Inside information, profit warning: Talenom cuts its guidance for 2023

Talenom Plc, inside information 12 October 2023 at 17:50 EEST

Inside information, profit warning: Talenom cuts its guidance for 2023

Talenom cuts its guidance for 2023, both in terms of net sales and profitability, due to the effects of the weak economic cycle and a non-recurring write-down.

In line with its strong growth strategy, the company entered 2023 with resources tuned to growth. However, the market situation changed significantly during the spring. The company’s growth has been slower than expected this year as a result of the effects from the general economic slowdown in Finland and Sweden. The weak economic cycle has resulted in decreasing customer-specific invoicing as customers’ businesses contract and in weaker net sales growth than anticipated. In resourcing, Talenom prepared for stronger growth, which, together with weaker-than-targeted net sales, has depressed profitability. Due to the economic cycle that weakened further in the second half of the year, the impact of the adjustment measures initiated during spring will not be sufficiently visible during the rest of the year. These measures have progressed as planned and will significantly improve the profitability base in 2024 while maintaining the preconditions for growth in line with the strategy. The company’s business is still very profitable relative to the industry.

Talenom’s architectural reform has progressed faster than expected, and as a result old software will be decommissioned. In the third quarter, the company will make a non-recurring write-down of approximately EUR 3.2 million related to software investments.

New guidance for 2023:

Talenom estimates that 2023 net sales will be around EUR 120–125 million, EBITDA around EUR 30–34 million, comparable operating profit excluding software-related write-downs around EUR 10–13 million and operating profit around EUR 7–10 million.

Previous guidance for 2023:

Talenom estimates that 2023 net sales will be about EUR 125–130 million and that its euro-denominated EBITDA and operating profit will grow from 2022.

Talenom Plc

Board of Directors

Further information:

Otto-Pekka Huhtala

CEO, Talenom Plc

4

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 and banking services. Our vision is to provide superior accounting and banking services for SMEs.

Talenom's growth history has been strong – average annual net sales growth was around 17 % in 2005-2022. Talenom’s net sales were approximately EUR 102 million in 2022, and at the end of the year the company employed over 1,300 people in Finland, Sweden, Spain and Italy. Talenom's share is quoted on the Main Market of Nasdaq Helsinki. Read more: investors.talenom.com/en/