An extensive investment research report on Easor has now been published, and after the demerger, I will be the analyst covering the company.
Discussion regarding Easor can continue in the company’s own thread:
Juha also updated his view on the current Talenom prior to the demerger. The accounting firm Talenom will continue under his coverage after the split.
Harri Tahkola, Talenom’s largest shareholder and Chairman of the Board on X:
If the CEO’s success is measured by
then is creating shareholder value quite a secondary matter in companies?
Did Harri mention anything about profitability, the balance sheet, or the share price performance? 
Tahkola has come out with other similar brain farts over the years.
It’s a wonder he didn’t ask “Has the son-in-law succeeded…”, while failing to ask whether success means that the share value has more than halved (-85% from the peaks), earnings per share has collapsed, net debt/EBITDA has doubled, organic growth has slowed down or is negative in some markets.
Otto-Pekka won’t be getting top marks from here, and hopefully the Chairman of the Board will focus more in the future on evaluating the big picture with metrics other than just revenue, the IT department, and international acquisitions.
This is indeed the biggest red flag for owning Talenom (or Easor). If the company’s Chairman of the Board doesn’t understand the fundamentals, you can be sure that the company is doing and focusing too much on the wrong things.
This idolization of revenue growth is a classic sign of poor corporate management.
This Tahkola is specifically one of the biggest problems in this company, and in my opinion, the analyst doesn’t highlight the HarriRisk™ enough. Probably because it can’t be put directly into a DCF. This “growth company” has become indebted right before our eyes and has paid dividends completely pointlessly. My own guess is that Harri has needed cash for his own living expenses so he wouldn’t have to collect bottles.
It took me too long to realize the HarriRisk™. I should have realized it back at +15€ and not around ~6€. 6€ is of course better than this 2.5€.
Own with caution.
ROIC 
Indebtedness 
So much for shareholder value.
Perhaps the returns from these investments haven’t come through yet? And ROIC will start rising again and indebtedness will fall.
And just to be clear. I don’t believe in a turnaround, at least in the short term. As noted in previous posts, the principal owner risk is high and the retail investor is not in the same boat in terms of interests.
Hi
Thanks for the feedback. In my opinion, shouting from behind pseudonyms isn’t very constructive and shouldn’t be given much weight, but since the discussion here seems to have gained momentum, I’ll comment briefly for some Saturday entertainment. I have only a few hours left as the Chairman of Talenom’s Board, so I still have a brief mandate to weigh in 
.
The company’s goal over the past few years has been rapid growth. This has been the board’s strategic choice, and this goal has also been communicated to the market. Management has been executing this strategy. It would have been impossible to achieve this growth in Finland alone due to the small size of the market. That’s why we have gone abroad. In the short term, this has eroded profitability. In Finland, we have grown throughout these years, mainly organically. Profitability has improved and is at a top-tier level. However, when we acquire offices whose profitability might be only a third of the profitability in Finland, it naturally lowers the average profitability of the entire company.
A short tweet cannot fit all the numerous other metrics by which management has been measured and which have been required to build this entity. It has certainly not been just about measuring revenue. Internationalizing a service organization is very demanding, and one must succeed in many different areas. Not least in building the organization, ensuring employee satisfaction, and developing continuously improving services.
We have invested heavily in growth. In acquisitions and systems. Everything has been systematic and aimed far into the future. Of course, in hindsight, not all of these investments or other decisions have been successful, but that’s how it tends to be in business. Risk-taking.
Ultimately, it’s about the time horizon. Time rewards the long-term investor. In companies with a family business background, this horizon is clearly longer than a quarter or a year.
It would be nice if the company could determine the share price. However, the market determines it, and there’s no arguing with that .
Best regards,
Harri Tahkola
P.S. Otto-Pekka Huhtala is not my son-in-law.
It’s quite embarrassing to try to belittle what was said on that basis. It doesn’t matter whether the point comes from behind a pseudonym or not; what matters is what is being said. There’s no point stooping to this. It only undermines your actual counter-arguments.
Wouldn’t there be an opportunity for the insiders to snap up the cheap shares if they have confidence in the future?
Let’s “shout” a bit more from behind the pseudonym then.
You have bought offices and paid for them. You have printed more shares, i.e., diluted existing owners, and paid cash on top. You’ve financed this cash with debt. At the same time, however, dividends have been paid out and the taxman got his greasy fingers on them at that point (Doesn’t apply to you or Markus, because you own over 10%). With basic elementary school math, that dividend money should have been used to buy those “kiosks” instead of filling the taxman’s bottomless coffers. The balance sheet would be in a bit better shape, and maybe there would be less dilution too.
As the previous writer also noticed. Funnily enough, the “cheap stock” doesn’t seem to appeal to the insiders. Probably because they get them as share rewards for absolutely free. No need to put your own hand in your pocket.
A light 60k€ worth of shares for the CEO as a reward for something? You haven’t managed to drive the firm into bankruptcy, so I guess you can be rewarded for that?
Some relative of yours, Valtteri, has apparently also received 17k€ worth of shares as a reward for something. Congratulations.
I highly appreciate, Harri, that you respond to criticism and participate in the discussion this way! I hope you continue the dialogue – I, at least, am not hiding behind any pseudonym.
Harri, are you genuinely satisfied with Talenom’s operational performance over the last 5 years or so? And I am interested in two things here:
Growth. Revenue growth doesn’t mean anything if it doesn’t bring something good to the bottom line. I assume we agree on this? However, it has been admitted even by management that growth in Sweden has gone, to put it mildly, south.
Capital allocation. The company’s balance sheet is actually in a mess, whereas a few years ago it was anything but. With all this “sacrificing” of the balance sheet, the top line has indeed been made large, but the bottom line has been ruined. Has capital been invested sensibly at the operational level? And why on earth is the company paying dividends even though A) The balance sheet is in a mess B) The company’s goal is to grow, as you yourself say?
I run a small medical practice myself. Inflating revenue would be ridiculously easy, but the problem is that it is difficult to do so that there would be something left at the bottom line for all the effort/work that all these recruitments would require. Growth is not sensible just for the sake of growth.
Talenom has indeed grown impressively during its listing history, and the growth has also been very profitable. Operating cash flow is generated quite excellently. The problem is that they are investing far too much, leading to increased debt, and dividends are being paid “on debt.” This is a problem. Unfortunately, investors look at EPS or other figures that tell nothing about the actual cash flow. However, the present value of future cash flows should be the factor that determines the company’s value. Talenom generates a significant amount of cash flow relative to its current market value.
@Valkeus I wonder which figures you are referring to regarding operational cash flow? They can be quite misleading if you only look at the figures provided by the company, as the company’s cash flow-based figures have specifically been worse than what the earnings multiples suggest for years now. This has been discussed in the thread for years; for example, take a look at these messages from over two years ago regarding cash flows:
It’s funny, by the way, to look at my own post from 2.5 years ago. Indeed: the company has performed so poorly that the narrative is strongly that growth has not really been in the company’s own hands. The strategy change likely reflects that as well.
That aside, I haven’t seriously looked at Talenom for a couple of years (as the company has no longer been investable in my book), so I don’t know if the situation has somehow changed in a more positive direction recently! In fact, I lost faith shortly after the message I quoted when it seemed to become clear that the company’s direction couldn’t be corrected.
@JNivala Isn’t operating cash flow the same as cash flow from operations? And yeah, different figures if you look at free cash flow, but for example, with that €11m free cash flow or €7.8m free cash flow, the company still looks like a good value when the market cap is under €100m. But yeah, true that those intangible & tangible capex cut a big chunk out of the cash flow from operations.
I’m posting this here just in case the share prices and/or quotes are causing any confusion.
Next week
I’m satisfied with the big picture. Of course, many things could have gone better. In my experience, that’s often how it goes in business. Many things go well, but never everything at the same time
However, since growth—and specifically international growth—has been the goal, it hasn’t been anywhere near a walk in the park, and there have been plenty of surprises. Profitability has suffered, and that too is a conscious choice. A major explanatory factor is also Finland’s weak economic cycle. It has hit Finnish companies hard, and that is visible in accounting firms. In a normal economic cycle, Talenom’s figures would also look quite different. Considering the cycle, operational performance in Finland has been excellent. Growth has continued, profitability has improved, and we have gained many new customers.
It would have been possible to stay in Finland and try to achieve 5% annual growth from a saturated market. And improve profitability by the same amount. These figures would have guaranteed the “quality company” label on the Helsinki Stock Exchange, but that has not been the company’s goal; instead, our gaze is set further ahead. Growing the top line in new markets requires acquisitions. Later, organic growth is also possible there. This is largely how we have grown in Finland over the past 15 years.
If the balance sheet is a mess with that level of indebtedness, then it has always been that way in the company. We have always maximized the use of bank debt for growth. The limit I have maintained (for the over 30 years I’ve been with the firm) is that in such a defensive industry, debt can be about 3x EBITDA. During this time, we have grown from about 1 million euros to 130 million euros. Whether this substantial use of leverage for growth has been wise, I don’t know, but it has been our choice in any case. For lenders, this is not an issue.
In Sweden, we haven’t succeeded as quickly as we would have liked, but the trend there turned over a year ago. Spain has gone according to plan. The lessons from Sweden are in our back pocket, and the expansion strategy for Spain is different. Exporting professional services abroad is slow work, and the pace of change cannot be very fast.
In Q3/25, we reported that cash flow improved by 45% from the previous year. Our investments have decreased, and now they are practically collapsing on Talenom’s side as IT investments move to Easor from today onwards.
The demerger of Easor gave Talenom’s owners the opportunity to be part of two growth stories. And I emphasize: growth stories. The company has operated in the same way throughout its history (nearly 55 years), and I believe we will continue in much the same way.
Hopefully, Finland’s economic situation will improve soon and we can get growth started. That is what all companies, people, and our entire society need!
New Talenom, new report and 12-month target price €1.9 and add.
Good new report @Juha_Kinnunen, and you managed to cut the dividend even more than I expected. Reflecting on Talenom’s history, I don’t believe in such a drastic cut, even though they might not necessarily be able to afford it. It remains to be seen how the market reacts next week when the dividend proposal is heard, as there are likely still many investors on board longing for the old dividend.
Even though the guidance is already known, over the course of the year we will be wiser about Talenom’s earnings performance.
The Y-axis figures were missing from the “predicted revenue development” table on page 4.
Hi,
the revenues for different countries are included within that graph. Of course, an axis could have been added as well, which would have made it easier to see the level for the entire group.
The dividend remains a mystery for now, but it seems clear that it will drop significantly from its previous level. Easor, however, accounted for a large part of the result previously. Let’s see what they come up with.
