Ladies and gentlemen, welcome to Terveystalo's first quarter 2019 results call and webcast. As usual, our CEO, Yrjö Närhinen, and our CFO, Ilkka Laurila, will go through the results in a short presentation, and we'll follow that with a Q&A. We'll take questions through the phone lines and through the webcast as well. Without further ado, I'll let Yrjö start with the presentation. Thanks.
Thanks, Kati, and good morning, all. Welcome to Q1 webcast, and we'll try to split this into the usual routine. I'll cover a little bit of overall sentiment of the business, and then we'll let Ilkka to dive in deeper into the details. If you look our Q1, basically I think the encouraging and good news is we see strong development, solid development across business areas. That is, of course, I think a result of many of the initiatives that we have done during past year. Seeing that materialize on a broad scale is probably what makes me the most happy about it. Attendo is of course significantly increasing our revenue, but I think the key highlight really is that our integration is proceeding as planned, and we are on track to deliver the announced synergies, as well as integrating the operations.
We see strong growth in preventative wellbeing services across the board. I think this is an area that we have and we will continue to invest in because we so firmly believe that this is one of the areas where we can really lead the consumer-centric mass on top of basic healthcare provision. Ilkka will probably talk much more about IFRS 16 being an expert, for sure compared to me on that. I think what it does, it does really impact our comparability of the numbers, and I think that's a key thing for Ilkka to explain during the call. As said, Attendo is on track, but just to remind everyone what is the real key driver of having acquired Attendo and having invested into quite large portion of public/private.
I think it goes without saying that if you look at the Finnish market, there is quite reasonable to assume that public/private over time, regardless of reforms or regardless of politics, will continue to be a growth area because we see public healthcare provision, of course, struggling with financing efficiency. Many of the societal pressures will actually meet, especially on a city community level. Having then the expertise of both handling staffing business, outsourcing business, as well as then, I would say, classical private healthcare business, we believe builds a combination that allows us to cater basically quite unique needs of every hospital district community and city. That then, of course, broadens our total portfolio offering, which then makes us even more, I would say, connected to the entire development of healthcare.
Whichever area of healthcare develops positively, we will be then able to tap into these possibilities. Basically all of these assumptions are more or less verified as we have gone into the integration. I think the best thing of it all is that we do believe that there is a very similar approach and culture, and I think we can really broaden the career plans for both ex-Attendo people, ex-Terveystalo people, and going forward to really provide a unique career plans for healthcare professionals. Not only physicians, but actually a broader term of healthcare professionals. We're very happy about that integration, and we think it's progressing as planned and the big assumptions hold. Attendo increases our revenue significantly, and if you look at the revenue split per customer group, you'll see 36% overall growth from EUR 198 million to EUR 268 million on the Q1.
A major part of that growth naturally goes into the public finance, that jumping from EUR 20 million to EUR 74 million. We also see growth in private, less so in corporate. If I then flip on the next page, you'll see that the growth is actually broader than just Attendo driven, where we see 6% growth overall excluding Attendo, close to 10% on public. Private now basically returning on a growth plan with 3.7% growth and corporate growing at 6%. That, of course, is good news and I'm particularly pleased about the breadth of that growth. Seeing regional growth, seeing customer specific growth, is exactly what we always look for. Many sources for revenue growth is of course much more healthier. Profitability continues to increase. If you look at the EBITDA, our adjusted EBITDA goes from EUR 25.6 million to EUR 32.4 million.
A healthy increase and of course continuing, despite Attendo coming in with somewhat lower profitability, we feel confident that our long-term targets remain, and we'll be able to achieve them. On a profit year-over-year, you'll need to recognize basically two key drivers of it, which is last year, there was accrued losses that were basically taken into account, similar period year ago, as well as now also then we need to accrue for taxes. These two key drivers basically explain for the net profit difference. Ilkka will cover that in more detail. Going forward, looking at the market, we see no material changes in kind of the basic sentiment of healthcare market and all the fundamentals look steady and good. We see steady demand on corporate and private customers, which, of course, is our core of the business.
Last year, we talked quite some of the intense increased clinical and hospital capacity. I think that kind of capacity growth has stalled. Actually we saw record high demand numbers seen across the period also last year towards Terveystalo services. We've really worked hard and continue to work hard on making sure that we're able to match supply and demand at any given time, which is, of course, a function of our scale, digital services, and a broad physical network. This work has started well, will continue, that basically means that we believe that we will be able to answer for that demand, and demand remains strong. Therefore we see the market fundamentals being very good for us. Sote being postponed is, of course, never a good news for us as society.
We do believe, however, or I do believe that none of that work has really been lost. As we will see a new government being formed, the expectation is that some of the fundamentals, many of the fundamentals will be built upon. I think the work that has been done towards recreating social healthcare reform in Finland, I think is not lost at all. For us in Terveystalo, of course, I do need to always underline that our business is not a function of a reform, but rather we have the capability on answering any need at any specific time, given the structure of our business, which is a broad offering on public, corporate, and private businesses. Therefore, we can afford to basically receive practically any shape of return, simply reform, simply because we believe that the market's fundamentals are so strong.
Outlook does remain very steady. I do feel compelled, and I'm probably talking a little bit more at the back end, but if I look at the reform and kind of the fundamentals of the reform, I would like us to kind of focus the discussion more towards the dynamics of creating a competitive, equal, high-quality marketplace, as opposed to only kind of structures on how do we create geographical structures. That I think is one of the last points that I would like to bring up. Many years of healthcare experience here in Finland, and I think having the pleasure of being part of several of the reforms, I would say that there is one key driver that I think we should all strive towards, which is creating as transparent and comparable workplace and marketplace as possible.
Even the word marketplace doesn't really exist in many of the discussions. Why is this so important for healthcare in particular is that it is a very complex industry. It is a very complex field of work, and therefore we need to strive for understanding quality drivers, value drivers, price drivers, availability drivers in kind of the whole field of operation. If I would take one learning from this Sote reform work that we have been doing for quite some time, is really that the key driver is to create comparability in the marketplace, because only then we can start to make informed decisions, be it the buyer, consumer, corporation, municipality. We in Terveystalo then think that that's the only way for us to continue to challenge ourselves.
Please do have a look at quality books if you haven't received, but we really think that that's the type of dialogue that we do need to continue, and we need to be the leader of that. We will continue to challenge ourselves on this whole transparency field, because I think that's extremely important for the benefit of the entire industry. Digital will play a big role in that, and that's something that in order for us to create a truly digital workplaces, digital surroundings, digital industries, I think having data, having the ability to compare quality, I think is one of the key drivers. Therefore, this whole work on quality makes us also ready for a more digital future, I believe. That's the work we then do, and I think it's really about getting the balance right between quality with operational efficiency, customer centricness.
That's the work we do. I think overall, if you look at what we're trying to explain and strategically drive is really the whole work towards not only healthcare or sickness care, but actually a more holistic wellbeing offering, which basically centers around the individual and hopefully empowers the individual, thus removing costs and risks out of the society, improving the quality of life. For us, it also means that it is a new field of operation. That means that we do broaden our offering. We have done several acquisitions in this field, and I think this is an area where we really think that wellbeing and preventative work, in conjunction with high-quality healthcare, is what triggers the entire system to be more 360 and holistic. Together with the transparency that I think the society needs, is basically the core operation for us.
That's something that I would like to see being more discussed in a public domain as we do these reforms. Enough of that, I think. Please take the quality book, now for the piece that you have been all waiting for, which is the financial outlook. Ilkka.
Good morning on my behalf as well. We will take a closer look on the numbers and the financial performance then. First, if we take a look at the EBITDA, as well as the adjusted EBITDA numbers, these are now comparable numbers, so we have excluded the impact of IFRS 16. A couple of things probably to highlight in this number is that first you can see that these are quite well in line with the sort of, that we have expected and that we are quite satisfied, like Yrjö said, already with the profitability development being 14.2% on adjusted EBITDA level and that 12% on adjusted EBITDA level.
That is, as said, quite nicely in line with our own expectations and to be also taken into account that the synergies obviously, because after the closing Attendo healthcare piece is only included for three months and obviously therefore the realized synergy amount is quite small, yet which is included in the realized numbers. Table where you can see the impact of the IFRS 16. Just quickly highlighting that the biggest impact obviously is for the adjusted EBITDA level. The further down you go, the impact is probably not that material on adjusted EBITDA. It's only EUR 0.3 million. Further you go, you can see that there is no material impact on those line items. Roughly EUR 190 million increase in assets and liabilities through the IFRS 16 impact and close to EUR 10 million impact on cash flow for the operating activities.
Those are the sort of the key impacts collected in one table regarding the IFRS 16 changes. Obviously that this has been, like I said already many times, the two big events for this quarter versus the year before, Attendo and IFRS 16. If you take a look at now the cost structure and how those changes have impacted in those, you can see that now as the material and the services, which is the variable cost in our business, has increased slightly less than the top line. It actually have been so that the material in that expense has increased only 4%, and the services have increased quite well in line with the top-line increase.
The employee benefit expenses increased more than the top line, deriving from the fact that especially the Attendo's healthcare business is very much a personal-driven business and therefore it will have and it has had a big impact on the employee benefit expenses going forward also as well. If you break down the operating expenses in two pieces, take the other operating expenses, you can see that it has increased only 4.3%. Even though that you would adjust the IFRS 16 impact back to the premises related expenses, it has increased only 20%. There you can see in the future as well the operating leverage piece. Obviously for the first quarter, the biggest impact is the Attendo integration. On this slide, I would like to highlight what kind of structural changes the Attendo and the increased proportion of the public business will bring to our P&L.
We have discussed many times in almost all quarters, we have discussed how, especially in the private and corporate segment, how the operating leverage works with our business. Here we would like to highlight that basically, as you can see for the corporate business and for the private business, as well as for the public service business, for the public services, as well as for the public occupational healthcare business, which are services that are provided within our own premises. Those are scalable businesses and the operating leverage works as described earlier. If you take the outsourcing business or the staffing business, that is quite typically provided in the network or the units outside our own network. Therefore, in those businesses, the scalable element is basically the central overheads as well as the procurement.
That will have an impact on the P&L structure and how it will develop going forward, and then will have obviously the logic with the outsourcing businesses is different with other businesses that we have. In that business, it's not so much on the top line, but the profitability development as it is not that asset driven and not that scalable element. On the balance sheet, I think there's two highlights in there. Obviously, for the comparison period for the March or the Q1 2018, the purchase price allocation and as well as the goodwill have had big impact as well as the IFRS 16, which as said, is roughly EUR 190 million impact on both the assets and the liability side.
That has resulted the leverage ratio so that the reported leverage ratio including all the IFRS numbers, but only including obviously one quarter of the P&L impact of the Attendo profitability ends up on having 4.6 on the leverage ratio. The comparable number for the Q4 numbers is that 3.3, if you would adjust it to be comparable for the previous numbers. As a reminder, that also includes only one quarter of the impact of the Attendo in the profitability. Obviously, if you would do even some sort of pro forma for Q1 numbers, that will end up having a significantly lower leverage ratio. Therefore, we still believe that we are not worried about our solvency or the leverage ratio, and we see that we have room to move if needed.
As always, we also would like to highlight that even though that we have now in the integration phase of the sizable business, we still have been able to increase our operational efficiency, which can be seen and reflected in the working capital development that we are continuously able, if you take the comparison period, that we are continuously able to improve the efficiency when it comes to the working capital and therefore improve the cash flow also continuously. Regarding the CapEx, relatively speaking, slightly down. If you take a look at the LTM number versus the revenue in total, slightly up.
Probably highlighting that as you can see, if in Q4 2017, the investments in intangible assets, which is basically investments in digitalization, have increased from EUR 5 million to EUR 10 million and as communicated earlier, we will continue investing on those digitalization related capabilities and therefore it will also in the future will somewhat increase. The cash flow. I think two messages here. First is that the cash flow in Q1 was good. You can see how it developed versus the quarter in 2018, so that the cash at the end of the period is EUR 20 million more than at the beginning of the period versus EUR 11 million increase year before. Also secondly, highlighting the impact of the IFRS 16 for the cash flow statement.
If you take a look at the cash flow statement, it will have EUR 9.8 million impact on operating cash flow and EUR 9.8 million impact for the financing cash flow, therefore that should be also considered when taking a look at those numbers. That basically concludes the financial performance section. Now I think we have time for the Q&A.
Thanks, Ilkka and Yrjö. We are ready to take questions. Are there any questions on the phone lines?
Thank you. Ladies and gentlemen, if you would like to ask a question, please press zero one on your telephone keypad. The first question comes from the line of Alex Gibson from Morgan Stanley. Please go ahead.
Hi. Thanks for taking the questions. Good morning. I have three main ones here. The first one is around the, you mentioned there's a decline in physician appointments. Is this a continuation of the trends we saw in the last couple of quarters? Can you highlight or fully explain the reasoning why there was a 4% decline? The second question is around the integration of Attendo. Could you highlight how that is going and when you see synergies that are going to start kicking in? What the synergies run rate will be at the end of the year? My third question is also around Attendo. What are your expectations for the growth profile for the rest of the year? Should we see the run rate continue going forward? Will we see any lost customers as a relation to the acquisition? Thank you.
If I may start, at least. The first question was regarding the doctor appointments. The key reason there is, as mentioned, there's actually two reasons. There's a high utilization rates. We are still living in a high utilization rates. Secondly, we had a quite considerably lower levels of the sort of influenza and flu season versus year before. It's actually quite nicely in line with the 2017 level, but back at 2018, it was a considerably higher level of flu and influenza season. Those are the two key sort of drivers affecting the doctor appointments. Second question was regarding the Attendo integration and the synergies.
The estimate still remains the same as earlier, it's the EUR 5 million is the total sort of amount of the synergies, which has been communicated earlier and as I said, it's progressing as planned and according to our plans and therefore the sort of the realized impact will be that EUR 5 million quite close to 12 months after the closing of the transaction. So at the year-end, we would estimate it to have a almost full impact of the synergies. The third question was-
About growth profile. If I let Ilkka breathe there a little bit and kind of comment a little bit on public business growth profiles. There's one thing to note that is that you could essentially split the business into four different parts. One is staffing business, then you have an outsourced business, the contract business. You have what we would call service sales, which will be public hospitals buying specific services to reduce their queues. Then you have occupational healthcare, either deals or outsourcing. In some parts, like staffing, the demand is practically infinite. It's more a question of how much supply can one get. The second piece, which is then the contracted outsourcing businesses, it's always a function of how much of these tenders and in what shape and form come about.
I would say that almost regardless of the shape they come in, we will be highly competitive there. I would say, ingoing position is that we will continue to demand and maintain our minimum of our fair share of these tenders. Service sales, I think continues actually very steadily. There are small pieces going at all times where we do, be it eye clinics or be it some parts of surgery or be it in-patients, outsourcings. These are small deals that there's a large number going at any given time. On occupational healthcare, there has been basically three M&A business deals done, we have won all three. We do believe that in all of those sectors, in terms of demand, however difficult to predict the exact numbers, I think we are participating in all sectors of those growth and competitive.
Outlook for that remains positive. Last point. Sales in outsourcing businesses can be different than driving long-term profitability, and I think that's also one thing that only looking at sales may not be 100% indicator. We are very selective on deals that we do. We continue to strike a balance between profitability and sales in there. If-
Just adding one comment that obviously for those three of those four businesses, meaning staffing, service sales, and public occupational healthcare, the sort of the tender processes are significantly faster than when it comes to the outsourcing. In that business, the tender processes are quite long. Typically from 6 to 12 months after the process is ongoing when the service sales starts. Those orders are quite long.
Okay, thank you. That's very good color. One final follow-up is, or not really a follow-up, new question. You have 240 locations now in your total portfolio, quite significantly higher than your nearest competitor. How do you think about this portfolio going forward? Are you at a stage where you don't need to expand much further? Is there any areas where you think you can materially add or consolidate those locations?
All of the above. I think the key takeaway is that there are no major gaps in our portfolio in terms of presence. Our footprint covers entire Finland. That does not mean it covers every single community in Finland. Therefore, we need to remain one agile tactical, if need be, equally then consolidate premises in any given location wherever there is a possibility. I would say the big driver of the physical network is really the amount of public-private sales, and then on the other end, how fast digital services, centrally provided services, will actually start to grow next to physical network. We do not believe that the physical network would disappear any time soon, but we do firmly believe that digital services, centrally provided around-the-clock services, will, over time, become a significant piece next to the physical offering.
To be able to provide these two things in such a way that the consumer, the patient, can actually choose at any given time whether there's a digital pathway or a physical pathway, I think it's more of a value driver. The reason why it's a value driver is not so much cutting physical network, but rather optimizing supply and demand, which is what we're very focused on.
Yeah. Basically, we are more in an optimizing phase when it comes to the network, not so much on expanding phase, although we will also expand our services and the network.
In well-being and dental. Sure.
Yeah. Secondly, it's good to highlight that the network and the size of the network is exactly our competitive edge when it comes to the tender processes, both in M&A, be it M&A or be it normal, as an example, outsourcing or occupational healthcare. Because we are able to optimize our network, and we don't need to expand our network. That's why it favors us.
Thanks very much.
Cheers.
The next question comes from the line of [Ronald Letemäki] from Danske Bank. Please go ahead.
Yes, thank you. I have three questions. The first one is actually a follow-up to the previous one about the network. Did the clarity on the Sote reform change anything related to how do you see your unique network? For example, as we know that there won't be the market for Sote centers, do you think that you could close down some of the lower margin units, and any kind of indication or numbers how many of the units are unprofitable? That's the first question.
Okay. Well, I can take that. No units are unprofitable with or without Sote reform. If there would be an unprofitable unit, we would most likely have closed it already. We have every unit profitable. The other one is that we made zero investments on Sote reform, and in hindsight, I would say that's exactly the choice because one should never make political bets on building premises, but rather reacting to the decisions, because we can always react, I believe, quicker than our public counterparts. The Sote decision does not have any impact on our existing network. The only impact is that there is no need to invest further on facilities, i.e., Sote not coming means business as usual, and therefore, all our plans are basically on track.
Okay, thank you. The second question is about the organic growth in Q1, which improved from the previous quarters. Can you give more color on what changed? You mentioned that you are happy with the broad-based growth, Still, what happened in, for example, the corporate business that you achieved 6% growth and it was in the ballpark of two in the second half of last year?
Well, one thing is that the quarters are never brothers or sisters with one another. There's always quarterly variation in there. It's always, as you all know, it's extremely difficult for us to get reliable market data which we could rely on. The time lag for the market data is significant, but demand has been very steady. I think we have been able to work better in terms of optimizing that demand and matching that demand, which has remained very high. I would say our supply situation, we probably have a stronger grip on that since last year. That's for sure one element that I can see.
The preventive services have increased as well as the digital services, and also diagnostic services have also developed quite nicely.
Thank you. My final question is about the outsourcing market outlook. You gave similar comments as your peers that given that the SOTE has now failed or postponed, the outsourcing market is likely to pick up, but can you give any more color on that? How many cases do you see in the market? Are you having negotiations with the municipalities? How soon do you expect that any of this could lead to contracts? Does this law that is limiting the outsourcing still have impact on this or is it just a non-issue for the municipalities?
From my point of view, of course, I can't comment on our competitors' numbers or their outlooks. From my point of view, I would rather say one needs to have a little bit of a caution, as Ilkka already mentioned, the processes are public and quite long. Before they start, and they can often even get stopped or reach or change to different directions. One should never make very long forecasts on those. At the moment, I would say the overall sentiment is still more of engaging phase. There clearly was a period when everybody were waiting for the SOTE reform to come around that basically everything was in a little bit of a standstill.
Now I can see people returning to their old roles from moving from the regional roles back into municipality roles, looking at their situation in the municipal level, realizing that not much has changed for a couple of years, except things got a bit worse. Everybody is now looking at what will they do. I would say current status is active on dialogue basis, but we will most likely need to wait until end of summer before we'll start seeing anything earliest being in tender phases. That would be my judgment on it. I don't know if you want to-
Yeah, just adding on the like said and like communicated that the processes are so long that most likely those will not have significant impact for the 2019 numbers. That's for sure.
Okay. Thank you.
Yeah.
Ladies and gentlemen, once again, if you would like to ask a question, please press 01 on your telephone keypad.
If we wait a little bit, we'll take some questions from the room in meanwhile. I think Jutta was first.
Ladies first. Thanks, Neel.
Thank you. Jutta Rahikainen from SEB. A question on the competition, you say in the slides here that the significant capacity growth is no longer there. If I phrase it like this, is there actually any capacity growth in the market currently? That's the first part of the question. Relating to that, have you seen anything changing in competition? We know the big players, anything else cooking that we should be aware of, either good or bad things? That's the first, well, I'll take that one first.
Minor upgrades on networks, we all continue to invest in our networks.
Yeah.
I don't see major larger entities being built. From a competitive front, no major shifts.
No major shift. Like Jutta said, Pihlajalinna announced they will open a new clinic in Vaasa. Mehiläinen has opened some dental clinics in Joensuu.
Yeah
some clinics in Mikkeli and some brownfield investments in Pori, et cetera. There's a slight smaller investments.
I will classifying as normal development of the network.
Yeah. Not part of the network development.
This would be the type of situation where we would normally say every single town has a little bit of a microcosm on its own. I think the last year's impact of, I would say, Pohjola and Pihlajalinna announcing at the same time quite large number of large entities. I think that was a bit of a shock to the system rather than now this is more business as usual, I would say.
Yeah.
We continue on a same rate renewing our own network.
Yeah, we have opened new clinic in Uusikaupunki and increased service offering, especially in wellbeing in many municipalities and cities.
Invested in imaging.
Yeah.
So.
Okay, I think I ask this every quarter, I'll ask it again about the insurance flows and on how you're positioned. Of course, Pohjola is now the situation has changed.
Yeah.
I think that's the first part. Are you gaining on that one? Anything else, Fennia, Tapiola, this year?
Yeah. Insurance, I think insurance companies changing partnerships and making, I would say, strategic and tactical decisions. I think that landscape, I would say, I would draw the conclusion that my whole background from fast-moving consumer goods or retail, there's very similar behavior. I would still expect changes to happen and new partnerships being formed and new negotiations being had. I think the insurance situation remains relatively fluid all the time, and I think our solution to it is we seek to be partners with everyone. We seek to develop our digital services, our network, and with that, we think we remain competitive in that situation, which means that we'll be able to absorb changes in relationships, relative changes. As I think Jutta already said, there is one thing that nobody can offer, which is the extent of physical network.
I think that acts from a financial point of view as a little bit of a barrier or a buffer which means that we continue to have constructive dialogue with all to some shape or form.
The last one on my behalf. On M&A, is it fair to assume that this year you will digest the Attendo deal and no larger acquisitions are in the cards?
Attendo, it requires a piece of work, as with all. Having said that, as and if there are movement in the market, we will continue to participate in practically everything. We look at each case on its own merits. We have the financial capability if we so choose. I think the discussion is case by case.
It's case by case. Attendo integration is spread that it's not restricting us.
Exactly
us to move.
Is there movement in the market? I mean, potential targets.
Always is.
Always in healthcare.
All right. Thank you.
Okay, thanks. Sami Sarkamies, Nordea Markets.
Hi.
I have two questions. Firstly, a follow-up question to earlier discussion regarding improved growth rates at the private and corporate segments. You did provide some color. I would ask, are you aware of any headwinds that would prevent you from maintaining the Q1 growth rates during the remainder of the year?
I would say overall, just the overall sentiment, if we look back, if we look forward, it's extremely difficult to predict the entire market growth. Of course, the larger we become, the more connected we are on the overall growth of the market. I think that remains a little bit of a mystery at any given time. Having said that, I think where I then have high confidence is our ability to perform in the relative shape of the market. If the market is growing, I believe we will always tap into the growth equal as to our fair share. Rather, if I look back, I think we have overperformed the market in the past years. I don't see any reason why that momentum would change. At the end of the day, we believe in our strategy on broader offering.
We believe in our strategy on investing in the digital offering. We believe in our strategy in investing in the wellbeing and prevention. All of those things, I think, enrich our total offering, which we believe makes us stronger when the customers, the consumers, municipalities, make their choices on who they work with. We remain confident that we will continue to grow at the rate or higher rate than the market, but market is always a question mark.
There's obviously always quarterly variations.
Flu seasons, red days, all these kind of things, but that's for everyone.
In both ways. One thing to notice that there is a one working day, technical thing to notice that there is one working day less in Q2 than year before.
Yeah. Then second question. Would you be able to provide some color on profit contribution of Attendo in Q1 that did you have further margin progression at your own business what was the contribution from Attendo in Q1?
Attendo comes in from starting point with a lower margin. Normally if you take any past performance, you know, if again, then if wants to give more light, normally these first months are the difficult months of the integration. I think the mix will change, overall, we will need to continue to drive efficiency out of our existing business and some of the growth coming out of Attendo. We believe that we can continue to deliver, to develop our total margin despite Attendo being lower in going point of view. The question is how will we be able to develop Attendo mix because Attendo has a broader mix in terms of profit than we do in our existing business.
They're very profitable and not so profitable cases. It's really how do we manage the mix going forward. That's If you want to-
On aggregate level, I would say there is no material differences versus the sort of the plan-
Ingoing plan, yeah
that there are. Obviously, there's always variances between different business areas, but nothing that material that would have an impact on the plan and business going forward then in the longer term.
Maybe a follow-up still. If you think about the old Terveystalo business, you did have quite nice growth in Q1. Did you witness further margin progression because of that in Q1?
Obviously, always as said and as our operating leverage also works that obviously when the top line grows and when it comes from either the visits or with the price increases, it will have a positive impact on the margins as well.
I think a side comment or what I think you're trying to break down is, it is true that our existing business or historical business and Attendo's business work with slightly different gearing and logic. It's a little bit difficult to forecast how that will go forward because they have somewhat different rules in terms of scalability. Overall, we still believe that scale gives us the advantage. For us, it's worth growing because we're able to drive efficiency out of the entire system.
Okay, thanks.
Thank you.
Thanks. Do we have any further questions through the phone lines?
Once again, ladies and gentlemen, please press 01 on your telephone keypad. There are currently no questions from the phone lines.
Thanks. We have no further questions from the room. We thank you for your time.
Thank you.
Thank you.