Translation: Original published in Finnish on 8/14/2026 at 8:00 am EEST.

We reiterate our Buy recommendation and EUR 1.7 target price for Talenom. Q2 earnings would have significantly exceeded our expectations had it not been for the 1.2 MEUR write-down of Spanish trade receivables. Finnish profitability clearly exceeded our estimates, and Sweden indicated an impending earnings turnaround, which is important for the company's risk profile. We made only minor changes to our estimates (increasing Finnish estimates and decreasing Spanish estimates), and the value indicated by our sum-of-the-parts calculation increased slightly.

Many positives in Q2 result, but Spain delivered disappointment

Talenom's Q2 revenue increased by 2.8% to 30.6 MEUR, slightly below our forecast. This was due to weaker-than-expected growth in Finland (1.4% vs. estimate of 3.0%). The market situation in Finland remained challenging, as customers are going bankrupt and their business operations are shrinking. At the same time, according to our estimates, price pressure increased due to both service cutbacks and intensified competition. The positive effects of the turnaround in the Finnish economy will be reflected in the market with a delay, presumably not until during 2027. Revenue in Sweden matched that in Spain at the 5.9 MEUR level, as revenue in Sweden declined by approximately 10% as expected, while revenue in Spain grew by 26%. Revenue in Spain was slightly disappointing for us, likely due to higher customer churn resulting from acquisitions.

EBIT in Q2 was 2.3 MEUR, slightly below our forecast of 2.6 MEUR. The deviation was due to an unexpected 1.2 MEUR impairment of trade receivables in Spain, which directly burdened the comparable figures as well. This impairment was related to overdue receivables that accumulated during the acquisitions' integration phase. Otherwise, operational development in Spain was approximately as expected. Excluding this presumably one-time occurrence, Talenom’s operating result (3.5 MEUR) clearly exceeded our expectations. Sweden offered another positive signal as, despite a decrease in revenue, EBITDA (0.7 MEUR) improved significantly (Q2'25: 0.4 MEUR) thanks to recovered customer retention and efficiency. There is still work to be done in Sweden, but the direction is right. Finland generated a suitably unexciting but strong EBIT of 3.4 MEUR in Q2, with a very good margin of 18.1%, as costs remained significantly better controlled than anticipated.

Estimate changes were minor due to strong results in Finland

Talenom reiterated its guidance, and the company estimates 2026 revenue to be 110-120 MEUR and comparable EBITDA to be 18-22 MEUR. We made only minor adjustments to our estimates because the significantly better-than-expected operational development offset the impact of the impairment in Spain Specifically, the Finnish earnings estimates increased thanks to improved profitability and a better outlook for demand in the coming years, and in Sweden, the company is progressing towards its targeted positive EBITDA. In regard to Spain, we lowered our forecasts, especially in terms of profitability, for the coming years as well. We will monitor Spain's profitability trends closely, as problems tend to recur. Although Finland will continue to account for the lion's share of Talenom's earnings and cash flows, a large portion of its investments (acquisitions) will be directed toward Spain. These will need to generate returns, not least to ensure the credibility of the company's internationalization strategy.

Slightly positive vibe around valuation

Our sum-of-the-parts analysis value rose slightly to EUR 1.9 (previously EUR 1.8), in line with Finland’s strong development. High financial leverage leads to a wide range between positive and negative scenarios but Talenom, which is out of favor, also has significant upside potential. Additionally, when looking at operational cash flow, we believe the valuation is already attractive with 2026 forecasts, despite high earnings-based valuation multiples. We kept our target price (EUR 1.7) below the sum-of-the-parts average (EUR 1.9) and the DCF (EUR 2.0) to reflect the risks associated with Sweden, the recent challenges in Spain, and the continued weak sentiment surrounding the stock.