Mehiläinen’s financial year 2022: Strong growth continued, cost inflation increased significantly, and profitability decreased

The COVID-19 pandemic, Russia’s invasion of Ukraine, the labour shortage in the social and healthcare sector, changes in regulations, high cost inflation rates, increased interest rates, and the decreased availability of debt capital made the operating environment unforeseeable in 2022.

- Mehiläinen performed very well in a difficult market environment. We increased our revenue and market share, and our operational profitability remained above the industry average. However, costs increased steeply, profitability decreased, and the result of the period was negative. We cannot be satisfied with the net result, says CEO Janne-Olli Järvenpää.

Mehiläinen’s revenue in 2022 increased by 16.7% from the comparison year to EUR 1,632.8 (1,398.9) million. Privately funded healthcare services, therapy services and international operations showed particularly strong growth. In COVID-19 related services such as testing, the revenue decreased significantly. The market share increased in several business areas through organic growth and add-on acquisitions.

Cash flow from operating activities in 2022 increased by 8.6% from the comparison year and was EUR 264.2 (243.2) million. However, the increase in cost levels reduced the group’s profitability. The underlying operating profit before depreciation and amortisation of intangible assets arising from business combinations, impairments and items affecting comparability (underlying EBITA) was EUR 137.6 (163.6) million. Mehiläinen’s result for the period was negative at EUR -9.4 (24.9) million.

- Despite the challenging year, we continued to work hard to achieve a high level of quality and develop our services. We made significant investments in new facilities and equipment, digital development, and acquisitions that expanded our network and services scope. Total investments increased to EUR 218.1 (159.7) million, says Järvenpää.

Mehiläinen’s tax footprint increased during the year by 20.7% to EUR 364.0 (301.6) million. The group paid EUR 17.9 (19.2) million in corporate tax.

High demand for healthcare services, COVID-19 services decreased

For healthcare services, the year was characterised by a high demand. Mehiläinen increased its market share in physician and dental care services, as well as physiotherapy through the acquisition of Fysios. The number of appointments increased significantly. In Working Life Services, customer volumes and the use of services also increased considerably.

- During the year, we helped dissolve the wave of infections related to COVID-19 and post-pandemic delays in care, says Järvenpää.

In public healthcare services, access to care was at an excellent level, and the number of customers listed at public health centres operated by Mehiläinen reached a new record. During the year, Mehiläinen launched the Centre for remote healthcare to serve clients in the public sector. Speech and occupational therapy services grew both organically and through business acquisitions.

Significant cost increases in social care services

Year 2022 was a difficult year in social care services. The labour shortage, cost inflation, amendments to legislation and regulations governing the industry, and the transfer of the responsibility to provide services from municipalities to wellbeing services counties changed the operating environment dramatically.

- Mehiläinen provides meals round the clock for 7,000 residents, and operates in more than 800 properties. The sudden increase in energy and food costs had a significant adverse impact on profitability. The pandemic and labour shortage also increased personnel costs, says Järvenpää.

The rapid and unexpected increase in costs could not be transferred to prices during 2022 due to long-term agreements. High cost pressures are also expected to continue in the future.

Strong international growth continued

Mehiläinen continued its expansion outside Finland during the year. The revenue of international operations in Estonia, Sweden and Germany is already roughly EUR 100 million. The digital healthcare platform of Mehiläinen’s subsidiary BeeHealthy has already been deployed in ten different countries.

- Our international operations are experiencing strong initial growth, and they have significant future growth potential. In Estonia, Sweden and Germany, the market of private outpatient healthcare services totals several tens of billions of euros, says Järvenpää.

High customer satisfaction and employee experience

Mehiläinen’s customer satisfaction and employee experience remained high. The total Net Promoter Score (NPS) of Mehiläinen’s private healthcare services was 89. During the year, Mehiläinen employed 33,000 employees and private practitioners in total. The full-time personnel increased by 18.8% to 13,400. The personnel survey showed excellent results. Long-term personnel activities were also recognised externally, with Mehiläinen being selected as the Employer Brand of the Year and voted the most attractive employer in the sector among students.

KEY FIGURES

	2019	2020	2021	2022	Change %
Revenue	1,064.1	1,162.5	1,398.9	1,632,8	16.7 %
Underlying EBITDA 1)	202.0	227.6	271.0	266,0	-1.8 %
% of revenue	19.0	19.6	19.4	16.3
EBITDA	197.1	218.6	263.9	262.2	-0.6 %
% of revenue	18.5	18.8	18.9	16.1
Underlying EBITA 2)	118.8	134.1	163.6	137.6	-15.9 %
% of revenue	11.2	11.5	11.7	8.4
EBITA 3)	114.0	125.1	153.3	133.8	-12.7 %
% of revenue	10.7	10.8	11.0	8.2
Operating profit	81.8	86.0	113.8	85.1	-25.3 %
% of revenue	7.7	7.4	8.1	5.2
Net result for the financial year	0.6	0.2	24.9	-9.4	-137.8 %
% of revenue	0.1	0.0	1.8	-0.6
Net cash flow from operating activities	200.7	202.0	243.2	264.2	8.6 %
Tax footprint 4)	217.6	230.9	301.6	364.0	20.7 %
Corporate income taxes 5)	6.4	14.6	19.4	15.2	-21.5 %
Total investments in acquisitions, tangible and intangible assets	85.4	52.8	159.7	218.1	36.5 %
Average personnel (full-time)	9,077	9,461	11,281	13,404	18.8 %
Customers’ Net Promoter Score (NPS)	89	89	89	89

1) EBITDA before items affecting comparability.
2) Operating profit before the amortisation and impairment of intangible assets arising from acquisitions and items affecting comparability.
3) Operating profit before the amortisation and impairment of intangible assets arising from acquisitions.
4) Tax footprint including the employer’s social insurance contributions. The tax footprint of the private practitioners operating at Mehiläinen comes on top of Mehiläinen’s own tax footprint. The tax footprint of private practitioners amounts to an estimated EUR 89.5 (76.5) million.
5) Corporation taxes for the financial year include all income tax recorded in the results for the financial year as well as the income tax from previous years recorded during this financial year due to income adjustments (does not include deferred taxes).

Please find the Annual Report and Financial Statements on Mehiläinen’s website:
https://www.mehilainen.fi/en/company-information/mehilainens-year-2022