Talenom Oyj

Hello, you are welcome to follow up Talenum H1 report release. My name is CEO Otto-Pekka Huhtala. And here's my colleague.

Hello, everybody. My name is Matti Elonen. I'm CFO of Talenum.

And shortly, I will go through our content today. I will go through review period and strategy progress and also software business. And after that, Matti will continue with financial development and outlook and guidance. So thank you. Let's go. Some highlights from Q2. Comparable net sales increase driven by Finland and Spain. Second one, we also launched our new brand for our software business, which goes today Jaasar. And we ended our piloting of software sales in Finland for external accounting firms and their clients. And this pilot went successfully. Third highlight is that customer base growth continued at 4.7% annually. From a financial point of view, this highlights, as I told, how comparable net sales increased driven by Finland and Spain. It increased 3.1%. And EBITDA growth came from Spain, while Finland and Sweden remained at the comparison periods level. So EBITDA was 1.2% over last year. compared to last year and it was close to 10 million euro and right hand side you can see that our accounting business revenue is around 30 million was around 30 million and software business was around 5 million in Q2 and now we will go to the strategy progress Everything started from our target and it is growth. And Talenon will focus on our core competencies, which what we have developed many decades, like accounting businesses. We have been there over five decades. And we have developed our own software over two decades. And now we have these two pillars and we will grow with those. And by that way, we believe that we can have more scalable growth potential than before. Some market trends which are accelerating growth. First is the legislation and the most important is that these trends are driving digitalization. For example, e-invoicing, it will be mandatory in, for example, in Spain near future. Second one is customer behavior is changing to our digital platform. We have also experience of that. We have sold our services more and more via digital way. Third one is digitalization is happening now, particularly in Spain and in Italy. And I will tell more about that later. By this slide, we will open more about history and our proven strategy and strong historical track record. So we can see that our high investment pace is over and our fruit is going to be colleagues near future. There's four phases. The first one is that when we developed our digital capabilities and platform in Finland, And the second one, 16 to 20, you can see that when digital transformation impact on profitability in Finland, so our comparable EBIT increased third time, fourth time, what is before that phase, when we implemented all our digital features in place in Finland. And third phase is here that we strongly invested in internationalization and software. Of course, we have built our organization in Sweden, Spain and Italy. And we have also localized our software in Sweden and now it's in use there. So, for example, in the last five years, our software investment cost has been over 60 million euros, and we have also acquired over 30, close to 40 million euros in other countries than in Finland to acquire new businesses. And now it looks like that our software investments is decreasing, as we have told before. And this four phase is that replicating a proven strategy and concept in international markets. So we have good capabilities for profitable growth created in Sweden. And Matt will open more about later of that by figure. We have well positioned in Spain to benefit from the e-invoicing reform. And now we are more focused company. We are focusing on only for our core businesses. We don't have any more like new business areas. And the fourth one is the software business becomes the second pillar alongside the service business. And it will be the scalable one also. Here's three strategic priorities for this year. First one is improving profitability in Sweden. Second, leveraging the entry into force of the Spanish e-invoicing directive. And the third one is building sales channels and developing SaaS capabilities in the software business. What we have done in Sweden, we systematically implemented one talent operating methods and process as well as our propriety software. We also invested in turning net sales on the growth track. And third one, we estimate that profitability will improve from the comparison period towards the end of the year. Matti will open later a figure, but now we are seeing that we are now in the same profitable level and turnaround is ongoing well. Second, strategy progress capitalizing on the entry into force of the Spanish e-invoicing directive. So it's good to know that officer has decided in Spain that businesses who are sending invoices, they have to use Stamped software, this kind of software what officer has accepted and when they are invoicing in the 1st of January, they have to use one of those listed software and we have built these capabilities to our own software that we can like respond to market change. And we also continue to roll out our proprietary software to our customers to facilitate their business and prepare them for the invoicing transition. So we have well positioned in Spain and this looks like very good just now. When we compare this situation, what we have seen 10, 15 years ago in Finland, so it looks like very good. Okay, how about software businesses, sales channels? We hire business leads appointed in Spain and Sweden. And Talenum Software brand loans, as I told, Talenum Software also will operate under the EASER brand from now on. And EASER means easy advisor. So we think about so that By using Azure, you can easily find good advisor and it helps you manage your businesses because it's so easy to use for, I mean, for entrepreneurs and of course for accountants, it's so easy to use. Okay, piloting of software sales in Finland to external accounting firms and their clients was also successful. And now I will open more about software business. What it is really. Okay, so we approach so that we have like two interfaces. The left side hand, you can see Azure app, which is a dedicated interface for the entrepreneurs. And in the right hand side, you can see the Azure Accounting, which has developed for professional for accountants. And by dividing these two interfaces, of course, they have the same database, but two different interfaces. We can really differentiate from the other competitor softwares by offering easier tools to use for, for entrepreneurs and enterprises. And for accountant, we can offer the good process and software, which is very, very high automated. And by that way, they can like save time and make more, more profitable. Some figures. Today we have over 12,000 small and medium enterprises clients. Our annual recurring revenue is over 20 million euros. This comes mostly from Finland, maybe 99% of that. And we have over 60,000 end users, over 9.5 million transactions annually, I mean sales and purchase invoices. We have like in four countries, 140 full-time employees, logins per month over 200,000. And today we have over 60 partner offices in Finland already. And just remind that we started to sell our software for other accounting offices. We call those offices partner offices and the beginning of that this year. So we really see that this has successful well. And some development in the number of customers. If I go through these lines, the first line there is the SaaS charts separately. These clients comes from the mostly from the Finland. And this means that easier or directly invoice sees end customers for software. So easier don't invoice talent and talent invoice. and don't invoice software to the end clients. So the both businesses, EASR will invoice their own clients and Tallinnum Accounting Business will invoice their own clients. Second row is SaaS Not Charged Separately. These are the clients who are using our software and these are from Sweden and and Spain, software fees are not yet charged separately and are partly included in the service prices. And during next fall, we are going to make decision via Patket that how do we going to start charging those clients. But it's good to know that we estimate that the average revenue per customers in Spain and Sweden is around half or less compared to the price level in Finland. And third row is that potential customers for software as a service. So these kind of clients who are only service clients, This comes also from Sweden and Spain. There is a large number of customers who are not yet using the software. And of course, now we are hiring new accounting offices and they have started to sell for their own clients. So those clients will come over that software. figures when they really succeed selling their services and DALENOM LSO software for end clients. But we see that there is the big potential of this conversation in current businesses, but in the long term, of course, the bigger part of the growth will come from the other clients than DALENOM service clients. Okay, this was my stay and now Matt, go ahead, please.