Talenom Oyj
OMXH:TNOM
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[Foreign Language] Good afternoon, everybody. You are welcome to Talenom. First Q report release. I will start in Finnish. And after me, our CFO, Antti Aho will continue in English. You are welcome. [Foreign Language]
Hello, everybody. This is CFO of Talenom speaking, Antti Aho is my name. Welcome to follow our release from the first quarter. To put it shortly, the financial year started out very nicely. Especially, I want to emphasize our core businesses that, Finnish accounting services, very strong performance in the first quarter. And this gave -- and still gives us the confidence to continue our expansion in Sweden to other markets and also to go into new ventures like small company concept, carryout acquisitions and so forth. First, I want to memorize a little bit our strategic cornerstones. You may have seen this before. We have 3 cornerstones in our strategy. And today, I'd like to a little bit reflect on those. What can we say about those from the first quarter. First, we want to make our customers' lives easy by digitalizing their financial management through [ teens ]. During the first quarter, we launched our new Talenom online version and are currently transferring our customers from the old Talenom online to the new Talenom online, which makes the customer experience even better. Secondly, we want to automize the routines of the -- related to the accounting payroll processes. And during the first quarter, the degree of our automation kept pricing, which partly explains our good results from the first quarter. And all this, of course, gives our accountant more time to talk with customers and provide value add services. And our customer retention during the first quarter also improved very well. In Sweden, we made several acquisitions during the first quarter, we entered into 3 new cities, and strengthened our position in Stockholm, of course, the new locations being Växjö, Östersund and Åre. This is not only about entering new markets and getting more revenue, but it's also -- and maybe even more importantly, hiring new and right people to strengthen our local management team in Sweden. And we really look forward that we now have a good, strong team there to keep growing in Sweden. And also we kept on working with our small company concept KontoKalle in the Swedish market, the same, which we call TiliJaska in Finland. And also that project was in schedule. And now it seems that during the summer, we will launch the KontoKalle for the first customers in Swedish market. Also, maybe I want to stop here a little bit to remind that when we bring KontoKalle to Swedish market, this is our first step to bring our own software to Swedish market. And much of that work can be used later when we introduce our software to our existing Swedish customers. Another important and we could say, historical step, not only for Talenom, but for accounting industry, I would like to say is that we introduced bank accounts and bank cards to our small company customers during the first quarter. And our goal is to bring these bank accounts and banking services also to our mid-segment customers by the end of this year. Why -- what's the point in bringing bank cards and bank accounts into our service offering? It's not that we would like to be just another bank in the banking sector. The point is that when we bundle banking services and accounting services together, we think that we take a very significant step towards easier lives for our customers. Also, our banking services are very competitive in many ways. The bank account can be opened within a few minutes, which we think that our customers will appreciate. And also, they will bring significant savings in bringing banking costs. For the smallest customers, the banking services are free of charge. And when they grow, they start paying, but still we believe that we can keep the pricing very aggressive compared to current status in the banking industry. A couple of words of the TiliJaska, small company platform project. We presented this slide in our CMD in October. And here is the schedule. And as we can see, we are proceeding in schedule as we introduced the banking services by the end of March. And we also set some goals for the amount of customers. Our goal was to have 200 to 300 customers by the end of March. We had some 400 to 500 customers by the end of March. In 19th April, the total number was 655 in TiliJaska and in the light entrepreneur concept. So it's going very well and according to our plans. And the next significant step being accelerating growth in Finland, and to introduce the first person, the Swedish market during the summer. Then the figures from the first quarter, the net sales increased by 17%, about of which 2/3 came from acquisitions, and the rest was done by our sales team. The corona still had a slight impact making the sales a little bit more challenging, pushing down a little bit, the transaction-based invoicing, but another major impact and no increase in the amount of bankruptcies. So -- so looking forward that corona is soon over. The profitability side also improved quite nicely. The operating profit improved by 18.7%, the EBIT being at 21.7% at the end of the quarter. The reasons behind this, as I mentioned, the automation level kept increasing in our Finnish accounting business. Also some savings on fixed costs, pretty much due to corona. And then also, on the other hand, although the total figure turned out quite nicely, but when we slice it down a little bit, we can see there quite a significant negative impact from the acquisitions, which we are doing more and more. As we have earlier communicated, the first 3 years, they typically stress our margins before they catch up with our normal level. A couple of figures depicting long term improvement. The first one, showing the accounting market in Finland. As we see the market is growing. And digitalization of the market seems to be boosting the growth of the market. The market is very fragmented. We have only 4.8% share of the market. Which we think is an important driver for future growth even in Finland. Our net sales, as we can see, has been improving quite nicely year by year. And operating profit and the product margin seems to be going to right direction as well. We raised our guidance a couple of times during the first part of the year. The latest guidance we gave on 15th of April after this 1 acquisition where we stated that our revenue is expected to be between EUR 80 million and EUR 84 million this financial year and the operating profit being EUR 14 million to EUR 16 million. If you look at -- if you looked at the future and where our profitable growth lies, there are at least 5 points that I want to remind. First, we are -- we have encouraging experiences from the Swedish market. And after being studying other markets as well, that these -- our key strengths, which seem to work in Finnish market seem to work in other markets as well. And we look forward entering new markets and continue our growth in Sweden. Secondly, we continue both organic growth and acquisition growth. And both of those in all the markets where we operate, they exploit this digital transformation of our industry. The small company concept and the Light Entrepreneur concept, both good solutions for the smallest customers. They bring us new growth and also enable us to enter the digital selling. So far, we have pretty much relied on a traditional sales force, but this will open the door to digital selling, we believe. And then the banking services, it will be business in itself, we expect. But most importantly, it will make our service offering to entrepreneurs even more attractive and will boost our growth. There are also many process benefits we get when we combine accounting services and banking service. There's a lot of same data we need to provide both services and this will bring savings in fixed costs and when running the operations. This is a good picture. To end my presentation, this is our vision picture, which is in works to provide unbeatable accounting and banking services for SMEs in Europe. Now we have Finland and Swedish market going strong and growing. And these red arrows pointing to other countries. We can see their words, automation, easy routines and care services. Those are the cornerstones of our strategy, which we rely on. Thank you very much. Questions [Foreign Language]
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