Terveystalo Oyj
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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. So welcome to Q1 webcast. And we'll try to split this into the usual routine. So I'll cover a little bit of kind of overall sentiment of the business and then will let Ilkka to dive deeper into the details.If you look, our Q1, I mean, basically, I think the encouraging and good news is we see strong development, solid development across business areas. And that is, of course, I think the result of many of the initiatives that we have done during past year. Seeing that, that materialized on a, kind of a broad scale is probably what makes me the most happy about it. Attendo is also -- is, of course, significantly increasing our revenue. But I think there, that 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 well-being services across the board. And 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 kind of consumer centric-ness on top of basic health care provision. Then Ilkka will probably talk much more about IFRS 16, being an expert, for sure, compared to me on that. But 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 kind of invested into quite a large portion of public-private. And I think it goes without saying that if you look at the Finnish market, there is -- that it's 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 health care provision, of course, struggling with financing, efficiency and kind of many of the societal pressures, we'll 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 health care 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 health care. So whichever area of health care develops positively, we'll be then able to tap into these possibilities. So 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 Attendo -- ex-Attendo people, ex-Terveystalo people and, I mean, going forward, to really provide unique career plans for health care professionals, not only physicians but actually a broader team of health care professionals. So we're very happy about that integration. We think it's progressing as planned and the big assumptions hold. Of course, Attendo then 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 Q1. A major part of that growth naturally goes into the public finance, so that jumping from EUR 20 million to EUR 74 million. But we also see growth in private, less so in corporate. But if I then flip on the next page, you'll see that the growth is actually broader than just Attendo driven. We see 6% growth overall excluding Attendo, close to 10% on the public, private now basically returning on a growth plan with a 3.7% growth and corporate growing at 6%. And that, of course, is good news, and I'm particularly pleased about, because of the breadth of that growth. So seeing regional growth, seeing customer-specific growth is exactly what we always looked for. So many, many sources for revenue growth is, of course, much more healthier.Profitability continues to increase. If you look at the EBITA, EBITDA goes up from -- adjusted EBITDA, sorry, goes from EUR 25.6 million to EUR 32.4 million, a healthy increase and of course then, continuing despite then 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-on-year, you'll need to recognize especially 2 key drivers with -- which is, last year, there was accrued losses that were basically taken into account similar period a year ago; as well as then -- now also then, we need to accrue for taxes. So these 2 key drivers basically explain for the net profit difference, but Ilkka will cover that in more detail.Going forward, looking at the market. I mean we see no material changes in kind of the basic sentiment of health care market, and all the fundaments look steady and good. And 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, and actually, we saw record-high demand numbers seen across the period also last year towards Terveystalo’s services. We've really worked hard and continued to work hard on making sure that we can -- 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. We'll continue. But that basically means that we believe that we will be able to answer for that demand. And demand remains strong. So therefore, we see the market fundaments staying very good for us. Sote being postponed is, of course, never a good news for us as a society. And 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 fundaments -- and many of the fundaments will be built upon. So I think the work that has been done towards recreating social health care reform in Finland, I think, it's not lost at all. For us in Terveystalo, of course, I do need to always underline that our business is not a function or 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. And so therefore, we can afford to basically receive practically any shape of return simply -- reform simply because we believe that the market fundaments are so strong.Outlook thus remained very, very, 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 fundaments 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. And so that, I think, is one of the last points that I would like to bring up. Many years of health care 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 though the word marketplace doesn't really exist in many of the discussions. And so why is this so important for health care 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 the -- in kind of the whole field of operation. And 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 a buyer, consumer, corporation, municipality. And so we at Terveystalo then think that, that's the only way for us to continue to challenge ourselves. And so 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. And therefore, this whole work on quality makes us also ready for a more a digital future, I believe. And that's the work we then do, and I think it's just really about getting the balance right between quality before -- with operational efficiency, customer centric-ness. That's the work we do. But I think, overall, if you look at what we're trying to explain and strategically drive, it's really the whole work towards not only health care or sickness care but actually a more holistic well-being 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 get to -- 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 well-being and preventative work in conjunction with high-quality health care is what kind of triggers the entire system to be more 360 and holistic. That then, together with kind of the transparency that I think the society needs, is basically the core operation for us, and that's something that I would like to see being more discussed in a public domain as we do these reforms. But enough of that, I think. So please take the quality book. But now for the piece that you have been all waiting for, which is the financial outlook. Ilkka?
Good morning on my behalf as well, and I will provide kind of a closer look on the numbers and the financial performance then.First, if you 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. And a couple of things to probably to highlight in these numbers is that, first, you can see that these are quite well in line with the, sort of that we have expected. And we are quite satisfied, like Yrjö said, already with the profitability development being 14.2% on adjusted EBITDA level and 12% on adjusted EBITDA level, and that is, as such, quite nicely in line with our own expectations. And to be also taken into account are the synergies obviously because after closing, Attendo health care piece is only included for 3 months. And obviously, therefore, the realized synergy amount is quite small yet, which is included in the realized numbers.Then, there's a 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. But then the further down you go, the impact is probably not that material. On adjusted EBITDA, it's only EUR 0.3 million. And further you go, you can see that there's 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. So those are the sort of the key impacts collected in one table regarding the IFRS 16 changes.Then obviously, there has been -- like said already many times, that we got 2 big events for this quarter versus the year before, Attendo and IFRS 16. And 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's actually had been shown that the material expense has increased only 4% and the services have increased quite well in line with the -- actually, 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 health care business is very much sort of personnel-driven business, and therefore, it will have and it has had a big impact on the employee benefit expenses going forward as well. Then if you break down the operating expenses in 2 pieces. The other operating expenses, you can see that it has increased only 4.3%. And 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. But obviously, for the first quarter the biggest impact is the Attendo integration.Then on this slide, I would like to sort of highlight what kind of structural changes the Attendo and the increased proportion of the public business will bring to our sort of P&L. We have discussed many times -- in almost all quarters we have discussed how the -- especially in the private and the 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 health care business, these are services that are provided within our own premises. Those are scalable businesses, and the operating leverage works as described earlier. But 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 and as well as the procurement. And that will have a slightly sort of -- will have an impact on the P&L structure and how it will develop going forward. And then we'll have -- obviously, the logic with the outsourcing businesses is different with the other businesses that we have. In that business, it's not so much on the top line, but the profitability development, it is not that asset-driven and not that scalable element.On the balance sheet, I think there's 2 highlights in there. Obviously, if you're -- for the comparison period for the March -- or to Q1 2018, that those are of the purchase price allocation. And as well as the goodwill have had big impact as well as the IFRS 16, which, as I said, is roughly EUR 190 million impact on both the assets and the liability side.And that has resulted -- the leverage ratio showed that -- the reported leverage ratio, including all the IFRS numbers but only including, obviously, 1 quarter of the P&L impact of the Attendo profitability ends up on having 4.6 on the leverage ratio. But the comparable number for the Q4 numbers is that 3.3 if you would adjust it to be comparable for the previous numbers. And as a reminder, that also includes only 1 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. And therefore, we still believe that -- we are not worried about our solvency or deleverage ratio, and we'll see that we have room to move if needed.As always, the -- also, I would like to highlight that even though that we are now in the integration phase of the sizable business, we still have been able to increase our operational efficiency, which can be seen and, in fact, reflected in the working capital development, that we are continuously able -- if you take the comparison period, 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 then, 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 intangible investments in -- intangible asset, 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, it will somewhat increase.Then the cash flow. I think 3 major things 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 a year before. And also, secondly highlighting the impact of the IFRS 16 for the cash flow statement. If you take at look at the cash flow statement, it will have an impact -- EUR 9.8 million impact on operating cash flow and EUR 9.8 million impact for the financing cash flow. And therefore, that should be also considered when taking a look at those numbers.That basically concludes then the financial performance section. And 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?
[Operator Instructions] The first question comes from the line of Alex Gibson from Morgan Stanley.
So I have 3 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 and what these synergies run rate will be at the end of the year? And then 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? Or will we see any lost customers as a relation to the acquisition?
If I may start, at least. The first question was regarding the doctor appointments. The key reason there is -- as mentioned is -- there's actually 2 reasons. There's high utilization rates. We are still living in high utilization rates. And secondly, we had 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 levels, but back at 2018, it was a considerably higher level of flu and influenza season. So those are the key 2, 3 -- 2 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. So it's -- EUR 5 million is the total sort of amount of the synergies, which has been communicated earlier. And as said, it's progressing as planned and according to our plans. And therefore, the sort of the realized impact is -- 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 almost full impact of the synergies. And the third question was...
It's about growth profile.
Yes.
And 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 if we -- if it essentially split the business into 4 different parts. One is staffing business, then you have an outsourced business, it's a contract business, you have what we would call service sales, which will be public hospitals buying specific services to reduce their queues. And then you have occupational health care, either deals or outsourcing. And in some parts, like staffing, the demand is practically infinite. So 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 are these tenders and in what shape and form come about. But what 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. Then 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 inpatients outsourcings. So these are small deals that are -- there's a large number going at any given time. On occupational health care, there has been basically 3 M&A business deals done, and we have won all 3. So 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. And so 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 is -- may not be 100% indicator. So we are very selective on deals that we do. We continue to strike a balance between profitability and sales in there, but if...
Yes. Just adding one comment that obviously, for those -- 3 of those 4 businesses, meaning staffing, service sales and public occupational health care, 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. It will take typically from 6 to 12 months before -- after the sort of the process is ongoing when the service sales starts.
Starts.
So those processes are quite long.
Okay. And that's very good color. And one final follow-up is -- or not really follow-up, a new question. You have 240 locations now, and your total portfolio is 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? And it's -- or do you -- is there any areas where you think you can materially add or consolidate those locations?
All of the above. I think -- I mean, I think the key takeaway is that there are no major gaps in our portfolio in terms of presence. So our footprint covers the 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 at -- 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 hand, 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 in any time soon, but we do firmly believe that digital services centrally provided, round-the-clock services will, over time, become a significant piece next to the physical offering. And to be able to provide these 2 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. And 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.
Yes. So 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. Secondly...
In well-being and then [ profit share ]...
Yes. And secondly, it's good to highlight that the network and the size of the network is exactly at our competitive edge when it comes to the tender processes, both in M&A -- be it M&A or be it normal sort of, as an example, outsourcing or occupational health care because we are able to sort of optimize our network and we don't need to sort of expand our network. And that's why it favors us.
The next question comes from the line of Panu Laitinmäki from Danske Bank.
I have 3 questions. The first one is actually a follow-up to the previous one about network. Did the clarity on the Sote reform kind of change anything related to how do you see your unit network? For example, as we know, that there won't be the market for Sote centers, do you think that you could kind of 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. So we have every unit profitable. The other one is that we did -- we made 0 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. So 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.
Perfect. The second question is about the organic growth in Q1, which improved from the previous quarters. Can you kind of give more color on what changed? You mentioned that you're happy with the broad-based growth, but still kind of what happened in, for example, the corporate business that you achieved 6% growth and it was in the ballpark of 2% in the second half of last year?
Well, I mean, one thing is that the quarters are never brothers or sisters with one another, so there's always quarterly variation in there. And it's always -- as you all know, it's extremely difficult for us to get reliable market data which we could rely on. So that -- the time lag for the market data is significant. But demand has been very steady. We have -- I think we have been able to work better in terms of optimizing that demand and matching that demand, which has remained very high. So I would say our supply situation is -- we probably have a stronger grip on that since last year. That's, for sure, one element that I can see.
Yes. And the preventative services have increased as well as the digital services. And also, diagnostic services have also developed quite nicely.
All right. My final question is about the outsourcing market outlook. You gave similar comments as your peers that given that the Sote is now failed or postponed. The outsourcing market is likely to pick up. But can you give any kind of more color on that? How many cases do you see in the market? Are you having negotiations with the municipalities? And how soon do you expect that any of this could kind of lead to contracts? And then does this law that is limiting the outsourcing still have impact on this? Or is it just kind of nonissue for the municipalities?
Well, I mean, from my point of view, of course, I can't comment on our competitive's numbers or their outlooks. But from my point of view, I would rather say one needs to have a little bit of caution. As Ilkka already mentioned, the processes are public and quite long. And so before they start -- and they can often even get stopped or reach, or changed to different directions. So one would -- one should never make very long forecast on those. But at the moment, I would say the overall sentiment is still more of engaging phase. So there clearly was a period when everybody were waiting for the Sote reform to come around, that basically everything was kind of 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 could have been worse. And so everybody is now looking at what will they do. And so I would say current status is active on dialogue basis, but we will most likely need to end up -- we'll need to wait until end of summer before we'll start seeing anything, earliest, being in tender phases. That will be my judgment on it. I don't know if you want to….
Yes. Just adding on that, like said and like communicated, that those will -- the processes are so long that, most likely, those will not have significant impact for the 2019 numbers. That's for sure.
[Operator Instructions]
If we wait a little bit. We'll take some questions from the room in -- meanwhile. I think Jutta was first.
Ladies first.
So Jutta Rahikainen from SEB. A question on competition. And you say in the slides here that the significant sort of capacity growth is no longer there. But if I phrase it like this, is there actually any capacity growth in the market currently? So that's the first part of the question. And relating to that, have you seen anything changing in competition? I mean we know the big players, but anything else cooking that we should be aware of, either good or bad things? So that's the first. And then -- well, I will take that one first .
Minor upgrades on networks. So Mehiläinen is -- I mean we all continue to invest in our networks. But I don't see major kind of larger entities being built. From a competitive front, no major shifts in any..
No major shifts. Like Yrjö said this, [ Finland ] announced -- like they announced they will open a new clinic in Vaasa. Mehiläinen has opened some dental clinics in Joensuu.
Yes.
I think, and some clinics in Mikkeli, and some brownfield investments in Pori, et cetera. So those are slight or smaller investments, but...
I will -- classifying as normal development of the network.
Yes. Not far -- network development.
So if you -- this will be the type of situation where we would normally say every single town has a little bit of a micro customer on its own. And I think the last year's kind of impact of, I would say, Pohjola and [ Finland ] 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 kind of business as usual, I would say.
Yes.
Because we continue on a same rate within our own network. So…
Yes. We have opened new clinic in Uusikaupunki and increased service offering, especially in well-being in many municipalities and cities.
And then imaging, with. So...
Yes.
Okay. And then I think I ask this every quarter. I'll ask it again, about the insurance flows and how you're positioned. Of course, Pohjola is now -- the situation has changed, and I think that's the first part. Are you gaining on that one? And anything else, Fennia, Tapiola...
I would -- yes. I mean in insurance -- I think insurance company is changing partnerships and making, I would say, kind of a strategic and tactical decisions, I think that landscape, I would say -- I would draw the conclusion that my old background from fast-moving consumer goods or retail, there's very similar behavior. So I would still expect changes to happen and new partnerships being formed and new negotiations being had. So 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. But as I think Ilkka already said, there is one thing that nobody can offer, which is the extent of physical network. And I think that acts, from a financial point of view, as a little bit of a -- kind of a barrier or a buffer, which means that we continue to have constructive dialogue with all, to some shape or form.
Yes.
Okay. And then 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?
Well, Attendo is -- it requires a piece of work, as with all. Having said that, if this, if as -- and if there are movement in the market, we will continue to participate in practically everything. And we look at each case on its own merits, and we have the financial capability, if we so choose. So I think the discussion is case by case.
It's case by case. Attendo integration, it was pretty tough, but it's not restricting us to move.
Restrict. Exactly.
And is there a movement in the market? I mean potential target...
Always is.
Always is.
Always in health care.
Sami Sarkamies, Nordea Markets. I have 2 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 that, are you aware of any headwinds that would sort of prevent you from maintaining the Q1 growth rates during the remainder of the year?
I would say, overall -- I mean, just kind of the overall sentiment, if we look back, if we look forward. It's extremely difficult to predict the entire market growth. And of course, the larger we become, the more connected we are on the overall growth of the market. And I think that remains a little bit of a mystery at any given time. Having said that, I think where I didn't have high confidence is our ability to perform in the relative -- kind of relative shape of the market. So if the market is growing, I believe we will always tap into the growth equal to our fair share. And rather, if I look back, I think we have overperformed the market in the past years. And I don't see any reason why that momentum would change. Because, at the end of the day, we believe in our strategy on broader offering, we believe in our strategy of investing into digital offering, we believe in our strategy in investing into well-being and prevention, and all of those things, I think, enrich our total offering, which we believe makes us stronger when the customers, consumers, municipalities make their choices of who do they work with. And so we remain confident that we will continue to grow at the rate or higher rate than the market. But market is always a question, and that's unfortunately…
Yes. And there's obviously, always quarterly variation, variations and...
Flu seasons, red days, all these kind of things, but that's for everyone.
Yes, in both ways. And one thing to note is that there is 1 working day -- the technical thing to notice that there is 1 working day less in Q2 than a year before.
And 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? And then what was the contribution from Attendo in Q1?
Well, Attendo comes in from the starting point with a lower margin. And normally, if you take any past performance -- Ilkka, again then, if he wants to, give more light. But normally, these first months are kind of the difficult months of the integration. And so I think that the mix will change, but overall, we will need to continue to drive efficiency out of our existing business and some of the growth coming out of Attendo. So we believe that we can continue to deliver -- to develop our total margin despite Attendo being lower, ingoing point of view. Then 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, there are very profitable and not so profitable cases. And so it's really how do we manage the mix going forward. But that's -- so if would add, if you want.
Yes. On an aggregate level, I would say there is no material differences versus the sort of the plan.
Ingoing plan, yes.
But, obviously, there's always variances between different sort of business areas, but nothing sort of that material that would have an impact on the sort of the plan and our business going forward, 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 like a further margin progression because of that in Q1?
Obviously, always -- as I said and as our operating leverage sort of 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 the 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. And it's a little bit difficult to forecast how that will go forward because they have somewhat different rules in terms of scalability. But overall, we still believe that scale gives us the advantage. So for us, it's worth growing because we're able to drive efficiency out of the entire system.
Thanks. Do we have any further questions through the phone lines?
[Operator Instructions] There are currently no questions from the phone lines.
Thanks. We have no further questions from the room. So we thank you for your time.
Thank you.
Thank you.