TERVEYSTALO
Annual Report
2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Contents
YEAR 2020
Terveystalo in brief
Year 2020
CEO’s review
Operating environment
Terveystalo platform
Strategy
Value creation model
Terveystalo as an investment
CORPORATE GOVERNANCE
Corporate Governance Statement
Board of Directors
Executive team
Remuneration policy
Remuneration Report
Information for shareholders
FINANCIALS
Board of Directors’ report
Financial statements
Auditors’ report
6
8
10
12
15
16
20
22
26
28
35
38
42
44
52
66
116
Foreword
This report is for shareholders, investors, analysts, media, clients,
personnel, and other stakeholders who are interested in Terveystalo.
Terveystalo’s business activities focus on holistic health and well-
being. We offer a wide variety of primary health care, specialized
care, and well-being services for corporate and private customers
and the public sector. Our nationwide network covers over 300
clinics across Finland. The network of clinics is supplemented by
24/7 digital services.
This Annual Report and its sister publication, the Corporate
Responsibility Report, report on the company’s financial, social,
and environmental impact and explain their strategic significance
for the company’s business.
The Annual Report includes Terveystalo’s highlights in 2020,
the CEO’s review, a description of the operating environment, the
strategy and value creation section, the Corporate Governance
Statement, and the remuneration policy statement as well as the
Report of the Board of Directors and the financial statements with
notes.
The Statement of Non-Financial Information as required by the
Accounting Act is included in the Report of the Board of Directors
found in the financials section of the Annual report. Terveystalo’s
sustainability management and results are reported in more detail
in Terveystalo’s Corporate Responsibility Report.
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TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Year
2020
In 2020, Terveystalo had approximately 1.2 million
individual customers. The number of customer visits
reached 6.9 million, 1.8 million of which were remote
appointments. Our revenue was EUR 986 million, and
we employed a total of 13,000 professionals directly
and indirectly. This year, we particularly invested in
the availability of digital services and COVID-19 tests,
in addition to the development of preventive and
comprehensive well-being services. Terveystalo plays
a vital role in helping Finns overcome the COVID-19
crisis. Effective and efficiently provided care benefits
everyone.
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TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Terveystalo in brief
Terveystalo is listed on the Helsinki Stock Exchange and has a predominantly Finnish ownership. In terms of revenue
and network, Terveystalo is the largest private health service provider in Finland. We offer a wide variety of primary
health care, specialized care, and well-being services for corporate and private customers and the public sector. Our
nationwide network covers over 300 clinics across Finland. The clinic network is supplemented by 24/7 digital services.
TERVEYSTALO IS THE LARGEST PRIVATE HEALTH SERVICE PROVIDER IN FINLAND
APPROX.
3.7
1
million visits to the doctor
in 2020
APPROX.
1.8
APPROX.
1.2
million remote visits
in 2020
million individual customers
in 2020
REVENUE BY CUSTOMER GROUP 2020
28%
30%
TOTAL
986.4
EUR mill.
42%
Corporate, 42% (42%)
Private individuals, 30% (29%)
Public, 28% (29%)
(Total 1,030.7)
(Total 1,030.7)
KEY FIGURES
986
REVENUE IN MILL. EUROS
2020
(1,030)
10.3%
PROFIT (ADJUSTED EBITA),
% OF REVENUE
2020
(11.2%)
SERVICES PROVIDED
• OCCUPATIONAL HEALTH SERVICES
• OUTPATIENT SURGERY
• GENERAL AND SPECIALIST MEDICAL
• OUTSOURCING SERVICES
SERVICES
• WELFARE SERVICES
• IMAGING AND LABORATORY STUDIES
• STAFFING SERVICES
Finland’s largest
309
CLINICS OF WHICH
17 ARE HOSPITAL UNITS AND
43 DENTAL CLINICS
24/7
digital services
regardless of the place
TERVEYSTALO’S PLATFORM BUSINESS MODEL MATCHES CUSTOMERS WITH PRIVATE
PRACTITIONERS AND INTEGRATES EPISODES INTO EFFECTIVE CARE CHAINS
EXCEL IN CUSTOMER
EXPERIENCE &
ENGAGEMENT
INTEGRATE CARE CHAINS,
OPTIMIZE AVAILABILITY
OF RIGHT EXPERTS
Terveystalo
platform
WITH DATA DRIVEN CARE MODELS
Partnership ecosystem
Personnel
Private
practitioners
Labs, imaging,
physical clinics
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TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Year 2020
In 2020, Terveystalo adapted its services in response to the rapidly changing environment created by COVID-19,
strongly increased the range of digital services and developed new services related to the COVID-19 strategy.
This spread includes some of the highlights of 2020.
FEBRUARY
MAY
TERVEYSTALO INTRODUCED STRONG IDENTIFICATION
FOR ONLINE BOOKING
Terveystalo was the first Finnish private health
care provider to adopt strong identification also
for electronic online booking.
TERVEYSTALO BIOBANK THE FIRST FINNISH BIOBANK
TO RECEIVE ISO QUALITY CERTIFICATION – BIOBANK
ACTIVITIES ALSO PROMOTE SCIENTIFIC RESEARCH
RELATED TO COVID-19
Biobank samples of COVID-19 patients
collected in Terveystalo Biobank have been used
in national and international research projects.
SEPTEMBER
FINNAIR AND TERVEYSTALO OFFER CUSTOMERS EASY
ACCESS TO A COVID-19 TEST BEFORE FLYING
Through this cooperation, customers have
convenient and rapid access to a certificate of
negative COVID-19 test result required by the
destination country. Customers can use their
Finnair Plus points to pay for this service.
OCTOBER
TERVEYSTALO DEFINED THE KEY TARGETS OF THE UN
SUSTAINABLE DEVELOPMENT GOALS IN ITS OPERATIONS
Terveystalo commits to promoting sustainable
development goals that are pivotal to its business.
MARCH
TERVEYSTALO INITIATED COVID-19 TESTING
In 2020, approximately 10% of all COVID-19
tests in Finland were performed at Terveystalo.
At best, Terveystalo conducted 11,000 tests
per day and the results were provided in
approximately one day.
PROCENT OF ALL COVID-19 TESTS
IN FINLAND WERE PERFORMED AT
TERVEYSTALO
APPROX.
10
8
THE NUMBER OF DIGITAL APPOINTMENTS BREAKS THE LIMIT OF 0.5 MILLION
Terveystalo was quick to respond to the growing demand of digital appointments and increased their supply
throughout the year. The limit of 0.5 million digital appointments was broken in October.
THE DEVELOPMENT OF DIGITAL SERVICES
Reception visits per month
100,000
80,000
60,000
40,000
20,000
0
January
February
March
April
May
June
July
August
September
October
November
December
Chat receptions
Video receptions
Other remote receptions
NOVEMBER
TERVEYSTALO IS THE MOST POPULAR
WORKPLACE AMONG PROFESSIONALS
According to the employer image study conducted
by Universum, Terveystalo is the most attracti-
ve workplace among health care professionals.
Terveystalo has been the most popular choice
among students for seven consecutive years.
MOST POPULAR CHOICE
AMONG STUDENTS FOR SEVEN
CONSECUTIVE YEARS.
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TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
The exceptional year
challenged the entire
industry, and Terveystalo
passed the test with
flying colors
CEO’S REVIEW:
The COVID-19 pandemic
accelerates the digitalization
of health care
The COVID-19 pandemic faced by the world in 2020 strengthened the trends of health care and accelerated the change of the field. The
digital transformation of the industry is a fact and people’s interest in their health and well-being is clearly growing. At Terveystalo, demand has
increasingly shifted toward digital services. Our solutions work: Despite the exceptional circumstances, our customer satisfaction has remained
at a record-high, and we are the most attractive employer in our industry for the seventh consecutive year. Our brand preference has reached
an all time high and is clearly the best in the industry.
THE EXCEPTIONAL YEAR CHALLENGED THE ENTIRE INDUSTRY, AND TERVEYSTALO PASSED
THE TEST WITH FLYING COLORS
Since the very beginning of the COVID-19 crisis, we focused on agility and
preserving room for financial flexibility. Operatively speaking, we focused
on optimal targeting of supply in the continuously changing demand envi-
ronment. Whereas the second quarter tested our ability to adjust to a sharp
decline in demand, the third quarter challenged us to scale up our services
and create new services. Faced with rapidly changing demand conditions,
we shifted the focus of our service production particularly toward testing and
digital services. Thanks to our agility, we managed to defend our top line.
Revenue decreased only by 4 percent year-on-year, while our cost control and
quick adjustment measures to respond to the development of the pandemic
ensured that our profitability remained at a high level.
The second wave of COVID-19 testing started at the beginning of
August, and we were able to quickly respond by quintupling our testing
capacity over a period of a couple of weeks. Over the entire year, we con-
ducted over 200,000 tests, and their demand is expected to remain high
at least until the next spring. With the service solutions that are related
to the COVID-19 strategy, we do our part to help society remain open
and operational, even though the service chain takes up resources from our
other business areas.
The exceptional business circumstances brought on by the COVID-19
pandemic will last at least until the summer. In our management, we will
continue to emphasize agility and responsiveness. While the uncertain en-
vironment and the need to maintain a shorter-term focus than usual has
placed great demands on our organization, we have performed well. I am
proud of the performance of Terveystalo’s employees and I am very plea-
sed about the trust shown to us by customers and professionals.
OUR STRATEGY FOCUS AREAS ARE THE MOST INTELLIGENT SERVICE PLATFORM IN THE
INDUSTRY AND HEALTH PARTNERSHIPS WITH OUR CUSTOMERS
COVID-19 has not changed the trend of people being increasingly interested
in investing in their well-being, and we witness growth potential in services
that support holistic well-being and lifelong health. One of our three strategic
focus areas will be to develop health partnerships with our customers. We
are building a model for supporting our customers and keeping in touch with
them, anticipating their needs, and providing comprehensive well-being
services. Our second focus area is the development of the most intelligent
service platform in our industry, one that will enable us to effectively provide
our customers with the right service regardless of time, place, payment
method and channel, from the beginning of the treatment path to its end.
Our third focus area is to grow through acquisitions.
Our strategy is not reliant on the development of the publicly funded
market or policy decisions concerning social and health services. It is based
on the industry-leading innovations and competencies that also serve pub-
lic buyers, and a bigger role would serve to improve the functioning of the
entire health care system.
THE AFTERCARE OF THE CORONA CRISIS CONTINUES
The pandemic is both an immediate health crisis and a slow-moving health
crisis. The treatment backlog in Finland is growing every day due to the
pandemic despite the partial recovery of demand and services. According
to the Finnish Institute for Health and Welfare, the number of people who
have been waiting for non-urgent care for more than six months approached
18,000 in August. The pandemic is also causing an increase in mental health
problems: According to Terveystalo’s data, anxiety disorders are now the
third most common diagnosis and three of the top five causes of sickness
absences are related to mental health problems.
Terveystalo has been at the forefront of addressing the immediate ef-
fects of the crisis, and we will play an important part in responding to the
long-term effects. Elimination of the treatment backlog will require the
input of the private sector, and the growing challenges related to mental
well-being will call for more digital solutions. Thanks to the strength of our
traditional clinic network and our digital capabilities, we play an important
role in helping Finns to overcome the crisis. Efficiently produced effective
care benefits everyone – the individual, employer, and society.
Ville Iho
Chief Executive Officer
Terveystalo
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TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Operating environment and megatrends
Digital services transform health care and create new solutions, but they also create new expectations from customers
HEALTHCARE TRENDS
CHANGE IN
DEMOGRAPHICS
CUSTOMER CENTRIC
DIGITAL SERVICES
THE EMPOWERED
CONSUMER
THE DISTRUSTFUL
CONSUMER
HOLISTIC HEALTH
AND WELLBEING
LONGER LIVES AND
CHRONIC DISEASES
DEPLETING
RESOURCES
CHANGING EMPLOYEE
EXPECTATIONS
Aging population
• Increased healthcare
costs
Customers increasingly own
their data and select their
own services
New type of competitors
(from start-ups to tech
giants)
• Customer experience
• Competitive
and digital
personalization
advantage from data
and quality metrics
• Digital platforms as a
source of competitive
advantage
Growing preference of digital
channels
• Role of proactive and
preventative care
enforced
• More frequent
interactions
• Service chain
transformation, for
example digital diagnosis,
to a doctor only if
needed
Increasing interest in own
health
Nutrition trends
Wearables and biohacking
Meditation & yoga
Exercising gaining
popularity
• Increasing demand for
preventive care and
wellbeing offering
Increasing need for
cost-effective population
management
• Monetization models
change e.g. from
fee-for-service to
subscription-based
services
Lack of professional
resources
• Role of nurses and other
professionals increasing
• Efficiency will be value
driver
• Ability to attract
professionals is key
Increased popularity of
flexible, self-directed forms
of work that allow better
work-life balance
More widespread desire for
work with a purpose and
opportunities for impact
OUR RESPONS
Terveystalo promotes healthier and better life for
everyone. That means that in addition to providing
tailored treatment for our customers, we strive to create
a healthier society. Our vision is to empower people for
a long life of health and well-being. We don’t just treat
illnesses – we support, advise, and keep in touch. Our
mission is to support customers with our services that
are based on extensively researched information.
WE ARE BUILDING THE MOST INTEL-
LIGENT PLATFORM IN THE INDUSTRY
We provide our customers with the
right service regardless of time, place,
and channel, from the beginning of the
treatment path to its end.
WE DEVELOP HEALTH PARTNERSHIPS
WITH OUR CUSTOMERS
We support our customers and keep in
touch with them, anticipate their needs,
and provide comprehensive well-being
services.
WE OFFER THE BEST DIGITAL CUSTOM-
ER EXPERIENCE 24/7, WITH A WAIT TIME
OF ONLY 7 SECONDS
WE OFFER PROFESSIONALS THE MOST
ATTRACTIVE WORKPLACE IN THE
INDUSTRY
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TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
THE FINNISH HEALTH CARE MARKET
Private health care plays a significant role in the Finnish system. Nearly half
of all primary health care visits in Finland are provided privately.
invest in work ability management benefit manifold. One invested euro
returns six euros as a result of lower sickness absence and pension costs.
Finland has a unique occupational health system that covers 1.9 million
Finns. Occupational health is associated with a statutory pension system.
The system encourages employers to invest in occupational health to bring
down pension costs. This has effects on public health as well as the total
cost of health care. According to studies, companies that systematically
The total annual cost of health care in Finland is approximately EUR
15 billion. Privately provided health care accounts for about one quarter.
Rapid aging of the population, the treatment backlog accrued during the
pandemic as well as high rate of lifestyle diseases will increase the need for
care in the years to come.
Terveystalo’s intelligent platform spurs
growth of health and well-being services
Terveystalo serves a diverse customer base, offering them health and well-being services and integrating courses of treatment into efficient
chains using a physical and digital platform business model. Terveystalo’s scalable platform has been built for privately funded business but it
can also be used for public sector customers.
PUBLIC PROVISION
PRIVATE PROVISION
TERVEYSTALO PLATFORM
PUBLIC OUTSOURCING & STAFFING
PUBLIC
FUNDING
PRIVATE
FUNDING
Public provision and funding
74%
EUR 10.8 bn.
Finnish
healthcare
market in total
EUR 14.5
bn.
Public provision and funding
7%
EUR 1.0 bn.
Private provision and funding
19%
EUR 2.7 bn.
• Market leader with ≈ EUR 800 million sales
• Terveystalo clinics and 24/7 digital platform, fee for service
-model, scalable
OPERATING MODEL
• Corporate, Private and Public service sales
GROWTH
Organic growth, bolt-on M&A, strategic M&A
• One of the largest in the market
with ≈ EUR 200 million sales
• Public clinics and equipment,
capitation/fixed fee
Opportunity: Long queues in public,
aging population
MARGIN POTENTIAL
High with operating leverage as a key profitability driver
High-medium-low
In 2017 according to Nordic Healthcare Group estimate.
INVESTMENT REQUIREMENTS
Moderate with digitalization as a key driver
Low
Finnish health care hit hard by the pandemic
The global COVID-19 pandemic heavily affected the Finnish health care
system as well. During the second quarter of the year, health care activities
were restricted with a heavy hand and resources were shifted to treatment
of COVID-19 in public health care. Privately provided health care services
focused more on remote appointments, while there was a strong increase
in the demand for COVID-19 testing.
The downsizing of non-urgent care in the private and public health care
sectors while the restrictions were in place resulted in a significant treat-
ment gap in other illnesses. According to the Finnish Institute for Health
and Welfare, the number of people who have been waiting for non-urgent
care for more than six months approached 18,000 in August. The pande-
mic has also increased the number of mental health problems: According
to Terveystalo’s data, anxiety disorders were the third most common diag-
nosis and three of the top five causes of sickness absences were related to
mental health problems. Elimination of the treatment backlog will require
the input of the private sector, and the growing challenges related to mental
well-being will call for more digital solutions.
The growing demand for health and well-being services offers growth opportunities, and Terveystalo seeks to take advantage of them by growing the market.
The toolkit includes introducing new products in the portfolio, increasing the market share, promoting customer loyalty, and making selected acquisitions.
MARKET AND
SHARE GROWTH
GROW SHARE
OF WALLET
CONTINUED
M&A
The smartest platform in the industry
Opportunity:
increase conversion, profit per visit, higher
output from limited resources, increase visits
and grow in verticals
We invest in:
“the Engine room”, Centers of Excellence,
pricing intelligence
The customer’s health
partner
Selective M&A
Opportunity:
Expand to new markets with new products,
increase share of wallet
We invest in:
Customer relationship and engagement
Opportunity:
Further strengthen our capabilities, scale
and service scope + enter new markets
We invest in:
Scale, scalable competencies, adjacencies
and specialties
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TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
OUR STRATEGY
Our vision is to empower
people to lifelong health
and well-being
That is why we are fighting for a healthier life. Every day.
VALUES
Human being in the center
We take responsibility for the health and well-being of our
fellow human beings, for the opportunity to live a good
life. We work together to help the customer and customer
guides us in our renewal. We help each other and value all
of our experts.
Steered by medical science
Everything we do is based on medical science and
researched knowledge. All our decisions are steered by
care efficacy and the well-being of our customers.
For the common good
We build health and wealth for the society and produce
effective care efficiently. We share information and ignite
discussion and create better healthcare for all: customers.
Professionals, and society.
MEGATRENDS
Holistic health and wellbeing
Customer centric digital services
Longer lives and chronic diseases
Purpose at work
Life-job balance
Competition for professionals
Distrust in institutions
HOW
The smartest platform in the industry
We offer the most relevant service to the customer
regardless of time, place and channel, from the
beginning to the end of the integrated care chain.
The customer’s health partner
We engage in dialogue with the customers,
anticipate their needs and offer comprehensive
wellbeing services.
STRATEGIC OBJECTIVES
The profitability leader in the Nordic
region in private health services.
Preferred by customers and
professionals.
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TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
OUR STRATEGY
Terveystalo’s customer-driven high-quality services promote the health of
Finns and, thereby, the well-being of the Finnish society as a whole. Our mis-
sion is to fight for a healthier life. In addition to providing tailored treatment for
our customers, we strive to create a healthier society. Our vision is to empower
people to long-life health and well-being. We don’t just treat illnesses – we
support, advise, and keep in touch. Our mission is to support customers with
our services that are based on extensively researched information.
Our competitive advantages include a wide and comprehensive
network, a scalable business model, and a broad range of digital services;
together with our development-oriented culture, they attract the field’s
best talent.
In the spring 2020, Terveystalo’s Board of Directors approved the new
focus areas as well as strategic and financial goals for the strategy period
2021–2025.
Terveystalo’s strategic goals:
• To be the most profitable private health care operator in the Nordic countries
• To be the preferred choice of customers and professionals
To attain these strategy goals, the Board approved the following development
areas as the strategy period’s focus areas:
• We build the most intelligent platform in the industry – We provide our cus-
tomers with the right service regardless of time, place, and channel,
from the beginning of the treatment path to its end.
• We develop health partnerships with our customers – We support our custo-
mers and keep in touch with them, anticipate their needs, and provide
comprehensive well-being services.
Expansion of well-being services and strategic, complimentary acquisitions
will be a part of Terveystalo’s growth strategy also in the future.
In addition
to providing
tailored
treatment for
our customers,
we strive
to create a
healthier
society.
THE MOST INTELLIGENT SERVICE PLATFORM IN THE INDUSTRY
We are developing our operating model to respond to the transformation
needs brought on by market trends. The demand for novel health services,
pricing models and operative models is growing, while the scarcity of health
care professionals is increasing the need for more intelligent use of compe-
tence. Digital services transform health care and create new solutions, but
they also create new expectations from customers. We are developing an
intelligent platform to meet the customer expectations and demands in a
scalable manner also in the future. The intelligent platform guides growth,
profitability, customer satisfaction, and commitment. Through the most
intelligent platform in the industry, we are able to provide our customers with
the right service regardless of time, place, and channel, from the beginning
of the treatment path to its end.
Corporate, 42% (42%)
HEALTH PARTNERSHIPS WITH CUSTOMERS
As many as 50 percent of working-age Finns have or are at risk of developing
a lifestyle disease. Obesity, diabetes, hypertension, sleep disorders, substance
abuse, back problems and mental health challenges are increasing the need for
preventive and well-being services. At the same time, the interest in holistic
well-being is growing. In addition to curing diseases, we want to create health
partnerships with our customers and to keep in touch, predict the customers’
needs and offer holistic well-being services. We use digital solutions to engage
customers and to offer a platform for continuous health partnership and
personalized services. We will also introduce new low-threshold well-being
services in our portfolio.
Private individuals, 30% (29%)
Public, 28% (29%)
UPDATED FINANCIAL TARGETS
As long-term financial goals, Terveystalo’s Board of Directors adopted 5
percent annual revenue growth through organic growth and acquisitions and,
in terms of profitability, an adjusted EBITA margin of 12–13 percent in the
medium to long term. With regard to the capital structure, the target for the
net debt/adjusted EBITDA ratio is 3.5x or less. However, indebtedness may
temporarily exceed the target level, such as in conjunction with acquisitions.
The company also aims to distribute a minimum of 40 percent of net profit as
dividends annually. However, the dividend proposal must take into account
Terveystalo’s long-term development potential and financial position.
STRATEGY IMPLEMENTATION IS PROGRESSING DESPITE COVID-19
The key strategic measures in 2020 included increasing our digital offering
and further developing our platform.
The Net Promoter Score* (NPS) for customer experience reached
a record high in all of the measured areas. Personnel job satisfaction at
Terveystalo was at an excellent level, and the employee net promoter score
(eNPS) was clearly improved compared to the reference period. Terveys-
talo’s comprehensive overall health and well-being service portfolio was
further diversified, especially with regard to digital channels. Revenue de-
creased by 4.3 percent, due to negative impact from COVID-19 in the se-
cond quarter of the year. Profitability was strong nevertheless and adjusted
EBITA was 10.3 percent of revenue.
3
ACHIEVEMENT OF FINANCIAL TARGETS
6
REVENUE, EUR MILL.
Target of at least 5% growth annually
DISTRIBUTION OF DIVIDENS, € & % OF NET PROFIT
Target is to distribute at least 40% of net profit as dividends.
1,200
1,000
800
600
400
200
0
4
16%
3.5
547
690
745
1,031
986
2016
2017
2018
2019
2020
5
120
100
80
60
40
20
0
0.06€
0.20€
0.13€
0.26€
N/A
106.9%
37.1%
30.7%
72.0%
2016
2017
2018
2019
2020*
*Proposed dividend in total
ADJUSTED EBITA, EUR MILL. AND % OF REVENUE
Target 12-13% Adj. EBITA margin
NET DEBT / ADJUSTED EBITDA
120
100
80
60
40
20
0
16%
56.8
10.4%
73.0
10.6%
87.7
11.8%
115.1
11.2%
101.9
10.3%
5
4
3
2
1
0
TARGET
max
3.5
4.2
2.8
3.8
2.7*
3.0
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
*Before IFRS 16 impact (comparable)
18 ENPS, NET PROMOTER
SCORE OF EMPLOYEES
AND PROFESSIONALS
83 NET PROMOTER SCORE,
NPS IN APPOINTMENTS
18
19
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Value creation model
RESOURCES AND KEY CAPITAL:
BUSINESS MODEL:
OUTPUTS:
CREATED VALUE AND IMPACTS:
PERSONNEL AND COMPETENCE
• We employed more than 13,000 people, of whom more than
5,000 are private practitioners. Our employees include about
1,800 doctors and Bachelors of Medicine, more than 3,200
nurses, 650 dentists and dental hygienists, 610 other health and
well-being professionals, 91 psychologists and psychotherapists,
and more than 740 customer service staff, and nearly 900 people
in administrative or managerial positions.
FINANCIAL
• Net debt excluding IFRS 16 EUR 325.9 million
• Equity EUR 571.4 million
IMMATERIAL
•
ISO 9001: 2015 Quality Certification
• Utilising customer information in the management of medical
quality and promoting public health in society
• Care chains based and developed on evidence-based medicine
• Medical Quality Management Tools: Etydi, Medical Reporting,
and Dashboard
• A strong brand, the most interesting employer among doctors
and healthcare students
• Responsible use of data and artificial intelligence
• Ensuring data protection and data security
SOCIAL
• Good relationships, especially with private practitioners
and other healthcare professionals, investors, suppliers of
materials and services, directly affect our ability to deliver
high quality, personalized health services
• Close cooperation with industry associations, insurance and
pension companies and health insurance funds to promote
We empower people to lifelong health and well-being
Occupational
health
Services
Health care
staffing
e
Doctors, n u r s
Primary and
specialist care
s a n d o ther healthcare pro
f
e
s
si
o
CUSTOMER AND HEALTH CARE SERVICES
• 6.9 mill. customer visits
HEALTH AND WELLBEING
• High quality and efficacy of care and individual-centered services for promoting health
•
3.7 mill. doctor visits for 1.2 mill.
• Utilization of data in managing medical quality and promoting public health in society
individual customers,
(e.g. the results of the mental health care pathway)
• Over 1.8 mill. remote appointments
• Smooth care chains ensure fast access to care and work ability recovery
• Population Health Management
• Decrease in sickness related work absences and the cost of work left undone
Monitoring Tool, PRO professional’s work
• Prevention of illnesses
management application
• Fast access to care: Chat reception to a general practitioner or occupational health practitioner available
•
”In the Best Hands” operating model in
24/7 in 7 seconds on average
taking customer needs into consideration
• High Customer Satisfaction and Net Promoter Score, NPS 83
• My Plan (personal health plan) operating
• Strong patient safety
model in preventive health care
• Corona-related services enable society to remain open
• Medical research: Terveystalo clinical
research, biobank
ACCESS TO CARE AND INNOVATIONS
Outsourcing
Services
WE FIGHT FOR A
HEALTHIER LIFE
n
a
l
s
,
• Trainee programs, recruitment and staff
• Availability of care everywhere in Finland, digital services available 24/7, average Finn lives 8.5
training (A total of 63,864 hours of training
kilometers drive away from Terveystalo unit
was provided)
• Cost savings and improved access to care in publicly funded services
Well-being
services
EMISSION AND WASTE
• Cooperation and partnerships with the public sector - solutions for access to care and productivity
• Carbon footprint 996.4 tonnes
• Digital tools for professionals assist in identifying disease risks and improve the quality and effectiveness of care
• Biobank samples are used in clinical research to determine the causes of diseases and to develop treatments
n
ationwide network a n d d i g it
a l s ervices
Clinical
research
Imaging
and labs
Day surgery
CO2e (Scope 1 & 2)
• Waste 81 tonnes
RESPONSIBLE WORK AND ECONOMIC GROWTH
(mixed and hazardous waste)
• Wages and salaries, EUR 310 million
• Personnel sickness absenteeism rate 3.6 below national average
• Lost work injury frequency rate, LTIR 25, significantly below industry national average
•
eNPS at 18, a good level
• Tax EUR 40 mill.
• Dividends distributed EUR 17 mill.
•
Investments, excl. M&A EUR 33 mill.
• Materials and services purchased EUR 448 mill.
• Financial expenses (net) of EUR 10 mill.
SAFE AND ETHICAL PRACTICES
• We ensure data protection and security by storing patient data in a security-certified patient information
the sharing of best practices and the efficacy of care
KEY OPERATIONAL MANAGEMENT SYSTEMS
DIGITALIZATION AND INNOVATIONS
system
• Good relationships with authorities and decision-makers
support our operations and role in the Finnish healthcare
system
INFRASTRUCTURE
•
•
309 clinics
17 clinic hospitals
• 43 dental clinics
•
53 Rela massage therapy units
NATURAL RESOURCES
• Energy consumption 15,944 MWh (electricity)
• Quality management
• Leading professionals
• Network management
• Digital solutions to improve the clinical,
operational and customer experience
quality
• A model for continuous improvement
• New services and service models
• Managing profitability and growth
Governance structures, policies and controls related to good corporate governance,
Code of Conduct, risk management and compliance.
• The development of ethical operating principles and compliance ensures compliance with laws, regulations
and generally accepted ethical standards.
• Responsible sourcing practices and supplier self-assessments
SUSTAINABLE CONSUMPTION AND CLIMATE WORK
• Reduce travel emissions by developing digital healthcare solutions
• Minimize negative environmental impacts through material efficiency and improved recycling
20
21
TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Terveystalo as an investment – a growth
platform for health and well-being
Terveystalo, a company founded in 2001, has grown through nearly 200 acquisitions into Finland’s largest health care service company. In
recent years, Terveystalo has made some significant investments, particularly in digitalization and customer experience as well as clinical
and operational quality. Terveystalo’s strengths provide it with several channels for growth.
STRONG DRIVERS FOR
MARKET GROWTH
1
THE LARGEST PRIVATE
HEALTH CARE COMPANY
IN THE INDUSTRY
2
3
THE MOST DESIRABLE
EMPLOYER
STRONG PLATFORM WITH
GROWTH POTENTIAL
4
ADDED POTENTIAL FOR
IMPROVED PROFITABILITY
5
Aging population and high rate
of lifestyle diseases increase the
demand for and costs of health
care. Growing interest in health
and well-being, increasing use of
services.
Finland’s largest in terms of
revenue, network, digital footprint
and profitability.
Terveystalo has been chosen as
the most attractive employer
among physicians and health care
students for seven years in a row.
Growing market and market share,
selected acquisitions and a larger
share of customers’ consumption
through increased loyalty.
The leverage effect of operations
as a driver for profitability and
improved conversion in addition to
improving customer engagement.
22
23
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Corporate
governance
At Terveystalo, the highest decision-making power is
exercised by the shareholders at the Annual General
Meeting. The Board of Directors is responsible for
Terveystalo’s administration and the appropriate
organisation of its operations. The Board of Directors
is responsible for ensuring that Terveystalo complies
with good corporate governance principles. The
Board of Directors appoints the CEO who is
responsible for the day-to-day management of the
company in accordance with the instructions and
orders issued by the Board of Directors. The rest of
the Executive Team assists and supports the CEO in
his duties.
24
25
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Corporate Governance Statement
I. INTRODUCTION
Governance at Terveystalo Plc (hereinafter referred to as “Terveystalo” or
the “Company”) is based on applicable laws, the rules and recommenda-
tions of Nasdaq Helsinki Ltd (hereinafter referred to as the “Helsinki Stock
Exchange”), and the Company’s Articles of Association. In addition, the
Company follows the Finnish Corporate Governance Code 2020 (“Cor-
porate Governance Code”), issued by the Securities Market Association
and available on its website at www.cgfinland.fi. Terveystalo complies with
all the recommendations in the Corporate Governance Code. Terveystalo’s
Corporate Governance Statement has been prepared in accordance with the
Corporate Governance Reporting section of the Corporate Governance
Code.
This statement has been reviewed and approved by Terveystalo’s Audit
Committee and Board of Directors, and it has been prepared separately
from the Report of the Board of Directors. The statement is available on
the Company website at: https://www.terveystalo.com/en/investors/Cor-
porate-governance/.
II. DESCRIPTIONS CONCERNING
CORPORATE GOVERNANCE
Terveystalo Plc is a Finnish public limited liability company domiciled in
Helsinki. The parent company, Terveystalo Plc, and its subsidiaries form the
Terveystalo Group (hereinafter referred to as the “Group”). The responsibility
for the administration and operations of Terveystalo Group lies with the
governing bodies of the parent company, Terveystalo Plc. These governing
bodies include the Annual General Meeting, the Board of Directors, and
the CEO. The AGM elects the members of the Board of Directors on the
basis of the proposal of the Shareholders’ Nomination Board consisting of
the largest shareholders. The work of the Board of Directors is aided by two
committees. The Board elects the committee members from amongst its
members. The CEO appointed by the Board manages the operations of
Terveystalo Group, assisted by the rest of the Executive Team. The work of
the Board of Directors, its committees, the CEO, and the rest of the Execu-
tive Team is governed by the Company’s corporate governance principles,
adopted by the Board of Directors. These principles include the Charters
of the Board and its committees, the division of responsibilities between the
decision-making bodies, and the principles concerning the arrangement of
internal control and risk management. The Company’s governance structure
is described below.
TERVEYSTALO’S GOVERNANCE STRUCTURE
GENERAL MEETING
NOMINATION BOARD
AUDIT
BOARD OF DIRECTIORS
AUDIT COMMITTEE
Internal Control and Risk
Management
REMUNERATION COMMITTEE
CHEF EXECUTIVE OFFICER
EXECUTIVE TEAM
dance with the above, the following persons continued as members of
Terveystalo’s Nomination Board from September 6, 2020 onwards: Ris-
to Murto (Varma Mutual Pension Insurance Company), Matts Rosen-
berg (Rettig Group AB), Peter Therman (Hartwall Capital), Olli Lehtilä
(OP Group), and Kari Kauniskangas (Chair of the Board of Directors of
Terveystalo Plc). There were no changes in the composition of the Nomi-
nation Board in 2020.
In its organization meeting held on September 6, 2020, the Nomination
Board re-elected Risto Murto as its Chair. The Shareholders’ Nomination
Board forwarded its proposals for the Annual General Meeting to Terveys-
talo’s Board of Directors on December 10, 2020. In 2020, the Nomination
Board convened 7 times. The attendance rate of members was 100%.
Name
Risto Murto
Olli Lehtilä
Matts Rosenberg
Peter Therman
Kari Kauniskangas
Meetings
7/7
7/7
7/7
7/7
7/7
Attendance rate
100%
100%
100%
100%
100%
ANNUAL GENERAL MEETING
The Annual General Meeting is Terveystalo’s highest decision-making body.
The Annual General Meeting is held annually on a date determined by the
Board of Directors, within six (6) months of the end of the financial year.
The Annual General Meeting deals with matters falling within its com-
petence pursuant to the Finnish Limited Liability Companies Act and
Terveystalo’s Articles of Association, and any possible other matters. An
Extraordinary General Meeting is convened when necessary. More detai-
led information about the Annual General Meeting is provided in Terve-
ystalo’s Articles of Association, which can be found on the company web-
site at: https://www.terveystalo.com/en/investors/Corporate-governance.
The Annual General Meeting for 2020 was held on May 28, 2020. The
decisions of each Annual General Meeting can be found on Terveystalo’s
website at: https://www.terveystalo.com/en/investors/Corporate-gover-
nance/General-Meeting-of-Shareholders/.
SHAREHOLDERS’ NOMINATION BOARD
In accordance with the decision of the Annual General Meeting, the Sharehol-
ders’ Nomination Board (hereinafter referred to as the “Nomination Board”)
annually prepares proposals to the next Annual General Meeting concerning
the number of the Members of the Board and their election and remuneration.
It also identifies candidates for Members of the Board. The Nomination Board
consists of the Chair of the Company’s Board of Directors and, generally,
representatives of the Company’s four largest shareholders. If the ownership
of the Company’s fifth largest shareholder exceeds ten (10) percent of all
the shares and votes in the Company, the five largest shareholders shall be
represented in the Nomination Board. The composition of the Nomination
Board is determined based on the shareholdings on the first bank day in
September each calendar year. The Chair of the Board of Directors convenes
the first meeting of the Nomination Board. The Nomination Board elects a
Chair from amongst its members. Subsequent meetings of the Nomination
Board are convened by the elected Chair. If more than half of the members of
the Nomination Board are present, they constitute a quorum. The Nomination
Board has a written Charter which includes a more detailed description of
the election process and the duties of the Nomination Board members as
well as the procedures of the Nomination Board’s meetings. A description
of the main contents of the Charter of the Nomination Board can be found
on the Company website at: https://www.terveystalo.com/en/investors/
Corporate-governance/shareholders-nomination-board/.
In accordance with shareholdings on September 1, 2020, Terveystalo’s
Nomination Board consists of the representatives of the Company’s four
largest shareholders and the Chair of the Board of Directors. In accor-
26
27
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
BOARD OF DIRECTORS
According to Terveystalo’s Articles of Association, the Board of Directors
has a minimum of five (5) and a maximum of eight (8) ordinary members.
The Annual General Meeting of Shareholders elects the members of the
Board of Directors. The Board of Directors elects the Chair from among their
members. In 2020, the Annual General Meeting elected seven members
to the Board of Directors:
• Dag Andersson, born in 1961, BBA, MBA,
main occupation: XVIVO Perfusion, CEO
• Lasse Heinonen, born in 1968, M. Sc. (Econ.),
main occupation: Ahlström Capital, CEO
• Kari Kauniskangas (Chair), born in 1962, M. Sc. (Econ.),
main occupation: Board Professional
• Åse Aulie Michelet, born in 1952, M. Sc. (Pharm.),
main occupation: Board Professional
• Niko Mokkila, born in 1979, M.Sc. (Tech.), M.Sc. (Econ.)
main occupation: Hartwall Capital Ltd, Managing Director
• Katri Viippola, born in 1976, Executive MBA, Master of Arts,
main occupation: Varma Mutual Pension Insurance Company,
SVP, HR, Communications and Corporate Social Responsibility
• Tomas von Rettig, born in 1980, BBA, CEFA,
main occupation: Rettig Group Ltd, Chair of the Board
All the members of the Board are independent of the Company. Kari
Kauniskangas, Dag Andersson, Lasse Heinonen, and Åse Aulie Michelet
are independent of major shareholders of the Company. According to the
Board of Directors’ assessment, the following members of the Board are
not independent of major shareholders of the Company due to their main
occupation: Niko Mokkila (Managing Director of Hartwall Capital Ltd),
Katri Viippola (Varma Mutual Pension Insurance Company, SVP, HR,
Communications and Corporate Social Responsibility) and Tomas von
Rettig (Rettig Group Ltd, Chair of the Board).
In accordance with the decision of the Annual General Meeting of 2019,
Kari Kauniskangas (Chair), Dag Andersson, Paul Hartwall, Lasse Heino-
nen, Olli Holmström, Åse Aulie Michelet, Katri Viippola, and Tomas von
Rettig were members of the Board of Directors until May 28, 2020.
HOLDINGS OF THE BOARD MEMBERS AND THEIR CONTROLLED ENTITIES IN
THE GROUP, DECEMBER 31, 2020
Kari Kauniskangas
Dag Andersson
Lasse Heinonen
Åse Aulie Michelet
Niko Mokkila
Katri Viippola
Tomas von Rettig
7,990
3,467
13,161
27,530
1,772
4,906
6,161
DIVERSITY OF THE BOARD OF DIRECTORS
The Company’s principles concerning the diversity of the Board of Directors
came into effect on September 27, 2017. The Company regards the diversity
of the Board of Directors as a material contributing factor in achieving the
Company’s strategic targets. The work of the Board of Directors requires
understanding of differences in cultures, values, and business practices.
Diversity is assessed from different perspectives, including age, gender,
education, and professional background. Both genders shall be represented
on the Board of Directors. In planing the composition of the Board of Direc-
tors, the Shareholders’ Nomination Board considers the composition of the
Board from the perspective of the Company’s current and future business
needs, taking into account the diversity of the Board. In 2020, the Company’s
Board of Directors met the diversity criteria. The age span of Board members
is 40–68 years. Two of the Board members are women and five are men.
DESCRIPTION OF THE WORK OF THE BOARD OF DIRECTORS
The Board of Directors has adopted a written Charter of the Board on
January 23, 2018. It supplements the provisions of the Articles of Association
and the applicable laws and regulations. The Charter of the Board of Dire-
ctors describes the Board’s composition, election process of the directors,
responsibilities of the Board, meeting arrangements, and reporting to the
Board of Directors. The CEO attends Board meetings. The Chief Financial
Officer (CFO), General Counsel, and other members of the Executive
Team attend Board meetings upon invitation by the Board of Directors.
The Board of Directors has general competence to decide and to act in
matters that do not fall within the competence of the Annual General Mee-
ting or the CEO’s general authority under law or the Company’s Articles
of Association. The Board of Directors is responsible for the Company’s
governance and the appropriate arrangement of its operations. In addition,
the Board of Directors is responsible for ensuring appropriate supervision of
the Company’s accounting and asset management. The Board of Directors
decides on matters of principle and on any issues that could have broad-ran-
ging implications for the Company. It decides on major corporate plans
and transactions. The Board of Directors also establishes limits for capital
expenditure, investments, divestments, and financial commitments. The
Board of Directors’ responsibilities also include reviewing and approving
the strategic objectives and strategic plans of the Company and its various
business functions as well as monitoring their implementation. The Board
of Directors also reviews and approves the Company’s financial targets.
In addition, the Board of Directors monitors and assesses the Company’s
financial reporting system, approves the Company’s financial reports, and
monitors the Company’s external audit process. It also ensures that the
Company has defined the operating principles of internal control, internal
auditing, and risk management, and monitors compliance with these prin-
ciples. In all situations, the Board of Directors shall act in the best interest
of the Company and its shareholders. The Board of Directors appoints and
dismisses the CEO, supervises the CEO’s actions, and approves the CEO’s
service contract. It also approves the CEO’s remuneration and other benefits
upon the recommendation of the Remuneration Committee, within the
framework of the Remuneration Policy presented to the Annual General
Meeting. Upon the proposal of the CEO, the Board of Directors appoints
the rest of the Executive Team reporting directly to the CEO and approves
their service contracts and remuneration based on the recommendation of
the Remuneration Committee. In addition, the CEO shall consult the Chair
of the Board of Directors on dismissal of members of the Executive Team
reporting directly to the CEO. The number of terms or the age of Board
members has not been limited. A description of the main contents of the
Charter of the Board of Directors can be found at: https://www.terveystalo.
com/en/investors/Corporate-governance/Board-of-Directors/.
The Board of Directors may establish committees to support the Board
with the preparation and performance of its duties and responsibilities. The
Board of Directors determines the size and composition of such commit-
tees and approves their charters.
In 2020, the Board of Directors convened 19 times. The average atten-
dance rate at Board meetings was 98 percent. Attendance rate by member
is shown in a separate table under Attendance of Board members at Board
and Committee meetings in 2020.
The Audit Committee consists of at least three members appointed by
the Board of Directors. The Audit Committee has a Chair, elected by the
Board of Directors. The members of the Audit Committee must meet the
expertise and independence criteria and other criteria applicable to Audit
Committee members of publicly listed companies in Finland. These provide,
for example, that the majority of the Audit Committee members shall be
independent of the Company, and at least one member shall be independent
of the major shareholders of the Company.
Lasse Heinonen served as Chair of the Audit Committee, and Paul
Hartwall and Olli Holmström served as Committee members until May
28, 2020. As of May 28, 2020, Committee members comprised Niko Mok-
kila and Tomas Von Rettig. Lasse Heinonen continued as the Chair. The
Audit Committee convened 5 times in the financial year 2020. The average
attendance rate of the Committee members was 100 percent. Attendance
rate by member is shown in a separate table under Attendance of Board
members at Board and Committee meetings in 2020.
COMMITTEES OF THE
BOARD OF DIRECTORS
The Company’s Board of Directors has established two committees to
improve the efficacy of the work of the Board: the Audit Committee and
the Remuneration Committee.
AUDIT COMMITTEE
The Audit Committee carries out its responsibilities under its Charter adopt-
ed by the Board of Directors on January 23, 2018. The Audit Committee
assists the Board of Directors in performing and monitoring its supervisory
duties related to the financial reporting process and auditing. In addition,
the Audit Committee assists the Board of Directors in supervising matters
related to financial reporting, internal control, internal auditing, and risk
management. The Audit Committee monitors the financial reporting
processes, the quality and integrity of the financial statements and other
financial reports, and the Company’s financial performance. In addition, the
Audit Committee monitors the statutory audit of the financial statements,
consolidated financial statements, and the annual, half-year, and interim
reports. The Audit Committee also monitors the efficiency of the Company’s
internal control, internal auditing, and risk management systems and assesses
the performance of internal auditing. Furthermore, the Audit Committee
evaluates the qualifications and independence of the external auditor and, in
particular, the provision of non-audit services to the Company, prepares the
proposal for the election of the external auditor, and monitors compliance
with laws and regulations. The Audit Committee prepares the proposal for
the remuneration and election or re-election of the external auditor and
submits its recommendation for the appointment of the external auditor to
the Board of Directors. In addition, the Audit Committee shall ensure that
the Board of Directors is aware of matters which may significantly impact
the Company’s financial condition or business operations. A description of
the main contents of the Charter of the Audit Committee can be found
at: https://www.terveystalo.com/en/investors/Corporate-governance/
Board-of-Directors/.
REMUNERATION COMMITTEE
The Remuneration Committee carries out its responsibilities under its Char-
ter adopted by the Board of Directors. The Charter of the Remuneration
Committee came into effect on January 23, 2018. The Remuneration Com-
mittee of the Board of Directors identifies individuals qualified to serve as the
CEO of the Company and gives its recommendation on the appointment
of the CEO to the Board of Directors. It also assists the Board of Directors
with any major management reorganizations based on the preparation and
proposals by the CEO. The Remuneration Committee assists the Board of
Directors with the evaluation and remuneration of the CEO and the rest of
the Executive Team reporting directly to the CEO, oversees the Company’s
remuneration policies, schemes, and plans, as well as reviews appropriate
succession planning procedures for the Executive Team. A description of
the main contents of the Charter of the Remuneration Committee can be
found at: https://www.terveystalo.com/en/investors/Corporate-governance/
Board-of-Directors/.
The Remuneration Committee consists of a minimum of three mem-
bers elected by the Board of Directors from among its number. The mem-
bers of the Remuneration Committee must meet the independence crite-
ria applicable to such committee members of publicly listed companies in
Finland, including that the majority of the members of the committee must
be independent of the Company. Remuneration Committee members
must possess the expertise and experience required for the performance of
the duties and responsibilities of the Remuneration Committee. Desirable
qualifications for members of the Remuneration Committee include expe-
rience in business management, corporate governance, human resources
management, and personnel and executive remuneration.
The Remuneration Committee establishes its own schedule and meets
as frequently as necessary to carry out its responsibilities under its Charter,
and in any event at least twice a year.
Kari Kauniskangas is Chair of the Remuneration Committee and Dag
Andersson, Åse Aulie Michelet, and Katri Viippola are Committee mem-
bers. The Remuneration Committee convened 7 times during the financial
year. The average attendance rate of the Committee members was 100
percent. Attendance rate by member is shown in a separate table under
Attendance of Board members at Board and Committee meetings in 2020.
28
29
TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
ATTENDANCE OF BOARD MEMBERS AT BOARD AND COMMITTEE MEETINGS IN 2020
GROUP ORGANIZATION
•
•
NAME
Kari Kauniskangas
Dag Andersson
Lasse Heinonen
Niko Mokkila
Åse Aulie Michelet
Katri Viippola
Tomas von Rettig
Members of the Board of Directors until May 28, 2020:
Paul Hartwall
Olli Holmström
* Attendance rates cover meetings held during each member’s term of office.
ATTENDANCE AT BOARD
MEETINGS*
ATTENDANCE AT AUDIT
COMMITTEE MEETINGS*
ATTENDANCE AT REMUNERATION
COMMITTEE MEETINGS*
19/19
16/19
19/19
12/12
19/19
18/19
19/19
7/7
7/7
5/5
3/3
3/3
2/2
2/2
7/7
7/7
7/7
7/7
Mikko Tainio, born in 1979, M.Sc. (Econ), Senior Vice President,
Public Partnerships since November 1, 2020
Pia Westman, born in 1965, PhD, Senior Vice President,
Wellbeing, Diagnostics and Digital Services
518
23,594
The following persons have been members in the Executive Team during
2020: Susanna Laine until January 2020, Julia Ormio until January 2020,
Jens Jensen until May 2020, as well as Laura Räty until November 2020.
In addition, the following changes in the Executive Team have been
published or have taken place as per the date of this review: Marja-Leena
Tuomola has been appointed Senior Vice President, Corporate Health at
Terveystalo and member of the Executive Team as of 1 January 2021. Petri
Keksi has been appointed Senior Vice President, Growth Businesses and
member of the Executive Team as of 1 January 2021. Veera Siivonen has
been appointed Senior Vice President, Consumer Business as of 1 January
2021. Siina Saksi has been appointed COO of Terveystalo as of 1 January
2021. Pia Westman, who previously was responsible for Well-being, Diag-
nostics and Digital Services business area, was appointed to lead separate
strategic growth projects as of 1.1.2021.
The current information on the Executive Team shall be found from
the Company’s website: https://www.terveystalo.com/en/Company/Con-
tact-information/Management/.
Biographical details of the Executive Team members are provided
below under Group Management.
The Executive Team meets once or twice a month or as needed. It
assists the CEO with tasks such as the preparation and execution of the
Company strategy, business plans, matters of principle, and any other
important matters. In addition, the rest of the Executive Team assists the
CEO in ensuring the flow of information and working internal cooperation.
The Company’s Board of Directors decides on the nomination and remu-
neration of Executive Team members.
CHIEF EXECUTIVE OFFICER
The CEO is responsible for the day-to-day management of the company and
for implementing the Company strategy in accordance with the instructions
and orders issued by the Board of Directors. The CEO undertakes the
execution of measures approved by the Board of Directors and oversees
preparations for strategically important measures. The CEO ensures that
the management of the Company is adequately arranged, and that the
Company’s accounting complies with the applicable legislation. The CEO
also ensures the appropriate arrangement of the Company’s administration
and asset management. Ville Iho has served as the CEO for Terveystalo
since late 2019. Biographical details of the CEO are provided below under
Group Management.
GROUP EXECUTIVE TEAM AND MANAGEMENT SYSTEM
The Company’s CEO serves as the Chair of the Executive Team. In 2020,
the Executive Team also included the Chief Medical Officer and the Officers
and Senior Vice Presidents responsible for digitalization, finances, HR, legal
matters, communications, marketing, and the various business lines. The
share holdings of the members of the Executive Team and their controlled
entities on December 31, 2020 are presented below.
Ville Iho, born in 1969, M.Sc. (engineering)., CEO
Petri Bono, born in 1970, MD, oncologist,
Adjunct Professor, Chief Medical Officer
Tomi Gustafsson, born in 1978, Master of Arts (Education),
Interim SVP, Corporate Health since May 13, 2020
Juha Juosila, born in 1972, M. Sc. (Econ), Chief Digital Officer
Ilkka Laurila, born in 1977, M. Sc. (Econ), M. Sc. (Forestry),
Chief Financial Officer
Siina Saksi, born in 1966, M. Sc. (Econ), EMBA,
Senior Vice President, Private Customers and Clinics
Elina Saviharju, born in 1981, LL.B, LL.M (Harvard), Senior Vice
President, Legal, General Counsel since May 11, 2020
Veera Siivonen, born in 1980, M. Sc. (Tech), Senior Vice President,
Marketing and Communications since May 1, 2020
Minttu Sinisalo, born in 1980, M. Sc. (Econ), Senior Vice President,
Human Resources since January 1, 2020
0
0
0
87,435
304,900
50,559
0
348
0
30
TERVEYSTALO PLC – THE PARENT COMPANY OF THE GROUP
TERVEYSTALO HEALTHCARE HOLDING OY – FINANCING
TERVEYSTALO HEALTHCARE OY – GROUP’S CENTRALIZED PROCUREMENT
SUOMEN TERVEYSTALO OY AND OTHER OPERATIVE
COMPANIES – THE OPERATIVE BUSINESS
The CEO, CFO, and General Counsel usually serve as members of the
subsidiaries’ Board of Directors. From the perspective of business ope-
rations, the Group subsidiaries operate in accordance with the Group’s
management system. The Group’s operative business activities are mainly
carried out by Suomen Terveystalo Oy, Terveystalo Julkiset Palvelut Oy
and Terveystalo Kuntaturva Oy. Terveystalo Healthcare Oy is the Group’s
purchasing company.
III. DESCRIPTIONS OF INTERNAL
CONTROL PROCEDURES AND
THE MAIN FEATURES OF RISK
MANAGEMENT SYSTEMS
RISK MANAGEMENT
Risk management is part of Terveystalo’s management system. The Compa-
ny applies a risk management policy adopted by the Board of Directors. The
purpose of risk management is to ensure fulfillment of the customer promise,
patient and occupational safety, high quality of the operations, financial
performance, business continuity, a good public image of the Company,
and corporate social responsibility.
Risk management is an integral part of the planning processes as well
as the monitoring and reporting routines in Terveystalo Group. It is imple-
mented in the day-to-day management and activities at all levels of the
organization. Risk management must be consistent and commensurable. It
is important to understand the causes and consequences of risks and to en-
sure that the risk management measures are correct and properly targeted.
The objectives of risk management include, among others:
• Ensuring business continuity
• Ensuring the achievement of strategic and operative objectives
• Managing risks associated with financial transactions
• Supporting decision-making
• Ensuring top quality care and patient safety
• Ensuring employees’ expertise and occupational safety
• Avoiding operational risks and risks of damage and minimizing
damage if a risk is realized
• Ensuring data security, data protection, and environmental
responsibility
Improving risk awareness within the organization
Identifying opportunities associated with risk-taking, improving risk
tolerance
Identifying development opportunities within the operations
•
• Gaining the trust of external and internal stakeholders
Terveystalo strives to proactively identify, analyze and manage major risks.
Risk management is an integral part of management. It contributes to strategic
development, helps managers make informed choices, puts measures in an
order of priority, takes into account opportunities, uncertainties, and their
effects, and distinguishes between alternative approaches.
The Board of Directors is responsible for risk management and its ade-
quacy and adopts the risk management policy. The CEO is responsible for
organizing risk management in the Group. The rest of the Executive Team
support the CEO in implementing risk management, monitoring operatio-
nal risks, assessing risks, and implementing measures related to risks.
RISK MANAGEMENT PROCESS
Risks are assessed on all levels of Terveystalo Group’s organization.
Terveystalo identifies risks using, for example, performance indicators, market
statistics, effectiveness data, customer feedback, register data, inspection
reports and inquiries from the authorities, occupational safety risk surveys,
incident information, results of internal audits and audits, and competitor
information.
INTERNAL CONTROL
In its operations, the Company applies a risk management and internal control
policy, adopted by the Board of Directors. The objectives of internal control
related to the financial reporting process are to ensure that Terveystalo’s
financial reporting is reliable; that interim reports and financial statements are
prepared in accordance with the accounting principles and policies applied
by Terveystalo and give essentially correct information of the Company’s
finances; and that regulations and principles are complied with. Internal
control is based on Terveystalo’s risk management system, business culture,
and respective practices. The Company values, Code of Conduct, and
Group policies and principles, such as the risk management and internal
control policy, financial policy, procurement policy, credit policy, disclosure
policy, and approval authorizations, guide the internal control. The purpose
of compliance is to ensure compliance with corporate governance principles
throughout the Company and the accuracy of financial reporting. It aims
to create a uniform control environment by applying appropriate internal
control principles in the various business processes. Terveystalo is using
WhistleB, a whistleblower system open for everyone. This channel enables
anonymous reporting of observed or suspected misconduct at: www.report.
whistleb.com/terveystalo.
Generally, financial reporting-related policies are owned by the Chief
Financial Officer. Internal control is carried out by the Board of Directors,
Audit Committee, operational management and, in respect of the financial
reporting process, the employees in financial administration. Terveystalo’s
Board of Directors bears overall responsibility for internal control and risk
management in the Company. The Board of Directors has delegated the
practical implementation of an efficient control environment and control
measures related to the reliability of financial reporting to the CEO. The
Chief Financial Officer is responsible for the control environment of finan-
cial reporting. The CFO acts as the owner of reporting risks, reporting to
the Audit Committee and the Board of Directors on risk management and
31
TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
internal control. Control involves various measures, such as the revision of
financial reports, the balancing of accounts, subledgers, and system tran-
sfers, logical analyses of reported figures, and reference analyses of fore-
casts and realizations. Monitoring of monthly performance in relation to the
specified targets is an essential factor. These control measures are carried
out at different organizational levels.
IV. OTHER INFORMATION
PROVIDED IN THE STATEMENT
INTERNAL AUDIT
The primary objective of internal audit is to support the Board of Directors,
other corporate bodies, and the management in performing their control
duties. The Company has outsourced internal audit to be carried out by aut-
horized public accountants. On the basis of a report drafted by the authorized
public accountants, the Company adopts a plan of appropriate measures and
monitors the fulfillment of that plan. The internal audit function reports to
the Audit Committee on the audits carried out in accordance with its annual
audit plan. The report will be brought before the Board of Directors if deemed
necessary by the Audit Committee.
The key principles applied in the Company’s internal audit are the prin-
ciples of independence, objectivity and confidentiality. The purpose of in-
ternal audit is to produce impartial and independent information for the Bo-
ard of Directors and the management. Internal audit focuses, in particular,
on issues that are important both in the long and short term from the pers-
pective of strategy, business, and operations. When preparing the audit plan
and establishing the scope and focus areas of internal audit, the following
matters are typically considered: business-driven internal audit, internal au-
dit relating to the Company’s risks and strategy execution, and internal audit
focusing on Corporate Governance and Compliance. The planning and risk
assessment process of internal audit also includes reviewing the annual plans
and work results of the other second line of defense players. In 2020, audits
were conducted on a strategic development project, Core, management of
the COVID-19 pandemic as well as ensuring continuity. The planned focus
areas for audits in 2021 include IT and digital development processes and
the payroll process. Terveystalo’s quality system has been certified in accor-
dance with the ISO 9001:2015 standard. Compliance is assessed regularly
through internal audits and audits conducted by an external accredited par-
ty. The Company’s internal quality function ensures that the organization
complies with the quality standards in accordance with the certificate.
RELATED PARTY TRANSACTIONS
To identify related party transactions, the Company keeps a record of the
individuals and legal persons falling amongst its related parties. According
to the Company’s definition, related parties include the Group companies,
members of the Board of Directors, the CEO and the rest of the Management
Team, including close family members of the aforementioned as well as
entities in which the aforementioned have control, joint control, or significant
influence. In agreements and other legal acts between the Company and its
related parties, the ordinary course of business of the Company and market
conditions shall be followed. If a transaction with the Company’s related
32
parties were not part of the ordinary course of business of the Company or
if it deviated from arm’s length terms, the decision on entering such related
party transaction should be made by the Company’s Board of Directors. With
regard to agreements or other legal acts between the Company and its related
parties, provisions on conflicts of interest shall be observed, as applicable, and
the persons connected to the related party in question shall not participate in
the decision-making process regarding the related party transaction.
The Company’s financial administration monitors related party transac-
tions as part of the Company’s normal reporting and control procedures and
submits regular reports on related party transactions to the Audit Commit-
tee. The Audit Committee monitors and evaluates transactions between
the Company and its related parties to ensure that they are in the ordinary
course of business and at arm’s length. Material transactions between the
Company and its related parties are presented annually in Notes to the
Consolidated Financial Statements.
MAIN PROCEDURES OF INSIDER MANAGEMENT
Terveystalo complies with the EU Market Abuse Regulation (MAR), the
Finnish Securities Markets Act, the guidelines and regulations issued by the
European Securities and Markets Authority (ESMA) and the Finnish Financial
Supervisory Authority (FIVA), and the Guidelines for Insiders published by
Nasdaq Helsinki Oy. The insider policy adopted by the Company’s Board
of Directors supplements the applicable insider regulation and specifies the
procedures of the Company’s insider management.
The Company has identified persons in charge of insider management
tasks and their substitutes. The Company does not have a permanent, com-
pany-specific insider list. Instead, it has project-specific insider lists. In accor-
dance with MAR, the Company has specified the members of the Board of
Directors, the CEO, the CFO, and the Senior Vice President, Legal as exe-
cutives until the end of 2020. The executives must specify the persons and
communities closely associated with them and disclose them to Terveystalo
as their related parties. Terveystalo’s executives and their related parties
must report to the Company and FIVA their transactions with Terveystalo’s
financial instruments that exceed the limit specified by FIVA for a calendar
year (EUR 5,000). Terveystalo has recommended that executives and their
related parties report all transactions with Terveystalo’s financial instruments
to the Company, regardless of whether the abovementioned threshold is
met or not. Terveystalo publishes all executive transactions reported to the
Company in a stock exchange release. The executives and persons involved
in the preparation of the Company’s financial reviews, i.e., those who partici-
pate in the preparation or publication of interim reports and annual financial
statements/financial statement releases shall not, directly or indirectly, carry
out transactions with the Company’s financial instruments themselves or on
behalf of a third party, or advise anyone to do so, during a silent period of
30 calendar days preceding the publication of the Company’s each interim
report and annual financial statements release and on the date of publication
of such a report.
AUDITOR
The Company’s auditor in 2020 was Authorised Public Accountants KPMG
Oy Ab. APA Henrik Holmbom, elected by the Annual General Meeting
2020, served as the auditor in charge starting from May 28, 2020, preceded
by APA Jari Härmälä (both from KPMG Oy Ab). Auditor’s fees paid in 2020
for statutory audit totaled EUR 145,500, and fees paid for other services
totaled EUR 22,100. Auditor’s fees are presented without VAT.
GROUP MANAGEMENT
Board of Directors
KARI KAUNISKANGAS
DAG ANDERSSON
LASSE HEINONEN
ÅSE AULIE MICHELET
b. 1962, M.Sc. (Econ.), Finnish citizen
b. 1961, BBA, MBA, Swedish citizen
b. 1968, M.Sc. (Econ.), Finnish citizen
Chairman of Terveystalo’s Board of Di-
rectors since 2019. Independent of the
company and its major shareholders.
Member of Terveystalo’s Board of Di-
rectors since 2019. Independent of the
company and its major shareholders.
Member of Terveystalo’s Board of Di-
rectors since 2018. Independent of the
company and its major shareholders.
Committees:
Chairman of the Remuneration Com-
mittee, member of the Shareholders’
Nomination Board
Committees:
Member of the Remuneration
Committee
Main occupation:
CEO, XVIVO AB
Relevant work history:
2008–2018 Diaverum AB (formerly
Gambro Health Care), President and
CEO, 1998–2007 Mölnlycke Health
Care AB, multiple executive positions,
most recently President of the Surgical
Division
Main positions of trust:
Member of the Board of Directors of:
2014–2020 Nolato AB, 2018– GHP AB
and 2018– 2020 XVIVO AB
Main past positions of trust:
2018–2019 Diaverum Arabia, Chairman
of the Board of Directors, 2009–2011
Terveystalo, Member of the Board of
Directors
Main occupation:
Board professional
Relevant work history:
2008–2017, Fiskars Corporation,
President and CEO; 1999–2007, Amer
Sports Corporation, multiple executive
positions, most recently Senior Vice
President, Sales & Distribution and
Head of Winter & Outdoor Division
Main positions of trust:
Chairman of the Board of Directors
of: 2020– Ahlström Capital Oyj and
2019– Veho Oy Ab. Member of the
Board of: 2018– Luhta Sportswear
Company Oy, 2017– O.Mustad &
Son A.S., 2020– CAP Group Oy and
2020– Cura of Sweden AB.
Main past positions of trust:
2018– 2019 Raisio Plc, Vice Chairman
of the Board of Directors, 2008–2010
Wärtsilä Corporation, Member of the
Board of Directors
Committees:
Chairman of the Audit Committee
Main occupation:
2018– Ahlström Capital, CEO
Relevant work history:
2011–2018 Tieto Plc, Executive Vice
President, CFO, 2015–2016 Tieto Plc,
Head of Telecom, Media and Energy.
2004–2011 Leadership roles in Finnair,
e.g. EVP Cargo & Aviation Services,
Deputy CEO and CFO. 1992–2004
Various leadership roles in Novartis
Pharma and Sandoz in Finland, Turkey,
and Switzerland in finance and supply
chain management
Main positions of trust:
Member of the Board of Directors in
Ahlstrom-Munksjö Plc, Olvi Plc, Enics
Ag and Destia Oy
Main past positions of trust:
Member of the Board of Directors in
Are Oy
b.1952, M. Sc. Pharm. Norwegian
citizen
Member of Terveystalo’s Board of Di-
rectors since 2016. Independent of the
company and its major shareholders.
Committees:
Member of the Remuneration
Committee
Main occupation:
Board professional
Relevant work history:
Managing Director of Teres Medical
Group AS, CEO of Marine Harvest
ASA (now Mowi ASA), and Senior Ma-
nagement positions at GE Healthcare
Main positions of trust:
Chairman of the Board of Directors at
Inven2 AS, SpinChip Diagnostics AS,
CSAM Health AS and BI Norwegian
Business School, Member of the Board
of Directors of Odfjell SE
Main past positions of trust:
Chairman of the Board of Directors
of Photocure ASA, Member of the
Board of Directors of Royal Greenland
AS, Cermaq ASA, Norske Skog ASA,
Orkla ASA, and Yara ASA
33
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
GROUP MANAGEMENT
Board of Directors
GROUP MANAGEMENT
Executive team
NIKO MOKKILA
KATRI VIIPPOLA
TOMAS VON RETTIG
b. 1979, M. Sc. (Tech.), M. Sc. (Econ.),
Finnish citizen
b. 1976, Executive MBA, Master of
Arts, Finnish citizen
Member of Terveystalo’s Board of Dire-
ctors since 28 May 2020. Independent
of the company. Not Independent of
the major shareholders of the company
due to main occupation.
Member of Terveystalo’s Board of
Directors since 2018. Independent of
the company. Not Independent of the
major shareholders of the company
due to main occupation.
Committees:
Member of the Audit Committee since
28 May 2020
Committees:
Member of the Remuneration
Committee
Main occupation:
Managing Director, Head of
Investments, Hartwall Capital Oy Ab
Relevant work history:
Altor Equity Partners 2007–2019: mul-
tiple positions, most recently Director,
Merrill Lynch 2005–2007: Analyst
Main positions of trust:
2020– Konecranes Plc, Member of the
Board of Directors, 2019 - Remeo Oy,
Member of the Board of Directors, 2019 -
LeaseGreen Group Oy, Chairman of the
Board of Directors, 2016– Realia Group
Oy, Member of the Board of Directors
Main past positions of trust:
2018–2019 Trioplast Industrier AB,
Member of the Board of Directors
Main occupation:
2016– Varma Mutual Pension Insurance
Company, SVP, HR, Communications,
and Corporate Social Responsibility
Relevant work history:
2013–2015 Keva, HR and Administra-
tive Director, HR Director. 2008–2013
Yle (Finnish Broadcasting Company),
Head of Personnel Development, HR
Manager, HR Consultant. 2002–2008
Yle, Yle News and Aamu-tv morning
show, Journalist and News Anchor
Main positions of trust:
The Finnish Broadcasting Company Yle,
Vice Chairman of The Board, Economy
and youth TAT, Board Member
b. 1980, BBA (Bachelor of Business Ad-
ministration), CEFA (Certified European
Financial Analyst), Finnish citizen
Vice Chairman of Terveystalo’s Board
of Directors since 2018. Independent of
the company. Not Independent of the
major shareholders of the company due
to main occupation.
Committees:
Member of the Audit Committee since
28 May 2020
Main occupation:
2019– Rettig Group Ltd, Chairman of
the Board
Relevant work history:
2016–2019 Rettig Group Ltd., President
& CEO. 2008–2016 Rettig Group Ltd.,
several leadership positions. 2006–2008,
2006–2008 Skandinaviska Enskilda
Banken Ab (publ), Middle Office
Main positions of trust:
Purmo Group Ltd., Chairman of the
Board, EQ Plc, Member of the Board
of Directors
Main past positions of trust:
Nordkalk Ltd., Bore Ltd., Roof Productions
Ltd, Chairman of the Board. Finlayson
Ltd., Member of the Board of Directors
CHANGES IN THE MEMBERS
OF THE BOARD OF DIRECTORS
Paul Hartwall and Olli Holmström were
Members of the Board of Directors until
28 May 2020 In accordance with the
Annual General Meeting’s resolution.
Paul Hartwal
Information presented as per 28 May
2020. b. 1981, M. Sc. (Econ.), Finnish
citizen. Member of Terveystalo’s Board
of Directors 2019–2020. Independent
of the company. Not Independent of
the major shareholders of the company
due to positions of trust. Committees:
Member of the Audit Committee until 28
May 2020. Main occupation: Kusinkapital
Ab, CEO. Relevant work history: 2008–
Kusinkapital Ab, CEO. Main positions of
trust: Member of the Board of Directors
of 2010– Hartwall Capital Oy Ab and
2009– Ultivista Oy. Main past positions
of trust: 2019–2020 Hoivatilat Plc and
2014–2017 Sponda Plc, Member of the
Board of Director
Olli Holmström
Information presented as per 28 May
2020. b. 1960, M.Th., Finnish citizen.
Member of Terveystalo’s Board of
Directors 2017–2020. Independent of
the company. Not Independent of the
major shareholders of the company
due to main occupation. Committees:
Member of the Audit Committee until 28
May 2020. Main occupation: CEO of the
Helsinki Deaconess Institute Foundation
sr. Relevant work history: Nokia Plc,
Director, HR of the CTO unit, multiple
senior positions in human resources
management at Nokia Plc. Main
positions of trust: Member of the Board
of Directors of Suomen Diakoniaopisto
Ltd, Diaconia University of Applied
Sciences Ltd, Finnish Association of
Private Care Providers, Chairman of the
Board of Directors of Helsinki Deaconess
Institute Hoiva Ltd. Main past positions
of trust: Chairman of the Board of Diacor
Terveyspalvelut Ltd and Cecilia Hoiva
Ltd.; Chairman of the Finnish Association
of Private Care providers, Member
of the Board of the Confederation of
Finnish Industries, Vice Chairman of the
Executive Committee of the Association
for Finnish Work, Member of the Board
of Medix Laboratoriot Ltd, Joint Medix
Laboratoriot Ltd, Chairman of the Board
of Rinnekoti Foundation sr.
VILLE IHO, CEO
PETRI BONO, CHIEF MEDICAL OFFICER
b.1969, M.Sc. (engineering), Finnish
citizen
b. 1970, MD, oncologist, adjunct
professor, Finnish citizen
President and Chief Executive Officer
from December 6, 2019.
Chief Medical Officer and member of
the Management Group since 2019.
Relevant work history:
CEO of Nurminen Logistics Plc, mul-
tiple managerial positions at Finnair,
most recently as COO, Deputy CEO,
and acting CEO
Main positions of trust:
The Finnish Association of Private
Care Providers, Member of the Board
of Directors (from 1 January 2021
onwards Chairman of the Board). From
1 January 2021 onwards Confederation
of Finnish Industries (EK), Member of
the Executive Committee and of the
Labor Committee
Relevant work history:
Hospital District of Helsinki and Uu-
simaa (HUS), Deputy Chief Medical
Officer, Helsinki University Central
Hospital (HUCH), Chief Medical
Officer, HUS Comprehensive Cancer
Center, Director
Main positions of trust:
Association of Finnish Private
Healthcare Providers, Member of the
Board; Finnish Medical Association,
Member of the Quality Council;
TILT therapeutics, Oncorena and
Faron Pharmaceuticals, member of
the Scientific Advisory Board; Instru
Science Foundation, Vice Chairman of
the Board
Main past positions of trust:
HUS Kiinteistöt Oy, HYKS Instituutti
Oy, Board member; Orion Research
Foundation, Vice Chairman of the
Board
TOMI GUSTAFSSON, INTERIM SENIOR VICE
PRESIDENT, CORPORATE HEALTH
b. 1978, Master of Arts (Education),
Finnish citizen
Deputy Senior Vice President,
Corporate Health and member of the
Management Group 13 May 2020 - 31
December 2020.
Relevant work history:
Terveystalo, Business Director for
Customers, Corporate Health, Sales
and Insurance Business; Terveystalo,
Director, Corporate Health for
Western and Central Finland;
Terveystalo, Unit Director for Turku
District. Several leadership positions
In the insurance business, the most
recent being Director, Broker and
Public Business with If, member of the
Management Board for Corporate
Business with If, as well as member of
the Management Board of the Nordic
Broker Business with If
JUHA JUOSILA, CHIEF DIGITAL OFFICER
b. 1972, M.Sc. (Econ.), Finnish citizen
Chief Digital Officer since 2016,
member of the Management Group
since 2016.
Relevant work history:
Director of Business Development
and Strategy at Sanoma Pro Ltd, Chief
Marketing and Technology Officer at
Realia Group Oy, several managerial
positions at MTV Sisällöt Oy (MTV 3)
and Sonera Plc.
Main positions of trust:
Member of the Board of Directors
at Etsimo Healthcare Oy until 21
December 2020
Main past positions of trust:
Member of the Board of Directors of
Realia Isännöinti Oy, Huoneistokeskus
Oy, Huoneistomarkkinointi Oy, Realia
Management Oy, SKV Kiinteistönväli-
tys Oy, Sentraali Oy, and Jokakoti Oy
(currently Oikotie Asunnot Oy), vice
Member of the Board of Directors of
Oy Suomen Uutisradio Ab
34
35
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
GROUP MANAGEMENT
Executive team
ILKKA LAURILA, CFO
b. 1977, M.Sc. (Forestry), M.Sc.
(Econ.), Finnish citizen
CFO since 2015, Member of the
Management Group since 2015.
Relevant work history:
Terveystalo Head of Treasury and
Finance and Head of Procurement,
Head of Treasury, Deputy Head of
Procurement; Associate Director of
Rahoituksen neuvontapalvelut Inspira
Oy, managerial positions at Ernst &
Young Oy
Main positions of trust:
Confederation of Finnish Industries
(EK), Member of the Economy and
Tax Committee; Hurtti-Paino Oy,
Member of the Board of Directors.
Since 21 January 2021, member of the
Board of Directors of Musti Group Plc.
SIINA SAKSI, SENIOR VICE PRESIDENT,
PRIVATE CUSTOMERS AND CLINICS
ELINA SAVIHARJU, SENIOR VICE
PRESIDENT, LEGAL
VEERA SIIVONEN, SENIOR VICE PRESIDENT,
MARKETING AND COMMUNICATIONS
MINTTU SINISALO, SENIOR VICE
PRESIDENT, HUMAN RESOURCES
MIKKO TAINIO, SENIOR VICE PRESIDENT,
PUBLIC PARTNERSHIPS
b. 1966, M.Sc. (Econ), EMBA, Finnish
citizen
b. 1981, LL.B., LL.M. (Harvard),
Finnish citizen
b. 1980, M.Sc. (Tech.), Finnish citizen.
b. 1980, M.Sc. (Econ.), Finnish citizen
b. 1979, M.Sc. (Econ.), Finnish citizen
Senior Vice President for Private
Customers and Clinics since 2019,
Member of the Management Group
since 2016. Since 1 January 2021, Chief
Operating Officer.
Relevant work history:
Business Director for the network
at Terveystalo, Business Director
for Western and Central Finland at
Terveystalo, Senior Vice President, HR
Specialist Sales at Pohjola Insurance
Ltd, Country Manager of Tryg Finland
at Tryg Forsikring A/S, Finnish Branch,
and member of Tryg’s Sweden-Finland
Executive team at Tryg A/S, several
managerial positions at Tryg A/S, If
P&C Insurance Company Ltd, Merita
Bank Plc and Kansallis-Osake-Pankki
Senior Vice President, Legal and
member of the Management Group
since 11 May 2020.
Relevant work history:
Avance Attorneys Ltd., Senior Asso-
ciate, Co-Head for IP & Technology
practice; Paul Hastings LLP (New York
City, USA), Life Sciences IP Litigation
Associate; Roschier Attorneys Ltd.,
Associate
Senior Vice President, Marketing and
Communications and member of the
Management Group since 24 April
2020. Since 1 January 2021, Senior Vice
President, Consumer Business.
Relevant work history:
Several leading positions in Sanoma
Corporation, as, inter alia Marketing
Director and Head of Strategy and
Business Development for Helsingin
Sanomat and Vice President, Portfolio
Development and Marketing of Sano-
ma News & Feature. Business manager
in Blyk Services Oy and multiple
international managerial positions in
Nokia Mobile Phones
Senior Vice President, Human Resour-
ces and member of the Management
Team since 1 January 2020.
Senior Vice President, Public Partner-
ships and member of the Management
Team since 1 November 2020.
Relevant work history:
Multiple HR leadership positions at
Finnair, most recently VP, People and
Culture at Finnair Operations business
unit. August Associates HR manager
and management consultant
Relevant work history:
Most recently, Managing Director at
Finnair Cargo Oy and, before that,
several core managerial positions in
operations and finance at the Finnair
group since 2005
Main positions of trust:
A-Talent Recruiting Oy, member of the
Board of Directors
Main past positions of trust:
Confederation of Finnish Industries
(EK), member of Logistics Committee
Main past positions of trust:
Finnair Pension Fund Board member
and Chairman of the Board
PIA WESTMAN, SENIOR VICE PRESIDENT,
WELLBEING, DIAGNOSTICS AND DIGITAL
SERVICES
b. 1965, PhD, Finnish citizen
Senior Vice President for Well-being
and Digital Services since 2017 and
Senior Vice President for Well-being,
Diagnostics and Digital Services since
2019. Member of the Management
Group from 2016 until 31 December
2020.
Relevant work history:
Several leadership positions within
Terveystalo including, inter alia,
Director of Hospital and Healthcare
Services, Business Director within the
network and Unit Director. Several
management group level positions at
Eira Hospital Ltd and the Finnish Red
Cross Blood Transfusion Service
Main positions of trust:
Merivaara Group, member of the
Board of Directors since 2019
CHANGES IN THE GROUP MANAGEMENT TEAM
Also the following persons have been members in the group Management Team
during 2020: Susanna Laine until January 2020, Julia Ormio until January 2020,
Jens Jensen until May 2020, as well as Laura Räty until November 2020.
Susanna Laine, Senior Vice President, Communications and Brand
b. 1967, M.Scs., Finnish citizen. Senior Vice President, Communications and Brand since
2015, Member of the Management Group from 2010 to January 2020. Relevant work
history: Terveystalo Head of Communications, Marketing, Customer Experience and
Private Customers, several communications positions at ISS Palvelut Oy (part of ISS
Group), Infor Consulting Oy, Oy SRG Finland Ab (Töölön Matkatoimisto), and Oy
AC-tiedotus Ab.
Julia Ormio, Senior Vice President, Legal
b. 1970, LL.B., LL.M., Finnish citizen. Senior Vice President, Legal and member of
the Management Group from December 2018 until January 2020. Relevant work
history: 2017–2018 SVP, Legal and Compliance, Sumitomo SHI FW Oy, 2012–2017
Vice President, Legal & Compliance, Amec Foster Wheeler Energy OY Group and
Power Group Asia, 2008–2011 Senior Legal Counsel Outotec Oyj, 2006–2008, Senior
Associate, Attorney-at-Law, Castrén & Snellman, Attorneys LTD, 2001–2006 Legal
Counsel Elcoteq Network Corporation. Main past positions of trust: 2015–2019 Port of
Helsinki Oy, member of the Board of Directors; 2011–2013 Revenio Group Plc, Member
of the Board of Directors.
Jens Jensen, Senior Vice President, Corporate Health
b. 1973, M.Sc. (Econ.), Finnish citizen. Senior Vice President, Corporate Health since
2019, Member of the Management Group from 2016 until May 2020. Relevant work
history: CFO of Terveystalo, Head of Sales and Service, Commercial Finland of If P&C
Insurance Company Ltd, various managerial positions at If P&C Insurance Company Ltd.
Main past positions of trust: Member of the Board of Directors of the Finnish Workers’
Compensation Center.
Laura Räty, Senior Vice President, Public Partnerships
b. 1977, Lic. Med., EMBA, Finnish citizen. Senior Vice President, Public Partnerships
since 2016, Member of the Management Group from 2016 until November 2020.
Relevant work history: Senior Vice President for Public Partnerships in Terveystalo,
Deputy Mayor for Social Affairs and Public Health of the City of Helsinki, Minister of
Social Affairs and Health, member of the Finnish Government and Chairperson of the
Party Council of the National Coalition Party of Finland, several positions in healthcare
sector entities. Main past positions of trust: Chairperson of the Board of Directors of Oy
Apotti Ab and Keva, Member of the Board of Directors of Helsingin Kansallismedia Oy,
Member of the Council of Representatives of Helsinki Cooperative Society HOK-Elanto.
THE FOLLOWING CHANGES IN THE GROUP MANAGEMENT TEAM HAVE BEEN PUBLISHED OR
HAVE TAKEN PLACE AS PER THE DATE OF THIS REVIEW:
Marja-Leena Tuomola has been appointed Senior Vice President, Corporate Health at
Terveystalo and member of the Management Group as of 1 January 2021. Petri Keksi has
been appointed Senior Vice President, Growth Businesses and member of the Management
Group as of 1 January 2021. Veera Siivonen has been appointed Senior Vice President, Con-
sumer Business as of 1 January 2021. Siina Saksi has been appointed COO of Terveystalo as
of 1 January 2021.
Petri Keksi, Senior Vice President, Growth Businesses
b. 1974, M.Sc. (Econ.), Finnish citizen. Senior Vice President, Growth Businesses and
member of the Management Team as of 1 January 2021. Relevant work history:
Several management positions at Terveystalo since 2009, most recently as Business
Director for Oral Health, prior to whichh Director of M&A.
Marja-Leena Tuomola, Senior Vice President, Corporate Health
b. 1962, LL.M., eMBA, Finnish citizen. Senior Vice President, Corporate Health as of 1
January 2021. Relevant work history: President & COO Schibsted Finland (formerly Sa-
noma Digital Finland). Prior to that, several management positions in the Sanoma Group,
including as SVP Business & Digital Operations Development. Main past positions of
trust: Savings Bank Group, member of the Board of Directors and Risk Committee;
Haaga-Helia University of Applied Sciences Ltd., Chairman of the Board of Directors.
36
37
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Terveystalo remuneration
policy for governing bodies
1. INTRODUCTION
This remuneration Policy of Terveystalo Plc is the Policy referred to in re-
porting requirements of the Finnish Corporate Governance Code for listed
companies issued by the Securities Market Association on November 1,
2019. This policy presents the governance and principles of remuneration for
governing bodies at Terveystalo Group. This policy has been approved by
the Board of Directors of Terveystalo Plc. It will be presented to the Annual
General Meeting in the spring 2021.
Adjustments have been made to the remuneration policy reviewed by
the Annual General Meeting in the spring 2020 regarding the CEO’s long-
term incentive opportunity, in line with general market practices.
Remuneration at Terveystalo is based on the principles of performance,
fairness and competitiveness. These remuneration principles apply to all
Terveystalo employees and the purpose is to ensure that Terveystalo as an
employer attracts motivated and competent professionals. Remuneration
shall support
the achievement of Terveystalo’s strategic goals,
align management’s priorities with the interests of Terveystalo’s share-
holders, encourage behaviour consistent with Terveystalo’s values, and
reward excellent performance.
The Company’s compensation philosophy is based on the underlying
principle of shareholder value creation. The incentives are aligned with the
Company’s business strategy. The objective is to reward concrete achieve-
ments in implementing the company’s strategy and in achieving its busi-
ness targets. The Company’s compensation structures are designed to be
competitive in the relevant market. According to the pay for performance
principle, incentive plans places emphasis on performance to ensure that
management achieves its goals.
Remuneration is designed to attract and retain the desired talent and
to motivate the employees to deliver the strategy and to maximize share-
holder value creation. The targets and rewards in the incentive systems are
balanced between long-term value creation and efficient achievement of
short-term goals.
This policy describes the principles and governance of the remuneration
paid to the Company’s Board of Directors and to the CEO of Terveystalo.
In the event that a Deputy was appointed to the CEO position, the same
principles would apply to the Deputy CEO.
The Board of Directors may make minor amendments to the remune-
ration arrangements regarding the CEO described in the policy for regu-
latory, exchange control, tax or administrative purposes or to take account
of changes in the legislation.
2. DESCRIPTION OF THE
DECISION-MAKING PROCESS
The Shareholders’ Nomination Board reviews and prepares the remunera-
38
tion principles for the members of the Board of Directors, defined in this
policy. The Shareholders’ Nomination Board also prepares its proposal for
the remuneration of the members of the Board of Directors annually. The
proposal shall be based on the principles defined in this policy. The AGM
makes the final decision on the Board of Directors’ remuneration. According
to the decision of the AGM, the Chairman of the Board of Directors is a
member of the Shareholders’ Nomination Board as his/her role in providing
insight regarding the Board of Directors’ work and composition is crucial.
The Board of Directors reviews and approves the remuneration prin-
ciples for the CEO defined in this policy based on preparatory work car-
ried out by the Board of Directors’ Remuneration Committee. The Board
of Directors also decides on the salary, incentive schemes and associated
targets of the CEO based on preparatory work carried out by the Board of
Directors’ Remuneration Committee. All share based incentive schemes
are decided by the Board of Directors based on the preparatory work of
the Remuneration Committee.
The CEO normally participates in the Remuneration Committee’s
meetings, except for matters relating to the service terms and remunera-
tion of the CEO.
The governance principles in decision-making on remuneration in the
Company follow principles aimed at ensuring the prevention of and for
the management of conflicts of interest. The underlying principle is that
the corporate organ which elects the respective corporate organ also deci-
des on its remuneration. The Company observes the rules set in its Code
of Conduct, the Finnish Companies Act and the Finnish Corporate Go-
vernance Code which stipulate governance procedures and rules for the
avoidance of conflicts of interest. The decision-making process described
above aims at guaranteeing that the decisions are fair and unbiased.
3. DESCRIPTION OF THE REMUNERA-
TION OF THE BOARD OF DIRECTORS
The purpose of the Board remuneration is to ensure that Terveystalo has a
Board consisting of highly competent professionals representing a diverse
and relevant mix of skills, capabilities and experience. The Board of Directors’
remuneration shall be transparent, reasonable and comparable to market
levels. The Board of Directors’ remuneration is designed to align the Board’s
interests with those of all shareholders.
The Shareholders’ Nomination Board prepares and presents its pro-
posal on the remuneration of the members of the Board of Directors to the
AGM. The proposal should take into account the relevant market level and
the time and effort required from the members of the Board of Directors,
as well as additional responsibilities assigned to the members, such as chair-
manship of the Board of Directors or its Committees.
DECISION-MAKING PROCEDURE
SHAREHOLDERS NOMINATION BOARD
Responsible for proposing the Board’s remuneration.
ANNUAL GENERAL MEETING OF SHAREHOLDERS
Responsible for deciding the Board’s remuneration.
BOARD OF DIRECTORS
Responsible for deciding the remuneration paid to the CEO and the
Executive Team members. Responsible for deciding short-term and long-term
incentive plans based on company level targets.
REMUNERATION COMMITTEE
Responsible for preparing
remuneration-related matters and
proposals for the Board.
CEO
EXECUTIVE TEAM
REMUNERATION OF THE BOARD OF DIRECTORS
REMUNERATION
ELEMENT
Annual
remuneration
PURPOSE AND LINK TO STRATEGY
DESCRIPTION
The annual remuneration should be
sufficient to attract, retain and motivate
high-performing individuals.
The Shareholders’ Nomination Board prepares and presents its proposal on the remuneration
of the members of the Board of Directors to the AGM based on what the AGM decides on the
Board’s remuneration annually. The proposal should take into account the relevant market level
and the time and effort required from the members of the Board of Directors, as well as additional
responsibilities assigned to the members, such as chairmanship of the Board of Directors or its
Committees. The annual remuneration is paid as a combination of Terveystalo shares and cash or
fully in cash.
Meeting fees
The meeting fees are intended to link part
of the remuneration to the time and effort
required from the members of the Board of
Directors in respect of the meetings.
Meeting fees are paid in cash.
Travel expenses
Intended to reimburse the members of the
Board of Directors for reasonable costs and
expenses related to their work.
The members of the Board are entitled to reimbursement for reasonable travel expenses related
to their work.
4. DESCRIPTION OF THE
REMUNERATION OF THE CEO
Terveystalo’s approach to the remuneration of the CEO is that the remu-
neration should align the interest of the CEO with those of the company’s
shareholders. Terveystalo uses various remuneration elements to attract,
motivate and retain high performing individuals with the right skills, capabili-
ties and mindset. Performance correlates with reward level, and this promotes
sustained high performance and focus to business targets and strategy
execution. The remuneration structure and level should be comparable to
the relevant national and industry benchmarks. The CEO is encouraged to
accumulate and maintain a personal shareholding in Terveystalo.
REMUNERATION COMPONENTS, GROUNDS FOR
DETERMINING VARIABLE REMUNERATION COMPONENTS
AND PROPORTIONAL SHARES OF OVERALL REMUNERATION
The remuneration of the CEO is defined to be competitive with a significant
part of the remuneration being performance-based.
39
TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
CEO FIXED REMUNERATION
REMUNERATION
ELEMENT
PURPOSE AND LINK TO
STRATEGY
DESCRIPTION
Base salary
Base salary provides a core
compensation for the role and
attracts, retains and motivates
high-calibre individuals.
Base salary is set by the Board of Directors, taking into account a number of factors, such as:
• recognition of the value of an individual’s personal performance and contribution to the business
• the individual’s skills and experience
• internal salary levels
• relevant external market conditions
Base salary is reviewed annually.
Benefits and
insurance
coverage
Insurance coverages and
other benefits that are in line
with local market practices
attract and retain high-calibre
individuals.
Taxable fringe benefits, standard Terveystalo personnel benefits, and other benefits are included in the base
salary.
Insurances include leisure time accident insurance, travel insurance and management liability insurance.
The Board of Directors has a possibility to decide on supplementary defined contribution pension in line with
local market practices. In such case the maximum annual pension contribution may not exceed 20% of annual base
salary.
CEO VARIABLE REMUNERATION
Up-to-date descriptions of ongoing incentive plans are published on the Terveystalo website, at www.terveystalo.com.
REMUNERATION
ELEMENT
Short-term
incentives (STI)
PURPOSE AND LINK TO STRATEGY
DESCRIPTION
The STI is aimed at driving short-term (an-
nual) performance against specific Group
targets and individual objectives based on
key strategic priorities for the year.
Long-term
incentives (LTI)
LTI is aimed at driving long-term perfor-
mance against specific group targets, as well
as committing the CEO to the company
and aligning the CEO’s interests with the
interests of the shareholders.
Performance is measured over a one-year period and potential rewards are paid in the following
year. The terms of the Short-Term Incentive plan is described on the company website.
Performance criteria:
• Performance criteria are set annually by the Board based on the key priorities for the financial
year. Criteria may include both financial and non-financial criteria. Reaching maximum level
requires exceptional performance.
• Following the end of the performance period the Board of Directors confirms the achievement
of the criteria and determines the amount of the payout.
Incentive opportunity:
• Incentive opportunity at maximum level of performance may not exceed 120% of annual base
salary.
The terms and conditions for each Long-Term Incentive plan are decided by the Board of Direc-
tors. The terms of ongoing Long-Term Incentive plans are described on the company website.
Performance criteria:
• Performance criteria for each plan are set by the Board of Directors based on the key priorities
for the performance period. Reaching the maximum level requires exceptional performance.
• Following the end of the performance period the Board of Directors confirms the achievement
of the criteria and determines the amount of the payout.
• The LTI performance period shall, as a rule, be no fewer than three years. Performance criteria
for each plan are set by the Board of Directors based on the key priorities for and within the
performance period.
Discretion and claw-back:
• The Board of Directors is entitled, subject to a particularly weighty reason, to change or cancel
the incentive payout or to postpone its payment, and, in exceptional cases, such as intentional
misstatement of financials underlying the measures, to recover rewards paid prior to said
misconduct.
Incentive opportunity:
• The Board of Directors decides on LTI allocation on individual level.
• At the maximum level, the amount of incentives paid in the same year may not exceed 220% of
the annual base salary.
5. TEMPORARY DEVIATION
The Board of Directors may temporarily deviate from any sections of the
Policy and from any contents of the Policy based on its full discretion in any
of the circumstances and on any of the grounds described below:
• a structural change (change in the Company’s corporate, group,
business or organizational structure or a material change in its ow-
nership structure),
• a personnel change (such as changes in the Board of Directors or in
the top management of the Company or need to recruit a new CEO
or Deputy to the CEO),
• other exceptional or unexpected event or change or materially chan-
ged circumstances in the Company or in its business or operating
environment or a material change in the Company’s strategy or
business plan,
• material change in the Company’s financial position or outlook,
•
regulatory or judicial changes, changes in governmental or admi-
nistrative orders or in taxation or taxation practice, or
• other change or circumstances not specified above if the Board of
Directors, after careful consideration, deems that a deviation is ne-
cessary or advisable in order to safeguard the Company’s long-term
interests or sustainability such as, without limitation, in order to ensure
the continuity of the Company’s management.
The procedure to be followed in the deviation from this Policy shall be the
same as the decision-making procedure for the implementation of this
Policy described elsewhere in this policy. If the deviation concerns Board
remuneration, the decision-making may involve an annual or extraordinary
shareholder meeting as applicable in the individual circumstances. The
deviation and its grounds shall be reported in the next annual remuneration
Report and presented to the next AGM as part thereof.
PROPORTION OF REMUNERATION ELEMENTS
The remuneration of the CEO is defined to be competitive with a significant
part of the remuneration being performance-based. Incentive opportunity
at maximum level performance of STI is 120% of annual base salary and
maximum level performance of LTI paid in the same year is 220% of annual
base salary.
OTHER KEY TERMS APPLICABLE TO THE SERVICE CONTRACT
SHARE OWNERSHIP REQUIREMENT
To encourage building a meaningful shareholding in Terveystalo, the CEO
is expected to retain at least 50% of the net shares received based on the
LTI plans until his/her share ownership in Terveystalo corresponds to at least
his/her annual gross base salary.
TERMINATION OF THE SERVICE CONTRACT AND SEVERANCE PAY
Regarding the termination of the service contract and severance pay of
the CEO, the agreement may be terminated by both parties by giving six
(6) months’ notice. Should the Company terminate the agreement, the
Company is required to pay an additional severance pay, equivalent to 12
month’s base salary.
SUPPLEMENTARY INFORMATION
As a benchmarking approach, the Remuneration Committee reviews market
benchmark data from Finnish and, where necessary, international healthcare
companies of a similar size and complexity to Terveystalo when setting
total remuneration packages for the CEO. This is used more as a guide
than a direct determinant of pay levels. Other factors considered include
each individual’s role and experience, as well as Company performance and
personal performance.
TERMS FOR DEFERRAL AND POSSIBLE CLAWBACK OF REMUNERATION
Clawback provisions apply to LTI and STI plan awards in exceptional circum-
stances. The Board of Directors is entitled, subject to a particularly weighty
reason, to change or cancel the incentive payout or to postpone its payment,
and, in exceptional cases, such as intentional misstatement of financials
underlying the measures, to recover rewards paid prior to said misconduct.
PREVIOUSLY AGREED OR GRANTED AWARDS
The Board reserves the right to make any remuneration payments and/or
payments for loss of office (including exercising any discretions available to
it in connection with such payments) notwithstanding that they are not in line
with the Policy set out above where the terms of the payment were agreed
prior to the presentation of this Policy to the AGM.
40
41
TERVEYSTALOANNUAL REPORT 2020
Corporate, 42% (42%)
Private individuals, 30% (29%)
Public, 28% (29%)
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Remuneration Report
Terveystalo’s remuneration principles are based on performance, fairness and competitiveness. Remuneration supports the achievement
of Terveystalo’s strategic goals and the long-term financial success of the Company. The remuneration policy and the decision-making
process is described in more detail in the remuneration policy for governing bodies.
3
Terveystalo’s revenue and profitability have improved steadily over the
last five years, excluding the exceptional year 2020. The positive business
development is also reflected in remuneration levels. In remuneration de-
4
velopment, the figures for 2016–2017 are not fully comparable due to a
change in the ownership structure and listing in the stock exchange in 2017.
REVENUE, EUR MILL.
Target of at least 5% growth annually
ADJUSTED EBITA, EUR MILL. AND % OF REVENUE
Target 12-13% Adj. EBITA margin
REMUNERATION OF THE BOARD OF DIRECTORS
FOR THE FINANCIAL YEAR 2020
Terveystalo’s Annual General Meeting, held on May 28, 2020, resolved
in accordance with the proposal of the Shareholders’ Nomination Board
that the Chair of the Board of Directors be paid an annual remuneration
of EUR 85,000, the Vice Chair an annual remuneration of EUR 50,500,
the members an annual remuneration of EUR 40,250, and the Chair of the
Audit Committee EUR 50,500. In addition, an attendance fee of EUR 625
will be paid for members of the Board of Directors and Committee members
residing in Finland, EUR 1,300 for members residing elsewhere in Europe,
and EUR 2,600 for members residing outside of Europe for each Board and
Committee meeting that they attend. For Board and Committee meetings
that are held by telephone or other electronic means, the attendance fee is
EUR 625. Travel costs are reimbursed based on the company’s travel policy.
The annual remuneration of the Board is paid as a combination of com-
pany shares (40%) and cash (60%). The Company will reimburse the tran-
saction costs and capital transfer tax related to trading. Attendance fees
are paid in cash.
The following table presents the remuneration paid to the Board of Di-
rectors during the financial year 2020:
1,200
1,000
800
600
400
200
0
16%
547
690
745
1,031
986
120
100
80
60
40
20
0
16%
NAME
Kari Kauniskangas
Lasse Heinonen
Tomas von Rettig
Åse Aulie Michelet
Katri Viippola
Dag Andersson
Niko Mokkila (from May 28, 2020)
85,000
50,500
50,500
40,250
40,250
40,250
40,250
33,995
20,195
20,195
16,098
16,098
16,098
16,098
56.8
10.4%
73.0
10.6%
87.7
11.8%
115.1
11.2%
101.9
10.3%
Members of the Board of Directors until May 28, 2020:
Olli Holmström
–
–
51,005
30,305
30,305
24,152
24,152
24,152
24,152
–
–
544
323
323
258
258
258
258
–
–
15,250
14,025
15,900
20,125
14,625
18,900
5,625
8,400
8,400
IN TOTAL,
EUR
100,794
64,848
66,723
60,633
55,133
59,408
46,133
8,400
8,400
ANNUAL FEE,
TOTAL, EUR 1
ANNUAL FEE IN
SHARES, EUR
ANNUAL FEE IN
CASH, EUR
OTHER FINANCIAL
BENEFITS, EUR 2
MEETING FEES OF THE BOARD
OF DIRECTORS AND BOARD’S
COMMITTEES, EUR
Paul Hartwall
¹
1 Total annual compensation consists of stock award (40%) and cash compensation (60%).
2 Other financial benefits include transfer tax fees for the annual fees paid in shares.
–
–
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
REMUNERATION DEVELOPMENT 2016–2020 :
TOTAL REMUNERATION, EUR
(ROUNDED TO THE NEAREST THOUSAND)
Chair of the Board
Vice Chair of the Board
Other members of the Board, on average
CEO
Salary development of average employees1
2016 2
50,000
25,000
25,000
523,000
57,000
2017 2
50,000
25,000
25,000
675,000
58,000
2018
102,000
54,000
50,000
910,000
55,000
2019
91,000
62,000
53,000
938,000
62,000
2020
101,000
67,000
57,000
367,000
62,000
REMUNERATION OF THE CEO FOR THE FINANCIAL YEAR 2020
The following table presents the remuneration paid to the CEO during the financial year 2020:
FIXED ANNUAL SALARY
(INCLUDING TAXABLE BENEFITS), EUR
SHORT-TERM INCENTIVES,
EUR
REMUNERATION BASED ON LONG-TERM
INCENTIVE SCHEMES, EUR
IN TOTAL, EUR
Ville Iho, CEO
366,667
-
-
366,667
1 Salary development of average employees has been calculated by dividing the personnel costs for each year (excluding other social security costs)
by the average number of personnel.
2 Not comparable due to a change in the ownership structure and listing in the stock exchange in 2017.
Changes in the remuneration of the Board after 2017 are due to a change
in the ownership structure and listing in the stock exchange, and the Board
remuneration was determined to correspond to the market level by the
decision of the AGM 2018. The remuneration level was reviewed in 2020.
In accordance with the remuneration policy, remuneration of the CEO
is strongly based on performance, and a significant share of the overall re-
muneration of the CEO consists of short-term and long-term incentives.
The targets of the incentive schemes are directly linked to the Company
performance, and the Company’s positive financial development in 2017-
2018 is reflected in the remuneration of the CEO. A CEO change took
place at the end of 2019, and in 2020, remuneration of the CEO exceptio-
nally only consisted of the base salary. The CEO also declined a salary for
one month in the spring 2020.
The average salary development of employees has shown a rising trend
with the exception of year 2018, when the number of personnel increased,
and the structure changed due to acquisitions. Approximately 65% of the
personnel is covered by collective agreements, and the general increases
determined in the collective agreements guide the salary development of
this personnel group.
In 2020, the CEO’s compensation only consisted of the fixed annual salary.
Since taking over in 2019, the CEO is included in incentive schemes only from
2020 onward, and the first payout under a short-term program is scheduled
for the spring of 2021. In addition, as a part of company’s mitigation measures
during the second quarter of 2020 due to the corona epidemic, the CEO
declined a salary for one month.
In the performance period 2020, the short-term incentives were based
on adjusted EBITA as well as the eNPS and NPS scores. Based on the
short-term incentive program, the CEO will receive a payment of EUR
240,000 in the spring 2021, which corresponds to 75% of the target ear-
nings.
In the performance period 2020, the performance criteria for the sha-
re-based long-term incentive scheme were based on the Company’s ad-
justed EBITA and the total shareholder return (TSR). The criteria were not
met, and the CEO will not be remunerated for this performance period.
42
43
TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Information for shareholders
A shareholder may send the advance voting form available on the Company’s
website or corresponding information to Euroclear Finland Oy by regular
mail to Euroclear Finland Oy, Yhtiökokous/Terveystalo Oyj, P.O. Box 1110,
FI-00101 Helsinki or by email at yhtiokokous@euroclear.eu. If the shareholder
participates in the meeting by sending the votes in advance by regular mail or
by email to Euroclear Finland Ltd, the delivery of the votes before ending of
the registration period and the advance voting shall constitute registration for
the Annual General Meeting, if the above-mentioned information required
for the registration is delivered at the same time and the documents are
received at the latest by 18 March 2021 at 4:00 p.m. (EET).
Instructions relating to the advance voting may also be found on the
Company’s website https://www.terveystalo.com/en/investors/Corpora-
te-governance/General-Meeting-of-Shareholders/AGM-2021/.
PROPOSAL FOR THE DISTRIBUTION OF PROFITS
On 31 December 2020, the parent company’s distributable funds totaled EUR
543.1 million, of which EUR 26.0 million was profit for the financial year. The
Board of Directors proposes to the Annual General Meeting 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 would be 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 would be paid on 7 April 2021.
The Board of Directors further proposes that the Board of Directors
be authorized to resolve in its discretion on the payment of dividend as
follows: The amount 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.
Carnegie Iiris Theman
+358 (0)9 618 71 241 iiris.theman@carnegie.fi
Danske Bank Panu Laitinmäki
+358 (0)10 2364 867 panu.laitinmaki@danskebank.com
Inderes Olli Vilppo
+358 (0)40 761 9380 olli.vilppo@inderes.fi
Jefferies James Vane-Tempest
+44 207 029 8275
jvane-tempest@jefferies.com
Morgan Stanley Alex Gibson
+44 20 7425 5975
alex.gibson@morganstanley.com
Nordea Sami Sarkamies
+358 (0)9 5300 5176 sami.sarkamies@nordea.com
OP Anssi Raussi
+358 (0)10 252 4392 anssi.raussi@op.fi
SEB Jutta Rahikainen
+358 (0)9 616 28 713 jutta.rahikainen@seb.fi
BASIC SHARE INFORMATION
Listing: Nasdaq Helsinki Oy
Trading ticker: TTALO
ISIN code: FI4000252127
Sector: Health care
Number of shares on December 31, 2020: 128,036,531
FINANCIAL REVIEWS IN 2021
In 2021, Terveystalo Plc will publish financial reports as follows:
Interim report for January–March 2021 on Thursday, April 29, 2021
Half-Year Report for January–June 2021 on Friday, July 16, 2021
Interim report for January–September 2021 on Thursday, October 28, 2021
Terveystalo’s financial reports are prepared in Finnish and English. Subscri-
be to receive Terveystalo’s information releases by email at https://www.
terveystalo.com/en/investors/News-room/.
SILENT PERIOD
Terveystalo observes a silent period of 30 days prior to the publication of
interim reports and the year-end result. During the silent period, Terveystalo
does not comment on any business-related matters or meet with any repre-
sentatives of the capital markets.
CHANGES OF ADDRESS
Euroclear Finland Ltd maintains lists of Terveystalo Plc’s shares, shareholders,
and options. Shareholders who wish to make changes to their personal and
contact information are kindly asked to contact their own account operator
directly. Terveystalo does not make such updates.
EVALUATION OF TERVEYSTALO AS AN INVESTMENT
According to our knowledge, the following analysts follow Terveystalo Group
regularly. The list is not necessarily exhaustive. Terveystalo assumes no
responsibility for any opinions of the analysts following the company.
ANNUAL GENERAL MEETING
Annual General Meeting of Terveystalo Plc will be held on Thursday,
March 25, 2021 in Helsinki. The notice to General Meeting of Sharehol-
ders, as well as the Board of Directors’ proposals to the General Meeting
are published in a stock exchange release and on Terveystalo’s website.
THE RIGHT TO ATTEND
Each shareholder, who on the record date of the General Meeting, 15 March
2021, is registered in the Company’s shareholders’ register held by Euroclear
Finland Oy, has the right to participate in the Annual General Meeting.
A shareholder whose shares are registered on his/her personal Finnish
book-entry account is registered in the Company’s shareholders’ register.
Shareholders cannot participate in the meeting by any other means than
voting in advance in the manner instructed below as well as by submitting
counterproposals and asking questions in advance.
REGISTRATION AND ADVANCE VOTING
Registration for the meeting and advance voting will begin on 24 February
2021 following the deadline for submitting counterproposals. A shareholder
with a Finnish book-entry account, who wishes to participate in the Annual
General Meeting by voting in advance, must register for the Meeting and
vote in advance no later than by 18 March 2021 at 4:00 p.m. (EET) by which
time the registration and votes need to be received.
In connection with the registration, a shareholder is required to provide
the requested information, such as his/her name, personal identification
number, address and telephone number as well as the name and perso-
nal identification number of a possible proxy representative. The personal
data given to Terveystalo Plc and Euroclear Finland Ltd will be used only
in connection with the General Meeting and with the processing of related
registrations necessary.
Shareholders with a Finnish book-entry account may register and vote
in advance on certain matters on the agenda of the Annual General Mee-
ting from 9.00 a.m. (EET) on 24 February 2021 until 4.00 p.m. (EET) on 18
March 2021 by the following manners:
a) through the Company’s website at https://www.terveystalo.com/en/
investors/Corporate-governance/General-Meeting-of-Sharehol-
ders/AGM-2021/
The Finnish personal identity code or business ID and book-entry account
number of the shareholder is needed for the electronic voting in advance.
When shareholders who are natural persons log into the service of Euroclear
Finland Ltd through the Company’s website, they are directed to the strong
electronic authentication. For shareholders that are legal persons, no strong
electronic authentication is required. Strong electronic authentication can
be conducted with online banking codes or a mobile certificate.
b) by regular mail or email
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TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Contact information
CONTACT INFORMATION
Customer service and appointment booking
+358 (0)30 6000
Exchange
+358 (0)30 63 311
Email addresses are of the format:
firstname.lastname(at)terveystalo.com
PRESS CONTACTS
Expert interview requests for media: Terveystalo media desk,
on weekdays from 9 am to 4 pm, tel. +358 (0)50 358 1170
TERVEYSTALO GROUP SERVICES AND MANAGEMENT
Terveystalo Piazza
Jaakonkatu 3 B, 3rd floor
00100 Helsinki, Finland
INVESTOR RELATIONS
Please email flagging notifications
to: investors@terveystalo.com
VICE PRESIDENT, COMMUNICATIONS
Kati Kaksonen, tel. +358 (0)10 345 2034
kati.kaksonen@terveystalo.com
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TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Board of
Directors'
report and
Financial
Statements
This section includes the Board of Directors’ Report for
2020, including Statement of non-financial information,
the Financial Statements for 2020 including Notes to
the Financial Statements and the Auditor’s Report.
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TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Contents
TERVEYSTALO BOARD OF DIRECTORS’ REPORT
CONSOLIDATED FINANCIAL STATEMENTS, IFRS
Consolidated statement of income and comprehensive income
Consolidated statement of financial position
Consolidated statement of cash flows
Consolidated statement of changes in equity
1. Corporate information
2. Accounting policies for the consolidated financial statements
Impairment
Basis of preparation
Principles of consolidation
Foreign currency transactions
Property, plant and equipment
Investment properties
2.1
2.2 Application of new and amended IFRSs
2.3 Critical accounting estimates and judgments
2.4
2.5
2.6
2.7
2.8 Goodwill and other intangible assets
2.9
2.10 Leases – Group as a lessee
Financial assets and liabilities
2.11
2.12
Inventories
2.13 Employee benefits
2.14 Provisions and contingent liabilities
2.15 Revenue recognition
2.16 Segment information
2.17 Government grants
2.18 Operating profit
2.19 Earnings per share
Income taxes
2.20
3. Business combination
4. Disaggregation of revenue
5. Other operating income
6. Material and services
7. Employee benefit expenses
8. Depreciation, amortisation and impairment
9. Other operating expenses
10. Financial income and expenses
11. Taxes
Income taxes
11.1
11.2 Deferred tax assets and liabilities
12. Earnings per share
13. Property, plant and equipment and right-of-use assets
13.1
Finance leases and right-of-use assets
14. Intangible assets
14.1 Carrying amounts of intangible assets
14.2 Development costs
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15. Impairment testing of cash-generating units including goodwill
16. Investment properties
17. Associated companies
18. Share-based payments
19. Financial assets and liabilities – carrying amount and fair value and fair value hierarchy
20. Financial risks
Interest rate risk
20.1 Financial risk management
20.2
20.3 Credit risk
20.4 Liquidity risk
20.5 Capital management
21. Trade and other receivables
22. Cash and cash equivalents
23. Non-current assets held for sale
24. Share capital and invested non-restricted equity reserve
25. Financial liabilities
26. Trade and other payables
27. Provisions
28. Collateral and other contingent liabilities
29. Related party transactions
30. Group companies
30.1 Changes in the Group structure
31. Group’s key financial ratios
32. Calculation of financial ratios and alternative performance measures
33. Reconciliation of alternative performance measures
34. Subsequent events
PARENT COMPANY’S FINANCIAL STATEMENTS
Parent company’s statement of income
Parent company’s statement of financial position
Parent company’s statement of cash flows
Parent company’s accounting policies and measurement and recognition principles and methods
Notes to the parent company’s financial statements
SIGNATURES TO THE FINANCIAL STATEMENTS AND BOARD OF DIRECTOR’S REPORT
AUDITOR’S REPORT
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TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Terveystalo board of directors’ report
THE IMPACTS OF COVID-19 AND
THE MEASURES TAKEN BY TERVEYSTALO
To minimize the impacts of the pandemic, Terveystalo adjusted its operations
to the exceptional circumstances to safeguard the cash flow and profitability of
the business by means such as freezing service purchasing and re-evaluating
investment needs, freezing replacement recruitment, and temporarily laying
off employees. The need for adjustment as well as adjustment measures
decreased clearly in the second half of the year as demand returned closer
to normal. The focus of service production was particularly shifted toward
coronavirus testing and digital services, and demand for these multiplied
from the beginning of the year.
Because of the uncertainty caused by the pandemic. Terveystalo has
assessed the impacts of the coronavirus on the reported figures and fore-
casts as described below. In the current situation, these forecasts strongly
rely on assessments made by the company management.
Because of the uncertainty in the economic operating environment,
the credit loss risk of trade receivables and the impairment risk of assets
were assessed in light of the changed market outlook and latest forecasts
in connection with the financial reporting on the fourth quarter. The risk of
credit losses related to trade receivables was not found to have increased
significantly. The risk of asset impairment was not found to have increased.
Goodwill impairment testing was carried out in accordance with the normal
process in the final quarter of 2020.
The company’s liquidity and financing situation has remained strong.
During the financial year, the company fulfilled the covenant requirement
included in the financing agreement that depicts relative indebtedness.
The company estimates that, in addition to the direct impacts of the
crisis, changes in the employment rate and consumer confidence may be
reflected in the underlying demand even after the acute phase has passed.
Nevertheless, the company estimates that its diverse customer base and
service selection will mitigate the impacts on its business from any changes
in demand for individual services or in individual customer relationships.
OPERATING ENVIRONMENT
The coronavirus pandemic had a material impact on the Finnish healthcare
market in the financial year. Privately provided healthcare services focused
more on remote appointments, and there was strong demand for coronavirus
testing. The distribution of COVID-19 vaccines began in the final part of
the year. Vaccination of the working-age population is estimated to begin in
April 2021 at the earliest, depending on the availability of vaccines.
The duration and extent of the impacts of the coronavirus on the de-
mand for private healthcare services depend largely on the development of
the pandemic and its effects on consumer behaviour and employment. The
contraction of non-urgent care in the private and public healthcare sectors
while the restrictions were in place has resulted in a significant treatment
gap in other illnesses. The clearing of the queues for non-urgent care in
the public sector will require more extensive use of private healthcare ser-
vices in the aftercare of the pandemic. According to the Finnish Institute
for Health and Welfare (THL), 17,728 (12.9 percent) of those queuing for
non-urgent specialized care had been in the queue for more than six mon-
ths. For the past ten years, the average figure on the survey date has been
2,000 people.
In October, the Finnish government informed about amendments to
its proposal on Finnish health and social services reform in response to the
comments received. According to the proposal, Finland will be divided into
21 well-being services counties that will be responsible for publicly funded
social and healthcare services. With respect to outsourced services, the
multiple provider model will remain, and service vouchers can be used as
before. The Finnish Parliament will discuss the proposal for the social and
healthcare services reform during the first half of 2021. Whether the reform
will be implemented is still uncertain, but if it is realized, it will enter into
force in 2023. According to the company’s assessment, the proposal has no
material effect on Terveystalo’s business.
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 pandemic
is over.
KEY FIGURES
Terveystalo Group, EUR million
Revenue
Adjusted EBITDA, * 1)
Adjusted EBITDA margin, % * 1)
EBITDA 1)
EBITDA margin, % 1)
Adjusted EBITA, * 1)
Adjusted EBITA margin, % *1)
EBITA 1)
EBITA margin, % 1)
Adjusted EBIT * 1)
Adjusted EBIT margin, % * 1)
EBIT
EBIT margin, %
Return on equity (ROE), % 1)
Equity ratio, % 1)
Earnings per share (EUR)
Net debt
Gearing, % 1)
Net debt/adjusted EBITDA 1)
Total assets
Average personnel in person-years
Personnel (end of period)
Private practitioners (end of period)
Adjusted EBITDA, excluding IFRS 16* 1)
Net debt, excluding IFRS 16
Adjusted net debt/ adjusted EBITDA, excluding IFRS 16* 1)
Quality index 2)
Net Promoter Score (NPS), appointments
Employee Net Promoter Score (eNPS)2)
Mixed waste intensity 2)
2020
986.4
162.8
16.5
158.3
16.1
101.9
10.3
97.4
9.9
71.6
7.3
67.2
6.8
8.2
42.1
0.36
490.9
85.9
3.0
1,361.0
4,900
8,253
5,057
118.0
325.9
2.8
94.2
82.8
18.0
6.0
2019
Change, %
1,030.7
176.3
17.1
171.2
16.6
115.1
11.2
110.0
10.7
86.5
8.4
81.4
7.9
10.3
39.9
0.43
548.2
101.3
3.1
1,359.3
4,943
8,685
5,068
131.4
366.4
2.8
96.4
72.5
9.0
4.9
-4.3
-7.7
–
-7.5
–
-11.5
–
-11.4
–
-17.2
–
-17.5
–
–
–
-15.5
-10.5
–
–
0.1
-0.9
-5.0
-0.2
-10.2
-11.1
-
-2.3
14.2
100.0
23.7
The calculation and reconciliations for the key figures are presented in the financial statements.
*) 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
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.
eNPS is measured every six months; the reported figure is the result of the latest measurement.
Mixed waste intensity = Amount of mixed waste (metric tons) relative to total revenue (EUR 100 million)
52
53
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
OUTLOOK
•
In the short term, the market environment is still uncertain because
of the changes in consumer behavior resulting from the COVID-19
pandemic, and predicting demand is challenging in the short term.
Demand for coronavirus testing is expected to remain high throughout
the first half of 2021, and demand for healthcare services in general
is expected to grow clearly year-on-year compared with the weak
second-quarter reference period, providing that there will be no need
to implement strict pandemic restriction measures as was the case
in the first half of 2020.
• Demand from corporate customers for preventive and statutory occu-
pational health services is expected to remain stable. The recovery of
demand for acute and non-urgent medical care is uncertain, owing
to a reduction in general morbidity and the measures to restrict the
pandemic. The proportion of remote services will increase conside-
rably. Significant changes in the employment rate may be reflected
in the underlying demand.
• Overall demand from private customers is expected to remain normal,
providing that, in particular, major restrictions to free movement can
be avoided. However, there may be considerable differences between
specialties in the short term because of variation in general morbidity
and pandemic-related area-specific restrictive measures. Demand
for remote services will increase considerably. Significant changes in
consumer confidence may be reflected in the underlying demand.
• Stable demand from the public sector is expected to continue in
occupational health, service sales, and staffing services. Revenue
from outsourcing business will decrease, following the planned expiry
of outsourcing contracts.
GROUP REVENUE
Revenue for 2020 decreased by 4.3 percent year-on-year, amounting to
EUR 986.4 (1,030.7) million. In the first half of the year, revenue decreased
considerably, resulting from the restrictions imposed in March to reduce
the spread of the coronavirus pandemic as well as changes in customer
behaviour. In particular, physician’s appointments associated with various
infections and long-term illnesses, such as cardiovascular diseases, decreased
significantly year-on-year. The planned expiry of outsourcing agreements
with public sector customers reduced our revenue. On the other hand,
demand for digital services multiplied and remained strong throughout the
year. Digital appointments amounted to nearly 700,000. Combined with
telephone appointments, there were nearly 1.8 million remote appointments
in 2020. Remote appointments through digital channels or over the phone
accounted for approximately 26 percent of all appointments in 2020. Despite
the pandemic, Terveystalo’s competitiveness was reflected in the strong
performance in insurance company sales and the high demand for well-
being services. The strong demand for coronavirus-related services partly
compensated for the decrease in underlying demand in the second half of
the year. Terveystalo performed over 200,000 coronavirus tests during the
year. There were 253 business days in 2020, which is two days more compared
with the reference period (251).
EUR million
Corporate customers
Private customers
Public sector customers
Outsourcing
Staffing services
2020
418.8
295.4
272.2
121.4
83.1
67.7
986.4
2019
432.5
303.1
295.1
149.9
86.9
58.2
1030.7
Change, %
-3.2
-2.5
-7.7
-19.1
-4.4
16.5
-4.3
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.
Service sales, occupational
health and others
Total
2020 REVENUE
BY PAYER GROUP, %
2020 REVENUE
BY PAYER GROUP, M€
28%
30%
1,200
1,000
800
600
400
200
0
-4,3%
1,031
58
58
87
150
303
433
2019
986
68
68
83
121
295
433
2020
Corporate
Private
Public
Staffing services
Service sales, occupational
health and other
42%
Corporate
Private
Public
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 pro-
vides 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 end users. Terveystalo provides occupational
health services for over 24,000 companies. In 2020, the company provided
occupational health services for a total of approximately 700,000 customers.
Revenue for 2020 from corporate customers decreased by 3.2 per-
cent to EUR 418.8 (432.5) million. With respect to medical appointment
services not related to the coronavirus, demand remained clearly below the
reference period level throughout the year and the proportion of remote
appointments increased. The measures aimed at restricting people’s mobility
had a significant impact on the development of the sales of preventive*
occupational health services, as many activities — such as workplace surveys,
health examinations, counselling, and guidance — were either suspended
or considerably delayed. In 2020, Terveystalo started providing some of its
preventive services as remote appointments. Sales of well-being services**
increased by approximately 2 percent year-on-year. Over 150,000 coro-
navirus tests were performed on corporate customers in 2020. The use of
digital services more than tripled to approximately 562,000 appointments
(approximately 147,000), representing over 13 percent of all Corporate Health
clinic visits. The number of occupational health end customers was on a par
with the reference period.
*The statutory task of occupational healthcare is to prevent work-related adverse health
effects. Preventive services include, for example, workplace surveys to examine the
conditions and exposures at the workplace; health examinations; suggested measures to
improve work conditions and to promote the employees’ ability to work; guidance and
counselling; participation in the planning and implementation of measures that maintain
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.
**Well-being services include, for example, physiotherapy, mental well-being services
(psychologists and psychotherapists), nutritional therapy, work ability coaching, and
massage services at Rela hierojat (Terveystalo’s subsidiary).
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 persona-
lized 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 for 2020 from private customers decreased by 2.5 percent
year-on-year, amounting to EUR 295.4 (303.1) million.
Demand for appointments with GPs and specialists fell clearly during
the year, owing to a strong reduction in general morbidity and the measures
to restrict the pandemic. The number of digital appointments nearly quin-
tupled to approximately 63,300 visits (approximately 13,400), representing
about 4 percent of all appointments. Coronavirus testing increased the sa-
les of laboratory services considerably. Demand for surgical and well-being
services also increased year-on-year. Nearly 36,000 coronavirus tests were
performed on private customers in 2020, and sales of private healthcare
services to occupational health customers increased 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. 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 outsourcing, healthcare staffing services, specialized care
services, other healthcare services as well as occupational health services
for municipalities, municipal federations, and hospital districts.
Revenue for 2020 from public sector customers decreased by 7.7
percent year-on-year, amounting to EUR 272.2 (295.1) million.
Revenue from the outsourcing business fell by 19.1 percent to EUR
121.4 (149.9) million as a result of the expiry of outsourcing contracts at the
end of 2019. Service production began in April on the Hattula outsourcing
agreement.
Revenue from staffing services decreased by 4.4 percent, amounting to
EUR 83.1 (86.9) million. This resulted from the expiry of on-call agreements
as well as the challenges related to the availability of staff and the restric-
tions applied to public sector services.
Revenue from service sales as well as services provided for municipal
occupational health customers and other public sector customers increa-
sed by 16.5 percent year-on-year to EUR 67.7 million (58.2). This resulted
mainly from the strong demand for coronavirus-related services as well as
our occupational health business that increased through acquisitions and
new agreements. Digital appointments increased by more than sixfold to
74,300. The sales of well-being services also grew by 30 percent year-on-
year.
FINANCIAL PERFORMANCE
VAdjusted EBITDA for 2020 decreased by 7.7 percent year-on-year to
EUR 162.8 million (176.3). Profitability was reduced by lower sales volumes,
particularly during the second quarter, and changes in the service sales
mix. Employee benefit expenses decreased by 1.3 percent as a result of
the temporary layoffs carried out during the quarter, pension contribution
(TyEL) discount and the postponed recruitments. Other operating expenses
decreased by 1.8 percent to EUR 73.0 (74.4) million, mainly owing to cost
adjustments. Investment in the development of digital services and infra-
structure increased IT expenses by 19.7 percent year-on-year.
Adjusted earnings before interest, taxes, and amortization (EBITA) fell
by 11.5 percent to EUR 101.9 million (115.1), representing 10.3 (11.2) percent
of revenue.
Adjusted operating profit was EUR 71.6 (86.5) million, and profit before
tax was EUR 56.6 (66.8) million.
As a result of the refinancing arrangement carried out in the latter part
of 2019, full-year net financial expenses decreased by 30.2 percent to EUR
10.0 million (14.4). Income tax decreased by 15.4 percent as a result of lower
taxable profit. Profit for the period was EUR 45.8 (54.1) million, and earnin-
gs per share were EUR 0.36 (0.43).
54
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TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Operating cash flow decreased as a result of the contraction of business
operations, amounting to EUR 143.7 (173.6) million in the financial year. In
addition, operating cash flow in the financial year was affected by an increase
in taxes paid year-on-year.
Cash flow from investing activities was EUR -36.0 (-46.7) million. The
change from the comparison period was mainly attributable to a reduction
in M&A-related investments.
Cash flow from financing activities amounted to EUR -71.2 (-123.1)
million. The change in the cash flow from financing activities was mainly
due to a short-term loan from a financial institution withdrawn during the
reporting period. The change was also attributable to the higher equity
repayment and higher interest rate level in the reference period.
THE GROUP’S FINANCIAL POSITION
Terveystalo’s liquidity position is good. Cash and cash equivalents at the end
of the reporting period amounted to EUR 77.1 million (EUR 40.6 million in
December 2019). The company agreed on additional financing of EUR 40
million in June. Total assets of the Group amounted to EUR 1,361.0 million
(EUR 1,359.3 million in December 2019).
Equity attributable to owners of the parent company totaled EUR 571.4
(541.2) million. The growth was due to the increase in retained earnings.
Dividend was paid in July 2020 in accordance with the AGM’s decision.
Gearing at the end of the financial year was 85.9 (101.3) percent, and net
interest-bearing debt amounted to EUR 490.9 (548.2) million.
In the final quarter of 2019, Terveystalo signed a financing agreement of
EUR 410 million. During the financial year, the company fulfilled the cove-
nant requirement included in the financing agreement that depicts relative
indebtedness and achieved the sustainability goals for 2020 that were tied
to the financing agreement. Of the credit included in the financing agree-
ment, EUR 40 million remained unused at the end of the financial year.
Return on equity for the financial year was 8.2 (10.3) percent. Equity
ratio was 42.1 (39.9) 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. Revenue
from public sector customers is distributed evenly with the exception of
staffing services. 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* during the financial year, including M&A, amounted to
EUR 41.2 (58.2) million. The Group’s net cash capital expenditure, excluding
M&A, was EUR 32.7 (33.2) million and the corresponding non-cash capital
expenditure EUR 5.3 (11.2) million. The investments consisted mainly of in-
vestments in IT system projects (including ERP and EMR), digital application
and service development, medical equipment, and the network. The relative
share of intangible investments in gross investments increased, whereas the
share of tangible investments fell respectively.
In the first quarter of 2020, Terveystalo carried out one acquisition to
supplement its business, acquiring the business of Varkauden Fysiokeskus
Oy. No acquisitions were made in the second quarter. During the third
quarter of 2020, Terveystalo acquired the occupational health activities
of Keski-Satakunnan Työterveydenhuolto and the business of Keski-Lapin
Hammashuolto Oy. In the fourth quarter, Terveystalo acquired all the sha-
res of MedInari Oy, an occupational health service provider, and Helsinki
Sleep Clinic Vitalmed Oy.
*Net investments do not include the increases of right-of-use assets related to leases for
business premises recognized on the balance sheet as a result of the adoption of IFRS
16.
STATEMENT OF NON-FINANCIAL INFORMATION
Terveystalo is the largest private health service company in Finland in terms
of revenue and network. The company offers a broad range of primary and
specialist medical care services as well as well-being services for corporate
and private customers and the public sector. Terveystalo’s nationwide network
covers over 300 clinics across Finland. The clinic network is supplemented
by 24/7 digital services.
Despite the corona crisis, Terveystalo promoted corporate sustainabili-
ty in many areas in 2020. The company will report on its sustainability in the
Sustainability Report to be published in week 7. This section is a summary
of the key results documented in the report.
Terveystalo’s sustainability and corporate responsibility efforts are gui-
ded 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 compa-
ny respects all internationally recognized human rights.
The table on the next page shows a summary of the key aspects, tar-
gets, and achievements of Terveystalo’s sustainability efforts in 2020.
56
GOAL
MEASURABLE TARGET
INDICATOR
2020
SDG
Quality index:
high clinical and
experienced quality,
access to care, and
preventive care
Quality index
94.2 (96.4)
3
GOOD HEALTH AND WELL-BEING
Use of the WHO Surgical Safety Checklist in over 99% of
surgical operations
Use of the WHO Surgical Safety Checklist in
surgical operations
97.8% (97.2%)
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
4.6% (-)
Duration of sickness absence issued on the day of operation
less than 28 days, repair of the rotator cuff and the anterior
cruciate ligament
Median sickness absence days after operation
36 (42)
Percentage of preventive work of occupational health
appointments over 60%
Percentage of preventive work of occupational
health appointments
67.8% (67.5%)
Days until next available appointment (T3) below 1.00
Days until next available appointment
1.17 (0.98)
Appointment NPS over 74
Appointment NPS
eNPS at least 14 in 2020
eNPS
82.8 (72.5)
18 (9)
Patient safety
Objections vs. visits to a physician
0.01% (0.01%)
3
Patient claim reports vs. visits to a physician
0.01% (0.01%)
Complaints vs. visits to a physician
0.00% (0.00%)
Incident reports vs. visits to a physician
0.14% (0.15%)
100% of our employees have completed Compliance training
Percentage of employees who have completed
the training relative to all employees
52.3%
ETHICAL BUSINESS
100% of our suppliers have accepted the Supplier Code of Conduct
Percentage of suppliers who have approved
the Supplier Code of Conduct relative to all
suppliers
Employees who
have completed
Compliance training
Suppliers who
have approved the
Supplier Code of
Conduct
Occupational safety Accident occurrence rate below the industry average of 39
Accident rate
RESPONSIBLE WORK
Personnel’s wellbeing
Employer
recommended by the
personnel
Improving the employee Net Promoter Score (eNPS) to 31 (good
level) by 2025
eNPS
Sickness absences
Tax footprint
We openly disclose our tax footprint annually
Taxes paid
SUSTAINABLE ECONOMIC GROWTH
Revenue growth
Minimum annual growth 5%
Revenue growth, %
The people we
employ
We create jobs in Finland
Employee benefit expenses
RESPONSIBLE CONSUMPTION AND CLIMATE ACTION
Reducing the
carbon footprint
Material efficiency
and waste recycling
Decreasing the carbon footprint by 40% by 2030
Direct (scope 1) and indirect (scope 2) greenhou-
se gas emissions, tCO2
996 tCO2e (2,142)
Annual reduction in mixed waste intensity
Mixed waste intensity (mixed waste [metric
tons] relative to total revenue [100 million])
6.0 (4.9)
Approximately 80%
of suppliers who
are responsible for
80% (60%) of our
total acquisitions have
approved the Supplier
Code of Conduct
25 (25)
3.6 (3.7)
18 (9)
EUR 40 (29) million
-4.3%
310.2 (314.3)
16
16
8
8
8
8
8
13
12
57
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
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 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. In 2020, our quality efforts were
affected by COVID-19. Therefore, one of the key objectives of our quality
work is the management of the COVID-19 situation and recovery. The
quality work also 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 treat-
ment. The quality steering group monitors the achievement of the quality
objectives quarterly using quality indicators.
PATIENT SAFETY IS THE FOUNDATION FOR HIGH-QUALITY HEALTHCARE
Patient safety is a continuously monitored and developed key element of our
quality efforts. Compared with the number of visits, Terveystalo’s patient
injury rates are below the national average for the industry. In 2020, the ratio
of objections vs. visits to a physician was 0.01% (0.01), ratio of patient claim
reports vs. visits to a physician 0.01% (0.01), ratio of complaints vs. visits to
a physician 0.0% (0.0), and ratio of incident reports vs. visits to a physician
0.14% (0.15).
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 Centre, among
other measures. The safety and effectiveness of the pharmacotherapy pro-
vided are ensured by medication plans, operating guidelines, and a basic
range of drugs.
THE QUALITY INDEX MEASURES CLINICAL AND EXPERIENCED QUALITY
Terveystalo continuously develops its services by measuring the quality
and effectiveness of the care provided and the customer service experien-
ce. Clinical, experienced, and process results are measured in accordance
with international best practices. In 2020, a new quality index consisting of
four dimensions was introduced: high clinical quality, accessibility of care,
preventive treatment, and experienced quality, from the perspective of
professionals and customers alike.
The quality index comprises seven key indicators: use of the WHO
Surgical Safety Checklist, number of prescriptions for drugs affecting the
central nervous system vs. visits to a physician, duration of sickness absence
issued on the day of operation for surgical repair of the rotator cuff and
the anterior cruciate ligament, percentage of preventive work of occupa-
tional health appointments, T3 indicating the accessibility of care (the third
available appointment in the Terveystalo network), NPS for appointments,
and eNPS.
Terveystalo performs surgical operations in a network of 17 hospitals.
the WHO Surgical Safety Checklist is used systematically before the start
of a procedure. The checklist is a standard list of questions to check safety
issues relevant for the operation in the operating room. In 2020, the WHO
Surgical Safety Checklist was used in 97.8% of the operations performed
(97.2% in 2019).
58
When used properly, 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 is running a project aimed
at promoting the safe use of these products in accordance with clinical
guidelines when treating patients. To harmonize prescription practices,
Terveystalo has prepared detailed guidelines for prescribing drugs affecting
the central nervous system. They are 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 2020, our clinics wrote 4.6 prescriptions
for drugs affecting the central nervous system per one hundred visits to a
physician (N/A).
The objective of surgical operations is to promptly provide high-quali-
ty care pursuant to care criteria to quickly restore the patient’s functional
capacity and ability to work. Our treatment chain for surgery patients is
developed systematically. The objective 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 36
days in 2020 (42 days in 2019).
Work not carried out is expensive for Finnish companies. Therefore, it
pays to invest in disability management through preventive measures. Effe-
ctive disability management requires that organizations know what kinds of
risks to work ability they are managing. With targeted health examinations,
Terveystalo surveys the organization’s health and disability risks and obtain
information to support the management efforts. An electronic scientifically
validated health survey is always attached to occupational health examina-
tions, completed as self-assessment by the employee. It helps to identify
health risks and any risk of disability. With the survey, measures can be tar-
geted at anyone with significant risks. In 2020, preventive work accounted
for 67.8% of all occupational health appointments (67.5% in 2019).
Terveystalo aims to stand out by providing an excellent experience in all
customer encounters. Operations are developed by listening to customers
and utilizing new technology. NPS (Net Promoter Score) is the most im-
portant indicator of customer satisfaction. Feedback is collected by means
of SMS and browser-based surveys. In addition, new NPS measurements
are continuously launched at new customer encounter points. In 2020,
Terveystalo achieved the highest NPS result ever: appointment NPS rose
to 83 (73 in 2019), and NPS for hospital services also remained high, being
94 (89).
Despite the exceptionally challenging year, Terveystalo’s employee Net
Promoter Score (eNPS) increased clearly compared with the reference pe-
riod and was 18 (9 in 2019).
EXCELLENT ACCESSIBILITY OF PUBLIC PRIMARY HEALTHCARE
TIn primary health care, Terveystalo partners with several municipalities and
joint authorities. Terveystalo provides health centre appointment services
in 19 health centres and is involved in a pilot project in Espoo, related to the
use of service vouchers in health centres. Fast and timely access to care is
one of the biggest challenges of Finnish primary health care. Terveystalo has
systematically developed operating models for health centres to ensure easy
access to care. Accessibility of care was excellent nationwide throughout the
year in health centres outsourced to Terveystalo. In Terveystalo health centres,
the average T3 time indicating the availability of non-urgent appointments
(the third available appointment) was 5.6 days. The median time was 4
days. On the Espoo pilot project referred to above, the average T3 time
and median were 5 days from May to November 2020. Nationwide, 51% of
patients have waited more than 8 days to see a health center physician, and
14% have waited more than 30 days (Finnish Institute for Health and Welfare/
Avohilmo register for outpatient care).
Accessibility of oral health care has also remained at a good level in Ter-
veystalo’s 14 outsources dental clinics, despite the COVID-19 pandemic.
In 2020, the average T3 time for non-urgent dentist appointments was 30
days and the median time was 26 days. This is also reflected in the NPS from
the customers: in the fall, the NPS indicating customer satisfaction was 83.
ETHICAL BUSINESS
Values and ethics are emphasized in Terveystalo’s work through the require-
ments 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. Terveystalo’s Code of Conduct provides
umbrella guidelines that must be respected in our work at Terveystalo. The
Code of Conduct translates our values into concrete principles that form a
foundation for our daily work and decision-making.
TRAINING IN CODE OF CONDUCT AND COMPLIANCE
Risks related to non-compliance with the Code of Conduct are managed
through communications and by arranging mandatory training for all
personnel. Non-compliance risks may be related to possible conflicts of
interests or the giving and receiving of business gifts, for instance. Actual or
suspected non-compliance with the Code of Conduct must be reported to
the supervisor, the supervisor’s supervisor, Terveystalo’s Legal & Compliance
department, or via the Terveystalo whistleblowing channel.
In 2020, we have trained employees on the content of the Code of
Conduct more efficiently: in 2020, we provided 4 training sessions for the
management teams of the different businesses, support functions, and ot-
her selected groups, and 5,950 people working in Terveystalo successfully
completed the new mandatory online training. Of these, 4,318 are emplo-
yed staff (52% of all employed staff). The goal is that 100% of employees
complete the Code of Conduct training.
THE SUPPLIER CODE OF CONDUCT ENSURES RESPONSIBLE ACTION OF SUPPLIERS
Terveystalo’s partners are also expected to adhere to the Code of Conduct.
Terveystalo’s Supplier Code of Conduct entered into effect in autumn
2018 and is widely applied in Terveystalo Group’s standard agreements.
Contractual clauses pertaining to the Supplier Code of Conduct must be
included in all agreements under which the companies of Terveystalo Group
acquire products and services from external suppliers.
At the end of 2020, 80% (60) of suppliers representing 80% of Terveys-
talo’s total procurement volume had approved the Supplier Code of Con-
duct. We also expanded the use of a self-assessment form for suppliers that
surveys matters such as compliance with the Supplier Code of Conduct.
In 2020, we received a total of 10 reports through the whistleblowing
channel. Out of these, the reports already investigated did not reveal any
noncompliance with or infringement of law or the Code of Conduct. The
findings of the reports and investigations have been considered in the de-
velopment of Terveystalo’s processes.
the industry, the requirements concerning data protection and information
security increase accordingly.
Terveystalo stores patient information in an information security certi-
fied patient information system. Terveystalo’s patient information system
is a so-called category A system, and it has undergone information security
certification in accordance with the regulations related to providing Kanta
services. In addition, our data protection and information security is regu-
larly audited internally and by a third party according to the ISO 9001:2015
certification.
Terveystalo applies the appropriate physical, technical, and administra-
tive protection measures to protect data from misuse. These measures in-
clude, among others, control and filtering of network traffic, use of encrypti-
on techniques and safe data centres, appropriate access control, controlled
granting of access rights and supervision of their use, giving instructions to
staff participating in personal data processing, and risk management re-
lated 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. In 2020, Terveystalo
had 8,253 employees (2019: 8,685) and 5,057 private practitioners (2019:
5,068).
All of our employed staff in Finland are covered by statutory pension
security and parental leave benefits. 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, spe-
cialized 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 occupa-
tional 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 throughout Finland. Terveystalo Occupational
Healthcare holds the ISO 9001:2015 Quality System Certificate awarded
by Labquality Oy.
DATA PROTECTION AND INFORMATION SECURITY
The digitalization of healthcare presents significant opportunities for impro-
ving 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
In 2020, Terveystalo invested heavily in the maintenance of our per-
sonnel’s work ability and medical care in the exceptional circumstances.
Terveystalo professionals stayed healthy throughout the year despite wor-
king at the very core of the COVID-19 pandemic . In 2020, the sickness
absence rate was 3.6 percent of hours worked (2019: 3.65%).
59
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
There were no fatal accidents or accidents leading to serious injuries at
Terveystalo in 2020. In 2020, the accident rate was 25 (2019: 25), which is
clearly below the average in the healthcare industry (39).
In 2020, Terveystalo paid particular attention to ensuring the safety of
its staff. COVID-19 guidelines for various roles in Terveystalo were acti-
vely updated, and 98% of staff reported that they had acquainted them-
selves with the guidelines in their work. Active internal communications
also played a major role. For instance, webinars on topical issues related
to COVID-19 to employees were arranged, as often as once a week. A
COVID-19-related occupational safety survey aimed to find out how occu-
pational safety is implemented in daily work during these exceptional times
and how it could still be improved. The survey supplemented other active
efforts related to occupational safety. Coping at work and the strain caused
by work were a concern to Terveystalo professionals during the COVID-19
pandemic. However, the majority of respondents said that they could cope
well or relatively well.
In the personnel survey, the employee Net Promoter Score (eNPS) is
used as a key indicator of well-being at work and coping with the require-
ments of work. The eNPS figure (includes private practitioners) indicates
the proportion of employees and private practitioners who would recom-
mend Terveystalo as a workplace to others. Despite the exceptional year,
the index improved considerably, being 18 (9) in the latest survey.
COMPETENCE BUILDING
The systematic and business-driven development of the personnel is espe-
cially important for Terveystalo’s future success. Streamlined processes and
appropriate, responsible supervisor work ensure our personnel’s well-being,
which in turn benefits our customers through better care and a positive
customer experience.
Terveystalo has particularly focused on the development of managerial
work and training as well as supporting on-the-job self-study by increasing
online learning, for example. In addition, Terveystalo engages in research
and education cooperation with several universities and promotes youth
employment by means such as trainee programs. In 2020, we provided a
total of 63,864 (58,793) hours of training, which means 7.5 hours per emp-
loyee.
SUSTAINABLE ECONOMIC GROWTH
Responsible business is also financially profitable and sustainable. Terveystalo
creates value for customers, society, and shareholders by continuously deve-
loping the clinical, operational, and experienced quality of its work, enabling
faster access to treatment, reducing sickness absences, and employing dire-
ctly and indirectly more than 13,000 people. We are 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, per-
sonnel, 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 2020, Terveystalo’s revenue and other operating income totaled EUR
989.1 million (2019: EUR 1,032.8 million). The goods, materials and services
purchased from suppliers amounted to EUR 447.6 million (2019: EUR 472.9
million). Salaries and remuneration and the related social security contribu-
tions amounted to EUR 310.2 million (2019: EUR 314.3 million). Net finan-
cial expenses to creditors amounted to EUR 10.0 million (2019: EUR 14.4
60
million). Dividends paid to our shareholders in 2020 based on the results of
the previous fiscal year amounted to EUR 16.5 million (2019: return of capi-
tal EUR 25.5. million). We invested a total of EUR 32.7 million to business
development (2019: EUR 33.2 million).
In 2020, Terveystalo’s tax footprint totalled EUR 152.3 million (2019:
EUR 149.9 million). In addition, a total of EUR 283.2 million (2019: EUR
298.8 million) was paid to private practitioners, who pay their individual
taxes independently.
RESPONSIBLE CONSUMPTION AND CLIMATE ACTION
Terveystalo is committed to the targets agreed upon in international cli-
mate summits for the mitigation of climate change. The emissions arising
from operations are reduced, for example, by increasingly shifting to green
electricity and preferring vehicles with low emissions. The conservation
and sustainable use of natural resources in our 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
us to simultaneously improve service availability and reduce our customers’
travel times and the emissions generated by travel.
In 2020, Terveystalo added green electricity to its electricity portfolio
and updated its procurement and vehicle policy to better include environ-
mental aspects. According to the revised vehicle policy, all company cars
must be electric or hybrid cars in the future. In addition, the plastic recycling
project was extended to three hospital units.
Terveystalo’s environmental policy and program guide the operations
of all Terveystalo Group’s units and meet the requirements of the environ-
mental standard. Terveystalo’s key partners are expected to respect the
principles of environmental management.
The carbon footprint is an environmental perspective of Terveystalo’s
business operations that is considered important by investors in particular.
Terveystalo’s carbon footprint mainly consists of emissions arising from the
production of electrical energy consumed by properties, emissions gene-
rated by transport and travel as well as waste generated at hospitals and
clinics.
The direct (scope 1) and indirect (scope 2) greenhouse gas emissions
arising from operations are reported in accordance with the GHG Protocol
standard.
• Scope 1: greenhouse gas emissions arising from fuel consumption
related to the heating and electricity production for properties
controlled by Terveystalo as well as transport and travel operations
controlled by Terveystalo.
As 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 Terveystalo’s own driving and driving
under Terveystalo’s direct control were calculated based on fuel consumption.
In 2020, Scope 1 CO2e emissions totalled 287.2 metric tons (357.7).
• Scope 2: greenhouse gas emissions arising from the production of
electricity purchased by Terveystalo and the production of district
heating consumed at properties controlled by Terveystalo.
In 2020, electricity purchases for Terveystalo properties totalled 15,944
(16,219) MWh. Since January 2020, the company’s electricity portfolio
(electricity purchased for properties) is zero-CO2 green electricity. Zero-CO2
electricity purchased for 2020 totaled 9,934 MWh, representing approxima-
tely 62 percent of the company’s electricity consumption. The remainder,
6,010 MWh, corresponds to 709.2 metric tons (1,784.1) of CO2e emissions.
Due to the use of green electricity and reduced total fuel consumption,
Terveystalo's carbon footprint of Scope 1 and 2 emissions was 996.4 (2,141.8)
tCO2e in total, a decrease of 53 per cent year-on-year.
Due to the nature of the company’s operations, the CO2 emissions in-
tensity is low. In 2020, Terveystalo’s emissions intensity (Scope 1 and 2) per
revenue was 1 gCO2e/EUR (2 gCO2e/EUR) and 0.12 tCO2e (0.25 tCO2e)
per number of employees.
Terveystalo’s goal is to minimize mixed waste in all its operations and re-
cover as much waste as possible. Terveystalo is committed to reducing the
plastic waste generated by its operations in accordance with the EU’s plas-
tic strategy by improving recycling and reviewing the packaging options
offered by suppliers when possible. Medical waste is also closely monitored
and prevented through enhanced inventory management.
This exceptional year challenged our goal to reduce the waste gene-
rated by our operations because the use of protective equipment needed
for COVID-19 testing and to protect our staff and customers multiplied
by almost 10 in 2020. Our clinics used as many as 300,000 surgical mouth
guards or face shields a week. Thanks to an improved recycling rate for
hazardous waste and plastic recycling, the volume of our mixed waste inc-
reased only by 18 percent to 59 (50) metric tons, despite the sharp increase
in the use of protective equipment. Mixed waste intensity, or the amount
of mixed waste relative to revenue, increased by 23.7 percent year-on-year.
This was due to the reduction in revenue and increase in mixed waste year-
on-year.
According to the company’s assessment, the nature of Terveystalo’s
operations does not involve significant risks with respect to the environ-
mental perspective
PERSONNEL
The number of Terveystalo’s employed staff on December 31, 2020 was
8,253 (8,685). The decrease was mainly due to the termination of nonactive
employment contracts in staffing services. In person-years, the average
number of staff was 4,900 (4,943). The number of private practitioners was
similar to the reference period, 5,057 (5,068).
SHARES, SHAREHOLDERS, AND BOARD AUTHORIZATIONS
At the end of December 2020, Terveystalo’s market value was EUR 1,285
million (1,431) and the closing price was EUR 10.04 (11.18). In 2020, the highest
price of Terveystalo’s share on Nasdaq Helsinki Ltd was EUR 12.66 (11.18),
the lowest price EUR 7.40 (7.90) and the average price EUR 9.67 (9.94).
A total of 26.6 (27.8) million shares were traded in 2020. 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 LARGEST REGISTERED SHAREHOLDERS ON DECEMBER 31, 2020
Name
Number of shares
% of shares
Votes
% of votes
Varma Mutual Pension Insurance Company
Rettig Group AB
Hartwall Capital
Pohjola Insurance Ltd
OP Life Assurance Company Ltd
Elo Mutual Pension Insurance Company
Ilmarinen Mutual Pension Insurance Company
Mandatum Life Insurance Company
Investment fund OP-Suomi
Åbo Akademi University Foundation
Ten largest, in total
22,151,945
21,153,191
14,431,690
8,530,332
7,036,706
5,232,951
3,963,500
3,566,934
1,896,255
1,816,242
17.3
16.5
11.3
6.7
5.5
4.1
3.1
2.8
1.5
1.4
22,151,945
21,153,191
14,431,690
8,530,332
7,036,706
5,232,951
3,963,500
3,566,934
1,896,255
1,816,242
89,779,746
70.1
89,779,746
The list is based on the register of shareholdings maintained by Euroclear, and it does not include nominee-registered shares.
According to its own notification and its custodian’s notification, Lannebo Fonder owns a total of 4,594,963 shares, which corresponds to 3.6% of all shares.
17.3
16.5
11.3
6.7
5.5
4.1
3.1
2.8
1.5
1.4
70.1
61
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
DISTRIBUTION OF OWNERSHIP, DECEMBER 31, 2020
Number of shares
shareholders % of shareholders
Number of
1–100
101–500
501–1,000
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
100,001–500,000
500,001–
Total
of which nominee-registered
Non-transferred, total
In general account
In special accounts, total
Total issued
9,362
8,691
1,698
1,184
139
107
29
24
25
44.0
40.9
8.0
5.6
0.7
0.5
0.1
0.1
0.1
21,259
100.0
11
0
SHAREHOLDER GROUPS, DECEMBER 31, 2020
Shareholders by sector
Households
Public entities
Financial and insurance institutions
Companies
Non-profit institutions
Foreign owners
Total
Of which nominee-registered
Number of
securities
465,015
2,154,513
1,310,040
2,394,657
1,025,469
2,213,035
2,120,389
4,933,055
111,420,358
128,036,531
10,862,671
0
0
0
% of securities
Number of votes
% of votes
0.4
1.7
1.0
1.9
0.8
1.7
1.7
3.9
87.0
100.0
8.5
0
0
0
465,015
2,154,513
1,310,040
2,394,657
1,025,469
2,213,035
2,120,389
4,933,055
111,420,358
128,036,531
10,862,671
0
0
0
0.4
1.7
1.0
1.9
0.8
1.7
1.7
3.9
87.0
100.0
8.5
0
0
0
100
128,036,531
100
128,036,531
Number of shares
% of shares
8,106,373
32,757,498
30,487,993
21,628,172
2,989,911
21,203,913
117,173,860
10,862,671
6.9
28.0
26.0
18.5
2.6
18.1
100.0
8.5
BOARD AND MANAGEMENT HOLDINGS
The holdings of the Board of Directors and management are presented in
the financial statements and in the corporate governance statement.
NOTIFICATIONS OF MAJOR SHAREHOLDINGS
In 2020, Terveystalo did not receive any notifications of major shareholdings.
SHARE-BASED INCENTIVE SCHEMES AND THE BOARD’S AUTHORIZATIONS
The company’s currently valid long-term share-based incentive scheme
consists of three performance periods, the calendar years 2018, 2019, and
2020. The Board of Directors decides on the performance criteria and the
required performance levels for each criterion at the beginning of each
performance period.
During the performance period 2020, the scheme offered the key emp-
loyees the possibility to earn rewards based on the Company achieving the
required operational targets and Total Shareholder Return (TSR) levels.
These targets were not met and no rewards will be paid for this earning
period.
Terveystalo Plc's Board of Directors has decided on a new long-term sha-
re-based incentive program for key personnel. The plan replaces the previous
long-term incentive program. The long-term incentive plan consists of
a Performance Share Plan for Terveystalo's management and other key
personnel, a Bridge plan for the President and CEO, and of a Restricted
Share Plan for specific situations such as key recruitments or for recognizing
key talent. The Performance Share Plan is based on a rolling three-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.
Evli Awards Management Oy (EAM) is responsible for the acquisition
and management of the shares in accordance with the section of the Li-
mited Liability Companies Act concerning incentives and the financing of
the acquisition of company shares. Financed by Terveystalo, EAM TTALO
Holding Oy will acquire shares in accordance with the agreement to be
used as part of Terveystalo’s share-based incentive system, in accordance
would be paid no later than July 15, 2020. On June 30, 2020, Terveystalo’s
Board of Directors decided that the EUR 0.13 dividend per share resolved
by the Annual General Meeting be paid to shareholders who are included
in the company shareholders’ register, maintained by Euroclear Finland Ltd,
on the record date of dividend payment, July 2, 2020. Dividend was paid
on July 9, 2020.
The number of the members of the Board of Directors was confirmed
as seven (7). Dag Andersson, Lasse Heinonen, Kari Kauniskangas, Åse
Aulie Michelet, Katri Viippola, and Tomas von Rettig were re-elected as
members of the Board, and Niko Mokkila was elected as a new member
of the Board.
Authorized Public Accountants KPMG Oy Ab was re-elected as the
company’s auditor, with APA Henrik Holmbom as the auditor in charge.
The Annual General Meeting authorized the Board of Directors to
resolve on the repurchase or 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 own shares in total, which corresponds
to approximately 10 percent of the company’s currently registered shares.
The Annual General Meeting also authorized the Board of Directors
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 of a maximum of 12,803,653 shares in total, which cor-
responds to approximately 10 percent of the company’s currently registe-
red shares.
The authorization can be used for the financing or execution of acquisi-
tions 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.
The Annual General Meeting authorized the Board of Directors to de-
cide on donations of a total maximum of EUR 150,000 for charitable or
corresponding purposes.
All of the authorizations will remain effective until the end of the Annual
General Meeting 2021 and in any event no longer than June 30, 2021.
The new Board of Directors elected Kari Kauniskangas as its Chairman
and Tomas von Rettig as its Vice-Chairman. The Board of Directors also
elected members to the Board committees. Lasse Heinonen was elected as
Chairman of the Audit Committee and Tomas von Rettig and Niko Mok-
kila as members of the Audit Committee. Kari Kauniskangas was elected
as Chairman of the Remuneration Committee and Dag Andersson, Åse
Michelet, and Katri Viippola as members of the Remuneration Committee.
CORPORATE GOVERNANCE
Terveystalo Plc’s Corporate Governance Statement, Remuneration Policy,
and Remuneration Report for 2020 have been published as a separate docu-
ment from the Board of Directors' Report and as part of the Annual Report
on pages 26-43 and are also available on the company's website.
with the terms of the scheme. During the financial year, EAM TTALO Hol-
ding Oy held 730,000 Terveystalo shares.
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 re-
gistered 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 per-
cent of the company’s currently registered shares. The authorization can
be used for the financing or execution of acquisitions or other business ar-
rangements, 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 Direc-
tors, or for other purposes as determined by the Board of Directors.
DIVIDEND POLICY AND DISTRIBUTION OF PROFITS FOR 2020
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 perfor-
mance, development potential, financial position, and capital requirements
are taken into account. In 2020, earnings per share were EUR 0.36 (0.43).
The parent company’s distributable funds totaled EUR 543.1 million, of
which EUR 26.0 million is profit for the financial year. The Board of Dire-
ctors proposes to the Annual General Meeting that a dividend EUR 0.13
(0.13) per share be distributed for 2020, totaling EUR 16.5 (16.5) million.
Furthermore, the Board of Directors proposes that the Board of Directors
be authorized to decide at its discretion on a further dividend payment,
so that the maximum amount of dividend payable under the authoriza-
tion is EUR 0.13 per share. This means that the maximum dividend per
share would be EUR 0.26 in total. The authorization will remain in force
until the beginning of the next Annual General Meeting. Unless the Board
of Directors decides otherwise for a justified reason, dividend under this
authorization will be paid once during its period of validity. 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 2020 AND THE
FIRST BOARD MEETING
Terveystalo Plc’s Annual General Meeting was held in Helsinki on May 28,
2020. The Annual General Meeting adopted the financial statements for
the year 2019 and discharged the members of the Board of Directors and the
President and CEO from liability. The Annual General Meeting approved
the proposals of the Shareholders’ Nomination Board and the Board of
Directors without any changes.
In accordance with the proposal of the Board of Directors, the Annual
General Meeting resolved to pay a dividend of EUR 0.13 per share on the
basis of the balance sheet confirmed for the financial year 2019 (at the cur-
rent number of shares, this totals approximately EUR 16.6 million) In addi-
tion, in accordance with the proposal of the Board of Directors, the Annual
General Meeting resolved to authorize the Board of Directors to decide
on the date of record and date of payment at its discretion, so that dividend
62
63
TERVEYSTALOANNUAL REPORT 2020 GENERAL MEETING OF SHAREHOLDERS 2021
Annual General Meeting of Terveystalo Plc will be held on Thursday, March
25, 2021 in Helsinki.
Terveystalo Plc
Board of Directors
• 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.
• The development and implementation of information system pro-
jects 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’s business operations rely on its capacity to identify,
recruit, and retain competent and professional healthcare professio-
nals, 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 company may not be able to find suitable acquisition targets or
expansion opportunities under favourable terms, and the integration
of acquisition targets is not necessarily realized as planned.
• The company’s business is very dependent on functioning informa-
tion 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.
• 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 https://www.terveystalo.com/en/investors/
Corporate-governance/Risk-management-and-risks/ and in the company’s
Annual Review.
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
CHANGES IN MANAGEMENT
• Minttu Sinisalo b. 1980, M.Sc. (Econ.) started as Terveystalo’s Senior
Vice President for Human Resources on January 1, 2020.
• Susanna Laine, Senior Vice President, Communications and Brand,
vacated her position on January 8, 2020. Veera Siivonen, b.1980,
M.Sc. Tech, was appointed Terveystalo’s Senior Vice President,
Marketing and Communications as of May 1, 2020.
• Elina Saviharju, b. 1981, LL. B, LL.M. (Harvard) was appointed
Terveystalo’s Senior Vice President, Legal, as of May 11, 2020, after
Julia Ormio resigned.
• Mikko Tainio b. 1979, M.Sc. (Econ.), was appointed Senior Vice Pre-
sident, Public Services as of November 1, 2020, after his predecessor
Laura Räty resigned.
• Tom Gustafsson served as interim Senior Vice President, Corpo-
rate Health, after Jens Jensen resigned in May 2020. Marja-Leena
Tuomola, b. 1962, LL.M., eMBA, was appointed Terveystalo’s Senior
Vice President, Corporate Health as of January 1, 2021.
The above members of Terveystalo Management Group report to President
and CEO Ville Iho.
EVENTS AFTER THE REPORTING PERIOD
Terveystalo is reshaping its operating model to better respond to its cus-
tomers’ needs and the ongoing transformation of the healthcare industry.
As of January 1, 2021, Terveystalo’s organization consists of five business
areas: Corporate Health, led by Marja-Leena Tuomola; Consumer Business,
led by Veera Siivonen; Public Partnerships, led by Mikko Tainio; Growth
Businesses, led by Petri Keksi, and Medical Clinic Network, led by Siina Saksi.
The business areas are supported by six departments: Clinical Quali-
ty and Management (Petri Bono, CMO), Finance (Ilkka Laurila, CFO),
Digitalization and IT (Juha Juosila, Chief Digital Officer), HR (Minttu Si-
nisalo, SVP HR), Law and Compliance (Elina Saviharju, SVP Legal), and
Communications, Investor Relations, and Corporate Responsibility (Kati
Kaksonen, VP Communications).
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 global pandemic and the related restrictive measures may have
a significant impact on consumer behaviour, demand for healthcare
services, and the company’s expected financial development. The
Emergency Powers Act and other regulations pertaining to emer-
gency circumstances give the public sector the power to intervene
in service production and even take private sector resources into
public use if necessary.
• The restrictions complicate supply chain operations globally, which
reduces the availability of the personal protective equipment neces-
sary in service provision, among other things.
64
65
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
CONSOLIDATED FINANCIAL STATEMENTS, IFRS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF INCOME
EUR mill.
Revenue
Other operating income
Materials and services
Employee benefit expenses
Depreciation, amortization and impairment losses
Other operating expenses
Operating profit
Financial income
Financial expenses
Net finance expenses
Share of results in associated companies
Profit before taxes
Income tax expense
Profit for the period
Profit attributable to
Owners of the parent company
Non-controlling interests
Earnings per share for profit attributable to the shareholders of the parent company, in euro
Basic earnings per share
Diluted earnings per share
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR mill.
Profit for the period
Other comprehensive adjustments, net of taxes
Total comprehensive income
Total comprehensive income attributable to
Owners of the parent company
Non-controlling interest
The notes are an integral part of the Consolidated financial statements.
Note
1.1.-31.12.2020
1.1.-31.12.2019
4
5
6
7
8
9
10
10
11
12
12
986.4
2.7
-447.6
-310.2
-91.2
-73.0
67.2
0.2
-10.3
-10.0
-0.6
56.6
-10.8
45.8
45.8
-0.0
0.36
0.36
1,030.7
2.1
-472.9
-314.3
-89.8
-74.4
81.4
0.3
-14.7
-14.4
-0.2
66.8
-12.7
54.1
54.2
-0.1
0.43
0.42
1.1.-31.12.2020
1.1.-31.12.2019
45,8
-
45,8
45,8
-0,0
54,1
-
54,1
54,2
-0,1
EUR mill.
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
Other intangible assets
Investment properties
Investments in associates
Loan receivables
Deferred tax assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Non-current assets held for sale
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity attributable to equity holders of the Company
Share capital
Invested non-restricted equity reserve
Treasury shares
Retained earnings
Equity attributable to equity holders of the Company total
Non-controlling interest
TOTAL EQUITY
Non-current liabilities
Non-current financial liabilities
Non-current lease liabilities *
Deferred tax liabilities
Provisions
Other liabilities
Total non-current liabilities
Current liabilities
Provisions
Trade and other payables
Current tax liabilities
Current financial liabilities
Current lease liabilities *
Total current liabilities
TOTAL LIABILITIES
66
TOTAL EQUITY AND LIABILITIES
The notes are an integral part of the consolidated financial statements.
*) The presentation of statement of financial position has been changed and the comparison period has been restated respectively.
Note
31 Dec 2020
31 Dec 2019
13
13
14, 15
14
16
17
21
11
21
22
23
20, 25
20, 25
11
27
27
26
20, 25
20, 25
67.6
172.4
781.8
152.2
0.5
2.2
0.3
4.4
69.5
193.2
779.2
161.9
0.5
2.3
0.3
3.7
1,181.3
1,210.7
6.8
95.1
77.1
179.0
0.8
1,361.0
0.1
492.8
-6.7
85.3
571.4
-
571.4
302.3
141.1
26.0
7.7
9.4
486.6
2.4
162.7
13.5
87.2
37.3
303.1
5.6
101.6
40.6
147.8
0.8
1,359.3
0.1
492.8
-6.7
55.1
541.2
0.0
541.2
344.1
159.9
30.3
7.5
9.7
551.5
1.6
165.4
14.8
46.7
38.1
266.6
789.6
1,361.0
818.0
1,359.3
67
TERVEYSTALOANNUAL REPORT 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
EUR mill.
Equity 1 Jan 2020
Comprehensive income
Profit for the period
Transactions with owners
Share-based payments
Dividends
Equity 31 Dec 2020
EUR mill.
Equity 1 Jan 2019
Comprehensive income
Profit for the period
Transactions with owners
Share-based payments
Equity repayment
Other adjustments
Equity 31 Dec 2019
Equity attributable to owners of the parent company
Share capital
Invested
non-restricted
equity reserve
Treasury
shares
Retained
earnings
0.1
492.8
-6.7
-
-
-
-
-
-
-
-
-
0.1
492.8
-6.7
55.1
45.8
0.9
-16.5
85.3
Equity attributable to owners of the parent company
Share capital
Invested
non-restricted
equity reserve
Treasury
shares
Retained
earnings
0.1
518.2
-6.7
-
-
-
-
0.1
-
-
-25.5
-
492.8
-
-
-
-6.7
0.1
54.2
0.7
-
0.1
55.1
Non-
controlling
interests
Total equity
0.0
0.0
-
-
-
541.2
45.8
0.9
-16.5
571.4
Non-
controlling
interests
Total equity
0.1
-0.1
-
-
-
0.0
511.8
54.1
0.7
-25.5
0.1
541.2
Total
541.2
45.8
0.9
-16.5
571.4
Total
511.7
54.2
0.7
-25.5
0.1
541.2
The notes are an integral part of the consolidated financial statements.
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR mill.
Cash flows from operating activities
Profit before income taxes
Adjustments for
Non-cash transactions
Depreciation, amortization and impairment losses
Change in provisions
Other non-cash transactions
Gains and Losses on sale of property, plant, equipment and other changes
Net finance expenses
Changes in working capital
Trade and other receivables
Inventories
Trade and other payables
Interests received
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired
Acquisition of property, plant and equipment
Acquisition of intangible assets
Investments to associated companies
Proceeds from sale of financial assets
Acquisition of business operations, net of cash acquired
Long-term loans granted
Proceeds from granted long-term loans
Proceeds from sale of property, plant and equipment
Dividends received
Net cash from investing activities
Cash flows from financing activities
Proceeds from non-current borrowings
Repayment of non-current borrowings
Proceeds from current borrowings
Repayment of current borrowings
Payment of lease liabilities
Payment of hire purchase liabilities
Interests and other financial expenses paid
Dividends paid and equity repayment
Net cash from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
The notes are an integral part of these Consolidated financial statements.
Note
1.1.-31.12.2020
1.1.-31.12.2019
56.6
66.8
8
10
25
25
25
25
25
25
91.2
1.0
-0.8
0.0
10.0
5.3
-1.2
-1.4
0.2
-17.2
143.7
-2.0
-13.0
-20.1
-0.5
0.0
-0.6
-0.2
-
0.4
0.0
89.8
-1.2
-2.4
0.0
14.4
-7.9
0.3
17.7
0.3
-4.1
173.6
-12.3
-15.9
-17.7
-0.3
0.3
-1.0
-0.3
0.2
0.1
0.1
-36.0
-46.7
-
-41.5
40.0
-
-37.7
-5.5
-10.0
-16.5
-71.2
36.5
40.6
77.1
370.0
-401.4
-
-10.0
-37.1
-4.9
-14.2
-25.5
-123.1
3.8
36.9
40.6
68
69
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
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”) consists of the parent company and 17 subsidiaries. More information
on subsidiaries is presented in note 30. 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, diagnos-
tic services, outpatient surgery, dental services and other adjacent services
to corporate, private and public sector customers. Terveystalo had appro-
ximately 300 clinics in financial year 2020.
In its meeting on 10 February 2021 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 2020. 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 otherwi-
se 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
NEW AND AMENDED STANDARDS APPLIED IN THE FINANCIAL YEAR 2020
Terveystalo Group has applied as from 1 January 2020 the following new
and amended standards that have come into effect:
AMENDMENTS TO REFERENCES TO CONCEPTUAL FRAMEWORK IN IFRS STANDARDS
The revised Framework codifies IASB’s thinking adopted in recent stan-
dards. The Conceptual Framework primarily serves as a tool for the IASB
to develop standards and to assist the IFRS Interpretations Committee in
interpreting them. It does not override the requirements of individual IFRSs.
The amendments to the Conceptual Framework did not have a significant
impact on Terveystalo’s consolidated financial statements.
AMENDMENTS TO IFRS 3 – DEFINITION OF A BUSINESS
The amendments narrowed and clarified the definition of a business. They
also permit a simplified assessment of whether an acquired set is a group of
assets rather than a business. The new amendments did not have a significant
impact on Terveystalo’s consolidated financial statements.
AMENDMENTS TO IAS 1 AND IAS 8 – DEFINITION OF MATERIAL
The amendments clarify the definition of material and include guidance to
help improve consistency in the application of that concept across all IFRS
Standards. In addition, the explanations accompanying the definition have
been improved. The new amendments did not have a significant impact on
Terveystalo’s consolidated financial statements.
AMENDMENTS TO IFRS 9, IAS 39 AND IFRS 7 – INTEREST RATE BENCHMARK REFORM
Amendments have been issued to address uncertainties related to the reform
of interbank offered rates (IBOR). The amendments provide targeted relief
for financial instruments qualifying for hedge accounting in the lead up to
IBOR reform. The new amendments did not have an impact on Terveystalo’s
consolidated financial statements.
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 2020.
AMENDMENT TO IFRS 16 – COVID-19-RELATED RENT CONCESSIONS
(effective for financial years beginning on or after 1 June 2020)
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 are not
expected to be significant.
AMENDMENTS TO IFRS 9, IAS 39, IFRS 7, IFRS 4 AND IFRS 16 – INTEREST RATE BENCHMARK
REFORM – PHASE 2*
(effective for financial years beginning on or after 1 January 2021)
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 are not expected to be significant.
AMENDMENTS TO IAS 16 – PROCEEDS BEFORE INTENDED*
(effective for financial years beginning on or after 1 January 2022)
Under the amendments, proceeds from selling items before the related item
of PPE is available for use should be recognized in profit or loss, together with
the costs of producing those items. The amendments are not expected to
have an impact on Terveystalo’s consolidated financial statements.
AMENDMENTS TO IAS 37 – ONEROUS CONTRACTS*
(effective for financial years beginning on or after 1 January 2022)
estimate or assumption is revised, and in the future periods if the change
affects the subsequent periods.
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*
(effective for financial years beginning on or after 1 January 2022)
•
•
IFRS 9: This amendment clarifies that – for the purpose of perfor-
ming 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.
AMENDMENTS TO IAS 1 – CLASSIFICATION OF LIABILITIES AS CURRENT OR NON-CURRENT*
(effective for financial years beginning on or after 1 January 2023)
The amendments are to promote consistency in application and clarify the
requirements on determining if a liability is current or non-current. The im-
pacts of the amendments on Terveystalo’s consolidated financial statements
are not expected to be significant.
IFRS 17 INSURANCE CONTRACTS*
(effective for financial years beginning on or after 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 Terve-
ystalo’s consolidated financial statements is not expected to be significant.
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
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 rea-
sonable for measurement of fair values. In addition, the Group’s property,
plant and equipment and intangible assets are assessed to determine whet-
her there is any indication of impairment at least at each reporting date.
The valuation of deferred 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 profitability of each scenario.
Lease contracts
Terveystalo’s lease contracts include both termination and extension options.
Group uses the options in managing lease contracts to ensure flexible use
of premises in Group’s businesses. Management uses judgment to deter-
mine 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. See note 15 Impairment testing of cash-generating units including
goodwill for more detailed information.
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 loss-making contracts.
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FINANCIALS
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 con-
tingent 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 state-
ment 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.
Transactions with non-controlling interests that do not result in the loss
of control are treated as equity transactions – in other words, as transac-
tions 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.
Terveystalo Group does not have such subsidiaries, which have a significant
non-controlling interest.
ASSOCIATES
Associates are entities over which the Group has significant influence. Sig-
nificant 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 in-
vestment, 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 owner-
ship. 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. Ad-
justments 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 indi-
cation 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 signifi-
cant 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 Group had no significant foreign currency transactions during the
reporting period and as at the reporting date the Group has no significant
foreign currency denominated monetary or non monetary statement of
financial position items.
2.6 PROPERTY, PLANT AND EQUIPMENT
Items of property, plant and equipment are measured at cost less accumu-
lated depreciation and impairment losses. Depreciation is recognized on a
straight-line basis over the estimated useful lives of items of property, plant
and equipment. Land is not depreciated.
The estimated useful lives are as follows:
Magnetic resonance imaging equipment
Buildings
Machinery and equipment
Improvements to office premises
Right-of-use assets
Other intangible assets are measured at cost and amortized on a straight-line
basis over the known or estimated useful lives.
The Group has no intangible assets other than goodwill with indefinite
useful lives.
Amortization periods used for intangible assets are as follows:
10 years
10–40 years
2–7 year
2–10 years
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 depre-
ciated over the useful life.
Gains and losses on the sale and disposal of property, plant and equip-
ment 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 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.
Goodwill is not amortized but tested for impairment annually. For im-
pairment testing, goodwill is allocated to cash generating units or groups of
cash generating units. Goodwill is measured at cost less accumulated im-
pairment 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 recognized 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.
Intangible assets acquired in a business combination are recognized 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.
Immaterial rights
Other intangible assets
Software
Customer agreements and
related customer relationships
Trademarks
3–10 years
3–5 years
5 years
2-12 years
20 years or
shorter useful life
RESEARCH AND DEVELOPMENT
Research expenditure are recognized as an expense as incurred in the sta-
tement 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 an-
nually, irrespective of whether there is any evidence of impairment. Evidence
of impairment is assessed at the level of geographical areas using common
resources (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 im-
pairment 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.
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YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
FINANCIAL ASSETS
At the end of each reporting period the Group evaluates indicators of
potential impairment of a single financial asset or a group of financial assets.
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 los-
ses 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 relat-
ed 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 compo-
nents, they are accounted for separately.
Subsequently right-of-use assets are measured at cost less any accumu-
lated depreciation and any accumulated impairment losses and adjusted
for any remeasurements of the lease liability. A right-of-use asset is depre-
ciated 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 pay-
ments 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.
in the Terveystalo’s estimate of the amount expected to be payable under a
residual value guarantee or if the Group changes its assessment of whether
it will exercise a purchase, extension or termination option. When a lease
liability is remeasured in this way, a corresponding adjustment is made to
the carrying amount of the right-to-use asset or is recorded in the state-
ment 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
Financial assets are classified in accordance with IFRS 9 Financial instruments
into the following categories: financial assets at fair value through the state-
ment of income, financial assets at fair value through other comprehensive
income or financial assets 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 comp-
rise mainly of loan receivables and are initially measured at fair value. Fair
value is determined based on their current quotation in active markets.
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.
Terveystalo has not had financial assets at fair value through other
comprehensive income during the periods 2019 or 2020.
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 instru-
ment for less than 12 months from the reporting date, in which case they are
included in current assets.
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 anot-
her 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
Financial liabilities are measured at fair value through the statement of income
or loss or at amortized cost.
Financial liabilities at fair value through the statement of income include
interest rate derivatives. 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 ins-
titutions, lease liabilities and hire and purchase liabilities. They are initially
recognized at fair value which is based on the consideration received. Tran-
saction costs are included in the initial amount recognized and subsequent-
ly the financial liability is measured at amortized cost using the effective
interest method.
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
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 uncon-
ditional right to postpone the payment of the liability to at least 12 months
from the reporting date.
Overdraft accounts included in Group cash pool account structure are
included in current interest-bearing financial liabilities and they are presented
on a net basis, because the Group has a contractual legal right to off-set or
otherwise eliminate an amount due to a debtor fully or in part.
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.
The classification of the Group’s liabilities is presented in note 24 Fi-
nancial liabilities.
2.12 INVENTORIES
Inventories are measured at the lower of cost and net realizable value. The
cost of inventories is determined by using FIFO (first in, first out) method.
Net realizable value is the cost of inventory less obsolescence allowance.
2.13 EMPLOYEE BENEFITS
PENSION BENEFITS
Pension plans are classified as either defined contribution plans or defined
benefit plans. The Finnish TyEL pension insurance is treated as a defined
contribution plan. 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.
SHARE-BASED PAYMENT TRANSACTIONS
Share-based payment schemes are valued at fair value on the grant date
and recognized as an expense over the vesting period. A corresponding
adjustment is made to equity or liabilities when the transaction is cash settled.
The expense determined at the grant date is based on the Group’s es-
timate of the number of shares that will ultimately vest. The estimate is
reviewed at the end of each reporting period and the potential impact of
any adjustments to the initial estimates is recognized in profit or loss and a
corresponding adjustment is made to equity or liabilities. When the shares
are subscribed, the proceeds received, net of any transaction costs, are cre-
dited in the invested non-restricted equity reserve.
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 eco-
nomic benefits will be required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation. Provisions are recognized at
the present value of the expenditure required to fulfil the obligation. If the
obligation can be partially compensated by a third party, the compensation
is treated as a separate asset, but only when it is virtually certain that the
compensation will be received.
A provision is recognized for contracts when the unavoidable costs of
meeting the obligations under the contract exceed the economic benefits
expected to be received under it.
A contingent liability is a possible obligation arising as a result of past
events, and whose existence will be confirmed only when an uncertain futu-
re 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
Terveystalo Group’s revenue consist mainly of occupational healthcare
services, general practice and clinic hospital operations, dental services as
well as diagnostic services. Terveystalo Group also provides diverse primary
healthcare and special healthcare services for public sector. 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 Terveystalo 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 predeter-
mined services or a bundle of services, revenue is recognized as Terveystalo
fulfils the performance obligation by performing the promised service.
Long-term contracts are assessed to include a single performance obliga-
tion 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 char-
ged through the statement of income in the period in which they become
known. Terveystalo Group has not incurred any substantial costs for obtai-
ning customer contracts.
Regarding private practitioners, Terveystalo acts as the principal and
recognizes revenue on a gross basis. Fees related to purchasing these ser-
vices are recognized in materials and services expenses.
2.16 SEGMENT INFORMATION
Terveystalo Group’s business is divided into three regions which are the
Group’s operating segments: Capital region, Central Units and Regional
Units. 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 reports the Group as
one reportable segment based on the IFRS 8 aggregation criteria as same
services are offered in all regions, customer type is similar in all regions,
methods used to provide services are similar and regulatory environment and
operational risks are same in all regions. In addition, monitoring of profitability
is primarily based on geographical areas. CEO is Terveystalo’s chief operating
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CORPORATE GOVERNANCE
FINANCIALS
decision maker. Terveystalo operates mainly in Finland and Terveystalo does
not have individual significant customers as defined in IFRS 8.
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 rea-
sonable assurance that grants will be received, and Group will comply with
the conditions associated with the grants.
2.18 OPERATING PROFIT
IAS 1 (Presentation of Financial Statements) standard does not define opera-
ting 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, dep-
reciation, 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 repor-
ting 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 cont-
racts.
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.
76
3. BUSINESS COMBINATIONS
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 a value EUR 0.1 million. The
contingent consideration is tied to the future sales to be incurred.
On the 1 August 2020 Suomen Terveystalo Oy acquired the occupa-
tional health business activities of Keski-Satakunnan Työterveydenhuolto.
On the 30 August 2020 Suomen Terveystalo Oy acquired the busi-
ness 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 per-
cent 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 ac-
quired and liabilities assumed at the acquisition date. The statement of
financial position of acquired companies has been prepared in accordan-
ce with IFRS and Terveystalo Group’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.
Cash
Contingent consideration
Total consideration transferred
Identifiable assets acquired and liabilities assumed
EUR mill.
Cash and cash equivalents
Intangible assets
Trade and other receivables
Trade and other payables
Deferred tax liabilities
Total identifiable net assets acquired
Goodwill
2.4
0.5
2.9
0.1
0.5
0.1
-0.2
-0.1
0.5
2.5
As a result of these business combinations, a preliminary 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 bu-
siness acquisitions.
recognized. 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 0.4 million. The contingent
consideration is tied to the sales during the next 36 months period, starting
from the acquisition date.
In these business combinations, the Group has acquired customer re-
lationships. The fair value of customer contracts and related customer re-
lationships included in other intangible assets has been determined on the
basis of the estimated duration of customer relationships and the discount-
ed 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 78.8
thousand related to transfer tax, consulting, valuation or equivalent ser-
vices. 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 estima-
tes 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.
YEAR 2019
During the year 2019, the Group has made six business acquisitions and
acquired three businesses.
On 31 January 2019 Terveystalo Healthcare Oy acquired 100 percent
of the shares of Länsi-Vantaan Hammaslääkärit Oy. The acquired subsidia-
ry has been consolidated to Group’s financial statements from the acqui-
sition month onwards. 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 0.5 million. The con-
tingent consideration is tied to the sales during the next 36 months period,
starting from the acquisition date.
On 29 March 2019 Terveystalo Healthcare Oy acquired 100 percent
of the shares of Kajaanin OMT-Fysioterapia Oy. The acquired subsidiary
has been consolidated to Group’s financial statements from the acquisition
month onwards. 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 0.1 million. The con-
tingent consideration is tied to the sales during the next 36 months period,
starting from the acquisition date.
On 28 June 2019 Terveystalo Healthcare Oy acquired 100 percent of
the shares of Etelä-Karjalan Työkunto Oy. The acquired subsidiary has
been consolidated to Group’s financial statements from the acquisition
month onwards.
On 30 August 2019 Terveystalo Healthcare Oy acquired 100 percent of
the shares of TyöSyke Oy. The acquired subsidiary has been consolidated
to Group’s financial statements from the acquisition month onwards.
On 30 August 2019 Suomen Terveystalo Oy acquired the business
from Hammaslääkäri Osmo Karinen Trade name.
On 30 September 2019 Terveystalo Healthcare Oy acquired 100
percent of the shares of Hardent Oy. A goodwill of 1.7 EUR million was
On 30 September 2019 Suomen Terveystalo Oy acquired the business
from Forssan seudun hyvinvointikuntayhtymä.
On 28 October 2019 Terveystalo acquired 100 percent of the shares of
Evalua International Ltd. The acquired subsidiary has been consolidated
to Group’s financial statements from the acquisition month onwards. 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 0.4 million.
On 31 of December 2019 Terveystalo acquired the occupational health
business from Municapality of Säkylä.
The following table summarizes the acquisition date fair values of the
consideration transferred as well as the recognized amounts of assets ac-
quired, and liabilities assumed at the date of acquisition. The statement of
financial position of acquired companies has been prepared in accordance
with IFRS and Terveystalo Group’s accounting principles in all material res-
pect. In the following table the information has been consolidated, because
the acquisitions are not material individually.
Consideration transferred
EUR mill.
Cash
Contingent consideration
Total consideration transferred
Identifiable assets acquired and liabilities assumed
EUR mill.
Cash and cash equivalents
Intangible assets
Property, plant and equipment
Inventories
Trade and other receivables
Trade and other payables
Deferred tax liabilities
Total identifiable net assets acquired
Goodwill
14.0
1.4
15.4
1.6
4.8
0.3
0.1
1.2
-1.8
-0.9
5.2
10.2
The tangible assets acquired in the business combination described above
were measured at fair value. In these business combinations, the Group
has acquired customer relationships and other intangible assets. The fair
value of customer contracts and related customer relationships included in
other intangible assets has been determined on the basis of the estimated
duration of customer relationships and the discounted net cash flows from
existing customer contracts.
77
TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
As a result of these business combinations, a goodwill amounting to EUR 10.2
million was recognized. The goodwill is attributable to skills of the workforce
and synergies expected to be achieved. The recognized goodwill is tax
deductible as far as it is related to business acquisitions.
The fair value of the acquired trade and other receivables amounted to
EUR 1.2 million, for which the risk of impairment has been deemed non-
significant.
The Group has incurred acquisition related expenses of EUR 1.6 million
related to transfer tax caused by the transaction, and related to consulting,
valuation or equivalent services. The expenses have been included in other
operating expenses.
The contributed recognized revenue from these acquisitions in 2019
was EUR 6.7 million and the result was EUR 0.3 million.
If the acquisition had occurred on 1 January 2019, management estima-
tes that the Group’s consolidated revenue in 2019 would have been EUR
1,038.7 million and the consolidated result would have been EUR 53.8 mil-
lion.
4. DISAGGREGATION OF 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 healthcare 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 healthcare cus-
tomers. The company provides statutory occupational health services and
other occupational health and well-being services for corporate custo-
mers of all sizes. Terveystalo is the largest provider of occupational health
care services in Finland in terms of revenue and the number of end-users.
Terveystalo provides occupational healthcare services for over 24,000
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 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.
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 healthcare customers. Terve-
ystalo’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 custo-
mers are mainly financed by municipalities and government budgets.
78
Disagregation of revenue
EUR mill.
Corporate
Private
Public
Outsourcing
Staffing services
Service sales, occupational health and others
Total
Timing of satisfying performance obligations
EUR mill.
At a point in time
Over time
Total
Balances in the statement of financial position
EUR mill.
Trade receivables
Contract assets
Contract liabilities
5. OTHER OPERATING INCOME
EUR mill.
Rental income
Gains on sale of property, plant and equipment
Gains on disposal of subsidiaries
Other items
Total
6. MATERIALS AND SERVICES
EUR mill.
Purchases of materials
Change in inventories
External services
Total
7. EMPLOYEE BENEFIT EXPENSES
EUR mill.
Wages and salaries
Share-based payments
Pension expenses - defined contribution plans
Other social security costs
Total
Number of personnel at the end of the reporting period
1.1.-31.12.2020
1.1.-31.12.2019
418.8
295.4
272.2
121.4
83.1
67.7
986.4
432.5
303.1
295.1
149.9
86.9
58.2
1 030.7
1.1.-31.12.2020
1.1.-31.12.2019
861.8
124.5
986.4
877.1
153.6
1 030.7
1.1.-31.12.2020
1.1.-31.12.2019
85.8
5.6
2.2
90.1
8.8
1.5
1.1.-31.12.2020
1.1.-31.12.2019
1.1
0.2
-
1.5
2.7
1.2
0.3
-0.5
1.1
2.1
1.1.-31.12.2020
1.1.-31.12.2019
-35.5
1.3
-413.4
-447.6
-32.0
-0.3
-440.6
-472.9
1.1.-31.12.2020
1.1.-31.12.2019
-261.6
-0.9
-38.6
-9.0
-310.2
8,253
-261.2
-0.7
-44.1
-8.4
-314.3
8,685
79
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
8. DEPRECIATION, AMORTIZATION AND IMPAIRMENT
EUR mill.
Depreciation and amortization by asset type
Intangible assets
Trademarks
Customer relationships
Other intangible assets
Total
Property, plant and equipment
Buildings
Machinery and equipment
Improvement to premises
Other tangible assets
Total
Right-of-use assets
Investment property
Depreciation and amortization total
Impairment losses by asset groups
Other intangible assets
Machinery and equipment
Other property, plant and equipment
Improvement to premises
Impairment total
Total depreciation, amortization and impairment losses
9. OTHER OPERATING EXPENSES
Specification of other operating expenses
EUR mill.
External services
Operating and maintenance expenses for premises and equipment
ICT expenses
Non-statutory personnel expenses
Leases and charges
Travel expenses
Marketing and communication
Acquisition related expenses
Other costs
Total
80
1.1.-31.12.2020
1.1.-31.12.2019
In thousands of euro
1.1.-31.12.2020
1.1.-31.12.2019
Auditor's fees
-4.1
-17.8
-8.2
-30.2
-2.1
-14.4
-5.1
-0.8
-22.4
-38.5
-0.0
-91.1
-0.0
-0.0
-0.0
-
-0.1
-91.2
-4.1
-17.4
-6.6
-28.1
-2.3
-15.1
-4.8
-0.8
-22.9
-38.3
-0.0
-89.4
-0.3
-
-0.0
-0.0
-0.4
-89.8
Audit and auditor's statements based on laws and regulations
Audit, KPMG
Auditor's statements based on laws and regulations, KPMG
Total
Non audit services
Assurance services, KPMG
Tax services, KPMG
Other services, KPMG
Total
Auditor's fees total
Auditor's fees have been presented excluding valued added tax.
10. FINANCIAL INCOME AND EXPENSES
EUR mill.
Interest income on loans and other receivables
Dividend income
Total financial income
Interest expense on loans from financial institutions
Interest expenses on lease liabilities
Change in fair value of interest rate derivatives, no hedge accounting
Other financial expenses
Total financial expenses
Net finance expenses
-145.5
-3.2
-148.7
-0.9
-1.0
-17.0
-18.9
-167.6
-147.2
-38.4
-185.6
-5.5
-4.4
-16.0
-25.9
-211.5
1.1.-31.12.2020
1.1.-31.12.2019
0.2
0.0
0.2
-5.9
-4.2
0.3
-0.5
-10.3
-10.0
0.3
0.0
0.3
-7.9
-4.5
-0.5
-1.7
-14.7
-14.4
1.1.-31.12.2020
1.1.-31.12.2019
Financial income and expenses do not include any significant foreign exchange gains or losses and there are no other foreign currency items in the consolidated statement
of income.
-2.4
-17.5
-27.1
-4.0
-3.5
-3.6
-4.6
-0.1
-10.3
-73.0
-2.5
-16.5
-22.8
-4.8
-3.7
-4.9
-7.2
-0.4
-11.5
-74.4
11. TAXES
11.1 INCOME TAXES
Income taxes in the statement of income
EUR mill.
Current tax for the reporting year
Income taxes for previous periods
Change in deferred taxes
Total income taxes
Deferred taxes have been calculated using the enacted tax rate of 20%.
1.1.-31.12.2020
1.1.-31.12.2019
-15.8
-0.0
5.1
-10.8
-15.6
0.0
2.8
-12.7
81
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Reconciliation of the Group's tax rate to the Finnish tax rate
EUR mill.
Profit or loss before taxes
Tax using the parent company's tax rate
Tax rates in foreign jurisdictions
Tax exempt income
Non-deductible expenses
Share of profit in associated companies
Recognition of previously unrecognized tax losses
Tax losses for which no deferred taxes are recognized
Taxes from previous periods
Other
Total income taxes in the statement of income
11.2 DEFERRED TAX ASSETS AND LIABILITIES
DURING THE YEAR 2020
Deferred tax assets:
1.1.-31.12.2020
1.1.-31.12.2019
56.6
-11.3
-0.0
0.2
-0.1
-0.1
0.2
-0.0
-0.0
0.4
-10.8
66.8
-13.4
0.0
0.1
-0.1
0.0
0.3
-0.2
0.0
0.6
-12.7
EUR mill.
Provisions
Leases
Interest rate derivatives
Other temporary differences
Total
Deferred tax liabilities:
EUR mill.
Reversal of goodwill amortization
Business combinations
Depreciation difference
Loan withdrawal expense
Other temporary differences
Total
1 Jan 2020
Recognized in
the statement
of income
Recognized
in equity
Business
combinations
31 Dec 2020
1.2
1.0
0.3
1.3
3.7
0.2
0.2
-0.1
0.3
0.7
-
-
-
-
–
-
-
-
-
–
1.4
1.2
0.2
1.6
4.4
1 Jan 2020
Recognized in
the statement
of income
Recognized
in equity
Business
combinations
31 Dec 2020
2.6
27.1
0.2
0.2
0.2
30.3
0.2
-4.8
0.4
-0.1
0.0
-4.3
-
-
-
-
-
–
-
0.1
-
-
-
0.1
2.8
22.4
0.6
0.2
0.1
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.
DURING THE YEAR 2019
Deferred tax assets:
EUR mill.
Provisions
Tax losses carried forward
Leases
Interest rate derivatives
Other temporary differences
Total
Deferred tax liabilities:
EUR mill.
Reversal of goodwill amortization
Business combinations
Depreciation difference
Loan withdrawal expense
Other temporary differences
Total
Recognized in
the statement of
income
1 Jan 2019
Recognized in
equity
Business
combinations
31 Dec 2019
1.6
2.3
0.5
0.2
1.2
5.8
-0.3
-2.3
0.5
0.1
0.1
-1.9
-
-
-
-
-
-0.1
-
-
-
-
0.0
-0.1
1.2
-
1.0
0.3
1.3
3.7
Recognized in
the statement of
income
1 Jan 2019
Recognized in
equity
Business
combinations
31 Dec 2019
2.3
31.1
0.2
0.3
0.2
34.1
0.2
-4.9
0.0
0.0
0.0
-4.7
-
-
-
-
-
0.0
-
0.9
-
-
-
0.9
2.6
27.1
0.2
0.2
0.2
30.3
Deferred tax assets are recognized from tax losses carried forward to the extent that is probable that future taxable profits will be available against which the losses can be
used. Unused tax losses amount to EUR 11.4 million in the beginning of financial year 2019.
12. EARNINGS PER SHARE
Result attributable to the equity holders of the company, EUR mill.
Weighted average number of shares, in thousands
Diluted average number of shares, in thousands
Basic earnings per share for result attributable to the equity holders of the company, EUR
Diluted earnings per share for result attributable to the equity holders of the company, EUR
1.1.-31.12.2020
1.1.-31.12.2019
45.8
127,307
127,860
0.36
0.36
54.2
127,307
127,907
0.43
0.42
82
83
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
13. PROPERTY, PLANT AND EQUIPMENT
13.1 RIGHT OF-USE-ASSETS AND LEASE LIABILITIES
2020
EUR mill.
Acquisition cost 1 Jan 2020
Business combination
Additions
Disposals
Transfers between items
Acquisition cost 31 Dec 2020
Accumulated depreciation and
impairment losses 1 Jan 2020
Depreciation for the reporting period
Accumulated depreciation and
impairment losses 31 Dec 2020
Carrying amount 1 Jan 2020
Carrying amount 31 Dec 2020
2019
EUR mill.
Acquisition cost 1 Jan 2019
Business combination
Additions
Disposals
Acquisition cost 31 Dec 2019
Accumulated depreciation and
impairment losses 1 Jan 2019
Depreciation for the reporting period
Impairment losses
Accumulated depreciation and
impairment losses 31 Dec 2019
Carrying amount 1 Jan 2019
Carrying amount 31 Dec 2019
Land and water,
buildings and
constructions
Machinery and
equipment
Improvement to
premises
Other tangible
assets and
advances paid
2.1
-
-
-
-
2.1
-1.1
-0.0
-1.1
1.0
1.0
115.6
0.0
12.4
-0.5
-0.1
127.4
-74.3
-13.8
-88.1
41.3
39.3
44.1
-
5.1
-0.0
0.3
49.5
-19.0
-5.1
-24.1
25.1
25.5
1.9
-
0.0
-
-0.1
1.8
-
-
-
1.9
1.8
Land and water,
buildings and
constructions
Machinery and
equipment
Improvement to
premises
Other tangible
assets and
advances paid
2.1
-
-
-
2.1
-0.8
-0.2
-
-1.1
1.3
1.0
98.1
0.3
18.5
-1.3
115.6
-60.2
-14.1
-
-74.3
37.9
41.3
38.0
-
6.1
-
44.1
-13.9
-4.8
-0.3
-19.0
24.1
25.1
0.7
-
1.2
-
1.9
-
-
-
-
0.7
1.9
Total
163.8
0.0
17.5
-0.5
-
180.8
-94.4
-18.9
-113.3
69.5
67.6
Total
138.9
0.3
25.9
-1.3
163.8
-74.9
-19.1
-0.3
-94.4
64.0
69.5
2020
EUR mill.
Acquisition cost 1 Jan 2020
Transactions
Acquisition cost 31 Dec 2020
Accumulated depreciation and impairment losses 1 Jan 2020
Depreciation for the reporting period
Accumulated depreciation and impairment losses 31 Dec 2020
Carrying amount 1 Jan 2020
Carrying amount 31 Dec 2020
2019
EUR mill.
Acquisition cost 1 Jan 2019 (IAS 17)
IFRS 16 implementation
Transactions
Acquisition cost 31 Dec 2019
Accumulated depreciation and impairment losses 1 Jan 2019
Depreciation for the reporting period
Accumulated depreciation and impairment losses 31 Dec 2019
Carrying amount 1 Jan 2019
Carrying amount 31 Dec 2019
2020
EUR mill.
Carrying amount 1 Jan 2020
Transactions
Payment of lease liabilities
Carrying amount 31 Dec 2020
Premises
Other
right-of-use assets
214.7
20.2
234.9
-38.3
-38.5
-76.8
176.4
158.1
37.9
1.0
38.9
-21.1
-3.5
-24.6
16.8
14.3
Premises
Other
right-of-use assets
–
199.8
14.9
214.7
–
-38.3
-38.3
–
176.4
36.9
-
1.1
37.9
-17.2
-4.0
-21.2
19.7
16.8
In 31 December 2020 lease liabilities EUR 161.7 million is due to the implementation of IFRS 16 and EUR 16.8 million is lease liability of previous standards.
2019
EUR mill.
Opening balance 1 Jan 2019
Transactions
Payment of lease liabilities
Carrying amount 31 Dec 2019
In 31 December 2019 lease liabilities EUR 178.7 million is due to the implementation of IFRS 16 and EUR 19.4 million is lease liability of previous standards.
Total
252.6
21.2
273.8
-59.4
-42.0
-101.4
193.2
172.4
Total
36.9
199.8
16.0
252.6
-17.2
-42.3
-59.4
19.7
193.2
Lease liabilities
198.1
18.1
-37.7
178.5
Lease liabilities
222.5
12.7
-37.1
198.1
84
85
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
14. INTANGIBLE ASSETS
2020
EUR mill.
Acquisition cost 1 Jan 2020
Business combination
Additions
Disposals
Goodwill
Customer
relationships
847.2
2.5
-
-
153.7
0.5
-
-
Trademarks
82.9
-
-
-
Acquisition cost 31 Dec 2020
849.8
154.0
82.9
Other intangible
assets and advan-
ces paid
61.0
-
19.9
-0.0
80.9
-31.1
-8.2
-39.3
29.9
29.9
41.6
-68.0
-
-68.0
779.2
779.2
781.8
-79.5
-17.8
-97.3
74.2
74.2
56.9
-25.1
-4.1
-29.2
57.8
57.8
53.6
Goodwill
Customer
relationships
Trademarks
Other intangible
assets and advan-
ces paid
836.7
10.6
-
847.2
-68.0
-
-
-68.0
-68.0
768.7
779.2
149.5
4.2
-
153.7
-62.1
-17.4
-
-79.5
-79.5
87.4
74.2
82.9
-
-
82.9
-21.0
-4.1
-
-25.1
-25.1
61.9
57.8
42.7
0.6
17.7
61.0
-24.4
-6.5
-0.3
-31.1
-31.1
18.4
29.9
Total
1,144.9
3.0
19.9
-0.0
1,167.8
-203.7
-30.2
-233.9
941.2
941.2
933.9
Total
1.111.7
15.4
17.7
1.144.8
-175.4
-28.0
-0.3
-203.7
-203.7
936.4
941.2
14.1 DEVELOPMENT EXPENDITURE
Other intangible assets include development expenditure as follows:
EUR mill.
Acquisition cost 1 Jan 2020
Additions
Acquisition cost 31 Dec 2020
Accumulated amortizations and impairment losses 1 Jan 2020
Amortization
Accumulated amortizations and impairment losses 31 Dec 2020
Carrying amount 1 Jan 2020
Carrying amount 31 Dec 2020
EUR mill.
Acquisition cost 1 Jan 2019
Additions
Disposals
Acquisition cost 31 Dec 2019
Accumulated amortizations and impairment losses 1 Jan 2019
Amortization
Accumulated amortizations and impairment losses 31 Dec 2019
Carrying amount 1 Jan 2019
Carrying amount 31 Dec 2019
4.2
2.2
6.4
-1.9
-1.0
-2.9
2.3
3.5
2.6
1.6
-0.1
4.2
-1.3
-0.6
-1.9
2.6
2.3
15. 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.
EUR mill.
Regional units
Capital region
Central units
Total
31 Dec 2020
Goodwill
369.7
230.2
181.8
781.8
%
EUR mill.
47.3%
29.4%
23.3%
Regional units
Capital region
Central units
100.0%
Total
31 Dec 2019
Goodwill
368.2
229.2
181.8
779.2
%
47.3%
29.3%
23.3%
100.0%
Accumulated amortizations and impairment
losses 1 Jan 2020
Amortization for the reporting period
Accumulated amortizations and impairment
losses 31 Dec 2020
Carrying amount 1 Jan 2020
Carrying amount 31 Dec 2020
2019
EUR mill.
Acquisition cost 1 Jan 2019
Business combination
Additions
Acquisition cost 31 Dec 2019
Accumulated amortizations and impairment
losses 1 Jan 2019
Amortization for the reporting period
Impairment losses
Accumulated amortizations and impairment
losses 31 Dec 2019
Carrying amount 1 Jan 2019
Carrying amount 31 Dec 2019
86
87
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
The recoverable amounts of the cash-generating units are based on va-
lue-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
2021–2025 including the long-term growth which have been approved by
the management.
The assumptions used in impair-
ment calculations are:
The length of impairment testing
period
Terminal period revenue growth rate
Profitability (EBIT %) during the
terminal period
Discount rate (Pre-tax WACC)
Discount rate (Post-tax WACC)
2020
5 years
2.0%
9.8%
7.1%
6.1%
2019
5 years
2.0%
9.8%
7.5%
6.6%
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, in-
dustry-specific beta, industry-specific cost of debt, and industry specific
equity / debt ratios. Uncertainty in the future cash flows arising from Co-
vid-19 pandemic has been taken into account in the discount rate used in
the 2020 testing.
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.
Change
2020
2019
Fair values of investment properties
Terminal period
revenue growth rate
Regional Units
Capital Regions
Central Unit
Profitability (EBIT %)
during the terminal period
Regional Units
Capital Regions
Central Unit
Discount rate
(Pre-tax WACC)
Regional Units
Capital Regions
Central Unit
Decrease over 4.4
percentage points
Decrease over 4.8
percentage points
Decrease over 10.4
percentage points
Decrease over 13.1
percentage points
Decrease over 23.9
percentage points
Decrease over 18.8
percentage points
Decrease over 4.8
percentage points
Decrease over 5.7
percentage points
Decrease over 8.1
percentage points
Decrease over 9.7
percentage points
Decrease over 9.8
percentage points
Decrease over 9.5
percentage points
Increase over 3.4
percentage points
Increase over 4.3
percentage points
Increase over 6.9
percentage points
Increase over 9.5
percentage points
Increase over 11.7
percentage points
Increase over 12.3
percentage points
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 units would fall below their
carrying amount.
16. INVESTMENT PROPERTIES
Carrying amount of investment properties
EUR mill.
2020
2019
Carrying amount at the beginning
of the period
Depreciation
Carrying amount at the end of the
period
0.6
-0.0
0.5
0.6
-0.0
0.6
Income and expenses related to investment properties
EUR mill.
1.1.-31.12.2020
1.1.-31.12.2019
Rental income from investment
properties
Operating expenses for investment
properties
Total
0.1
-0.0
0.1
0.1
-0.0
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.
Investment
Value per m2
(In thousands
of euro)
m2
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 %).
17. 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
Olo-apteekki Oy
Terveyden Tuottajat Oy
Finland
Finland
Finland
21.5%
20.0%
0.0%
Summarized financial information on associated companies
EUR mill.
Carrying amount
Group's share of total
comprehensive income
2020
2.2
-0.6
21.5%
20.0%
48.8%
2019
2.3
-0.2
18. SHARE-BASED PAYMENTS
On 29 November 2017 the Board of Terveystalo decided on a new sha-
re-based incentive plan targeted to the key employees of the Group. The
purpose of the plan is to align the interests of the key employees with those
of the company’s shareholders and thus to increase the value of Terveystalo
share in the long term and to offer the key employees with competitive
compensation based on earning company shares for excellent performance.
The plan has been implemented in vesting periods which consists of a
one-year performance period and a two-year waiting period. The perfor-
mance periods are calendar years 2018, 2019 and 2020. The targets for the
performance periods are based on operative earnings and total shareholder
return (TSR).
The potential rewards earned are paid in approximately two years after
the end of the performance period as shares and in cash intended for taxes
arising from the reward to the participant. As a main rule, no reward shall
be paid if the participant's employment terminates before the reward pay-
ment. The share-based incentive plan is fully accounted for as an equity
settled share-based payment.
The targets set for the performance periods 2018 and 2020 were not
met and no share rewards will be paid. The reward earned on the basis of the
performance period 2019 accounts for a total of 553.114 gross shares which
will be paid to 75 participants in spring 2022 as a combination of shares and
cash-for-taxes.
The fair value of share-based incentives has been determined at grant date
and the fair value is expensed until the share awards have been vested. Market
condition, in this case Total Share Holder Return of the Performance Share
Plans was taken into account when determining the fair value at grant date
and it will not be changed during the plan, except to the extent the service
and non-market conditions are not met.
Key characteristics and terms of Terveystalo share-based plans granted
and effective during 2020 are listed in the table below.
Program
Grant date
2020
2019
30 April 2020
27 March 2019
Maximum number of share awards
Outstanding at 1 Jan
Granted share awards during the period
Forfeited share awards during the period
Exercised share awards during the period
Outstanding at 31 Dec
Fair value of the share award at grant date
660,836
-
660,836
660,836
-
-
4.48
943,000
712,000
-
158,886
-
553,114
9.04
End of the performance period
31 Dec 2020
31 Dec 2019
End of the vesting period
30 April 2023
30 April 2022
Vesting conditions
Exercised
Total Sharehol-
der Return (TSR)
and profitability
Total Sharehol-
der Return (TSR)
and profitability
In shares and
cash
In shares and
cash
In 2020, EUR 0.9 million from share-based payments was recognized in employee
benefit expenses and retained earnings (2019: EUR 0.7 million).
SHARE-BASED INCENTIVE PROGRAM 2021-2023
Terveystalo Plc's Board of Directors has on 3 December 2020 decided on a
new long-term share-based incentive program for key personnel. The plan
replaces the previous long-term incentive program. The long-term incentive
plan consists of a Performance Share Plan for Terveystalo's management
and other key personnel, a Bridge plan for the President and CEO, and of
a Restricted Share Plan for specific situations such as key recruitments or
for recognizing key talent.
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 partici-
pants, 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 new,
strategy by offering them a competitive, share-based incentive program.
The terms of the program are expected to be specified and the program is
expected to start during the first half of 2021.
88
89
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
19. FINANCIAL ASSETS AND LIABILITIES – CARRYING AMOUNT, FAIR VALUES AND FAIR VALUE HIERARCHY
EUR mill. 31 Dec 2020
Financial assets
Non-current
Loan receivables
Current
Cash and cash equivalents
Total
Financial liabilities
Non-current
Loans from financial institutions
Hire purchase liabilities
Deferred contingent considerations
Current
Loans from financial institutions
Hire purchase liabilities
Deferred contingent considerations
Interest rate derivatives
Total
EUR mill. 31 Dec 2019
Financial assets
Non-current
Loan receivables
Current
Cash and cash equivalents
Total
Financial liabilities
Non-current
Loans from financial institutions
Hire purchase liabilities
Deferred contingent considerations
Current
Loans from financial institutions
Hire purchase liabilities
Deferred contingent considerations
Interest rate derivatives
Total
Financial assets and
liabilities at fair value
Financial assets
and liabilities at
amortized cost
Carrying
amount
Fair value
Fair value
hierarchy
0.3
-
0.3
-
-
1.0
-
-
0.9
1.1
3.1
-
77.1
77.1
290.5
11.8
-
81.4
5.8
-
-
389.5
0.3
77.1
77.4
290.5
11.8
1.0
81.4
5.8
0.9
1.1
0.3
77.1
77.4
290.5
11.8
1.0
81.4
5.8
0.9
1.1
392.6
392.6
Level 2
Level 3
Level 3
Level 2
Financial assets and
liabilities at fair value
Financial assets
and liabilities at
amortized cost
Carrying
amount
Fair value
Fair value
hierarchy
0.3
-
0.3
-
-
1.2
-
-
1.2
1.4
3.8
-
40.6
40.6
331.6
12.5
-
41.5
5.2
-
-
0.3
40.6
40.9
331.6
12.5
1.2
41.5
5.2
1.2
1.4
0.3
40.6
40.9
331.6
12.5
1.2
41.5
5.2
1.2
1.4
Level 2
Level 3
Level 3
Level 2
390.8
394.6
394.6
Financial liabilities classified at fair value hierarchy level 3 consist of deferred contingent considerations from business combinations. The measurement of deferred
contingent considerations is based on the amounts specified in purchase agreements and the management estimate on whether the deferred consideration will be realized.
The effect on earnings arising from the changes of fair values of the deferred contingent considerations has been EUR 0.5 million (2019: EUR 0.1 million).
20.4 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 in-
vestments 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 reser-
ves and forecasting future cash flows.
The Group has an overdraft facility in use, of which EUR 48.0 million
remained unused at the reporting date (2019: 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.
20. FINANCIAL RISKS
20.1 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.
20.2 INTEREST RATE RISK
The Company’s interest rate risk arises from its loans from financial institutions
issued at floating rate. In 2020, the Group’s average interest rate for loans
from financial institutions has been 1.1 percent (2019: 1.5 percent). If the
interests would have been one percentage point higher it would have caused
an increase of EUR 3.8 million in interest expenses during the year 2020.
(2019: EUR 2.5 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:
•
Interest rate swap agreements based on which the Group pays fixed
0.19, 0.21, 0.50 and 0.51 percent interest rate and receives variable
interest on EUR 50.0, 25.0 and 30.0 million loan capital.
• Floor agreements, in which the interest rate floor has been set to 0.00
percent on EUR 50.0, 25.0 and 30.0 million loan capital.
20.3 CREDIT RISK
The majority of the Group’s incoming cash flows are payments from es-
tablished 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 e qual to the carrying amount of financial assets at the reporting date.
The maturity distribution of the Group’s trade receivables is disclosed in
note 21 Trade and other receivables.
90
91
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Maturity analysis of liquidity risk
31 Dec 2020
EUR mill.
Loans from financial
institutions
Lease liabilities
Hire purchase liabilities
Trade payables
Interest rate derivatives
Total
31 Dec 2019
EUR mill.
Loans from financial
institutions
Lease liabilities
Hire purchase liabilities
Trade payables
Interest rate derivatives
Total
Carrying amount
Contractual cash
flows
1 year
1–2 years
2–5 years
Over 5 years
371.9
178.5
17.6
40.1
1.1
609.3
383.5
193.1
18.2
40.1
1.2
636.1
84.9
42.1
6.0
40.1
0.5
173.6
44.3
37.5
5.2
-
0.5
87.5
254.3
79.3
6.9
-
0.1
340.6
-
34.2
-
-
-
34.2
Carrying amount
Contractual cash
flows
1 year
1–2 years
2–5 years
Over 5 years
373.1
198.1
17.7
38.5
1.4
628.8
388.4
215.0
18.0
38.5
1.7
661.7
45.1
42.3
5.5
38.5
0.5
131.9
44.7
37.9
4.8
-
0.5
88.0
298.6
82.0
7.8
-
0.6
389.0
-
52.8
-
-
-
52.8
20.5 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
share issues, by increase or repayment of financial liabilities, possible con-
versions between equity and financial liabilities, as well as through operati-
ve 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, amon-
gst 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 85.9 percent at the
reporting date (2019: 101.3 percent). The ratio is calculated by dividing inte-
rest bearing net debt with equity. The net debt includes interest bearing lia-
bilities less interest bearing receivables and cash and cash equivalents. The
Group’s interest bearing liabilities were EUR 568.0 million at the reporting
date (2019: EUR 588.8 million). A significant part of the interest-bearing
liabilities consists of loans from financial institutions.
21. TRADE AND OTHER RECEIVABLES
Carrying amounts of trade and other receivables
EUR mill.
Non-current
Loan receivables
Total non-current receivables
Current
Trade receivables
Other receivables
Accrued income and deferred
expenses
Total
31 Dec 2020
31 Dec 2019
0.3
0.3
85.8
1.4
7.9
95.1
0.3
0.3
90.1
2.7
8.8
101.6
Specification of accrued income and deferred expenses
EUR mill.
31 Dec 2020
31 Dec 2019
Personnel related deferred
expenses
Current tax receivables
Other accrued income and
deferred expenses
Total
0.1
3.3
4.5
7.9
0.1
3.7
5.0
8.8
During the reporting period the Group has recognized final credit losses
and expected credit losses on trade receivables through the statement of
income totaling EUR 1.2 million (2019: EUR 0.9 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 accrued income corresponds
with their carrying amount.
Ageing of trade receivables and recognized credit losses
31 Dec 2020
EUR mill.
Not past due
Past due
Less than 30 days
31–90 days
91–180 days
Over 180 days
Total
Trade receivables total
Expected credit loss
Recognized expected credit
loss
Carrying amount
78.6
4.5
1.1
0.5
2.2
87.0
0.1%
0.5%
2.0%
10.0%
45.8%
-0.1
-0.0
-0.0
-0.1
-1.0
-1.2
78.5
4.5
1.1
0.5
1.2
85.8
Trade receivables are denominated in euros. Information about credit risk related to trade receivables is stated in note 20 Financial risks.
Ageing of trade receivables and recognized credit losses
31 Dec 2019
EUR mill.
Not past due
Past due
Less than 30 days
31–90 days
91–180 days
Over 180 days
Total
Trade receivables total
Expected credit loss
Recognized expected credit
loss
Carrying amount
79.0
6.7
2.8
0.7
1.8
91.0
0.1%
0.5%
2.0%
10.0%
53.8%
-0.1
-0.0
-0.1
-0.1
-0.6
-0.9
79.3
6.7
2.8
0.6
0.8
90.1
Trade receivables are denominated in euros. Information about credit risk related to trade receivables is stated in note 20 Financial risks.
22. CASH AND CASH EQUIVALENTS
23. NON-CURRENT ASSETS HELD FOR SALE
The Group’s cash and cash equivalents at 31 December 2020, amounting to
EUR 77.1 million (2019: EUR 40.6 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.
EUR mill.
31 Dec 2020
31 Dec 2019
Unquoted equity investments
0.8
0.8
Non-current assets held for sale at 31 December 2020, amounting to EUR
0.8 million (2019: EUR 0.8 million), consists of shares in real estate and
housing companies and other shares. The Group expects that the carrying
value would be recovered through sale rather than through continuing use.
92
93
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
24. SHARE CAPITAL AND INVESTED NON-RESTRICTED EQUITY RESERVE
EUR mill.
1 Jan 2019
Equity repayment
31 Dec 2019
1 Jan 2020
31 Dec 2020
Number of
outstanding
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
127,307
-
127,307
127,307
127,307
730
-
730
730
730
128,037
-
128,037
128,037
128,037
0.1
0.1
0.1
0.1
518.2
-25.5
492.8
492.8
492.8
-6.7
-
-6.7
-6.7
-6.7
Total
511.6
-25.5
486.1
486.1
486.1
SHARES AND SHARE CAPITAL
On 31 December 2020, the amount of shares is 128,036,531 of which amount
of outstanding shares is 127,306,531 and amount of treasury shares is 730,000.
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 sys-
tem 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 2020, the distributable funds of the parent company
totalled EUR 543.1 million including the profit of the financial period 2020 of
EUR 26.0 million. The Board of Directors proposes to the Annual General
Meeting in 2021 for profit distribution as follows:
•
• A dividend of EUR 0.13 (0.13) per share be distributed for 2020,
totalling EUR 16.5 (16.5) million and the rest of the profit is recognized
in equity.
In addition, the Board of Directors be authorized to resolve in its disc-
retion on the payment of additional dividend. The amount dividend
to be paid based on the authorization shall not exceed EUR 0.13 per
share and EUR 16.5 million in aggregate. 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
EUR mill.
Non-current
Loans from financial institutions
Hire purchase liabilities
Lease liabilities
Total
Current
Loans from financial institutions
Hire purchase liabilities
Lease liabilities
Total
1 Jan 2020
Cash flows
Changes
Reclassifi-cations
31 Dec 2020
Non-cash changes
331.6
12.5
159.9
504.0
41.5
5.2
38.1
84.8
-
-
-
-
-1.5
-5.5
-37.8
-44.8
0.3
4.2
18.9
23.5
0.0
1.1
-0.8
0.3
-41.4
-4.9
-37.8
-84.1
41.4
4.9
37.8
84.1
290.5
11.8
141.1
443.5
81.4
5.8
37.3
124.5
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.
94
26. TRADE AND OTHER PAYABLES
Carrying amounts of trade and other payables
EUR mill.
Trade payables
Other payables
Advances received
Interest rate derivatives
Accrued expenses
Total
Specification of other payables
EUR mill.
Doctor's fee liabilities
VAT liabilities
Other
Total
Specification of accrued expenses
EUR mill.
Personnel related accrued expenses
Interest liabilities
Other
Total
27. PROVISIONS
Carrying amounts of provisions
EUR mill.
Non-current provisions
Current provisions
Total
EUR mill.
Onerous contracts
Other provisions
Total
31 Dec 2020
31 Dec 2019
40.1
64.8
2.2
1.1
54.5
162.7
38.5
66.2
1.5
1.4
57.7
165.4
31 Dec 2020
31 Dec 2019
38.4
19.5
6.8
64.8
41.1
17.0
8.1
66.2
31 Dec 2020
31 Dec 2019
52.2
0.3
1.9
54.5
55.1
0.4
2.2
57.7
31 Dec 2020
31 Dec 2019
7.7
2.4
10.1
7.5
1.6
9.1
31 Dec 2020
31 Dec 2019
5.8
4.3
10.1
5.0
4.1
9.1
95
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Changes in provisions during the financial year 2020
EUR mill.
1 Jan 2020
Increase in provisions
Used provisions
31 Dec 2020
Changes in provisions during the financial year 2019
EUR mill.
1 Jan 2019
Increase in provisions
Used provisions
31 Dec 2019
Onerous contracts Other provisions
5.0
3.0
-2.2
5.8
4.1
0.4
-0.3
4.3
Total
9.1
3.5
-2.5
10.1
Onerous contracts Other provisions
Total
7.0
0.5
-2.5
5.0
4.4
0.8
-1.1
4.1
11.4
1.3
-3.6
9.1
ONEROUS CONTRACTS AND OTHER PROVISIONS
The most significant provisions in the statement of financial position relate to onerous contracts and to some asset retirement obligations related to leased
premises.
28. COLLATERAL AND CONTINGENT LIABILITIES
EUR mill.
Business mortgages
Total
Securities for own debts
Deposits
Guarantees
Total
31 Dec 2020
31 Dec 2019
-
-
0.2
0.7
0.9
0.6
0.6
0.2
0.9
1.0
29. RELATED PARTY TRANSACTIONS
GROUP’S RELATED PARTIES
The Group’s related parties include the parent company as well as subsidia-
ries 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 disclo-
sed in note 30 Group companies.
Related party transactions
2020
Sales Purchases Receivables
Payables
Associated companies
Other related parties
Total:
2019
Associated companies
Other related parties
Total:
0.5
-
0.5
17.4
-
17.4
0.5
-
0.5
1.5
-
1.5
Sales Purchases Receivables
Payables
0.0
0.1
0.1
19.3
-
19.3
0.3
0.0
0.3
0.0
-
0.0
Compensation for the key management
Remuneration for CEOs, in thousands
of euro
2020
2019
Ville Iho
Fixed pay
Short-term incentives
Other benefits
Share-based payments
Pensions (statutory)
Yrjö Närhinen
Fixed pay
Other short-term employee benefits
Short-term incentives
Other benefits
Share-based payments
Pension (statutory)
366.7
240.0
-
-
89.6
-
-
-
-
-
-
27.3
-
-
-
4.7
464,0
24,0
-
65.3
-
95,7
Total
696.3
681.0
Renumeration for CEOs is presented on accrual basis.
Remuneration to members of the
Executive team (excluding CEO), in
thousands of euro
Fixed pay
Short term employee benefits
Short-term incentives
Share-based payments
Termination benefits
Pensions (statutory)
Pensions (voluntary)
Total
2020
1,499.9
43.5
424.1
209.1
656.2
387.5
-
2019
1,724.1
82.0
693.9
179.8
-
432.3
8.5
3,220.4
3,120.7
Renumeration to members of the Executive team is presented on accrual basis.
BONUS SCHEME
The Company operates a bonus scheme, which is determined by the Board
of Directors of the Company upon the recommendation of the Remune-
ration 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
EBITDA 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 18
Share-based payments.
96
97
TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
2020
2019
30. GROUP COMPANIES
The Group’s parent company is Terveystalo Plc domiciled in Finland.
Subsidiaries as at 31 Dec 2020
Company name
EAM TTALO Holding Oy*
Evalua International Ltd. Oy
Domicile
Finland
Finland
Evalua Nederland B.V.
Netherlands
VitalMed Oy
Hierojakoulu Relaxi Oy
MedInari Oy
Rela Estonia OÜ
Rela-Group Oy
Rela-hierojat Oy
Suomen Terveystalo Oy
Terveystalo Estonia OÜ
Terveystalo Healthcare Holding Oy
Terveystalo Healthcare Oy
Terveystalo Julkiset palvelut Oy
Terveystalo Kuntaturva Oy
Terveystalo Tactus Oy
TT Ålands Tandläkarna Ab
Finland
Finland
Finland
Estonia
Finland
Finland
Finland
Estonia
Finland
Finland
Finland
Finland
Finland
Finland
Group's
share
Group's
voting
rights
0.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
0.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
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.
Remuneration to Board of Directors,
in thousands of euro
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
financial
benefits*
Kari Kauniskangas
(Chairman of the board)
Tomas von Rettig
Lasse Heinonen
Åse Aulie Michelet
Niko Mokkila**
Katri Viippola
Dag Andersson
Members of the Board of Directors until
28 May 2020
Olli Holmström
Paul Hartwall
Members of the Board until 4 April 2019
Fredrik Cappelen
Eeva Ahdekivi
Yhteensä
51.0
30.3
30.3
24.2
24.2
24.2
24.2
-
-
-
-
34.0
20.2
20.2
16.1
16.1
16.1
16.1
-
-
-
-
16.0
18.0
14.8
19.1
9.4
15.4
17.3
5.4
5.4
-
-
0.5
0.3
0.3
0.3
0.3
0.3
0.3
-
-
-
-
48.0
29.4
29.4
23.4
-
23.4
23.4
23.4
23.4
-
-
32.0
19.6
19.6
15.6
-
15.6
15.6
15.6
15.6
-
-
14.4
12.6
12.0
22.8
-
16.2
16.2
12.6
10.8
4.8
1.8
208.4
138.8
120.8
2.3
223.8
149.2
124.2
0.5
0.3
0.3
0.2
-
0.2
0.2
0.2
0.2
-
-
2.1
* Other financial benefits include transfer tax fees for the annual fees paid in shares
** Member of the Board of Directors from 2020
Management holdings
Name
Position
Kari Kauniskangas
Chairman of the Board of Directors
Dag Andersson
Member of the Board of Directors
Lasse Heinonen
Member of the Board of Directors
Åse Aulie Michelet
Member of the Board of Directors
Niko Mokkila
Katri Viippola
Member of the Board of Directors
Member of the Board of Directors
Tomas von Rettig
Member of the Board of Directors
2020
7,990
3,467
13,161
27,530
1,772
4,906
6,161
-
-
87,435
304,900
50,559
-
348
-
Chief Executive Officer
Chief Medical Officer
Chief Digital Officer
Chief Financial Officer
SVP, Private Customers and Clinics
SVP, Legal
SVP, Marketing and Communications
SVP, HR
SVP, Wellbeing, Diagnostics and Digital
Services
23,594
Ville Iho
Petri Bono
Juha Juosila
Ilkka Laurila
Siina Saksi
Elina Saviharju
Veera Siivonen
Minttu Sinisalo
Pia Westman
98
30.1 CHANGES IN THE GROUP STRUCTURE
FINANCIAL YEAR 2020
The following mergers took place during the financial year 2020:
• 31.1.2020 Etelä-Karjalan Työkunto Oy merged with Suomen
Terveystalo Oy.
• 29.2.2020 Hardent Oy merged with Suomen Terveystalo Oy.
• 31.3.2020 TyöSyke Oy merged with Suomen Terveystalo Oy.
• 30.9.2020 Examinatio Magnetica Fennica Oy merged with Suomen
Terveystalo Oy.
• 31.12.2020 Fertility Clinic Holding Oy merged with Suomen
Terveystalo Oy.
FINANCIAL YEAR 2019
The following mergers took place during the financial year 2019:
• 28.2.2019 Fysiatrinen osaamiskeskus Prima Oy merged with Suomen
Terveystalo Oy.
• 28.2.2019 Jyväskylän Silmätutkimuslaboratorio Oy merged with
Suomen Terveystalo Oy.
• 28.2.2019 Puistosairaalan Silmälääkärit Oy merged with Suomen
Terveystalo Oy.
• 30.4.2019 Attendo Aaria Oy merged with Attendo Hammaslääkä-
ripalvelut Oy.
• 30.4.2019 Attendo Hammaslääkäriasemat merged with Oy Attendo
Hammaslääkäripalvelut Oy.
• 30.4.2019 Attendo Hammaslääkärikeskukset Oy merged Suomen
Terveystalo Oy.
• 30.4.2019 Attendo Hammaslääkäripalvelut Oy merged with Suomen
Terveystalo Oy.
• 30.4.2019 Attendo Työterveyspalvelut Oy merged with Terveystalo
Julkiset palvelut Oy.
• 30.4.2019 Terveystalo Julkiset palvelut Oy partially demergered to
Suomen Terveystalo Oy.
• 31.5.2019 Kuntoutumisasema OTE Oy merged with Suomen
Terveystalo Oy.
• 30.6.2019 Länsi-Vantaan Hammaslääkärit Oy merged with Suomen
Terveystalo Oy.
• 30.9.2019 Kajaanin OMT - Fysioterapia Oy merged with Suomen
Terveystalo Oy.
99
TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
31. GROUP'S KEY FINANCIAL RATIOS
Terveystalo Group, EUR mill.
Revenue
Adjusted EBITDA, * 1) 2)
Adjusted EBITDA, % * 1) 2)
EBITDA 1) 2)
EBITDA, % 1) 2)
Adjusted EBITA * 1) 2)
Adjusted EBITA, % * 1) 2)
EBITA 1) 2)
EBITA, %1) 2)
Adjusted operating profit (EBIT) * 1) 2)
Adjusted operating profit (EBIT), % * 1) 2)
Operating profit (EBIT) 2)
Operating profit (EBIT), % 2)
Return on equity (ROE), % 1) 2) 3)
Equity ratio, % 1) 2)
Earnings per share (€) 2) 3)
Net debt 2)
Gearing, % 1) 2)
Net debt/Adjusted EBITDA 1) 2) 4)
Total assets 2)
Average personnel FTE
Personnel (end of period)
Private practitioners (end of period)
Adjusted EBITDA, excluding IFRS 16 * 1)
Net debt, excluding IFRS 16
Net debt/Adjusted EBITDA, excluding IFRS 16 * 1) 4)
2020
986.4
162.8
16.5
158.3
16.1
101.9
10.3
97.4
9.9
71.6
7.3
67.2
6.8
8.2
42.1
0.36
490.9
85.9
3.0
1,361.0
4,900
8,253
5,057
118.0
325.9
2.8
2019
1,030.7
176.3
17.1
171.2
16.6
115.1
11.2
110.0
10.7
86.5
8.4
81.4
7.9
10.3
39.9
0.43
548.2
101.3
3.1
1,359.3
4,943
8,685
5,068
131.4
366.4
2.8
2018
744.7
108.9
14.6
116.6
15.7
87.7
11.8
95.5
12.8
67.7
9.1
75.4
10.1
14.2
44.1
0.54
413.3
80.8
3.8
1,162.3
3,498
6,018
4,877
108.9
413.3
3.8
* 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) Alternative performance measure. Terveystalo presents alternative performance measures as additional information to financial measures defined in IFRS. Those are performance
measures that the company monitors internally, and they provide management, investors, securities analysts and other parties with significant additional information related to the
company's results of operations, financial position and cash flows. These should not be considered in isolation or as substitute to the measures under IFRS.
2) 2018 not comparable due to the effect of IFRS 16 implementation.
3) The net profit of the January–December reference period 2018 was improved by a non-recurring deferred tax asset of EUR 13.0 million related to tax loss carry-forward.
4) 2018 does not include Attendo Health Services' result.
32. 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
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, %
Equity ratio, %
Gearing, %
Net debt/Adjusted EBITDA*
=
=
=
=
Profit/loss for the period
Equity (including non-controlling interest) (average)
Equity (including non-controlling interest)
Total assets - advances received
Interest-bearing liabilities - interest-bearing receivables and cash and cash equivalents
Equity
Interest-bearing liabilities - interest-bearing receivables and cash and cash equivalents
Adjusted EBITDA
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*
Adjusted EBITDA, %*
Adjusted EBITA*
Adjusted EBITA, %*
Adjusted operating profit (EBIT)*
Adjusted operating profit (EBIT), %*
EBITDA
EBITDA, %
EBITA
EBITA, %
Operating profit (EBIT)
Operating profit (EBIT), %
=
=
=
=
=
=
=
=
=
=
=
=
Earnings Before Interest, Taxes, Depreciation, Amortization, impairment losses and adjustments
Earnings Before Interest, Taxes, Depreciation, Amortization, impairment losses and adjustments
Revenue
Earnings Before Interest, Taxes, Amortization, impairment losses and adjustments
Earnings Before Interest, Taxes, Amortization, impairment losses and adjustments
Revenue
Earnings Before Interest, Taxes and Share of profits in associated companies, and adjustments
Earnings Before Interest, Taxes and Share of profits in associated companies, and adjustments
Revenue
x 100%
Earnings Before Interest, Taxes, Depreciation and Amortization and impairment losses
Earnings Before Interest, Taxes, Depreciation and Amortization and impairment losses
Revenue
x 100%
Earnings Before Interest, Taxes, Amortization and impairment losses
Earnings Before Interest, Taxes, Amortization and impairment losses
Revenue
Earnings Before Interest, Taxes and Share of profits in associated companies
Earnings Before Interest, Taxes and Share of profits in associated companies
Revenue
x 100%
x 100%
x 100%
x 100%
x 100%
x 100%
x 100%
101
100
* Adjustments are material items outside the ordinary course of business, and these relate to acquisition related expenses, restructuring related expenses, gain on sale of
assets, strategic projects, new operations and other items affecting comparability.
TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
33. RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES
Return on equity, %
Profit/loss for the period
Equity (including non-controlling interest) (average)
Return on equity, %
Equity ratio, %
Equity (including non-controlling interest)
Total assets
Advances received
Equity ratio, %
Gearing, %
Interest-bearing liabilities
Interest-bearing receivables and cash and cash equivalents
Equity
Gearing, %
Net debt /Adjusted EBITDA
Interest-bearing liabilities
Interest-bearing receivables and cash and cash equivalents
Adjusted EBITDA
Net debt / Adjusted EBITDA
Adjusted EBITDA, EUR mill.
Profit (loss) for the period
Income tax expense
Share of profits in associated companies
Net finance expenses
Depreciation, amortization and impairment losses
Adjustments*
Adjusted EBITDA
Adjusted EBITDA, %
Adjusted EBITDA
Revenue
Adjusted EBITDA, %
102
2020
45.8
556.3
8.2
2020
571.4
1,361.0
2.2
42.1
2020
568.0
77.1
571.4
85.9
2020
568.0
77.1
162.8
3.0
2020
45.8
10.8
0.6
10.0
91.2
4.5
162.8
2020
162.8
986.4
16.5
2019
54.1
526.5
10.3
2019
541.2
1,359.3
1.5
39.9
2019
588.8
40.6
541.2
101.3
2019
588.8
40.6
176.3
3.1
2019
54.1
12.7
0.2
14.4
89.8
5.1
176.3
2019
176.3
1,030.7
17.1
2018
68.7
484.5
14.2
2018
511.8
1,162.3
1.8
44.1
2018
450.1
36.9
511.8
80.8
2018
450.1
36.9
108.9
3.8
2018
68.7
-0.5
-1.9
9.2
41.1
-7.7
108.9
2018
108.9
744.7
14.6
Adjusted EBITA, EUR mill.
Profit (loss) for the period
Income tax expense
Share of profits in associated companies
Net finance expenses
Amortization and impairment losses
Adjustments*
Adjusted EBITA
Adjusted EBITA, %
Adjusted EBITA
Revenue
Adjusted EBITA, %
Adjusted operating profit (EBIT), EUR mill.
Profit (loss) for the period
Income tax expense
Share of profits in associated companies
Net finance expenses
Adjustments*
Adjusted EBITA
Adjusted operating profit (EBIT), %
Adjusted EBITA
Revenue
Adjusted EBIT, %
EBITDA, EUR mill.
Profit (loss) for the period
Income tax expense
Share of profits in associated companies
Net finance expenses
Depreciation, amortization and impairment losses
EBITDA
EBITDA, %
EBITDA
Revenue
EBITDA, %
2020
45.8
10.8
0.6
10.0
30.3
4.5
101.9
2020
101.9
986.4
10.3
2020
45.8
10.8
0.6
10.0
4.5
71.6
2020
71.6
986.4
7.3
2020
45.8
10.8
0.6
10.0
91.2
158.3
2020
158.3
986.4
16.1
2019
54.1
12.7
0.2
14.4
28.6
5.1
115.1
2019
115.1
1,030.7
11.2
2019
54.1
12.7
0.2
14.4
5.1
86.5
2019
86.5
1,030.7
8.4
2019
54.1
12.7
0.2
14.4
89.8
171.2
2019
171.2
1,030.7
16.6
2018
68.7
-0.5
-1.9
9.2
20.0
-7.7
87.7
2018
87.7
744.7
11.8
2018
68.7
-0.5
-1.9
9.2
-7.7
67.7
2018
67.7
744.7
9.1
2018
68.7
-0.5
-1.9
9.2
41.1
116.6
2018
116.6
744.7
15.7
103
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
EBITA, EUR mill.
Profit (loss) for the period
Income tax expense
Share of profits in associated companies
Net finance expenses
Amortization and impairment losses
EBITA
EBITA, %
EBITA
Revenue
EBITA, %
Operating profit (EBIT), EUR mill.
Profit (loss) for the period
Income tax expense
Share of profits in associated companies
Net finance expenses
EBIT
Operating profit, (EBIT), %
EBIT
Revenue
EBIT, %
2020
45.8
10.8
0.6
10.0
30.3
97.4
2020
97.4
986.4
9.9
2020
45.8
10.8
0.6
10.0
67.2
2020
67.2
986.4
6.8
2019
54.1
12.7
0.2
14.4
28.6
110.0
2019
110.0
1 030.7
10.7
2019
54.1
12.7
0.2
14.4
81.4
2019
81.4
1,030.7
7.9
Adjustments based on subject area* , EUR mill.
2020
2019
Acquisition related expenses 1)
Restructuring related expenses 2)
Gain on sale of asset
Strategic projects, new operations and other items affecting to comparability
Adjustments
Adjustments based on account group* , EUR mill.
Other operating income
Materials and services costs
Personnel expenses
Other operating expenses
Adjustments
0.5
1.6
-0.1
2.5
4.5
2020
-0.5
1.8
1.3
1.9
4.5
3.3
0.7
0.3
0.8
5.1
2019
-0.3
-
0.4
5.0
5.1
2018
68.7
-0.5
-1.9
9.2
20.0
95.5
2018
95.5
744.7
12.8
2018
68.7
-0.5
-1.9
9.2
75.4
2018
75.4
744.7
10.1
2018
6.6
1.4
-15.8
0.1
-7.7
2018
-16.8
0.4
0.0
8.7
-7.7
Adjusted EBITDA, excluding IFRS 16
Profit (loss) for the period
Income tax expense
Share of profits in associated companies
Net finance expenses
Depreciation, amortization and impairment losses
Adjustments*
IFRS 16 lease expense adjustment
Adjusted EBITDA, excluding IFRS 16
Net debt/Adjusted EBITDA, excluding IFRS 16
Interest-bearing liabilities
Interest-bearing receivables and cash and cash equivalents
Adjusted EBITDA
Net debt/Adjusted EBITDA, excluding IFRS 16
2020
45.8
10.8
0.6
10.0
91.2
4.5
-44.8
118.0
2020
403.0
77.1
118.0
2.8
2019
54.1
12.7
0.2
14.4
89.8
5.1
-45.0
131.4
2019
407.0
40.6
131.4
2.8
2018
68.7
-0.5
-1.9
9.2
41.1
-7.7
-
108.9
2018
450.1
36.9
108.9
3.8
* 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) Including restructuring of network and business operations, provisions for onerous contracts (lease agreements and other).
34. SUBSEQUENT EVENTS
Terveystalo is reshaping its operating model to better respond to its custo-
mers’ needs and the ongoing transformation of the healthcare industry. As
of January 1, 2021, Terveystalo’s organization consists of five business areas:
Corporate Health, led by Marja-Leena Tuomola; Consumer Business, led by
Veera Siivonen; Public Partnerships, led by Mikko Tainio; Growth Businesses,
led by Petri Keksi, and Medical Clinic Network, led by Siina Saksi.
104
105
TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
PARENT COMPANY'S FINANCIAL STATEMENT, FAS
PARENT COMPANY’S INCOME STATEMENT
PARENT COMPANY’S STATEMENT OF FINANCIAL POSITION
EUR
Revenue
Other operating income
Materials and supplies
Employee benefit expenses
Wages and salaries
Social security expenses
Pension expenses
Other social security expenses
Depreciation, amortization and impairment losses
Other operating expenses
Operating profit or loss
Financial income and expenses
Other interest and financial income
From others
Other interest and financial expenses
To group companies
To others
Profit or loss before appropriations and taxes
Appropriations
Increase/decrease in depreciation in excess of plan
Group contributions
Taxes
Profit or loss for the period
1.1
1.2
1.4
1.5
1.6
Note
1.1.-31.12.2020
1.1.-31.12.2019
924,670
-
-296
742,672
146,000
-955
EUR
ASSETS
Non-current assets
Property, plant and equipment
Machinery and equipment
-2,027,165
-1,819,857
Investments
-226,232
-47,089
-3,469
-1,635,698
-3,015,279
-237,965
-11,449
-15,131
-1,429,164
-2,625,850
236
392
-39,503
-1,233
-48,553
-2,596
-3,055,779
-2,676,606
10,621
35,500,000
-6,496,468
25,958,375
4,297
54,000,000
-10,224,640
41,103,051
Holdings in group companies
Total non-current assets
Current assets
Receivables from group companies
Prepayments and accrued income
Cash and cash equivalents
Total current assets
TOTAL ASSETS
EUR
EQUITY AND LIABILITIES
Equity
Share capital
Invested non-restricted equity reserve
Retained earnings
Profit or loss for the period
Total equity
Appropriations
Depreciation in excess of plan
Total appropriations
Liabilities
Current liabilities
Loans from financial institutions
Trade payables
Liabilities to group companies
Other liabilities
Accruals and deferred income
Total liabilities
TOTAL EQUITY AND LIABILITIES
Note
31 Dec 2020
31 Dec 2019
2.1
2.2
2.3
2.4
-
44,379
516,818,244
506,685,344
516,818,244
506,745,532
49,558,965
162,841
-
71,811,351
204,252
690
49,721,807
72,016,293
566,540,051
578,746,016
Note
31 Dec 2020
31 Dec 2019
2.5
2.6
80,000
80,000
493,503,962
493,503,962
23,652,357
25,958,375
-900,845
41,103,051
543,194,694
533,786,168
-
-
-
140,007
16,822,320
179,157
6,203,873
10,621
10,621
37,365
176,642
34,054,995
144,331
10,535,893
23,345,357
44,949,227
566,540,051
578,746,016
106
107
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
PARENT COMPANY'S STATEMENT OF CASH FLOWS
EUR
Cash flows from operating activities
Profit/loss for the period
Adjustments
Depreciations according to plan
Non-cash transactions
Financial income and expenses
Gains and losses on sale of property, plant, equipment
Other adjustments
Change in working capital
Change in trade and other receivables
Change in trade and other payables
Taxes
Net cash from operating activities
Cash flows from investing activities
Purchase of tangible and intangible items
Proceeds from sale of tangible and intangible items
Net cash from investing activities
Cash flows from financial activities
Change in group account
Payment of hire purchase liabilities
Received group contribution
Dividends paid and equity repayments
Interest paid
Net cash from financial activities
Net change in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
1.1.-31.12.2020
1.1.-31.12.2019
25,958,375
41,103,051
3,469
15,131
-35,550,124
-54,004,297
40,737
893
51,149
830
-3,633,322
10,380,880
9,997,111
298,840
-11,130,628
-331,073
-727,065
-
-14,014,650
-3,511,394
-
40,016
40,016
-23,437,608
-37,365
54,000,000
-16,549,849
-1,233
13,973,945
-152
-
-152
17,093,486
-19,440
12,000,000
-25,607,306
-51,149
3,415,592
-690
-95,954
690
-
96,644
690
ACCOUNTING POLICIES OF PARENT COMPANY’S FINANCIAL
STATEMENTS
The financial statements of Terveystalo Oyj are prepared in accordance
with Finnish Accounting Standards (FAS).
MEASUREMENT AND RECOGNITION PRINCIPLES AND METHODS
HOLDINGS IN GROUP COMPANIES
The carrying amount of holdings in group companies consists of historical
costs less impairments. If the estimated future cash flows generated by a
non-current asset are expected to be permanently lower than the balance of
carrying amount, an adjustment to the value must be made to write-down
the difference as an expense. If the basis for the impairment can no longer
be justified at 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
108
109
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
NOTES TO THE STATEMENT OF INCOME
1.1 REVENUE
EUR
Finland
Total
1.2 DEPRECIATION, AMORTIZATION AND IMPAIRMENT LOSSES
EUR
Depreciation
Total
1.3 PERSONNEL
Average number of personnel during financial year
1.4 OTHER OPERATING EXPENSES
EUR
External services
ICT expenses
Non-statutory personnel expenses
Leases
Travel expenses
Marketing and communication
Other costs
Total
Auditor’s fees
EUR
Audit and auditor's statements based on laws and regulations
Audit, KPMG
Auditor's statements based on laws and regulations, KPMG
Total
Non audit services
Assurance services, KPMG
Tax services, KPMG
Total
Auditor's fees total
1.1.-31.12.2020
1.1.-31.12.2019
924,670
924,670
742,672
742,672
1.1.-31.12.2020
1.1.-31.12.2019
-3,469
-3,469
-15,131
-15,131
1.1.-31.12.2020
1.1.-31.12.2019
6
6
1.1.-31.12.2020
1.1.-31.12.2019
-633,564
-29,014
-51,934
-14,560
-17,762
-423,979
-464,886
-410,585
-21,799
-294,403
-51,318
-43,950
-105,119
-501,989
-1,635,698
-1,429,164
1.1.-31.12.2020
1.1.-31.12.2019
-56,240
-
-56,240
-
-
-
-56,240
-63,195
-13,500
-76,695
-6,448
-41,352
-47,800
-124,495
1.5 FINANCIAL INCOME AND EXPENSES
EUR
Other interest and financial income
From others
Total
Other interest and financial expenses
To group companies
To others
Total
1.6 APPROPRIATIONS
EUR
Increase/decrease in depreciation in excess of plan
Group contributions received
Appropriations total
NOTES TO THE STATEMENT OF THE FINANCIAL POSITION
2.1 PROPERTY, PLANT AND EQUIPMENT
Machinery and equipment
EUR
Acquisition cost 1 Jan
Additions
Disposals
Acquisition cost 31 Dec
Accumulated depreciation and impairment losses 1 Jan
Depreciation for the period
Accumulated depreciation and impairment losses 31 Dec
Carrying amount 1 Jan
Carrying amount 31 Dec
2.2 INVESTMENTS
Holdings in group companies
EUR
Acquisition cost 1 Jan
Addition
Acquisition cost 31 Dec
Carrying amount 1 Jan
Carrying amount 31 Dec
1.1.-31.12.2020
1.1.-31.12.2019
236
236
-39,503
-1,233
-40,737
392
392
-48,553
-2,596
-51,149
1.1.-31.12.2020
1.1.-31.12.2019
10,621
4,297
35,500,000
54,000,000
35,510,621
54,004,297
2020
79,152
-
-40,627
38,525
-34,773
-3,752
-38,525
44,379
-
2019
79,830
152
-830
79,152
-19,642
-15,131
-34,773
60,188
44,379
2020
2019
506,685,344
506,685,344
10,132,900
-
516,818,244
506,685,344
506,685,344
506,685,344
516,818,244
506,685,344
110
111
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
Parent company ownerships:
Holdings in group companies
Terveystalo Healthcare Holding Oy
2.3 RECEIVABLES FROM GROUP COMPANIES
EUR
Loan receivables
Trade receivables
Group account receivables
Prepayments and accrued income
Total
2.4 CHANGES IN EQUITY
RESTRICTED EQUITY
Share capital
EUR
At the beginning of the period
At the end of the period
Total restricted equity
UNRESTRICTED EQUITY
Invested non-restricted equity reserve
EUR
At the beginning of the period
Equity repayment
At the end of the period
Retained earnings
EUR
Retained earnings at the beginning of the period
Dividends paid
Retained earnings at the end of the period
Profit or loss for the period
Total unrestricted equity
Total equity
Distributable equity
EUR
Invested non-restricted equity reserve
Retained earnings
Profit or loss for the period
Total
2020
40,202,206
-16,549,849
23,652,357
25,958,375
2019
-900,845
-
-900,845
41,103,051
543,114,694
533,706,168
543,194,694
533,786,168
31 Dec 2020
31 Dec 2019
493,503,962
493,503,962
23,652,357
25,958,375
-900,845
41,103,051
543,114,694
533,706,168
SHARES AND SHARE CAPITAL
On 31 December 2020 the amount of shares is 128,036,531 of which 730,000
is held by EAM TTALO Holding Oy, company which is under the control
of Terveystalo PLC. 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 sys-
tem 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.
2020
100%
2019
100%
31 Dec 2020
31 Dec 2019
-
1,146,591
6,203,314
42,209,060
49,558,965
10,132,900
969,860
-
60,708,591
71,811,351
2020
80,000
80,000
2019
80,000
80,000
80,000
80,000
2020
2019
493,503,962
-
519,111,269
-25,607,306
493,503,962
493,503,962
112
113
TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
2.5 LIABILITIES
2.5.1 CURRENT LIABILITIES
EUR
Loans from financial institutions
Trade payables
Other liabilities to group companies
Other liabilities
Accruals
Total
2.5.2 LIABILITIES TO GROUP COMPANIES
EUR
Trade payables
Group account payables
Accruals and deferred income
Total
2.5.3 ACCRUALS AND DEFERRED EXPENSES
EUR
Personnel related accrued expenses
Tax liabilities
Total
OTHER NOTES
3. COLLATERAL AND OTHER CONTINGENT LIABILITIES
EUR
Suretyship
Guarantees
31 Dec 2020
31 Dec 2019
-
140,007
16,822,320
179,157
6,203,873
37,365
176,642
34,054,995
144,331
10,535,893
23,345,357
44,949,227
31 Dec 2020
31 Dec 2019
157,021
16,662,176
3,123
2,285
33,896,471
156,240
16,822,320
34,054,996
31 Dec 2020
31 Dec 2019
613,405
5,590,468
311,253
10,224,640
6,203,873
10,535,893
31 Dec 2020
31 Dec 2019
372,800,000
374,200,000
393,134
400,734
SIGNATURES TO THE FINANCIAL STATEMENTS AND BOARD OF DIRECTOR’S REPORT
Helsinki, 10 February 2021
Kari Kauniskangas
Chairman of the Board of Directors
Dag Andersson
Member of the Board of Directors
Lasse Heinonen
Member of the Board of Directors
Åse Aulie Michelet
Member of the Board of Directors
Niko Mokkila
Member of the Board of Directors
Katri Viippola
Member of the Board of Directors
Tomas von Rettig
Member of the Board of Directors
Ville Iho
President and CEO
AUDITORS NOTE
A report on the audit has been issued today.
Helsinki, 10 February 2021
KPMG Oy Ab
Audit firm
Henrik Holmbom
Authorised Public Accountant
114
115
TERVEYSTALOANNUAL REPORT 2020
YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
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 2020. The financial state-
ments comprise the consolidated balance sheet, income statement, 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 com-
pany’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 com-
panies 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 re-
ferred to in Article 5(1) of EU regulation 537/2014. The non-audit services
that we have provided have been disclosed in note 9 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 reaso-
nably 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.
THE KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN THE AUDIT
VALUATION OF GOODWILL AND INTANGIBLE ASSETS
(ACCOUNTING PRINCIPLES FOR THE CONSOLIDATED FINANCIAL STATEMENTS AND THE NOTES 14 AND 15)
• At the year-end 2020 the goodwill amounted to 781.8 M€ and accounted
for 57% of the consolidated total assets and for 137% of the consolidated
equity.
• 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 recognized assets for trade mark and customer
relationships at the year-end 2020 were in total 110.5 M€. These assets
have finite useful lives and the related amortization periods shall be
reviewed annually.
• 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 financial and industry forecasts.
• In respect of the acquisition-related intangible assets we evaluated the recove-
rability 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 intangible assets.
REVENUE RECOGNITION
(ACCOUNTING PRINCIPLES FOR THE CONSOLIDATED FINANCIAL STATEMENTS AND THE NOTE 4)
• The consolidated revenue amounted to 986.4 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.
• We evaluated the IT systems relevant for revenue recognition and the functio-
ning of the related general IT controls.
• 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.
• In addition, we tested controls over cash sales such as reconciliation routines.
• We considered the appropriateness of the disclosures provided for revenue in
the consolidated financial statements.
116
117
TERVEYSTALOANNUAL REPORT 2020 YEAR 2020
CORPORATE GOVERNANCE
FINANCIALS
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 com-
pany’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 exerci-
se professional judgment and maintain professional scepticism throughout
the audit. We also:
•
Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the cir-
cumstances, 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 finan-
cial 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 indepen-
dence, and communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where app-
licable, 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 9 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 respon-
sibility 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 appli-
cable laws and regulations.
In our opinion, the information in the report of the Board of Directors is
consistent with the information in the financial statements and the report of
the Board of Directors has been prepared in accordance with the applicable
laws and regulations.
If, based on the work we have performed on the other information that
we obtained prior to the date of this auditor’s report, we conclude that the-
re is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Helsinki, 10 February 2021
KPMG OY AB
Henrik Holmbom
Authorised Public Accountant, KHT
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TERVEYSTALOANNUAL REPORT 2020 TERVEYSTALO PLC
Jaakonkatu 3 B, 3rd floor
00100 Helsinki, Finland
Exchange: 030 633 11
www.terveystalo.com