Hi. Good morning, everybody, and welcome to Terrestrial's half year results, webcast and and call. As usual, our CEO, Vilejo, and our CFO is Galadala with the present results of today, and we'll follow that with a Q And A. We also have a third speaker today, Mr. Simo Taimena from one of our subsidiaries, Evaloa, who will talk a little bit more about, the capabilities that we have in predictive analytics and and so forth.
But, as usual, we'd take questions from the phone lines and through the webcast after the presentations and you can send them out from from the link as well. And without further ado, I will give the speech over to Billy. Thank
you,
Kathy. Good morning, from my behalf let's dive directly into, main headlines of Q2. And it's no surprise, of course, for anybody that
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Yes. My name is Bobsmith, b o b s m I t h, and I'm calling from S And P Global.
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Yes. Thank you very much.
As I said to to our personal, just a couple of, minutes ago when when we had a a brief, this, COVID crisis, is is like, having a boxing fight where you don't know how many rounds do you need to fight? Now we have fought 1st round. We don't know how how many there there will be, but, as per as per today, I I can say that this quarter 2 has been a defensive win for for Theravist. From many points of view. Now, we see that demand is is recovering.
It's course, fall is very hazy. It's very difficult to predict where the demand for different services will go. But, today, of course, we we are picking up, in in in demand. We have been successful in in mitigating the crisis, I I would say, from operational point of view, from medical point of view, from a financial point of view, and also, from a customer service point of view, one thing that every, every thermostat, employee can be proud of is is is the fact that we have been beating our employee satisfaction records, every month, basically, going into into the crisis. And then now we are over 80 with NPS for for the appointments, which is a record high high level.
Trust from our customers has been strengthening throughout the crisis. And I I think that is a very, very clear sign of of the capabilities of the robust organization. Coming to the fall, I said already that demand has been picking up in in July, we, gave some detailed numbers on on on that one, but we need to be a flexi flexible flexibility has has been, the key for for our, managing the the crisis and it's continued it continues to be the the key, for managing 4 as well. There will be swings up and down, and and we need to be very, very agile in in matching demand and supply and also also providing, right type of services through right channels, for for all of our customer groups. Some details, from q 2 and and now, also some sneak peeks from H2 and beginning of of H2.
So, revenue was, obviously, heavily in it by by COVID crisis, almost 20% down for for corporate customers, during q 2 24% down for private customers, for for Q2, and also some impact in in in our public customers namely through lower demand, for staffing services and then also, some difficulties in in supply for staffing staffing services due to some restrictions for for movement, of of actors from Estonia, especially. Now, the h two, beginning, and and and the numbers describing the the recovery of course, very interesting. So so, what we, came out already with, all the detailed numbers for, corporate customers, demand development and also private customers demand development. Revenue from corporate customers in July, almost flat year on year. And, private customers are are picking up quite nicely 9% up compared to last year's period.
You need to bear in mind, of course, that July is the slowest season for for our services. So, you shouldn't make 2 direct conclusions from this one. We have, all the time said that, decisive period for for our is and and how how the recovery will will continue. It's going to be, mid August. So these are the critical weeks and, we'll see how the fall will develop.
And and as I said, we are, prepared for any any scenario we remain flexible. And I I think the quarter 2 result and a performance by the company is a clear sign that, there's a capability, inside the organization to tackle any any any scenario, any situation. All in all, revenues down to to a 109,000,000, results. I I already explained, and the and the drivers for for obviously, I will give some more detail, and and dive deeper into these numbers. Then going forward, as as I already said, H2, extremely hazy.
Obviously, we are right now, picking up nicely, on on on demand. But COVID nineteen has been full of full full of supply surprises, very difficult to predict and, the mobility of of people in in RB customer customer groups will be will be the key if the mobility will be the people are highly aware of of of the after, health, they they are sensitive in taking tests, etcetera, etcetera. Of course, that's going to be a positive scenario for us But then, of course, any any, harsher restrictions or lockdowns, again, will will, then then impact negatively on on on how results going going forward. As said, we are, we are prepared for for any scenario. We started, the the fall plan with the 4 different scenarios.
We picked 1 as a base scenario, and our targets are based on that one, but we remain flexible. From a result point of view, on EBITDA level, we reached almost 9,000,000 which I think is is a a a good, achievement by the organization. As I said, this can be called a defensive victory. We were successful in in matching supply and and demand quite nicely. We were able to come up, with the new new services for for corporate and and private customers, in in, testing arena arena, for example, we were able to direct, demand to new channels, digital channels, and we were, heavy on cost mitigation, and, through those actions and and very active crisis management, the the result is, in these circumstances, at least satisfactory The other positive thing, of course, has been our our cash situation and and cash flow, cash cash flow through, named actions and also some some detailed, cash flow mitigation actions have been strong throughout the period.
As I said, name of the game has been flexibility. Flexibility in demand demand supply, management, but also in in, matching our services with the customer need. Evolving customer needs, from corporate customers, from public customers, from private customers, we have been very active in establishing new type of services for testing, tracking, and, you know, risk assessment we are helping our our customers to to mitigate who this crisis also during during fall. We are, also, preparing for for new services for for the fall. I would name as as one of the most important, the quick test, which which is, going to be a very effective tool for for managing COVID 19 situation in in different type of our customer groups.
As we promised, even though though we were in in the middle of the crisis, we, updated our, vision, mission, and strategy and also, strategic, targets. If you want to sort of, describe, you know, nutshell what we are aiming at, in in in this industry. The starting point, for for health care industry is is fairly immaterial. We are well under, underway in industrializing and commercializing this in this industry. And now our key, targets, key key, key themes, throughout the strategy period will be, to build the smartest, model, smartest service model for for the industry.
And be very close to the the customer and customer, the customer's health partner. This requires a lot of internal intel, system, invalid and, we thought that it would it would be very refreshing for for the audience to hear a sneak peek on on one of the capabilities that that we have been developing. It's it's a only one, but it's it's one one of, one of many and and a very interesting one So, mister Simo Thai from Evalva, a a company, analytics company, which we, acquired last Paul will, give a brief how, with analytics data and and science, you can, predict and and and support our our strategy and and and our our customers going forward. With that all with the
with. K. Good morning, ladies and gentlemen. Thank you, Hilda. Yes.
My name is Sima Pamela, and I'm the founder and CEO of of the, Evallo company. And, as we lay introduced a brief, interaction to evaluate what we do. Where we come from. And, Valua is part of, as Mila said, out of the the thermostat group. Since November to, last year.
We have specialized in in health risk appraisals and related services. Mostly to corporate clients. And, the company was established already 2003. And we started first with us as our offering our services to Internationally operating large corporations like Nokia, ABB, but it's and the like later on to insurance companies and, and, you know, over the past, I would say, 10 years to health service providers. Including thermostat already for from 2012 onwards, I think.
We have a presence in Finland and the Netherlands. There is a subsidiary the Netherlands, the Netherlands, and and, and the company is based on a very solid, scientific, background of science Foundation And Research Network. Content wise, we we have been developing our our services, primarily by 4 four people mentioned here. Myself, I have a academic background. I'm an adjunct professor of epidemiology at the University of Helsinki.
I'm still working part time for the university medical doctor originally. William Mcmillan, Alan Van Day Bake, and, on animal professors at the University of Amsterdam. And, they have a very, very broad experience and size size background in in in the field will be what we do. The problem that what we are trying to solve What is that? Many many companies have realized that, taking good care of employees is a means to secure, optimize the productivity.
Which largely determines, profitability in services and, expect services, especially. And certain operative means in for that include, identification of individuals with care needs, especially of those individuals with work disability risk factors and, intervening the problems accordingly. Another one includes identification of the individual who who might may have mostly lifestyle related issues that hamper their vitality, their well-being at work, And then then therefore, influences their productivity. And a third mean could include identification of the communities their issues with lifestyle or work, related problems and work disability risk factors are more common than elsewhere. And I and intervening accordingly.
So our solution, what we offer includes the Santa Cube Health Risk reprisal. We have been developing the contents already for 17, 18 years, and I think we have found a reasonable package, but not only limited to the questionnaire, but we also have incorporated a personal feedback so that each and every respondents received immediate immediate feedback after responding about what are findings? What are what are the meaning of each or each individual finding or the topic? And and what can I do about it? What are the means that I can do and when up should I seek help for for the issues that have been pointed out?
In other words, we can build an action plan guiding towards personalized interventions. All this is operated through a versatile, IT platform for because my health and workability platform, and that enables, operation of, questionnaires in large volumes it's highly scalable. Also, over the course of the years, there has been an accumulation on the last database. So we have been doing quite a bit of research and analytics about the bindings, and we we do have a benchmarking database. Based on which we can provide, a group level qualitative inform information and and feedback to the companies on on what level they are as compared to what the rate they should be and what are the issues that they should focus on on a company level or or or a business level or department level or or so on.
What is the predictability of the questionnaire. We have been studying that quite extensively, the most recent science scientific papers have been published in less than 1 year in international journals. In the nutshell, we put together the data of 22,000 people's responses to the questionnaire, and they're seeking that substance, records and, permanent disability benefit records. This was done in collaboration with the University of Pampers in Finland. And, the results quite clear clearly indicate that the subgroups that we can identify as the, work disability risk factor group in which belongs about 1 quarter of the respondents on the average as compared to the reference group with no findings or lifestyle issues only.
Cygnus absence days are fourfold within this work disability risk factor subgroup. And if, the individuals have 2 or more, simultaneous work disability risk factors, they have over tenfold risk of ending up on a permanent disability benefit over the course of 6 years. So the predictive capability of the questionnaire is rather good. And then we have done, for example, a randomized controlled trial on on, the, early intervention model versus the traditional or care as usual, have it occupational health services. And in this randomly allocated two groups, the targeted invention, bay which was based on defining the Santa Cube, the group had, 35% less circumstances days over the course of following 20 12 months the benefit per individual per year was about 11 days per year.
And, surprisingly, also the savings in health care costs were noted, the early intervention reduced the future health care utilization more than it temporarily increased. So so there is a double benefit both on the health care cost and the circumstances. We have also published the paper. Actually, Jesper Wake has published the paper. I was involved where we compared, the, cost benefit, either using finish costing parameters or the Dutch costing parameters.
And the cost benefit ratio was very high. The investment point estimate was in around €30 per, saving per 1 Cygnus absence day. So with the finish costing parameters, the return on investment would be more than tenfold. So the current solution for the problem that I described earlier, it includes the idea that for those with work disability risk factors, we perform the Santa Q targeted health checkup coordination of the interventions by the occupational physicians, and we expect reduction of sickness absence and the future healthcare utilization. And for those with lifestyle issues or well-being issues, we can also follow the idea of targeted health checkups and and perhaps, or I stop coaching.
And on a on an aggregate level or group level, we provide group reports and, support the management decisions about what to do with, developing the, HR management in the company. Future opportunities may include horizontal expansion, new clients, new client segments, and the like and vertically we may think of, and we are actually working with, additional surveys for, for example, occupational hazards. Dig in deeper on occupational. We'll be also designing more effective or new effective interventions, and the life In as a summary, we aim at, improving vitality, well-being, health, and reliability of employees in order to improve the labor productivity and, improve the competitive advantage of our client companies. By the means of, first of all, pleasant, versatile questionnaire, guiding individuals correct interventions and making it possible to build a seamless coordination of the services within occupational health services, health advisers, but also it's possible to build an entire eHealth ecosystem around around the services in the future.
There is a strong scientific proof of the predictive value effectiveness and cost effectiveness on this model of operation. Thank you.
Thank you, Simo, and, good morning on on my behalf, as well. That was one of the from the finance perspective, that was one of the examples that we asked that we do, in a in a in our preventive services and and and which are having a strong sort of scientific and and clinical background and and And, like we have communicated earlier, I think we are, quite forerunner in in that arena and that and, as a terrorist colony also, although as a as a country and and, and we believe that that that that is the it is a fact also in the in the international context. But then few words, regarding the financial performance in the second quarter, a. Starting from from the, sales and profitability development. As Bill already told, of course, the profitability in absolute and in relative terms declined, as the revenue declined during the second quarter, if we compare to your default numbers, the biggest reasoning, of course, was the decline in the revenue, but also as a result of of changes in the sales mix, meaning that as we have said, the as the the infections declined and the and the sort of the services for the lifestyle diseases declined as well as the preventive services declined.
Those services typically include at least sample portion of diagnostic services And therefore, relatively speaking, diagnostic services declined in the 2nd quarter with more than 20 appointment services, which had a negative impact on the profitability as as well. The third thing, obviously, is on top of the protected gearings that we are the it's it's cost increased as well as is is the fact that that we have continued digitalization of our appropriate operations, which which will have a, a increase in impact for the cost structure as well. From the cost structure wise, the numbers can be seen here. So, basically, what happened is is that even though that the top line declined at 19%, The purchase of the materials increased the 20%. And the reason for that is is is the obvious is to protect the gearings that we have the the acquired.
Secondly, the employee benefit expenses declined as a result of of those temporary layoffs that we we had during the second quarter, thirdly, as as I said, the IT expenses continue to to to increase even though that we have of course, mitigating actions, but as as we transfer our operations rapidly, to work more in a remote mode, that had a sort of let's put it that way, sort of, nonrecurring type of, increase in PRD expenses. But, of course, as we continue to digitalize our operations that will have a continuous impact for the IT expenses sent twice as well. Then, the cost mitigating actions, on in addition to employee benefit expenses can be seen in auto operating expenses which includes different kind of administrative marketing, etcetera, etcetera expenses, and that declined with approximately that 35% and has declined, during this year, that that 15% in in total. So so, that shows, the capabilities that we have to to sort of cut the cost in a short term if if if needed. From the balance sheet, wide wise, the, increased or made an additional financing agreement of €40,000,000 during the second quarter.
The result status that we have now cash, cash, and cash equivalent assets is is that 90,000,000. And on top of that, we have some full union of undrawn loan facility. So so in that sense, we we can argue that that from the financial perspective or the liquidity perspective, we are in a very strong position at the moment. And our net debt also has declined, and and the net debt the adjusted EBITDA, the leverage ratio is still below the target and available below, the last year's number, which was that 4.1. From the operational efficiency and and the cash flow wise, we have been able to sort of control the working capital as well quite, quite effectively.
You can see that that the trade and other receivables have declined. That the one reason, of course, is that that the top line declined, but but we have also sort of improved our our debt collection and and and invoicing, sort of functions and and operations, and and we have had positive impact to the cash flow from that as well. Then on the other hand, you can see the trade and other other payables have increased. And, there's a several reasons for that as well. And a lot of activities behind that.
One reason is that depends on expenses, like, you know, to finish companies, we are able to sort of postpone the payments to to the to the 3rd fourth quarter. The second element is that we have negotiated longer payment terms with some of the suppliers as well as some of the tenants as as as well. And the net result of of these activities has been that that the, networking capital has improved as as shown here. Sort of third thing related to cash flow is that, like we said, we have sort of frees and and and reconsidered some of the investing activities during the second quarter the result you can see see see here so that that the investments related to digitalization, annuity, continued on a high level, €18,000,000 as an LTM number, but but for investments for the machinery and equipment declined quite considerably. One reason that for that is that, that during the comparison period, we had, to MRI machine, acquisitions at the time.
But but the second reason is is that They have postponed some of the non necessary, investing activities just to secure the cash flow and and the liquidity position. And and our sort of capabilities from the cash flow files, you can see from the numbers as well so that if the EBITDA in the 2nd quarter declined €17,000,000. Roughly speaking, the cash flow after the investing activities only declined that roughly €7,000,000. So so so that shows that in this kind of situation, we are able to manage the cash flow quite quite nicely as well. Then finally, I think as communicated over earlier, we will have a Capital Markets Day, on 2nd September this year.
And that then you will hear more, with with with regards to our operated strategy. And, and, looking forward to to sort of see some of you hopefully during that meeting and and, at least hear you, during that that Capital Markets Day. Then I think that we have a time for for Q And A.
Thanks, Silinda. I think that we have a couple of questions already on the line from the
If you wish to ask a question, you may do so by pressing 1 on your telephone keypad. If you wish to withdraw your question, we may do so by pressing 02 to cancel. Again, it's 1 on your telephone keypad. If you wish to ask your question. Our first question comes from Alex Gibson, Morgan Stanley.
The floor is now open to you.
Great. Thanks for taking the question and good morning. My first one is on the sales development that you've seen in July. And, can you talk about the seasonality of the quarter? And how that's impacted the July level and what you expect for the rest of Q3 with the balance of pent up demand, the holidays that you expect to to come through, and the availability of physicians.
That's my first question. Thanks.
Well, in Finland, July is the is the sort of the quiet month of the year. School starts this year. I think it's 12th August, and and a lot of parents and and people are coming back to offices in the middle of the of the August. So so, therefore, the July is the slower months. And and and that's why why we already said that the predictability of the July numbers is a bit hazy and and we still on that but that's the only fact that we have at the moment and and, and, of course, the sort of the swings will be quite high, obviously, during the during the third quarter and and and disruptive development remains to be seen, but the July is the slowest month.
Clearly, starts then gradually increase towards September, and and October, November, whichever, sort of the highest sales months during the second half of the year.
But I guess on that point that you talk about your developments in July so far is the expectation that you won't see as strong a covery in August September from here on out just because July is usually seasonally weak. So you're getting more people coming in because of the pent up demand argument. Just trying to think, like, is is so July, should we bid expecting a slowdown on a relative growth basis in August September.
Yeah. It's a it's a it would be a sort of you know, normally, it would be a much easier to sort of give more sort of flavor on that, but but but this year, I would say that the only fact that we know is is the July number. And and and, and that it's really difficult to per predict at the time. It really depends on on on, how the consumers behave and how corporates are behaving and and what will happen with the unemployment, etcetera, etcetera. So there's a lot of lot of soft, uncertainties, in a short term, especially And and that's why it's really difficult to say of anything anything sort of firm with regarding to August September.
Okay.
So as to add on that one, you need to be assessed here because it's very cautious to draw conclusions from, July, we have said during, q 2 that decisive period for for the recovery for us will be mid August and onwards. So so these are very interesting weeks for us obviously, as to your question, around pent up demand, we can clearly see that there there there is pent up demand we we can see that one in in some some of the services and our bookings, but but still even with that one, you you need to be cautious because we are still in in in COVID 19, period and and very, very difficult to predict the the impacts also on on on on that one.
Okay. Great. And my second question is just on the sustainability of the, the layoffs and the cost savings that you've seen, clearly through crisis, it's it might have been easier and more understandable to, to to cut out costs. But as things do return to normal, how do you expect your costs to evolve over the next quarter, and how do you balance kind of the return in demand with your more fixed cost employee base?
Well, if I may comment on on on that one, the finish, unpaid leave of analog system is is highly flexible. And, that's that's one of the benefits in in in in the Phoenix Finnish system. So from that point of view, it's we are a child. We are very flexible in in matching demand and supply as far as I said earlier. Right now, when when the demand is picking up, of course, the the layoffs are at at the minimum level.
But we have a preparedness for for, increasing the layoffs, if if the demand would be lower than than than expected. So, I don't I don't see any difference between q 2 and and qq3, for example, from from this point of view. We will, according to demand, and and we are highly flexible in in doing so.
Okay. Great. And my last question is just on M and A opportunities and just interested to hear if you've seen an increase in any stressed assets out there, that have potentially been approaching you to be a wired or the partnership in any way. And if that is the case, do you think you have enough allowance in your your leverage levels to push any of that M and A opportunity through? Thanks.
To answer the latter part of the question, yes. We think that we have flexibility to to move if if needed, and and with regard M and A market, we can see in a small, companies. We can see some activities that that, some small companies are are running out of cash and and and have difficulties when it comes to the liquidity. And and therefore, that might and up in, you know, some kind of M and A situations, but in a more mid to larger size we don't see that kind of, distressed activity raising at the moment.
Okay. Great. Okay.
Thank you. Our next question comes
from Antonio McHenry
Yes. Thank you. I have two questions Firstly, can you talk about this topic of, cures or backlog being created, in the public sector and and the impact of your business Have you seen have you kind of done any contracts to to help the public sector with this and what is your view, how this will develop. And and then have you seen any kind of spillover demand from public to private if people kind of get tired of waiting for a cataract surgery, for example, and then decide to pay you to do it.
Okay. Well, 1st of all, for from the, sort of, medical disease category that we have been looking at we could see during qq2 that, certain disease types were were slowing down more more than more than the arrest. And, for for those ones, we we've said, one of the groups were were sort of, a lifestyle related, and disease is which typically our our long term issues, we we could clearly see that there's a there's a bend up demand building building up So it's the case for, for example, dental services, and and from a public discussion, you can you can, of course, see and and read on here that, for on on on the public side, you have been building even even more more that that, pent up demand From our bookings, we we can see that, the the the, on on private site people are coming back with with the with the, longer term diseases. And, when it comes to a public Yes. We had there there have been, throughout Q2 already some some activities with with the public sector.
But, in in larger scale, it it's not yet materialized. At certain point, it needs to materialize. There's there's no other other way to to solve the situation and and, solve the queuing queuing situation and and problem on on the public side. But, in in larger scale, the the sort of a wave of, public sector demand has has not yet arrived.
Just to comment that that I agree. So, basically, we see some signs, but but the materiality of of those activities is still quite low.
But if it's naturalized, do you think it will be, like, a second half issue or or second half thing for this year or, would it kind of happen next year?
Well, spillover impact, obviously, the this this this year and and and and this half. Then, public, side, solutions depends, those depend on on on political decisions. A party, part part of the, this is, of course, our local for for municipalities. And and those those could materialize him in Q4. I I would say at at this stage.
Alright. Thank you. My second question, it was on cost. So Basically, have you seen, do you see potential for more structural changes, after after this changes in in your business. And and I mean, that the remote services have grown quite a bit.
Do you, for example, see potential to close some units and and, do some that kind of changes to your your kind of, network of of offices.
Well, the balance between, different channels will change due to this crisis and and, we we, of course, can see clear signs on on on that one. One is to, from thermos, telephone, if you want, one is to, mass state that we believe going forward in in omnichannel environments. So so we need to have a a bigger motor network, a very strong one, but at the same time, we we need to be able to couple couple, services 2 different channels for for a individual customers. During the crisis, we have already closed some units temporarily. So so we have been reacting to to lower demand on, based based on based on that one.
At the same time, we have we have been increasing services through digital channels. So so we are already in a in a way in in that shift, but there's there's no sort of, at this stage, any any sort of a large scale plan to to reset our network based on the based on the new situation. It's too early to to make make that call. But, in a long run, as to your question, of course, the, balance between the channels. We'll see if that and we will, then then, adjust accordingly.
To remember that that we do, our sort of result with the with the integrated cadence and and those remote visits and digital services typically relate to appointments. So, basically, that that is only one sort of the If you wanna call it that it's a first contact with the customer and then it then it's sort of preferred link to other services within our our organization and and operations, and that's that's why it will not have that significant impact in the short term. It might be quite the sort of opposite because it's it's lowers the sort of the barrier to to to entry to our services because it's easier to contact medical services, through digital services, but the integrated kits and it's always good to remember when when considering these kind of issues.
Any other questions from the phone lines.
Thank you. Our next question comes from Idris Seaman Carnegie. The floor is now open to you.
Hello. This is from Carnegie. I have three questions. So, firstly, it's still on the on the cost side and your investment side, as the demand has started to pick up. So have you started to increase your other cost or or investments.
And, then secondly, how do you expect your sales may to develop in the second half of this year. And third, my third question is related to the power government sought a report proposal. It indicates that there could be cancellation cancellations of some municipality outsourcing contract I I guess or I remember that you had some alternative full outsourcing contracts in place. So is there a risk that some of these contracts could be canceled. Thank you.
Maybe I can I can answer the first question which regarding the costs, activities? So far, we just sort of returned. Everybody has just just returned from the holidays. So we haven't yet made any any sort of decisive, moments regarding the cost activities. So we continue with with the same pace as as as earlier.
And, and as as Will said, we, what's closely the activity level and how it develops and and adjust our cost structure also to those to put that activity level and and and try to keep us as our our organization and cost structure as agile as possible in this kind of situation.
Yeah. That, especially relates to, investments, linked to implementing our our our new strategy. And and, of course, have a in in, operational, on on operational side, we are running very tight ship, and and we are we are keeping costs in in a very tight control, but then at the same time, of course, we we are building a road map for for our our strategy implementation. And that will include investments in in in digital and and and system inter in intelligence as as I pointed out earlier, but as Silke said, we have not mapped out, that investment program for for the fall or even even next year. The next question was, around the, sales mix.
Well, if you you'll come on to want to comment on that one. The indication from, July recovery is is that sales mix will will normalize. But against Swinks are, they they they are possible that they are even even likely. Yeah. Precisely.
So so in July, the sales mix has has sort of normalized, so
to speak. So so we have seen seen, like, like I said, we have seen, increasing demand for those specialty care doctors services, especially on that that typically include diagnostic services as well. And therefore, to sort of the sales mix has has more or less normalized during the July.
Yeah.
And on and the infections has have also increased during the
Yeah.
During the July, luckily, those have been the re coronavirus related sort of normal flu of the coronavirus.
Yeah. And testing activity, of course, has has increased quite a bit, in in in the 1st weeks of, of of 4. Then the last question was was around the. Yes, we do have a a a couple of outsourcing deals out there according to our assessment, they they are not at at risk and on on the on the other hand, their significance, to to our business especially on, on on on result level is, is very, very, very low. Thermostat has has never, sort of, been, a a a sorta company as as we have never never sort of solved the story based on any any any sort of scenario.
We are we have the capabilities to serve all of our customers and and and help, fin Finland, in in large scale to to, decrease the health care costs and and improve the quality if, this is a maker. So so wish, but our strategies is not based on on any any any individual scenario.
Thank you.
Just as a reminder, if you do wish to ask an audio question, you may do so by pressing 1 on your telephone keypad. Okay. There appears to be no further questions, so I'll hand back to the speakers for any other remarks.
Thank you. We have some follow-up questions from from the webcast, first of all, from Ansera OC Markets. Could you describe the potential outsourcing pipeline and market in Finland? For example, Municipality of Wallanca said yesterday that they are considering out sourcing?
Well, all in all, outsourcing market, regardless of the so the talk and and discussion is, quite active in Finland. It's it's, it hasn't been this active during my time. As it is, right now. So so there there are, there are there are activities and and and there there are initiatives out of there. And and, of course, we are interested in in in those.
So no major changes in the market after the, government sort there.
No. No. It's, these initiatives and and and outsourcing, packages that we we are seeing in in the market right now, of course, they they are, they they have been pushed by by a local municipalities, and they they they are doing their independent decisions, and and I I think they're they're doing white wise decisions right now. And I'm looking for solutions for for the high cost and and low low availability where we can help
Thanks. Then we have a question from Yuktara Hagan and SCB. Two questions on the corporate customers. How was corporate customer sales in May, June, and trending up during the q 2, or was it a big jump to what's normal in in July specifically. And then secondly, do you think corporates will continue to invest in well-being and active care also in H2, should most of the office people continue to work remotely from their homes.
Or will the distance working automatically mean lower corporate customers' revenues for us?
Let me take that one. So starting from from May, June. So so, like, I think it it put the sort of the pattern was quite similar with both private and and and corporate customers. So we see we saw sort of a gradual increase since April and and the society opened it as as as well. July specifically, it's a it's a with regards to corporate sales.
Obviously, they meant most of the for most of the fin lines is on holiday. It's a bit weird mark for for the corporate segment customers specifically. But but, in there, we we already like like like in in, in May, June, we saw that that that the one that is is actually sort of the below, the normal level is is articles legally required and and preventive services, meaning health checkups, etcetera, etcetera, which is also part of the part of the diagnostic services, typically, that has been relatively speaking. Relatively speaking, on a lower level, that that was sort of the normal, let's say, Cigna's care for for the occupational health care customers because that's that's that's typically if you are secure to to take care of that that issue. But for those for those preventive activities, you are able to postpone it within the year from the from the spring to the autumn.
And that's that's more most likely what we have seen. So so so in that sense, because it has to be taken care within within certain certain sort of calendar year. Most likely, we can see, increased activity in 22nd. Second half of the year when it comes to the, legal required preventive occupational care services. That's a long question, Lester.
I've got other sort of parts that I had in advance.
And and about the whether, if you people continue to work remotely from their home, should that have an impact on on the corporate sales going forward?
That's that's the tricky piece, I would say, because, of course, if if, like, the second for the 2nd quarter, if if we can see, lower numbers of the infections if people are not contacting each other, overall, all kind of infections be be any kind of respiratory or auto eye infections or anything like that. Of course, it will, have impact for the acute care related sales for the corporate and for the private customers. On the other hand, even though that you are staying at at home, if you are having sort of health checkups or etcetera, if you are having a having a any kind of activity planning with the corporates, or workplace assessments or anything like that. That activity should continue even though that you are working remotely. The 3rd element is 1010 acute, care.
I and and I think that the sort of the behavior with with the private individual and the corporate end user customer is quite similar. So so so you can sort of postpone certain non non acute care activities for the certain times, but there's always always a sort of limit that how how long you're you're you're willing to sort of postpone your cataract surgery or or or with your knee problems. And and that's why it's so difficult to predict the the demand for the second have the data that, like, we have set most likely, there's a pent up demand for those non acute services, but the quantity and the amount of that. That's that's the that's the big question mark. And and this related to sort of, restrictions regarding the movement on society.
Of course, because if people are remaining at home, they can live with that me problem or with that cataract still a few months. But net net eventually, it has to be taken care of. In in the third quarter, 4th quarter, 1st quarter of of 21 or or later. It it it will not pass away.
Yes. May maybe to add on on on that one. As I said earlier, the, also as a silk cassette, mobility of, different customers with corporate or or private customer. That's one of the key for for the demand for for for the fall as well as it was for for qq2. We saw demand picking up as as restrictions, well, if needed, and and, people started to move and and, live more more normal life.
If there are if there's no movement, if people are saying, oh, my if because that, of course, the the demand will will will be lower. What we can see right now, which is, maybe one one sort of example is is that, obviously, well, when, companies are normalizing the the, the business and and and a way of, doing doing office work, for example, the testing activity, is, increasing, fast because people are very, very co companies and and individual people are very sensitive on their health, and and, of course, with, any even even small symptoms, you you will not go to the work and and and that that sort of feeds in into, testing activity.
And that's that's part of as far as we said that that one of the, sort of the biggest impact that we had during the second quarter was that infections where we saw sort of very significant decline because all kind of infections declined, of course, because people were not contacting each other. And now when when people have started to move, they have some kind of infection. So be it, then then flu, be it the eye infection, be it the your other ear, nose, throat related infection or stomach, infection. So any any any type kind of and and, of course, they are now sort of very eager to to come to check whether that is, sort of normal infection or or more severe c b o sort of infection and in corona.
Thanks. We're almost running out of time, but I have a couple of more questions from from the webcast, one from James, Spain Tempest from Jefferies. We mentioned that the the next week's as people return from holidays and there's pent up demand. What what's our perception of the consumer the moment, do we have a sense that people are wanting to have treatment, or are they delaying nonessential treatments until they have more visibility around the COVID situation?
Now
we are talking about psychology and, and and and consumer behavior based based on that one. Right now, as you can see in in, in Helsinki or or in in Durham or basically, anyway, Finland, people are much more relaxed than and people are are not afraid of, coming out. People are not afraid of moving about And, as I said said, just just a minute ago, that feeds in into to, testing activity and and later later to rest rest the services. So right now, the mood is very different from from spring. But this is, COVID 19 and and, things can change.
And if if the epidemic situation drastically, worsens in in Finland.
Thanks. I I think we are now, on time. And thank you, everybody, for for taking part and and, listening on the lines, and then, we wish you a good rest of the day.
Thank you.