Slides
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Business review Q1 2025 CEO Otto-Pekka Huhtala and CFO Matti Eilonen Talenom Plc 24 April 2025
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Content • Review period • Financial development • Outlook and guidance • Strategy progress • Software business
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The separation of the Software business was completed, the Finnish business grew while profitability improved further Net sales January-March (EUR million) Net sales in Finland developed positively, Group’s comparable net sales at year-on-year level EBITDA January-March (EUR million) Finland's excellent margin boosted the Group's EBITDA Business areas from the beginning of 2025: Accounting and Software business +12.5%+4.9% Net sales January-March (EUR million) 28.8 6.9 Accounting business Software business 34.1 35.7 Q1/2024 Q1/2025 9.5 10.7 Q1/2024 Q1/2025
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Finances
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The Group's comparable net sales at the previous year's level Net sales January-March (EUR million) • Comparable net sales were at the level of the comparison period. • Net sales in Finland increased, while customer churn in Sweden during 2024 impacted net sales negatively. • Net sales in Spain remained at the level of the comparison period. 20 25 31 34 36 0 10 20 30 40 Q1 2021 Q1 2022 Q1 2023 Q1 2024 Q1 2025 +5% Net sales by business area in January-March (EUR million) • Due to the income recognition principles of the Software business, net sales were EUR 1.5 million higher than in the comparison period. • The Group’s comparable net sales were EUR 34.2 million. 29 7 0 10 20 30 40 Q1 2025 Software business Accounting business
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EBITDA development January-March • Profitability in Finland improved significantly, supported by organic growth and improved efficiency. • Development in Sweden slowed the improvement in profitability as net sales remained below the comparison period. • Comparable EBITDA improved by EUR 0.3 million. • Comparable operating profit was slightly below the comparison period due to the higher level of depreciation. Operating profit development January-March The Group’s profitability continued to strengthen due to the good development in Finland 7.2 8.9 8.4 9.5 10.7 35.4% 35.2% 26.7% 27.9% 29.9% 0% 10% 20% 30% 40% 0 5 10 15 Q1 2021 Q1 2022 Q1 2023 Q1 2024 Q1 2025 EBITDA, EUR million EBITDA, % of net sales 4.4 4.9 3.5 3.9 4.7 21.7% 19.3% 11.0% 11.3% 13.1% 0% 10% 20% 30% 0 2 4 6 Q1 2021 Q1 2022 Q1 2023 Q1 2024 Q1 2025 Operating profit, MEUR Operating profit, % of net sales
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Business development in Finland • In Finland, the decline in customers' transaction volumes has stopped. Comparable net sales increased by approximately 4.9% (0.1) thanks to successful new customer acquisition. • Comparability was affected by the income recognition principles of the Software business, which improved reported net sales by EUR 1.5 million. Net sales development in January-March (EUR million) EBITDA development in January-March • Profitability improved clearly due to organic net sales growth and further improved efficiency. 21.0 23.4 23.4 26.1 0 5 10 15 20 25 30 Q1 2022 Q1 2023 Q1 2024 Q1 2025 8.4 8.2 9.3 11.340.0% 35.0% 39.7% 43.3% 0% 10% 20% 30% 40% 50% 0 2 4 6 8 10 12 Q1 2022 Q1 2023 Q1 2024 Q1 2025 EBITDA Finland, EUR million EBITDA Finland, % of net sales +11.3%
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Business development in Sweden • In Sweden, net sales decreased as a result of customer churn in 2024. • We saw the trend turning for the better in new sales and churn, but the 2024 customer churn will negatively impact net sales development in 2025. Net sales development in January-March (EUR million) EBITDA development in January-March 4.0 6.7 7.0 6.0 0 2 4 6 8 Q1 2022 Q1 2023 Q1 2024 Q1 2025 0.5 0.8 -0.02 -0.2 13.6% 12.6% -0.3% -3.0% -5% 0% 5% 10% 15% -0.5 0 0.5 1 Q1 2022 Q1 2023 Q1 2024 Q1 2025 EBITDA Sweden, EUR million EBITDA Sweden, % of net sales • Profitability was burdened by the decrease in net sales, and the aim is to scale the number of employees to correspond to net sales. Cost scaling has not been possible at the same pace as the decline in net sales, as we have aimed to secure growth preconditions. • Profitability has also been burdened by the implementation of our own platform, which requires resources to ensure the progress of the project and has kept the cost level higher than under normal circumstances. -14.0%
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Business development in Spain • The focus of new customer acquisition was on acquiring customers with recurring invoicing, which resulted in a decrease in non-recurring net sales. • Organic growth is expected to strengthen with well- functioning new customer acquisition and the entry into force of the e-invoicing Directive. Net sales development in January-March (EUR million) EBITDA development in January-March (EUR million) • We focused on improving profitability by streamlining the process and investing in acquiring recurring and profitable customers. 1.1 3.5 3.6 0 1 2 3 4 Q1 2023 Q1 2024 Q1 2025 -0.4 -0.02 0.01 -37.2% -0.6% 0.2% -40% -30% -20% -10% 0% 10% -0.5 -0.4 -0.3 -0.2 -0.1 0 0.1 Q1 2023 Q1 2024 Q1 2025 EBITDA Spain, EUR million EBITDA Spain, % of net sales +0,7 %
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Business areas Comparable EBITDA January-March 2025 (EUR million) • The net sales of the Accounting business were approximately EUR 28.8 million. • The net sales of the Software business were approximately EUR 5.4 million. The higher net sales for the first quarter were affected by a change in the net sales recognition principle for the Software business, which improved reported net sales by EUR 1.5 million (reported net sales of EUR 6.9 million). Comparable net sales January-March 2025 (EUR million) • The Accounting business’ EBITDA margin was EUR 5.3 million, or 18.5%. • The recurring Software business’ profitability, measured by EBITDA and adjusted for the recognition principle, was EUR 3.8 million, or 70.3%. 5.3 3.8 Accounting business Software business 28.8 5.4 Accounting business Software business
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Outlook and guidance
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Outlook and guidance for 2025 Guidance unchanged (published 13 December 2024) • Net sales around EUR 130-140 million • EBITDA around EUR 36-42 million Background for the guidance Talenom expects demand in the accounting services market to remain stable in all of the company’s operating countries in 2025. Market conditions affecting the company are estimated to remain unchanged in Finland and Sweden in the first half of 2025 and to pick up during the second half of the year. In addition to organic growth, the guidance includes an estimate of possible acquisitions to be completed during 2025. In addition, consolidation in the industry is expected to continue, driven by, for instance, the digital revolution and tightening legislation in electronic financial management. Expansion into new market areas has enabled long-term growth for the company. Acquisitions are focused on strategically significant targets. Talenom expects profitability to improve driven by uniform processes and automation.
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Strategy progress
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Growth. We want to focus on our core competencies and promote scalable growth. Target state
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• 02. 02. Customer behavior is changing towards digital platforms. 03. Digitalization is happening now – particularly in Spain and Italy: choices between platforms are being made and the barrier to switch is proven to be high. 01. Legislation and market trends are driving digitalization (PSD2, e- invoicing, e-receipts, EU Green Transition). Key market trends accelerating growth
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Updated strategy is focused on the core expertise Courage Will Care Our values Most preferred financial management partner Automation Ease Care “We help entrepreneurs succeed”
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Proven strategy and strong historical track record – high investment phase is over Building digital capabilities and platform in Finland Digital transformation's impact on profitability in Finland Strong investments in internationalization and software 2000 − 2015 2016 − 2020 2021 − 2024 Replicating a proven strategy and concept in international markets • Capabilities for profitable growth created in Sweden • Well-positioned in Spain to benefit from the e-invoicing reform • Focusing on core business • Software business becomes a second pillar alongside the service business 2025 − -10% -5% 0% 5% 10% 15% 20% 25% 0 20 40 60 80 100 120 140 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Net sales, EUR million EBIT % (comparable)
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01. 02. 03. Improving profitability in Sweden. Systematic implementation of the software, processes and the ONE Talenom operating model. Leveraging the entry into force of the Spanish e-invoicing directive. The mandatory introduction of e- invoicing forces companies to receive and send e-invoices. Customers must acquire software for this purpose, which creates a rare demand spike for software and accounting services. Building sales channels and developing SaaS capabilities in the software business. Strategic priorities for 2025
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Strategy progress Q1/2025 • We systematically implemented ONE Talenom operating methods and processes, as well as our proprietary software. • We invested in turning net sales onto a growth track. We saw the trend turning for the better in new sales and customer churn. 01. Improving profitability in Sweden. 02. Capitalizing on the entry into force of the Spanish e-invoicing directive 03. Building sales channels and developing SaaS capabilities in the Software business.
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Strategy progress Q1/2025 • The transition to e-invoicing driven by legislation is the most significant trend driving future customer demand. • We have built these software capabilities to respond to market change. • We also continued to roll out our proprietary software to our customers to facilitate their business and prepare them for the e-invoicing transition. 01. Improving profitability in Sweden. 02. Capitalizing on the entry into force of the Spanish e-invoicing directive 03. Building sales channels and developing SaaS capabilities in the Software business.
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Strategy progress Q1/2025 01. Improving profitability in Sweden. 02. Capitalizing on the entry into force of the Spanish e-invoicing directive 03. Building sales channels and developing SaaS capabilities in the Software business.
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Talenom software business
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Talenom Online ja App In our opinion, the easiest to use software on the market for SMEs In our opinion, most efficient software on the market for accounting professionals Talenom Accounting
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Talenom software business in figures Partnef offices in Finland already +40 (approx. 4,500 accounting firms in Finland) SME clients +12,000 ARR (net sales FIN) +20 MEUR Software end-users +60,000 In four countries 140 FTE Transactions annually +9.5 million Logins per month +200,000
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Development of the number of customers • In Finland, software charges and service charges are separated and generate separated revenue from Q1 2025. • In Sweden and Spain, software fees are not charged separately. Software fees will be separated later. • We estimate the average revenue per customer to land about half or less the price compared to the Finnish price level. EUR +20 million net sales 0 5000 10000 15000 20000 25000 Q12022 Q12023 Q12024 Q1 2025 Conversion potential, only service customer Software customers not yet being charged Software customers being charged
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Roadmap for launching Software business distribution • Figures for the Software business are reported separately • Recruitment of business leads in Spain and Sweden • Software company's brand launch on 28 May 2025 • The strategy update focuses on starting software sales to other accounting firms as well • Software separated into its own company, invoicing separately for software and services in Finland • Management and responsibilities of the software and service business reorganized • Growth in 2025-2026 mainly from converting Swedish and Spanish customers to the platform • More than 50% of the platform business growth came from partner agencies 20272026Q1/25Q4/24Q3/24
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Thank you Otto-Pekka Huhtala CEO +358 40 703 8554 otto-pekka.huhtala@talenom.fi Matti Eilonen CFO +358 40 753 4335 matti.eilonen@talenom.fi