Terveystalo Oyj (TTALO) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to Terveystalo's Q4 and Full Year 2024 Results Webcast and Call. My name is Kati Kaksonen, and I'm responsible for Investor Relations and Sustainability here at Terveystalo. As usual, our CEO, Ville Iho; and CFO, Juuso Pajunen, will go through the presentation of the results, and we'll follow that with a Q&A. You have the opportunity to send in your questions via the webcast or then through phone lines, and we'll take the questions after the presentation. Without further ado, over to you, Ville.

Thank you, Kati. So let's recap shortly Q4 and then discuss whole journey during '24 and then take a look forward into Terveystalo's agenda and future journey. Q4, very shortly numbers. This is the seventh consecutive quarter of clear improvement. This is sort of the final testament of our turnaround and improvement journey, a rock solid quarter once again, each and every number that we can see regardless of it being financial or quality is all-time high. So we have put ourselves in a very, very strong position for the next chapter of Terveystalo journey. Clear improvement again in profitability, growth driven by health care services, individual customer satisfaction measured in NPS all-time high and especially a strong operating cash flow during Q4 as per Terveystalo standard. Taking a step back a little bit and looking at the journey during the last 3 years. In '22, of course, situation was quite a bit more difficult, a lot of negative trends. We then took action, started the journey of improvement, being very, very consistent in improving the operations ever since and have done that one against fairly tough macro conditions. That needs to be bear in mind. Against the tough macro conditions, we have taken Terveystalo onto a new performance level and starting point for next chapter is stronger than ever. Not only financial numbers have been improving, also the satisfaction of our customers. has steadily improved. We started the journey maybe 5 years ago on a roughly 70 NPS level. Now we are at 88 in appointments in hospitals. We are roughly at 95. So altogether, it's an excellent, excellent level. We have done some tough things during our improvement journey, which has taken a toll on Terveystalo team. But very happy to say that the engagement of our professionals, our employees, the full team measured in engagement index is all-time high, clearly all-time high, 4.2. Also, the medical quality measured in patient enablement index, all-time high level, 69%. So this is a solid full package of improvement. We have delivered the results at the same services to our customers and also the medical quality. Journey in quarters, this has been shown -- since we started the journey, it's very consistent. One important thing or even more important thing than the improvement is that we are a low-risk company with a higher performance as we speak. So improvement all time -- performance all-time high in our finances. At the same time, a lower risk level due to evenly -- more evenly mixed margin distribution in our operations, especially in Healthcare Services, lower exposure to legacy contracts, which are exposed to inflation and lower leverage ratio. So high performance, lower risk and again, very strong position to take the next step in Terveystalo's journey. Looking a little bit into our different 3 businesses. Of course, in their journeys, they are in different phases. Healthcare Services has been driving the improvement since '22, be it growth or profitability. It's in a more mature state and now ready for investments into technology and continuous improvement. We are seeing a lot of opportunities for further improvement in Healthcare Services and targeting a higher level of performance and profitability going forward, which is also visible in our guidance. Portfolio businesses have started the improvement journey operationally against very, very tough market environment in consumer businesses and also in the public businesses, it has been able to improve, but market has been tough. The agenda is -- the improvement journey has started. We can see the results and the journey will continue so that we'll reach 10% of EBITDA level. Sweden is the final -- one of these 3 started the improvement journey. Latest are on track with the program. Macro in Sweden is slightly tougher than we thought that it will be. So recovery in Swedish economy has taken slight delay. But the most important thing that the team has been able to deliver according to our plan, according to our program and even against tough conditions, they are showing month-to-month improvement. We'll turn around the business during this year. Our agenda with our track record with our view into the markets and into the future. We have -- we disclosed late last year our revised financial targets, demonstrating and showcasing more mature company, lower risk with a high performance. Our aim is to continue profitable growth with 10% on average annual EPS growth with a more moderate leverage ratio than we have seen before, and with attractive dividends. And first time showcasing our new dividend policy, the dividend proposal is EUR 0.48 per share, representing 85% of net results from last year. Now as I said, we have a rock solid foundation. We have taken the company into a new level of performance and journey continues. We have already accelerated our investments. A lot of the improvements that we are now seeking for -- and also forecasting are down to technology. We have very robust architecture in place. We have clear projects already ongoing, which will improve our efficiency in our medical delivery forward. Projects are already ongoing. Ship is sailing and we'll see -- and this is also reflected, again, as I said, in our guidance for this year. We are in a place where we can invest, but also the platform is mature enough to yield the results. Our focus areas going forward throughout the company in these 5 buckets, engage team, of course, very important going forward. Our supply is great. We have been able to improve that one. Throughout the journey, the engagement of the team is all-time high, but we need to invest even more into this area going forward. We'll invest more than we did during the program into our product services and customer value, especially in B2B -- and B2B. As you saw, individual customers are ever so happy in our services. There will be incremental improvement in that front as well, but special focus will be put in occupational health care, insurance customers and health care counties so that the smoothness of our services, ease of dealing with us and value that we can demonstrate in our services will improve drastically over the next years. Organic growth is a key driver for future performance improvement. We have a focused agenda. We are targeting at certain specialties at certain services where we feel that the market is growing faster or that we feel Terveystalo's position in market share is not at the level where our brand and strength would allow us to be. So very focused agenda there, and will drive organic growth. And with our improved operating leverage, of course, that's going to be a source of improved financial performance. Efficiency, even though the profitability improvement program has ended, efficiency will be a key, not only for Terveystalo, but for health care in general. Closing the care gap will only happen through technology, improved processes, better leadership. We have -- in this field, we have dedicated focused projects ongoing already, transforming the way we deliver our services in physical and digital. We have projects enabling us to make support functions more efficient and our resourcing more lean and mean. We have dry powder in the context of our cash flow and revised financial targets to do acquisitions. We will do those in focused and disciplined manner, but it's in our agenda also in coming years. So with this agenda and with the track record, with the position that we are in, we are fully committed to continue the improvement journey. And as I said, that's visible also in our guidance for this year. With that one, over to you.

Thank you, Ville. Good morning all. So my name is Juuso Pajunen. I'm the CFO of Terveystalo and really happy here and proud to present the numbers we have delivered in '24. Ville concentrated more on the full year, so I will talk a bit about the quarter and then come back to the guidance. So basically, revenue growth, it was driven by strong supply. We have an improved sales mix and successful commercial actions and supported by the strong flu season. Then it's also good to say that the strong flu season slightly stabilized at the end of the quarter. We have seen that the upper respiratory diseases have been lower in December than they were in October and November level compared to previous year levels. The Healthcare Services were growing by 10%, which is a healthy good number in a muted volume environment. It's especially coming from all of the customer segments where we have been seeing positive development. We have the corporate customers growing by 12% and consumers by 10% and even public sector in a slightly positive level. And this, combined with the positive sales mix, we have been able to increase the revenues by the 10%. Then if we look portfolio of businesses, we have a bit of a mixed view if we see the total revenue development. On the other hand, we have a reduction of revenue by our own choice. We have the outsourcing contracts, the legacy contracts are declining. As we have been communicating earlier within the pace we have been communicating earlier. And in staffing, like we have throughout '24, we have done some client and service selection where we have been on more value-adding contracts. So part of this reduction of revenue is by choice. But at the same time, if we look first into the public sector market, it has been fairly soft in Q4. So many of our services, the demand has been not as robust as it has been earlier. And the well-being counties have been now setting up their operations, and we are seeing that little by little, the market is coming back and the start of January is already fairly good. But looking to the macro environment and the market environment, public sector market has been soft. Then if we look at the private market, we have compared to the previous year figures, we are still reducing in dental and in massage, but we also have seen that the decline has stabilized and turns are coming back along with the consumer purchase powers that have been improving. Sweden, from a revenue perspective, it is the story continued to end customer contracts and the demand environment has been weak still in Q4. But at the same time, we have been able to make sure that our machine is little by little improving. So on the total revenue growth and revenue mix, we have a positive underlying demand, especially in health care services. We have an improving demand on the private services. What comes to portfolio businesses, we have a public sector market that is now also improving, but that was soft in Q4. And Sweden, we are now moving forward and progressing well with our profit improvement program. Then if we look on the Profitability, strong performance from Healthcare Services. We have the continued operational efficiency. You know the story about the profit improvement program. We are now running that really efficient machine. And when we have a good demand environment, yet not growing in volume, but a good demand environment, we are reaping the benefits on that one. And when we have a solid sales mix throughout appointments, diagnostics and other services, it generates revenue. Then it's good to remember that in these numbers, we have the onetime expenses related to personnel. So we have paid an extra bonus to all of our employees. And then we have the collateral labor agreement, additional pay EUR 500 per employee who are within that CLA. That is now burdening the Q4 results. That is a good segue to the portfolio businesses. Also they paid those bonuses and those extra pay to CLA employees. If you clean out from the performance, these numbers, they are actually -- underlying operational performance is improving. It's not reaching our ambition at the moment, and we have the actions ongoing to make it better. So operationally improving, full year improving, but also we think that we can do better and we can do more. So that is a topic that we are addressing at the moment. And then we have the Sweden where we now see that the profit improvement program is proceeding according to plan. And at the same time, we see that despite a weaker -- we see month-on-month improvement from Q3 and within Q4 that we are planning to continue in '25. So all in all, a strong profit growth as a group, solid margins, remembering that we have taken also these onetime personnel expenses, we delivered operationally really strong quarter for Q4. Then a bit further to highlight what I said earlier, if we look to Healthcare Services, we do see that all customer segments are growing, are delivering healthy growth, healthy margins. And then we have in the portfolio businesses, we do see that especially the public sector-driven services have been declining. And as said, the market has been somewhat soft in Q4. Sweden, story continued. But at the same time, we are in an EBITA making position or adjusted EBITA making position in the quarter. So a little by little stepping forward, what comes to all segments and especially strong performance from Healthcare Services. If we take a quick view on the full year, this is story continued from fourth quarter. We have increased our revenues. We have a 10% revenue growth in Healthcare Services, and we delivered EUR 1.340 billion of revenues for full year. Adjusted EBITA at EUR 171 million, 12.8% of the revenues. The biggest contribution coming from Healthcare Services, but it is good to note that also portfolios are improving and Sweden, we have a clear track going forward on that one. If we think about -- then looking forward, our investments, they are now at EUR 40 million or 3% of the revenues. Like stated in the Capital Markets Day, this is something that we are accelerating. We will invest into the organic growth also like Ville explained, we have plenty of positive investment initiatives and our balance sheet is in a really good shape to do so. So when going forward, it is clear that the organic growth and accelerating that one is a high priority in our agenda. What comes to M&A, disciplined M&A, something that adds our customer value that we can basically bring in to positively improve our position is very interesting to us. Then it is clear that health care services is something that we are always keen to work on. Then in portfolios, especially Dental, we have been highlighting as a growth opportunity. Sweden will fix their base first before we will discuss about M&A for Swedish offering. Then talking about leverage and cash flow, we had a strong cash quarter in Q4. But then those ones who were listening the same presentation after Q3 may remember that in Q3, we had weaker net working capital development that we have caught up now in Q4. So this is normal timing difference within the cash generation. Then if you look for the full year cash, it is really strong. But at the same time, if we look year backwards, we had in Q4 weaker -- Q4 '23, a weaker net working capital development that we were able then to catch up in Q1. So we -- this is, again, a normal timing difference. But now at the end of Q4, we are benefiting a bit on that timing difference that was a bit more difficult in Q4 '23 and Q3 '24. So all in all, normal, we are a cash machine that picks very reliably operational cash flow. And that one then is visible when we look at the net debt to adjusted EBITDA at 2.1x leverage ratio. That is a solid amount and highlights that we have plenty of powder if and when we choose to invest. So basically, if we take a look back to the full year, we think about what we are offering. We have now all of our services are delivering healthy margins, both appointments, diagnostics, and so on, but also all of the channels are doing that one. We have a solid cash delivery that keeps our balance sheet in order. We have a foundation that is stronger than ever before. So we are building on that one when we go forward. So when we talk about year '25, and we talk about our guidance, we have updated our guidance structure. So in the future, we will guide on expectations on revenue. That has not changed. We have guided that one already earlier, but now we are turning our eyes to adjusted EBIT margin. Previously, it was adjusted EBITA margin. So now we are taking it one line below or one line lower in the income statement, just to highlight that all investments count. We are in for earnings per share growth at least 10% annually. And within that one, then whatever we invest, whether it's organic, whether it's inorganic, it counts and it needs to reap adjusted EBIT margins. So with that logic, our guidance for full year '25 is we are expecting revenues to grow, and we are expecting our adjusted EBIT to be in the range of 10.7% to 11.8% of revenues. And now just setting your eyes on the new structure, it was 10.5% in '24. So we are guiding that we will -- under the scenarios we foresee, we are improving, and we have still hefty room to improve further. So we are clearly continuing on the operational improvement part that we have continuously been talking about. These estimates always come with the disclaimer, explanations. So we have -- this is based on the stable demand environment, employment levels and typical morbidity rates. So normal world continues forward in a normal manner. We have disclosed the legacy contracts maturity curve. That has not changed, and we are expecting roughly EUR 25 million revenue reduction within the portfolio business segments, outsourcing operations due to those legacy contracts. And then basically, we are expecting that all business segments will improve their operations and profitability during the year. These don't, as usual, take into account any kind of significant acquisitions or divestments, so also a normal exclusion on that one. So with that said, as a summary, we had operationally strong fourth quarter. We have been able to improve our operations, especially in Healthcare Services, but also other segments are in a positive track going forward. We expect them to improve profitability. We have a healthy cash delivery, strong balance sheet, enabling us to invest into the future and into the organic growth. So we have with these words, let's invite Kati and Ville back on stage and start the Q&A.

Thanks, Juuso. We are now ready for your questions. Do we have any questions from the phone lines at the moment?

[Operator Instructions] The next question comes from Iiris Theman from Carnegie.

Iiris Theman, from Carnegie. I have 3 questions, please. So firstly, starting with your volume. So basically, your volume growth that started in Q2 didn't continue in Healthcare Services, why? And what is the outlook for volume growth in 2025? And can you comment on the drivers? Then secondly, what happened in portfolio business basically because your margin decreased a lot from a year ago and from Q3? And did you mention that you expect a 10% EBITA margin level here? If so, basically, how fast do you see a recovery? And my final question is related to your margin guidance range. So what are the headwinds and tailwinds for this year?

Good. If I start from the volume development. So we had a muted volume environment in Q4. It was basically flat. If you then go a step deeper into the volume, you see that it was remote channels actually that we are contradicting. They were going down some 9% on year. There's 2 different topics on that. One, there's a channel change from remote channels into physical channels that has been favorable for us because that generates still with a better referral rate or so diagnostics. But then the other part is that we have been renewing our operating model what comes to especially chat appointments. So that is a, from pieces perspective, a high-volume component. But of course, then from a revenue perspective, each chat is a bit cheaper than other. When we renew that operating model, we saw a temporary lower supply what comes to the chat availability, which was especially in October and November visible. Now we are back in the more stable environment. That explains partly that one. And then if you just now look January, for example, our open data, you can interpret that our volume environment is very healthy, at least what comes for the start of the year. Then the second question was related on...

Portfolio business.

Portfolio businesses. So basically, first of all, on the operational part of that one, you need to now remember that despite performance being weaker in portfolios, we paid the same bonuses to all employees in Finland. And then we had the CLA EUR 500 per employee also in there. So that one is north of EUR 1 million. And if you adjust that one, you will see that basically portfolios were operationally improving. But having said that one they didn't improve as much as our ambition is. We see clearly room for improvement in there. We see -- and we have a clear path on delivering that one. But then the third component on that performance is that the public sector market was slightly soft. So that one also then impacted a bit. But operational performance, the underlying operations have continued to improve. Then the final question was on the 10% on portfolio. So we have in our CMD said that we see that the margin potential by '29 is 10%. And that one, we are not backing up. You have heard Henri discussing about that one. We clearly see that we have a good potential in the portfolio businesses. We have a clear track on taking the steps to deliver that one. And then obviously, we have the market component where now the likely opening of public market will generate opportunities to us as an optional way if it opens in a manner that is leveraging also our operational strength. So 10% by '29 is what we have stated in the CMD, and we are very confident and comfortable stating it again.

And regarding your margin -- group margin guidance rates, so what are the headwinds and tailwinds for this year?

Yes. So basically, on the guidance from the 10.7% to 11.8%, I think that on the tailwind side, we are expecting the market to continue as such. There are always scenarios where one can throw a dice and think about that markets would go materially more difficult than in '24. That's not within our current scenarios. Then on the upside, we have the volume component. So the more volume we are able to generate, it is clear that it would push us into the upper range and so on. So nothing really drastic in this guidance or the expected environment.

Just to add one note on portfolio businesses. If you compare our model in portfolio businesses with maybe some others, what you can see is against the macro and demand environment in general, we are more in sort of a spot agreement type of business model where fluctuations in demand environment impact us faster. So we have decisively gone away from large outsourcing contracts, which are always existing and continues to deliver. Our portfolio is more skewed to sort of a spot dealing with counties and also our consumer businesses under portfolio businesses, it's totally consumer driven. So against that one, both of these markets have been muted. Counties have been squeezing for obvious reasons, which we know and our consumer confidence and demand has been very, very low. When those environments improve and they will improve, of course, the operating machine is there and operating leverage is there.

The next question comes from Anssi Raussi from SEB.

I have a few questions left, and I start also with your margin guidance. So of course, it's clear that you state that you expect your margins to improve in all segments. But maybe about this Healthcare Services segment. So basically, how much you still see room to improve here? And do you think that like what will be the contribution in 2025 margin improvement from this segment?

If I first comment on the agenda and the improvement potential sort of inside out and then Juuso will comment on the contribution, and how we see that one. So we have taken Healthcare Services into a new level as we all have seen. So the performance is all-time high. But within the operations, within the processes, we see a clear path for improvement in some processes, in some services, even drastic improvement. That's very much down to using smarter technology, better processes. And as I said in my presentation, we have already projects ongoing, which will then support and boost performance improvement going forward. So tinkering that machine with the better process and technology we are only in the start, not at the end. Then, of course, market conditions will then state how much we are -- the environment allows us to improve the margins, but we are not ready. We have only started.

Yes, I can only complement that we see continued performance improvement opportunities also in Healthcare Services. And then -- but at the same time, when you remember how big the change in profitability has been when looking backwards, obviously, that type of a change is not visible. But the more we get volume, the operating leverage we have really worked on. So that one will create extra kickers if that one comes in. But in all foreseeable scenarios, that 10.7% lower end also includes some performance improvement from Healthcare Services.

And do you want to elaborate on the contribution of portfolios in Sweden?

Yes. So contribution from portfolios in Sweden, both of those ones, we are expecting to continue on the operating environment -- in the operating improvement. And portfolios, as said, they will improve both based on our actions, and then we have a fair good understanding that the market is little by little improving. Sweden, we have progressed very well in our profit improvement program and are expecting also them to improve. We have seen now the month-on-month improvement during the -- especially Q4, but starting from Q3 and the next steps will be that we need to improve year-on-year also on that one. So we are confident also on that operating improvement.

Okay. Clear. And maybe about your revenue guidance, you guide, of course, growth year-over-year. But if you think about underlying pieces here, maybe a bit more modest price increases. You already mentioned healthy volumes in January. But if we try to think about the net impact, is it possible that we could actually see accelerating revenue growth, especially in Healthcare Services? Or is it flattish growth? Or how would you describe your, let's say, base scenario here?

Yes. I think our base scenario is coming from the adjective grow. I think that we've been talking about that this is something that is clearly different from 0, but probably below 5%. So from those ones, you can get a bit of the understanding. We are expecting Healthcare Services to grow because already, if you take that EUR 25 million from the portfolio businesses out, that's rounded 2 percentage points of the revenue. We need to get the other parts of the organization grow in a healthy manner to make that guidance happen. So obviously, Healthcare Services will continue growing, and there will be most likely a pricing component or commercial component and a volume component included.

That's clear. And finally, you have multiple efficiency programs ongoing in portfolio business and I guess, in Sweden. So could you maybe give us an estimate of adjustment items in 2025 and how big share of these will have a cash impact?

Yes. So basically, first of all, we continue on the profit improvement programs in portfolio in Sweden. Our methodology follows the Alpha methodology from the Healthcare Services. So those are highly success-driven projects what comes to cash outflow. We are using an external support in there. So basically, the cash outs will materialize only when we have proof of improvement as such in there. Then what comes to the volumes and what comes to the total amount, you can a bit iterate what type of improvement we are trying to achieve. And then the cost of that program is similar. So we are talking about clearly lower amount of adjustment items that we had during '22, '23, '24 periods, what comes to Alfa due to, of course, lower volumes and lower absolute euro improvements.

The next question comes from Joni Sandvall from Nordea.

Maybe following on the portfolio businesses and the legacy contracts that are ending, how much positive margin improvement do you expect from this?

Do you now mean the contracts itself that what happens on the legacy contracts or kind of that -- how they dilute?

I mean that now when those are ending, how large positive impact that will have on the margins?

Given the existing volumes, it will be a moderate, modest margin improvement. They are still margin diluting to a certain degree, but we have also been working very hard on those ones, and we have been able to improve the underlying margins. So they are not in a place they were maybe in '22 and '23. So the total margin diluting impact is now quite modest, remembering that we have a EUR 50 million volumes in a EUR 1.3 billion business.

Yes, sure. Then maybe a question on the Dental. You mentioned that the decline has stabilized. So what can we actually expect from the Dental side? I know that you are maybe targeting some M&A there, but is there some other organic actions that you could make to support the growth?

Yes. Maybe if I start, as we stated in CMD, Dental is part of our core offering. So holistic health offering by Terveystalo going forward, and we'll invest and focus into that segment going forward. M&A is part of the play, of course, but there's -- we have ample opportunities to improve the operations. We have started the improvement journey. We see that on an operational level, even against the tough market, we have improved steadily. So the decision to make it more independent business has been the right call. Now what we are doing, there are a couple of different big elements where we see organic growth. We are leveraging our occupational health care contract base. And since late Q4, actually, we see encouraging results that the flows actually work, and we can leverage that exceptionally large base of loyal customers. Then there are still operational improvements just by benchmarking to the best peers dedicated Dental players. We can improve our referrals, for example, that process, which will feed into the volumes. So there are things clearly on our table, which we can improve, which will contribute to volumes. M&A is not, of course, not the only solution.

Okay. That's clear. And lastly, maybe we have seen in Finland, the new proposal for [Indiscernible] reimbursements for over 65-year old people. So have you been able to make any plans on this, and how you view the new proposal?

Yes, we have been part of the discussion, and we have looked at the scenarios. As we stated from the beginning, it's an interesting pilot and interesting exercise sort of a little bit testing out freedom of choice type of model for right segment, sort of more senior people over 65 who are falling out from occupational health care offering and services. So focus is right. The model itself is, of course, embedding that one into existing operations requires some work, but we have a clear plan how to do it. We are, of course, interested party in this exercise, and see that it will generate some additional volumes if and when it will be successful. But it will not, during this year, '25, move the needle as such. But it is a test case. It's a positive test case, and we are part of the pilot.

Okay. And maybe lastly for you now given the new disclosure on EBIT margins, are you aiming to start to disclose EBIT also for segments?

That is our target. So obviously, with the logic that all investment count, all investments in all segments count. So we will not take the EBITA away at least this year. So we will most likely disclose both EBITA and EBIT adjusted numbers on segment level to bring further transparency. I think that transparency always is a good thing when it comes to investor communication.

The next question comes from Sami Sarkamies from Danske Bank.

I still have a couple of questions. Firstly, can you comment on your Q4 performance at portfolio businesses in Sweden? Were there any surprises against your own expectations?

Yes. If I start then on that one, I stated a couple of times that portfolios is not reaching our ambition. And one part of that one is that the softness of the public sector market, we had in our game book slightly better market conditions, nothing great, but that has a bit been impacting, especially the spot part of the business that Ville was referring to. So that is maybe a minor deviation compared to our expectations at the end of September or early October. Then what comes to Sweden, Sweden has been progressing as we have planned. Absolute numbers are not satisfactory, but the traction and the direction is the right one. So that one is within our own expectations.

Yes, I would only complement by saying that the only -- not a surprise, but slightly lower than expected is the market conditions as Juuso said, both in portfolio businesses where we have a consumer market and health care counties buying from us in that spot trade-dominated business model and also in Sweden, where the recovery has been clearly delayed from the expectations on market level and on buying behavior level. But as I said, programs as such and the operations and the machine is progressing as we expect.

Okay. And then my second question would be on the outlook for portfolio businesses and Sweden for this year. If we look at the Q4 exit rates when it comes to sort of growth and margin level, what will bring you the improvement from that during '25 -- so what are kind of like levers you can pull or that will be pulled for you?

Yes. So if I start and Ville will complement. So we have different type of levers. If we start from the portfolio and if we split it into components, we have -- efficiency is the clear component when it comes to portfolios. We have been working on that one like we work with Healthcare Services in Alfa. Efficiency comes from a slightly different sources, whether you look into the private part of the business or whether you look into the public part of the business. So in those ones now, I think that we have progressed well, and we are in a positive scenario that with the existing volumes, we can improve and then we can improve even better with improved volumes. So I think that both combination of efficiency and then commercial actions will yield us a positive result what comes to '25. So there -- but it's not rocket science. It is leveraging the existing resources, cross sales like Ville explained on the Dental side, also a bit on Massage side and then making sure that the underlying machine ticks well. Then what comes to Sweden, now during '24, we have concentrated heavily on putting the machine in place, looking on the people, looking on the delivery geographies and the footprint to make sure that we have optimized the underlying fixed base -- fixed cost base and then the people base. And now we are in a place that we -- that already with that one, we can dig continuously better. Then we have learned a lot better also the cross sales and the client service kind of account management. We have taken a bit of best practices from Finland, but we have been taking next steps on that one in Sweden. So already this formula should support also better sales with improved efficiency should yield results. And then on top of that one, again, with the macro environment, still in my opinion, improving in '25 in Sweden, that one should give a positive operating leverage. So I think that we have -- the full recipe is in place, and now we need to just decisively and actively continue on the well-chosen agenda and implement it to roll it through.

Yes, only thing to complement this is maybe just reinforcing what you said around efficiency being the key driver especially for Sweden, we have already showcased that, for example, occupancy rate for the staff has drastically improved throughout the year. So the machine is way more efficient and operating leverage is improving. Same applies to businesses and the portfolio. But there in portfolio, especially in consumer-facing businesses, Massage and Dental, we have also this quite impactful commercial actions that will take -- will be in play, especially when the market conditions improve.

Okay. And then my final question would be on the top line for '25. I think we already discussed earlier that the price increase component will be less pronounced -- but how do you think of the volume component? Is that sort of stable? Or do you see it like tailing off or even accelerating from the previous year level?

If we simply take the guidance, so first of all, let's remember that the guidance is revenue to grow, including then that EUR 25 million reduction in portfolio. So that's the ballpark we are talking about. And within our plans, we see that pricing will continue to be a component, better channel optimization and sales mix will continue to be a component. But we do also understand that the current volume environment has been muted, and we would expect modest steps in there. So with all of these combined, we continue to iterate that our revenues will grow.

Okay. So you would expect some volume growth adjusted for kind of the portfolio changes?

That is what we are saying that we are expecting modest volume growth. And now we need to remember that we continuously talk about on the group level guidance what comes to revenue.

There are no more questions at this time. So I hand the conference back to the speakers.

Thank you, operator. We only have one question on the chat at the moment. So if you have any last-minute questions, do send them in. Anything that we could say about our cooperation with Nightingale Health. We talked about this topic in our Capital Markets Day in relation to prevention and occupational health, especially.

Actually, very good and interesting question. So what we have done during last year is that we have solidified the position of Nightingale technology in our occupational health care offering. And from the top of my head, I don't remember the final number that we achieved in the testing, but it's over 100,000 Nightingale tests. And that's the basis. Now what we are developing is care paths based on the Nightingale assessment, and that's the next phase. On top of that one, we are rethinking and reorganizing this preventive care, not only for corporates, but also for individual customers. And that's part of our strategy during this spring. So solid steps last year developing on the Nightingale test package, and volume during this year and then taking steps in preventive health care going forward.

Great. At the moment, we don't have any further questions on the phone lines. But maybe to finish off, shall we talk about a little bit of the market environment. In the beginning, you said that we have achieved a really solid record results in a quite challenging macro environment, whether it comes to the public market here in Finland, private pay segments or then especially in Sweden. How do we think about the macro environment going forward and the impact on our business?

Yes, very important and good question. So as Kati you said, the journey '22, '23, '24 has been executed against tough market environment. Of course, differences in different segments. But all in all, it has not been sort of a tailwind to boost our growth. Despite that one, we have made a drastic profit improvement -- profitability improvement and are stronger than ever going forward. Then looking forward, I think the most important thing to think about is megatrends and demography and that one boosting into overall volumes to health care system. Terveystalo is a big part of our health care system and growing part of the health care system. And really, the megatrends have not been muted quite the contrary. The volumes will grow, and we are readier than ever to capture our share of that growth going forward.

Yes. So continuing on an improvement journey, and we see still strong drivers for demand environment. Anything that you want to add?

No, absolutely. I would like to remind that even in this environment, we made 12.8% EBITA for 2024, and we are guiding improved performance. So market is not a big topic. Obviously, we would benefit from tailwinds, but I think we have delivered.

With that, any closing words before we finish for today.

I think it has been a sort of a full package of discussing quarter last year and also the future. But maybe restating just that stronger than ever, clear agenda megatrends supporting our growth going forward and guiding for improvement. Lower risk, higher performance, bright future ahead.

Great. With that, happy Valentine's Day, everybody, and have a great weekend ahead.

Thank you.