consideration transferred as well as the
recognized amounts of assets acquired and liabilities assumed at the acquisition date. The statement of financial
position of acquired companies has been prepared in accordance with IFRS and Terveystalo’s accounting
principles in all material respect. The information in following table has been consolidated, because the acquisitions
are not material individually.
Consideration transferred
EUR mill.
Purchase price, payable in cash
24,0
Contingent consideration
7,3
Total consideration transferred
31,4
Identifiable assets acquired and liabilities assumed
EUR mill.
Cash and cash equivalents
3,6
Intangible assets
5,5
Property, plant and equipment
0,9
Right-of-use assets
7,2
Inventories
0,2
Trade and other receivables
3,5
Financial liabilities
-0,8
Lease liabilities
-7,2
Trade and other payables
-6,6
Deferred tax liabilities
-1,0
Total identifiable net assets acquired
5,4
54
Goodwill
26,0
As a result of these business combinations, a goodwill amounting to EUR 26.0 million was recognized. The goodwill
is attributable to skills of the workforce and synergies expected to be achieved. EUR 0.4 million of the recognized
goodwill is deductible in taxation. The cash flow impact of the acquisitions was EUR 20.3 million.
In these business combinations, the Group has acquired customer relationships. The fair value of customer
contracts and related customer relationships included in other intangible assets has been determined on the basis
of the estimated duration of customer relationships and the discounted net cash flows from existing customer
contracts.
The fair value of the acquired trade and other receivables amounted to EUR 3.5 million, for which the risk of
impairment has been deemed as non-significant.
The Group has incurred acquisition -related expenses of EUR 0.9 million related to transfer tax, consulting, valuation
or equivalent services. The expenses have been included in other operating expenses.
The contributed revenue recognized from the acquisitions during 2021 was EUR 15.7 million and the impact to the
profit for the period was EUR 0.7 million.
If the acquisition had occurred on 1 January 2021, management estimates that the Group’s consolidated revenue in
2021 would have been EUR 1,176.6 million and the consolidated result for the period would have been EUR 79.2
million.
4. Revenue
The Group's distribution of revenue is based on the customer types. The Group does not have customers whose
revenue exceeds 10 percent of the Group's total revenue. Terveystalo offers its primary and outpatient secondary
health care services to three distinct customer groups: corporate customers, private customers and public
customers.
Corporate customers constitute Terveystalo’s largest customer group. Terveystalo’s corporate customers consist of
the company’s occupational health care customers, excluding municipal occupational health care customers. The
company provides statutory occupational health services and other occupational health and well-being services for
corporate customers of all sizes. Terveystalo is the largest provider of occupational healthcare services in Finland in
terms of revenue and the number of end-users. Terveystalo provides occupational healthcare services for over
27,000 companies.
Private customers are Terveystalo’s second-largest customer group. Private customers include private individuals
and families. The company’s strong brand, easy access to services without long waiting times, leading service
portfolio for private customers, families, and senior citizens, and personalized digital services give Terveystalo a
competitive edge over public health care services and encourage customers to invest in their own health. Services
for private customers are paid for either by the customers themselves or by their insurance companies.
Terveystalo’s public customer group is made up of Finnish public sector organizations, such as municipalities,
municipal federations, and hospital districts, as well as municipal occupational health care customers. Terveystalo’s
broad nationwide platform, digital offering, good reputation, and established brand, as well as its thorough expertise
and experience in health care services throughout the chain of care, make Terveystalo an attractive partner for the
public sector. Terveystalo’s services for public sector customers are mainly financed from budgets of municipalities,
municipal federations, and hospital districts. The services offered to public sector customers include full and partial
outsourcings, health care staffing services, specialized care services, other health care services, as well as
occupational health care services for municipalities, municipal federations, and hospital districts.
55
Dissagregation of revenue
EUR mill.
1.1.-31.12.2022
1.1.-31.12.2021
Corporate
511,7
481,7
Private
339,4
333,2
Public
315,2
302,8
Outsourcing
122,2
121,1
Staffing services
89,8
87,6
Service sales, occupational health and others
103,3
94,0
Finland
1 166,2
1 117,7
Sweden and other*
92,8
36,9
Total
1 259,1
1 154,6
* Consists of Group’s operations in Sweden, Estonia and the Netherlands. The impact of Estonia and the Netherlands to the revenue of the
financial year has not been material.
Timing of satisfying performance obligations
EUR mill.
1.1.-31.12.2022
1.1.-31.12.2021
At a point in time
1 134,4
1 030,1
Over time
124,6
124,5
Total
1 259,1
1 154,6
Balances in the statement of financial position
EUR mill.
31 Dec 2022
31 Dec 2021
Contract assets
12,8
15,0
Contract liabilities
10,3
6,1
The Group will satisfy performance obligations related to the contract liabilities within one year.
5. Segment information
Terveystalo’s operating segments are Capital region, Central units, Regional units and Sweden and other. The
Group reports the operating segments in Finland as one reportable segment based on the IFRS 8 aggregation
criteria, as the same services are offered in all Finnish regions, customer types are similar, methods used to provide
services are similar and the regulatory environment and operational risks are the same. Terveystalo’s reportable
segments are:
- Finland
- Sweden and other
Segment information
1.1.-31.12.2022
Finland
Sweden and
other
Internal
eliminations
Total
EUR mill.
Revenue
56
Revenues from external customers
1 166,2
92,8
-
1 259,1
revenues from transactions with other operating segments of the
same entity
0,0
0,2
-0,2
-
Total revenue
1 166,2
93,0
-0,2
1 259,1
Adjusted EBITA
102,3
2,8
-
105,2
Depreciations
66,2
6,6
-
72,8
Segment information
1.1.-31.12.2021
Finland
Sweden and
other
Internal
eliminations
Total
EUR mill.
Revenue
Revenues from external customers
1 117,7
36,9
-
1 154,6
revenues from transactions with other operating segments of the
same entity
0,1
0,2
-0,3
-
Total revenue
1 117,7
37,2
-0,3
1 154,6
Adjusted EBITA
140,2
0,8
-
141,0
Depreciations
62,3
2,8
-
65,1
Reconciliation of the total of the reportable segment's adjusted EBITA to the Group's profit before taxes
1.1.-31.12.2022
1.1.-31.12.2021
EUR mill.
Profit before taxes
30,9
100,7
Share of profits in associated companies
0,1
0,3
Net finance expenses
2,9
9,0
Amortisation and impairment losses
62,0
26,6
Adjustments*
9,2
4,3
Adjusted EBITA
105,2
141,0
* Addittional information on adjustment is presented in the note 34.
.
Non-current assets by geographical areas
Non-current assets include property, plant and equipment, right-of-use assets, goodwill, other intangible assets, investment
properties and investments in associates.
EUR mill.
31 Dec 2022
31 Dec 2021
Finland
1 206,3
1 197,8
Sweden and other
74,8
71,6
Total
1 281,1
1 269,4
6. Other operating income
EUR mill.
1.1.-31.12.2022
1.1.-31.12.2021
Rental income
1,1
1,2
Gains on sale of property, plant and equipment
0,3
0,2
Other items
1,2
2,1
Total
2,7
3,4
57
7. Materials and services
EUR mill.
1.1.-31.12.2022
1.1.-31.12.2021
Purchases of materials
-44,1
-34,8
Change in inventories
0,2
-0,6
External services
-481,8
-453,4
Total
-525,7
-488,9
8. Employee benefit expenses
EUR mill.
1.1.-31.12.2022
1.1.-31.12.2021
Wages and salaries
-379,5
-314,1
Share-based payments
-2,0
-1,9
Pension expenses - defined contribution plans
-61,0
-50,6
Other social security costs
-12,5
-11,7
Total
-455,0
-378,2
Number of personnel at the end of the reporting period
10 933
9 805
9. Depreciation, amortization and impairment
EUR mill.
1.1.-31.12.2022
1.1.-31.12.2021
Depreciation and amortization by asset type
Intangible assets
-4,5
-4,5
-4,8
-10,0
-20,9
-10,8
Total
-30,1
-25,3
Property, plant and equipment
-0,0
-0,0
-14,6
-13,6
-5,9
-5,5
Total
-20,5
-19,2
Right-of-use assets
-52,4
-45,9
Investment property
-0,0
-0,0
Depreciation and amortization total
-103,0
-90,3
Impairment losses by asset groups
-30,5
-0,0
-0,8
0,0
-
-0,0
-0,2
-0,0
-0,4
-1,2
Impairment total
-31,9
-1,3
Total depreciation, amortization and impairment losses
-134,9
-91,7
10. Other operating expenses
58
Specification of other operating expenses
EUR mill.
1.1.-31.12.2022
1.1.-31.12.2021
External services
-3,7
-3,0
Operating and maintenance expenses for premises and equipment
-22,6
-19,2
ICT expenses
-39,7
-31,7
Non-statutory personnel expenses
-7,1
-4,8
Leases and charges
-5,1
-4,1
Travel expenses
-6,5
-4,3
Marketing and communication
-8,5
-7,3
Acquisition-related expenses
-1,6
-2,3
Other costs
-17,4
-12,3
Total
-112,3
-89,2
Auditor's fees
In thousands of euro
1.1.-31.12.2022
1.1.-31.12.2021
Audit and auditor's statements based on laws and regulations
-387,9
-302,5
-13,4
-4,6
Total
-401,4
-307,1
Non audit services
-2,8
-2,2
-49,5
-34,5
Total
-52,3
-36,7
Auditor's fees total
-453,6
-343,8
Auditor's fees have been presented excluding value-added tax. Non-audit services paid for the parent company’s auditor, KPMG Oy Ab, were
52 (37) thousand euros in total.
11. Financial income and expenses
EUR mill.
1.1.-31.12.2022
1.1.-31.12.2021
Interest income on loans and other receivables
0,3
0,3
Dividend income
0,0
0,0
Change in fair value of interest rate derivatives, no hedge accounting
7,1
0,6
Total financial income
7,5
0,8
Interest expense on loans from financial institutions
-5,9
-5,5
Interest expenses on lease liabilities
-3,9
-3,9
Other financial expenses
-0,5
-0,5
Total financial expenses
-10,4
-9,9
Net finance expenses
-2,9
-9,0
12. Taxes
59
Income taxes in the statement of income
EUR mill.
1.1.-31.12.2022
1.1.-31.12.2021
Current tax for the reporting year
-8,3
-23,4
Income taxes for previous periods
0,0
-0,0
Change in deferred taxes
1,8
3,1
Total income taxes
-6,5
-20,3
Reconciliation of the Group's tax rate to the Finnish tax rate
EUR mill.
1.1.-31.12.2022
1.1.-31.12.2021
Profit or loss before taxes
30,9
100,7
Tax using the parent company's tax rate
-6,2
-20,1
Tax rates in foreign jurisdictions
-0,0
0,0
Tax exempt income
0,2
0,2
Non-deductible expenses
-0,5
-0,8
Share of profit in associated companies
-0,0
-0,1
Recognition of previously unrecognized tax losses
0,2
0,1
Tax losses for which no deferred taxes are recognized
-0,2
0,0
Taxes from previous periods
0,0
0,1
Other
0,0
0,3
Total income taxes in the statement of income
-6,5
-20,3
12.2 Deferred tax assets and liabilities
Deferred tax assets 2022
EUR mill.
1 Jan 2022
Business
combinations
Recognized
in the
statement of
income
Translation
differences
31 Dec 2022
Provisions
1,5
-
0,1
-
1,6
Tax losses carried forward
0,0
-
1,8
-
1,8
Leases
1,4
0,0
0,0
-0,0
1,4
Interest rate derivatives
0,2
-
0,4
-
0,7
Other temporary differences
2,3
-
-0,2
-0,0
2,1
Total
5,4
0,0
2,0
-0,0
7,7
Deferred tax liabilities 2022
EUR mill.
1 Jan 2022
Business
combinations
Recognized
in the
statement of
income
Translation
differences
31 Dec 2022
Reversal of goodwill amortization
2,9
-
0,1
-
3,0
Business combinations
23,5
1,2
-3,4
-0,1
21,1
Depreciation difference
1,3
-
1,2
-
2,5
Loan withdrawal expense
0,1
-
-0,0
-
0,1
Interest rate derivatives
0,1
-
1,9
-
2,0
Other temporary differences
0,6
-
0,2
-0,0
0,8
Total
28,5
1,2
-0,1
-0,1
29,5
60
The Group has no material deductible temporary differences, unused tax losses or unused tax credits for which
no deferred tax asset has been recognized.
Deferred tax assets 2021
EUR mill.
1 Jan 2021
Business
combinations
Recognize
d in the
statement
of income
Translation
difference
31 Dec 2021
Provisions
1,4
-
0,2
-
1,5
Leases
1,2
0,0
0,1
-0,0
1,4
Interest rate derivatives
0,2
-
0,0
-
0,2
Other temporary differences
1,6
0,0
0,6
-0,0
2,3
Total
4,4
0,1
0,9
-0,0
5,4
Deferred tax liabilities 2021
EUR mill.
1 Jan 2021
Business
combinations
Recognize
d in the
statement
of income
Translation
difference
31 Dec 2021
Reversal of goodwill amortization
2,8
-
0,1
-
2,9
Business combinations
22,4
4,2
-3,1
-0,0
23,5
Depreciation difference
0,6
-
0,8
-
1,3
Loan withdrawal expense
0,2
-
-0,1
-
0,1
Interest rate derivatives
-
-
0,1
-
0,1
Other temporary differences
0,1
0,5
0,0
-0,0
0,6
Total
26,0
4,6
-2,2
-0,0
28,5
The Group has no material deductible temporary differences, unused tax losses or unused tax credits for which no deferred tax
asset has been recognized.
13. Earnings per share
1.1-31.12.2022
1.1-31.12.2021
Result attributable to the equity holders of the company, EUR mill.
24,4
80,5
Weighted average number of outstanding shares, in thousands
126 508
127 180
Diluted average number of outstanding shares, in thousands
127 037
127 700
Basic earnings per share for result attributable to the equity holders of the company, EUR
0,19
0,63
Diluted earnings per share for result attributable to the equity holders of the company,
EUR
0,19
0,63
61
14. Property, plant and equipment
2022
Land and
water,
buildings and
constructions
Machinery
and
equipment
Improvement to
premises
Other tangible
assets and
advances paid
Total
EUR mill.
Acquisition cost 1 Jan 2022
2,1
144,4
55,0
3,0
204,4
Business combination
0,2
0,4
0,5
0,0
1,1
Additions
-
20,0
4,9
6,1
31,0
Disposals
-
-0,4
-
-0,0
-0,4
Translation differences
-0,0
-0,2
-0,0
-0,0
-0,2
Transfers between items
-
1,0
4,0
-4,9
0,1
Acquisition cost 31 Dec 2022
2,3
165,1
64,4
4,2
236,0
Accumulated depreciation and impairment
losses 1 Jan 2022
-1,1
-101,7
-29,6
-
-132,4
Depreciation
-0,0
-14,6
-5,9
-
-20,6
Impairment losses
-
-0,8
-0,2
-
-1,0
Translation differences
0,0
0,1
0,0
-
0,1
Accumulated depreciation and impairment
losses 31 Dec 2022
-1,2
-117,1
-35,8
-
-154,0
Carrying amount 1 Jan 2022
1,0
42,6
25,4
2,9
72,0
Carrying amount 31 Dec 2022
1,2
47,9
28,7
4,2
82,0
.
2021
Land and
water,
buildings and
constructions
Machinery
and
equipment
Improvement to
premises
Other tangible
assets and
advances paid
Total
EUR mill.
Acquisition cost 1 Jan 2021
2,1
127,4
49,5
1,8
180,8
Business combination
-
2,6
0,4
0,0
3,0
Additions
-
13,5
1,7
5,8
21,1
Disposals
-
-0,4
-0,0
-
-0,5
Translation differences
-
-0,0
-0,0
-
-0,0
Transfers between items
-
1,3
3,4
-4,7
-
Acquisition cost 31 Dec 2021
2,1
144,4
55,0
3,0
204,4
Accumulated depreciation and impairment
losses 1 Jan 2021
-1,1
-88,1
-24,1
-
-113,3
Depreciation and impairment losses
-0,0
-13,6
-5,5
-
-19,2
Accumulated depreciation and impairment
losses 31 Dec 2021
-1,1
-101,7
-29,6
-
-132,4
Carrying amount 1 Jan 2021
1,0
39,3
25,5
1,8
67,6
Carrying amount 31 Dec 2021
1,0
42,6
25,4
2,9
72,0
62
14.1 Right of-use-assets
2022
Premises
Other right-of-
use assets
Total
EUR mill.
Acquisition cost 1 Jan 2022
278,7
41,1
319,8
Business combination
4,4
-
4,4
Additions
54,5
0,8
55,3
Disposals
-4,7
-0,3
-5,0
Translation differences
-1,3
-
-1,3
Acquisition cost 31 Dec 2022
331,7
41,5
373,1
Accumulated depreciation and impairment
losses 1 Jan 2022
-119,0
-28,3
-147,3
Depreciation for the reporting period
-48,8
-3,5
-52,3
Translation differences
0,3
0,0
0,3
Accumulated depreciation and impairment
losses 31 Dec 2022
-167,5
-31,8
-199,3
Carrying amount 1 Jan 2022
159,7
12,7
172,5
Carrying amount 31 Dec 2022
164,2
9,7
173,9
.
2021
Premises
Other right-of-
use assets
Total
EUR mill.
Acquisition cost 1 Jan 2021
234,9
38,9
273,8
Business combination
17,3
0,6
17,9
Additions
29,7
1,8
31,5
Disposals
-3,0
-0,2
-3,2
Translation differences
-0,1
-0,0
-0,1
Acquisition cost 31 Dec 2021
278,7
41,1
319,8
Accumulated depreciation and impairment
losses 1 Jan 2021
-76,8
-24,6
-101,4
Depreciation for the reporting period
-42,2
-3,7
-45,9
Accumulated depreciation and impairment
losses 31 Dec 2021
-119,0
-28,3
-147,3
Carrying amount 1 Jan 2021
158,1
14,3
172,4
Carrying amount 31 Dec 2021
159,7
12,7
172,5
14.2. Lease liabilities
2022
Premises
Other lease
liabilities
Total
EUR mill.
Non-current lease liabilities
124,2
9,0
133,2
Current lease liabilities
43,7
2,8
46,5
Total lease liabilities
167,9
11,8
179,8
2021
Premises
Other lease
liabilities
Total
EUR mill.
Non-current lease liabilities
120,0
11,4
131,4
Current lease liabilities
43,4
3,7
47,1
Total lease liabilities
163,3
15,1
178,5
63
15. Intangible assets
2022
Goodwill
Customer
relationships
Trademarks
Other
intangible
assets and
advances
paid
Total
EUR mill.
Acquisition cost 1 Jan 2022
916,6
166,5
88,8
111,0
1 282,9
Business combination
34,4
2,0
-
4,1
40,4
Additions
-
-
-
26,1
26,1
Reclassifications
-
-
-
-0,1
-0,1
Translation differences
-3,5
-0,7
-0,1
-0,9
-5,2
Acquisition cost 31 Dec 2022
947,5
167,8
88,7
140,2
1 344,2
Accumulated amortizations and impairment losses 1 Jan
2022
-68,0
-107,4
-33,7
-50,0
-259,1
Amortization
-
-10,2
-4,8
-15,1
-30,1
Impairment losses*
-
-
-
-30,5
-30,5
Translation differences
-
0,1
0,0
0,1
0,2
Accumulated amortizations and impairment losses 31
Dec 2022
-68,0
-117,5
-38,5
-95,6
-319,6
Carrying amount 1 Jan 2022
848,6
59,1
55,1
61,0
1 023,8
Carrying amount 31 Dec 2022
879,5
50,3
50,2
44,6
1 024,7
* Includes approx. EUR 29 million impairment related to discontinued sub-projects of the basic IT system development.
2021
Goodwill
Customer
relationships
Trademarks
Other
intangible
assets and
advances
paid
Total
EUR mill.
Acquisition cost 1 Jan 2021
849,8
154,2
82,9
80,9
1 167,8
Business combination
67,3
12,3
6,0
5,1
90,6
Additions
-
-
-
25,1
25,1
Disposals
-
-
-
-0,0
-0,0
Translation differences
-0,4
-0,1
-0,1
-0,0
-0,5
Acquisition cost 31 Dec 2021
916,6
166,5
88,8
111,0
1 282,9
Accumulated amortizations and impairment losses 1 Jan
2021
-68,0
-97,3
-29,2
-39,3
-233,9
Amortization and impairment losses for the reporting period
-
-10,0
-4,5
-10,8
-25,3
Accumulated amortizations and impairment losses 31
Dec 2021
-68,0
-107,4
-33,7
-50,0
-259,1
Carrying amount 1 Jan 2021
781,8
56,9
53,6
41,6
933,9
Carrying amount 31 Dec 2021
848,6
59,1
55,1
61,0
1 023,8
15.1 Development expenditure
Other intangible assets include development expenditure as follows:
2022
EUR mill.
Acquisition cost 1 Jan 2022
18,2
Business combination
0,1
Additions
16,4
Translation differences
-0,2
Acquisition cost 31 Dec 2022
34,5
Accumulated amortizations and impairment losses 1 Jan 2022
-5,2
64
Amortization and impairment losses
-7,8
Accumulated amortizations and impairment losses 31 Dec 2022
-13,0
Carrying amount 1 Jan 2022
12,8
Carrying amount 31 Dec 2022
21,6
2021
EUR mill.
Acquisition cost 1 Jan 2021
6,4
Business combination
2,1
Additions
9,7
Acquisition cost 31 Dec 2021
18,2
Accumulated amortizations and impairment losses 1 Jan 2021
-2,9
Amortization
-2,6
Accumulated amortizations and impairment losses 31 Dec 2021
-5,5
Carrying amount 1 Jan 2021
3,5
Carrying amount 31 Dec 2021
12,8
16. Impairment testing of cash-generating units including goodwill
Goodwill is not amortized but it is tested for impairment at least annually.
Goodwill arising from business combinations has been allocated to cash-generating units as shown in the table
below. Geographical areas consist of units with their own budgets and performance measurement, but they use
shared resources and are centrally managed.
.
31 Dec 2022
31 Dec 2021
EUR mill.
Goodwill
%
EUR mill.
Goodwill
%
Regional units
386,4
43,9 %
Regional units
385,2
45,4 %
Capital region
256,7
29,2 %
Capital region
237,0
27,9 %
Central units
193,1
22,0 %
Central units
184,1
21,7 %
Sweden and other
43,3
4,9 %
Sweden and other
42,3
5,0 %
Total
879,5
100,0 %
Total
848,6
100,0 %
In financial years 2021 and 2022 there were four cash generating units. The fourth cash generating unit, Sweden
and other, was formed in the Group due to the Feelgood acquisition in 2021. The recoverable amounts of the cash-
generating units are based on value-in-use calculations which have been calculated using discounted cash flow
projections. The key assumptions used in the calculations are terminal period revenue growth rate, profitability
(EBIT %) and the discount rate. The projections are based on the budgets and estimates for the years 2023–2026,
including the long-term growth, which have been approved by the management.
The assumptions used in impairment calculations in 2022
Regiona
l units
Capital
region
Central
units
Sweden
and
other
The length of impairment testing period
4 years
4 years
4 years
4 years
Terminal period revenue growth rate
2,0 %
2,0 %
2,0 %
2,0 %
Profitability (EBIT %) during the terminal period
9,2 %
11,9 %
11,4 %
4,7 %
Discount rate (Pre-tax WACC)
8,0 %
8,0 %
8,0 %
6,8 %
65
Discount rate (Post-tax WACC)
6,8 %
6,8 %
6,8 %
5,8 %
The assumptions used in impairment calculations in 2021
Regiona
l units
Capital
region
Central
units
Sweden
and
other
The length of impairment testing period
4 years
4 years
4 years
4 years
Terminal period revenue growth rate
2,0 %
2,0 %
2,0 %
2,0 %
Profitability (EBIT %) during the terminal period
9,7 %
11,7 %
10,1 %
5,4 %
Discount rate (Pre-tax WACC)
6,5 %
6,5 %
6,5 %
6,1 %
Discount rate (Post-tax WACC)
5,6 %
5,6 %
5,6 %
5,2 %
Revenue growth during the terminal period is based on a flat growth factor which corresponds to long-term target
inflation of the European Central Bank. Profitability during the terminal period is based on the assumed organic
growth under normal market situation, general development in health care services market and long-term estimates
by the Group’s management.
The discount rate used in impairment testing has been Pre-tax WACC of which the components are risk-free
interest rate, risk premiums, industry-specific beta, industry-specific cost of debt, and industry specific equity / debt
ratios.
Based on the impairment testing, there is no need for recognition of impairment losses. All cash generating units’
value in use exceeded their carrying amount.
Sensitivity analysis
The Group has assessed the sensitivity of the impairment testing to the effect of the most critical assumptions used
in the calculation. The table below shows the required change in a single assumption that the recoverable amount
would fall below the carrying amount.
Variable
2022
2021
Terminal period revenue growth rate
Regional Units
Decrease over 2.4 percentage points
Decrease over 4.1 percentage points
Capital Regions
Decrease over 9.3 percentage points
Decrease over 12.4 percentage points
Central Unit
Decrease over 12.7 percentage points
Decrease over 15.1 percentage points
Sweden and other
Decrease over 4.5 percentage points
Decrease over 3.7 percentage points
Profitability (EBIT %) during the terminal period
Regional Units
Decrease over 3.3 percentage points
Decrease over 5.6 percentage points
Capital Regions
Decrease over 8.4 percentage points
Decrease over 9.7 percentage points
Central Unit
Decrease over 8.9 percentage points
Decrease over 8.7 percentage points
Sweden and other
Decrease over 2.3 percentage points
Decrease over 2.8 percentage points
Discount rate (Pre-tax WACC)
Regional Units
Increase over 2.6 percentage points
Increase over 4.4 percentage points
Capital Regions
Increase over 9.0 percentage points
Increase over 10.9 percentage points
Central Unit
Increase over 11.7 percentage points
Increase over 12.8 percentage points
Sweden and other
Increase over 3.9 percentage points
Increase over 3.5 percentage points
.
66
When assessing the recoverable amounts of cash generating units, management believes that no reasonably
possible change in any of the key variables used would lead to a situation where the recoverable amount of the
cash generating units would fall below their carrying amount.
17. Investment properties
Carrying amount of investment properties
EUR mill.
1.1-31.12.2022
1.1-31.12.2021
Carrying amount at the beginning of the period
0,5
0,5
Depreciation
-0.0
-0.0
Carrying amount at the end of the period
0,5
0,5
Income and expenses related to investment properties
EUR mill.
1.1-31.12.2022
1.1-31.12.2021
Rental income from investment properties
0,1
0,1
Operating expenses for investment properties
-0.0
-0.0
Total
0,1
0,1
Income and expenses relating to investment properties are presented based on the Group’s ownership in the
investment properties. There are no other contractual obligations related to investment properties.
Fair values of investment properties
Investment
m2
Value per m2 (In thousands of euro)
Total value (In thousands
of euro)
Koy Jyväskylän Väinönkatu 30
1 348
0,4–0,5
556–679
The value of Kiinteistö Oy Jyväskylän Väinönkatu has been determined based on the Group’s share of ownership
(16.81 %).
18. Associated companies
Terveystalo has the following associated companies which are all consolidated using the equity method. The Group has
no individually material associates.
Associated companies 31 Dec 2022
Domicile
Ownership
Voting rights
Terveyden Tuottajat Oy
Finland
0,0 %
48,2 %
Summarized financial information on associated companies
EUR mill.
2022
2021
Carrying amount
0,0
0,6
Group's share of total comprehensive income
-0,1
-0,3
19. Share-based payments
Performance Share Plan 2021
67
Performance Share Plan is targeted to Terveystalo’s key employees. The long-term share-based payment plan is
based on a rolling 3-year performance period structure, with a new performance period starting each year, if so
decided by the Board. The Board decides on the participants, performance measures and targets as well as earning
opportunities on an annual basis. Rewards are conditional on the fulfilment of a three-year service condition and
performance conditions tied to financial targets that are set separately. The reward is granted as a gross number of
Terveystalo shares, including a cash portion for taxes and tax-related expenses arising from the reward to the
employee. The reward is settled as net shares. The plan is fully accounted for as an equity settled share-based
payment. Under the plan, two (2) performance periods 2021–2023 and 2022–2024 have been launched. The
impact of the Performance Period 2021–2023 to the result for the period has been EUR 0.9 million and the
expected total cost of the plan is EUR 3.4 million. 45 persons are included in the arrangement the Performance
Period 2021–2023. The impact of the Performance Period 2022–2024 to the result for the period has been EUR 0.6
million and the expected total cost of the plan is EUR 2.3 million. 63 persons are included in the arrangement for the
Performance Period 2022–2024.
Performance Share Plan 2021
2022-2024
2021-2023
Grant date
1 Apr 2022
1 Apr 2021
Maximum number of share awards
683,085
642,000
Outstanding at 1 Jan 2022
-
598,000
Granted share awards during the period
683,085
14,556
Forfeited share awards during the period
105,221
126,000
Exercised share awards during the period
-
-
Outstanding at 31 Dec 2022
577,864
486,556
Fair value of the share award at grant date
9.2
12.6
End of the performance period
28 Feb 2025
29 Feb 2024
End of the vesting period, expected
31 Mar 2025
31 Mar 2024
Vesting conditions
Service
condition, total
Shareholder
Return (TSR)
Service condition,
total Shareholder
Return (TSR),
productivity and
digital sales
Exercised
In shares and
cash
In shares and cash
Bridge Plan
Bridge Plan is targeted for President and CEO. Rewards are conditional on the fulfilment of a two-year service
condition and performance conditions tied to financial targets that are set separately. The reward is granted as a
gross number of Terveystalo shares including a cash portion for taxes and tax-related expenses arising from the
reward to the employee. The reward is settled as net shares. The plan is fully accounted for as an equity settled
share-based payment. The plan’s impact to the result for the period has been EUR 0.3 million and the expected
total cost of the plan is EUR 0.5 million.
Bridge Plan
2021-2022
Grant date
24 May 2021
Maximum number of share awards
58,600
Outstanding at 1 Jan 2022
-
Granted share awards during the period
58,600
Forfeited share awards during the period
-
Exercised share awards during the period
-
Outstanding at 31 Dec 2022
58,600
Fair value of the share award at grant date
14.1
End of the performance period
28 Feb 2023
End of the vesting period, expected
31 Mar 2023
Vesting conditions
Service condition, total Shareholder
Return (TSR), productivity and digital
sales
Exercised
In shares and cash
68
Performance Share Plan 2018-2020
Performance Share Plan 2018–2020 is targeted to Terveystalo’s key employees. The plan consists of three vesting
periods which consists of a one-year performance period and a two-year waiting period. The performance periods
are calendar years 2018, 2019 and 2020. Rewards are conditional on the fulfilment of a three-year service condition
and performance conditions tied to financial targets that are set separately. The reward is granted as a gross
number of Terveystalo shares, including a cash portion for taxes and tax-related expenses arising from the reward
to the employee. The reward is settled as net shares. The plan is fully accounted for as an equity settled share-
based payment. No rewards were earned on the basis of the performance periods 2018 and 2020. During the
reporting period the shares earned from the performance period 2019 were paid to the participants at the end of a
2-year vesting period. The plan’s impact to the result for the period has been EUR 0.3 million. 68 persons were
included in the arrangement until the plan end.
Performance Share Plan 2018-2020
2020
2019
2018
Grant date
30 April 2020
27 March 2019
30 Jan 2018
Maximum number of share awards
660,836
943,000
943,000
Outstanding at 1 Jan 2022
-
519,674
-
Granted share awards during the period
-
-
-
Forfeited share awards during the period
-
-
-
Exercised share awards during the period
-
519,674
-
Outstanding at 31 Dec 2022
-
-
-
Fair value of the share award at grant date
8.8
9.0
6.9
End of the performance period
31 Dec 2020
31 Dec 2019
31 Dec 2018
End of the vesting period
Not applicable
8 Mar 2022
Not applicable
Vesting conditions
Service condition, total Shareholder Return (TSR) and
profitability
Exercised
In shares and cash
Restricted Share Plan
Restricted Share Plan offers individually selected employees an opportunity to earn a fixed number of shares after a
vesting period. Rewards are conditional on the fulfilment of a service condition during the vesting period. The
reward is granted as a gross number of Terveystalo shares, including a cash portion for taxes and tax-related
expenses arising from the reward to the employee. The reward is settled as net shares. The plan is fully accounted
for as an equity settled share-based payment. Two (2) vesting periods have been launched in the plan. At the
reporting period end, three (3) persons were included in the arrangement. The impact to the result of the vesting
periods 2021–2023 and 2022–2024 has been EUR 0.0 million and the expected total cost of the plan is EUR 0.1
million.
Restricted Share Plan
2022-2024
2021-2023
Grant date
22 Jun 2022
15 Apr 2021
Maximum number of share awards
68,309
64,200
Outstanding at 1 Jan 2022
-
7,000
Granted share awards during the period
3,000
-
Forfeited share awards during the period
-
-
Exercised share awards during the period
-
-
Outstanding at 31 Dec 2022
3,000
7,000
Fair value of the share award at grant date
9.5
11.2
End of the performance period
-
-
End of the vesting period, expected
31 Mar 2025
31 Mar 2024
Vesting conditions
Service condition
Service condition
Exercised
In shares and
cash
In shares and cash
69
20. Financial assets and liabilities – carrying amount, fair values and fair value hierarchy
EUR mill. 31 Dec 2022
Financial assets
and liabilities at
fair value
Financial assets and
liabilities at
amortized cost
Carrying
amount
Fair value
Fair value
hierarchy
Financial assets
Non-current
0,3
-
0,3
0,3
Level 2
0,8
-
0,8
0,8
Level 3
Current
-
106,9
106,9
106,9
-
12,8
12,8
12,8
-
40,2
40,2
40,2
9,9
-
9,9
9,9
Level 2
Total
11,0
159,9
170,9
170,9
Financial liabilities
Non-current
-
379,2
379,2
379,2
-
3,9
3,9
3,9
5,6
-
5,6
5,6
Level 3
Current
-
40,0
40,0
40,0
-
4,2
4,2
4,2
-
49,0
49,0
49,0
5,0
-
5,0
5,0
Level 3
3,4
-
3,4
3,4
Level 2
Total
14,0
476,2
490,2
490,2
Financial assets and liabilities classified at fair value hierarchy level 3 consist of unquoted equity investments and contingent
considerations from business combinations. The measurement of unquoted equity investments is based on the managements estimate
of future cash flows arising from the investments and the measurement of contingent considerations is based on the amounts specified
in purchase agreements and the management estimate on whether the consideration will be realized. The effect on earnings arising
from the changes of fair values of financial assets and liabilities classified at fair value hierarchy level 3 has been EUR -2.4 million
(2021: EUR 0.5 million).
EUR mill. 31 Dec 2021
Financial assets
and liabilities at
fair value
Financial assets and
liabilities at
amortized cost
Carrying
amount
Fair value
Fair value
hierarchy
Financial assets
Non-current
0,1
-
0,1
0,1
Level 2
70
0,8
-
0,8
0,8
Level 3
Current
-
103,4
103,4
103,4
-
15,0
15,0
15,0
-
38,1
38,1
38,1
0,6
-
0,6
0,6
Level 2
Total
1,6
156,5
158,1
158,1
Financial liabilities
Non-current
-
249,8
249,8
249,8
-
8,1
8,1
8,1
Level 2
5,4
-
5,4
5,4
Level 3
Current
-
115,6
115,6
115,6
-
5,3
5,3
5,3
-
57,1
57,1
57,1
2,8
-
2,8
2,8
Level 3
1,2
-
1,2
1,2
Level 2
Total
9,4
435,8
445,2
445,2
.
21. Financial risks
21.1 Financial risk management
The Group is exposed to various financial risks in its normal business activities. The objective of the Group’s risk
management is to minimize the negative effects of changes in the financial markets on the
Group’s result and valuation. The Group’s main financial risks are interest rate risk, credit risk and liquidity risk. The
Group’s risk management principles are approved by the Board of Directors and the
Group’s financial department is responsible for the implementation of the principles. The Group’s
financial department identifies and assesses risks and acquires instruments needed to hedge against them.
21.2 Interest rate risk and currency risk
The Group’s interest rate risk arises from its loans from financial institutions issued at a floating rate.
In 2022, the Group’s average interest rate for loans from financial institutions has been 1.2 percent (2021: 0.9
percent). If the interests would have been one percentage point higher it would have caused an increase of EUR
3.9 million in interest expenses during the year 2022. (2021: EUR 3.7 million).
The Group does not apply hedge accounting according to IFRS 9. The Group’s subsidiaries have the following open
interest rate derivative contracts at the reporting date:
●
percent interest rate and receives variable interest on EUR 30.0, 30.0, 50.0, 50.0 and 50.0 million loan
capital.
Besides Finland, the Group has operations in Sweden and to a minor extent in Estonia and the Netherlands and is
thereby exposed to currency risk arising from Swedish krona. As billing and purchasing of the Group companies is
conducted in the local currency, the transaction risk exposure for Terveystalo is insignificant. During the year 2022,
the Group incurred foreign exchange losses of EUR 0.1 million (2021: EUR 0.4 million). However, the group is
exposed to exchange rate translation differences, which are booked in other comprehensive income that may be
reclassified as profit or loss.
21.3 Credit risk
The majority of the Group’s incoming cash flows are payments from established institutions, public sector and
companies with appropriate credit rating. However, the Group’s trade receivables include credit risk.
71
Credit risk is managed mainly by monitoring the customer’s credit rating on a regular basis and by co-operating with
collection agencies. In addition, the Group’s customers include private people whose
invoicing is primarily carried out in connection with the rendering of services.
The Group has no major customer specific risk concentrations and its credit risk is diversified. Credit risk
is managed by monitoring the amount, maturity distribution and turnover of trade receivables. Credit risk
is also monitored on a client by client basis.
The Group has assessed the potential impact of Covid-19 to credit risk of trade receivables. Based on the
assessment, the Group’s view is that the credit risk has not significantly increased.
The Group’s maximum credit risk is equal to the carrying amount of financial assets at the reporting date.
The maturity distribution of the Group’s trade receivables is disclosed in note 22
Trade and other receivables
.
21.4 Liquidity risk
The Group aims to assess and monitor continuously the amount of funding required by business
operations, in order to ensure sufficient liquidity to finance its operations, to repay maturing loans as well
as to carry out investments and acquisitions of companies according to the growth strategy. The Group’s
cash and cash equivalents comprise cash in bank accounts, cash in hand and cash payments not yet
recorded into the Group’s bank accounts (cash in transit) at the reporting date.
The Group manages liquidity risk by monitoring unused liquidity reserves and forecasting future cash
flows.
The Group has an overdraft facility and undrawn credit facilities, of which EUR 99.6 million remained unused at the
reporting date (2021: EUR 55.5 million).
The table below presents a contractual maturity analysis of financial liabilities. The cash flow figures are
undiscounted and they include both interest payments and repayments of principals. Interest payments which are
based on variable rates have been presented using variable rates as of the end of the reporting date.
Maturity analysis of liquidity risk
31 Dec 2022
EUR mill.
Carrying amount
Contractual cash
flows
1 year
1–2 years
2–5 years
Over 5 years
Loans from financial institutions
419,2
446,9
52,3
220,3
151,5
22,5
Lease liabilities
179,8
191,9
49,9
43,2
74,8
24,0
Hire purchase liabilities
8,0
8,2
4,3
2,6
1,3
-
Trade payables
49,0
49,0
49,0
-
-
-
Interest rate derivatives
3,4
2,9
0,1
1,9
0,9
-
Total
659,4
698,5
155,6
267,9
228,5
46,4
31 Dec 2021
EUR mill.
Carrying amount
Contractual cash
flows
1 year
1–2 years
2–5 years
Over 5 years
Loans from financial institutions
365,4
373,5
118,6*
42,8
212,0
-
Lease liabilities
178,5
186,4
48,9
42,0
72,8
22,8
Hire purchase liabilities
13,3
13,7
5,5
4,3
3,8
-
Trade payables
57,1
57,1
57,1
-
-
-
Interest rate derivatives
1,2
1,4
1,1
0,2
0,0
-
Total
615,4
631,9
231,2
89,4
288,6
22,8
72
.
21.5 Capital management
The objective of the Group’s capital management is to support business operations and to ensure competitive
operating conditions with optimal capital structure, as well as to enable the implementation of the strategy.
In addition to operative cash flows, the capital structure is managed by potential share issues, acquisition of
treasury shares by increase or repayment of financial liabilities, possible conversions between equity and financial
liabilities, as well as through operative decisions on investments and growth and potential disposals of assets in
order to reduce liabilities.
The development of the Group’s capital structure is monitored, amongst other things, with the following: change in
net debt, ratio of net debt to operating margin, and the cash flow forecast.
The Group’s net debt to equity ratio (gearing) was 95.7 percent at the reporting date (2021: 85.2 percent). The ratio
is calculated by dividing interest-bearing net debt with equity. The net debt includes interest-bearing liabilities less
interest-bearing receivables and cash and cash equivalents. The Group’s interest-bearing liabilities were EUR
607.0 million at the reporting date (2021: EUR 557.2 million). A significant part of the interest-bearing liabilities
consists of loans from financial institutions.
The Group’s loan agreements include a covenant, based on which creditors can demand an immediate repayment
of the loans if a certain covenant limit is breached. The covenant relates to the ratio between EBITDA and net debt.
The Group has met all covenant terms and conditions during the reporting period and at the reporting date.
22. Trade and other receivables and contract assets
Carrying amounts of trade and other receivables and contract assets
EUR mill.
2022
2021
Non-current
Loan receivables
0,3
0,1
Total non-current receivables
0,3
0,1
Current
Trade receivables
106,9
103,4
Other receivables
2,1
2,0
Prepaid expenses
21,0
7,9
Contract assets
12,8
15,0
Total
142,9
128,3
Specification of prepaid expenses
EUR mill.
2022
2021
Derivatives
9,9
0,6
Current tax receivables
4,5
0,1
Other prepaid expenses
6,5
7,3
Total
21,0
7,9
During the reporting period the Group has recognized final credit losses and expected credit losses on trade
receivables and contract assets through the statement of income totaling EUR 1.9 million (2021: EUR 1.6 million).
73
Impairment loss provision is based on a simplified approach. Estimated impairment loss rates have been calculated
using historical information of actual impairment losses, and the current conditions and the Group’s view of the
economic conditions over the expected lives of the receivables have been taken into account.
Based on the Group’s view, the carrying amount of trade receivables corresponds to the maximum credit risk if the
contractual parties are unable to meet their obligations related to trade receivables.
The fair value of other receivables and prepaid expenses corresponds with their carrying amount.
Ageing of trade receivables and recognized credit losses
2022
EUR mill.
Trade receivables and
contract assets total
Expected credit loss
Recognized expected
credit loss
Carrying amount
Contract assets
12,8
0,0 %
-0,0
12,8
Not past due
95,0
-0,1 %
-0,1
95,0
Past due
7,3
-0,4 %
-0,0
7,3
2,3
-1,2 %
-0,0
2,3
1,0
-5,9 %
-0,1
1,0
3,2
-55,5 %
-1,8
1,4
Total
121,6
-1,9
119,7
Information about credit risk related to trade receivables is stated in note 21 Financial risks.
Ageing of trade receivables and recognized credit losses
2021
EUR mill.
Trade receivables total
Expected credit loss
Recognized expected
credit loss
Carrying amount
Contract assets
15,0
-0,1 %
-0,0
15,0
Not past due
92,0
-0,1 %
-0,1
91,9
Past due
6,5
-0,3 %
-0,0
6,5
2,1
-1,1 %
-0,0
2,1
1,7
-6,4 %
-0,1
1,6
2,8
-50,9 %
-1,4
1,4
Total
120,1
-1,6
118,4
Information about credit risk related to trade receivables is stated in note 21 Financial risks.
74
23. Cash and cash equivalents
The Group’s cash and cash equivalents on 31 December 2022, amounting to EUR 40,2 million (2021: EUR
38.1 million) consist of cash in hand and bank as well as, cash payments on the bank settlement account at the
reporting date.
The carrying amounts in the statement of financial position correspond to the maximum amount of credit risk if the
contractual parties are unable to meet their obligations. However, no significant counterparty risks are associated
with cash and cash equivalents. The fair value of cash and cash equivalents correspond to their carrying amounts.
24. Share capital and invested non-restricted equity reserve
EUR mill.
Number of
outstandin
g shares,
1,000 pcs
Number
of
treasury
shares,
1,000
pcs
Number
of shares
total,
1,000 pcs
Share capital
Invested non-
restricted equity
reserve
Treasury
shares
Total
1 Jan 2021
127 307
730
128 037
0,1
492,8
-6,7
486,1
Acquisition of treasury
shares
-1 000
1 000
-
-
-
-11,3
-11,3
31 Dec 2021
126 307
1 730
128 037
0,1
492,8
-18,0
474,9
1 Jan 2022
126 307
1 730
128 037
0,1
492,8
-18,0
474,9
Acquisition of treasury
shares
241
-241
-
-
-
2,2
2,2
Cancellation of treasury
shares
-1 000
-1 000
-
-
-
-
31 Dec 2022
126 548
489
127 037
0,1
492,8
-15,8
477,1
Shares and share capital
On 31 December 2022, the amount of shares is 127,036,531 of which amount of outstanding shares is 126,547,995
and amount of treasury shares is 488,536.
The Company has a single share class. The shares have no nominal value. All shares issued have been paid in full.
Each share has one vote at the Annual General Meeting and equal rights to dividend and other distribution of
assets.
Terveystalo PLC’s share is listed on Nasdaq Helsinki Oy. The trading code is TTALO. Terveystalo PLC’s shares
belong to the book-entry system maintained by Euroclear Finland Oy.
Invested non-restricted equity reserve
Invested non-restricted equity reserve consists of other investments similar to equity and the subscription price of
shares to the extent that it has not been recorded in share capital according to specific resolution. According to the
current Finnish Companies Act subscription price of new shares is recognized in the share capital, unless it has not
been according to Issuance Resolution fully or partly recognized in invested non-restricted equity reserve.
Distributable funds
On 31 December 2022, the distributable funds of the parent company totaled EUR 530.8 million including the profit
of the financial period 2022 of EUR 23.7 million. The Board of Directors proposes to the Annual General Meeting
that a dividend of EUR
) per share totaling EUR
financial position adopted for the financial year ended 31 December 2022. The dividend would be paid in two
instalments as follows:
75
●
registered in the shareholders' register of the Company maintained by Euroclear Finland Ltd on the record
date of the first dividend instalment on 27 March 2023. The Board of Directors proposes that the first
dividend instalment would be paid on 3 April 2023.
●
the shareholders' register of the Company maintained by Euroclear Finland Ltd on the record date of the
second dividend instalment on 2 October 2023. The Board of Directors proposes that the second dividend
instalment would be paid on 9 October 2023. The Board of Directors also proposes that the Annual General
Meeting would authorize the Board of Directors to resolve, if necessary, on a new record date and date of
payment for the second dividend instalment should the rules of Euroclear Finland Ltd or statutes applicable
to the Finnish book-entry system change or otherwise so require.
The dividend proposed by the Board of Directors to the Annual General Meeting is not deducted from distributable
equity until approved by the Annual General Meeting of Shareholders.
No material changes have taken place in the company’s financial position since the end of the financial year. The
liquidity of the company is good and the proposed allocation of funds, in the view of the Board of Directors, does not
endanger the company's solvency.
25. Financial liabilities
Non-cash changes
EUR mill.
1 Jan 2022
Cash flows
Business
combinations
Other changes
Translation
differences
31 Dec 2022
Loans from financial institutions
365,4
53,8
0,5
-0,2
-0,4
419,2
Hire purchase liabilities
13,3
-5,3
-
-
-
8,0
Lease liabilities
178,5
-49,3
4,4
46,2
-0,0
179,8
Total
557,2
-0,8
4,9
46,0
-0,4
607,0
.
Non-cash changes
EUR mill.
1 Jan 2021
Cash flows
Business
combinations
Other changes
Translation
differences
31 Dec 2021
Loans from financial institutions
371,9
-11,5
4,8
0,3
-0,0
365,4
Hire purchase liabilities
17,6
-5,9
-
1,6
-
13,3
Lease liabilities
178,5
-42,4
17,1
25,3
-0,0
178,5
Total
567,9
-59,8
21,9
27,1
-0,0
557,2
The Group’s loan agreements include a covenant, based on which creditors can demand an immediate repayment
of the loans if a certain covenant limit is breached. The covenant relates to the ratio between EBITDA and net debt.
The Group has met all covenant terms and conditions during the reporting period and at the reporting date.
26. Trade and other payables
Carrying amounts of trade and other payables
EUR mill.
2022
2021
76
Trade payables
49,0
57,1
Other payables
81,9
75,9
Contract liabilities
10,3
6,1
Interest rate derivatives
3,4
1,2
Accrued expenses
78,7
73,9
Total
223,2
214,1
Specification of other payables
EUR mill.
2022
2021
Doctor's fee liabilities
48,2
44,6
VAT liabilities
24,0
20,8
Other
9,7
10,6
Total
81,9
75,9
Specification of accrued expenses
EUR mill.
2022
2021
Personnel-related accrued expenses
71,4
67,1
Interest liabilities
1,5
0,2
Other
5,8
6,6
Total
78,7
73,9
27. Provisions
Carrying amounts of provisions
EUR mill.
2022
2021
Non-current provisions
8,3
8,5
Current provisions
3,2
2,5
Total
11,5
11,0
EUR mill.
2022
2021
Onerous contracts
7,1
6,6
Other provisions
4,4
4,4
Total
11,5
11,0
Changes in provisions during the financial year 2022
EUR mill.
Onerous
contracts
Other
provisions
Total
1 Jan 2022
6,6
4,4
11,0
Increase in provisions
2,2
0,6
2,8
Used provisions
-1,7
-0,6
-2,3
31 Dec 2022
7,1
4,4
11,5
Changes in provisions during the financial year 2021
77
EUR mill.
Onerous
contracts
Other
provisions
Total
1 Jan 2021
5,8
4,3
10,1
Increase in provisions
2,0
0,6
2,6
Used provisions
-1,2
-0,5
-1,7
31 Dec 2021
6,6
4,4
11,0
28. Defined benefit plans
The Group has defined benefit plans in Sweden in the Feelgood subgroup . These consists of PSA and PA -KL plans
which are closed and for which all the participants have either retired or left the Group. There are no assets related
to the Group’s defined benefit plans. The defined benefit plans determine the amount of pension to be paid and the
benefits to be paid for disability and at termination of employment. The benefits in these plans are usually based on
the length of employment and the level of final salary. The weighted average duration of the defined benefit
obligations was 8 years at the reporting date.
Summary of the impact of the defined benefit plans in the financial statements
EUR mill.
2022
2021
Present value of the defined benefit obligations
1,3
1,7
Expenses related to defined benefit plans
0,0
0,0
Remeasurements of defined benefit obligations
-0,2
-0,1
Reconciliation of the defined benefit obligation
EUR mill.
2022
2021
1 Jan
1,7
-
Business combinations
-
1,9
Interest expense (+) / income (-)
0,0
0,0
Benefits paid
-0,1
-0,1
Remeasurement of the obligation
Actuarial gain (-) / loss (+) from change in demographic assumptions
-
-
Actuarial gain (-) / loss (+) from change in financial assumptions
-0,2
-0,1
Experience adjustment gain (-) / loss (+)
-
-
Translation differences
-0,1
-0,0
31 Dec
1,3
1,7
Applied actuarial assumptions
%
2022
2021
Discount rate
3,80
1,20
Inflation
1,90
2,20
The discount rate is determined based on the yield of Swedish housing market bonds which have a length that approximates the Group’s
pension obligations.
78
.
Sensitivity analysis of the relevant actuarial assumptions’ impact on defined benefit obligation
EUR mill.
2022
2021
0.5%-point increase in the principal assumption
Discount rate
-0,0
-0,1
Inflation
0,0
0,1
0.5%-point decrease in the principal assumption
Discount rate
0,0
0,1
Inflation
-0,0
-0,1
An external actuary has performed the sensitivity analysis for one variable at a time while holding all other variables constant and regardless
of the actual volatility of the given variable. Consequently, the purpose of the analysis is not to quantify expected change in the defined
benefit obligation but to illustrate the sensitivity of the value of the obligation to these variables.
.
29. Collateral and contingent liabilities
EUR mill.
31 Dec 2022
31 Dec 2021
Business mortgages
11,4
11,4
Total
11,4
11,4
Securities for own debts
Deposits
0,5
0,2
Guarantees
0,4
0,9
Total
0,9
1,1
30. Related party transactions
Group’s related parties
The Group’s related parties include the parent company as well as subsidiaries and associated companies. In
addition, related parties include also the members of the Board of Directors, Group management and the CEO as
well as their close family members and entities in which they have control or joint control. Related party transactions
which are not eliminated in the preparation of Terveystalo’s consolidated financial statements are presented as
related party transactions.
The relationships of the parent company and the subsidiaries are disclosed in note 31
Group companies
.
Related party transactions
2022
Sales
Purchases
Receivables
Payables
Associated companies
0,6
10,6
0,3
1,0
Other related parties
-
-
-
-
Total:
0,6
10,6
0,3
1,0
79
2021
Sales
Purchases
Receivables
Payables
Associated companies
0,7
12,5
0,2
1,1
Other related parties
-
-
-
-
Total:
0,7
12,5
0,2
1,1
Compensation for the key management
Remuneration for CEO, in thousands of euro
2022
2021
Fixed pay
393,6
400,0
Other benefits
6,4
-
Short-term incentives
105,0
433,8
Share-based payments
546,9
306,7
Pensions (statutory)
82,9
136,0
Total
1 134,8
1 276,4
Renumeration for the CEO is presented on an accrual basis.
Remuneration to members of the Executive team
(excluding CEO), in thousands of euro
2022
2021
Fixed pay
1 638,5
1 754,1
Other benefits
28,1
41,8
Short-term incentives
146,1
880,2
Share-based payments
730,9
611,6
Termination benefits
305,9
-
Pensions (statutory)
301,6
436,5
Total
3 151,1
3 724,3
Renumeration to members of the Executive team is presented on an accrual basis.
Remuneration to Board of
Directors, in thousands of euro
2022
2021
Annual fee
settled in
cash
Annual fee
settled in
shares
Meeting
fees
Other
financial
benefits*
Annual fee
settled in
cash
Annual fee
settled in
shares
Meeting
fees
Other
financia
l
benefit
s*
Kari Kauniskangas (Chairman of
the board)
52,5
35,0
19,0
0,6
50,5
34,0
15,0
0,5
Kristian Pullola
31,2
20,8
14,2
0,3
30,0
20,2
12,5
0,3
Katri Viippola
24,9
16,6
15,5
0,3
23,9
16,1
15,0
0,3
Carola Lemne**
24,9
16,6
14,7
0,3
-
-
-
-
Matts Rosenberg**
31,2
20,8
10,4
0,3
-
-
-
-
Members of the Board of
Directors until 10 October 2022
Dag Andersson
41,5
0,0
13,8
0,0
23,9
16,1
15,3
0,3
Members of the Board until 7 April
2022
Niko Mokkila
0,0
0,0
3,8
0,0
23,9
16,1
15,0
0,3
Åse Aulie Michet
0,0
0,0
4,4
0,0
23,9
16,1
16,4
0,3
Tomas Von Rettig
0,0
0,0
5,1
0,0
30,0
20,2
17,0
0,3
80
Members of the Board of
Directors until 25 March 2021
Lasse Heinonen
-
-
-
-
-
-
3,1
-
Total
206,2
109,8
100,7
1,8
206,0
138,7
109,3
2,2
* Other financial benefits include transfer tax fees for the annual fees paid in shares.
** Member of the Board of Directors from 2022.
.
Bonus Scheme
The Company operates a bonus scheme, which is determined by the Board of Directors of the Company upon the
recommendation of the Remuneration Committee. The CEO and the members of the Executive Team are eligible to
participate in the bonus scheme in accordance with the Company’s bonus policy. Annual bonuses are payable
based on the attainment of key performance targets of the Company. The key performance targets of the CEO and
the Executive Team are based on the Company’s adjusted EBITA as well as the individual business and
performance targets. The individual business and performance targets are set by the manager of the participant in
the bonus scheme.
The Board of Directors of Terveystalo Plc has resolved to establish a share-based incentive plan directed to the
Group’s key employees. More information on the share-based incentive plan is presented in note 19
payments.
Management holdings
Name
Position
31 Dec 2022
Kari Kauniskangas
Chairman of the Board of Directors
16 532
Matts Rosenberg
Member of the Board of Directors
11 366
Carola Lemne
Member of the Board of Directors
2 627
Kristian Pullola
Member of the Board of Directors
5 075
Katri Viippola
Member of the Board of Directors
8 954
Ville Iho
President and CEO
5 000
Juuso Pajunen
Chief Financial Officer
12 000
Petri Bono
Chief Medical Officer
7 587
Siina Saksi
Chief Operating Officer, Healthcare Services
60 380
Marja-Leena Tuomola
Chief Commercial Officer, Healthcare Services
1 000
Kati Sulin
Senior Vice President, Digital Business
-
Mikko Tainio
Senior Vice President, Portfolio Businesses
518
Minttu Sinisalo
Senior Vice President, Human Resources
-
31. Group companies
81
The Group’s parent company is Terveystalo Plc domiciled in Finland.
Subsidiaries as at 31 December 2022
Company name
Domicile
Group's share
Group's voting
rights
Alna Sverige AB
Finland
100,0 %
100,0 %
EAM TTALO Holding Oy*
Finland
0,0 %
0,0 %
Evalua International Ltd. Oy
Finland
100,0 %
100,0 %
Evalua Nederland B.V.
Netherlands
100,0 %
100,0 %
Feelgood Företagshälsa Dalarna AB
Sweden
100,0 %
100,0 %
Feelgood Företagshälsovård AB
Sweden
100,0 %
100,0 %
Feelgood Jobbhälsan AB
Sweden
100,0 %
100,0 %
Feelgood Länshälsan AB
Sweden
100,0 %
100,0 %
Feelgood Sjukvård AB
Sweden
100,0 %
100,0 %
Feelgood Svenska AB
Sweden
100,0 %
100,0 %
Idavallen AB
Sweden
100,0 %
100,0 %
Kunnon Syke Oy
Finland
100,0 %
100,0 %
Ludus Oy Tutkimus- ja Kuntoutuspalvelut
Finland
100,0 %
100,0 %
Länshälsan Skåne AB
Sweden
100,0 %
100,0 %
Medicin Direkt Östersund AB
Sweden
100,0 %
100,0 %
Medimar Scandinavia Ab
Finland
100,0 %
100,0 %
Nämndemansgården i Sverige AB
Sweden
100,0 %
100,0 %
Rela Estonia OÜ
Estonia
100,0 %
100,0 %
Rela-hierojat Oy
Finland
100,0 %
100,0 %
Saimaan Urheilufysioterapia Oy
Finland
100,0 %
100,0 %
Sauma Lastensuojelupalvelut Oy
Finland
100,0 %
100,0 %
Sivupersoona Oy
Finland
100,0 %
100,0 %
Somia Reality Oy
Finland
100,0 %
100,0 %
Suomen Hierojakoulut Oy
Finland
100,0 %
100,0 %
Suomen Terveystalo Oy
Finland
100,0 %
100,0 %
Terveystalo Estonia OÜ
Estonia
100,0 %
100,0 %
Terveystalo Healthcare Holding Oy
Finland
100,0 %
100,0 %
Terveystalo Healthcare Oy
Finland
100,0 %
100,0 %
Terveystalo Julkiset palvelut Oy
Finland
100,0 %
100,0 %
Terveystalo Kuntaturva Oy
Finland
100,0 %
100,0 %
Terveystalo Tactus Oy
Finland
100,0 %
100,0 %
The Drawing Room AB
Sweden
100,0 %
100,0 %
TT Ålands Tandläkarna Ab
Finland
100,0 %
100,0 %
*Evli Asset Management holds the ownership and voting rights of EAM TTALO Holding Oy by legal terms, but according to the agreement
Terveystalo has control over the company and acts as the principal, whereas EAM is an agent through the holding company. Based on this
control arising from contractual terms, the holding company is consolidated into the Group's IFRS financial statements as a structured
entity.
31.1 Changes in the Group structure
Financial year 2022
The following mergers took place during the financial year 2022:
82
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
Financial year 2021
The following mergers took place during the financial year 2021:
●
●
●
●
●
12.2021 Rela-group Oy merged with Rela-hierojat Oy.
83
32. Group's key financial ratios
Terveystalo Group, EUR mill.
2022
2021
2020
Revenue
1 259,1
1 154,6
986,4
Adjusted EBITDA, *
1)
178,0
206,1
162,8
Adjusted EBITDA, % *
1)
14,1
17,8
16,5
EBITDA
1)
168,8
201,8
158,3
EBITDA, %
1)
13,4
17,5
16,1
Adjusted EBITA *
1)
105,2
141,0
101,9
Adjusted EBITA, % *
1)
8,4
12,2
10,3
EBITA
1)
95,9
136,7
97,4
EBITA, %
1)
7,6
11,8
9,9
Adjusted operating profit (EBIT) *
1)
73,4
114,4
71,6
Adjusted operating profit (EBIT), % *
1)
5,8
9,9
7,3
Operating profit (EBIT)
33,9
110,1
67,2
Operating profit (EBIT), %
2,7
9,5
6,8
Return on equity (ROE), %
1)
4,1
13,6
8,2
Equity ratio, %
1)
40,2
42,2
42,1
Earnings per share (€)
0,19
0,63
0,36
Net debt
566,6
519,0
490,9
Gearing, %
1)
95,7
85,2
85,9
Net debt/Adjusted EBITDA
1)
3,2
2,5
3,0
Total assets
1 479,4
1 448,6
1 361,0
Average personnel FTE
6 552
5 643
4 900
Personnel (end of period)
10 933
9 805
8 253
Private practitioners (end of period)
5 928
5 754
5 057
Adjusted EBITDA, excluding IFRS 16 *
1)
122,2
156,9
118,0
Net debt, excluding IFRS 16
386,8
340,6
312,4
Net debt/Adjusted EBITDA, excluding IFRS 16 *
1)
3,2
2,2
2,6
* Adjustments are material items outside the ordinary course of business, and these relate to acquisition-related
expenses, restructuring-related expenses, gain / losses on sale of assets (net), impairment losses, strategic projects and
other items affecting comparability.
1)
financial measures defined in IFRS. Those are performance measures that the company monitors internally, and they
provide management, investors, securities analysts and other parties significant additional information related to the
company's results of operations, financial position and cash flows. These should not be considered in isolation or as a
substitute to the measures under IFRS.
84
33. Calculation of financial ratios and alternative performance measures
Financial ratios
Earnings per share, (EUR)
=
Profit for the period attributable to owners of the parent company
Average number of shares during the period
Terveystalo presents alternative performance measures as additional information to the financial measures defined in IFRS. Those are
performance measures that the company monitors internally and they provide significant additional information related to the company's results of
operations, financial position and cash flows to the management, investors, securities analysts and other parties. These should not be considered
in isolation or as a substitute to the measures under IFRS.
Alternative performance measures to the statement of financial position
The company presents the following alternative performance measures to the statement of financial position as they are, in the company's view,
useful indicators of the company's ability to obtain financing and service its debt.
Return on equity, %
=
Profit/loss for the period (LTM)
x 100%
Equity (including non-controlling interest) (average)
Equity ratio, %
=
Equity (including non-controlling interest)
x 100%
Total assets - advances received
Gearing, %
=
Interest-bearing liabilities - interest-bearing receivables and cash and cash
equivalents
x 100%
Equity
Net debt/Adjusted EBITDA (LTM) *
=
Interest-bearing liabilities - interest-bearing receivables and cash and cash
equivalents
Adjusted EBITDA (LTM)
Net debt/Adjusted EBITDA (LTM), excluding
IFRS 16 *
=
Interest-bearing liabilities excluding lease liabilities - interest-bearing receivables
and cash and cash equivalents
Adjusted EBITDA (LTM), excluding IFRS 16
Alternative performance measures to the statement of income
The company presents the following alternative performance measures to the statement of income, as in the company's view, they increase
understanding of the company's results of operations. In addition, the adjusted alternative performance measures are widely used by analysts,
investors and other parties and facilitates comparability between periods.
Adjusted EBITDA*
=
Earnings Before Interest, Taxes, Depreciation, Amortization, Impairment losses
and adjustments
Adjusted EBITDA, %*
=
Earnings Before Interest, Taxes, Depreciation, Amortization, Impairment losses
and adjustments
x 100%
Revenue
Adjusted EBITA*
=
Earnings Before Interest, Taxes, Amortization, Impairment losses and adjustments
85
Adjusted EBITA, %*
=
Earnings Before Interest, Taxes, Amortization, Impairment losses and
adjustments
x 100%
Revenue
Adjusted operating profit (EBIT)*
=
Earnings Before Interest, Taxes and Share of profits in associated companies,
and adjustments
Adjusted operating profit (EBIT), %*
=
Earnings Before Interest, Taxes and Share of profits in associated companies,
and adjustments
x 100%
Revenue
EBITDA
=
Earnings Before Interest, Taxes, Depreciation and Amortization and Impairment losses
EBITDA, %
=
Earnings Before Interest, Taxes, Depreciation and Amortization and Impairment
losses
x 100%
Revenue
EBITA
=
Earnings Before Interest, Taxes, Amortization and Impairment losses
EBITA, %
=
Earnings Before Interest, Taxes, Amortization and Impairment losses
x 100%
Revenue
Operating profit (EBIT)
=
Earnings Before Interest, Taxes and Share of profits in associated companies
Operating profit (EBIT), %
=
Earnings Before Interest, Taxes and Share of profits in associated companies
x 100%
Revenue
Adjusted EBITDA, excluding IFRS 16 *
=
Earnings Before Interest, Taxes, Depreciation, Amortization, Impairment losses
and adjustments, excluding IFRS 16 lease adjustments
* Adjustments are material items outside the ordinary course of business and these relate to acquisition-related expenses, restructuring-related
expenses, gains and losses on sale of assets (net), impairment losses, strategic projects and other items affecting comparability.
86
34. Reconciliation of alternative performance measures
Return on equity, %
2022
2021
2020
Profit/loss for the period
24,4
80,4
45,8
Equity (including non-controlling interest) (average)
600,4
590,1
556,3
Return on equity, %
4,1
13,6
8,2
Equity ratio, %
2022
2021
2020
Equity (including non-controlling interest)
592,0
608,9
571,4
Total assets
1 479,4
1 448,6
1361,0
Advances received
7,1
6,1
2,2
Equity ratio, %
40,2
42,2
42,1
Gearing, %
2022
2021
2020
Interest-bearing liabilities
607,0
557,2
568,0
Interest-bearing receivables and cash and cash equivalents
40,4
38,2
77,1
Equity
592,0
608,9
571,4
Gearing, %
95,7
85,2
85,9
Net debt /Adjusted EBITDA
2022
2021
2020
Interest-bearing liabilities
607,0
557,2
568,0
Interest-bearing receivables and cash and cash equivalents
40,4
38,2
77,1
Adjusted EBITDA
178,0
206,1
162,8
Net debt / Adjusted EBITDA
3,2
2,5
3,0
Adjusted EBITDA, EUR mill.
2022
2021
2020
Profit (loss) for the period
24,4
80,4
45,8
Income tax expense
6,5
20,3
10,8
Share of profits in associated companies
0,1
0,3
0,6
Net finance expenses
2,9
9,0
10,0
Depreciation, amortization and impairment losses
134,9
91,7
91,2
Adjustments*
9,2
4,3
4,5
Adjusted EBITDA
178,0
206,1
162,8
Adjusted EBITDA, %
2022
2021
2020
Adjusted EBITDA
178,0
206,1
162,8
Revenue
1 259,1
1154,6
986,4
Adjusted EBITDA, %
14,1
17,8
16,5
.
Adjusted EBITA, EUR mill.
2022
2021
2020
Profit (loss) for the period
24,4
80,4
45,8
Income tax expense
6,5
20,3
10,8
Share of profits in associated companies
0,1
0,3
0,6
Net finance expenses
2,9
9,0
10,0
Amortization and impairment losses
62,0
26,6
30,3
Adjustments*
9,2
4,3
4,5
Adjusted EBITA
105,2
141,0
101,9
87
Adjusted EBITA, %
2022
2021
2020
Adjusted EBITA
105,2
141,0
101,9
Revenue
1 259,1
1154,6
986,4
Adjusted EBITA, %
8,4
12,2
10,3
Adjusted operating profit (EBIT), EUR mill.
2022
2021
2020
Profit (loss) for the period
24,4
80,4
45,8
Income tax expense
6,5
20,3
10,8
Share of profits in associated companies
0,1
0,3
0,6
Net finance expenses
2,9
9,0
10,0
Adjustments*
39,5
4,3
4,5
Adjusted EBIT
73,4
114,4
71,6
Adjusted operating profit (EBIT), %
2022
2021
2020
Adjusted EBIT
73,4
114,4
71,6
Revenue
1 259,1
1 154,6
986,4
Adjusted EBIT, %
5,8
9,9
7,3
EBITDA, EUR mill.
2022
2021
2020
Profit (loss) for the period
24,4
80,4
45,8
Income tax expense
6,5
20,3
10,8
Share of profits in associated companies
0,1
0,3
0,6
Net finance expenses
2,9
9,0
10,0
Depreciation, amortization and impairment losses
134,9
91,7
91,2
EBITDA
168,8
201,8
158,3
EBITDA, %
2022
2021
2020
EBITDA
168,8
201,8
158,3
Revenue
1 259,1
1 154,6
986,4
EBITDA, %
13,4
17,5
16,1
EBITA, EUR mill.
2022
2021
2020
Profit (loss) for the period
24,4
80,4
45,8
Income tax expense
6,5
20,3
10,8
Share of profits in associated companies
0,1
0,3
0,6
Net finance expenses
2,9
9,0
10,0
Amortization and impairment losses
62,0
26,6
30,3
EBITA
95,9
136,7
97,4
EBITA, %
2022
2021
2020
EBITA
95,9
136,7
97,4
Revenue
1 259,1
1 154,6
986,4
EBITA, %
7,6
11,8
9,9
88
Operating profit (EBIT), EUR mill.
2022
2021
2020
Profit (loss) for the period
24,4
80,4
45,8
Income tax expense
6,5
20,3
10,8
Share of profits in associated companies
0,1
0,3
0,6
Net finance expenses
2,9
9,0
10,0
EBIT
33,9
110,1
67,2
Operating profit, (EBIT), %
2022
2021
2020
EBIT
33,9
110,1
67,2
Revenue
1 259,1
1 154,6
986,4
EBIT, %
2,7
9,5
6,8
Adjustments based on subject area* , EUR mill.
2022
2021
2020
Acquisition-related expenses
1)
2,8
3,1
0,5
Restructuring-related expenses
2)
1,5
0,3
1,6
Gain on sale of asset
-
-
-0,1
Impairment losses
30,3
-
-
Strategic projects and other items affecting to comparability
5,0
0,8
2,5
Adjustments
39,5
4,3
4,5
Adjustments based on account group* , EUR mill.
2022
2021
2020
Other operating income
-0,1
-0,4
-0,5
Materials and services costs
-
-
1,8
Personnel expenses
1,3
0,3
1,3
Other operating expenses
8,0
4,4
1,9
Impairment
30,3
-
-
Adjustments
39,5
4,3
4,5
Adjusted EBITDA, excluding IFRS 16
2022
2021
2020
Profit (loss) for the period
24,4
80,4
45,8
Income tax expense
6,5
20,3
10,8
Share of profits in associated companies
0,1
0,3
0,6
Net finance expenses
2,9
9,0
10,0
Depreciation, amortization and impairment losses
134,9
91,7
91,2
Adjustments*
9,2
4,3
4,5
IFRS 16 lease expense adjustment
-55,8
-49,2
-44,8
Adjusted EBITDA, excluding IFRS 16
122,2
156,9
118,0
Net debt/Adjusted EBITDA, excluding IFRS 16
2022
2021
2020
Interest-bearing liabilities
427,2
378,8
389,5
Interest-bearing receivables and cash and cash equivalents
40,4
38,2
77,1
Adjusted EBITDA
122,2
156,9
118,0
Net debt/Adjusted EBITDA, excluding IFRS 16
3,2
2,2
2,6
* Adjustments are material items outside the ordinary course of business, and these relate to acquisition-related
expenses, restructuring-related expenses, gain /losses on sale of assets (net), impairment losses, strategic projects
and other items affecting comparability.
89
1)
Including transaction costs and expenses from integration of acquired businesses
2)
35. Subsequent events
Terveystalo Plc's Board of Directors has approved a new performance period covering years 2023-2025 of the long-
term share-based incentive plan for key personnel.
The Performance Share Plan is based on a rolling 3-year performance period structure, with a new performance
period starting at the beginning of each year if so decided by the Board. During the performance period 2023-2025,
the performance indicators on the basis of which share rewards may be paid are absolute Total Shareholder Return
(TSR) and relative TSR (compared to the OMX HKI benchmark CAP GI index). The maximum number of shares to
be paid based on this plan is 640,000 shares. Taxes and tax-like payments to the recipient are deducted from the
share reward, after which the remaining net amount is paid to the participants in shares.
Performance Period 2023-2025 of the Restricted Share Plan (RSP). The purpose of the Restricted Share Plan is to
act as a supplementary structure for separately selected key personnel of Terveystalo in special situations. The
share rewards will be paid in Terveystalo Plc shares after the end of the performance period, provided that the
individual participants are still employed by Terveystalo. The maximum number of shares to be paid based on this
plan is 64,000 shares.
90
Parent company's financial statement, FAS
Parent company’s income statement
EUR
Note
1.1.-31.12.2022
1.1.-31.12.2021
Revenue
1.1
1 622 050
517 094
Materials and supplies
-1 851
-1 333
Employee benefit expenses
-1 446 798
-1 741 835
-128 348
-247 805
-21 741
-33 539
Depreciation, amortization and impairment losses
1.2
-8 199
-136
Other operating expenses
1.4
-4 804 758
-1 699 187
Operating loss
-4 789 646
-3 206 740
Financial income and expenses
1.5
1 629
3 478
10
56
-10 753
-15 888
-215 450
-22 655
Loss before appropriations and taxes
-5 014 210
-3 241 749
Appropriations
1.6
-8 937
-
34 634 000
58 000 000
Taxes
-5 952 627
-10 954 938
Profit for the period
23 658 227
43 803 313
Parent company’s statement of financial position
EUR
Note
31 Dec 2022
31 Dec 2021
ASSETS
Non-current assets
Property, plant and equipment
2.1
60 753
227
91
Investments
2.2
516 818 244
516 818 244
Total non-current assets
516 878 997
516 818 471
Current assets
2.3
41 133 012
65 338 343
2.4
603 637
233 545
Total current assets
41 736 649
65 571 888
TOTAL ASSETS
558 615 647
582 390 359
EUR
Note
31 Dec 2022
31 Dec 2021
EQUITY AND LIABILITIES
Equity
2.5
80 000
80 000
493 503 962
493 503 962
13 632 562
5 262 687
Profit for the period
23 658 227
43 803 313
Total equity
530 874 751
542 649 963
Appropriations
8 937
-
Total appropriations
8 937
-
Liabilities
2.6
Current liabilities
1 541 585
274 515
25 190 668
33 052 398
25 159
113 610
974 548
6 299 873
Total liabilities
27 731 959
39 740 396
TOTAL EQUITY AND LIABILITIES
558 615 647
582 390 359
92
Parent company's statement of cash flows
EUR
1.1.-31.12.2022
1.1.-31.12.2021
Cash flows from operating activities
Profit for the period before income taxes
29 610 853
54 758 251
Adjustments
8 199
136
-34 625 063
-58 000 000
224 564
35 008
Change in working capital
469 239
446 604
455 667
406 664
Taxes
-10 546 536
-11 093 468
Net cash from operating activities
-14 403 077
-13 446 803
Cash flows from investing activities
Purchase of tangible and intangible items
-68 726
-363
Net cash from investing activities
-68 726
-363
Cash flows from financial activities
Acquisition of treasury shares
-
-11 248 346
Change in group account
-7 870 194
22 330 218
Received group contribution
58 000 000
35 500 000
Dividends paid
-35 433 439
-33 099 698
Interest and other financial expenses paid
-224 564
-35 008
Net cash from financial activities
14 471 803
13 447 166
Net change in cash and cash equivalents
-
-
Cash and cash equivalents at 1 January
-
-
Cash and cash equivalents at 31 December
-
-
Accounting policies of parent company’s financial statements
The financial statements of Terveystalo Oyj are prepared in accordance with Finnish Accounting Standards (FAS).
Measurement and recognition principles and methods
Holdings in group companies
The carrying amount of holdings in group companies consists of historical costs less impairments. If the estimated
future cash flows generated by a non-current asset are expected to be permanently lower than the balance of
carrying amount, an adjustment to the value must be made to write-down the difference as an expense. If the basis
for the impairment can no longer be justified at the reporting date, it is reversed.
Property, plant and equipment, and depreciation
93
The carrying amount of property, plant and equipment consists of historical costs less depreciation and other
deductions. Property, plant and equipment are depreciated using straight -line depreciation based on the expected
useful life of the asset.
The depreciation is based on the following expected useful lives:
Machinery and equipment: 5 years.
Notes to the statement of income
1.1 Revenue
EUR
2022
2021
Finland
1 593 045
469 436
Sweden
29 005
47 658
Total
1 622 050
517 094
1.2 Depreciation, amortization and impairment losses
EUR
2022
2021
Depreciation
-8 199
-136
Total
-8 199
-136
1.3 Personnel
Average number of personnel during financial year
4
4
1.4 Other operating expenses
EUR
2022
2021
External services
-3 535 145
-699 055
ICT expenses
-33 527
-23 453
Non-statutory personnel expenses
-126 093
-110 159
Leases
-13 121
-6 813
Travel expenses
-33 135
-21 730
Marketing and communication
-239 655
-177 298
Other costs
-824 083
-660 679
Total
-4 804 758
-1 699 187
Auditor's fees
EUR
2022
2021
Audit and auditor's statements based on laws and regulations
-76 000
-72 740
-
-1 551
Auditor's fees total
-76 000
-74 291
94
1.5 Financial income and expenses
EUR
2022
2021
Other interest and financial income
From group companies
1 629
3 478
From others
10
56
Total
1 639
3 534
Other interest and financial expenses
To group companies
-10 753
-15 888
To others
-215 450
-22 655
Total
-226 203
-38 542
1.6 Appropriations
EUR
2022
2021
Increase/decrease in depreciation in excess of plan
-8 937
0
Group contributions received
34 634 000
58 000 000
Appropriations total
34 625 063
58 000 000
Notes to the statement of the financial position
2.1 Property, plant and equipment
Machinery and equipment
EUR
2022
2021
Acquisition cost 1 Jan
38 888
38 525
Additions
68 726
363
Acquisition cost 31 Dec
107 614
38 888
Accumulated depreciation and impairment losses 1 Jan
-38 661
-38 525
Depreciation for the period
-8 199
-136
Accumulated depreciation and impairment losses 31 Dec
-46 861
-38 661
Carrying amount 1 Jan
227
-
Carrying amount 31 Dec
60 753
227
2.2 Investments
Holdings in group companies
EUR
2022
2021
95
Acquisition cost 1 Jan
516 818 244
516 818 244
Acquisition cost 31 Dec
516 818 244
516 818 244
Carrying amount 1 Jan
516 818 244
516 818 244
Carrying amount 31 Dec
516 818 244
516 818 244
Parent company ownerships:
Holdings in group companies
2022
2021
Terveystalo Healthcare Holding Oy
100%
100%
2.3 Receivables from group companies
EUR
2022
2021
Trade receivables
586 503
629 752
Group contribution receivables
34 634 000
58 000 000
Prepayments and accrued income
1 417 878
6 708 591
Total
36 638 381
65 338 343
2.4 Changes in equity
Restricted equity
Share capital
EUR
2022
2021
At the beginning of the period
80 000
80 000
At the end of the period
80 000
80 000
Total restricted equity
80 000
80 000
Unrestricted equity
Invested non-restricted equity reserve
EUR
2022
2021
At the beginning of the period
493 503 962
493 503 962
At the end of the period
493 503 962
493 503 962
Retained earnings
EUR
2022
2021
Retained earnings at the beginning of the period
49 066 001
49 610 731
Dividends paid
-35 433 439
-33 099 698
Acquisition of treasury shares
-
-11 248 346
Retained earnings at the end of the period
13 632 562
5 262 687
Profit for the period
23 658 227
43 803 313
Total unrestricted equity
530 794 751
542 569 963
Total equity
530 874 751
542 649 963
96
Distributable equity
EUR
2022
2021
Invested non-restricted equity reserve
493 503 962
493 503 962
Retained earnings
13 632 562
5 262 687
Profit for the period
23 658 227
43 803 313
Total
530 794 751
542 569 963
Shares and share capital
On 31 December 2022, the amount of shares is 127,036,531 of which 488,536 is held by EAM TTALO Holding Oy,
a company which is under the control of Terveystalo PLC.
The company has a single share class. The shares have no nominal value. All shares issued have been paid in full.
Each share has one vote at the Annual General Meeting and equal rights to dividend and other distribution of
assets.
Terveystalo PLC’s share is listed on Nasdaq Helsinki Oy. The trading code is TTALO. Terveystalo PLC’s shares
belong to the book-entry system maintained by Euroclear Finland Oy.
Invested non-restricted equity reserve
Invested non-restricted equity reserve consists of other investments similar to equity and the subscription price of
shares to the extent that it has not been recorded in share capital according to specific resolution. According to the
current Finnish Companies Act, subscription price of new shares is recognized in the share capital, unless it has not
been according to Issuance Resolution fully or partly recognized in invested non-restricted equity reserve.
2.5 Liabilities
2.5.1 Current liabilities
EUR
2022
2021
Trade payables
1 541 585
274 515
Other liabilities to group companies
25 190 668
33 052 398
Other liabilities
25 159
113 610
Accruals
974 548
6 299 873
Total
27 731 959
39 740 396
2.5.2 Liabilities to Group companies
EUR
2022
2021
Trade payables
-
263 318
Group account payables
24 918 886
32 789 081
Accruals and deferred income
271 781
-
Total
25 190 668
33 052 398
2.5.3 Accruals and deferred expenses
EUR
2022
2021
97
Personnel-related accrued expenses
271 105
847 935
Income tax liability
429 014
5 451 938
Total
700 120
6 299 873
Other notes
3. Collateral and other contingent liabilities
EUR
2022
2021
Suretyship
420 000 000
361 400 000
Guarantees
81 927
400 734
98
Signatures to the financial statements and Board of Director’s report
Helsinki, 9 February 2023
Kari Kauniskangas Kristian Pullola
Chairman of the Board of Directors Member of the Board of Directors
Katri Viippola Matts Rosenberg
Member of the Board of Directors Member of the Board of Directors
Carola Lemne Ville Iho
Member of the Board of Directors President and CEO
AUDITORS NOTE
A report on the audit has been issued today.
Helsinki, 9 February 2023
KPMG Oy Ab
Audit firm
Henrik Holmbom
Authorised Public Accountant
99
This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding.
Auditor’s Report
To the Annual General Meeting of Terveystalo Plc
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Terveystalo Plc (business identity code 2575979-3) for the year ended
31 December 2022. The financial statements comprise the consolidated statement of financial position, statement
of comprehensive income, statement of changes in equity, statement of cash flows and notes, including a summary
of significant accounting policies, as well as the parent company’s balance sheet, income statement, statement of
cash flows and notes.
In our opinion
—
the consolidated financial statements give a true and fair view of the group’s financial position, financial
performance and cash flows in accordance with International Financial Reporting Standards (IFRS) as adopted
by the EU
—
the financial statements give a true and fair view of the parent company’s financial performance and financial
position in accordance with the laws and regulations governing the preparation of financial statements in
Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good
auditing practice are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report.
We are independent of the parent company and of the group companies in accordance with the ethical
requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To our best knowledge and understanding, the non-audit services that we have provided to the parent company and
group companies are in compliance with laws and regulations applicable in Finland regarding these services, and
we have not provided any prohibited non-audit services referred to in Article 5(1) of EU regulation 537/2014. The
non-audit services that we have provided have been disclosed in note 10 to the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Materiality
The scope of our audit was influenced by our application of materiality. The materiality is determined based on our
professional judgement and is used to determine the nature, timing, and extent of our audit procedures and to
evaluate the effect of identified misstatements on the financial statements as a whole. The level of materiality we set
is based on our assessment of the magnitude of misstatements that, individually or in aggregate, could reasonably
be expected to have influence on the economic decisions of the users of the financial statements. We have also
taken into account misstatements that in our opinion are material for qualitative reasons for the users of the financial
statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. The significant risks of material misstatement referred to in the EU Regulation No 537/2014 point (c) of
Article 10(2) are included in the description of key audit matters below.
We have also addressed the risk of management override of internal controls. This includes consideration of
whether there was evidence of management bias that represented a risk of material misstatement due to fraud.
100
THE KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN THE
AUDIT
Valuation of Goodwill and acquisition related Intangible Assets (Accounting Principles for
the Consolidated Financial Statements and the Notes 3, 15 and 16)
—
At the year-end 2022 the goodwill
amounted to 880 M€ and accounted for
59% of the consolidated total assets and for
149% of the consolidated equity. In 2022
goodwill has increased with 31 M€.
—
Goodwill is tested for impairment at least
annually. An impairment is recognised
when the recoverable amount is less than
the carrying value of the asset.
—
Terveystalo determines recoverable
amounts for impairment tests based on
value in use. Preparation of cash flow
projections underlying impairment tests
requires management judgments for
profitability, long-term growth rate and
discount rate.
—
The acquisition-related recognised assets
for customer relationships and trademark
and at the year-end 2022 were in total 101
M€. These assets have finite useful lives
and are amortised on a straight-line basis
over their expected useful lives.
—
Given the high level of management
judgment related to the forecasts used and
the significant carrying amounts involved,
valuation of goodwill and acquisition related
intangible assets is considered a key audit
matter.
—
We assessed the key assumptions used in
the impairment tests, such as profitability,
discount rate and long-term growth rate. To
analyse the forecasts, we applied
professional judgement in testing the key
assumptions and assessing the resulting
effects on the sensitivity analysis.
—
We involved KPMG valuation specialists
when assessing the appropriateness of the
assumptions used and the technical
accuracy of the calculations. This included a
comparison to external market and industry
forecasts.
—
In respect of the acquisition-related
intangible assets we evaluated the
recognition and recoverability of these
assets by assessing the related calculations
and the underlying assumptions.
—
In addition, we considered the
appropriateness of the disclosures in
respect of goodwill, impairment testing and
acquisition related intangible assets.
Revenue Recognition (Accounting Principles for the Consolidated Financial Statements and
the Note 4)
—
The consolidated revenue amounted to
1.259 M€ million and consist of numerous
types of individual service transactions and
service combinations
generated to various
customer and payer groups in multiple
business locations. Volumes of sales
transactions processed in the IT systems
are substantial and Terveystalo also uses a
number of service pricing models and client
—
As part of our audit procedures, we
evaluated the sales-related internal control
environment, as well as tested the
effectiveness of the key controls. We also
performed substantive audit procedures,
using e.g. data-analytics.
—
We tested the effectiveness of the
processes to record sales transactions as
well as the sales pricing and invoicing
101
contract templates.
—
Given the variety and large number of sales
transactions, revenue recognition is
considered a key audit matter.
processes. We also tested inclusion of
relevant transactions in the appropriate
period in order to assess the accuracy of
revenue recognition.
—
We evaluated the IT systems relevant for
revenue recognition.
—
We tested controls over cash transactions
such as reconciliation routines.
—
We considered the appropriateness of the
disclosures presented for revenue in the
consolidated financial statements.
Responsibilities of the Board of Directors and the Managing Director (CEO) for the Financial Statements
The Board of Directors and the Managing Director (CEO) are responsible for the preparation of consolidated
financial statements that give a true and fair view in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU, and of financial statements that give a true and fair view in accordance with the laws
and regulations governing the preparation of financial statements in Finland and comply with statutory
requirements. The Board of Directors and the Managing Director (CEO) are also responsible for such internal
control as they determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the Managing Director (CEO) are responsible for
assessing the parent company’s and the group’s ability to continue as a going concern, disclosing, as applicable,
matters relating to going concern and using the going concern basis of accounting. The financial statements are
prepared using the going concern basis of accounting unless there is an intention to liquidate the parent company
or the group or cease operations, or there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
—
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
—
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
parent company’s or the group’s internal control.
—
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
—
Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s (CEO) use of the going
concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the parent company’s or the group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention
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in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the parent company or the group to cease
to continue as a going concern.
—
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events so that the financial
statements give a true and fair view.
—
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Other Reporting Requirements
Information on our audit engagement
We have acted as auditors appointed by the Annual General Meeting uninterrupted for eleven years. Terveystalo
Plc became a public interest entity on 13 October 2017.
Other Information
The Board of Directors and the Managing Director (CEO) are responsible for the other information. The other
information comprises the report of the Board of Directors and the information included in the Annual Report, but
does not include the financial statements and our auditor’s report thereon. We have obtained the report of the Board
of Directors prior to the date of this auditor’s report, and the Annual Report is expected to be made available to us
after that date. Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial
statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to
the report of the Board of Directors, our responsibility also includes considering whether the report of the Board of
Directors has been prepared in accordance with the applicable laws and regulations.
In our opinion, the information in the report of the Board of Directors is consistent with the information in the
financial statements and the report of the Board of Directors has been prepared in accordance with the applicable
laws and regulations.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
Helsinki, 9 February 2023
KPMG Oy Ab
HENRIK HOLMBOM
Authorised Public Accountant, KHT
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104
Independent Auditor’s Reasonable Assurance Report on
Terveystalo Plc’s ESEF Financial Statements
To the Board of Directors of Terveystalo Plc
We have undertaken a reasonable assurance engagement in respect of whether the consolidated financial
statements for the year ended 31 December, 2022 included in the digital financial statements
7437001AEZHLL3UEX093-2022-12-31-en.zip of Terveystalo Plc (Business ID 2575979-3) have been marked up
with iXBRL markups in accordance with the requirements of Article 4 of EU Delegated Regulation 2018/815 (ESEF
RTS).
The Responsibility of the Board of Directors and Managing Director
The Board of Directors and Managing Director are responsible for preparing the report of the Board of Directors and
financial statements (ESEF financial statements) that comply with the requirements of ESEF RTS. This
responsibility includes:
—
preparation of ESEF financial statements in XHTML format in accordance with Article 3 of the ESEF RTS
—
marking up the primary statements and the notes to the consolidated financial statements, and the company
identification data included in the ESEF financial statements with iXBRL tags in accordance with Article 4 of the
ESEF RTS; and
—
ensuring consistency between ESEF financial statements and audited financial statements.
The Board of Directors and the Managing Director are also responsible for such internal control as they deem
necessary to prepare the ESEF financial statements in accordance with the requirements of the ESEF RTS.
Auditor’s Independence and Quality Management
We are independent of the company in accordance with the ethical requirements applicable in Finland, which apply
to the engagement we have performed, and we have fulfilled our other ethical responsibilities in accordance with
these requirements.
The auditor applies International Standard on Quality Management ISQM 1, which requires the firm to design,
implement and operate a system of quality management including policies or procedures regarding compliance with
ethical requirements, professional standards and applicable legal and regulations requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our responsibility is to express an opinion on whether the marking up of
the consolidated financial statements included in the ESEF financial statements comply in all material respects with
the Article 4 of the ESEF RTS. We conducted our reasonable assurance engagement in accordance with
International Standard on Assurance Engagements 3000
.
The engagement involves procedures to obtain evidence whether;
—
the primary statements of the consolidated financial statements included in the ESEF financial statements are,
in all material respects, marked up with iXBRL tags in accordance with Article 4 of the ESEF RTS, and;
—
whether the notes to the consolidated financial statements and the company identification data included in the
ESEF financial statements data, have been marked up, in all material respects, with iXBRL tags in accordance
with Article 4 of the ESEF RTS; and
—
whether the ESEF financial statements and the audited financial statements are consistent with each other.
The nature, timing and the extent of procedures selected depend on practitioner’s judgement. This includes the
assessment of the risks of material departures from the requirements set out in the ESEF RTS, whether due to
fraud or error.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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Opinion
In our opinion, the primary statements of the consolidated financial statements, the notes to the consolidated
financial statements and the company identification data included in the ESEF financial statements of Terveystalo
Plc identified as 7437001AEZHLL3UEX093-2022-12-31-en.zip for the year ended 31 December, 2022 are, in all
material respects, marked up in compliance with the ESEF Regulatory Technical Standard.
Our audit opinion on the audit of the consolidated financial statements of Terveystalo Plc for the year ended 31
December, 2022 is set out in our Auditor’s Report dated 9 February , 2023. In this report, we do not express any
audit opinion or other assurance conclusion on the consolidated financial statements.
Helsinki 17 February, 2023
KPMG OY AB
Henrik Holmbom
Authorised Public Accountant, KHT