Talenom Oyj

Good morning everyone and welcome to join Talanom's H1 release webcast.

My name is Juho Ahosola and I work as a CEO of the company and with me here today as usually is our CFO Matti Säkkinen.

Good morning everyone and welcome on my behalf.

Okay, let's start then. Once again, welcome from my behalf as well. Here's the agenda for this review. So I will start with a short brief about Talanom. If we have some new investors online, then I will comment Q2 highlights as well as our development during the review period. and then Matti will comment after me our financial performance in a bit more detailed level as well as outlook and guidance. And at the end of this review there's time for questions as well, which you can ask throughout the review with the chat feature. But let's roll out a short brief about Talenom. What do we do and what kind of companies is Talenom? So Talenom is a service company. First of all, we help entrepreneurs succeed with different kind of services, accounting services, payroll services and different kind of consulting services as well. And we operate in three operating countries, Finland, Sweden and Spain. And we combine our growth two elements, organic growth and then selective acquisitions. and our approach is to combine strong local expertise and ownership with our scalable one talent concept which creates better business outcomes in different ways. and software-wise we work with best-in-class solutions and software in all our operating countries and this creates the way of sustainable growth for us and we help our clients grow as well. But that's Talanom at Glance. What it comes to our services and revenue streams as well, so we have core services, accounting services, payroll services and account receivable services and these are highly recurring and that's of course But in addition to these core services, we have also different kind of value-added services such as HR services or legal services or let's say business intelligence services. And we see these value-added services important in basically a couple of ways. So first of all they are important source of growth for us now and in the future as well and then secondly they are important in terms of customer retention so that's why we are focusing on these in addition to of course this our core and we have also industry focused solutions for different selected industries But that's our service portfolio, so revenue comes from services and the type of revenue is highly recurring. Then last point what it comes to this so our markets where we operate so we have three operating areas Finland, Sweden and Spain and we are not looking to expand into new areas or countries during near future. So basically here is the reason when we are looking markets we have a lot of room for growth in all our operating countries and we believe that we can grow remarkably in all these countries during upcoming years. And market wise the structure of accounting market is pretty similar. in all countries, Finland, Sweden and Spain. So we can recognize this fragmentation and then also this consolidation trend in all countries. But the main point is that we operate in these three countries and we see great growth opportunities in all our operating countries. That was a short summary about Talanom and let's then move into the second quarter and here's some highlights and then I will comment our strategic development as well. So starting from the summary. So this first, this second quarter was the first full reporting period for the new Talanom after this split with ISOR. and overall I would like to say that it was positive in many ways and we made good progress in multiple areas and in our main KPIs during the start of this year and Q2 as well. So many things are going and many KPIs into the right direction and we are super happy on that and I'm thankful for all our personnel of that hard work around this. During the review period, we continued the implementation of One Thalannum concept, which is really a central part of our strategy as we have communicated, and we also worked around these country-specific growth strategies a lot. And when it comes to software strategy, I would like to say that good progress around that. And we believe that this new software neutral approach for this new Talanom is opening significant growth potential for the future. So overall, I would like to say that positive quarter line. I'm super thankful for our personal, all the hard work around Q2. Here are our three main priority areas for this year, 2026, and I will now open how it's going in terms of these three areas. So first of all, implementation of the new strategy in all countries, as we have just started this new chapter of Talenom. Then improving profitability in Sweden and Spain, important as well. And then implementing growth strategies in all operating countries. But let's start from the first one. So, when it comes to strategy implementation during Q2, we continued systematic work with one-talanum concept in all our operating countries, and I would like to say that it's this implementation of new strategies going as planned. During Q2, we measured one-talanum index, which describes for us the degree of implementation of the one-talanum concept, and as well we measure customer experience, customer satisfaction and these both metrics are developing into the right direction which we are super happy about. And then when it comes to this new software strategy, extremely important part of our strategy, also growth-wise. So we made multiple collaboration agreements with several new system providers. And as said, we believe that in the long run, this will open up significant potential for us. And initial experiences around this new software strategy are positive in the organization. Then, secondly, improving profitability in Sweden and Spain, starting from Sweden. So, in Sweden, we can see a positive profitability trend. I would like to say that Swedish management has done really hard and amazing work around profitability. We are now definitely going into the right direction, as well as in multiple other metrics, such as customer experience, employee experience, and OneTalon as well. and as we know we have adjusted our cost base in Sweden remarkably during this year and now we can see effect on our figures and of course we are here building the base for future profitability for upcoming years as well. Then when it comes to Spain, comparable EBITDA was weighed down by acquisition integration costs and then particularly this 1.2 million impairment of trade receivables. And it's worth emphasizing that profitability was in line with comparison period if we exclude this one-time item, this impairment of trade receivables. And when it comes to these integration costs in Spain, we have a really, I would like to say, a solid plan in place to improve profitability and cut these integration costs in the future. But maybe this profitability trend and our development in Sweden is something that is really positive for us. Then thirdly, implementation of growth strategies in all operating countries. So we continued work around these growth strategies in all our operating countries and we really believe and we have good indicators that this broader software offering will open over time really good and significant growth potential for us. Also, when it comes to growth, something we want to communicate and emphasize that the market conditions in Finland Antti Aho, Marika Grönberg, Antti Aho, Marika Grönberg And when it comes to second part of our growth, so acquisitions, so we executed two acquisitions during review period in Spain for this second quarter. So that's about strategy implementation and these three main areas for this year. Here is the summary of our financial figures. Comparable net sales, it grew a bit, 2.8%, that is just 30.6 million. And then EBITDA, it's important to emphasize that comparable EBITDA declined slightly due to this impairment of trade receivables in Spain and was 5.8 million. and then operating profit you can see from the from the right hand side but Matti will comment and open figures now next in a bit more detailed level. Thank you at this point.

Thanks Juho. Okay let's jump to the financial key figures and in my slides I will focus to our continuing operations and comparable financial figures. Let's start from groups comparable net sales and our growth was 2.8% in Q2 and net sales was 30.6 million euros. This growth came from Finland and Spain. In Sweden our growth was negative. Groups comparable EBITDA, it was 5.8 million euros in Q2 and 18.9% of revenue. The profitability development in Finland and Sweden was positive and was impacting positively to our profitability. On the other hand, this non-recurring environment in Spain was impacting negatively to our profitability. Groups operating profit was 2.3 million euros and 7.7% of net sales. This development is in line with our EBITDA development depreciations were approximately at the same level with the comparison period. And then let's jump to the country specific key figures. In Finland our growth was 1.4% and net sales was 18.7 million euros in Q2. This growth was entirely organic and we still see in Finland that this economical situation is challenging our growth actions. Related to these challenges we see that customer churn is a little bit higher than normally and also we see markdowns do the lower level activities in our customer companies. It's great to see these positive signs from Finland's economic growth. It's meaning that in our business the impacts will be happened with the delay. So that's of course positive for the future. The profitability in Finland was strong. Comparable EBITDA in Q2 was 5.7 million euros and 30.2% of net sales. The business performed very well. On the other hand, we have adjusted our resources and costs to meet this challenging growth environment. There were also some timing differences of expenses between the quarters and that was also impacting positively to this development in EBIT. And now in Sweden, we see that our growth was negative, minus 9.9% and net sales was 5.9 million euros. We had high customer churn in Sweden in 2025 and this is still impacting to our net sales development. On the other hand, we all the time see that this trend from the new customers and customer churn is going to the right trend and we expect that it will also impact to our net sales development in the later phase. Comparable EBITDA in Sweden was 0.7 million euros and 11.6 percent of net sales. We have continued these cost adjustments and profitability actions in Sweden and we are very happy to see this positive trend in terms of profitability. Of course we continue these actions and we We expect that we are on track to achieve positive EBITDA in Sweden in this year. Then we jump to Spain figures. The growth was 26.2% in Spain and net sales 5.9 million euros. We have made four acquisitions in Spain after the Q2 2025. and most of the quarter's growth come via these acquisitions. We also continued steady performance with our new customer acquisition and it's meaning that it's also supporting our growth during this year and in the future. Comparable EBITDA in Spain was minus 0.6 million euros and minus 9.4 percent of net sales. We have integration costs and also increase in fixed software related costs, which are impacting negatively to our profitability development. In addition for that, this non-recurring environment of trade receivables is impacting significantly to our profitability development in Q2. And next we jump to outlook and guidance. We expect that our net sales will be from 110 to 120 million euros and comparable EBITDA from 18 to 22 million euros. So our guidance is unchanged. And now we jump to the questions.

Hi all, we have some questions online. So let's get started. Is there any of that Spanish 1.2 million write-down still collected? Can it still be collected or is it all gone?

Of course it's possible that there is some opportunities to collect them, but there is high risk for them and that's the reason that we have made this right now.

So what is included in the 2.4 million software and digital investments now when we are a service company? So what is those?

We are still continuing our investments related to our automation processes and also different AI improvements, for example.

and it's also worth mentioning that during this review period we finalized this like financial report for our clients like AI-packed report so that's one item there where we have invested and in the future as well we are going to develop digital solutions such as AI solutions in line with our strategy.

So do we have any results seen now from bringing the Fortnox back? So is it bringing any results?

Well, I think we are now talking about Sweden here. So we don't have this kind of like projects bringing some software back or so. We always want to find what is the best solution for our project. Our clients and sometimes it might be easier, sometimes it might be for someone, sometimes it might be some other solution. So we always start from a client perspective. That's our strategy and it's true that Fortnox is really good and important software for us in Sweden.

So when do you expect the international acquisitions to improve margins?

Well, if we start from Sweden, I think we have been quite clear with that. So we are now looking at this positive EBITDA and working hard around that target. And when it comes to Spain, I think where we have done our recent research, Acquisitions, there's a lot of different kind of integration costs and it's not only one thing. It includes software costs and broker costs and different kind of personal costs from HR and other support functions. And of course, we have a plan in place how to reduce that cost over time. And in Spain as well, our target is that positive EBITDA for this year.

Yeah. So do we have any more acquisitions coming from this year?

Well, as I said, in our growth strategy, we have two components, organic growth and acquisitions. And maybe that's something I would like to highlight that we are never doing acquisitions only because of growth. We're super selective and we want them to fit well and create long time value for owners.

So next one, did you transfer price any Finland profits to Sweden or was it was this just local improvement?

Yeah good question of these improvements is of course local so the Swedish management has been done very great work there and we have made many local improvements in the our costs and also this financial performance as well.

And maybe something I would like to highlight from Sweden, this great work that local management has done, and it's not only this profitability, it's of course super positive that now we can see it in financial figures, but also around customer experience, employee experience, and this new strategy and one talent also. Great work from Team Sweden.

One more in Sweden. Revenue is still down about 10%. So has new customer acquisitions already exceeded or churned? What is the realistic timeline for revenue to come to growth?

As we have communicated, it's like this net growth, it's going to right direction. There's differences between months. Trend is still positive. It's definitely going to right direction. We had previous year really high churn. And now when thinking about different growth elements churn-wise, we are really progressing as planned and we are really happy with that development. Now we are focusing more on accelerating sales and improving sales levels. So we have made during the spring some adjustments in the organization as well to accelerate our growth and sales in the future. But all in all, we don't promise any specific date for this, but we are going to the right direction, as Matti also said.

One more question. Has Finland and Sweden's recent economic recovery been visible in your monthly results?

When it comes to volumes, which is quite a concrete way to measure this activity, we don't yet see That positive trend. But we are super happy to hear this news now from multiple different sources of this economical situation in Finland and Sweden as well. And we really believe that that will boost our sales and growth. To me it seems that as we have now been working around this new software strategy and our sales teams in both countries have been working super hard, so we are more ready when we get a bit boost from the market as well. So quite confident with that.

Yes, thank you guys. That's all for the online questions.

Okay, thanks everyone for joining this review. Thank you. Thank you very much.