Talenom Oyj

Hello there. You're welcome to follow up, Talenom. Final statement released from June 2024. My name is Otto-Pekka Huhtola. I'm as a CEO. Here's my colleague. Matti Eilonen, CFO. Good afternoon.

I will start from the review period and the strategy progress, and after that... I will give the final figures of the group, followed by the country-specific figures. And finally, the outlook and the guidance.

Yes, this is our content today and let's go. Thank you. Short recap of last year. Moderate net sales growth, improving EBITDA, and this was our main target for last year. Our net sales increased closely 4% and EBITDA increased 9%. Also, software business separation market year 24. And I will recap shortly later on this, what does this really mean, what we did for our strategy. Internationalization has progressed as planned and here you can see three latest years net sales distribution and today under 70 percent of whole net sales comes from the Finland and the other parts from Sweden and other countries and as we told When we updated our strategy, we told that we will focus on our current target markets, Finland, Sweden, Spain and Italy. Strategy progress from last year. The first point is improving efficiency. As I told, we We improved the absolute EBITDA by close 3 million euros, so it increased 9% and a relative EBITDA by 1.3%. But we missed our target mainly due to economic cycle in Nordic, in Finland and in Sweden. Second point is platform rollout in Sweden. We achieved our target to transfer 50% of our number of our clients to our systems. And now we really work with the clients in our systems and we will work systematically and implementing our operation, best operations models and processes and one talent. best practices. So this will mean that we will get financial benefits in second half of this year. And third point is organic growth. Overall we succeed in acquiring new customers and generating additional sales to existing customers as targeted. But because of the recession in Nordic, we didn't achieve as good net sales as we estimated. And the other point is also that to develop our long-term scalable growth capability we began incorporating our own software and offering it to customers outside Talenom's accounting firm client and I will open more about that software businesses later on. Okay, what does this updated strategy mean and where it comes from? Our ambition is the growth. We are not happy current level, how do we grow today? And we want to focus on our core competencies and promote scalable growth. And now this software will be more scalable way of growth compared to service businesses. Key market trends which are accelerating growth. The first is the legislation on market trends, which boosts digitalization like PSD2 or e-invoicing, which will be a mandatory way sending and receiving e-invoices in the future. And we also see the customer's behavior is changing towards digital platform. Our clients are all the time more and more ready to buy services also via digital channels. And the third one is digitalization is happening now, especially in Spain and in Italy. The European accounting market and its evolution is close to 100 million euros and now our market will represent over 20% of the whole potential. And the digitalization is accelerated by many structural changes, as I told earlier. And we want to be in this digitalization wave and move. And we have good track record from that, from Finland. And we want to use this momentum, what we are facing on. What does this updated strategy really mean? The first A, the core remains unchanged. Our competitive advantage is based on a comprehensive approach considering the entire value chain through own software and services. Easy services, easy software for end users, automation for accountant and care will continue to be the foundation of our business in the future. And we are going to use these competitive advantages also future when we are selling, for example, B1, our software to other accounting firms. And B2 is that we focus on our core expertise by transferring all non-accounting services and products like debt collection, banking and financial service to our partners. And we did invest last latest quarter our debt collection services to Svea, for example. Updated strategy is focused on the core expertise. As I said, competitive advantages are easy, automation and care. And our mission is we help entrepreneurs succeed. It means, of course, end users, but also in our software businesses, those platform accountants who are using our softwares, that they will succeed as well. And our vision is most preferred financial management partner. And this means that we will focus more to our own. And we know that our clients need some other services and software. So we need software partners and they need also us, because they can't also resolve the whole problems. clients have. So these partner ecosystems mean that we all need each other. And we really believe that by that way, when we are most preferred financial management partners, we are getting more leads to our core businesses. Short recap of that is that this is shared to four phases and the first one is from million to 15 is building digital capabilities and platform in Finland And after that, we see that we got digital transformations impact on performance in Finland. And we went to Sweden in 19. And after that started the third phases. And it's like strong investments in internationalization and software. We have heavily invested, we doubled our software investment level that we could use our software in other countries. And at the same time, we also made many, many acquisitions. For example, previous three years, we have made 41 acquisitions, mostly in Sweden and Spain. So we have been absolutely highest speed to get new revenue in this latest period. And we have invested a lot to making our management system and management board in new countries. but we are not getting any fruit of these investments. And now we also, the latest phase is that we are going to replicate our proven strategy and concept on internationalization markets. And when we are focusing more on our own, so we see that we have better capabilities for profitable growth, creation in Sweden, also well-positioned in Spain to benefit from the e-invoice reform. And when we focus our core, it means that we have more energy to focus our core businesses and we don't need to so much think about the other opportunities and so on. And the fourth one is that we have the new pillar, and it's the software businesses. And we really believe that in the long term, it will have a big value for the whole company. Our long-term financial target is that in the software business, that annual net sales growth would be over 20% and in service business over 10%. This year focus areas are the first one is improving profitability in Sweden and how do we do that is the systematic implementation of the software processes and the one Talenom operation model. One Talenom operation model means that we have like the framework And we have there is like the metrics and we have the activities. If we do these activities, it will have this kind of impact for this metric. And we have like written down all those activities which will have a good impact for our businesses from the personal or customer or financial or process or growth side. And the second one is the leveraging the entry into force of the Spanish e-invoice directive. Today most of our clients they don't use any software in their businesses to sell like sending receiving invoices. They are like making the payments via banking online or they are going to visit in bank office to make payments and so on. And when Spanish government really demand that you have to start sending e-invoices, so it means that most of Spanish small and medium businesses have to choose some software to use sending e-invoices. And we really see that this is the huge opportunity for Talenom. And third one is this building sales channels and developing software as a service capabilities in the software business. This is shortly my presentation and now it's your time, Matti. Go ahead, please. Thank you, Otto.