Talenom’s half-year report 2022: Strong financial development continued and the strategy was determinedly progressed
Talenom Plc, Stock Exchange Release, 2 August 2022 at 09:00 EEST
TALENOM’S HALF-YEAR REPORT 2022: STRONG FINANCIAL DEVELOPMENT CONTINUED AND THE STRATEGY WAS DETERMINEDLY PROGRESSED
JANUARY–JUNE 2022 IN BRIEF
Net sales EUR 52.2 million (41.7), growth 25.2% (23.1)
EBITDA EUR 18.2 million (14.4), 34.8% (34.5) of net sales
Operating profit (EBIT) EUR 10.0 million (8.6), 19.1% (20.5) of net sales
Net profit EUR 7.8 million (6.4)
Earnings per share EUR 0.18 (0.15)
APRIL–JUNE 2022 IN BRIEF
Net sales EUR 27.0 million (21.4), growth 26.2% (29.6)
EBITDA EUR 9.3 million (7.2), 34.4% (33.7) of net sales
Operating profit (EBIT) EUR 5.1 million (4.1), 19.0% (19.4) of net sales
Net profit EUR 4.1 million (3.1)
Earnings per share EUR 0.09 (0.07)
GUIDANCE FOR 2022 UNCHANGED (PUBLISHED 16 DECEMBER 2021)
Talenom expects 2022 net sales to be EUR 100–110 million and operating profit (EBIT) to be EUR 15–18 million.
KEY FIGURES
Group | 1–6/2022 | 1–6/2021 | Change, % | 4–6/2022 | 4–6/2021 | Change, % |
Net sales, EUR 1,000 | 52,188 | 41,687 | 25.2% | 26,979 | 21,380 | 26.2% |
Net sales, increase % | 25.2% | 23.1% |
| 26.2% | 29.6% |
|
EBITDA, EUR 1,000 | 18,155 | 14,398 | 26.1% | 9,291 | 7,202 | 29.0% |
EBITDA of net sales, % | 34.8% | 34.5% |
| 34.4% | 33.7% |
|
Operating profit (EBIT), EUR 1,000 | 9,993 | 8,551 | 16.9% | 5,132 | 4,138 | 24.0% |
Operating profit (EBIT), as % of net sales | 19.1% | 20.5% |
| 19.0% | 19.4% |
|
Return on investment (ROI), % (rolling 12 months) | 15.7% | 18.4% |
| 15.7% | 18.4% |
|
Interest-bearing net liabilities, EUR 1,000 | 43,816 | 38,141 | 14.9% | 43,816 | 38,141 | 14.9% |
Net gearing ratio, % | 87% | 100% |
| 87% | 100% |
|
Equity ratio, % | 34.9% | 35,6% |
| 34.9% | 35.6% |
|
Net investments, EUR 1,000 | 15,438 | 23,454 | -34.2% | 8,036 | 13,670 | -41.2% |
Liquid assets, EUR 1,000 | 25,562 | 10,601 | 141.1% | 25,562 | 10,601 | 141.1% |
Earnings per share, EUR | 0.18 | 0.15 | 19.6% | 0.09 | 0.07 | 30.3% |
Weighted average number of shares during the period | 44,070,003 | 43,306,302 | 1.8% | 44,070,003 | 43,416,968 | 1.5% |
Net profit, EUR 1,000 | 7,799 | 6,411 | 21.7% | 4,051 | 3,062 | 32.3% |
CEO OTTO-PEKKA HUHTALA
Financial development in the first half of the year was excellent, despite a challenging operating environment. Our employees have done an excellent job for our customers. Net sales grew by 25.2% (23.1) to EUR 52.2 million (41.7). One-third of the growth was organic and two-thirds came from acquisitions. The EBITDA margin was 34.8% (34.5) and the EBIT margin 19.1% (20.5). Profitability remained excellent despite weaker profitability in the acquired businesses than in other Talenom units, the integration costs of the acquisitions and the increased depreciation level.
Net sales growth was strong. The positive development in Finnish operations continued, with net sales growth of 16.4% in the second quarter and the same in the first half of the year. In addition to acquisitions, net sales growth was boosted by new customer acquisitions and sales of value-added services. Development on the Swedish market was also strong, mainly driven by acquisitions. Net sales increased by 77.3% during the second quarter and by 75.5% during the first half of the year.
We continued to implement the strategy as planned and made progress in all three growth areas: active sales kicked off well in Sweden and we continued to grow the sales organization, in Finland, we promoted our digital sales channel in the small customer segment and started digital marketing activities in the segment, as well as implemented a number of acquisitions that support our strategy and growth in all operating countries. In Sweden, we continued to prepare for the large-scale implementation of our own software, which is planned to take place in the autumn. We want to utilise our accumulated expertise and be involved in the digitalisation of the European accounting service market, and we have continued researching new accounting service markets as planned.
Trends affecting our industry include the accelerating digital transformation driven by EU's Green Transition projects, and a number of EU-level legislative projects, such as the Payment Services and e-Invoicing Directive. We estimate that over 90% of European companies employ less than five people. We believe a majority of small businesses do not yet use a financial management platform. The above drivers have an impact on the fact that smaller and smaller companies are adopting financial management platforms. We have, therefore, developed our small customer concept and digital sales. To our understanding customer retention in the chosen financial management platform is strong. To speed up the implementation of our software platform in Spain, we acquired the locally operating Nomo customer interface. Our aim is to integrate Nomo into Talenom's own software. Talenom's vision is to be a one stop shop for a software platform, accounts and cards, and accounting services which we believe provides the best possible customer experience and retention.
The first half of the year went very well in terms of profitability and in accordance with the typical seasonality of our business. Our inflation resistance is good. We will grow our investments in strategic growth projects in the second half of the year. We, e.g., accelerate the scaling of our small customers business, implement our software in Sweden and speed up the business ramp-up in Spain. These actions will be visible as increased investments and costs.
We reiterate our guidance and expect 2022 net sales to be around EUR 100-110 million and EBIT to be EUR 15-18 million.
WEBCAST
The company's CEO Otto-Pekka Huhtala will present the main points of the review in a live webcast today Tuesday 2 August 2022 at 10:00 EEST. The live webcast will be in Finnish, but a recording of the event will be published also in English on Talenom’s website https://sijoittajat.talenom.fi/en
The live webcast event can be viewed at: https://talenom.videosync.fi/2022-q2-results
Participants will have the opportunity to present questions during the briefing over the webcast platform.
The presentation materials will be published before the start of the briefing on the company’s website.
TALENOM PLC
BOARD OF DIRECTORS
Further information:
Otto-Pekka Huhtala
CEO, Talenom Plc
+358 40 703 8554
otto-pekka.huhtala@talenom.fi
Talenom is an agile and progressive accounting firm established in 1972. Our business idea is to make daily life easier for entrepreneurs with the easiest-to-use digital tools on the market and highly automated services. In addition to comprehensive accounting services, we support our customers’ business with a wide range of expert services, as well as financing, account and payment traffic services. Our vision is to provide superior accounting, account and payment traffic services for SMEs.
Talenom’s growth history is strong – average annual net sales growth was approximately 16.2% between 2005 and 2021. In 2021, Talenom had on average 1,012 employees in Finland, Sweden and Spain at a total of 52 locations. Talenom’s share is quoted on the Main Market of Nasdaq Helsinki. Read more: sijoittajat.talenom.fi/en/
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