TERVEYSTALO PLC
Report of the Board of Directors and consolidated financial statements 31 December 2021
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Terveystalo Group’s Report of the Board of Directors and Consolidated Financial Statements 31 December
2021
Report of the Board of the Directors
Consolidated financial statements, IFRS
Consolidated statement of comprehensive income .................................................................................................. 28
Consolidated statement of financial position ............................................................................................................ 29
Consolidated statement of cash flows ...................................................................................................................... 30
Consolidated statement of changes in equity ........................................................................................................... 31
1. Corporate information ........................................................................................................................................... 32
2. Accounting policies for the consolidated financial statement s ............................................................................. 32
3. Business combination ........................................................................................................................................... 45
4. Revenue ............................................................................................................................................................... 50
5. Segment information............................................................................................................................................. 51
6. Other operating income ........................................................................................................................................ 52
7. Material and services ............................................................................................................................................ 52
8. Employee benefit expenses ................................................................................................................................. 53
9. Depreciation, amortization and impairment .......................................................................................................... 53
10. Other operating expenses .................................................................................................................................. 53
11. Financial income and expenses ......................................................................................................................... 54
12. Taxes .................................................................................................................................................................. 54
13. Earnings per share ............................................................................................................................................. 56
14. Property, plant and equipment ........................................................................................................................... 57
15. Intangible assets ................................................................................................................................................. 59
16. Impairment testing of cash-generating units including goodwill ......................................................................... 60
17. Investment properties ......................................................................................................................................... 62
18. Associated companies ........................................................................................................................................ 62
19. Share-based payments ...................................................................................................................................... 62
20. Financial assets and liabilities – carrying amount, fair value and fair value hierarchy ....................................... 64
21. Financial risks ..................................................................................................................................................... 65
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22. Trade and other receivables ............................................................................................................................... 67
23. Cash and cash equivalents ................................................................................................................................ 69
24. Share capital and invested non-restricted equity reserve .................................................................................. 69
25. Financial liabilities ............................................................................................................................................... 70
26. Trade and other payables ................................................................................................................................... 71
27. Provisions ........................................................................................................................................................... 71
28. Defined benefit plans .......................................................................................................................................... 72
29. Collateral and contingent liabilities ..................................................................................................................... 73
30. Related party transactions .................................................................................................................................. 74
31. Group companies ............................................................................................................................................... 76
32. Group’s key financial ratios ................................................................................................................................ 78
33. Calculation of financial ratios and alternative performance measures ............................................................... 79
34. Reconciliation of alternative performance measures ......................................................................................... 81
35. Subsequent events ............................................................................................................................................. 84
Parent company’s financial statements , FAS
Parent company’s statement of income ................................................................................................................... 85
Parent company’s statement of financial position .................................................................................................... 85
Parent company’s statement of cash flows .............................................................................................................. 87
Parent company’s accounting policies and measurement and recognition principles and methods ....................... 87
Notes to the parent company’s financial statements ................................................................................................ 88
Signatures to the financial statements and Board of Director’s report
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TERVEYSTALO BOARD OF DIRECTORS’
REPORT 2021
Operating environment
The impacts of the COVID-19 pandemic on healthcare and the market continued in 2021.
In privately produced healthcare services, growth in digital services and remote appointments continued to be strong and new operating
models have become part of normal operations. Demand for COVID-19 -related services also continued to grow, with test volumes
remaining high and vaccinations initiated at the end of 2020 continued throughout the year 2021. As the year progressed, demand for most
health services returned to normal. Demand for mental health services and for preventive and well -being services grew strongly. At the end
of the year, visits related to various infections were also increasing.
In Sweden, demand for occupational health was negatively impacted by the COVID -19 pandemic, as customers postponed occupational
health projects. The third quarter was also seasonally soft due to the impact of summer holidays. The demand picked up during the fourth
quarter, and activity and volumes were at a good level. Major projects relating to occupational health services that were postponed due to
the pandemic were agreed to be launched during 2022.
The contraction of non-urgent care in the private and public healthcare sectors during the period when COVID-19 restrictions have been in
place has resulted in a significant treatment gap in other illnesses. 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. According to the Finnish Institute for Health
and Welfare (THL), in Finland 140,032 patients were awaiting treatment in August 2021. Of them, 9,539 (6.8 percent) had been waiting for
non-urgent specialized care for more than six months. In August 2021, the number of people who had waited for treatment for more than
six months had decreased by 8,189 compared to a year earlier. The situation is similar in Sweden, where 169,000 fewer surgeries have been
performed during the pandemic and the queuing situation has deteriorated significantly. In December 2021, 162,234 people in Sweden
were waiting for a surgery or procedure (www.skr.se). In 2021, the Norbotten region in northern Sweden sought partnerships from Nordic
private providers to facilitate the dismantling of the queues for surgeries. Terveystalo was chosen as one of the suppliers in a frame
agreement.
The Government’s proposal on the reform of social and healthcare services was approved by the Parliament in June 2021. Under the
proposal, the responsibility for the organization of social and healthcare services will be transferred to the 21 well-being services counties
to be established and the City of Helsinki. The first county elections in Finland were held in January 2022, and the elected well-being
services county councils will commence the new era of social and healthcare services. The county councils 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.
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 will not have a significant impact
on Terveystalo.
With the most extensive network of clinics and hospitals as well as its broad range of services, the company believes that it is an attractive
partner for different customer groups in the management of the pandemic as well as the post-pandemic clearing of queues and closing of
the treatment gap. Terveystalo’s diverse customer base and service selection will also mitigate the impacts on its business from any
significant changes in demand for individual services. As a leading occupational healthcare service provider, Terveystalo has an important
role in supporting the business sector in the return to normal and in the resumption of operations after the crisis has passed.
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The impacts of COVID-19 and the measures taken by Terveystalo
During 2021, Terveystalo’s service production was again characterized by various COVID -19-related services as well as well-being and digital
services, which saw substantial year-on-year growth in demand.
The company’s liquidity and financing situation remained strong. During the review period, the company fulfilled the covenant requirement
included in the financing agreement that reflects relative indebtedness.
Key figures
Terveystalo Group, MEUR
2021
2020
Change, %
Revenue
1,154.6
986.4
17.1
Adjusted EBITDA, *
1)
206.1
162.8
26.6
Adjusted EBITDA, % *
1)
17.8
16.5
-
EBITDA
1)
201.8
158.3
27.4
EBITDA, %
1)
17.5
16.1
-
Adjusted EBITA *
1)
141.0
101.9
38.4
Adjusted EBITA, % *
1)
12.2
10.3
-
EBITA
1)
136.7
97.4
40.3
EBITA, %
1)
11.8
9.9
-
Adjusted EBIT *
1)
114.4
71.6
59.7
Adjusted EBIT, % *
1)
9.9
7.3
-
EBIT
110.1
67.2
64.0
EBIT, %
9.5
6.8
-
Return on equity (ROE), %
1)
13.6
8.2
-
Equity ratio, %
1)
42.2
42.1
-
Earnings per share (EUR)
0.63
0.36
75.9
Net debt
519.0
490.9
5.7
Gearing, %
1)
85.2
85.9
-
Net debt/adjusted EBITDA (last 12 months)
1)
2.5
3.0
-
Total assets
1,448.6
1,361.0
6.4
Adjusted EBITDA (last 12 months),
excluding IFRS 16*
1)
156.9
118.0
33.0
Net debt, excluding IFRS 16
340.6
312.4
9.0
Adjusted net debt/adjusted EBITDA (last 12 months),
excluding IFRS 16*
1)
2.2
2.6
-
Average personnel in person-years
5,643
4,900
15.2
Personnel (end of period)
9,805
8,253
18.8
Private practitioners (end of period)
5,754
5,057
13.8
Responsibility
Quality index
2)
94.6
94.2
0.4
Net Promoter Score (NPS), appointments
83.0
82.8
0.2
Employee Net Promoter Score (eNPS)
32
18
77.8
Mixed waste intensity
3)
6.42
6.00
6.7
*) Adjustments are material items outside the ordinary course of business, associated with acquisition-related expenses, restructuring-related expenses, gain on sale of assets,
strategic projects, and other items affecting comparability.
1) Alternative performance measure. In addition to the IFRS figures, Terveystalo presents additional, alternative performance indicators which the company monitors internally and
which provide the company management, investors, stock market analysts, and other stakeholders with important additional information concerning the company’s financial
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performance, financial position, and cash flows. These performance indicators should not be reviewed separate from the IFRS figures and they should not be considered to replace
the IFRS figures.
2) The quality index consists of seven effectiveness indicators that describe the clinical and experienced quality, access to care, and the proportion of preventive care.
3) Amount of mixed waste (metric tons) relative to total revenue (100 million)
Outlook
●
The market environment has normalized and the demand for health services is broad based and strong. However, growth is
restricted by supply.
●
The demand for services related to COVID-19 is expected to remain good. However, predicting the volume is difficult. The overall
demand for health services is expected to remain at a high level. The demand for digital services is expected to continue to grow.
●
Demand from corporate customers for preventive and statutory occupational health services is expected to develop favorably.
Demand for medical care is strong. Significant changes in the employment rate may be reflected in the underlying demand.
●
Overall demand is expected to remain strong in the private customer segment. Significant changes in consumer confidence may
be reflected in the underlying demand.
●
Demand from the public sector is expected to remain strong in occupational health, service sales, and staffing services. Revenue
from the outsourcing business is expected to remain stable.
●
Demand in the Swedish occupational health market is expected to develop favorably due to pent-up demand in the wake of the
pandemic. However, the spreading of the Omicron variant and new restrictions have resulted in uncertainty of demand in the
short term.
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.
Group revenue
Revenue for 2021
grew by 17.1 percent year-on-year and amounted to EUR 1,154.6 (986.4) million.
Revenue increased year-on-year in all customer groups. Revenue from corporate customers increased by 15.0 percent due to the increased
demand for preventive occupational health services and sales of COVID-19 testing services to corporate customers. Revenue from private
customers increased by 12.8 percent, mainly driven by COVID -19-related services, the growth of well-being services and services relating to
certain specialties. Revenue from public sector customers increased by 11.2 percent. Revenue from service sales to public sector customers
increased substantially and revenue from staffing services also grew despite the shortage of physicians restricting the growth during the
second half of the year. Full-year revenue from the outsourcing business decreased slightly due to the expiry of contracts at the end of
2020. In the fourth quarter, revenue from the outsourcing business increased as a result of the commencement of the agreement on
outsourcing the Kannelmäki health center, child welfare services business and invoicing for COVID-19-related additional services. Revenue
from insurance companies developed favorably.
The demand for primary care appointments normalized during the second half of the year and exceeded the number of appointments for
the comparison period. Appointments relating to general infections and otorhinolaryngologic diseases were below normal until the fourth
quarter of the year, but increased at a strong rate towards the end of the year. The demand for specialist medical services in fields such as
orthopedics, gynecology, ophthalmology, and dermatology continued to grow throughout the year. Revenue from surgical procedures and
imaging services also increased year-on-year. The demand for well-being services remained good, with revenue increasing by 19 percent to
EUR 107.8 (90.7) million. The demand for digital appointments
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approximately a million (700,000) appointments. Including calls, the total number of remote appointments was approximately 2.0 (1.8)
million during the year. Remote appointments through digital channels or over the phone accounted for approximately 25 (26) percent of
all appointments in 2021. The total number of customer appointments increased by 16 percent to more than 8 (6.9) million customer
appointments. Demand for COVID-19-related services continued to be strong throughout the year. Terveystalo performed approximately
500,000 (230,000) COVID-19 tests
2)
during the year. There were 253 (253) business days in 2021.
The external revenue of the Sweden and others segment (Feelgood consolidated as of July 1, 2021) amounted to EUR 36.9 million.
1)
Does not include the digital appointments of the Sweden and others segment.
2)
Excludes sample collection services
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MEUR
2021
2020
Change, %
Corporate customers
481.7
418.8
15.0
Private customers
333.2
295.4
12.8
Public sector customers
302.8
272.2
11.2
Outsourcing
121.1
121.4
-0.2
Staffing services
87.6
83.1
5.4
Service sales, occupational health and others
94.0
67.7
38.8
Finland in total
1,117.7
986.4
13.3
Sweden and others*
36.9
0.0
> 200.0
Total
1,154.6
986.4
17.1
*Consists of the Group’s business operations in Sweden, Estonia and the Netherlands. Feelgood (Sweden) was consolidated 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
25,000 companies in Finland, which have approximately 650,000
occupational health customers.
Revenue from corporate customers for 2021
increased by 15.0 percent to EUR 481.7 (418.8) million.
Revenue from preventive occupational health services
1)
guidance and counseling, health examinations, and disability risk assessments, normalized during the first half of the year and remained at a
good level throughout the year. Revenue was also increased by COVID-19 testing services offered to companies, with nearly 350,000
(160,000) COVID-19 tests performed during the year as a whole. The average prices of testing decreased year-on-year due to increased
supply and competition. Demand for primary care appointments not relating to COVID -19 remained clearly below the normal level due to
the low number of infections during the first half of the year, but then began to recover during the third quarter, and the number of
primary care appointments exceeded the level of the comparison period in the fourth quarter. Demand for well-being services
2)
was strong
throughout the year, with sales increasing by approximately 17 percent year-on-year. The strongest growth was again seen in mental well-
being services. The use of digital services increased by 41 percent to approximately 793,000 (562,000) appointments. The number of end
customers in occupational health care 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
counseling; participation in the planning and implementation of measures that maintain work ability; 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, work ability 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 own health. Services for private customers are paid for either by the customers
themselves or by their insurance companies.
Revenue from private customers for 2021
grew by 12.8 percent year-on-year and amounted to EUR 333.2 (295.4) million.
Demand for appointments with general practitioners was still clearly below the normal level in the first half of the year due to the low
number of infections. However, the demand normalized during the second half of the year and the number of appointments exceeded that
of the comparison period in the fourth quarter. The demand for specialist medical services in fields such as orthopedics, gynecology,
ophthalmology, and dermatology continued to grow throughout the year. Revenue from surgical operations and imaging services also grew
year-on-year. The demand for well-being services, such as mental well-being and physical therapy services, remained strong throughout the
year with revenue growing by 22 percent year-on-year. Demand for oral health services was negatively affected by the continuation of the
COVID-19 pandemic, and revenue decreased slightly year-on-year. Revenue from insurance companies increased clearly year-on-year. The
number of digital appointments increased by 71 percent to approximately 108,000 (63,300) appointments. COVID-19 testing increased the
sales of laboratory services considerably. More than 86,000 (36,000) COVID-19 tests were performed on private customers in 2021. The
number of occupational healthcare customers using private services and revenue from that segment grew substantially year-on-year.
Public sector customers
Terveystalo’s public sector customer group consists of Finnish public sector organizations, such as municipalities, municipal federations and
hospital districts as well as municipal occupational health customers. Terveystalo’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. 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
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 80,000 persons.
Revenue from public sector customers for 2021
grew by 11.2 percent year-on-year and amounted to EUR 302.8 (272.2) million.
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Revenue from the outsourcing business remained at the comparison period’s level and amounted to EUR 121.1 (121.4) million. Revenue
was decreased by the expiry of several minor partial outsourcing agreements at the end of 2020. Revenue was increased by the invoicing of
additional services related to COVID-19. In the fourth quarter, revenue was also positively affected by the commencement of the
agreement on outsourcing the Kannelmäki health center and the child welfare services business, which was not carried out in the
comparison period.
Revenue from staffing services increased by 5.4 percent to EUR 87.6 (83.1) million. The demand for staffing services was high throughout
the year, with the growth of revenue being restricted mainly by the limited supply of physicians. The demand for nurse staffing services was
also strong, mainly in services related to COVID-19.
Revenue from service sales as well as services provided for municipal occupational health customers and other public sector customers
increased by 38.8 percent year-on-year to EUR 94.0 (67.7) million. This resulted mainly from the strong demand for services related to
COVID-19, as well as occupational health business that increased through acquisitions and new agreements. Digital appointments increased
to over 133,000 (74,500) consultations. In addition, the sales of well-being services grew by 22 percent year-on-year. Over 65,000 (29,500)
COVID-19 tests
1)
In addition to testing, Terveystalo served as a partner to public
healthcare services in sample collection, and activity in this area remained high.
1) Excludes sample collection services
Sweden and others
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 700 employees in Sweden, serving customers digitally and in person at approximately
120 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, which have
approximately 825,000 employees covered by occupational health.
In addition to Sweden, Terveystalo operates at a small scale in Estonia
and the Netherlands.
The external revenue of the Sweden and others segment for 2021
amounted to EUR 36.9 million. Demand for occupational health was
seasonally soft during the third quarter due to the impact of summer holidays. The demand picked up during the fourth quarter, and
activity and volumes were at a good level. Demand was particularly strong in organization and leadership consultation, while the supply of
professionals restricted the growth to some extent. Revenue also increased due to the acquisition of Dalarnas Företagshälsa in the third
quarter. While large customers postponed occupational health projects due to COVID -19, alternative projects with small and medium-sized
customers have been started successfully. The Swedish operations were consolidated into Terveystalo’s reporting as of July 1, 2021.
Financial performance
The Group’s 2021
adjusted earnings before interest, taxes, and amortization (EBITA) increased by 38.4 percent to EUR 141.0 (101.9) million,
representing 12.2 (10.3) percent of revenue. Material expenses and service purchases increased by 9.2 percent year-on-year and amounted
to EUR 488.9 (447.6) million. Employee benefit expenses increased by 21.9 percent year-on-year and amounted to EUR 378.2 (310.2)
million. Expenses were increased by higher personnel costs due to services related to COVID-19 as well as personnel costs attributable to
acquisitions. Personnel costs in the comparison period were reduced by temporary layoffs, temporary reductions in pension contributions
and the postponement of recruitment. Other operating expenses increased by 22.1 percent to EUR 89.2 (73.0) million mainly due to higher
IT, marketing and administrative costs. Costs in the comparison period were reduced by cost adjustment measures.
Adjusted EBITDA increased by 26.6 percent year-on-year to EUR 206.1 (162.8) million.
Adjusted operating profit amounted to EUR 114.4 (71.6) million. Operating profit (EBIT) amounted to EUR 110.1 (67.2) million, and profit
before tax was EUR 100.7 (56.6) million.
Net financial expenses decreased to EUR 9.0 (10.0) million. Taxes on income increased to EUR 20.3 (10.8) million. Profit for the period was
EUR 80.4 (45.8) million, and earnings per share were EUR 0.63 (0.36).
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Cash flow from operating activities increased to EUR 195.2 (143.7) million. Cash flow from operating activities was favorably affected by
higher revenue, the improved result and the decrease in committed net working capital.
Cash flow from investing activities was EUR -108.1 (-36.0) million. The change from the comparison period was mainly attributable to
increased investments in acquisitions. Cash flow from financing activities amounted to EUR -126.1 (-71.2) million. The difference to the
comparison period was mainly attributable to higher dividends paid, acquisition of treasury shares, acquisition of non-controlling interests
and the drawing down of short-term loans.
The Sweden and others segment’s 2021
adjusted earnings before interest, taxes, and amortization (EBITA) amounted to EUR 0.8 million,
representing 2.1 percent of revenue. Seasonally low operating volume in the third quarter weighed down profitability, with the lower
activity not being coupled with corresponding flexibility in expenses. In the fourth quarter, the seasonally high operating volume and better
margins increased profitability compared to year earlier.
Financial position
Terveystalo’s liquidity position is good. Cash and cash equivalents at the end of the financial period amounted to EUR 38.1 (77.1) million.
The total assets of the Group amounted to EUR 1,448.6 (1,361.0) million.
Equity attributable to owners of the parent company totaled EUR 608.8
(571.4) million. The increase was due to the growth of retained
earnings. The non-controlling interest amounted to EUR 0.0 (-) million. The dividends paid by Terveystalo for the 2020 financial period
totaled EUR 0.26 per share (or approximately EUR 33 million), and they were paid in two equal tranches on April 7, 2021 and November 10,
2021.
Gearing (including lease liabilities) was 85.2 (85.9) percent and net debt amounted to EUR 519.0 (490.9)
million.
During the review period, the company fulfilled the covenant requirement included in its financing agreement that reflects relative
indebtedness. In the second quarter, the company entered into a new short-term financing agreement of EUR 70 million, with the loan
drawn in full during the review period. The financing agreement includes an option to postpone the repayment to 2023. The company is
planning to replace the financing agreement with long-term financing during 2022. 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 55.5 million.
Return on equity for the financial period was 13.6 (8.2) percent. The equity ratio was 42.2 (42.1) percent.
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 has an effect on 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* for the financial period January 1–December 31, 2021, including M&A, amounted to EUR 125.4 (41.2) million. The Group’s
net cash capital expenditure, excluding acquisitions, amounted to EUR 42.6 (32.7) million and the corresponding non-cash capital
expenditure came to EUR 4.7 (5.3) million. The investments consisted mainly of investments in IT system projects (including ERP and EMR),
digital application and service development, medical equipment, and the network. With respect to gross investments, the relative
proportions of investments in intangible and tangible assets remained at the same level as in the comparison period. Development
investments amounted to EUR 9.7 (2.2) million.
During 2021, Terveystalo made eleven acquisitions to complement its business. The Group acquired Espoon Keskuksen Hammaslääkärit Oy
(dental services), Attentio Oy (rehabilitation and therapy services), Keltaisen Kartanon Kuntoutus Oy (auxiliary business name Nuorten
Sutela, demanding child welfare services), Helsinki Hospital Oy (demanding surgery), the business of Fysiopiste Mervi Nivukoski (physical
therapy), Sivupersoona Oy (speech therapy and language interpretation), Dalarnas Företagshälsa AB (occupational health), Ankkuri’s child
welfare services, Medimar Scandinavia Ab (medical clinic on the Åland Islands) and Suomen Hierojakoulut Oy (massage therapist training).
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On June 14, 2021, Terveystalo acquired 72.1 percent of the share capital of Feelgood Svenska AB (publ), the parent company of the
Sweden-based Feelgood Group. At the same time, Terveystalo made a recommended mandatory cash offer to the remaining shareholders
of Feelgood to tender all of their shares in Feelgood to Terveystalo for a consideration of SEK 5.70 (approximately EUR 0.57) in cash per
share. On July 27, 2021, Terveystalo announced that, at the end of the extended acceptance period on July 26, 2021, Terveystalo owned in
aggregate 97.4 percent of the shares and votes in Feelgood. Terveystalo further announced that the acceptance period of the offer will not
be extended and, accordingly, the offer was closed. Feelgood’s shares were delisted from Nasdaq Stockholm on August 6, 2021. Terveystalo
initiated a mandatory redemption procedure concerning Feelgood’s remaining shares, and ownership of the remaining shares was obtained
in December 2021, resulting in 100 percent ownership of Feelgood.
Vantaa City Executive Board approved the sale of AITO Työterveys - Vantaan Työterveys Oy to Terveystalo on November 30, 2021. The
agreement was signed at the end of December after the appeal period had ended, and ownership was transferred in February 2022. The
agreement also includes providing occupational health services to the City of Vantaa for 4 years as of February 1, 2022.
* 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.
Personnel
The number of Terveystalo’s employed staff on December 31, 2021 was 9,805 (8,253). Of the increase, 668 employees were attributable to
the Feelgood acquisition. The number of personnel was also increased by recruitment related to services associated with COVID-19 and
digitalization. In full-time equivalent, the average number of staff was 5,643 (4,900). The number of private practitioners was 5,754 (5,057).
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 360 clinics across Finland. In Sweden, Terveystalo offers
occupational health services at 120 clinics. Terveystalo employs in total more than 15,500 health and well-being professionals. Terveystalo
is listed on the Helsinki Stock Exchange and has a predominantly Finnish ownership. In 2021, Terveystalo had 1.3 million individual
customers in Finland and some 8 million customer visits were made, of which a quarter took place in remote channels.
Terveystalo reports on its corporate responsibility work as part of the Annual Report
1)
. This section summarizes the key themes targets and
results.
Terveystalo’ s sustainability and corporate responsibility 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 the goals of sustainable
development. The company respects all internationally recognized human rights.
Terveystalo’ s systematic management of corporate responsibility is aimed at ensuring that the company achieves its responsibility 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 non-financial 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 non-financial risks are related to the availability of health care professionals and thus the
access to care. The 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 2021.
1)
Responsibility reporting does not include Feelgood figures unless otherwise stated.
12
TARGETS AND ACHIEVEMENTS
GOOD HEALTH AND WELL-BEING
Area
Target
Indicator
Target
2021
2020
2019
SDG
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
Over 99%
99.8 %
97.8 %
97.2 %
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%
4.3 %
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
32
36
42
Percentage of preventive
work of occupational
health appointments
over 60%
Percentage of preventive work of
occupational health appointments
> 60%
70.2 %
67.8 %
67.5 %
Days until next available
appointment, clinics (T3)
below 1.00
T3, i.e. the third available
appointment
< 1.00
1.61
1.17
0.98
Appointment NPS over
74
Appointment NPS
> 74
83.0
82.8
72.5
eNPS
14
32
18
9
Quality index total
Quality index, %
100
94.6
94.2
96.4
Access to care, public
services
Days until next available
appointment (T3) public
services < 7.00 for a
physician, < 2 for a nurse
T3, i.e. the third available
appointment with a physician
< 7.00
6.5
5.6
11.7
T3, i.e. the third available
appointment with a nurse
< 1.00
1
1
1
Patient safety
Reimbursed patient claims /
appointments with a physician
0.0019 %
0.0021 %
0.0025 %
Near misses/hazardous incidents
50.00 %
57.0 %
61 %
ETHICAL BUSINESS
Area
Target
Indicator
Target
2021
2020
2019
SDG
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
100%
66.0 %
52.3 %
-
16
13
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 %
60%
RESPONSIBLE WORK
Area
Target
Indicator
Target
2021
2020
2019
SDG
Occupational safety
Accident rate below the
sector average
Accident rate
< 35
(sector
average)
15
25
27
8
Personnel’s well-being
Reducing sickness absences
Sickness absences
-
4,4 %
3,8 %
3,8 %
Employer recommended by the
personnel
Improving the employee
promoter score
eNPS
31 by
2025
32
18
9
SUSTAINABLE ECONOMIC GROWTH
Area
Target
Indicator
Target
2021
2020
2019
SDG
Tax footprint
We openly disclose our tax
footprint annually
Tax footprint, EUR million
-
191.0
152.3
149.8
8
Revenue growth
Minimum annual growth
5%
Revenue growth, %
5 %
17.7 %
-4.3 %
38.4 %
The people we employ
We create jobs
Employee benefit expenses, EUR
million
-
378.2
310.2
314.3
The figures include the whole Group
.
SUSTAINABLE
CONSUMPTION AND CLIMATE ACTION
Area
Target
Indicator
Target
2021
2020
2019
SDG
Previous climate target:
Reducing the carbon
footprint
Reducing the carbon
footprint by 40% by
2030 (using 2018 as the
baseline)
1)
Direct (scope 1) and indirect (scope
2) greenhouse gas emissions, tCO
2
-40% by
2030
1,565.6
2, 168.6
2,141.1
New climate targets (set in
2021) Reducing the carbon
footprint
Carbon neutrality in
2022, zero emissions
from own operations in
2030. 2) Between 2022
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 tCO
2
)
2030
-89%
-66 %
-17 %
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, tCO
2
-80% by
2025
664.0
2,165.4
5,255.8
Zero emissions from
own operations in 2030
2)
Reduction of direct (scope 1) and
indirect (scope 2) greenhouse gas
emissions compared to 2018
(6,316.8 tCO
2
)
-100% by
2030
-89%
-66 %
-17 %
Energy consumption
We will purchase 100%
green electricity in
Finland by 2025 3)
Share of green electricity of all
purchased electricity, %
100% by
2025
89%
62 %
14
Waste recovery
We will minimize waste
in all of our operations
and forward all waste to
be recovered
The recovery rate of waste
generated at Terveystalo units, % 4)
100% by
2025
100%
99 %
12
The recycling rate of waste
generated at Terveystalo units, % 4)
100% by
2025
64%
61 %
Mixed waste intensity (mixed waste
[metric tons] relative to total
revenue [100 million])
Annual
reduction
6,4
6.0
4.9
1) Location based
2) Between 2022 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. The calculation of Scope 2
emissions is market-based. The calculation of the market-based figure is based on the emission factor of the electricity purchased by Terveystalo, while the
location-based figure is calculated according to a factor based on the source distribution of local energy production.
3) In the units where we purchase electricity ourselves.
4) Excludes waste fractions that cannot be recycled or recovered under any circumstances, such as hazardous waste.
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 and the customer’s and professional’s
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 continuously monitored and developed key element of Terveystalo’ s quality efforts. 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 continuous training
of experts as well as modern premises and technology. The patient safety is managed by monitoring the number of procedure 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 by medication plans,
operating guidelines, and a basic range of drugs.
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. This work is supported by internal and external audits. In 2021, the patient safety themes were
improving the patient safety culture and data protection. The priorities were pharmacotherapy permits, treatment of patients’ first -aid
situations as well as aseptic behavior and hand hygiene. 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 having 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. Terveystalo conducted a patient safety culture
survey in 2021 as part of the patient safety theme year 2021. The aim of the survey was to assess how patient safety is visible in
Terveystalo’ s day-to-day operations, what the personnel’s perceptions are regarding the realization of patient safety, the current level of
patient safety at Terveystalo and what issues we should focus on in the development of our patient safety culture. The feedback received
from professionals who work with patients provided valuable input for development efforts. Based on the results, development measures
will be started at the unit, regional and Group levels.
15
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, pprescriptions for drugs affecting the central nervous system relative to the number of physician’s 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 2021, Terveystalo continued to develop quality and effectiveness of the reporting and also adopted new quality indicators. Terveystalo
publishes a set of quality indicators, which is updated continuously
on the company’s website
.
Use of the WHO Surgical Safety Checklist in surgical operations
Terveystalo performs surgeries in its network of 18 hospitals. 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 2021, the WHO Surgical Safety
Checklist was used in 99.8 (97.8) 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 2021, at Terveystalo clinics prescriptions for drugs affecting the central nervous system were written for 4.3
(4.6) 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 32 (36) days in 2021.
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 2021, preventive work accounted for 70.2 (67.8) 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 1.61 (1.17) in 2021. 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 appointments
16
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 new 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 2021, the NPS for Terveystalo’ s appointments was 83 (83). The NPS for hospital services remained at a
high level at 94.7 (94.4).
Employee Net Promoter Score (eNPS)
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. Terveystalo’ s eNPS continued to develop favorably in 2021 and rose to a good level at 32 (18). The professionals’ experience at
Terveystalo improved in all key areas in 2021.
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 centers’
operating models over the longer term to ensure easy access to care. The goal is a health center with no queues, one that maintains a
high level of clinical quality while delivering a good customer and employee experience.
In primary health care, Terveystalo partners with several municipalities and joint authorities. The company produces health center
appointment services at 17 municipal health centers. At the start of October 2021, Terveystalo started operating the Kannelmäki health
center in partnership with the City of Helsinki and is now providing services for the 20,000 residents of the area. Terveystalo is also
participating in a service voucher pilot in Espoo, where customers can choose a private service provider as their health center by using a
service voucher issued by the city.
In Terveystalo health centers, the average T3 time indicating the availability of non-urgent appointments (the third available
appointment) was 6.5 (5.6) days in 2021. The target is less than 7 days for doctor’s services and less than 1 day for nurse’s services. The
availability of care was excellent nationwide at Terveystalo’ s health centers throughout the year. The availability of oral health care also
remained at a good level at Terve ystalo’ s 12 outsourced dental clinics despite the continued COVID -19 pandemic. The average T3 time for
non-urgent dentist’s appointments was 35 (30) days for the year.
17
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
In 2021, Terveystalo updated its orientation training on correct action and the Code of Conduct. An entirely new course was created for
employees and practitioners who engage in clinical work, while the course designed for administrative employees was updated with new
questions. 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 by everyone at Terveystalo. A further goal of the training is to create a better
understanding of key themes related to ethics, including fair competition, the avoidance of conflicts of interest, the prevention of bribery,
data protection and reporting misconduct. In 2021, 7 485 Terveystalo employees (6 032 salaried employees, 66.0 (52.3) percent of the
total salaried employees in Finland) completed the training and received a passing grade. The goal is that 100 percent of employees
complete the Code of Conduct training. The updated Code of Conduct has been well received by our employees – it has had a positive
effect on the experienced significance and sustainability of work.
ANTI-CORRUPTION AND BRIBERY
In the area of anti-corruption and 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 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 2021.
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 labor, any form of forced labor 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 Labor Organization (ILO) and related international conventions. The company is committed to the UN Global Compact
initiative and its principles pertaining to human rights and labor 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 more than 4,000 suppliers. Consequently, the network of
service providers and suppliers of goods – and good supplier cooperation – 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 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 2021, 80 (80) percent of suppliers
representing 80 percent of Terveystalo’ s total procurement volume had approved the Supplier Code of Conduct. Terveystalo also uses a
supplier self-assessment form that covers topics such as compliance with 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
18
processing of personal data and emphasize 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, modifying 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 is regularly audited
internally and by a third party according to the ISO 9001:2015 certification.
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 centers, 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 of 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.
Terveystalo is a significant employer in Finland. At the end of 2021, Terveystalo had 9,805 (8,253) employees and 5,644 (5,057)
independent practitioners in Finland. In 2021, Terveystalo acquired the Swedish occupational health company Feelgood, and got 668 new
employees and 110 practitioners in Sweden. Terveystalo also made 11 other complementary acquisitions during the year, which increased
our number of personnel by 172.
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 both students and
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 practitione rs). The eNPS figure indicates the proportion of our employees and private practitioners
who would recommend Terveystalo as a workplace to others. In the 2021 professional survey, the employee Net Promoter Score (eNPS)
continued to develop favorably, rising to a record -high level of 32 (18). The exit turnover of Terveystalo’ s personnel in Finland was 14.0
(17.1) percent.
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 mind. 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 the personnel
19
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, Terveystalo has invested significantly in maintaining personnel’s work ability and medical care under the
exceptional circumstances. Terveystalo’ s personnel have operated in the eye of the storm of the COVID-19 pandemic. Sickness absences
among our personnel increased slightly and the sickness absence rate in Finland was 4,4 (3,8) percent of hours worked.
There were no fatal accidents or accidents leading to serious injuries at Terveystalo in 2021. Terveystalo’ s accident frequency in Finland
was 15 (25) in 2021, which is clearly below the average in the health care industry (35).
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.
In 2021, Terveystalo launched Toward Better Leadership, a development program aimed at all managers and supervisors at Terveystalo.
The program is underpinned by the changes in management required for the implementation of new strategy as well as Terveystalo’ s
new leadership principles: people orientation, high performance and sustainability. In addition to launching the leadership program,
Occupational Health Sparring events for occupational health care professionals were organized, a project to develop the well-being at
work of occupational health nurses was started, training on the implementation of new tools and operating models was provided and a
wide range of training activities aimed at various professional groups to support their professional development were organized.
Terveystalo also provided training to its various personnel groups on data protection, information security and our Code of Conduct.
In 2021, Terveystalo provided a total of 79,847 (63,864) hours of training, which corresponds to 8.7 (7.5) hours per salaried 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 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. In 2021, two of the seven members of the Board of Directors were women. Five of the eleven 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 aimed at
promoting equal pay. Gender, for example, cannot be a factor that influences pay.
Sustainable economic growth
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
20
absences, and employing directly and indirectly more than 15,500 people. Terveystalo is a significant employer, taxpayer, and provider of
health services in Finland.
Terveystalo’ s operations produce economic added value for various stakeholders. The key stakeholders include shareholders, customers,
personnel, Terveystalo’ s private practitioners, suppliers, service providers, and society. The most important cash flows consist of revenue
generated from service sales and the operations of private practitioners, expenses arising from purchases from suppliers and service
providers, dividends paid to shareholders, salaries paid to personnel, as well as taxes and investments.
In 2021, Terveystalo’ s revenue and other operating income totaled EUR 1,158.0 (989.1) million. The goods, materials and services
purchased from suppliers amounted to EUR 488.9 (447.6) million. Salaries and remuneration and the related social security contributions
amounted to EUR 378.2 (310.2) million. Net financial expenses to creditors amounted to EUR 9.0 (10.0) million. Dividends paid to our
shareholders in 2021 based on the results of the previous fiscal year amounted to EUR 33.1 (16.5) million. Terveystalo invested a total of
EUR 42.6 (32.7)
million to business development.
In 2021, Terveystalo’ s tax footprint totaled EUR 191.0 (152.3) million. In addition, a total of EUR 316.3 (283.2) million was paid to private
practitioners, who pay their individual taxes independently. Private practitioners' taxes are not included in Terveystalo’ s own tax footprint.
The figures include the whole Group
.
Responsible 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 carbon neutrality in 2022 and zero emissions from our own operations in 2030. The conservation and sustainable use of natural
resources in Terveystalo’ s supply chains is 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 also
enable to simultaneously improve service availability and reduce 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. In 2021, Terveystalo expanded ISO 14001:2015
certification to include its Group services.
21
Terveystalo set ambitious new climate targets in late 2021. The goal is to reduce the carbon footprint so that Terveystalo’ s operations in
Finland are carbon neutral in 2022 and zero emissions in own operations will be achieved in 2030. Between 2022 and 2030, any remaining
greenhouse gas emissions will be compensated by investing in certified CO
2
discontinue compensation measures and to achieve zero emissions in own operations by 2030. A further goal is to reduce direct and
indirect CO
2
is for green electricity to account for 100 percent of the electricity purchased for Terveystalo’ s operations in Finland. 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 2021, Terveystalo’ s carbon footprint from Scope 1 and Scope 2 emissions (market-based) totaled 664.0 (2,165.4) tCO
2
-eq., which was 69 (59)
percent lower than in 2020. 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 its operations – and part of indirect
Scope 3 emissions – in accordance with the GHG standard.
Scope 1
Terveystalo 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 direct control are calculated based on fuel consumption. In 2021, Scope 1 CO
2
emissions totaled 245.5 (287.2) metric tons of
carbon dioxide equivalent (tCO
2
e).
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 2021, electricity purchases for properties controlled by Terveystalo totaled
14,195 (15,944) MWh. Since January 2020, the company’s electricity portfolio (electricity purchased for properties) is zero-CO
2
green
electricity. Zero-CO
2
company’s electricity consumption. The remainder, 1,499 (6,010) MWh, corresponds to 418.5 (1,878.2) metric tons of CO
2
equivalent
(tCO
2
e, market-based). As regards energy consumption, the target is for green electricity to account for 100 percent of the electricity
purchased for operations in Finland.
Scope 3
For indirect Scope 3 emissions, emissions arising from work -related travel by employees and waste created by the company’s operations
are reported.
At Terveystalo unnecessary work-related travel is aimed to be avoided by encouraging the use of remote meetings whenever possible. In
2021, Terveystalo’ s personnel flew a total of 0.3 (0.3) million kilometers in work-related travel, equaling 40 (37) tCO
2
e. Regarding
reimbursable work -related travel, the personnel traveled a total of 1.9 (1.6) million kilometers, equaling 322.1 (273.4) tCO
2
e. Terveystalo
encourages its personnel to choose low-emissions vehicles as company cars. The average emissions of the company cars used by the
Group amount to 92 (118) g CO
2
e/km. The indirect emissions arising from waste totaled 36.6 (30.2) tCO
2
e in 2021.
Terveystalo’s CO
2
1 and Scope 2, market -based) relative to revenue amounted to 0.6 gCO
2
e/EUR (2020: 2.2 gCO
2
e/EUR). Relative to the number of
employees (FTE), the emissions intensity was 0.12 (0.44) tCO
2
e.
The recycling and recovery of waste is another key theme in Terveystalo’ s environmental responsibility, with the goal being to minimize
mixed waste in all operations and forwarding 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. Terveystalo is committed to
reducing the plastic waste generated by its operations in accordance with the EU’s plastic strategy by improving recycling efforts and
22
reviewing the packaging options offered by suppliers when possible. Terveystalo also keep a close eye on the medical waste and tries to
minimize it by increasing the efficiency of inventory management. The COVID-19 pandemic also influenced the amount of waste
generated in 2021, as the use of protective equipment needed for COVID-19 testing, vaccination and the protection of staff and
customers increas ed during the year. The amount of mixed waste was also increased by the renovations of several units.
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’s perspective. Large companies must
report the share of sustainable business in their business in accordance with taxonomy criteria.
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).
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 operations (percent) in terms of net sales, operating costs and investments.
According to the company's estimate, 0 percent of Terveystalo’ s net sales, operating costs and investments are eligible with the current
taxonomy and 100 percent non-eligible.
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 responsibility is described in the Responsibility section of
Annual Report and in the Board of Directors' report.
Shares, shareholders, and Board authorizations
At the end of December 2021, Terveystalo’s market value was EUR 1,516 (1,285) million and the closing price was EUR 11.84 (10.04). In
2021, the highest price of Terveystalo’s share on Nasdaq Helsinki Ltd was EUR 12.56 (12.66), the lowest price EUR 10.10 (7.40) and the
average price EUR 11.34 (9.67). A total of 32.0 (26.6) million shares were traded in 2021. At the end of the reporting period, the number of
Terveystalo shares registered in the Trade Register was 128,036,531. The following tables list the largest shareholders, distribution of
ownership and owner groups. The management shareholdings are listed in the Financial Statements in note 30.
The largest registered shareholders on December 31, 2021
Name
Number of shares
% of shares
Votes
% of votes
Varma Mutual Pension Insurance Company
22,151,945
17.30
22,151,945
17.30
Rettig Group AB
21,153,191
16.52
21,153,191
16.52
Pohjola Insurance Ltd
8,530,332
6.66
8,530,332
6.66
Hartwall Capital
8,431,690
6.59
8,431,690
6.59
OP Life Assurance Company Ltd
7,112,915
5.56
7,112,915
5.56
Elo Mutual Pension Insurance Company
4,392,951
3.43
4,392,951
3.43
Ilmarinen Mutual Pension Insurance Company
3,882,000
3.03
3,882,000
3.03
Mandatum Life Insurance Company
3,436,209
2.68
3,436,209
2.68
LocalTapiola Mutual Insurance Company
2,600,000
2.03
2,600,000
2.03
Åbo Akademi University Foundation
1,816,242
1.42
1,816,242
1.42
Ten largest, in total
83,507,475
65.22
83,507,475
65.22
The list is based on the register of shareholdings maintained by Euroclear, and it does not include nominee-registered shares.
23
According to its own notification and its custodian’s notification,
Lannebo Fonder
Distribution of ownership, December 31, 2021
Number of shares
Number of shareholders
% of shareholders
Number of securities
% of securities
Number of votes
% of votes
1–100
12.093
47.07
576.425
0.45
576.425
0.45
101–500
9.924
38.63
2,499,640
1.95
2,499,640
1.95
501–1,000
2.011
7.83
1,563,527
1.22
1,563,527
1.22
1,001–5,000
1.338
5.21
2,719,972
2.12
2,719,972
2.12
5,001–10,000
137
0.53
993.220
0.78
993.220
0.78
10,001–50,000
113
0.44
2,318,299
1.81
2,318,299
1.81
50,001–100,000
22
0.09
1,628,154
1.27
1,628,154
1.27
100,001–500,000
30
0.12
6,359,924
4.97
6,359,924
4.97
500,001–
25
0.10
109,377,370
85.43
109,377,370
85.43
Total
25.693
100.0
128,036,531
100.00
128,036,531
100.00
of which nominee-registered
11
15,718,797
12.28
15,718,797
12.28
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
128,036,531
100
128,036,531
100
Shareholder groups, December 31, 2021
Shareholders by sector
Number of shares
% of shares
Households
8,941,603
7.96
Public entities
31,915,493
28.42
Financial and insurance institutions
32,179,768
28.65
Companies
15,036,371
13.39
Non-profit institutions
3,043,364
2.71
Foreign owners
21,201,135
18.88
Total
112,317,734
100.00
Of which nominee-registered
15,718,797
12.28
Notifications of major shareholdings
On 10 September 2021, Terveystalo Plc received a notification pursuant to Chapter 9, Section 5 of the Finnish Securities Markets Act from
Hartwall Capital Oy Ab (HC Holding Oy Ab). According to the notification, the total number of shares and votes held by Hartwall Capital fell
below the 10 percent threshold on 9 September 2021. Hartwall Capital's previous holding totalled 11.27 percent (14,431,690 shares) of all
Terveystalo's outstanding shares. The previous ownership has been announced in connection with the IPO and no flagging notification has
thus been made.
Share-based incentive schemes and the Board’s authorizations
On 9 February, Terveystalo Plc's Board of Directors approved a new performance period covering years 2022-2024 of the long-term share-
based incentive plan for key personnel. During the performance period 2022-2024, 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).
24
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 2022–2024 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 696,000 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.
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 implementing 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 2 December, 2020.
The Board’s authorizations
The Board has been authorized to resolve on 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 on 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. The authorization can be used for the financing or execution of
acquisitions or other business arrangements, to strengthen the balance sheet and financial position of the company, for implementing
share-based incentive plans or the payment of the annual compensation payable to the members of the Board of Directors, or for other
purposes as determined by the Board of Directors.
Share buyback program
On 28 October, 2021 the Board of Directors of Terveystalo Plc decided to launch a buyback program for Terveystalo's own shares based on
the authorisation granted by Terveystalo's Annual General Meeting on 25 March 2021.
The repurchases of the shares began on 29 October, 2021 and ended on 28 December, 2021. During that period, Terveystalo repurchased
1,000,000 of its own shares for an average price per share EUR 11.25. The shares were acquired at the market price quoted at the time of
acquisition in trading organised by Nasdaq Helsinki Ltd on a regulated market.
The purpose of the share buyback program was to optimize the Company's capital structure through reduction of capital. The repurchase of
own shares will reduce the Company's unrestricted equity. The repurchased 1,000,000 shares will be cancelled. Following the repurchases,
Terveystalo holds a total of 1,730,000 own shares, which represents approximately 1.35 per cent of all shares in Terveystalo Plc.
Dividend Policy and distribution of profits for 2021 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 2021, earnings per
share were EUR 0.63 (0.36).
The parent company’s distributable funds totaled EUR 542.6 (543.1) million, of which EUR 43.8 (26.0) million is profit for the financial year.
The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.28 (0.26) per share totaling EUR 35.6 (33.1) million
25
be paid based on the balance sheet adopted for the financial year ended 31 December 2021. The dividend would be paid in two instalments
as follows:
The first dividend instalment 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 instalment on 11 April 2022. The Board of
Directors proposes that the first dividend instalment would be paid on 20 April 2022.
The second dividend instalment 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 instalment on 10 October 2022. The Board of
Directors proposes that the second dividend instalment would be paid on 19 October 2022. 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 statues 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 2021 and the first Board meeting
The Annual General Meeting of Terveystalo Plc was held on 25 March 2021 in Helsinki, Finland. The Annual General Meeting adopted the
financial statements for the financial year 2020 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 0.13 per share
(totaling approximately EUR 16.5 million with the current number of shares) be paid based on the balance sheet adopted for the financial
year ended 31 December 2020. The dividend was paid to a shareholder registered in the Company’s shareholders’ register maintained by
Euroclear Finland Ltd on the dividend record date of 29 March 2021. The dividend was paid on 7 April 2021.
Further, the Board of Directors was authorized to resolve in its discretion on the payment of dividend as follows: The amount of dividend to
be paid based on the authorization shall not exceed EUR 0.13 per share. The authorization is valid until the opening of the next Annual
General Meeting. Unless the Board of Directors decides otherwise for a justified reason, the authorization will be used to pay dividend one
time during the period of validity of the authorization. In this case the Board of Directors will make a separate resolution on the payment of
dividend so that the dividend would preliminarily be paid by the end of November 2021. The Company shall make separate announcement
of such resolution and confirm the final record and payment dates in such announcement. The dividend to be paid based on a resolution of
the Board of Directors will be paid to a shareholder registered in the Company’s shareholders’ register maintained by Euroclear Finland Ltd
on the dividend record date.
The number of members of the Board of Directors was confirmed to be seven (7). Dag Andersson, Kari Kauniskangas, Åse Aulie Michelet,
Niko Mokkila, Katri Viippola, and Tomas von Rettig were re-elected as members of the Board and Kristian Pullola was elected as a new
member of the Board.
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 per cent 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 per cent 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 2022.
26
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 2022, 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 Tomas von Rettig as Vice Chairman of the Board. Kristian Pullola
was elected Chairman of the Audit Committee and Tomas von Rettig and Niko Mokkila were elected members. Kari Kauniskangas was
elected Chairman of the Remuneration Committee and Dag Andersson, Åse Michelet and Katri Viippola were elected members of the
Committee.
Corporate governance
Terveystalo Plc’s Corporate Governance Statement, Remuneration Policy, and Remuneration Report for 2021 will be published as part of
the Annual Review in week 7.
Activities following the end of the financial period
On 1 February 2022, Feelgood acquired Länshälsan Uppsala, an occupational health care provider. Revenue of the company was
approximately SEK 40 million in 2020 and the company has approximately 30 employees.
The acquisition of Vantaan Työterveys Oy was completed on 1 February, 2022.
On 9 February, 2022, the Board of Directors of Terveystalo Plc decided on a new performance period of the share-based incentive scheme
for 2022–2024.
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 future outlook within the next 12 months. The list is not intended to be exhaustive.
●
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.
●
The development and implementation of information system projects and services, service products, and operating models
involves risks. The company is gradually replacing its operating systems and support systems as well as creating new digital
customer solutions, which increases the overall risk related to information systems. Risk management is an essential aspect of the
systems integration and deployment processes.
●
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.
●
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 decline in customer satisfaction.
●
Endangered information security or privacy can lead to losses and claims for damages and endanger reputation.
●
The global pandemic and the related restrictive measures may have a significant impact on consumer behavior, demand for
healthcare services, and the company’s expected financial development. The Emergency Powers Act and other regulations
pertaining to emergency circumstances give the public sector the power to intervene in service production and even take private
sector resources into public use if necessary.
27
●
The restrictions complicate supply chain operations globally, which reduces the availability of the personal protective equipment
necessary in service provision, among other things.
●
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.
●
Corporate responsibility aspects are increasingly important for customers, such as ensuring the responsibility of the product
supply chain, fair and equal treatment of employees, avoidance of corruption and protection of the environment. Possible failures
associated with corporate responsibility would mean negative publicity for Terveystalo and could cause operational and financial
damage. Challenges related to Terveystalo’s corporate responsibility work include communicating the corporate responsibility
principles to the key stakeholders and ensuring the responsibility of the product and service supply chain.
●
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 at the company’s website and in
the company’s Annual Review.
General Meeting of Shareholders 2022
The Annual General Meeting of Terveystalo Plc will be held on Thursday, April 7, 2022 in Helsinki.
Terveysta lo Plc
Board of Directors
28
Consolidated financial statements, IFRS
Consolidated statement of comprehensive income
EUR mill.
Note
1.1.-31.12.2021
1.1.-31.12.2020
Revenue
4, 5
Other operating income
6
Materials and services
7
-488,9
-447,6
Employee benefit expenses
8
-378,2
-310,2
Depreciation, amortization and impairment losses
9
-91,7
-91,2
Other operating expenses
10
-89,2
-73,0
Operating profit
Financial income
11
Financial expenses
11
-9,9
-10,6
Net finance expenses
-9,0
-10,0
Share of results in associated companies
-0,3
-0,6
Profit before taxes
Income tax expense
12
-20,3
-10,8
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
-0,8
Items that will not be reclassified to profit or loss
28
Other comprehensive income for the period, net of tax
-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.
29
Consolidated statement of financial position
EUR mill.
Note
31 Dec
2021
31 Dec
2020
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
Non-current assets held for sale
23
-
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity attributable to equity holders of the Company
Share capital
Invested non-restricted equity reserve
Treasury shares
-18,0
-6,7
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
20, 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
20, 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.
30
Consolidated statement of cash flows
EUR mill.
Note
1.1.-31.12.2021
1.1.-31.12.2020
Cash flows from operating activities
Profit before income taxes
Adjustments for
Non-cash transactions
9
27
-0,8
Gains and Losses on sale of property, plant, equipment and other changes
-0,1
Net finance expenses
11
Changes in working capital
-17,0
-1,2
-1,4
Interests received
Income taxes paid
-20,7
-17,2
Net cash from operating activities
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired
3
-65,3
-2,0
Acquisition of property, plant and equipment
14
-21,0
-13,0
Acquisition of intangible assets
15
-22,1
-20,1
Investments to associated companies
-0,5
Proceeds from sale of financial assets
Acquisition of business operations, net of cash acquired
3
-0,1
-0,6
Long-term loans granted
-0,2
Proceeds from sale of property, plant and equipment
Dividends received
Net cash from investing activities
-108,0
-36,0
Cash flows from financing activities
Acquisition of non-controlling interests
3
-12,7
Acquisition of treasury shares
24
-11,3
Repayment of non-current borrowings
25
-41,9
-41,5
Proceeds from current borrowings
25
Repayment of current borrowings
25
-46,5
Payment of lease liabilities
25
-42,4
-37,7
Payment of hire purchase liabilities
25
-5,9
-5,5
Interests and other financial expenses paid
-9,3
-10,0
Dividends paid
-33,1
-16,5
Net cash from financing activities
-126,1
-71,2
Net change in cash and cash equivalents
-39,0
Cash and cash equivalents at 1 January
Exchange rate differences
-0,1
Cash and cash equivalents at 31 December
The notes are an integral part of these Consolidated financial statements.
31
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 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
-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
EUR mill.
Share
capital
Invested
non-
restricted
equity
reserve
Treasury
shares
Retained
earnings
Total
Non-
controlling
interests
Total
equity
Equity 1 Jan 2020
-6,7
Comprehensive income
Profit for the period
Transactions with owners
Share-based payments
-16,5
-16,5
-16,5
Equity 31 Dec 2020
-6,7
The notes are an integral part of the consolidated financial statements.
32
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
Name of ultimate parent of group
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 36 subsidiaries. More information on subsidiaries is
presented in note 31. A copy of the consolidated financial statements is available at the Group’s website
www.terveystalo.com
, 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 2022 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 2021. 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
33
New and amended standards applied in the financial year 2021
The Group has applied as from 1 January 2021 the following new and amended standards that have come into
effect:
Amendment to IFRS 16 –
Covid-19-Related Rent Concessions
The amendment allows the lessees not to account for rent concessions as lease modifications if the concessions
are a direct consequence of the covid-19 pandemic and only if certain conditions are met. The impacts of the
amendments on Terveystalo’s consolidated financial statements have not been significant.
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 –
Interest Rate Benchmark Reform – Phase 2
Amendments address issues affecting financial statements when changes are made to contractual cash flows and
hedging relationships as a result of interest rate benchmark reform. Amendments assist companies in providing
useful information about the effects of interest rate benchmark reform on financial statements. The impacts of the
amendments on Terveystalo’s consolidated financial statements have not been significant.
New IFRIC agenda decisions
IFRS interpretation committee (IFRIC) finalised in April 2021 its agenda decision Configuration or Customisation
Costs in a Cloud Computing Arrangement. In this agenda decision the interpretation committee considered,
whether, applying IAS 38, the customer recognises an intangible asset in relation to configuration or customisation
of the application software, and if an intangible asset is not recognised, how the customer accounts for the
configuration or customisation costs. The impacts of the agenda decision 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 2021.
Amendments to IAS 37 –
Onerous Contracts
(to be applied from 1 January 2022)
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 are not expected to be significant.
Annual Improvements to IFRS Standards 2018–2020
(to be applied from 1 January 2022)
IFRS 9: This 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 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.
The annual improvements are not expected to have a significant impact on Terveystalo’s consolidated financial
statements.
Amendments to IAS 16 –
Proceeds before Intended
(to be applied from 1 January 2022
)
34
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 impacts of the amendments on
Terveystalo’s consolidated financial statements are not expected to be significant.
Amendments to IFRS 3 –
Reference to the Conceptual Framework
(effective for financial years beginning on or
after 1 January 2022)
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 are
not expected to be significant.
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 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)
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 Terveystalo’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*
January 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.
35
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, to the expected development of the Group's 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 those are based on potential scenarios for future returns, amounts paid under different scenarios and
the probability of each scenario.
Lease contracts
36
Terveystalo’s lease contracts include both termination and extension options. Group uses the options in managing
lease contracts to ensure flexible use of premises in Group’s businesses. Management uses judgment to determine
the use of termination and extension options and assesses the lease termination dates and lease terms. Based on
management’s judgment, 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 to mainly 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.
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 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.
37
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.
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 recognized in profit or loss as financial income or expenses.
The functional currency of the acquired Feelgood group 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.
38
The estimated useful lives are as follows:
Magnetic resonance imaging equipment
10 years
Buildings
10–40
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.
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
39
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.
Amortisation periods used for intangible assets are as follows:
Immaterial rights
3–10 years
Other intangible assets
3–5 years
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
40
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 simplified
approach. Expected credit loss rates have been calculated using historical information of actual impairment losses
and 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 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
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 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
41
changes its assessment of whether it will exercise a purchase, extension or termination option. When a lease
liability is rem easured 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.
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 2020
or 2021.
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
2020 or 2021.
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.
42
2.12 Inventories
Inventories are measured at the lower of cost and net reali zable 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 which they relate.
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 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 cgurtailed, 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 consid ered 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.
43
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
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 Terve ystalo 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 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
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 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
44
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 on 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.
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.
45
3. Business combinations
During the year 2021, the Group has 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 August 6.
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 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
Group’s financial statements from the end of June 2021 onwards.
The following tables summarize the consideration transferred, acquisition date preliminary fair values of the assets
acquired and liabilities assumed, non-controlling interest and the cash flow impact of the acquisition.
Consideration transferred
EUR million
Purchase price, payable in cash
47.2
Total consideration transferred
47.2
46
Identifiable assets acquired and liabilities assumed, non-controlling interest and goodwill
EUR million
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
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 million
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.
The accounting for the business combination is provisional at the reporting date. The fair value measurement of the
assets acquired and the liabilities assumed is partly ongoing at the reporting date and are subject to adjustments
until the valuation is finalized. Furthermore, a detailed review of Feelgood’s accounting principles is ongoing at the
reporting date. Customer relationships, trademarks and technology related intangible assets were recognized in the
preliminary determination of fair values and the combined preliminary 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 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 preliminary 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 their carrying amount and for which the risk of impairment has been deemed non-significant.
47
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.
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
48
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
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
Goodwill
26,0
As a result of these business combinations, a preliminary 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.
49
Business combinations during 2020
During the year 2020, the Group acquired three businesses and has made two corporate acquisitions.
On 31 March 2020 Suomen Terveystalo Oy acquired the business from Varkauden fysiokeskus. Acquisition
includes a contingent consideration that was treated as part of the consideration transferred and recognized as a
liability at the date of acquisition with a fair value EUR 0.1 million. The contingent consideration is tied to the future
sales to be incurred.
On 1 August 2020 Suomen Terveystalo Oy acquired the occupational health business activities of Keski-
Satakunnan Työterveydenhuolto.
On 30
August 2020 Suomen Terveystalo Oy acquired the business of Keski-Lapin Hammashuolto. The acquisition
includes a contingent consideration that was treated as part of the consideration transferred and recognized as a
liability at the date of acquisition with a fair value EUR 30 thousand. The contingent consideration is tied to the
future sales to be incurred.
On 31 October 2020 Terveystalo Healthcare Oy acquired 100 percent of the shares of the medical center MedInari
Oy.
On 31 December 2020 Terveystalo Healthcare Oy acquired 100 percent of the shares of the sleep clinic Vitalmed
Oy. The acquisition includes a contingent consideration that was treated as a part of the consideration transferred
and recognized as a liability at the date of the acquisition with a fair value of EUR 0.4 million. The contingent
consideration is tied to the future sales to be incurred.
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
2,4
Contingent consideration
0,5
Total consideration transferred
2,9
Identifiable assets acquired and liabilities assumed
EUR mill.
Cash and cash equivalents
0,1
Intangible assets
0,5
Trade and other receivables
0,1
Trade and other payables
-0,2
Deferred tax liabilities
-0,1
Total identifiable net assets acquired
0,5
Goodwill
2,5
50
As a result of these business combinations, a goodwill amounting to EUR 2.5 million was recognized. The goodwill
is attributable to skills of the workforce and synergies expected to be achieved. EUR 0.5 of the goodwill recognized
is tax deductible as it was recognized from business acquisitions.
In these business combinations, the Group has acquired customer relationships. The fair value of customer
contracts and related customer relationships included in other intangible asse ts 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 0.1 million, for which the risk of
impairment has been deemed as non-significant.
The Group has incurred acquisition-related expenses of EUR 0.1 million thousand related to transfer tax, consulting,
valuation or equivalent services. The expenses have been included in other operating expenses.
The contributed recognized revenue from this acquisition during 2020 was EUR 0.5 million. The impact of the
business combinations during the year to the result for the period has not been material.
If the acquisition had occurred on 1 January 2020, management estimates that the Group’s consolidated revenue in
2020 would have been EUR 989.0 million and the consolidated result for the period would have been EUR 45.8
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
25,000 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.
Dissagregation of revenue
51
EUR mill.
1.1.-31.12.2021
1.1.-31.12.2020
Corporate
481,7
418,8
Private
333,2
295,4
Public
302,8
272,2
Outsourcing
121,1
121,4
Staffing services
87,6
83,1
Service sales, occupational health and others
94,0
67,7
Finland
1 117,7
986,4
Sweden and other *
36,9
0,0
Total
1 154,6
986,4
* Consists of Group’s operations in Sweden, Estonia and Netherlands. The impact of Estonia and Netherlands to the revenue of the financial
year has not been material.
Timing of satisfying performance obligations
EUR mill.
1.1.-31.12.2021
1.1.-31.12.2020
At a point in time
1 030,1
861,8
Over time
124,5
124,5
Total
1 154,6
986,4
Balances in the statement of financial position
EUR mill.
31 Dec 2021
31 Dec 2020
Contract assets
15,0
5,6
Contract liabilities
6,1
2,2
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. Group
reports the operating segments in Finland as one reportable segment based on the IFRS 8 aggregation criteria as
same services are offered in all Finnish regions, customer types are similar, methods used to provide services are
similar and regulatory environment and operational risks are same. Terveystalo’s reportable segments are:
- Finland
- Sweden and other
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
-
52
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 Group's profit before taxes
1.1-31.12.2021
EUR mill.
Profit before taxes
100,7
Share of profits in associated companies
0,3
Net finance expenses
9,0
Amortisation and impairment losses
26,6
Adjustments*
4,3
Adjusted EBITA
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 2021
Finland
1 197,8
Sweden and other
71,6
Total
1 269,4
6. Other operating income
EUR mill.
1.1.-31.12.2021
1.1.-31.12.2020
Rental income
1,2
1,1
Gains on sale of property, plant and equipment
0,2
0,2
Other items
2,1
1,5
Total
3,4
2,7
7. Materials and services
EUR mill.
1.1.-31.12.2021
1.1.-31.12.2020
Purchases of materials
-34,8
-35,5
Change in inventories
-0,6
1,3
External services
-453,4
-413,4
Total
-488,9
-447,6
8. Employee benefit expenses
EUR mill.
1.1.-31.12.2021
1.1.-31.12.2020
Wages and salaries
-314,1
-261,6
53
Share-based payments
-1,9
-0,9
Pension expenses - defined contribution plans
-50,6
-38,6
Other social security costs
-11,7
-9,0
Total
-378,2
-310,2
Number of personnel at the end of the reporting period
9 805
8 253
9. Depreciation, amortization and impairment
EUR mill.
1.1.-31.12.2021
1.1.-31.12.2020
Depreciation and amortization by asset type
Intangible assets
-4,5
-4,1
-10,0
-17,8
-10,8
-8,2
Total
-25,3
-30,2
Property, plant and equipment
-0,0
-0,0
-13,6
-13,8
-5,5
-5,1
-
-
Total
-19,2
-18,9
Right-of-use assets
-45,9
-42,0
Investment property
-0,0
-0,0
Depreciation and amortization total
-90,3
-91,1
Impairment losses by asset groups
-0,0
-0,0
-0,0
-0,0
-0,0
-0,0
-1,2
-
Impairment total
-1,3
-0,1
Total depreciation, amortization and impairment losses
-91,7
-91,2
10. Other operating expenses
Specification of other operating expenses
EUR mill.
1.1.-31.12.2021
1.1.-31.12.2020
External services
-3,0
-2,4
Operating and maintenance expenses for premises and equipment
-19,2
-17,5
ICT expenses
-31,7
-27,1
Non-statutory personnel expenses
-4,8
-4,0
Leases and charges
-4,1
-3,5
Travel expenses
-4,3
-3,6
Marketing and communication
-7,3
-4,6
Acquisition related expenses
-2,3
-0,1
54
Other costs
-12,3
-10,3
Total
-89,2
-73,0
Auditor's fees
In thousands of euro
1.1.-31.12.2021
1.1.-31.12.2020
Audit and auditor's statements based on laws and regulations
-275,2
-145,5
KPMG
-4,6
-3,2
Total
-279,7
-148,7
Non audit services
-
-0,9
-2,2
-1,0
-34,5
-17,0
Total
-36,7
-18,9
Auditor's fees total
-316,4
-167,6
Auditor's fees have been presented excluding valued added tax.
11. Financial income and expenses
EUR mill.
1.1.-31.12.2021
1.1.-31.12.2020
Interest income on loans and other receivables
0,3
0,2
Dividend income
0,0
0,0
Change in fair value of interest rate derivatives, no hedge accounting
0,6
0,3
Total financial income
0,8
0,5
Interest expense on loans from financial institutions
-5,5
-5,9
Interest expenses on lease liabilities
-3,9
-4,2
Other financial expenses
-0,5
-0,5
Total financial expenses
-9,9
-10,6
Net finance expenses
-9,0
-10,0
12. Taxes
Income taxes in the statement of income
EUR mill.
1.1.-31.12.2021
1.1.-31.12.2020
Current tax for the reporting year
-23,4
-15,8
Income taxes for previous periods
-0,0
-0,0
Change in deferred taxes
3,1
5,1
Total income taxes
-20,3
-10,8
55
Reconciliation of the Group's tax rate to the Finnish tax rate
EUR mill.
1.1.-31.12.2021
1.1.-31.12.2020
Profit or loss before taxes
100,7
56,6
Tax using the parent company's tax rate
-20,1
-11,3
Tax rates in foreign jurisdictions
0,0
-0,0
Tax exempt income
0,2
0,2
Non-deductible expenses
-0,8
-0,1
Share of profit in associated companies
-0,1
-0,1
Recognition of previously unrecognized tax losses
0,1
0,2
Tax losses for which no deferred taxes are recognized
0,0
-0,0
Taxes from previous periods
0,1
-0,0
Other
0,3
0,4
Total income taxes in the statement of income
-20,3
-10,8
12.2 Deferred tax assets and liabilities
Deferred tax assets 2021
EUR mill.
1 Jan 2021
Business
combinations
Recognized
in the
statement of
income
Translation
differences
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
Recognized
in the
statement of
income
Translation
differences
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.
Deferred tax assets 2020
EUR mill.
1 Jan 2020
Business
combinations
Recognize
d in the
statement
31 Dec 2020
56
of income
Provisions
1,2
-
0,2
1,4
Leases
1,0
-
0,2
1,2
Interest rate derivatives
0,3
-
-0,1
0,2
Other temporary differences
1,3
-
0,3
1,6
Total
3,7
-
0,7
4,4
Deferred tax liabilities 2020
EUR mill.
1 Jan 2020
Business
combinations
Recognize
d in the
statement
of income
31 Dec 2020
Reversal of goodwill amortization
2,6
-
0,2
2,8
Business combinations
27,1
0,1
-4,8
22,4
Depreciation difference
0,2
-
0,4
0,6
Loan withdrawal expense
0,2
-
-0,1
0,2
Other temporary differences
0,2
-
0,0
0,1
Total
30,3
0,1
-4,3
26,0
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
1.1-31.12.2021
1.1-31.12.2020
Result attributable to the equity holders of the company, EUR mill.
80,5
45,8
Weighted average number of outstanding shares, in thousands
127 180
127 307
Diluted average number of outstanding shares, in thousands
127 700
127 860
Basic earnings per share for result attributable to the equity holders of the company, EUR
0,63
0,36
Diluted earnings per share for result attributable to the equity holders of the company,
EUR
0,63
0,36
57
14. Property, plant and equipment
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 for the
reporting period
-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
2020
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 2020
2,1
115,6
44,1
1,9
163,8
Business combination
-
0,0
-
-
0,0
Additions
-
12,4
5,1
0,0
17,5
Disposals
-
-0,5
-0,0
-
-0,5
Transfers between items
-
-0,1
0,3
-0,1
-
Acquisition cost 31 Dec 2020
2,1
127,4
49,5
1,8
180,8
Accumulated depreciation and impairment
losses 1 Jan 2020
-1,1
-74,3
-19,0
-
-94,4
Depreciation and impairment losses for the
-0,0
-13,8
-5,1
-
-18,9
Accumulated depreciation and impairment
losses 31 Dec 2020
-1,1
-88,1
-24,1
-
-113,3
Carrying amount 1 Jan 2020
1,0
41,3
25,1
1,9
69,5
Carrying amount 31 Dec 2020
1,0
39,3
25,5
1,8
67,6
58
14.1 Right of-use-assets and lease liabilities
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
2020
Premises
Other right-of-
use assets
Total
EUR mill.
Acquisition cost 1 Jan 2020
214,7
37,9
252,6
Additions
26,2
1,3
27,5
Disposals
-6,0
-0,3
-6,3
Acquisition cost 31 Dec 2020
234,9
38,9
273,8
Accumulated depreciation and impairment
losses 1 Jan 2020
-38,3
-21,1
-59,4
Depreciation for the reporting period
-38,5
-3,5
-42,0
Accumulated depreciation and impairment
losses 31 Dec 2020
-76,8
-24,6
-101,4
Carrying amount 1 Jan 2020
176,4
16,8
193,2
Carrying amount 31 Dec 2020
158,1
14,3
172,4
2021
Premises
Other lease
liabilities
Total
EUR mill.
Carrying amount 1 Jan 2021
161,7
16,8
178,5
Transactions
40,2
2,1
42,4
Payment of lease liabilities
-38,6
-3,8
-42,4
Carrying amount 31 Dec 2021
163,3
15,1
178,5
2020
Premises
Other lease
liabilities
Total
EUR mill.
Carrying amount 1 Jan 2020
178,7
19,4
198,1
Transactions
17,1
1,0
18,1
Payment of lease liabilities
-34,1
-3,6
-37,7
Carrying amount 31 Dec 2020
161,7
16,8
178,5
59
15. Intangible assets
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
2020
Goodwill
Customer
relationships
Trademarks
Other
intangible
assets and
advances
paid
Total
EUR mill.
Acquisition cost 1 Jan 2020
847,2
153,7
82,9
61,0
1 144,9
Business combination
2,5
0,5
-
-
3,0
Additions
-
-
-
19,9
19,9
Disposals
-
-
-
-0,0
-0,0
Acquisition cost 31 Dec 2020
849,8
154,2
82,9
80,9
1 167,8
Accumulated amortizations and impairment losses 1 Jan
2020
-68,0
-79,5
-25,1
-31,1
-203,7
Amortization and impairment losses for the reporting period
-
-17,8
-4,1
-8,2
-30,2
Accumulated amortizations and impairment losses 31
Dec 2020
-68,0
-97,3
-29,2
-39,3
-233,9
Carrying amount 1 Jan 2020
779,2
74,2
57,8
29,9
941,2
Carrying amount 31 Dec 2020
781,8
56,9
53,6
41,6
933,9
Other intangible assets include development expenditure as follows:
2021
EUR mill.
Acquisition cost 1 Jan 2021
6,4
Business combination
2,1
Additions
9,7
Translation differences
0,0
Acquisition cost 31 Dec 2021
18,2
Accumulated amortizations and impairment losses 1 Jan 2020
-2,9
Amortization
-2,6
Accumulated amortizations and impairment losses 31 Dec 2021
-5,5
Carrying amount 1 Jan 2020
3,5
60
Carrying amount 31 Dec 2021
12,8
2020
EUR mill.
Acquisition cost 1 Jan 2020
4,2
Additions
2,2
Acquisition cost 31 Dec 2020
6,4
Accumulated amortizations and impairment losses 1 Jan 2020
-1,9
Amortization
-1,0
Accumulated amortizations and impairment losses 31 Dec 2020
-2,9
Carrying amount 1 Jan 2020
2,3
Carrying amount 31 Dec 2020
3,5
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 2020
31 Dec 2019
EUR mill.
Goodwill
%
EUR mill.
Goodwill
%
Regional units
385,2
45,4 %
Regional units
369,7
47,3 %
Capital region
237,0
27,9 %
Capital region
230,2
29,4 %
Central units
184,1
21,7 %
Central units
181,8
23,3 %
Sweden and other
42,3
5,0 %
Total
848,6
100,0 %
Total
781,8
100,0 %
In financial year 2021 there were four cash generating units, in comparison to three in financial year 2020. 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 2022–2025 including the long-term growth which have been approved by the management.
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 %
61
The assumptions used in impairment calculations in 2020
Regiona
l units
Capital
region
Central
units
The length of impairment testing period
5 years
5 years
5 years
Terminal period revenue growth rate
2,0 %
2,0 %
2,0 %
Profitability (EBIT %) during the terminal period
8,5 %
10,5 %
10,6 %
Discount rate (Pre-tax WACC)
7,1 %
7,1 %
7,1 %
Discount rate (Post-tax WACC)
6,1 %
6,1 %
6,1 %
Revenue growth during the terminal period is based on 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
2021
2020
Terminal period revenue growth rate
Regional Units
Decrease over 4.1 percentage points
Decrease over 4.4 percentage points
Capital Regions
Decrease over 12.4 percentage points
Decrease over 10.4 percentage points
Central Unit
Decrease over 15.1 percentage points
Decrease over 23.9 percentage points
Sweden and other
Decrease over 3.7 percentage points
-
Profitability (EBIT %) during the terminal period
Regional Units
Decrease over 5.6 percentage points
Decrease over 4.8 percentage points
Capital Regions
Decrease over 9.7 percentage points
Decrease over 8.1 percentage points
Central Unit
Decrease over 8.7 percentage points
Decrease over 9.8 percentage points
Sweden and other
Decrease over 2.8 percentage points
-
Discount rate (Pre-tax WACC)
Regional Units
Increase over 4.4 percentage points
Increase over 3.4 percentage points
Capital Regions
Increase over 10.9 percentage points
Increase over 6.9 percentage points
Central Unit
Increase over 12.8 percentage points
Increase over 11.7 percentage points
Sweden and other
Increase over 3.5 percentage points
-
62
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.
1.1-31.12.2021
1.1-31.12.2020
Carrying amount at the beginning of the period
0,5
0,6
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.
1.1-31.12.2021
1.1-31.12.2020
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
Domicile
Ownership
Voting rights
Etsimo Healthcare Oy
Finland
20,4 %
20,4 %
Olo-apteekki Oy
Finland
20,0 %
20,0 %
Terveyden Tuottajat Oy
Finland
0,0 %
48,0 %
Summarized financial information on associated companies
EUR mill.
2021
2020
Carrying amount
0,6
2,2
Group's share of total comprehensive income
-0,3
-0,6
19. Share-based payments
63
Performance Share Plan 2021
–
2023
Performance Share Plan 2021–2023 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 and
settled in Terveystalo shares on top of which Terveystalo pays taxes and tax-related expenses. The plan is fully
accounted for as an equity settled share-based payment. The plan’s impact (including the tax impact) to the result
for the period has been EUR 0.8 million and the expected total cost of the plan is EUR 4.2 million. 56 persons are
included in the arrangement.
Plan
2021
Grant date
1 Apr 2021
Maximum number of share awards
642,000
Outstanding at 1 Jan
-
Granted share awards during the period
622,000
Forfeited share awards during the period
24,000
Exercised share awards during the period
-
Outstanding at 31 Dec
598,000
Fair value of the share award at grant date
13.5
End of the performance period
31 Dec 2023
End of the vesting period
30 Apr 2024
Vesting conditions
Service condition, total Shareholder
Return (TSR), productivity and digital
sales
Exercised
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 and
settled in Terveystalo shares on top of which Terveystalo pays taxes and tax-related expenses. The plan is fully
accounted for as an equity settled share-based payment. The plan’s impact (including the tax impact) to the result
for the period has been EUR 0.1 million and the expected total cost of the plan is EUR 0.5 million.
Plan
2021
Grant date
24 May 2021
Maximum number of share awards
58,600
Outstanding at 1 Jan
-
Granted share awards during the period
58,600
Forfeited share awards during the period
-
Exercised share awards during the period
-
Outstanding at 31 Dec
58,600
Fair value of the share award at grant date
14.1
End of the performance period
31 Dec 2022
End of the vesting period
30 Apr 2023
Vesting conditions
Service condition, total Shareholder
Return (TSR), productivity and digital
sales
Exercised
In shares and cash
64
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 and settled in
Terveystalo shares on top of which Terveystalo pays taxes and tax-related expenses. The plan is fully accounted
for as an equity settled share-based payment. The plan’s impact (including the tax impact) to the result for the
period has been EUR 0.5 million and the expected total cost of the plan is EUR 2.5 million. 72 persons are included
in the arrangement.
Plan
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
-
553,114
-
Granted share awards during the period
-
-
-
Forfeited share awards during the period
-
33,400
-
Exercised share awards during the period
-
-
-
Outstanding at 31 Dec
-
519,674
-
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
30 Apr 2023
30 Apr 202
30 Apr 2021
Vesting conditions
Service condition, total Shareholder Return (TSR) and
profitability
Exercised
In shares and cash
20. Financial assets and liabilities – carrying amount, fair values and fair value hierarchy
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
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
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
65
Total
9,4
435,8
445,2
445,2
EUR mill. 31 Dec 2020
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
Current
-
80,2
80,2
80,2
-
5,6
5,6
5,6
-
77,1
77,1
77,1
Total
0,3
162,9
163,2
163,2
Financial liabilities
Non-current
-
290,5
290,5
290,5
-
11,8
11,8
11,8
1,0
-
1,0
1,0
Level 3
Current
-
81,4
81,4
81,4
-
5,8
5,8
5,8
-
40,1
40,1
40,1
0,9
-
0,9
0,9
Level 3
1,1
-
1,1
1,1
Level 2
Total
3,1
429,6
432,6
432,6
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 0.5 million (2020: EUR 0.5 million).
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 floating rate.
In 2021, the Group’s average interest rate for loans from financial institutions has been 0.9 percent (2020: 1.1
percent). If the interests would have been one percentage point higher it would have caused an increase of EUR
3.7 million in interest expenses during the year 2021. (2020: EUR 3.8 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:
66
●
interest rate and receives variable interest on EUR 50.0, 25.0 and 30.0 million loan capital.
●
million loan capital.
Besides Finland, the Group has operations in Sweden, Estonia and 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 2021, the Group incurred
foreign exchange losses of 0.4 million.
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.
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 55.5 million remained unused at the
reporting date (2020: EUR 48.0 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 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
-
67
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
* Includes a EUR 70 million loan drawn for the Feelgood acquisition which will be refinanced during 2022. The financing agreement includes an option to
defer the payment until 2023. The Group plans to replace the agreement with a long-term financing agreement during 2022.
31 Dec 2020
EUR mill.
Carrying amount
Contractual cash
flows
1 year
1–2 years
2–5 years
Over 5 years
Loans from financial institutions
371,9
383,5
84,9
44,3
254,3
-
Lease liabilities
178,5
193,1
42,1
37,5
79,3
34,2
Hire purchase liabilities
17,6
18,2
6,0
5,2
6,9
-
Trade payables
40,1
40,1
40,1
-
-
-
Interest rate derivatives
1,1
1,2
0,5
0,5
0,1
-
Total
609,3
636,1
173,6
87,5
340,6
34,2
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 85.2 percent at the reporting date (2020: 85.9 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
552.2 million at the reporting date (2020: EUR 568.0 million). A significant part of the interest-bearing liabilities
consists of loans from financial institutions.
22. Trade and other receivables
Carrying amounts of trade and other receivables
EUR mill.
2021
2020
Non-current
Loan receivables
0,1
0,3
Total non-current receivables
0,1
0,3
Current
Trade receivables
103,4
80,2
Other receivables
2,0
1,4
Prepaid expenses
7,9
7,9
Contract assets
15,0
5,6
Total
128,3
95,1
68
Specification of prepaid expenses
EUR mill.
2021
2020
Derivatives
0,6
-
Personnel related prepaid expenses
0,0
0,1
Current tax receivables
0,1
3,3
Other prepaid expenses
7,3
4,5
Total
7,9
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 1.6 million (2020: EUR 1.2 million).
Impairment loss provision is based on simplified approach. Estimated impairment loss rates have been calculated
using historical information of actual impairment losses and 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
2021
EUR mill.
Trade receivables and
contract assets 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.
Ageing of trade receivables and recognized credit losses
2020
EUR mill.
Trade receivables total
Expected credit loss
Recognized expected
credit loss
Carrying amount
69
Not past due
78,6
0,1 %
-0,1
78,5
Past due
4,5
0,5 %
-0,0
4,5
1,1
2,0 %
-0,0
1,1
0,5
10,0 %
-0,1
0,5
2,2
45,8 %
-1,0
1,2
Total
87,0
-1,2
85,8
Information about credit risk related to trade receivables is stated in note 21 Financial risks.
23. Cash and cash equivalents
The Group’s cash and cash equivalents at 31 December 2021, amounting to EUR 38,1 million (2020: EUR
77.1 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 2020
127 307
730
128 037
0,1
492,8
-6,7
486,1
31 Dec 2020
127 307
730
128 037
0,1
492,8
-6,7
486,1
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
Shares and share capital
On 31 December 2021, the amount of shares is 128,036,531 of which amount of outstanding shares is 126,306,531
and amount of treasury shares is 1,730,000. On October 28 2021 the Board of Directors of Terveystalo Plc decided
to launch a buyback program for Terveystalo's own shares based on the authorisation granted by Terveystalo's
Annual General Meeting on 25 March 2021. The repurchases of the shares began on 29 October 2021 and ended
on 28 December 2021. During that period, Terveystalo repurchased 1,000,000 of its own shares for an average
price per share EUR 11.25. The shares were acquired at the market price quoted at the time of acquisition in
trading organised by Nasdaq Helsinki Ltd on a regulated market. The purpose of the share buyback program was to
optimize the Group’s capital structure through reduction of capital. The repurchased 1,000,000 shares will be
cancelled.
The Company has 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.
70
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 2021, the distributable funds of the parent company totaled EUR 542.6 million including the profit
of the financial period 2021 of EUR 43.8 million. The Board of Directors proposes to the Annual General Meeting
that a dividend of EUR 0.28 (0.26) per share totaling EUR 35.6 (33.1) million be paid based on the statement of
financial position adopted for the financial year ended 31 December 2021. The dividend would be paid in two
instalments as follows:
●
the shareholders' register of the Company maintained by Euroclear Finland Ltd on the record date of the
first dividend instalment on 11 April 2022. The Board of Directors proposes that the first dividend instalment
would be paid on 20 April 2022.
●
the shareholders' register of the Company maintained by Euroclear Finland Ltd on the record date of the
second dividend instalment on 10 October 2022. The Board of Directors proposes that the second dividend
instalment would be paid on 19 October 2022. The Board of Directors also proposes that the Annual
General Meeting would authorise 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 statues
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 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
Non-cash changes
71
EUR mill.
1 Jan 2020
Cash flows
Business
combinations
Other changes
Translation
differences
31 Dec 2020
Loans from financial institutions
373,1
-1,5
-
0,3
-
371,9
Hire purchase liabilities
17,7
-5,5
-
5,3
-
17,6
Lease liabilities
198,0
-37,8
-
18,1
-
178,5
Total
588,8
-44,7
-
23,8
-
567,9
The Group’s loan agreement includes 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,
which are computed based on the IFRS standards effective as at the date of the loan agreement. 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.
2021
2020
Trade payables
57,1
40,1
Other payables
75,9
64,8
Contract liabilities
6,1
2,2
Interest rate derivatives
1,2
1,1
Accrued expenses
73,9
54,5
Total
214,1
162,7
Specification of other payables
EUR mill.
2021
2020
Doctor's fee liabilities
44,6
38,4
VAT liabilities
20,8
19,5
Other
10,6
6,8
Total
75,9
64,8
Specification of accrued expenses
EUR mill.
2021
2020
Personnel related accrued expenses
67,1
52,2
Interest liabilities
0,2
0,3
Other
6,6
1,9
Total
73,9
54,5
27. Provisions
Carrying amounts of provisions
EUR mill.
2021
2020
72
Non-current provisions
8,5
7,7
Current provisions
2,5
2,4
Total
11,0
10,1
EUR mill.
2021
2020
Onerous contracts
6,6
5,8
Other provisions
4,4
4,3
Total
11,0
10,1
Changes in provisions during the financial year 2021
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
Changes in provisions during the financial year 2020
EUR mill.
Onerous
contracts
Other
provisions
Total
1 Jan 2020
5,0
4,1
9,1
Increase in provisions
3,0
0,4
3,5
Used provisions
-2,2
-0,3
-2,5
31 Dec 2020
5,8
4,3
10,1
28. Defined benefit plans
Due to the acquisition of Feelgood group in 2021, the Group assumed defined benefit plans in Sweden. 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 9 years at the reporting date.
Summary of the impact of the defined benefit plans in the financial statements
EUR mill.
2021
Present value of the defined benefit obligations
1.7
Expenses related to defined benefit plans
0.0
Remeasurements of defined benefit obligations
-0.1
Reconciliation of the defined benefit obligation
73
EUR mill.
2021
1 Jan 2021
-
Business combinations
1.9
Interest expense (+) / income (-)
0.0
Benefits paid
-0.1
Remeasurement of the obligation
-
-0.1
-
Translation differences
-0.0
31 Dec 2021
1.7
Applied actuarial assumptions
%
2021
Discount rate
1.20
Inflation
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.
Sensitivity analysis of the relevant actuarial assumptions’ impact on defined benefit obligation
EUR mill.
2021
0.5%-point increase in the principal assumption
-0.1
0.5%-point decrease in the principal assumption
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 2021
31 Dec 2020
Business mortgages
11,4
-
Total
11,4
-
Securities for own debts
Deposits
0,2
0,2
Guarantees
0,9
0,7
74
Total
1,1
0,9
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
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
2020
Sales
Purchases
Receivables
Payables
Associated companies
0,5
17,4
0,5
1,5
Other related parties
-
-
-
-
Total:
0,5
17,4
0,5
1,5
Compensation for the key management
Remuneration for CEO, in thousands of euro
2021
2020
Fixed pay
400,0
366,7
Other benefits
-
-
Short-term incentives
433,8
240,0
Share-based payments
306,7
-
Pensions (statutory)
136,0
89,6
Total
1 276,4
696,3
Renumeration for the CEO is presented on accrual basis.
Remuneration to members of the Executive team
(excluding CEO), in thousands of euro
2021
2020
Fixed pay
1 754,1
1 499,9
Other benefits
41,8
43,5
Short-term incentives
880,2
424,1
Share-based payments
611,6
209,1
Termination benefits
-
656,2
75
Pensions (statutory)
436,5
387,5
Total
3 724,3
3 220,4
Renumeration to members of the Executive team is presented on accrual basis.
Remuneration to Board of
Directors, in thousands of euro
2021
2020
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)
50,5
34,0
15,0
0,5
51,0
34,0
16,0
0,5
Tomas Von Rettig
30,0
20,2
17,0
0,3
30,3
20,2
18,0
0,3
Åse Aulie Michet
23,9
16,1
16,4
0,3
24,2
16,1
19,1
0,3
Katri Viippola
23,9
16,1
15,0
0,3
24,2
16,1
15,4
0,3
Dag Andersson
23,9
16,1
15,3
0,3
24,2
16,1
17,3
0,3
Niko Mokkila
23,9
16,1
15,0
0,3
24,2
16,1
9,4
0,3
Kristian Pullola**
30,0
20,2
12,5
0,3
-
-
-
-
Members of the Board until 25
March 2021
Lasse Heinonen
-
-
3,1
-
30,3
20,2
14,8
0,3
Members of the Board of
Directors until 28 May 2020
Olli Holmström
-
-
-
-
-
-
5,4
-
Paul Hartwall
-
-
-
-
-
-
5,4
-
Total
206,0
138,7
109,3
2,2
208,4
138,8
120,8
2,3
* Other financial benefits include transfer tax fees for the annual fees paid in shares
** Member of the Board of Directors from 2021
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.
76
Management holdings
Name
Position
2021
Kari Kauniskangas
Chairman of the Board of Directors
10 992
Tomas Von Rettig
Member of the Board of Directors
7 944
Åse Aulie Michelet
Member of the Board of Directors
28 951
Katri Viippola
Member of the Board of Directors
6 327
Dag Andersson
Member of the Board of Directors
4 888
Niko Mokkila
Member of the Board of Directors
3 193
Kristian Pullola
Member of the Board of Directors
1 783
Ville Iho
Chief Executive Officer
-
Petri Bono
Chief Medical Officer
-
Juha Juosila
Chief Digital Officer
87 435
Ilkka Laurila
Chief Financial Officer
281 900
Siina Saksi
SVP, Medical Clinic Network
50 559
Elina Saviharju
SVP, Legal
-
Veera Siivonen
SVP, Consumer Business
348
Minttu Sinisalo
SVP, HR
-
Mikko Tainio
SVP, Public Partnerships
518
Petri Keksi
SVP, Growth Businesses
92 585
Marja-Leena Tuomola
SVP, Corporate Health
1 000
31. Group companies
The Group’s parent company is Terveystalo Plc domiciled in Finland.
Subsidiaries as at 31 Dec 2021
Company name
Domicile
Group's share
Group's voting
rights
Alna Sverige AB
Sweden
100,0 %
100,0 %
Ankkurin Huoltamo Oy
Finland
100,0 %
100,0 %
Attentio Oy
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 Företagshälsovård Södra AB
Sweden
100,0 %
100,0 %
Feelgood Företagshälsovård Östersund AB
Sweden
100,0 %
100,0 %
Feelgood Företagshälsövård Blekinge AB
Sweden
100,0 %
100,0 %
Feelgood Online AB
Sweden
100,0 %
100,0 %
Feelgood Primärvård AB
Sweden
100,0 %
100,0 %
Feelgood Sjukvård AB
Sweden
100,0 %
100,0 %
Feelgood Svenska AB
Sweden
100,0 %
100,0 %
77
Hierojakoulu Relaxi Oy
Finland
100,0 %
100,0 %
Jyväskylän Hoitokoti Ankkuri Oy
Finland
100,0 %
100,0 %
Jyväskylän Lastensuojelupalvelut Oy
Finland
100,0 %
100,0 %
Keltaisen Kartanon Kuntoutus Oy
Finland
100,0 %
100,0 %
Lastensuojelupalvelut Väylä Oy
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
94,3 %
94,3 %
Rela Estonia OÜ
Estonia
100,0 %
100,0 %
Rela-hierojat Oy
Finland
100,0 %
100,0 %
Sivupersoona Oy
Finland
100,0 %
100,0 %
Suomen Hierojakoulut Oy
Finland
100,0 %
100,0 %
Suomen Terveystalo Oy
Finland
100,0 %
100,0 %
Terapiatelakka 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 %
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.
Financial year 2021
The following mergers took place during the financial year 2021:
●
●
●
●
●
Financial year 2020
The following mergers took place during the financial year 2020:
●
●
●
●
●
78
32. Group's key financial ratios
Terveystalo Group, EUR mill.
2021
2020
2019
Revenue
1 154,6
986,4
1 030,7
Adjusted EBITDA, *
1)
206,1
162,8
176,3
Adjusted EBITDA, % *
1)
17,8
16,5
17,1
EBITDA
1)
201,8
158,3
171,2
EBITDA, %
1)
17,5
16,1
16,6
Adjusted EBITA *
1)
141,0
101,9
115,1
Adjusted EBITA, % *
1)
12,2
10,3
11,2
EBITA
1)
136,7
97,4
110,0
EBITA, %
1)
11,8
9,9
10,7
Adjusted operating profit (EBIT) *
1)
114,4
71,6
86,5
Adjusted operating profit (EBIT), % *
1)
9,9
7,3
8,4
Operating profit (EBIT)
110,1
67,2
81,4
Operating profit (EBIT), %
9,5
6,8
7,9
Return on equity (ROE), %
1)
13,6
8,2
10,3
Equity ratio, %
1)
42,2
42,1
39,9
Earnings per share (€)
0,63
0,36
0,43
Net debt
519,0
490,9
548,2
Gearing, %
1)
85,2
85,9
101,3
Net debt/Adjusted EBITDA
1)
2,5
3,0
3,1
Total assets
1 448,6
1 361,0
1 359,3
Average personnel FTE
5 643
4 900
4 943
Personnel (end of period)
9 805
8 253
8 685
Private practitioners (end of period)
5 754
5 057
5 068
Adjusted EBITDA, excluding IFRS 16 *
1)
156,9
118,0
131,4
Net debt, excluding IFRS 16
340,6
312,4
366,4
Net debt/Adjusted EBITDA, excluding IFRS 16 *
1)
2,2
2,6
2,8
* 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), 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 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.
79
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 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 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
80
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), strategic projects and other items affecting comparability.
81
34. Reconciliation of alternative performance measures
Return on equity, %
2021
2020
2019
Profit/loss for the period
80,4
45,8
54,1
Equity (including non-controlling interest) (average)
590,1
556,3
526,5
Return on equity, %
13,6
8,2
10,3
Equity ratio, %
2021
2020
2019
Equity (including non-controlling interest)
608,9
571,4
541,2
Total assets
1 448,6
1 361,0
1359,3
Advances received
6,1
2,2
1,5
Equity ratio, %
42,2
42,1
39,9
Gearing, %
2021
2020
2019
Interest-bearing liabilities
557,2
568,0
588,8
Interest-bearing receivables and cash and cash equivalents
38,2
77,1
40,6
Equity
608,9
571,4
541,2
Gearing, %
85,2
85,9
101,3
Net debt /Adjusted EBITDA
2021
2020
2019
Interest-bearing liabilities
557,2
568,0
588,8
Interest-bearing receivables and cash and cash equivalents
38,2
77,1
40,6
Adjusted EBITDA
206,1
162,8
176,3
Net debt / Adjusted EBITDA
2,5
3,0
3,1
Adjusted EBITDA, EUR mill.
2021
2020
2019
Profit (loss) for the period
80,4
45,8
54,1
Income tax expense
20,3
10,8
12,7
Share of profits in associated companies
0,3
0,6
0,2
Net finance expenses
9,0
10,0
14,4
Depreciation, amortization and impairment losses
91,7
91,2
89,8
Adjustments*
4,3
4,5
5,1
Adjusted EBITDA
206,1
162,8
176,3
Adjusted EBITDA, %
2021
2020
2019
Adjusted EBITDA
206,1
162,8
176,3
Revenue
1 154,6
986,4
1030,7
Adjusted EBITDA, %
17,8
16,5
17,1
Adjusted EBITA, EUR mill.
2021
2020
2019
Profit (loss) for the period
80,4
45,8
54,1
Income tax expense
20,3
10,8
12,7
Share of profits in associated companies
0,3
0,6
0,2
Net finance expenses
9,0
10,0
14,4
Amortization and impairment losses
26,6
30,3
28,6
Adjustments*
4,3
4,5
5,1
Adjusted EBITA
141,0
101,9
115,1
82
Adjusted EBITA, %
2021
2020
2019
Adjusted EBITA
141,0
101,9
115,1
Revenue
1 154,6
986,4
1030,7
Adjusted EBITA, %
12,2
10,3
11,2
Adjusted operating profit (EBIT), EUR mill.
2021
2020
2019
Profit (loss) for the period
80,4
45,8
54,1
Income tax expense
20,3
10,8
12,7
Share of profits in associated companies
0,3
0,6
0,2
Net finance expenses
9,0
10,0
14,4
Adjustments*
4,3
4,5
5,1
Adjusted EBITA
114,4
71,6
86,5
Adjusted operating profit (EBIT), %
2021
2020
2019
Adjusted EBITA
114,4
71,6
86,5
Revenue
1 154,6
986,4
1030,7
Adjusted EBIT, %
9,9
7,3
8,4
EBITDA, EUR mill.
2021
2020
2019
Profit (loss) for the period
80,4
45,8
54,1
Income tax expense
20,3
10,8
12,7
Share of profits in associated companies
0,3
0,6
0,2
Net finance expenses
9,0
10,0
14,4
Depreciation, amortization and impairment losses
91,7
91,2
89,8
EBITDA
201,8
158,3
171,2
EBITDA, %
2021
2020
2019
EBITDA
201,8
158,3
171,2
Revenue
1 154,6
986,4
1030,7
EBITDA, %
17,5
16,1
16,6
EBITA, EUR mill.
2021
2020
2019
Profit (loss) for the period
80,4
45,8
54,1
Income tax expense
20,3
10,8
12,7
Share of profits in associated companies
0,3
0,6
0,2
Net finance expenses
9,0
10,0
14,4
Amortization and impairment losses
26,6
30,3
28,6
EBITA
136,7
97,4
110,0
EBITA, %
2021
2020
2019
EBITA
136,7
97,4
110,0
Revenue
1 154,6
986,4
1030,7
EBITA, %
11,8
9,9
10,7
83
Operating profit (EBIT), EUR mill.
2021
2020
2019
Profit (loss) for the period
80,4
45,8
54,1
Income tax expense
20,3
10,8
12,7
Share of profits in associated companies
0,3
0,6
0,2
Net finance expenses
9,0
10,0
14,4
EBIT
110,1
67,2
81,4
Operating profit, (EBIT), %
2021
2020
2019
EBIT
110,1
67,2
81,4
Revenue
1 154,6
986,4
1030,7
EBIT, %
9,5
6,8
7,9
Adjustments based on subject area* , EUR mill.
2021
2020
2019
Acquisition related expenses
1)
3,1
0,5
3,3
Restructuring related expenses
2)
0,3
1,6
0,7
Gain on sale of asset
-
-0,1
0,3
Strategic projects and other items affecting to comparability
0,8
2,5
0,8
Adjustments
4,3
4,5
5,1
Adjustments based on account group* , EUR mill.
2021
2020
2019
Other operating income
-0,4
-0,5
-0,3
Materials and services costs
-
1,8
-
Personnel expenses
0,3
1,3
0,4
Other operating expenses
4,4
1,9
5,0
Adjustments
4,3
4,5
5,1
Adjusted EBITDA, excluding IFRS 16
2021
2020
2019
Profit (loss) for the period
80,4
45,8
54,1
Income tax expense
20,3
10,8
12,7
Share of profits in associated companies
0,3
0,6
0,2
Net finance expenses
9,0
10,0
14,4
Depreciation, amortization and impairment losses
91,7
91,2
89,8
Adjustments*
4,3
4,5
5,1
IFRS 16 lease expense adjustment
-49,2
-44,8
-45,0
Adjusted EBITDA, excluding IFRS 16
156,9
118,0
131,4
Net debt/Adjusted EBITDA, excluding IFRS 16
2021
2020
2019
Interest-bearing liabilities
378,8
389,5
407,0
Interest-bearing receivables and cash and cash equivalents
38,2
77,1
40,6
Adjusted EBITDA
156,9
118,0
131,4
Net debt/Adjusted EBITDA, excluding IFRS 16
2,2
2,6
2,8
* 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), strategic projects and other items
affecting comparability.
1)
Including transaction costs and expenses from integration of acquired businesses
2)
84
35. Subsequent events
Feelgood acquired on 1 February 2022 Länshälsan Uppsala, an occupational health care provider. Revenue of the
company was approximately SEK 40 million in 2020 and the company has approximately 30 employees.
The acquisition of Vantaan Työterveys Oy was completed on 1 February 2022.
On 9 February 2022, the Board of Directors of Terveystalo Plc decided on a new performance period of the share-
based incentive scheme for 2022–2024.
85
Parent company's financial statement, FAS
Parent company’s income statement
EUR
Note
1.1.-31.12.2021
1.1.-31.12.2020
Revenue
1.1
517 094
924 670
Materials and supplies
-1 333
-296
Employee benefit expenses
-1 741 835
-2 027 165
-247 805
-226 232
-33 539
-47 089
Depreciation, amortization and impairment losses
1.2
-136
-3 469
Other operating expenses
1.4
-1 699 187
-1 635 698
Operating loss
-3 206 740
-3 015 279
Financial income and expenses
1.5
3 478
-
56
236
-15 888
-39 503
-22 655
-1 233
Loss before appropriations and taxes
-3 241 749
-3 055 779
Appropriations
1.6
-
10 621
58 000 000
35 500 000
Taxes
-10 954 938
-6 496 468
Profit for the period
43 803 313
25 958 375
Parent company’s statement of financial position
EUR
Note
31 Dec 2021
31 Dec 2020
ASSETS
Non-current assets
Property, plant and equipment
2.1
227
-
Investments
2.2
86
516 818 244
516 818 244
Total non-current assets
516 818 471
516 818 244
Current assets
2.3
65 338 343
49 558 965
2.4
233 545
161 673
Total current assets
65 571 888
49 721 807
TOTAL ASSETS
582 390 359
566 540 051
EUR
Note
31 Dec 2021
31 Dec 2020
EQUITY AND LIABILITIES
Equity
2.5
80 000
80 000
493 503 962
493 503 962
5 262 687
23 652 357
Profit for the period
43 803 313
25 958 375
Total equity
542 649 963
543 194 694
Liabilities
2.6
Current liabilities
274 515
140 007
33 052 398
16 822 320
113 610
179 157
6 299 873
6 203 873
Total liabilities
39 740 396
23 345 357
TOTAL EQUITY AND LIABILITIES
582 390 359
566 540 051
87
Parent company's statement of cash flows
EUR
1.1.-31.12.2021
1.1.-31.12.2020
Cash flows from operating activities
Profit for the period before income taxes
54 758 251
32 454 830
Adjustments
136
3 469
-58 000 000
-35 550 124
35 008
40 737
-
893
-
-10 129 778
Change in working capital
446 604
9 997 111
406 664
298 840
Taxes
-11 093 468
-11 130 628
Net cash from operating activities
-13 446 803
-14 014 650
Cash flows from investing activities
Purchase of tangible and intangible items
-363
-
Proceeds from sale of tangible and intangible items
-
40 016
Net cash from investing activities
-363
40 016
Cash flows from financial activities
Acquisition of treasury shares
-11 248 346
-
Change in group account
22 330 218
-23 437 608
Payment of hire purchase liabilities
-
-37 365
Received group contribution
35 500 000
54 000 000
Dividends paid
-33 099 698
-16 549 849
Interest and other financial expenses paid
-35 008
-1 233
Net cash from financial activities
13 447 166
13 973 945
Net change in cash and cash equivalents
-
-690
Cash and cash equivalents at 1 January
-
690
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
88
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 reporting date, it is reversed.
Property, plant and equipment, and depreciation
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
2021
2020
Finland
469 436
924 670
Sweden
47 658
-
Total
517 094
924 670
1.2 Depreciation, amortization and impairment losses
EUR
2021
2020
Depreciation
-136
-3 469
Total
-136
-3 469
1.3 Personnel
Average number of personnel during financial year
4
6
1.4 Other operating expenses
EUR
2021
2020
External services
-699 055
-633 564
ICT expenses
-23 453
-29 014
Non-statutory personnel expenses
-110 159
-51 934
Leases
-6 813
-14 560
Travel expenses
-21 730
-17 762
Marketing and communication
-177 298
-423 979
Other costs
-660 679
-464 886
Total
-1 699 187
-1 635 698
Auditor's fees
EUR
2021
2020
Audit and auditor's statements based on laws and regulations
-72 740
-56 240
-1 551
-
Auditor's fees total
-74 291
-56 240
89
1.5 Financial income and expenses
EUR
2021
2020
Other interest and financial income
From group companies
3 478
-
From others
56
236
Total
3 534
236
Other interest and financial expenses
To group companies
-15 888
-39 503
To others
-22 655
-1 233
Total
-38 542
-40 737
1.6 Appropriations
EUR
2021
2020
Increase/decrease in depreciation in excess of plan
-
10 621
Group contributions received
58 000 000
35 500 000
Appropriations total
58 000 000
35 510 621
Notes to the statement of the financial position
2.1 Property, plant and equipment
Machinery and equipment
EUR
2021
2020
Acquisition cost 1.1
38 525
79 152
Additions
363
-
Disposals
-
-40 627
Acquisition cost 31.12
38 888
38 525
Accumulated depreciation and impairment losses 1.1
-38 525
-34 773
Depreciation for the period
-136
-3 752
Accumulated depreciation and impairment losses 31.12
-38 661
-38 525
Carrying amount 1.1
-
44 379
Carrying amount 31.12
227
-
2.2 Investments
Holdings in group companies
90
EUR
2021
2020
Acquisition cost 1.1
516 818 244
506 685 344
Addition
-
10 132 900
Acquisition cost 31.12
516 818 244
516 818 244
Carrying amount 1.1
516 818 244
506 685 344
Carrying amount 31.12
516 818 244
516 818 244
Parent company ownerships:
Holdings in group companies
2021
2020
Terveystalo Healthcare Holding Oy
100%
100%
2.3 Receivables from group companies
EUR
2021
2020
Trade receivables
629 752
1 146 591
Group account receivables
-
6 203 314
Prepayments and accrued income
64 708 591
42 209 060
Total
65 338 343
49 558 965
2.4 Changes in equity
Restricted equity
Share capital
EUR
2021
2020
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
2021
2020
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
2021
2020
Retained earnings at the beginning of the period
49 610 731
40 202 206
Dividends paid
-33 099 698
-16 549 849
Acquisition of treasury shares
-11 248 346
-
Retained earnings at the end of the period
5 262 687
23 652 357
Profit for the period
43 803 313
25 958 375
91
Total unrestricted equity
542 569 963
543 114 694
Total equity
542 649 963
543 194 694
Distributable equity
EUR
2021
2020
Invested non-restricted equity reserve
493 503 962
493 503 962
Retained earnings
5 262 687
23 652 357
Profit for the period
43 803 313
25 958 375
Total
542 569 963
543 114 694
Shares and share capital
On 31 December 2021 the amount of shares is 128,036,531 of which 1,000,000 is held by Terveystalo PLC and
730,000 is held by EAM TTALO Holding Oy, company which is under the control of Terveystalo PLC.
On 28 October, 2021 the Board of Directors of Terveystalo Plc decided to launch a buyback program for
Terveystalo's own shares based on the authorisation granted by Terveystalo's Annual General Meeting on 25
March 2021.
The repurchases of the shares began on 29 October, 2021 and ended on 28 December, 2021. During that period,
Terveystalo repurchased 1,000,000 of its own shares for an average price per share EUR 11.25. The shares were
acquired at the market price quoted at the time of acquisition in trading organised by Nasdaq Helsinki Ltd on a
regulated market.
The purpose of the share buyback program was to optimize the Company's capital structure through reduction of
capital. The repurchase of own shares will reduce the Company's unrestricted equity. The repurchased 1,000,000
shares will be cancelled.
The company has 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
2021
2020
Trade payables
274 515
140 007
Other liabilities to group companies
33 052 398
16 822 320
Other liabilities
113 610
179 157
92
Accruals
6 299 873
6 203 873
Total
39 740 396
23 345 357
2.5.2 Liabilities to Group companies
EUR
2021
2020
Trade payables
263 318
157 021
Group account payables
32 789 081
16 662 176
Accruals and deferred income
0
3 123
Total
33 052 398
16 822 320
2.5.3 Accruals and deferred expenses
EUR
2021
2020
Personnel related accrued expenses
847 935
613 405
Income tax liability
5 451 938
5 590 468
Total
6 299 873
6 203 873
Other notes
3. Collateral and other contingent liabilities
EUR
2021
2020
Suretyship
361 400 000
372 800 000
Guarantees
400 734
393 134
93
Signatures to the financial statements and Board of Director’s report
Helsinki, 9 February 2022
Kari Kauniskangas Dag Andersson
Chairman of the Board of Directors Member of the Board of Directors
Åse Aulie Michelet Niko Mokkila
Member of the Board of Directors Member of the Board of Directors
Kristian Pullola Katri Viippola
Member of the Board of Directors Member of the Board of Directors
Tomas von Rettig 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 2022
KPMG Oy Ab
Audit firm
Henrik Holmbom
Authorised Public Accountant
94
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 2021. 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.
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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 2021 the goodwill
amounted to 849 M€ and accounted for 59
% of the consolidated total assets and for
139 % of the consolidated equity. In 2021
goodwill has increased with 67 M€, mainly
relating to the acquisition of Feelgood
Svenska AB-Group.
—
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 2021 were in total 114
M€. Based on the preliminary Purchase
Price Allocation the Feelgood Svenska AB-
Group acquisition related recognised assets
for customer relationships and trademark
totalled to 14 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 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)
96
—
The consolidated revenue amounted to
1.155 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
contract templates.
—
Given the variety and large number of sales
transactions, revenue recognition is
considered a key audit matter.
—
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 enter and record sales
transactions as well as the sales pricing
and invoicing 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
97
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
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 ten 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.
98
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 2022
KPMG Oy Ab
HENRIK HOLMBOM
Authorised Public Accountant, KHT
99
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 on the iXBRL marking up of the consolidated financial
statements for the year ended 31 December, 2021, included in the Terveystalo Plc’s digital files [terveyst-2021-12-
31-en.zip] prepared 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 consolidated financial statements 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 Control
We are independent of the company in accordance with the ethical requirements applicable in Finland, which apply
to the engagement we have perform ed, and we have fulfilled our other ethical obligations in accordance with these
requirements.
The auditor applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system
of quality control including documented policies and procedures regarding compliance with ethical requirements,
professional standards and applicable legal and regulatory 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 consolidated financial statements included in the ESEF fina ncial statements are, in all material respects,
marked up with iXBRL tags in accordance with Article 4 of the ESEF RTS, and;
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.
Opinion
In our opinion, the consolidated financial statements included in the ESEF financial statements of Terveystalo Plc’s
identified as [terveyst-2021-12-31-en.zip] for the year ended 31 December, 2021 are marked up, in all material
respects, in compliance with the ESEF Regulatory Technical Standard.
100
Our audit opinion relating to the consolidated financial statements of Terveystalo Plc’s for the year ended 31
December, 2021 is set out in our Auditor’s Report dated 9 February, 2022. In this report, we do not express an audit
opinion, review conclusion or any other assurance conclusion on the consolidated financial statements.
Helsinki 17 February, 2022
KPMG OY AB
Henrik Holmbom
Authorised Public Accountant, KHT