Talenom Plc, Stock Exchange Release 1 February 2024 at 9:00 EET
Talenom Plc's Financial Statement Release 2023: Growth was strong, but profitability targets were missed. Thanks to profitability and strategic measures, expectations for 2024 are positive.
January-December 2023 in brief
- Net sales EUR 121.7 million (102.1), growth 19.2% (23.3)
- EBITDA EUR 31.9 million (32.4), 26.2% (31.7) of net sales
- Comparable operating profit (EBIT)* EUR 11.1 million (15.3), 9.1% (15.0) of net sales
- Operating profit (EBIT) EUR 7.9 million (15.3), 6.5% (15.0) of net sales
- Net profit EUR 3.4 million (11.8)
- Earnings per share EUR 0.07 (0.27)
- Board of Directors' dividend proposal EUR 0.19 (0.18) per share
October-December 2023 in brief
- Net sales EUR 29.7 million (26.3), growth 12.8% (21.1)
- EBITDA EUR 7.0 million (7.0), 23.7% (26.4) of net sales
- Comparable operating profit (EBIT)* EUR 1.6 million (2.2), 5.4% (8.3) of net sales
- Operating profit (EBIT) EUR 1.6 million (2.2), 5.4% (8.3) of net sales
- Net profit EUR 0.8 million (1.8)
- Earnings per share EUR 0.02 (0.04)
Key figures
Group | 1-12/2023 | 1-12/2022 | Change, % | 10-12/2023 | 10-12/2022 | Change, % |
Net sales, EUR 1,000 | 121,728 | 102,107 | 19.2% | 29,716 | 26,344 | 12.8% |
Net sales, increase % | 19.2% | 23.3% | 12.8% | 21.1% | ||
EBITDA, EUR 1,000 | 31,884 | 32,394 | -1.6% | 7,029 | 6,967 | 0.9% |
EBITDA of net sales, % | 26.2% | 31.7% | 23.7% | 26.4% | ||
Operating profit (EBIT), EUR 1,000 | 7,948 | 15,266 | -47.9% | 1,598 | 2,199 | -27.3% |
Operating profit (EBIT), as % of net sales | 6.5% | 15.0% | 5.4% | 8.3% | ||
Comparable operating profit, | 11,107 | 15,266 | -27.2% | 1,598 | 2,199 | -27.3% |
Comparable operating profit, as % of net sales | 9.1% | 15.0% | 5.4% | 8.3% | ||
Return on investment (ROI), % (rolling 12 months) | 6.0% | 14.0% | ||||
Cash flow from operations, EUR 1,000 | 28,628 | 27,448 | 4.3% | |||
Interest-bearing net liabilities, EUR 1,000 | 75,843 | 54,404 | 39.4% | |||
Net gearing ratio, % | 135.9% | 97.1% | ||||
Equity ratio, % | 31.8% | 35.9% | ||||
Net investments, EUR 1,000 | 39,944 | 40,868 | -2.3% | 9,056 | 8,949 | 1.2% |
Liquid assets, EUR 1,000 | 10,254 | 15,970 | -35.8% | |||
Earnings per share, EUR | 0.07 | 0.27 | -72.0% | 0.02 | 0.04 | -55.8% |
Weighted average number of shares during the period | 45,175,668 | 44,384,390 | 1.8% | 45,410,852 | 44,384,390 | 2.3% |
Net profit, EUR 1,000 | 3,361 | 11,801 | -71.5% | 831 | 1,837 | -54.8% |
*) Operating profit excluding software-related write-downs
Guidance for 2024
Talenom estimates that 2024 net sales will be about EUR 130-140 million, EBITDA EUR 34-40 million and operating profit EUR 14-17 million.
CEO Otto-Pekka Huhtala
The European accounting firm market is undergoing a digital transformation, which in our view will grow the accounting firm market and create demand for digital services. This development is supported by increasing regulation, increased labour shortage and directives promoting digitalization, such as e-invoicing. Talenom has a strong track record in Finland in leveraging digitalization and a conceptualized business model in the accounting business. Over the past three years, we have grown strongly through acquisitions and gone international. We will replicate in other countries our experiences gained in Finland. We now operate in four countries: Finland, Sweden, Spain and Italy. With the exception of Italy, we have a sufficiently strong foundation and an extensive office network to provide quality service and organic growth.
In 2023, we made decisive progress in implementing our strategic priorities. Digital distribution was improved together with the renewed brand and the digital purchase path. We distributed bank accounts in Finland, which, according to our previous experience, helps us in new customer acquisition especially among small enterprises. In Sweden, the roll-out of our own platform got off to a good start. We have completed the critical functionalities and the customer migration to our own software is progressing in stages, one office at a time. Our goal is to migrate at least 50% of our regular reporting customers to our own systems during 2024. Based on the experience in Finland, the introduction of Talenom's processes and platform enables reducing routine work to up to a quarter of the current time spent on such tasks.
Net sales grew by 19.2% (23.3) to EUR 121.7 million (102.1) in 2023. The growth was based on several acquisitions in Sweden and Spain, and organic growth in Finland. EBITDA was EUR 31.9 million (32.4), and operating cash flow remained strong. The EBITDA margin was 26.2% (31.7). Comparable operating profit excluding software write-downs carried out in the third quarter was EUR 11.1 million (15.3), or 9.1% (15.0) of net sales. Operating profit was EUR 7.9 million (15.3). The effects of the profitability improvement measures initiated in spring 2023 are reflected as improved profitability in Finland from the comparison period in the second half of the year. The improved profitability creates a good basis for 2024 while maintaining the prerequisites for growth in line with our strategy.
We look positively to the future. Talenom's different approach that combines accounting and banking services and our own software platform in a unique way for the benefit of both customers and financial management experts, is effective. We will continue on this path and strengthen the conditions for profitable organic growth. We expect our net sales to be EUR 130-140 million, EBITDA EUR 34-40 million and operating profit EUR 14-17 million this year. After a strong acquisition-driven growth phase, we will focus on improving profitability and accelerating organic growth in 2024, which is why net sales is expected to remain below the medium-term target.
I would like to thank our customers for their confidence in us, our excellent personnel for their commitment and our partners for good cooperation in the past year.
Board of Director's proposal concerning the result for the period
The Board of Directors proposes that the parent company's profit for the financial year EUR 5,792,434.77 is transferred to the retained earnings/loss account. The Board of Directors proposes that a dividend of EUR 0.19 per share (0.18) will be paid.
The company's financial position has not changed substantially since the end of the fiscal year.
Webcast
CEO Otto-Pekka Huhtala and CFO Matti Eilonen will present the main points of the release in a live webcast on 1 February 2024 at 10:00 EET (in Finnish) and at 12:00 EET (in English). Recordings of the events will be published on Talenom's website https://sijoittajat.talenom.fi/fi/ and https://investors.talenom.com/en
You can watch the webcast live in Finnish at 10:00 EET at https://talenom.videosync.fi/q4-2023
You can watch the webcast live in English at 12:00 EET at https://talenom.videosync.fi/q4-2023-eng
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 in brief
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 share is quoted on the Main Market of Nasdaq Helsinki. Read more: investors.talenom.com/en
