Mehiläinen’s financial year 2023: A year of positive development

Mehiläinen’s revenue for 2023 increased by 13.3% from the previous year to EUR 1,850.2 (1,632.8) million. All business areas grew in Finland and internationally. The revenue of private healthcare services increased in all customer segments, mainly organically. In addition, the revenue of social care services and public healthcare services increased partly as a result of organic growth and partly through business acquisitions.

- In many ways, 2023 marked a return to normal in Mehiläinen’s business activities with the end of the pandemic, even though the new wellbeing services counties started as providers of public healthcare and social welfare services, and cost inflation, which increased unexpectedly in 2022, remained high throughout the year, says Janne-Olli Järvenpää, CEO of Mehiläinen Group.

Mehiläinen Group’s underlying operating profit before the depreciation of intangible assets generated by business acquisitions, impairment and items affecting comparability (underlying EBITA) was EUR 215.7 (137.6) million. The result for the financial period was slightly positive at EUR 40.1 (-9.4) million or about 2.2% of revenue.

- We were able to partly compensate for the cost increases resulting from high inflation and legal amendments through the pricing of services. Profitability also developed positively through high demand, successful increase of supply and thereby better cost-effectiveness enabled by economies of scale. However, there is still a lot to do in terms of performance. In addition, the rapidly rising wages and other costs are causing additional pressure in the industry, Järvenpää says.

Mehiläinen Group’s tax footprint increased to EUR 389.4 (364.0) million. Together with the private practitioners, the tax footprint of the Mehiläinen Group was nearly half a billion euros. The group’s corporate income tax for the year amounted to EUR 22.6 (15.2) million.

The supply was increased successfully in healthcare services

Demand for healthcare services was high during 2023. Mehiläinen was very successful in recruiting physicians and other professionals and therefore in increasing availability of appointments, regardless of the challenging workforce situation. Dental care, physiotherapy, mental wellbeing services and diagnostics services also showed excellent development. The number of occupational healthcare customers exceeded the level of 600,000 employees, and the number of users of digital services was 1.8 million. The Net Promoter Score (NPS), which measures customer satisfaction at Mehiläinen’s medical clinics, was higher than ever at 90.

Cooperation with wellbeing services counties started seamlessly

Mehiläinen’s cooperation with the wellbeing services counties, which started at the beginning of 2023, got off to a seamless start. The SuomiSote services launched during the year cover all healthcare and social welfare services and digital solutions the wellbeing services counties need. The availability of services remained high at health centres maintained by Mehiläinen.

- Mehiläinen has the ability to provide quick access to care while ensuring a high level of quality and patient satisfaction. At the same time, cost-effectiveness can be enabled for providers of public primary healthcare services, Järvenpää says.

At the end of the year, the wellbeing services county of Päijät-Häme decided to use its ten-year agreement period options with joint venture Harjun terveys. Länsi-Pohja Central Hospital, operated by Mehiläinen, had the shortest queues for specialised healthcare in Finland, and at the end of 2023, the county council of the wellbeing services county of Lapland voted to extend Mehiläinen’s service agreement in line with the changes required by the new healthcare and social welfare legislation.

The profitability of Mehiläinen’s social care services developed positively after several financially difficult years. Mehiläinen was very successful in recruiting care professionals in the difficult workforce situation, and all units fulfilled the new staffing requirements laid down by law. Social care services also focused on the development of supervisory work and quality improvement activities.

The new collective agreement solution for the private social services sector, concluded in 2023, will significantly increase personnel costs in 2024. This poses challenges to maintaining a satisfactory level of profitability and enabling new investments while the population is ageing and the need for care is increasing.

Investments in quality, digitalisation and artificial intelligence

The further development of sustainability and quality were at the core during the year. Mehiläinen launched the Laatuportti system and deployed artificial intelligence solutions that improve customer service and the efficiency of work.

- During the year, we continued to make significant investments in our units and modern technologies. As an innovation, we launched the Mehidoc medical platform for our professionals. The user interface of Mehidoc’s electronic health record system and other tools give physicians more time to interact with patients, Järvenpää says.

Mehiläinen also expanded its operations in Estonia, Sweden and Germany. BeeHealthy, Mehiläinen’s subsidiary which provides software solutions in the healthcare service sector, signed new customer agreements and expanded its activities in the wellbeing services counties of Finland and internationally.

KEY FIGURES

EUR million	2021	2022	2023	Change %
Revenue	1 398,9	1 632,8	1 850,2	13,3 %
Underlying EBITDA 1)	271,0	266,0	354,9	33,4 %
% of revenue	19,4	16,3	19,2
EBITDA	263,9	262,2	346,2	32,0 %
% of revenue	18,9	16,1	18,7
Underlying EBITA 2)	163,6	137,6	215,7	56,7 %
% of revenue	11,7	8,4	11,7
EBITA 3)	153,3	133,8	207,0	54,7 %
% of revenue	11,0	8,2	11,2
Operating profit	113,8	85,1	160,2	88,4 %
% of revenue	8,1	5,2	8,7
Result for the financial year	24,9	-9,4	40,1	525,7 %
% of revenue	1,8	-0,6	2,2
Net cash from operating activities	243,2	264,2	384,1	45,4 %
Tax footprint 4)	301,6	364,0	389,4	7,0 %
Corporate income taxes 5)	19,4	15,2	22,6	48,8 %
Total investments in business acquisitions and tangible and intangible assets	159,7	218,1	88,1	-59,6 %
Average number of employees (full-time)	11 281	13 404	14 207	6,0 %
Customer NPS	89	89	90

1) EBITDA before items affecting comparability.
2) Operating profit before the depreciation and amortisation of intangible assets arising from business acquisitions, impairments and items affecting comparability.
3) Operating profit before the depreciation and amortisation of intangible assets arising from business acquisitions and impairments.
4) Tax footprint, including employer contributions. The tax footprint of private practitioners operating at Mehiläinen, estimated at EUR 105.2 (89.5) million, is added to Mehiläinen’s tax footprint.
5) Corporate income taxes include all income taxes recognised in the result for the financial year and income taxes recognised during the financial year due to adjusted income for the previous financial years (not including deferred taxes). Corporate income taxes paid during the financial period amounted to EUR 15.6 (2022: 17.9, 2021: 19.2) million.

Read the Annual Report and Financial Statements on Mehiläinen’s website: https://www.mehilainen.fi/en/company/mehilainens-year-2023. Mehiläinen’s Sustainability Report will be published on February 16, 2024.