financial statement 2018 presentation
TRANSCRIPT
Talenom Plc.Jussi Paaso
PROFITABILITY DEVELOPMENT FASTER
THAN EXPECTED
MEDIUM-TERM OBJECTIVES
HAS BEEN ACHIEVED
2018 – An impressive year
When the company was listed in 2015, Talenom was pursuing a 15–
20% annual growth in net sales and an EBITDA level of 20% on average.
With technological advances, operational efficiency increased
faster than anticipated.
FRANCHISE CHAIN GREW AT A GOOD
RATE
STRONG GROWTH IN NET
SALES CONTINUED
The growth was driven by the results achieved by
both the sales organisation and franchise entrepreneurs.
In 2018, 14 new entrepreneurs joined the franchise chain. All in all,
there are already 26 franchise entrepreneurs.
ONE OF THE BEST WORKPLACES IN
FINLAND (GPTW 2018,
LARGE COMPANIES)
A GREAT PLACE TO WORK!
1. EASY FINANCIAL MANAGEMENT ROUTINES FOR ENTREPRENEURS
2. AUTOMATED BOOKKEEPING
3. CARE AND VALUE-ADDED SERVICES
Choices for the strategy period: Effortless, automated and attentive
1–12/2018 Net salesEUR 48.9 (41.4) millionGrowth 18.0 (12.1)%
10–12/2018 Net salesEUR 12.5 (10.7) millionGrowth 16.5 (13.2)%
Strong growth in net sales continued
• In 2018, net sales grew by 18.0% and amounted to EUR 48.9 million
• Over 90% of net sales was generated from renewable billing
• The strong growth was driven by the new customer accounts brought in by the company’s sales organisation and franchise entrepreneurs
YEAR 2018
Profitability improvement was stronger than expected• During the financial period, Talenom's operating
profit improved significantly (76.5%) and amounted to EUR 8.5 million
• With technological advances, operational efficiency increased faster than anticipated, which lead to profitability improvement that was stronger than expected
• Positive cash flow after investments and financial items
1–12/2018 Net profitEUR 6.4 (3.4) million
1–12/2018 Operating profit (EBIT)
EUR 8.5 (4.8) million
1–12/2018 Earnings per share
EUR 0.93 (0.50)
10–12/2018 Net profitEUR 1.0 (0.6) million
10–12/2018 Operating profit (EBIT)
EUR 1.5 (0.9) million
10–12/2018 Earnings per share
EUR 0.15 (0.09)
YEAR 2018
Other business operations
• In the financial period, other business operations grew by 62.8% and amounted to EUR 3.4 million
• We continued and will continue the productisation related to other business operations and the concept development for new services
Why do our operations achieve the medium-term objectives that have been set?
• The core business has been organised as a scalable bookkeeping production line with technological capabilities that are unparalleled, including the degree of automation
• Product development provides our customers with increasingly effortless routines for financial administration
• We have not allowed digitalisation blur our understanding of the fact that caring for our customers and having high-quality customer encounters remain the lifeline of our operations
YEAR 2018
* The year 2017 has been ad justed for EUR 310 thousand in one-of f IPO expenses .+105%OPERATING
PROFIT (EBIT)
Because Talenom adopted IFRS report ing in 2017, the operat ing prof i t for the year 2016 cons is ts of ex -post comparat ive ca lcu lat ions .
*
MEUR
STRONG BASE FOR THE FUTURE
PROFITABLE GROWTH TO CONTINUE
+32%Net sales
MEUR
- 7 percentagepoints
37,041,4
48,9
0
10
20
30
40
50
60
2016 2017 2018RATIO OF
PERSONNEL EXPENSES TO NET SALES
60,5 57,453,7
0
10
20
30
40
50
60
70
2016 2017 2018
Percentage
4,25,2
8,5
0123456789
2016 2017 2018
Shares and shareholders 2018
Total exchange value 201824,6 MEUR
Number of shareholders2 796 (31.12.2018)
130,9 MEURmarket value of
investments(31.12.2018)
Stock quotation development, EUR
Guidance for 2019:“The company’s net sales is expected to grow at the same rate as in 2018 (18.0%). The operating profit margin (17.5%, 2018) is expected to still improve slightly compared to 2018.”
OUTLOOK
Strong performance as the trendsetter in the industry to continue
• We will continue investing in growth and the positive profitability development enabled by technological know-how
• Our technological expertise has proven to be excellent and it will enable us to increase our level of automation in the future as well
• With increased operational efficiency, we expect further improvement in our excellent profitability level
• With the increasing automation, we are developing into a direction in which financial management experts will be freed from routines and can use their time for consulting and customer care
EXPANDING THE FRANCHISE CHAIN
AND SALES NETWORK
Talenom is a growth company, with new accounts generated through active sales. In addition to its
own sales network, franchising is a key component of Talenom's organic growth.
Entrepreneur-driven offices enable Talenom to expand and grow efficiently even in smaller market
areas.
Talenom has 26 franchise entrepreneurs and 20 franchise offices. In 2018, the chain expanded to
Espoonlahti,Lempäälä,
Leppävaara (Espoo),Kempele,
Lielahti (Tampere),Hyvinkää,
Lahti,Muurame and
Rovaniemi
Talenom's officesTalenom's franchise locationsTalenom’s office and franchise office
• The accountancy market is a fragmented and growing market characterised by the statutory accounting requirement and the transition created by digitalisation
• The accounting market in Finland is highly fragmented: • In 2017, there were 4,249 (4,235) companies (")
• The average company size was 2.8 employees (")
• In 2017, the size of the accounting market in Finland was EUR 998 (970) million (")
• Annual market growth remained good despite various financial crises (")
• Historically, price rises, the increase in receipts and higher sales of value-added services have acted as drivers of growth * NB: When referring to corporate and financial statistics, which have been published since the 2013
figures, statistics preceding that year are also included: 2001-2006 Business Register statistics (TOL 2002) and 2007-2012 Business Register statistics (TOL 2008). (1) Statistics Finland, corporate and financial statistics*
BUSINESS ENVIRONMENT IN THE ACCOUNTING SECTOR
472531
585 582 538644 671
728 768821 861 892 890 915 958 970 998
0
200
400
600
800
1000
1200
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Size of sector (€ million)
Certain statements in this bulletin are forecasts based on the company's and management's views at the time the forecasts were made. For this reason, they
involve risks and uncertainties. The forecasts may also change, if significant changes occur in the general economic situation or the company's business environment.
DISCLAIMER
Annex 1. Key figures1 January–31 December 2018
*) The period 1 Jan.–31 Dec. 2017 includes EUR 310 thousand in one-off IPO expenses**) 5,100 shares held by the company were subtracted from the figure
Group 1–12/2018 1–12/2017 ChangeNet sales, thousand euro 48,871 41,421 7,450Net sales, increase % 18.0% 12.1% 5.9 percentage pointsOperating profit (EBIT), thousand euro *) 8,545 4,840 3,705Operating profit (EBIT), as % of net sales 17.5% 11.7% 5.8 percentage pointsReturn on investment (ROI), % (rolling 12 months) 21.4% 13.5% 7.9 percentage pointsInterest-bearing net liabilities, thousand euro 18,250 18,570 -320Net gearing ratio, % 98% 133% -36 percentage pointsEquity ratio, % 36,7% 30.5% 6.2 percentage pointsWorking capital, thousand euro -2,712 -2,887 175Net investments, thousand euro 9,503 7,429 2,073Liquid assets (cash in hand and in banks), thousand euro 5,914 4,879 1,034Earnings per share, euro 0.93 0.50 0.43Weighted average number of shares during the period **) 6,861,476 6,806,946 54,530Net profit, thousand euro *) 6,363 3,414 2,950
Annex 2. Key figures1 October–31 December 2018
Group 10–12/2018 10–12/2017 ChangeNet sales, thousand euro 12,467 10,699 1,768Net sales, increase % 16.5% 13.2% 3.3 percentage pointsOperating profit (EBIT), thousand euro 1,466 864 602Operating profit (EBIT), as % of net sales 11.8% 8.1% 3.7 percentage pointsReturn on investment (ROI), % (rolling 12 months) 21.4% 13.5% 7.9 percentage pointsNet investments, thousand euro 2,380 2,204 176Liquid assets (cash in hand and in banks), thousand euro 5,914 4,879 1,034Earnings per share, euro 0.15 0.09 0.06Net profit, thousand euro 1,001 590 411
Annex 3. Consolidated statement of comprehensive income1 January–31 December 2018
Thousand euro 1–12/2018 1–12/2017
Net sales 48,871 41,421Other operating revenue 658 338
Materials and services -2,555 -2,143Expenses arising from employee benefits -26,226 -23,758Depreciations and amortisations -5,130 -4,669Other operating expenses -7,073 -6,349Operating profit (EBIT) 8,545 4,840
Financial income 57 55Financial expenses -636 -602Net financial expenses -578 -547
Profit (loss) before taxes 7,966 4,294
Income taxes -1,603 -880
Profit (loss) for the financial period 6,363 3,414
Other items of comprehensive income
Items that may be subsequently transferred to profit or loss Cash flow hedging 27 67Taxes on items that may be subsequently transferred to profit or loss -5 -13
Other comprehensive income for the financial period after tax 22 54
Total comprehensive income for the financial period 6,385 3,467
Earnings per share calculated on the profit attributable to equity holders of the parent companyUndiluted earnings per share (EUR) 0.93 0.50Diluted earnings per share (EUR) 0.91 0.49
Annex 4. Consolidated balance sheet 31 Dec. 2018
Thousand euro 31 Dec. 2018 31 Dec. 2017
ASSETSNon-current assetsGoodwill 18,420 18,420Other intangible assets 10,493 7,787Property, plant and equipment 2,248 2,521Other non-current financial assets 237 237Deferred tax assets 62 191Capitalised contract costs 8,357 6,417Total non-current assets 39,817 35,573
Current assetsTrade and other receivables 5,473 5,457
Current tax assets 11 21Cash and cash equivalents 5,914 4,879Total current assets 11,398 10,357
Total assets 51,215 45,930
CAPITAL AND RESERVESShare capital 80 80Reserve for invested unrestricted equity 10,850 12,373Fair value reserve -93 -114Retained earnings 7,850 1,603
Total equity 18,688 13,942
LIABILITIES Non-current liabilitiesFinancial liabilities 23,500 22,000Trade and other payables 230 372Other non-current financial liabilities 116 143Deferred tax liabilities 50 44Total non-current liabilities 23,896 22,560
Current liabilitiesFinancial liabilities 0 500Trade and other payables 7,728 8,352Other current financial liabilities 0 1Current tax liabilities 903 575Total current liabilities 8,631 9,429
Total liabilities 32,528 31,989
Total equity and liabilities 51,215 45,930