Annual Report 2018
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ANNUAL REPORT YEAR Contents Pihlajalinna in brief ...............................1 Responsibility ..................................... 16 Board of Directors .............................. 30 From the Chairman Quality and safety of care ............... 17 Management Team ............................. 31 of the Board of Directors .....................4 Economic responsibility .............18–19 Financial year 2018 From the CEO ........................................5 Responsibility for personnel. .... 20–21 Report by the Board of Operational environment .....................6 Data protection and Directors.... ............................................ 33 Business and strategy ...........................8 information security ................... 22–23 Financial statements ......................... 53 Presentation of business areas ....10–13 Partnership .................................... 24–25 Auditor’s report ..................................98 Customer groups ..........................14–15 Impact maps .................................26–29 Information for shareholders .......... 101 Operating profit (EBIT) NET DEBT/ ADJUSTED EARNINGS NUMBER OF REVENUE EBITDA EBITDA PER SHARE PERSONNEL 12.8EUR million 487.8 2.6% 2.9 31.2 0.17 5,850 EUR million 31 Dec 2018 EUR million EUR 31 Dec 2018 (2017: 424.0) (2017: 19.1 EUR million (31 Dec 2017: 1.0) (2017: 33.3) (2017: 0.46) (31 Dec 2017: 4,753) 4.5%) +15% target below 3 target over 7% Organizational structure NORTHERN FINLAND BUSINESS AREAS one reportable segment EACH BUSINESS AREA is managed by a business director who is in charge of their area’s business operations and service offering both for the private and OSTROBOTHIA the public sector. THE CUSTOMER GROUPS MID-FINLAND • corporate customers • private customers • public-sector customers SOUTHERN FINLAND Timeline 2018 7 Mar 16 Feb Pihlajalinna 25 May 8 Jan Pihlajalinna 14 Mar The EU General opens a full Pihlajalinna 15 Jan acquires 70% The Data Protection Pihlajalinna wins a tender service private opens a full of the Forever codetermination Regulation for the healthcare services clinic in service private fitness centre negotiations are enters into of Hattula municipality. Seinäjoki. clinic in Oulu. chain. completed. force. 19 Jan 2 Feb 11 Mar 15 Mar 2 Jan Pihlajalinna starts 14 March Pihlajalinna acquires Someron Pihlajalinna Pihlajalinna Pihlajalinna codetermination Pihlajalinna’s new Lääkärikeskus Oy. acquires Linnan acquires acquires 51% negotiations geographical Pihlajalinna acquires Salon Klinikka Oy. Doctagon Ab. of the Suomen concerning a new structure and Lääkintälaboratorio Oy. Yksityiset structure. Management 30 Jan Hammaslääkärit Team become Pihlajalinna opens a full service Pihlajalinna chain of dental operational. private clinic in Turku. acquires Kymijoen clinics. Työterveys Oy. 2 BUSINESS AND REPORT BY THE AUDITED FINANCIAL INFORMATION FOR PIHLAJALINNA 2018 STRATEGY RESPONSIBILITY PARTNERSHIP BOARD OF DIRECTORS STATEMENTS SHAREHOLDERS Pihlajalinna in brief Pihlajalinna is one of Finland’s leading • Headquartered in Kehräsaari, PIHLAJALINNA providers of social, healthcare and Tampere BUSINESS LOCATIONS 2018 wellbeing services. The Group’s • Extensive range of services offered customers include private individuals, to both private and public sector Private clinic, Surgical operation, businesses, insurance companies customers Dental clinic, and public sector entities, such as • Strong geographical presence in Occupational healthcare Social and healthcare municipalities and joint municipal Pirkanmaa, South Ostrobothnia, outsourcings authorities. Central Finland, Pohjois-Savo and Residential services the Helsinki Metropolitan Area Fitness centres Responsible doctor PIHLAJALINNA • Aims to be the most valued and remote services • Market leader in social and healthcare and social services healthcare outsourcing in Finland company in Finland in 2020 • The Group pays all of its taxes to • Listed on the main list of Nasdaq Finland Helsinki in 2015 Pihlajalinna model The Pihlajalinna operating model and its social effects culminate in our EFFECTIVE CARE way of working in cooperation PUBLIC SECTOR with municipalities. When a joint ECONOMY • Tax revenue locally venture of Pihlajalinna and a • Savings for municipalities High quality, less Prevention municipality is responsible for • A share of the joint venture complications providing the municipality’s profits to municipalities social and healthcare services CUSTOMERS on a long-term agreement, • Equal access the company has a strong to care • Wellbeing incentive to promote health Rapid access and to adopt effective Strong primary to care operating models. Over 50 per care, no LOCAL cent of Pihlajalinna’s revenue unnecessary COMMUNITY referrals comes from complete outsourcing • The joint venture creates jobs Experienced agreements for municipal social • Maintaining vitality healthcare • Maintaining local and healthcare services. The average personnel services agreement period is 10+5 years. 18 Oct Pihlajalinna 1 Jun 20 Jun Pihlajalinna lowers discontinues 28 Dec Pihlajalinna its profitability the freedom of Pihlajalinna acquires acquires Leaf guidance. choice pilot in Terveyspalvelu Areena Oy. Jyväskylä. Verso Oy. 12 Jun Pihlajalinna 3 Oct 1 Dec 29 Jun 1 Sep Pihlajalinna acquires Pihlajalinna Production of Pihlajalinna opens a new Anula Oy. announces it residential services for launches a Forever fitness has increased its the elderly and people customer centre in holdings in municipal with developmental relationship Tampere. joint ventures. disabilities begins in programme. Laihia. 3 From the Chairman of the Board of Directors The schedule of the planned public discussion, there has been a quality and cost management. As the structural reform of healthcare and strong confrontation between private reform was cancelled, the juridical social services was delayed, and the and public healthcare and the new foundation for the restriction law resignation of the government as well structures instead of concentrating on disappeared. And that is good for both as the decision to not move forward how the patients would get the best communities and for the whole society. with the reform at the moment came possible care which our society could We are the leading company in just as our Annual Review was about afford in the future. municipal outsourcings and fixed- to be published. We had hoped for the In 2010, there were 940,000 people priced service production. We have a reform to go through, as our society in Finland over the age of 65. Current good foundation from which to meet needs it and the period of uncertainty estimates indicate that this number will the requirements of the communities has lasted too long, stopping both increase to about 1.5 million by 2030. and operate in the environment where development actions and necessary At their current levels, employment- the reform will not take place. Due to investments in municipalities. At the based immigration and the birth rate the fact that the reform was withdrawn, same time future county organisations will not alleviate the situation. These there is an opportunity for bigger and healthcare districts have made problems will be exacerbated in and faster organic growth than earlier significant investments in the future municipalities with negative migration expected. model that will not be implemented rates. Pihlajalinna is the domestic reformer now. I am optimistic and confident that of healthcare and is willing to maintain It is good that there was plenty of our welfare society will be preserved this responsibility going forward. I think discussion about the topic. What has in spite of these challenges, but not society needs to create opportunities slightly bothered me about the debate without significant changes. We for the innovative development of is how some participants seem to lack must look for ways to build genuine services. The aim is to ensure that all a full understanding of the need for cooperation and partnership between Finns receive the high-quality and reform. The question is not how we can public and private healthcare. There are ethically produced care they need maintain the current service level with already good examples of outsourcing without unnecessary delay. less money. The question is how we can and service vouchers. In outsourcing, prepare for the coming sustainability according to studies conducted by gap, the ageing of the population independent third parties, there have MIKKO WIRÉN and urbanisation. Furthermore, in the been good results in service availability, The Chairman of the Board of Directors 4 BUSINESS AND REPORT BY THE AUDITED FINANCIAL INFORMATION FOR PIHLAJALINNA 2018 STRATEGY RESPONSIBILITY PARTNERSHIP BOARD OF DIRECTORS STATEMENTS SHAREHOLDERS From the CEO 2018 was a year of building. We services with Forever fitness centres in opportunities, and we have been able to changed our organisational structure, the areas of occupational healthcare improve the profitability of occupational expanded geographically, built new and rehabilitation. We are also working healthcare. Our experience tells us that services and invested in creating a together with an increasingly extensive strong sales of occupational healthcare stronger brand and digital services. network of partners. In cooperation with services usually lead to an increase in self- While all this building eroded our the psychotherapy centre Vastaamo, paying customers in private clinics and profitability, we now enter the new year we are