Talenom Oyj

Good morning, everyone, and warmly welcome to join this Talenom's Q1 2026 business review. My name is Juho Ahosola, and I'm the CEO of Talenom, and I started in my position in the beginning of March, as well as my colleague Matti Säkkinen, CFO, who's here today with me.

Good morning, everyone, and welcome also from my behalf.

Thank you. Okay, let's roll out then. So here's the agenda for this review. So I will start with a short strategy recap. And after that, I will comment review period. And then after me, Matti will talk in a bit more detailed level about financial figures and financial performance. And then outlook and guidance. And at the end of this session, there's time for questions as well. And you can ask questions with the chat. during the presentation as well. Okay, but let's start then with a strategy review. And basically the big thing of this first quarter and review period was this demerger with Azure. So company started in last fall, last September, strategy review of the potential separation of the Azure software business into an independent stock listed company. and after a couple of different stages we are finally finally here that there are two independent companies Talenom and Easer and both are operating with own management own boards own growth strategies and no cross ownerships or structures like that and this was basically the biggest thing of this this review period and we're super happy and excited that this is now finalized and we can move on as an independent service company. The reasons behind this demerger, as a reminder, so basically we had two main drivers or two different drivers for this big move. So first of all, both companies, Talenum and Esore, can operate from a software perspective much more flexibly and also grow faster in the long run. Esore, they can acquire clients through other accounting firms or other channels they found working. And we in Talenum side, we are no more kind of like dependent on one single software solution in any level and we can always use the best available tools and solutions to support our clients. And secondly, from an investor perspective and also from an operational perspective, it is a much more clear case. It gives a lot of focus and we here on the Tylenol side, we can focus fully on our clients and create great customer experience with services. And to be clear with our software strategy, we always use best-in-class solutions for our clients. Sometimes it's easier, sometimes it could be some other solution. Then if we move on and think about this new talent, as we say here, internally, so this new start. So what do we do? What's our thing, so to say? So we're a service company. First of all, we help our clients, entrepreneurs, usually with different kind of accounting, consulting, payroll services. And we are operating in three countries, Finland, Sweden, and Spain. And in our growth, we combine two pillars. So first of all, organic growth, which is super important for us and where we want to deliver, and then selective acquisitions. And how we work, what is kind of the core of our strategy. So we combine strong local ownership, local expertise with the Scalable One Talenum concept. And combining these two elements, we believe that we will achieve great long-term growth. And this one Talenum concept is basically a really important part of our strategy, and we have seen that it affects positively in our main business outcomes like employee experience, customer experience, and profitability as well. So that's the new Talenum. Then a couple of words of our operating areas and organizational structure as well. So we are operating in three countries. Company has been started in Finland 1972, more than 50 years history, strong growth history and solid organization. In Sweden, we started 2019 through first acquisition, and in Spain, 2021. And here on the right-hand side, you can see this from financial statement, our personal is located in different countries and offices. An important thing or part of our strategy is that we are not in the near future looking to expand to new countries. We believe that we have massive growth opportunities in these existing markets. Also worth mentioning, when it comes to this ISOR split, that during previous year we built organizations in both, like, organizations ISOR and Talenom, and also in Talenom side we gathered management team and local management teams as well in countries. And that's important that we have now structures in place. When it comes to our revenue sources, revenue sources of new talent. So the main part of our revenue comes from our core services. So accounting services, payroll services, account receivable services. These are highly, highly or almost completely recurring services. And that's, of course, important and easy to forecast as well. And then in addition to these core services, we have value-added services, for example, CFO services or HR services and business intelligence services. And we see that these are important source of growth opportunities. in the future, and we are also focusing on these. And then secondly, they are supporting our customer experience, so affecting positively in customer experience and that way customer retention. Also worth mentioning that we have industry-focused teams for some selected sectors, and there we can give even deeper knowledge and service for our clients. But revenue mostly recurring and that's important and comes from services. If we then look into our markets where we operate, so we have three markets and basically the structure of markets It's pretty much the same. So there's a lot of fragmentations, a lot of small companies and players in the field. And then we can also recognize this consolidation trend in all our operating countries. And the main point here is that when we are looking at our market shares in Finland, where we have really established organizations strong, We have roughly 5% market share in Sweden, more or less 1%, and in Spain, 0.1%. So when we are looking at those pie charts, we can see that there's a lot of growth opportunities and potential in these existing markets. So that's basically the reason why we are not looking to expand to new countries in the near future. We have great opportunities in these existing ones. Next, I will walk us through the key elements of our strategy, three main areas. So first of all, starting from one talent concept. So this is the core of this new talent strategy. And one talent is our concept. It combines our processes, best practices, ways of doing things, way to lead basically this organization. And we have built this concept and then, of course, we are further developing it and testing it. And we can see that when we are applying the concept, it affects positively in our business outcomes in terms of employee experience, customer experience and profitability as well. And this is the important part of our strategy for upcoming times. And we really believe and we have seen that this works for us. Second point of our strategy is M&A. We have done a lot of acquisitions in the past and also during this review period. I would like to say that we have, first of all, learned a lot when it comes to acquisitions, and we have found our way to acquire companies and found what kind of companies to acquire. And we want that the companies that are joining us are growth-minded. They really believe in this one-talent concept and approach. as well, and then they can build that organic growth in the future, which is important for us. And maybe something I want to highlight here is that we are not doing these kind of like volume acquisitions at all. So only because of revenue we never acquire. So if we don't find suitable ones, then we don't buy. So that's important part that we are really, really selective. That's something that I want to highlight. And then third part, organic growth. So in addition to acquisitions, this organic growth is really important for us. And we believe that it's the most challenging part of growth in all organizations. And there's basically two parts. First of all, acquiring new clients, selling to new customers. And we have in all our countries, sales teams, marketing teams, organizations for doing new customer acquisition. We're doing a lot of marketing, digital marketing. We have a strong local footprint in areas where we operate, and we do a lot of activities around new customer acquisition. Worth mentioning that in Spain especially, it's not that normal in this industry to actively sell for new clients, and we are doing that and see that as an important part of our strategy and way of doing things. Then secondly, as I mentioned, we have different kind of consulting services and we believe that this is one like area where we can grow and we see that it's important in a couple of ways. First of all, revenue wise, we see that it's a good source for growth, but then it's also important in terms of customer experience and it supports retention. So the clients that are buying more services are usually those who are the happiest ones. But organic growth, it's definitely one of our focus areas. If we then move into this first quarter, so Q1, and here's a couple of highlights from the review period. So first of all, as I mentioned, this demerger split with the ESER was basically the biggest thing. And at this point, I also want to thank our personal and, of course, personal in ISOR as well organization did a lot of work around this. And it was really massive exercise. And now we are super excited that this is completed and we can focus in developing this new Talenom as a service company. And this is important that we are finally here. Super excited. Then during the review period, we also continued work with our strategy and growth strategies, one talent and it's been a good start that way. I'm happy with the work that the organization is doing and proud of the organization, how we have started with the strategy and this new era. Then third point, as said, we are now in this software-neutral environment, so to say, so we can freely choose softwares that we are using. I want to emphasize that these are important partners for us in the future as well. That's obvious. But in the long run, we believe that when we can acquire now clients with other softwares as well, that is opening doors for us and opening significant growth potential. So that's something that we are working with right now. If we then look into those priorities, which we have set for us for this year 2026. So we have three areas. First of all, this implementation of the new strategy as we have started first of March as a strategy. new company or like new Talenom, it's important that we work a lot around this implementation of new strategy and one Talenom concept especially. Then secondly, super important to us, we want to show profitability and profitability improvement, both Sweden and Spain. That's something where we are focusing the whole this year. This is important for us that we have three countries that are EBITDA-wise profitable. Then third one, implementing growth strategies in all countries where a lot of working around growth and then also as said these acquisitions are part of this third focus area. So these three areas and here's a couple of points how it's going with those. So, first of all, with strategy, as I said, we have been working with implementation of one Talenom concept in all countries, and I'm happy when I'm seeing how it's going. Management in all countries is doing good work, in my opinion. And maybe something I would like to highlight here is that We have measured during this review period employee satisfaction and customer satisfaction. Good results from Finland, it's not mentioned here. But in Sweden and Spain, we had, I would like to say, really remarkable improvements, and that's really, really good we are seeing. I'm happy with the figures that we are seeing. It's definitely going to right direction. And usually it tends to go in that order, that first employee satisfaction goes to right direction, then customer satisfaction, and then we can see Finally, those improvements in financial figures as well. That's usually the odd. Then when it comes to profitability in Sweden and Spain, I want to highlight that this is extremely important for us that we can succeed in all our countries and be a bit of a profitable. That's obvious. In Sweden, we moved slightly into the right direction and I'm I'm happy with the trend that we are seeing, and we have taken a lot of actions during last year and then also in the beginning of this year during this review period, and we believe strongly that we will deliver that positive EBITDA during this year from Sweden. Management has done a lot of work locally with profitability, and I believe that we will deliver. Then, when it comes to Spain, profitability was weak, and reasons behind the figures Basically a lot of integration related costs. So that's maybe the main topic I would like to say. Then we increased some investments in sales and marketing. And that's also important that in Spain we want to keep this growth track and focus on organic growth because we see a lot of potential. So we have not been cutting from sales and marketing costs that way. And then also because of this demerger, some software related costs. And then like what it comes to these integration costs is both like operational costs and then personal costs as well. And we have a clear, detailed plan for the rest of the year, for the whole year, how to work with development and improving profitability in Spain. So really detailed plan for that. Then thirdly, implementing growth strategies. This is important for us as we want to be a growth company. And we have been working a lot with these software strategies. It's an important element for us, and we believe that in the long run, it will open us remarkable opportunities. In the short run, we don't see that we will see effects in our figures, but in the long run, it's really important and offers a significant growth potential. Then something that I want to also emphasize is that in Finland, when we are looking at these market conditions, it's really, really challenging. And actually, accounting market declined previous year, and we believe that it will remain really challenging for this year as well. But at the same time, our approach is that we want to be a little bit better every day. We work really hard with... with growth strategies, with actions, and we focus where we can. So it doesn't make any sense to focus on those market conditions or challenges. We focus on our actions and we believe that over time that is the right approach. And in Spain also, when it comes to growth, acquisitions are an important part of it. And we completed a couple of acquisitions in the beginning of the review period and one after as well. So it's going according to plan. Here are the financial figures and highlights from there. So, as we know, net sales, when it comes to net sales, it grew a bit, driven by Finland and Spain, and then EBITDA and operating profit-wise, it decreased a bit, as we were expecting as well. But Matti will next go through financial figures in a more detailed level, and then it's time for questions. Thank you at this point.

Thanks Juho. Okay, let's jump to the financial figures. And in my presentation, I will focus on comparable figures in our continuing operations. At first, let's look at Group's net sales. It was 30.3 million euros in Q1. and our growth was 4.5%. This growth came from Finland and Spain, and in Sweden we had negative growth. Our group's EBITDA, it was 5.5 million euros and 18% of net sales. The development in Finland and Sweden had positive impact on profitability in euros. On the other hand, this development in Spain impacted negatively to our profitability. Operating profit was 2 million euros and 6.5% of net sales. In addition to this a little bit lower EBITDA, we had a little bit higher depreciations and amortizations in that period. And now we jump to the country specific key figures. And we start from Finland. In Finland, we continued stable performance. Our net sales was 20.2 million euros, and our growth was 3.7%. And this growth, it was entirely organic. But still, we want to say that this general economic situation is continuing challenging. We see lots of bankruptcies in Finland, and also companies are closing down their businesses. We estimate that this will also impact our growth during the rest of the year. EBITDA in Finland was 5.9 million euros and 29.2% of net sales. This EBITDA improved due to the revenue growth. On the other hand, as we have commented earlier, our relative costs are higher after this demerger and it was impacting negatively to our profitability and especially this relative profitability. In Sweden, our net sales was 5.4 million euros and decline in net sales was almost 9%. The previous year high customer churn was impacting negatively to our net sales development. We have continued our efforts to reduce customer churn and acquire new customers. And we still see that this net impact of the new and lost customers, this trend is going to the right direction. And we estimate that it will also help our net sales development in the future. Profitability in EBITDA was minus €100,000, so a small improvement there. Of course, this decline in the net sales was challenging our profitability development. But we have continued these cost adjustments and we still estimate that we can achieve positive EBITDA in Sweden in 2026. In Spain, we had a strongest growth. It was 31.8% and our net sales was 4.6 million euros. This growth, it came mainly from the acquisitions. We have made four acquisitions after the comparison period. So this was good growth for us. In EBITDA, So the profitability in EBITDA, it was minus €300,000. And as Juho commented earlier, we had some integration costs and increased investments in sales and marketing and also a higher cost in software. So these were impacting negatively to our profitability. But we are continuing our efforts in terms of profitability development, and we estimate that we can turn this on the right trend during the rest of the year. And then let's look at outlook and guidance. Our guidance is unchanged, meaning that we estimate that our net sales will be from 110 to 120 million euros and comparable EBITDA will be from 18 to 22 million euros. That's all from my side and now it's time for the questions.

Yes, there's quite many questions from online. We are starting from Finland. So strong growth, 3.7%. And where did it come from concretely? What was the contribution from pricing and volume and so on?

Yep, it was mixed of the customer base and also, of course, the price increases are impacting to positivity over growth in Finland. But as we commented, yeah, it was good growth in Q1, but still we see that this economical situation is a little bit challenging our growth efforts. And of course, as we said, we estimate that the rest of the year we will see like this continuing challenges. about these reasons.

Yes. So how about the trend in this growth? Are we seeing that it's going to be at the same level upcoming quarters or what is our point of that?

Yeah, I could comment on that. I would like to say that this was quite a strong quarter and when we are looking at the situation now and looking into the future, I would like to say that it might be challenging to keep that track. track going but we're working hard with around the growth but as said when looking towards future it's challenging market conditions yes yeah then we go to the spain here is breakdown in spain growth in q1 how much was the organic and how much mta driving It was mostly inorganic, some organic growth as well. But at the same time, when we are looking at our sales and churn figures, we expect that we will have support from organic growth during this year. So the team is doing good work around that. like new customer acquisitions and and i was to say that uh chern is also well well under control in in spain so when thinking spain uh in general we don't see that kind of like trends that we saw in sweden at the same same time with the story so uh like spain is spain is doing doing well yeah and now i meant how it was in sweden sweden back in a couple of years ago Yeah.

So in Sweden, positive EBITDA for full year 2026 in Sweden would require clearly positive EBITDA in Q2 and Q4. Q2 is seasonally strong, but do you expect to be profitability in Q4 and Q3?

Of course, we know that we have some seasonality changes between the quarters, but if you look at the full year, profitability, we estimate that it will be positive in EBITDA wise.

And our actions are in line with that target. Yeah.

Then the guidance for 2026, was Q1 in line with your expectations and are you ahead of, behind or behind the assumed development?

I would like to say that things are going in line with our guidance. And of course, Finnish figures were quite strong in Q1. But in general, it's going according to the guidance and plan.

Yes. So then the asker wants to know about the seasonality and how the accounting high season goes in Spain and Sweden, like compared to Finland.

Yeah, usually like the high season, it's a bit different in Spain. So basically this Q1 is not usually that strong in Spain and it's like Q2 and then also July actually is part of that high season, like invoicing wise. Usually in Spain, like the holiday season is a bit later or later than in Nordics. So it's usually like in August. So that plays also important role here. But the high season is longer than in Finland and Sweden. Yeah.

So there's also some questions in Finnish, the one I tried to translate it because we are speaking English here. So we have more offices compared to revenue in Spain and Sweden. Any plans to load the number of offices in those countries for low costs? Yeah.

Yeah, it's true, especially in Sweden, we have a lot of small offices. And of course, that's like one element that we are considering what is the right way to organize our office network, both to support our profitability, but also to support our business. our growth, but when it comes to costs, we have plans in both as this improving profitability in Sweden and Spain is important objective or target for us. So our plans are aligned with that. And of course, this office network is one element to consider. Yeah.

There's still one in question from Spain. So the probability improvement plan, what are its concrete actions and which concord do you expect them to start showing in numbers?

I could comment first. So there's a lot of, first of all, software-related costs, like when we have acquired companies and then we are integrating those companies to our IT system. So when changing environment, that's one thing. Then we are implementing new ERP system. So a lot of costs from there. And then also some... some personal costs, and we have clear, really detailed level plans how to work with those costs. But I think it's quite normal that in this kind of speed of acquisitions, there's kind of like double costs, so trying to reduce those first of all. And then at the same time, we have been investing in sales and marketing, which is important, because we want also to keep this like... positive trend in terms of new customer acquisition on the right track. It's important that we keep that growth going. I mean, organic growth. But yeah, like those operational costs, IT costs, and then, of course, costs in terms of personal. Yeah.

So there's still one question regarding to Sweden. There's revenue decline of 8.9% was steeper than expected. So has churn stabilized in Q1 or is there still a locket decline coming through?

It's from previous year. So we had high churn previous year, as we have commented. But now it's definitely looking good and trend is really, really positive. And we are happy with the figures that we have seen in the beginning of this year. Then also worth mentioning that those customer experience results and then also results from employee survey were... really high, and it gives a lot of trust. So these operational figures are definitely going in the right direction in Sweden, and management is there doing really good work. Thank you. That was all the questions for now. Thank you. Thank you very much.