Talenom (TNOM) Q2 2024 earnings summary

Executive summary

• Profitability improved as planned, driven by efficiency measures in Finland and higher business volumes in Spain, despite slower growth due to reduced acquisition activity and economic downturn in the Nordics.

• Acquisition pace slowed significantly, with focus shifting to organic growth, operational efficiency, and building capabilities for future growth, especially leveraging digitalization and regulatory changes.

• Net sales grew 6.7% year-over-year to EUR 68.0 million in H1 2024, with EBITDA up 14.6% to EUR 19.7 million and operating profit up 17.3% to EUR 8.4 million.

• Growth was mainly driven by acquisitions in Spain, while economic downturns in Finland and Sweden slowed organic growth; new customer acquisition offset some negative impacts.

• Over 90% of net sales are recurring, providing a stable foundation for long-term development.

Financial highlights

• Group net sales for January–June 2024 were EUR 68.0 million, up 6.7% year-over-year; EBITDA was EUR 19.7 million, up 14.6%, with a margin of 29.0%.

• Q2 2024 net sales were EUR 33.9 million (+4.5% y/y); EBITDA EUR 10.3 million (+15.7% y/y, 30.3% margin); EBIT EUR 4.5 million (+22.8% y/y, 13.3% margin).

• Operating profit margin for H1 2024 was 12.3%, up from 11.2% in H1 2023.

• Cash flow from operations increased 21.6% to EUR 18.2 million; liquid assets at period end were EUR 12.3 million (+14.1% y/y).

• Investments in acquisitions dropped 80.4% to EUR 2.7 million compared to the same period last year.

Outlook and guidance

• 2024 guidance unchanged: net sales expected at EUR 130–140 million, EBITDA EUR 34–40 million, and operating profit EUR 14–17 million.

• Growth in the accounting services market is expected to slow in the Nordics but continue elsewhere; demand remains stable, and industry consolidation is anticipated.

• Fewer acquisitions expected, focusing on strategic targets; software roll-out in Sweden to weigh on 2024 profitability but expected to benefit future years.

• Mid-term goal is for two-thirds of growth to come from organic sources and one-third from acquisitions, targeting over 30% total growth.

• Organic growth rate of up to 20% per year is considered achievable in a normal environment, with plans to reach this by 2026.