The kind of the year to date, as well as Q2 status, as well as talk about the kind of the outlook in the markets and in the business. I will now hand over to Elina to do that.
Thank you, Henrik. Yes, let's start with the overall situation in the operating environment and our strategy execution, and then briefly touch upon the volumes and finances as well. Starting from the overall macroeconomic situation, that continues obviously challenging in both of our main markets, meaning Finland and Sweden. Consumer confidence continues on low level in both countries. In Finland, they are continuously on low level, while in Sweden, consumer confidence has actually somewhat declined following the uncertain geopolitical situation and trade wars. Economists continue to expect the situation to somewhat improve for the latter part of the year in both countries. However, we do not see any major signs of recovery in activity and volumes at the moment.
Some customers of ours, they are though indicating the possibility to return to markets in consumer credit side, but that will be very much dependent, obviously, on the macro development. We also see that on business side, many companies have their investments on hold. On regulatory side, the Swedish consumer credit regulatory changes, including the interest rate cap, came into force mainly in March this year. As we mentioned in Q1, we have not seen any major changes in volumes due to this regulatory change as such. However, volumes overall, they continue on low level due to the reasons mentioned before. The broker regulation, that requirement for brokers to apply for a banking license, that was now approved in May by the Swedish government.
The regulation is coming into force in July 2025, with a transition period until July 2026, after which all the operating loan brokers need to have a banking license in place. There is one year to apply for this license and meet the requirements. The loan broker volumes continue on a low level and still decline year on year, but on a runway basis, the situation has now, in the past months, remained stable. We have not seen any major movements due to this regulation so far. Moving on to the strategy execution side, the infrastructure consolidation has been our main focus area now in Q2. We have now successfully migrated the major environments in Finland and Sweden. The Swedish migration took place last weekend, actually, and was successful. For example, the downtime was less than we had planned for.
However, while we have completed these migrations, our focus is now on stabilization and securing good quality of the operations in new environments. This means that, of course, now in Q2, our ability to develop has been impacted, and we expect that the stability actions will continue and will continue to impact our Q3 as well, meaning that we need to have more focus on the maintenance activities, stabilization, and that then naturally impacts, for example, our production volumes and maintenance costs. We then expect the situation to naturally start improving towards the latter part of the year. On the growth side, as we mentioned in Q1, our revenue development side, we have successfully launched first ONYSIP data services in Sweden, and we continue to see good traction with our customers towards that service.
No major deals yet, but we continue to believe on this opportunity, and we are also taking a lot of go-to-market actions in this area to boost the sales. We are also now accelerating the execution in relation to the Swedish premium business transformation, meaning that the speed will increase in H2. It is good to note that that may impact our revenue development in the short term, but it will support the profitability in the mid to long term. Very important business model change as such. Briefly regarding the volumes and finances. The second quarter, when we look at the year-on-year development, that is impacted by timing and one-off revenues that supported the prior year figures, both in consumer credit and business insight. We also have one business day less now in Q2 compared to prior year.
Timing of Easter, of course, always impacts the Q1-Q2 balance. However, if we then look at it from the daily sales and runway perspective, what we see now in Q2 and expect to see going forward as well is stable revenue and cost development likewise. When you look at the development on a quarter-to-quarter basis. When looking at the profitability then in more detail, the revenue development and sales mix continues to impact the profitability. We see increase, obviously, continue to see increase in data costs due to sales mix and price increases. On that area, we have many times talked about the price increases by Finnish government in relation to population registered data and that impact continues to impact year-on-year figures.
Of course, we are seeing good, continue to see good growth in areas that come with variable data acquisition costs like consumer marketing and real estate services here in Finland that impact the sales mix also. As already mentioned, the production for own use, meaning the capitalized development hours, continues to be pressured by the infrastructure consolidation. If we again look at the quarter-to-quarter situation and development, very similar development to what we saw in Q1. Overall, as I said, when we look at Q2, year-on-year looks the most challenging for us due to these various timing impacts and one-off revenues in the prior year, while when looking at the quarter-to-quarter, we see stable development. We do not see major recoveries in volumes, but we do not see major declines either.
That is the overall summary from financial perspective from my side. I think we can then continue with questions.
Good. I think Daniel, you have a hand up.
Yeah. Hi, Elina. Hi, Henrik.
Hi.
I mean, hey, just a quick clarification on the maintenance cost that you discussed. I mean, can you remind that are these included in your profitability guidance or you sort of take these as items affecting comparability?
Yes. Our guidance continues, you know, guidance continues to be valid as such and overall. These are included in the guidance as such. No changes in that perspective.
Yeah, thanks. Sort of a second question maybe on this new services production that was sort of clearly down on Q1. Can you remind, does this migration have any impact on your ability to generate these new services? First of all, if you can.
Yes.
Yeah. Sort of a second question on this, if this sort of migration or stabilization period sort of lengthens, I don't know, how much have you taken into account that you are not able to generate these new services as hoped? What comes to maybe your growth ambitions looking maybe next 12 months period or so? Can you maybe discuss this topic a bit?
Yeah. I think that overall, when it comes to our forecast, we have taken into account and are expecting the stabilization period to impact our ability to develop. Of course, now Q1, the activity level was already very high when it comes to the infrastructure consolidation, but now in Q2, it has been even higher because now the migrations in Finland and Sweden have actually taken place during this quarter. This means that basically our IT operations, our IT maintenance and development people have been very much focusing on securing successful migration. Of course, the stabilization period continues to impact also the maintenance and development people. When they are monitoring the situation, there are all the time some smaller findings, bugs in the new environment that require their attention.
This is somewhat sort of like usual that happens in these kind of bigger changes and, as I said, expected as well. When it then comes to the development activities as such, we are, of course, then clearly prioritizing and focusing our development activities in the key areas that we have been doing now and continue to do forward as well. We aim to allocate our resources in an efficient way that we still continue to prioritize and develop the key development areas that we have, including, for example, the Nordic compliance offering. Of course, the Q2 as such, when the migrations have been actually happening, then it means that even technically, when things are on the move, then you need to freeze the environments and not push new stuff and development into that.
We do not see that that kind of situation will now continue in the H2. It means that more resources need to be connected to the maintenance activities. However, we are securing that the prioritized actions will get the focus needed. In that sense, we do not see that there will be unexpected impacts to our development now and our growth ambitions either due to this.
Okay, thanks for the clarification. I guess the final question is sort of maybe looking at this one-offs that you reported in Q1, we're on a very high level. It's sort of, I guess, hearing your discussion on this migration, I guess we should anticipate quite much one-offs in Q2 as well.
Yes, yes. That we, I believe, communicated in Q1 as well, that we expect the one-offs now in Q2 to continue on high level due to this high season with the infrastructure consolidation. Of course, we now have some redundancy payments as well impacting the one-offs in Q2. Yes, that is a correct assumption that one-offs in Q2 will, due to these matters, continue to be on high level.
Thanks. That's all from my side.
Great. I think it's Jaakko.
Yes. Hello. I would like to understand a bit more on the trends in the underlying volume development of the Swedish consumer credit side. You state that apparently or obviously the broker volumes are in decline, but given all the tax reliefs and declining interest rate levels in Sweden, are you seeing the improved consumer purchasing power kind of transforming to improving demand in the consumer credit in Sweden?
No, no, not really. The consumer confidence in Sweden has actually declined despite the interest rate decreases. Of course, it is good to remember that Swedish consumers have much more investments in stocks compared to the Finnish side, so all the volatility in the stock markets impacts Swedish consumer behavior in a much bigger scale than what you can see in Finland. In Sweden, consumers have the ability to allocate their pension funds to stocks, and there is a quite different culture when it comes to investing in stock markets within consumers. That is probably why the volatility in stock markets impacts consumer confidence more, and of course, the funds of people as well if you have a lot of investments in the stock market. That is probably one thing that is currently impacting negatively the consumer confidence in Sweden.
Therefore, we haven't seen major changes in the volumes. As I said, they have remained stable when we look at the run rate, what we started seeing in late Q1. We haven't seen any drops, but no increases either. Overall, very stable situation as such.
Okay, makes sense. Thanks.
Yeah, exactly.
Yeah, yeah, makes sense. Thanks. I could continue on the sales process change or renewing the sales kind of a process in Sweden on the business insight side. Where you are with that process right now, and do you have any early indications on the possible impacts that you have been referring to previously?
When we look at the premium business now year to date, I mean, in Sweden, the revenue development has been somewhat already impacted by the actions because we are very much reliant on this one sales partner who currently, from which we are sort of like insourcing or transforming ourselves away from. The transition has started to impact their behavior somewhat. Of course, at the same time, the macroeconomic development continues challenging and impacts SME demand as well. One curiosity is, for example, that our certificate business, actually both in Finland and Sweden, is seeing negative development simply due to the fact that fewer companies qualify for certificates in this situation when their financial position has weakened or they no longer are qualified for being a Nordic growth company, for instance. There are both macro, but also the transformation that impacts the current volumes.
We haven't seen any dramatic drops as such, but muted development overall in the SME Sweden side and some pressures there. When we continue this transition, this means that the sales partner will start restructuring its operations while, of course, we take over the customers. Of course, where we see risks is that the sales partner is still supposed to be one of our sales partners in this whole big picture. What is their ability then, for example, to run new sales? There can be some risks. We are taking over. We talk about more than 20,000 customers here. How successful we are in potential win-back actions if there is churn due to these changes and introducing new partners to the game is where we see the biggest risks.
Of course, then driving new sales during this kind of transformation period. That is why we expect that there can be some turbulence in H2. Of course, we have various actions ongoing to mitigate the risks. I think it is very fair to say that we definitely cannot expect any growth in SME business Sweden premium now for H2, but probably even some decline.
Okay, thank you. All from my side.
Rolin, please.
Yes, hello. Maybe about Sweden one more. Could you comment if the other than the loan broker segment has continued on a positive trend still that we have seen in the past quarters?
The situation when we talk about quarter to quarter has now pretty much stabilized. For example, the housing markets that have been growing in Sweden have now turned into, I do not know if you can say into decline, but clearly the housing markets development has now slowed down in Sweden due to probably these uncertainties in the macroeconomic environment. There we continue to see, as I said, when we look at the volumes, those are rather stable but low when it comes to housing markets, when it comes to consumer lending, and actually when it comes to brokers as well. Stable quarter to quarter development. For example, now on the real estate side, the real estate transaction data in Sweden actually indicates that there is some stabilization, so to say, in that development at the moment ongoing.
That is probably related to the macro uncertainties.
All right. Maybe one general question for the interim CEO, so maybe if you could talk generally about the focus areas for you and where do you need to succeed so that you're happy with the interim period?
Of course, the critical thing is to secure stable performance, whether it's finances or operations. The key thing to succeed is, of course, the Swedish premium business transformation. Although it may impact in the short-term development, it is one of our major profitability drivers. When being successful in that, that will release a lot of capacity also to new sales and growth. I see that as the key thing now to execute successfully during H2. That is our key focus area as well.
All right. No more questions from me.
Good. Are there any further questions?
I could follow up on the Swedish premium business and the SME business question. Could you elaborate a bit how large is that Swedish business insight premium segment business for you?
It is like, let me just consider how I formulate this. I wonder what we have been sharing.
What we have previously shared is that it's slightly above EUR 10 million annually.
Okay. That's enough. Enough close kind of or enough good ballpark number. Thanks.
If no further questions, then we can close the call. Are there any? I don't see any hands up or any further questions. All right. Then we wish you a good period before the earnings season, and we will catch up again then in July. Have a good weekend, everyone.
A great weekend.
Thank you.
Bye now.
Bye.