Talenom Oyj

My name is Otto-Pekka Huhtala. I'm a CEO. And today, here are some other people who are explaining our things. Matti Eilonen, our chief financial officer, will open up our financial figures. And after that, Juho Ahosola, our new deputy CEO, will tell more about accounting business strategy. He has just nominated for this role. and this means that I can as a CEO focus more about separating our software business and leading that one. And then Lourdes Sandistepan who is our Country Director here in Spain will open more about accounting business opportunities and then after that Anxo Barreiro will speak about our software business opportunities here in Spain market. Some highlights from Q3. Our comparable net sales increased 2.4% and our cash flow improved significantly. to improve EBITDA and lower investment level. Matti will open more about this later on. Customer base in software business increased 4.7% annually. And as we have told, a strategic review of the potential separation of the Azure software business into an independent public listed company was initiated. And here you can see also figures and how this really gas flow after investments has improved. But Matti will open more about that later on. Some strategy review. We released it one year ago in October that we are going to start selling our software also for other accounting firms. And the beginning of this year, we started to, uh, we separated the software business as own business. And we started to invoice our own clients directly. And in, in February, we separated our management team that we have just, um, you host led, uh, accounting business management team. And I have led, um, this software business after that. And then of course we have the group management team. We had a good pilot sales project in Finland in spring. At the end of spring, we launched our brand easier. And our board made the decision in summer of a finalized strategy for the both businesses. And in September, Telenom initiated a strategy review of the potential separation of the Azure software businesses into an independent publicly listed company. This is a short strategy review and now I will give Juho. It's your time to go.

Thank you. Thanks, Otto, and good morning, everyone, also from my behalf. My name is Juho Ahosola, and as Otto said, I'm the one who's leading this Talenom's accounting business. And I'm going to now give a short presentation overview of this accounting business. And when I'm talking about Talenom, I mean this accounting business to be specific. Our agenda for this short overview, let's start look at Talanum in general. After that, a couple of points of strategy, our strengths after this potential carve-out. After that, let's cover this market, what kind of market potential do we see, and what kind of sources of growth we have identified. After that, as a last section, a couple of points of our accounting business as an investment. But let's move on. So about Talenam, who we are, what we do. So Talenam is an accounting company and long term partner for our clients, which are mostly SMEs. We have the same customer segment basically in all our countries, operating countries. And we help our customers with accounting services, payroll services, and different kind of advisory services as well, including, for example, HR services. We have been operating in Finland, as we know, for quite some time, since 1972, more than 50 years history from this industry. In Sweden, we started our operations in 2019, and here in Spain, 2021. Our mission in accounting business side is to help entrepreneurs succeed. Quite simple, but powerful mission. That's why we exist. And as a vision, what we want to be, we want to be most recommended financial partner by the people we serve and the people we work with. And that covers both our employees, which are super important to us and our clients as well. And there on the right hand side, you can see the main figures in terms of revenue and in terms of number of personnel right now after Q3. But that's Talenum in brief. Let's then have a look at our strengths after this potential carve-out. So first of all, we have a long history as an accounting company, as an accounting firm. We are established in 72. We have operated in this industry for more than 50 years. And that means that we have quite some knowledge about how to run an accounting office, how to run an accounting business. So this is basically not anything that's new to us. Then something I would like to point out what's important and not already mentioned. We have established management teams in all countries. We have management structures on place. And in addition to that, we have now this global management team in accounting business, which I'm leading. Second point is super crucial when it comes to our strategy. So during a couple of last years, we have clarified our operating model, which we call OneTalenum. And it covers our main processes, practices, ways of doing things. As an example, our leadership promise to our employees. And of course, we have also tested how this concept works and does it make sense. And there on the right hand side, you can see correlations between one index, as we call it, and customer experience, employee experience and profitability as well. And one dot there represents one team. And it means that when we apply these processes, these practices, we follow this one thing, so to say, our employee experience is higher, our customer experience is higher, and we are also more profitable. So this concept truly works. We also can see from this visualization that we have a lot of work to do, and we are working super hard in all countries with these processes and practices. Then third point I would like to talk about is the strong commercial capabilities. So we have been doing new customer acquisition quite a long time in Thailand. We have a lot of knowledge in terms of sales, in terms of marketing, how to acquire and attract new clients. And this is not that common in this industry. And we strongly believe in this and are willing also to further develop it. So to summarize, long experience from this industry, we have a concept that truly works, and then these strong commercial capabilities. These are strengths that we are seeing. Of course, in addition to these, we have many other things as well. These are the ones that I would like to point out. Let's move on to market potential. So accounting market, as we have previously explained, it's sort of fragmented. We can also recognize that trend of consolidation in this industry. And let's look at different markets that we are currently operating. So in Finland, market size is roughly 1.4 billion euros, and we have a relatively strong market share, almost 5%. And that's quite natural since we have been operating in Finland for quite some time. In Sweden, market is a bit bigger, 2 billion, and our market share is roughly 1%. And here in Spain, as we can see, market is quite massive. 12 billion an hour market share is super small. So a lot of potential here. But I would like to say that we have a lot of room for growth in basically in all our countries. And we definitely want to grow in Finland, in Sweden over time and in Spain as well. Then how we are planning to leverage this market potential and how we are planning to grow. So we have identified three sources of growth. So first of all, organic growth. So as I explained, we have a long history in selling new clients in this industry. And that's what we are going to do in the future as well. focusing on new customer acquisition in all countries. It's the hardest way of growth, but it's super important to us. Then second point, acquisitions. As we know, we have conducted multiple acquisitions during the last years in all of our operating countries. And in the future, we are going to do acquisitions, selective acquisitions as well. I also would like to say that we have learned a lot during past years and we have good learnings how to identify good companies where our values are aligned and what truly works with us. But acquisitions, selective acquisitions, they play a crucial role in our strategy. And then last but not least, we have a strong customer base. our current customers and we want to grow with them as well. Different kind of services, upselling, cross-selling, helping our clients in different kind of situations that they are facing. That's important for growth for us as well. So to summarize organic growth, selective acquisitions, and then also our current clients. Then last slide from my behalf. So Talanom accounting business as an investment. So a couple of points how this accounting business could look from investor perspective. So first of all, our business model, it's quite defensive. So to say revenues are largely recurring and these services, payroll services, accounting services, are mandatory in a way to our clients so our business is quite defensive also our profitability in this business is solid we have a good cash flow positive cash flow and in the future that enables both dividend and investments in growth as well And when thinking about investment, my last point is something I would like to point out, is that when we are investing, we're investing especially in growth. So sales, organic growth, and these M&A activities as well. And important thing is that these investments generate quite rapidly new cash flow to us. And this might be an important thing from investor perspective. And our target mid-term goal is plus 10% growth by those elements that we covered in previous slides. That was all from my behalf. Thank you very much and next Lourdes.

Good morning. Thank you. I'm Lourdes Santisteban, the country director of Spain since 2022, so three years or now. I'm really happy to have this presentation from Spain today. As we have seen already, there are huge opportunities in the market, and I'm going to talk a bit about market size, accounting market, digital maturity level that we are here now in as a country, and also the M&A opportunities and talent in Spain as a summary. So first of all, let's start with the market size. Here we can see the number of companies that are in the country and also the distribution of the size of the companies around Spain. And also aligned with our strategy, as you have mentioned before, our target market is the mid-sized customers, and we can see that it's almost 70% of the market already. When we see also the figures and the numbers of the total addressable market that we have in Spain, we can see these huge opportunities we have been mentioning up to now. Together with the number of potential customers we have, and we are constantly analyzing the accounting business itself, and we can see with these numbers in the screen that it is really automized nowadays. and there is still a lot of concentration in the companies which really low revenue it means uh headcounts of from one to three people more or less and it's starting to be a concentration in the market but slowly so there is a large number of companies addressing this market but huge opportunities especially because with the changes that the country is addressing with the digital changes also and this groups are stalling on coming to the country to change the industry um the opportunities are more on the bigger and higher accounting firm especially for searching for good quality services uh digitalization the level of investment of smaller companies is really limited and we will see a change on the tendency here soon Together with this, we would like just to have a few comments on the digital maturity of the customer. This is one of the reasons that Talenum decided four years ago to come to the country, knowing that the digitalization of the customers is still really low, as we can see from a barometer from the industry. The level of digitalization of these companies is still in the medium or even low site and only six percent of the customers consider to be on a high level of digitalization there are opportunities here also from our point of view because we can gain efficiency once the customers start to apply and use many often the tools that they will find in the market So, regarding the Talenum Spain timeline, just a short recap of our short history here in Spain. It's just for years that Talenum decided to come, as mentioned. It was in 2021 that we had the first acquisition, August, in fact, and it was one year later that we started to grow inorganically as we are mentioning here but also our strategy here as a part of the learning of Talenom of going abroad was starting by establishing the pillars or the core pillars of the company. It was in 2022 that we created the areas regarding HR, for example, IT, product marketing, sales. And with these pillars, we, the following year, in 2023, started to spread around the country and put layers of services on top of that because we were prepared to handle this this fast growth, in fact, in a year. 2024, it was our year of consolidation, as we mentioned here. We needed to consolidate the integration of this amount of companies and also starting to organize the whole Spanish organization in the Talenom way. Also appointing the managers, training the managers, focusing on maintaining, it was very important for us to focus on maintaining the organic growth of these companies that we had selected. to join Telenom while having before and our goal was to keep that level and also to strengthen the organic growth through establishing a potent marketing and sales team in Spain. 2025, it's aligned with the strategy of Telenom of the One Telenom concept. meaning to implementing in our offices the way of working together with the culture of the company also for the engagement of our employees and pushing on the same direction all of us organic growth as i mean driven always for us and inorganic growth that it's still continuing in spain and it's planned to continue as the country as we have seen and we will see also now it's really big and there are many opportunities These are the numbers for Spain now. So we can see the speed of the country in terms of revenue and in terms of number of employees. In 2025, the figures here are up to Q3. So that's why the revenue line is still not there. Where are we now in Tainom in Spain? So as a summary, we have presence in seven out of 17 regions, so still a lot of place. For us in the country, 16 acquisitions up to now, 330 people, 307 FITs. 6.5 thousand customers and the local management as commented in the history timeline are structured and established. So there is a strong organization already in place in Spain. This is a map of Spain to see the potentiality also and a small summary of where we are with our offices. But as we can see, there are still many spaces for Talenom to be present in the main cities and main provinces of the country. And the last point of my presentation is about the OneTalenom in Spain, aligned with Juho's presentation, or a short summary of what it does mean for us in Spain, the OneTalenom concept. So we summarized that in the way of working. So as mentioned, how we are as a company, what is important for us, for this integration concept that we have in Telenom, which is really important and different in the market, I have to say. So we have a clear objective for the organization, through the whole organization, a culture which is present in the teamwork, in the everyday of our accountants and our specialists. Of course, we put a lot of focus in the excellent customer experience. It's basic for us always, not to forget that it is through our customers that we grow, and it's the best way of growing, demonstrating that we have strong capacities on the customer experience and quality of our services. Processes and practices, we have a lot of experience as a company, 50 years of experience in making efficiency processes and working constantly on how to do our work best. and finally but not less important the stroke commercial capabilities as mentioned in before we have focused our growth in organic growth also on these companies that were growth driven already and we are here to maintain that this is our focus so now we have otto again from so is our site

Yes, thank you Juho and Lures. And I will go through the ESR software business strategy. ESR in brief, what is it? So it's a platform management company and we have now over 15,000 end clients. Our annual revenue is over 20 million euros recurring revenue and we have over 60,000 end users. We handle over 10 million transactions annually. We have more than 140 full-time employees. And there's around 200,000 logins in a month. So it's very much routine software. And today we have over 65 partner offices in Finland and Spain. Here is the one pager. And by that way, I want to explain that how easier business model really works. We are a financial management platform. In the left down corner, you see the entrepreneur. They will face many challenges in their businesses, like how to handle this paperwork, where can I find an advisor to help me. And the right corner opposite of that, you see the service providers who will face some challenges, how to find the new clients, how to handle all compliance issues, how to make this work more efficiently, how to earn more money and so on. And the both of them are happy around in the middle of the picture, around the issue, we connect them. We offer for entrepreneurs easy to use management tools for their daily businesses and on the other hand we help them to find new advisors for them. And for accountants we offer of course the most efficient tools in the world to handle their daily businesses from the professional accounting side. and we help our accounting partner offices to grow even faster. Our values are the same as the Talanon has been because we have the same history. Left up corner is our purpose. We want entrepreneurs to succeed by taking care of their paperwork so they can focus on what they love most. Our strategic focus areas are in the right up corner. The first one is easier, offers the easiest ways to be an entrepreneur. Our growth target is over 20% growth rate. And the third one is the most attractive ecosystem for providing business to business services. As we have our partners offer banking services, reconciliation collection services, funding services. We have more than 400 ERP systems connected to our systems and so on. This is roughly our one-pager, what does ESR really mean. Okay, what is the offering today? Left-hand side, you see the entrepreneur and we offer them easy routines, easy to use app for their daily businesses and broad selection of accountants. We have two marketplaces where they can find good account offices for them. Additional services, integration and support for them. And the right-hand side is from the account office point of view, we offer efficient business for them. We have very good track record of that in our own service business in Finland. And you can see this later on when you look at the figures. Compared to market, we have double size, higher comparable EBIT than other accounting offices. And we want to offer these kind of efficient tools for the other partner offices as well. One big thing is also that we have the channels, the boost, our partner offices, businesses, so we acquire new customers for them today. And the speed is in Finland around 30 to 50 clients where we are helping them to find new clients. We have very good support and education and community systems. We really help them to onboard clients, to onboard them to help using our systems and help them to fill all requirements which come from the compliance and so on. And other additional services we offer for them. This is today offering what we have. And of course, it has started from Finland. Now we have just launched our brand also in Spain. Anko will tell more about the Spain situation. In Sweden, we are going to start selling our services to partner offices next year. And in Italy, we are localizing phase just now. Our growth will come from new customer acquisition. In the left picture, you can see the dark pillar is the customer base, what we are charging today directly from Esure's side. And this light pillar means that those are the clients who are also as Talenum service clients who are using our systems, but we don't invoice those clients separately those clients comes from the spain and and speed mostly from the spain and we are going to start charging most of them beginning of next year but one notice is that price level is totally different in different markets. The highest price annual revenue per user is in Finland, then Sweden and Spain. So let's see later on what this does really mean. And in right hand side, you can see our amount of partner offices. We are ahead of our target and this is increasing very fast just now. Of course, we launched our brand one week ago in Spain, so this will be so much faster in future. What are growth drivers in our businesses? The first one is the legislation. And market trends which are driving digitalization, especially e-invoicing directive, PSD2, PSD3 is coming. And second one is customer behavior is changing to our digital platform. Entrepreneurs are more and more ready to buy via digital way. And the third one is digitalization is happening just now. And good example comes from next presentation, when Anko is explaining the Spain situation. Why to invest in Azure as a software business? And first one, we are running in financial management digitalization. We have very good track record in Nordic, how we have implemented new technology in our businesses. We have like over 20 years experience developed our softwares. And these are some maturity and we also see that we have like very high automated systems. And we see that the same kind of history, the same kind of future what we have seen in future history in Finland is going to happen. And the second one is readiness for scalable growth. We have businesses in four countries today, and big investments and architectural renewal are behind. So we are ready. Third one, high recurring revenue creates stable cash flow, reduces the risk level of the business. And targeting for fun, We aim to have over 20% annual revenue growth rate. Thank you, and now it's ANKHA time.

Thank you Otto. I'm Maestro Barreiro. I have been working in Talenon for two years and a half. And I have been recently appointed as country director for ISOR in Spain. And I would like to explain and to highlight how bright the future for ISOR looks in Spain in the next few slides. The market size in Spain following what my colleagues have said is huge and it's highly fragmented. More than 95% of the companies, of the SMEs and the freelancers that we have in Spain have less than 10 employees. This is even though that we can we can target higher companies or more mature companies. This is our sweetest spot. So it's where our e-source software works perfectly for the routines of these companies. But there is an important detail to explain regarding Spain is that these kind of companies are not used yet to pay for software, especially for accounting software or for bureaucracy on their own. They are used to rely upon the accounting offices for all of their financial routines and the tax affairs. So the number of accounting offices is key in our strategy in Spain, is our strategy in Spain, because we are aiming to sell our software from the accountants and from the routines that their clients and their accountants will automate from that perspective. And that makes sense from the point of view of the size and structure that the accounting offices have in Spain. The sector is highly fragmented and only a handful of accounting offices have a medium size right now. And the average, as my colleague Lourdes was explaining, the average on the sector is that only two accountants per accounting office are working there. And more than 80% of the accounting offices have less than 10 accountants. That explains why it's very difficult to work on digitalization, on processes, on automation. It's very difficult for an accounting office with such a structure to invest and to to think from the perspective of changing the routines and the softwares, especially without the perspective of a broader view of a bigger company. And that's where Azure can help because that transformation, it's not only based on digitalization. It takes much more. According to the latest studies, only 30% of the accounting offices use some cloud-based applications, cloud-based software. So, mostly they rely on promise accounting software. That makes it very difficult to work on automations and on new routines. And only 4% of those accounting offices have any kind of reporting tools or business intelligence reports. So the opportunity is huge to go to that market. But digitalization is not enough. Changing from the perspective of old-fashioned business and old way of working to a modern tool to a new routines it takes also education and trainings and it takes education and trainings not only for the accountant but also for the end client they need to They need to understand how to work on the new environment, what value can their advisor or their accountant take from the service, from the fee that they are paying. And it's a change of mindset. So the change of software is not enough, and we can't help there. So once we have there the trainings and the education for both of the sites, we can move on to the integrations and to the partnerships. Our focus is not only on the software, that is mandatory for sure and it's needed, but also for the distribution and how the partnerships may work in the future in Spain. As we rely mostly on promise accounting software, integration is not common in Spain yet. It's not widely demanded, but the shift is coming and we are seeing that the clients start demanding it more and more every day. So we are prepared for the upcoming shift. And when the clients demand more integrations, we will be there before the rest of the market, especially, obviously, depending on the accounting firms that are depending on Promise accounting software. And this connects with the delivery channels that we have created. We have sales processes and sales teams, we have marketing, and we have support teams to help on all of this that we need to change for succeeding in the future of the accounting software on the upcoming shift of there. of the um accounting fields and we need this to capitalize on the tailwind that we have because there is something very huge in spain right now that it's the momentum that we have in front of us the structural shifts are creating this momentum and the government is helping with the change of laws and the mandatory digitalization for for the companies. The first important moment that we had in Spain was Ticketbuy. Ticketbuy was implemented in 2022 in Basque Country, that is a region in the north of Spain. And it requires freelancers and companies to include a QR code in their invoices and at the same time submit them to the tax office. This simplifies tax filing. And it had a very strong adoption. More than 80% of the SMEs and the freelancers from the Basque Country complied within the first year because they didn't want to wait any longer. Right now, we have Verifacto in front of us. Verifacto is the nationwide evolution of Ticketbuy. It's starting in 2026 for SMEs and freelancers, but actually the early adoption happened in 25 for software companies. And all of our clients, all of ESR users in Spain, are already complying with Verifacto. The current studies show that over 70% of SMEs will need to adapt. And in order to explain, paper invoices will remain valid, but they must be generated, the invoices must be generated through authorized platforms such as ESER. And after that, we will have the electronic invoice. We don't have an exact date yet, but it's expected in 27. It is the evolution of Verifacto, and it will eliminate paper invoices entirely. It streamlines tax filling and inspections and helps with the payment control and the reconciliation between the payments within SMS. So, it will boost our automation and help us sell easier in the near future. And just to finalize what is our situation in Spain and to explain our history until today, in 2021, Talanum enters in Spain. In 2022, Talanum buys an invoicing software from Bank Sabadell. In 2023, Talanum evolves this invoicing software to do pre-accounting for SMEs to go to bigger companies. In 2024, we already had more than 2,500 Talenum clients using the software to create their invoices and control their businesses. And right now, in 2025, we have more than 4,000 Talenum active clients. In addition to those clients, we have more than 400 end clients that are using the software on their own without talent or service. One of the things that we will do in the next few weeks is to go over the accounting offices of these 400 end clients for those accounting offices to use the software for all of their clients. The Azure brand launch happened a couple of weeks ago and in this couple of weeks we already have five partner offices in piloting phase where they are testing the environment with real clients and we have more than 2,000 expected paying customers in the first quarter of 26 only from these five accounting offices that have already piloted our software.

Hello everybody. Welcome to follow this Q3 review from my behalf also. My name is Matti Eilonen. I'm CFO of Talenos. Let's start with the group figures. Our growth was 2.4%, ending up to 30 million on the last quarter. And it came mainly from the successful sales in new customers in Finland and in Spain. Also, we made a small acquisition in Spain in April, and that boosted a little bit this growth. On the other hand, the development in Sweden in net sales has slowed down our growth pace. EBITDA ended up to 8.6 million and the EBITDA growth was 700. The EBITDA growth came this time mainly from Finland and Sweden, while Spain was remaining on the comparison level. Operating profit EBIT went up a little bit, but the increase was slowed down because increased depreciation. And that comes from the past when we had higher investment level. And now we have lowered down our investment level by 2.7 million from January to September. And that will have an impact on our depreciation level in the future. but not for this year. Then moving to country-specific figures, Finland grew by 3.5% and it came from the new sales, getting new customers and so on. Finland has suffered quite a bit about the recession and the customers transactions volumes have been declined but now this declining has stopped and stabilized on the certain level we think that uh in finland this growth even that it was quite low but anyway where it was a strong performance in very challenging accounting market according to the latest research the accounting market hasn't grown in finland lately Finland EBITDA level was really high, 8.7 million and relative profitability really high. And it's growth by 400,000. Then moving to Sweden, Sweden net sales declined by 13% on the last quarter, and that came mainly from the customer churn. We continue our hard work to avoid the churn in the future and also to get new clients. That's our main focus area right now. We are focusing on really basic things in Sweden so that we can keep our revenue there. On the profitability side, we went up in EBITDA by 200,000. That's a good direction. Also, the relative profitability went up. And we were scaling down our costs in Sweden, but we didn't want to do it too fast because our aim is a long-term growth and long-term opportunities on growth. So we don't want to scale the cost too heavily down in order to achieve a short-term profitability. Then to Spain. Spain grew by 17% and the organic growth strengthened in Spain. It was about 5%. The organic growth and the rest came from the acquisitions. We believe that we have good capabilities to grow in Spain as we have very good function in getting new customers and also what Anshu and others told about the e-invoicing possibilities. We have the tools and we have the products for that and it's a good growing possibility. EBITDA in Spain was pretty much on the same level and relative profitability declined a little bit. There were some items non-recurring expenses and a little bit different seasonality which affected on EBITDA level in Spain. But overall in big picture it is steadily growing the profitability in Spain and we are focusing on our processes and of course that we are investing or we are trying to get only profitable customers and so on. Then a little bit about our cash flow. Even though we don't report cash flow on Q3, I would like to point out a few things because this is something that really matters. First thing is our EBITDA growth on comparable EBITDA. It was almost 1 million better. and also that we don't have to invest so much anymore, we lowered our investment level by 2.7 million. If we add these together, our cash flow after investments grew by 3.6 million, which is 45% more than last year. This is really a significant part. Of course, there's some other items in the cash flow as well, but they are pretty much on the same level as last year. And these are the things that really, really matters. And this is really super good when we are developing ahead this comeback. Then the business areas, net sales in software business was 5.2 million and in accounting business it was 24.5 and the EBITDA level was 3.8 in software and 5 million in accounting business. There is not so much seasonable variation in in software business, but some during the summer time. And the last slide about our guidance, the guidance remains the same. We are expecting to have a revenue between 130 and 140 million and between 36 and 42 million. Thank you, that was all, and now we can move to questions.

Hello. Now it's your time to ask. Is Jan-Medea in line?

We will start with audio questions. Please use the raise hand function if you wish to ask a question. The next question comes from Juha Kinnanen from Indiers. Please unmute your microphone.

Hi, this is Juha from Indiers.

Hello. Hello.

I will start with a question from Spain. So could you just begin with the current status, kind of a very specific Yes, or software currently used, how many, what percentage of your clients are currently using it, and how do you see this developing before we go to the future and talk about sales?

Yeah, Ankur can answer.

Sure, thank you for the question. Right now, we have closed that 70% of our customer base using the source of work.

Excellent. Maybe you can continue also. How many are actually already invoiced? Are they paying for it?

E-Soring Spain doesn't exist yet as an independent company, so it's not invoiced separately.

It will happen next year. is this uh does this mean that the revenue will grow directly because you will add the software invoice or does it mean that you will also lose some revenue from services where it's currently included yeah today it's include in in service prices yeah all right so basically the clients are paying for it but just not separately

Yes, that's true.

Excellent. Then, if I understood your go-to-market strategy correctly, you are aiming for the 52,000 accounting offices in Spain. And these are very small on average. So could you just tell, like, how can you reach these offices and what is your advantage?

The advantage is that a software like this is mandatory for the client, so they need to find a solution. So the way of selling right now is, let's say, easy, because it's... Mandatory. And then we have to test the distribution. We will start with two-tier distribution, where the accounting offices sell our software to their clients, and then we can move on after a few months, let's see how it evolves, to a three-tier distribution with a strategy where the distributors of software that are already established in Spain and are big, sell our software to accounting offices and then those accounting offices sell to their clients.

Yes, understood. Of course, it's a huge market opportunity and normally you need to have a really sharp focus when you try to enter this kind of market. Could you just elaborate a little bit? What are you looking for? Are the biggest offices the main clients or how are you aiming to reach your goals.

The idea of how to start is to look for accounting offices not such as small as one or two accountants, more close to eight or ten, because obviously the number of clients is higher in those accounting offices. and to reach them directly and sell our software to them. The thing that we are looking for in those accounting offices is to have alignment with their goals. To start, it shouldn't be something that is mandatory, but they don't see the benefit in using Azure. The alignment should be that they see clearly the benefits in the automation and where we help them. Let's say that it's not as easy as it seems, but we have a way of reaching those through accounting groups, in groups such as LinkedIn and so on, where they are aiming for automation features. We will reach those and analyze if the alignment between ISRO and the local accounting offices is good enough to implement our software there.

Fair enough. And maybe you could also open up a competitive situation currently. Who are the main competitors who are aiming for this market currently?

We have several competitors, but also the aiming and the features are different. Each one has their own way of reaching the clients. For instance, we have competitors that go after the complete routines, meaning that you don't need anything else in your accounting offices. From our point of view, we have been talking about this largely. And we think that the way of selling those is much difficult. Right now, we are aiming for specific accounting offices where our pre-accounting software, what is SOAR, connects to their regular software that they have been using for, let's say, 20 years or so. So the challenge for them, it's not as big as to change everything and that your day-to-day operations rely on a new company that you don't know about or you didn't know until a few weeks ago. And after that, we can start upselling inside the accounting office. And then we have another kind of competitors that go after only one or two features. Our aiming is invoicing, expense management, and financial analytic reporting. So it's not to change completely from scratch the routines from the accounting offices, but it's not also... to aim for only invoicing, because that's where most of our competitors go after. Only change the invoicing and not additional features that actually... The invoicing is all benefacto, but doesn't help in the automation of the accounting office.

All right. I think I understood most of it. Just one last question about sales and it's about resources. wondering how many people do you have going after this? How many millions are you going to invest in marketing and creating a brand and everything else like this?

Yeah, for now we are, as I was explaining, we have launched the brand two weeks ago, so we are just starting. But we have open positions for the sales team and we will invest heavily in the next few years as the opportunity is there. The window of opportunity is next year with Verifacto and in a couple of years with the electronic invoice. So we have to capitalize on the momentum that we have right now and not waiting two, three, or four years to invest.

All right. Thank you very much. I will let someone else have the floor for a while.

Thank you. Thank you for questions, Johan. Maybe there's some... Is there some other people in line?

There are no questions at this time, so I hand the conference back to the speakers for chat questions.

OK, where to start?

So Jani Lepojärvi is asking about, is Icer now sold in Spain as fully integrated package, not just normal plus interfaced third-party software?

Yeah, the solution is today that it's based for the normal software. As Anko said, we have continued to develop it as a pre-accounting software also. And there is also commercial software after that. So our solution is the customer interface. I mean, the enterprise tools. And also there's the account panel where our account can make reconciliation work. And most of their time will be joined in our platform. And they move... change, move the data to the A3 or Sage or some other commercial solutions and finalize the bookkeeping there. That's the situation just now. And our strategy in the long term is to integrate our easier accounting solutions step by step to the SaaS platform.

Okay, then Emily is asking about what are the main root causes in a high customer churn in Sweden? How much revenue has been lost in practice so far? And when will the churn turn into net growth?

Yes, we are not happy with the current journal rate and we are seeing that the situation is stabilizing and we are working hard to get new clients all the time. And we see what is happening, but we trust that we are going to better solution all the time. As Matt explained before, so we have decreased our personal costs and we see as we have told that our EBITDA margin is increasing compared to last year and this development will continue as well but of course the main focus in future is also in customer share and the getting new ones.

All right then Emilie continues about Sweden. How far along is the implementation of OneTalenon processes and software in Sweden in terms of customer base and teams. What measurable benefits have you achieved so far?

It takes time to adapt whole OneTalenon concept because everything starts from the leadership, leadership promises, after that are the processes, Then digitalization, automation, and premium services. This is the story where we are working there. And it takes some years to achieve all of those goals, what we are targeted for.

And Emily continues about Spain. What exactly did the one-time cost in Spain consist of? I can answer that. It was related to cost cuttings, which we did on Q3. And yeah, that was the reason. And then Emily Imonen asks, How do shareholders in Talenum benefit from the separate listing of EASOR?

I can take that one. It's a totally different lead to different businesses like software businesses and service businesses. And now when we are separating the businesses, then there is more potential for easier software for new clients when it has been only for Talenum service clients. So it has limited our growth opportunities in software side. Today we can say that if we calculate like net cumulative growth in Finland, so we see that 70 to 80 percent of net cumulative customer volumes comes from the uh partner offices and 20 percent from from talent offices so we see that there's the huge potential and we are just just started so it looks like very good and the other hand in service business um they can really focus only for the services if if if you look at from the management group point of view there isn't so many issues on the on the table at the same time, so they didn't need to handle those software business issues. They can focus only for the customer experiences and personal experience.

Then Emil Imonen asks, why do you want to separate the software now? Why not wait one year or two to see how well the rollout is going in Spain?

Why not? I'm thinking so that when we have made the decision, then it's time to go forward.

Then Emil Immonen asks, are Talenum current costs associated to functioning as a listed company? What will be the in for EASOR? Also, does EASOR need new HR, finance, marketing, other support functions, which are not included in EASOR current cost base? yeah i i can answer that we haven't announced these costs related to the listing or or maintaining the listing but it's rather relatively small to the size of the companies and also also will need to do some uh some recruit that's related to hr finance and marketing, but that's relatively small as well. And we are going to outsource many things. I personally know one good accounting company where we can outsource, for example, some accounting services. Yes. Then Daniel Lepiste from Danske is asking about what do you think about the currently very high software CapEx level compared to the software revenues? How much do you think you can decrease the software investments now that the product is separated?

I can assure for that. So, yeah, that's true that our investment level for current revenue is too high. It should be lower. And as we have told, we have decreased our investment level. And why we have done this and why this happened? We'll continue in next year. The reason behind that is there in architectural renewal. We have made big, big investments for our software platform to export it to other countries. And this is the behind. And we are just now slowing down the latest old part of software, what we are using in Finland. And after that, we have not like duplicated maintenance issues, etc. And so in future, it looks like that investment level will continue to decrease a little bit. But we are going to focus for getting more revenue, invest all or most of the cash flow to the getting new clients in software businesses. So when the revenue increase and the investment a little bit decrease, so this will be in normal in some years.

Okay, then Massimo is asking this. There's quite a lot of questions. I tried to put them in pieces. Question number one is, congratulations on the progress with EASOR separation. As the board conducts its strategic reviews, could you elaborate on the key criteria you are using to evaluate the different projects? options such as IPO versus a potential sale to ensure the final solution delivers the absolute maximum value of Tallinnum shareholders.

I can take this. Of course, the board has evaluated many, many, many things. And this progress is ongoing just now. And the main focus is there in IPO.

The M&A market for software companies currently appears exceptionally strong with the strategical and private equity investors paying premium prices and high quality profitable companies like EASOR. In contrast, the IPO market remains quite selective. How is the board weightening the certainty and the potential valuation premium offered by a strategy sale against the market, timing risks and costs associated with the IPO process?

Of course, this is on the board table and they have evaluated prices and the value of the company. The best view today is that via IPO we can get the best benefits for all shareholders in mid-term.

And Massimo continues, the very fact that legislation in Spain creates phenomenal and time-sensitive growth opportunities for EASO. A large strategic partner could likely accelerate the market capture there significantly. As you prepare for independencies, how do you access the unique strategical value to a potential acquired aiming to win the Spanish market? And how is this strategical premium being factored into your reviews?

Maybe I would like to reply to many things we have talked about. We see that the market is huge and the potential that the officer is saying that you have to start using some software. We really believe that this will increase demand of these kind of platforms as easier is. And all software companies are full of hand, the job, the onboarding, the lines that everybody can fill the requirements which come from the officers. So maybe shortly.

Then Massimo's final question is, the European accounting software market is strongly on a consolidating phase with large players like Visma actively acquiring local market leaders. Given this clear industry trend, have you received any preliminary inquiries regarding EASOR and how does the board view EASOR's potential role as a part of a larger strategic ecosystem as a way to accelerate the growth and mitigate future risks?

I can comment that this is a good potential question, but this is on the board table and I can't comment on it.

All right. Then Daniel Lepisto is asking, how are you planning to stop the revenue decline in Sweden? Do you need to walk back from the introduction of EASOR in the country and up the use for NOX?

The current situation that we are using both Fortnox and Azure, and because of this high churn, as we have told, we stopped to onboard new clients in Azure systems that we want to stabilize the current business. And after that, we will continue to implementing our solutions there.

Then Daniel Lepiste from Danske continues. How many other authorized verifactor platforms or competing softwares there are in Spain currently?

We can say that many. Yep.

Daniel Lepis, the final question. How much is the software annual recurring revenue in Spain currently?

We are going to tell this later on. Yes.

Massimo is asking, growth in Spain has been strong. How do we plan to maintain this momentum? And what are the next steps for expansion in Spanish markets?

Yes, we have good and strong growth rate just now and we have ongoing in our M&A funnel, we have ongoing many discussions and we are going to continue those acquisitions, selective acquisitions. We have been many discussions this year but Looters will take care of the acquisitions and is going to hire those offices which have a good fit with Thalannoma culture and we can then well implemented those acquired offices to our businesses. So during M&A funnel, we are going to increase the volume what we have been in this year for next year and also what comes to digital phase. Many accounting offices, they face the challenges because of the new legislation and that's why they are ready to jump to our businesses. And also one good to know is that in Spain, I don't know why, but many people think so that when something comes from the Nordic or Finland. So it's a happy thing. And so they see that we can really help them in this digital phase.

Olli Salo is commenting, great answers, Anxo, thank you. M. R. is asking, you have previously mentioned that the potential for organic growth in Sweden is very significant and you have initiated results that they were positive. What is your view on this matter now?

Yes, as we told. We are working hard with keeping the current clients and getting new ones. One thing that I will notice is that we got a new country director in the beginning of August. who comes from the inside of the company, and she has also good expertise from the practice level, how to do the bookkeeping, how to lead the team, how to lead the units, and she has been also an area director before being as a country director. So we are very happy of the current situation and we see now that many many things which comes to the one talent is going to implement it well. Of course it takes time but it looks like good just now.

Okay, then Ayari is continuing. You repeatedly use the word distribution when telling about selling Azure software. This sounds rather passive as you are mainly waiting for customers to contact you. What is the level of Tallinnum's own sale aggressiveness and ambition for EASOR in the coming quarters?

Yeah, we are not only waiting for getting new clients, we would be happy to have this kind of situation, but if I start from Finland, so we have two guys who are focused only acquiring new partner offices and there is two other guys who have focus for getting new end clients to the partner offices. And these kind of systems we will have also in Spain. We are just now hiring new people. who can focus to acquire new partner offices in Spain. And here we will sell more or less via accounting offices more. And later on, we will also help those accounting offices to find new clients. But today the situation is that the problem is to find the invoicing solutions in accounting offices for existing clients. So we are resolving that. to focusing to hire people to sell for potential partner offices our solutions. We are not waiting, we are actively doing.

Yes, then the final question from Matti. What about the second dividend? When we can anticipate a decision regarding it?

I can't comment it just now, but it's on the board table. Okay, there's only some positive feedback left, so we will have a nice weekend here in Costa del Sol. So thank you for everyone for following our report release and see you soon. Thank you. Bye. Thank you. Bye-bye. Indeed.