Talenom Oyj (TNOM) Earnings Call Transcript & Summary

Hello, everybody, to Talenom Capital Market Day. It's nice to see you here. Here, you can see our program of today. I will start from the overview of Talenom. And after me, Juha Jutila, our Director of the Business Development; will tell more about our automations. And after that, Juho Ahosola, Director of Finland Accounting Services, will tell our customer satisfactions. And after he, our CFO, Antti Aho, will tell how we will boost our growth by their acquisitions. And after that, Tuomas Iivanainen, our Director of the International Business, he will tell about our plans of the international growth. And the end of the all, Miikka Hätälä, our Director of the small customers, will tell latest greetings about TiliJaska. My name is Otto-Pekka Huhtala, and I'm CEO of Talenom. I will start my overview from this strategy choices. We have these 3 points. What we have -- where our strategy has base it. And here is this easy financing rulings it means that we have created very easy to use tools, our end customers that they can save time and we -- the other point is this automation. We have very high automation in our internal processes. And the third part is this, that now we have more time to our customers' gear. And we tell that we have this blue ocean strategy. And it pays that we have this very long-term skills from the accounting industry, and we have this developed unit, and we have bundled together these peoples. And it means that we can handle all these value chains from the end-to-end points. And it means -- it means that we can resolve better to customers' needs and our internal accountants' needs. And we will keep all these 3 points, and I will tell now more about our new vision, and it's call unbeatable accounting and banking services for small and mid entrepreneurs. Here, you can see our old mission. We can keep also this joy of entrepreneuring. And here you can see Finland and Sweden, that they are the greens. We are locating now in these 2 countries. And there is these 3 arrows: automation, easy routines and care services. And we have 3 values: courage and willpower and caring. And we have need all of these 3, and one of them is the big, is courage that we can say that we want to go to Europe. Tuomas Iivanainen will tell more about these internationalizations. But we want to tell everybody that this is our big, long-term goal, maybe next 10 years. And we want to go to Europe. Why Talenom want to go also to bank segment? We just launched that we have these 2 new product, bank card and bank account. We have been also these financing services maybe 2 years. But there is ongoing, in Europe and Nordic, many legislative chains which will promote digital transformation. And we know that we are the leader in this digitalization in accounting industry. It took maybe 10 to 15 years to transform this business from the traditional way to do this in digitalizing way. And now we see that there is ongoing -- these many, many legislative changes, for example, new e-Invoicing directive, and it means that government will get all invoices, per-case invoices by e-Invoicing structure, if they will, and it means that it will push every company that they have to send all invoices by e-Invoicing way. There is this -- second point is this PSD2 directive, which means that all banks have to offer these bank accounts for the third party. The third-party can look and handle bank accounts, but bank can't take any fee about that -- this. And it means that we can now connect by the modern way to other bank accounts. And it means to our customers that they will save money. And of course, there is going some Basel regulations, which mean that this will put banks press (sic) [pressure]. And we can see that he has created a need for new financing channels for SMEs and we have been in 2 years in this financing services. But these trends will go from the north to the south and east to the west. And we know that we have skills, and we understand well that how this will support our business and how this change have to do from traditional bookkeeping to digitalization bookkeeping business. And now I will go to our new customer segments. We launched this new small customer segments concept, which is called TiliJaska in Finland. [ AccountAlex ] could be better name in English, [Foreign Language] and it will open us this maybe 40% of all Finnish accounting industry. Of course, we have these small customers, and we have serviced them, and we know what are their needs. But now I will tell more about the concept that how we can go to these small customer segments. And Miikka Hätälä will also tell more about that. But this means that we have to have so different kind of product portfolio to serve these small customers. And our portfolio will start from the large entrepreneurs and after that, these small entrepreneurs and the brunt will be TiliJaska, and we have this all-inclusive Talenom accounting services. And Miikka will open more that. But the company is in good shape. And some of our overview of that, that -- Talenom is one of the best places to work in Finland. We have got this certificate many years. And next one, that we have also continued our automation, and we can also improve that. Our customer satisfaction is the best of all, and it's very high, our net promotion score, and we have a good record of the strong profitability, and it means that we have the money, invest more and more our growth and development. This is shortly overview of the Talenom. And here, you can see also accounting industry, how it has increased in Finland. And there has been some finance here, queries, but this industry has increased many, many years. This is very defensive markets. And the reason is that because the customers need every high and low season, they have to do bookkeeping. Okay. Now Juha Jutila will continue about the automation.

Thank you. My name is Juha Jutila. I'm heading Business Development, including digital unit, which is developed and software for example, our accounting products online. I have been working with Talenom now about 6 years and mostly focusing on digitalization and automation of accounting production line. And from the beginning, very early in the beginning, it was clear that we need to put high targets. And we formulated this mission 100% automation of accounting and payroll service. We are not there yet. The -- we have quite -- we are quite far, but not there yet. There's things what we can do. And in the result of this -- because of this, we can eliminate routines and have more time for experts to help customers. We started this automation. We have been doing digitalization and automation already a long time, but 2016 started put more effort to that. And we can see -- and we could see the results in 2017. After that -- those first steps, we continued the automation -- at the automation yearly. And then 2019, and we have already told this, that we created our own accounting production line and moved our customers there by the end of 2000 -- majority of our customers by the end of 2019. And now we can see this year, and we have seen the results of this new production line, which is now our own software of no commercial software included in there. And this step was not so much in automatization but more about simplifying the accounting process. So we could reduce the number of steps in accounting process from about 10 to 3 stages. So now our accounting production line has the automation present, a little bit above 70%. But there are still things what we can do. We are now -- we can now put more focus to automatization because of our own software. So we are not so dependent on commercial software, and we can take the next step. And we are targeting to go over 90% automation in accounting production line. The target is set for 2023. Then payroll service, as we have told already earlier, so that -- this is not run by our own software, but it's using commercial software. So the automatization of that is a little bit different. It's not so easy and straightforward, but we can also do that. So currently, we have had close to 0 automation there. But this year, we have started to add more effort there, and we are achieving 25% automation this year, and our aim is to have 100% automation of manual routines and payroll service. It, of course, doesn't mean that there's no work left after that. There's still tasks like entering the information, correcting errors and help the customer. Then the third area, what I can tell you here now is a development of automation in sales invoicing. So this means tracking of payments, accounts receivables. And here, we have had the high automation number already long time. And currently, we are about at the level of 95%, so close to 100, and now we are adding new steps in there and closing the 100 during this next year. And of course, during these years, we have seen the benefits in financial numbers, benefits of this automation. So in here in 2007, as I told earlier, we had the first result to be seen of the work done 1 year earlier. And then we have added new steps yearly and we can see how the -- these changes affect the operating profit. And now after the third quarter numbers, we can see clearly that this trend is continuing. So as a summary, we have done a lot on automation. And we have seen the positive effects in economic numbers, but also supporting service and giving us more time to help customers. But this work has not done yet. We can still do additional steps there and continue on this path. Next, Juho Ahosola will tell more about the other benefits of automation and digitalization than just the numbers in financial side.

Thank you very much, Juha. Hello, everyone. My name is Juho Ahosola, and I'm leading business operations here in Finland, and today, I'm going to tell you something about how we have improved our customer experience and especially customer service experience and then a couple of points of our growth plans here in Finland also. A little bit of my focus areas first. As I told, I'm responsible for business operations and organizations that I'm leading our accounting unit payroll services and our consulting services also and then our growth units, our sales organization and franchising organization. And I've been working here at Talenom about 7 years so far. And I must say that it has been really interesting and inspiring to see how this whole industry has developed during these years. And digitalization has really changed this industry in many, many ways. And the change is really, really remarkable. Yes. Let's get started then. Okay. So before we start, start with customer experience, something about our target market first. So our target market in Finland consists of customers with turnover between EUR 400,000 and EUR 10 million about. And of course, we have some number of customers with turnover much more than EUR 10 million. We have big companies, growing companies and everything like that. But then we have also some customers with turnover less than EUR 400,000 but the main point is that our target market is this between EUR 400,000 and EUR 10 million here in Finland. And our own sales has focused on this segment during previous years. Okay. Let's move on. As Juha and Otto told, we have -- in previous years, we have achieved really great results with automation and processes. And this part is one of our crucial strengths, have been during past years, and this is a really important thing for us. But the second important thing is this topic, which I'm going to talk about today, customer experience and especially customer service experience. And we have really improved that area during previous years, and this is important for us. And now I'm going to tell you why it is. Okay. So when we look at the market, we have basically 2 kind of companies working on this market. We have small accounting firms which basically work with commercial software, and they focus on service but they have very little to do with development of the software, which they are working with. And then second group is big software companies which basically sell software. And what we believe in is a deep connection with digitalization, software and the service. And this is something really, really special in this industry. So we compound the digital customers' experience and proactive customer service. And this is something really special, and this is what we believe in. And yes, these 2 things work solidly together. That's our main point. Okay. And what do we want? We want to stand out as an active player that works for benefit for entrepreneurs, and it doesn't mean only that we do accounting and payroll services. We do all other consulting things that help our customers in field of tax administration and finance. And for example, what we do for our customers, we do budgeting. We do different kind of calculations. During this quarantine, we have done many kind of aid applications and stuff like that. So we believe that the great customer experience, it's not only high level accounting or payroll services. We believe that we can help our customers with many other ways in the field of consultation. And this is really important for us, and we have really achieved good feedback from these consulting services. Yes. As you are told, now we have more time left that we used to have. And in fact, we have made decision that we want to invest majority of that time for helping customers. So that's an important decision. And in practice, what this means, in practical level, we contact our customers now even more actively than we used to. And this is really, really important. We have increased our contact levels remarkably. So we call out our customers by phone and discuss with them about business and everything like that. So the other important thing is that we have financial check-ups with our customers. So in our basic service model, there are 3 annual check-ups with customers. And in these interactions, accountants, they discuss with customers about how the business is going. Is there some necessary actions to take and these kind of things. And in these interactions, we have received really, really high-level feedback. And I'm going to tell you more about this now. Okay. Let's move on. One really important thing when we are talking about great customer experience is our personnel and people who are working in the front line, helping our customers every single day. And during previous years, we have focused really much on training and education for our personnel, and we have achieved really nice results in this field also. And one example that I want to tell is our KLT training program. So this KLT is high-valued examination in Finland in this industry. And during previous years from 2016 to 2019, we have from our own training, there's nearly 100 KLT experts from that education who have passed the test. So this is really something special in this industry and what we believe is that we really should focus on training and education in the future also. This really makes competitive advantage for us. This is extremely important thing. Okay. So when we have focused on additional contacts, these financial checkups, which I talked -- talk about and the training of our people about the results. So we have measured continuous customer satisfaction about 2 years so far, and we have achieved really nice results in this field. And our NPS, Net Promoter Score, is, at this point, based on 1,000 replies. It's 51 at this point of the year. And this is quite nice results, but of course, we want to improve it more in the future. But this is really, really important thing for us that we have been able to improve this area and improve our NPS because of this training, contacting, additional contacts and the service model, these financial check-ups. And yet, not only company level NPS. In addition to that, we have also NPS on accountants' level. And this is something really special that we have on specialized scorecard. We have personal NPS number. And it's really in the core of our management system, and we -- that's something special. I think, not too many companies in this industry can say that they have the same but this is something really special. Yes. These are important things. But of course, in the investors' point of view, it's interesting to know how the financial results have developed. And for now, I can say that higher customer satisfaction is improving our customer retention. And this, our customer retention has improved about 2 years so far. And we can say that investments in these things, training, education, additional contacts and financial checkups are really, really worth of investments, and we really should focus on these same areas in the future also. So we can say that this personal service compound to this digital customer experience is really winning model at the moment, and we should focus on this area also in the future. The service seems to be one of the most important thing for our customers. And here are some numbers of our NPS, how it has improved during this year. And I'm really, really happy that we have been able to improve also during this current time our NPS. That's something I'm really, really proud of. Okay. Then a couple of points of our growth plans here in Finland. And first of all, I want to announce that according to research company, Innolink Research, we are the best-known accounting company in Finland. And this is something I'm really proud of and happy to announce that, of course, because we are willing to grow in the future also, it's important that we are well known here in Finland. And in the growth, organic growth, we have actually 2 important teams working on the field. We have our own sales unit, and we have our franchising entrepreneurs, which are selling our services. And these 2 teams, they work nearly all over the Finland and sell actively our services. And when we look at the future, for the year 2021, we are going to actually expand both of these teams during next year. So we are really believing this organic growth. A couple of more points. In addition, to this normal sales, we have been actually doing remote sales since May this year because of this corona thing. And in the future, we are all also going to develop sales process, remote sales process. And as we can see from the map, we still have some areas left on the map where we don't have our sales unit or on franchising entrepreneur working also. In these areas, we are going to do sales by remote sales. And in addition to this organic growth, we have done some acquisitions in previous years. And now my colleague, Antti Aho, will tell more about this field of growth. Thank you very much. Thank you.

Thank you, Juho, and hi, everybody there. This is Antti Aho, CFO at Talenom, speaking now. And today, we'll look together a bit more closely on this acquisition growth and acquisition market. Yes. As my colleagues, Juho and Juha, told, we have quite successfully improved our efficiency and our customer experience during the past years. It all has required quite a bit of investments on technology and not only on technology but also in improving leadership management and our business processes and business model. And now we may ask ourselves why not to grow even the acquisition way in addition to this organic growth, which has always been very important to us. So from our point of view, the acquisitions make sense. We can scale our investments that way. But let's look at this from the other side of the table from a small accounting company's perspective. Why would it make sense to sell their business to Talenom and become part of the Talenom team right now? As we all know, we are living the years of digitalization in our industry, and we can say all accounting offices, they are forced to change their accounting software, if they have not done so yet. And we know that many are still on the way. To change the accounting software from a traditional accounting program to a modern digital platform, it's not only about buying a new license. It's actually much more. First, you have to transfer your customers from the old platform to a new platform. There is quite a bit of work, even manual work to be done. Then you have to train your customers and your employees to use the new system, which takes a lot of time and energy and also because the business model is completely different in the paper world and in traditional accounting software than it is in the modern accounting platform, so you also have to change your pricing model and renegotiate your contracts with the customers. So a lot of administrative work as well. All this takes a lot of resources, and in small accounting companies, there may not be the resources available. And I think that this is the reason why so many accounting offices have postponed this transformation so far, although there has been good commercial accounting software available in the market for many years, at least in Finland. Secondly, the digitalization is changing the power balance between the software company and the accounting company. In traditional world, the customer -- the end customer doesn't even know what is the accounting software that the accounting company is using. But in modern accounting platform, the customer actually is handling his financial routines on the platform. And therefore, the platform, the accounting software becomes very important to the customer. It's a major player in this customer experience. And it seems that the software companies are taking a stronger and stronger hold of these end customers. And I think that there is a big question that who actually owns the customer in future. Is it the accounting company as it has been in the past? Or is it the software company? And it seems that the software companies want to win this game. And the accounting companies may not like this. And if they don't like it, the increasing power of the software company, they may end up thinking about other solutions like selling their business to Talenom, for example, and joining Talenom team themselves. As a third point, we can say that, okay, why not then to improve your own accounting platform? As we know, in this very fragmented market, there are not many players who have enough resources to do that because it requires millions and millions of investment to improve own platform and to develop even further. We also have to point out that the legislation has quite a lot tightened and it's we are getting more and more legislation that have an impact on the accounting offices' work. Recently, we have adopted this income register, GDPR, Money Laundering Act, and we know that there is more to come. So all this requires a lot of administration and administrative resources in accounting offices. And if it's 1-to-5-person office, so there may not be so much resources available for this. We all know this based on the discussions we have had with other accounting companies and entrepreneurs in the field. A little look on the potential in this M&A market in accounting industry, first, the number of accounting companies depending on where -- which statistics you look. But traditionally, we have said that there are some 4,500 accounting companies in Finland. Maybe there are even more if we go to the very small ones and the ones that are not so active. But if you look at this number, 4,500, we can see that almost 4,000 of them are smaller in revenue than EUR 0.5 million. So they are very small. This basically means that there is 1 to 5 accountants working. So very, very fragmented market and then very few bigger players. The average operating profit of accounting companies in the field is around 10% in EBIT. And if you think of the acquisition market from our perspective, it seems that the valuation of accounting offices is something between -- if you look at the net sales and the multiplier there, it's about 0.3 to 1 as a multiplier from net sales. And if you look at the EBITDA level, the multiplier is around 3 to 5, sometimes even less. The smaller the company, of course, the smaller the multipliers are. So okay. Then what do the acquisitions mean from Talenom's financial perspective? And this has not been a big issue in the history because our growth has mostly been based on organic growth model. But now when the acquisition growth is increasing, we want to open a little bit the impact on Talenom's figures. And here, we have some figures you can study more closely from the material. But if I highlight some points from here, so what we have done here, we have eliminated the figures of the acquired offices, if they are acquired within 3 years. So the older than 3 years acquisitions they are in and the newer acquisitions are eliminated. And the first row in this calculation shows that during the 12-month period and now please notice that these are not financial years, but this is a 12-month periods calculated from October backwards. So they are comparable. And if you look at the first row, our net sales excluding acquisitions. And then there is the relative growth, we can see 14%, 14% and 8%. So -- and then we have the operating profit excluded these acquisitions. And if you look at the -- how the operating profit relatively has increased, we can say that, without acquisition, it has increased from 17% to 21% and from 21% to 23%. So there is a steady improvement in our efficiency, as Juha and Juho earlier communicated. Then there are the figures of the acquired targets. We can see that the net sales increasing from EUR 1.4 million to EUR 7.8 million, so quite steady growth in these acquired euros. And we can also see that if you put together these acquired units, we are making negative EBIT there. Then if you compare these figures to total Talenom figures, which we have also reported, we can see from the operating profit that there is -- the improvement is 17, 19, 19 compared to 17, 21, 23. So there is a significant impact on our profitability in short term, we can say. What is the good part here is that within 2 to 3 years, we believe that we can turn this acquired target profitable. Our history of acquisitions is not very long when it comes to statistics. And many of our acquired targets, we have merged into our existing units. So we don't have separate figures from all our acquired targets from the past years, but we have some. For example, Kuopio unit, which we acquired 3 years, 3.5 years ago, we show it here as a case example what the figures may look like after acquisition. If you look at the year 1, so we acquired some EUR 1.2 million. And with the first year, the operating profit was minus 7%. So that's quite normal because, in the first year, even if the operating profit at the moment of acquisition, if it's positive, but when we start the integration work, it usually goes down even to negative. Then we can see that already the second year, we made a 20% positive EBIT in Kuopio and also the third year, it was 19%. So we can say that quite rapidly in Kuopio, we succeeded to make it a very profitable business close to the normal level. And we can -- as we see from the figures that the revenue of the unit has increased steadily after the acquisition. And mostly, that comes from the fact that we started organic sales in the same region because when we start the automization in the acquired unit, we have resources, more space left in the accountants list so we can take new customers in. And of course, we have to take new customers in to improve the efficiency and profitability. So we need organic sales after acquisition to support the evidence because, otherwise, we should lay off people, and we don't like to do that. Roughly what happens in acquisition, the first year, we focus on the people, the customers and the personnel. We want to learn to know them. We want to build trust because it's a big change for all of them. So we spend a lot of time on the communication, and all these soft issues and then do some administrative changes and start planning the integration. The second year, we can say the focus is on the system replacement. We change the system, the Talenom system, and we train the customers and personnel and improve also the process there. And then the third year, we can say it's about stabilization. We focus on productivity and new customer acquisition. So this is roughly how it goes. But as you can see at Kuopio, we were a bit faster, and maybe in some other targets, we may be a bit slower. So there is quite a bit of variation there, but yes. I also want to point out here that, in the past, we have made quite a bit of acquisitions in Sweden. When you look at the figures I just show you, most of the euros come from Swedish acquisitions. And in Sweden, when we acquire, the figures are not as good as they are in Kuopio because we don't have yet there our own production line, which improves the efficiency so -- the same way. And also in Sweden, we sell there, we cannot capitalize so much of the costs of the customer acquisition than what we can do in Finland because of the different salary models and all that. And also in Sweden, we invest quite a bit in building the local management team and all these structures there. So cannot directly compare this to our acquisitions in Sweden. Yes. But now I would like to invite my colleague, Tuomas Iivanainen, in here to tell us a little bit more about our international growth. Thank you very much.

Thank you, Antti. Hello all. My name is Tuomas Iivanainen. I'm the Director of International Business in Talenom. So I slowly (sic) [solely] work with businesses outside of Finland. In this presentation, I will talk you through how we see international possibilities. And in the end, I will show you how we approach sort of the practical issues related to this. But before that, I would like to slightly touch the word growth. We grow by acquisitions, and we grow organically. When we get a new customer, that customer has chosen us to be the best for him. When we acquire a new office, that office has chosen us to be the partner to tackle the future challenges in this quite rapidly changing business. We want to keep this dialogue active not only because of the revenue we get, but also because of the feedback and the test we get when we address the market on a continuous pace. Without this test, we could not have the best services, the best strategy, the best approach on the market. The first thing to understand is that when we talk about international business, in Talenom, we talk about Europe. Europe is quite big. Looking from the current perspective of the Finnish market and now having an understanding about the Swedish market, when we look at Europe, it is very big. So here in this slide, I've gathered information of 15 European countries. Roughly, it is that the big countries here are Germany. We have Italy, Spain and France. We have the Nordics, excluding Norway. We have the Baltics. Then we have also Greece, Austria, Poland and Belgium. That's about it. And Sweden, of course, and Portugal are there. But the main figure here is that the amount of companies in this area is about 17 million. These 17 million companies are employing about 65 million people. And then when we look at the structure, you can see that almost all these companies are SMEs. Only a very, very small proportion are over 250 persons employing companies. Now when we think how this market is served regarding the financial administration, we see that it's like micro businesses serving the micro market. We have consultants working on their own. We have small accounting companies. It's a very, very fragmented business. Then when we look on how they work, it's a very traditional way. So although we are seeing lots of digital tools coming in, still the way they work is very, very traditional. So when we look at this and we look what we have done in Finland and now having some understanding from Sweden, we see easily short-term potential on efficiency gain regarding the way we work, and it's related to process development, so redesigning the processes; using simple automation tools on that redesign process; and then having systematic leadership and management regarding the business. How big are these short-term efficiency potential? We have no exact figure, but we have a sophisticated guess that we can easily say that the potential regarding efficiency, sort of the time spent on work with these tools just mentioned is from 10% to 30%. Okay. The nice thing is that if we work this way and we have the new process in place, we can actually work on having the long-term potential, and the long-term potential is based on bringing in the best practice process, which is implemented in our own software. Okay. The question is then how big is this potential. Again, no one for sure. We don't actually know that. But we know from our experience in Finland, that the remaining part after having this sort of short-term potential, the remaining part can be reduced by 40% to 50%. Now it starts sounding quite interesting. Great potential and then we do actually have the assets to make the change. Now we dig further, and we try to find an example, how would it look like. We have been in Sweden for 1.5 years now. So we have some understanding, and I will talk about that more in the next slide. But if we think that we can actually work in Finland and Sweden and then move on like further in this example, I have taken 1 big country and 2 countries beside that big country, and these countries are Austria, Germany and the Netherlands. And when we look at the market size, so these are rough figures, but they are very sophisticated. So I would say that they are very correct. So the Finnish figure is if the finish figure is 1, that's EUR 1 billion. And then Swedish is twice as big. And when we take Austria, Germany and Netherlands there, that all together means that, that total market is 45x as big as is our Finnish market. And here, we have only 3 countries from Europe, 1 big and 2 there on the side. So the market potential, we don't need to address and find a solution for all markets in Europe. Even a small proportion of this makes a huge difference. What are our observations regarding issues in Europe? Well, the legislation, that has evolved within hundreds of years. It's rather complex than simple. Okay. There is an exception, which is Estonia, and that legislation has developed quite recently in the late '80s, in the beginning of the '90s and evolved then, but that is an exception, a very interesting one, though. There is weak economic growth. So we are low interests. We are trying to struggle in a new kind of environment where we are seeking for growth, but having difficulties in finding it. So there is a big call for efficiency gains. The proportion of SMEs is huge. Like I showed you in the previous slide, SMEs are ruling Europe. Their proportion of the GDP is more than 50%. And if we think of the added value, the EU 28 countries, the added value that is created by the SMEs is more than 56% of the total. Then we have the fragmented accounting market. This means that there is limited investment capability. We have the traditional working methods. There is a need for investments. And then, let's say, the final thing is that there is a lack of qualified personnel. So actually, the work needs to be made more efficient because we don't have the resources to keep up the current system. So how do we approach this? What does this really mean? Well, first of all, we have pictured 4 phases in entering a new market, and first phase is to understand the market. We call this phase the James Bond phase. It's a question of intelligence, finding the right data, making the market analysis, having the right people around them, building the network, understanding the infrastructure, understanding the way they work and then doing the pre-acquisition activities. This takes -- well, if done actively about 12 months, but I must say that we are in Phase 1 in several countries. So there are certain things you have to know before entering the market. Then when the time comes and you find the right target, then you make the deal. Then you have to be determined here because this is a strategic step. We call the next phase the bridge head position, and that's when we start really learning the game. You can learn certain things without playing the game. But if you want to become a professional, you need to join the game, and that's what we do in Phase 2. We try to find the right acquisition target, start working with it, and then we start working on building the concept. Usually, accounting offices do not have a concept. So we product-ize the services. To do this, we need a lot of understanding. But it helps us -- it basically enables us to build the sales organization because the sales organization we built is based on people that are professional in sales, and they need a product and a concept that they can sell. On the same time, we start working with the process efficiency. We redesigned the processes. We have the secret question, which is why. We ask time and time again. Why are you working like this? Why are we doing these things? And in the end, we find out the right whys and then we know that we have the streamlined process that is based on the infrastructure and the tools we have there in place. On that process, we start working with efficiency gains with robots with the new kind of reporting and so on. Then we built the organization. We develop our leadership and management tools and practices, and we find the right people for the right places. Now when this is ready, about 12 months, we go into Phase 3, and we continue with this. Now we press on the gas. So the sales goes up. We start recruiting more and more salespeople. We enter new cities with acquisitions, and we start developing industry-specific services, and we work on a continuous development model that we have learned and sort of taken from the lean philosophy. And now the secret in this phase is that we start localizing our own software. So in this phase, we build the basis for Phase 4, where we have our own technology and services in place in that target country. And about -- of this, we talk, it is service as a service because the service and the software are combined, and this gives us total control of the services side. This leads us to strong growth and profitability. So if you look at the big picture, we have 2 things to do. We have Phase 4, which we develop further. And then we have the way we develop new countries to build them from Phase 1 to Phase 2 to Phase 3 to enter Phase 4 and go on working with the best service, service as a service related to accounting industry. So we have heard lots of things about efficiency, about growth, about customer service. And I would say in the international growth, these all things come together. So we are learning this because Europe needs us. There's a huge potential. We need to be humble to understand how we proceed, how we find the best ways to make Talenom international. So with this, I complete my presentation. And then we move onward to the most extremely interesting small customer concept, and I invite Miikka Hätälä on stage. Thank you.

Thank you, Tuomas, a lot. And it's been extremely exciting 1 hour. I have seen my colleagues outdoing themselves this first time. Despite -- until this is first time, they are presenting in English and they are very professional in their responsibility areas, but this first time. And now this is even more exciting to be here as a presenter. And I will -- my name is Miikka Hätälä. I'm presenting you with Small Customer Concept and, basically, the business potentiality behind it. I highlight a couple of key factors why we need to go there. I present the product itself, and we go through a couple of key success factors. And then we look at what we are going to do next in small customer concept, and let's call it [ AccountingAlex ]. In this presentation. You have heard today, what's the old Talenom and, for example, the story of unbeatable customer experience and the things we have done there nearly 50 years old. It's a big story. And in this slide, you see the customer segment where we are already very strong. And colleagues, you have seen here today have been doing very great work. And it has been a growing and profitable business for years now, and that's something you need to understand that if you are thinking whether to invest in Talenom or not, you are basically doing business about this segment where we already are. And now when I'm talking with this whole idea about the coming entry, we are just in the beginning, and there's something we can do in next 3 or basically in next 3 years, and the old Talenom is in this SME's mid-cap segment. It's very strong. And if you have followed our journey, you know that we have had the distribution channel, very organic productive sales has been in a major role. And that's -- I just can say that I have not been in this battle in Talenom, but I have seen my colleagues doing a very good job there. I have been since 2015, and that's an honor with these guys in this company. If we look at the business where we are entering at the moment, it's small customer segment. It's nearly 40% of our industry. And there is the first decision that we made that we need to adjust a bit our trades, our growth strategy, which means that when at the moment, we are growing basically by organic sales. Now we adjust it a bit towards marketing oriented, this kind of platform, I can say, platform-oriented automated or digitalized marketing. And that's basically that in the current -- in the middle segment, we call door by door, one by one, selling the customers to be in our services. Now we try to attract a group of people and mass of entrepreneurs to pick up our customers. And it's a bit different growing strategy we have had in history. And it's still -- it needs a different ways to manage the growth. And I hope that these factors, how we can do it will come through in this presentation. I would like to highlight also 3 more factors why it's -- what it means for us when we are entering in the small customer segment. We have announced this decision 4 years back in our third quarter event. And so in that event, we had already 60 beta customers in our closed beta system. And that's because in our organic sales organization, we had to solution for customers who didn't need that all-inclusive service we are providing them. They didn't need that in their -- one of their companies. They normally have many companies. One of the companies, they just need some platform how they can survive and do things on their own. And we have this platform, [ Accounting Alex ], we were able to offer them. And so the thing is that we are having synergies between these 2 segments when we grow in both. If you have followed Talenom, you know that our culture, how we invest in growth and R&D, it's quite unique. We have made investments in technology year after year. And in this product we have just launched 2 weeks back, we have been able to use the same back-end abilities we used in our mid segment's bookkeeping production line. It means that there have been investments made which can be reused in our case. With this speed, we are -- the production, this kind of unique vertical product, this wouldn't be possible without the back-end systems we are already having in Talenom, in Talenom's bookable products on line. And so we are kind of staying on the up R&D work made in [ Holland ] many years. There is very excellent developers in [ Holland ] Talenom. We are worked in this project a lot. The third thing I would like to highlight in this slide is that the group of small customers and the segment, it's quite a big influencer. It's -- especially in the English-speaking market, we see that they are in a position where they select which platform is the winning platform in the end. So we want to be in this competition. It's just if you look at the history of Talenom, it's normal that we want to be there and do all we can to be the winning platform. Here is a big picture about the products we have launched 2 weeks back in an open beta. There's a Talenom light entrepreneur software. It's a mobile app where you can just send one invoice without having company ID. And that can be -- you are not required to do anything else. And that's the lightest and easiest and cheapest way to start enterprising in Finland. And then there's [ AccountingAlex ] free version, where you can just have your basic software basic tools for free. When your business grows a bit, you can have -- you can start to pay our platform customers with multi-platform fee. And in the end, if you are not willing to do the service, we can do it in [ AccountingAlex ] premium. We can do it without name and contact portion from service center. And in the end, we are having the services you have heard today and basically the -- Juho 's business where we are serving you with named contact persons and financial experts and consultants, and like it's a most easy service scope you can have. You just call to your consultant if you need, and it's like all-inclusive service. So in the -- so with this scope, we have service for every kind of service needs there exist in the market. To dig into TiliJaska, even more, there is a very unique offering for entrepreneurs. There's a premium and I mean really free software. It's very unique that we offer free software, free accounting software for entrepreneurs. And when you need service, it's smooth transformation from free platform customer from payable platform customer and in the end for our service customer. And in the same platform, we also serve offering our own banking services, meaning our own i-banks and debit cards. And if we -- even if you look at the international competitors at the moment, when we are having this all free software service on iPads, on cars, banking services in our own value chain, this is very unique and, to our mind, winning product scope which entrepreneurs need. Then we go through a couple of key success factors. There is needed to be -- to compete in the segment. And these are -- it's very important to understand, that in the small customer segment, you need to have quite a rapid growth. And the speed is a very big [ outline piece ], the growth speed. And we have really studied a lot that how -- what are the factors, which we need to -- where we need to succeed, if we want to be the most growing platform with best speed. And in the beginning, we need to have the unbeatable product and product portfolio. And I think that in the last slide, you had the picture that we have defined to be really unbeatable. And of course, we need to follow a lot at what's happening in the industry. We need to have a high expertise and development speed. And if you have followed our stock exchange releases, you have found that there has been made 2 acquisitions because of that. And we have basically acquired to just target know-how in this project. We have made a business acquisition of Vanaja Tech and Matti Saarine started as our Head of R&D in our project, the [ Vantaa ] acquisition in Sweden. We acquired Frivision and [indiscernible] his and his team's experience in this small customer segment is phenomenal. I'm very confident with our development piece. We need to have most visible brand and all financing required to pull the fast rate of growth. And we have a culture, as I said, we have a culture of investing in growth and in R&D. And so I'm very confident with that also. But we have seen first time that also our brand is very strong. We had a feedback. Two weeks, we have had a [ feedback ], seeing that how -- what's the impact of this quite emotional brand. And there's also a huge potentiality included that -- especially you will have stayed with the last couple of years. And if you have -- if you read our listing process, you know that every deployment of new customer is investment of us. It's a very profitable investment, but still it's investment with costs. And we really think there's many members in the team who have inspired a lot from gaming industry. And we really think that we can automate the deployment of new customers. And we think that because, for example, in Finland, there is the games which are even more difficult to deploy than our services and they manage to do it. And yes, we call them like gamification components, and they are a huge potentiality for us. But it's something we are going to see, and the effectiveness of these items, we are going to see later. But even now we see that the brand is strong and it's having an impact. This gamification is something we need to prove after. Last thing, I'm telling you what's going next to TiliJaska. And the team, as the head of R&D, there is Matti Saarinen who really thinks that engineering takes the time you keep you give to engineering, and that's a lovely idea, and that's why we are really focused on having this kind of call, some call windows. We really push our project. And that's -- next slide is there's a time table where I present where we are aiming at the moment. It's an ambition, we take it seriously, but it's ambition. We are doing something what's not done before. So of course, anything can happen, but we still take it seriously. With this disclaimer, I will present to you the next target schedule. In third quarter report event, we released our first version of [ AccountingAlex ] and light entrepreneur service from close better to open and 360 customers included. We think that at the end of this year, we are going to get rid of these restrictions. And we start to let customers come in without restrictions, they are at the moment. And in the next year between beginning of February and the end of March, we are aiming to launch the end product with [ outward ] beta and with banking services. This ambition, but we are pushing it and taking seriously. We think that in this space, we are having something between 200 and 300 customers in the platform. And of the first half next year, between July and June, beginning of June and end of July, we are releasing the first version in Sweden. That's our target schedule. In the end, I would like to just -- given you an advertisement to join as a beta customer in Talenom Light Entrepreneur service, [ AccountingAlex ] service in Finland -- Finnish, it's a brilliant sort of AI. Join in the beta phase and start using our services, and that's it. That's my presentation. Actually, I think that it's a full Capital Markets Day. This ends Capital Markets Day. If you wish to ask any questions, you might find our contact information via our website, and in the live event, there is also possibility to ask questions. Yes. Thank you all for watching.