Talenom's Q3 result was better than we predicted, as Finland’s excellent profitability covered the lousiness of Sweden. In Sweden, the ‘backstop’ is leaking and the situation is worrying, but the greatest pain may already be over. In the updated strategy, the company focuses its operations on accounting services and software to be separated, while smaller by-products are given to partners.

Yesterday, Talenom issued a negative profit warning. In connection with the release, the company announced plans to spin off its software business into a separate company, which in practice means that the company's software will also be sold to third parties.

Finland's economic recovery does not seem to be on the expected path, which is why we have lowered our growth and earnings forecasts for the coming years by around 5%. However, we expect the company to be able to achieve significant profitability improvements in the coming years, especially in Sweden, as the benefits of implementing its own software become apparent.

Q2 results were in line with our expectations, but the operational development was not as favorable. In Finland and Sweden, organic growth was negative in a weak market environment, but on the cost side the measures taken are having the expected effect. Progress in Spain has been good and Sweden is also on track. In the coming years, we will see if Talenom in Sweden can improve productivity and profitability, which will likely determine the direction of the stock.

Q1 results were slightly below our expectations due to slow organic growth, but the company demonstrated that the Finnish business continues to be in line with the company's guidance as profitability improves.