Yes.
Okay, good. Let's kick off. So, good morning, good day, everyone, and welcome to Enento Group's Q4 2025 pre-silent call. And thank you all for joining us. You know me, I'm Arto Paukku, the group CMO, and with me today we have our new CEO, Teppo Paavola, and our CFO, Elina Stråhlman. And our agenda is very simple and traditional, but we will start with Teppo introducing himself shortly, and then we will cover the key events for Q4 and the current trading. And as usual, we will then conclude with a Q&A session. But with that, I'm pleased to hand over to Teppo for his introduction, so please go ahead.
Thanks, Arto. And as said, this will be an introduction of myself, but not the business this time around, as it is only my third day in the company. So started this week. It's been fun. It's, I think, a good start. So, as said, I haven't really prepared anything for this, but I'll just say a couple of words of my own background. And so I've had all kinds of different roles in multiple parts of the world in the financial services. I've been in the leadership team of a large bank at BBVA, board member of a couple of smaller banks, a lot of different kinds of fintech activity. And also outside financial services and technology, mostly in digital businesses, and also non-digital businesses doing the digital part.
I've had the, for example, Chief Digital Officer role, most recently at the Adecco Group. So that's kind of a combination of tech and finance. I have not led a data services business before, but I've worked a lot with data and also have been, as said, a user of a lot of the kinds of services that Enento sells. In terms of ambitions, first ambition is figuring out the business, obviously. As said, third day now, and I've done a lot of reading, of course, beforehand, as naturally, but well, then of course for the whole business is figuring out how to grow. That was a key topic in the whole interview process. So there's an interest for not just management, but board and shareholders, of course, as well.
This is a rather common challenge in today's world, and especially in Europe. How do you grow in a non-growth scenario or non-growth economy? Those would be top of the list of my ambitions. Happy to answer any questions. But as said, probably that's just about me as a person and not yet the business.
Thank you, Teppo. And of course you can then take questions afterwards for Teppo if you wish. Happy to have you on board. But now let's continue with the usual agenda, and I will start by going through the macroeconomic development and then deep dive a bit more into our business and volumes and performance. But if we start from the macro and starting from the obvious, so we have not seen any major changes in the macroeconomic and market environment in the last quarter, meaning that the situation continues to be stable but challenging. Overall, macroeconomic situation continues to be rather muted both in our main markets, Finland and Sweden. Finnish economy ended up roughly in flat development for 2025, and in Sweden, the growth remained well below 2%.
Overall, Nordic economies have faced a delayed recovery, and the expectations have been continuously pushed forward, as we probably all know. Consumer confidence has also remained very low in Finland for a longer period of time, and that did not change in the last quarter. In Sweden, as well, the consumer confidence remains below long-term averages, and in November, the housing transaction levels were actually also surprising, a bit surprisingly, even declining. Looking forward to 2026, the outlook for Finnish economy continues to be muted, and economists expect modest, close to flat, development, while in Sweden, consumer consumption is expected to grow and improve the economic development. Now let's then continue with the performance and volumes for Q4 in Enento.
Also here we can, unfortunately, repeat the message that the development has remained stable during the last quarter, but there has been no major changes overall in the performance. The development in Business Insight remains solid and slightly positive, as we've seen in previous quarters as well, while the situation in Consumer Insight continues to be muted. In Finland, Business Insight shows more solid performance supported by stable enterprise business, meaning credit business mainly, and good continued growth in compliance and real estate services. In real estate services, especially, we have launched new services, and we have good pipeline as well for the coming year. There we have been greatly successful in commercializing those services and also driving growth beyond the market development. Also then, as a positive note, after some more challenging quarters, also the Finnish SME premium business developed more stable in the last quarter.
Then again, in the Consumer Insight and consumer credit especially, there we continue to face more muted volumes also here in Finland following the macroeconomic situation and low consumer confidence. So no change in that situation either. However, we see good activity level and some new players entering Finnish markets despite this overall situation. In Consumer Insight, Sweden, consumer credit continues to face more muted but rather stable demand. The daily volumes have stabilized overall and also in the broker segment. And when we look at the month-by-month development, the situation has remained rather stable since February, March, 2025. The broker volumes, as mentioned, have now remained stable, and our understanding is that all the larger brokers are going to apply for a vetting license.
The only surprising hiccup that we've seen was in November when Swedish housing transaction levels declined, surprisingly, also somewhat impacting our volumes, but in the big picture, the trend hasn't changed. We, of course, continue to follow this situation. Then, in Business Insight, the situation continues to be more challenging, and that is especially impacted by the SME Transformation and the restructurings in the sales partner side, while then the development in credit and real estate business has in Q4 been more stable. The SME Transformation, it is progressing according to plan, and we have initiated the digital renewal process for selected products and a small number of customers now during Q4, with a broader rollout starting now in January 2026, and that is, as we have previously communicated as well.
The target is that all customers will have renewed under the new process by the end of 2026. And while the transformation continues to pose risks during the year, the profitability potential is, of course, significant. And we are actively, of course, working to secure retention of the existing customers and also securing successful new sales. On the positive side in Sweden, we have also signed smaller customers for our new compliance services, and we continue to see good interest within our customers in that field as well. Then, moving on to the profitability. So our profitability continues to be impacted by muted revenue development, but costs are in good control. We expect our profitability trend overall to be similar with the past quarters when taking into account the seasonal patterns.
However, it's also good to note that, compared to previous quarters, the data acquisition cost development is now more stable and only impacted by the volume growth in variable data since the major price increases by government were implemented already more than one year back and no longer impact the development compared to prior quarters. Also, we have now been able to focus more efforts into capitalized product development, which is then visible as an increase in production for own use. This is also something that we have been already expecting and communicating to happen. Also then to note that late last quarter in Q4, we initiated and closed small change negotiations, aiming to support us building winning organization, having the right roles and competencies in place to support new sales development, growth, and strategy execution going forward.
As a result of these negotiations, we have terminated contracts of 16 employees, and while there are of course some temporary efficiencies, the main reason behind is shifting in competencies and resourcing for growth, and we have recognized termination benefits as usual, as one- off costs amounting to around 1.5 million EUR for Q4. And then for the full year, we reiterate our guidance of course and continue to be confident that our net sales will be around 150 to 156 million EUR and Adjusted EBITDA around 50 to 55 million EUR. Thank you, but this was my summary of the last quarter, and now I think we can jump into the questions.
Yes, please raise your hand and let's take them one by one. Daniel, please go ahead.
Thanks. Yeah, just maybe one question on this Swedish SME Transformation. I mean, you keep referring to these risks on this transformation, but as far as I've understood, these customers used to, you know, renew basically this contract by phone previously, or there was this external sales force that did this, and now it's fully digitalized, you know. I understood automated renewal. So can you discuss what are the risks here? Are you afraid of that these customers would churn, or what are the risks with this transformation?
Well, there are two risks. Firstly, the retention of the current customers. Of course, you know, some of the customers have even built customer relations with the sales partner. So then, the retention with this new process and to churn is always a risk. It is something that in the longer term, we definitely expect to decrease. But how customers will react in this change situation is the big question mark. And will we see higher churn now when the change happens? Another risk is that the sales partner we have been heavily dependent on, this one specific sales partner in Sweden, and they have been responsible of all the new sales. We have introduced new sales partners.
Also, this old sales partner, so to say, called ISA, continues on new sales, but they have been ongoing heavy restructurings and reductions in their operations. So then, of course, how well the new partners are able to execute on the new sale. We have also some own people executing on it. Then what is the performance of the old sales partner in this? These are the risks in this transfer, you know, transformation period that we see. But as said, in the longer term, definitely this both releases capacity for new sales, and this is clearly a profitability improvement activity, so to say.
Can you sort of remind on the, what are the alternatives that if these, you know, customers would maybe choose to churn? Are these sales partners that you sort of broke the connection with previously, are these now selling some other product, or what's the, you know, background here?
We have had one big sales partner who has been selling these products via telesales for us. The sales partner has cut their resourcing significantly due to the change in the process. Of course, some people have also resigned by themselves and decided to leave due to the changes in the business model and operations. Overall, it's more about that when it comes to this old partner that they are in the middle of major restructurings. It impacts the salesperson's, you know, basic salary and incentive models and how you are incentivized and how that then impacts the performance is a question mark. It's not that the sales partner is starting to sell anyone else's products.
Then we have introduced new sales partners to support the new sales, but of course, they are new to us. They haven't been selling our products before. So it's another question mark how successful they are. Then, of course, customers can always choose to go to our competitors like D&B or Creditsafe, for instance.
Okay, I think I got it. Thank you.
Good. Thanks.
Good. And then we have Kimmo next. Please go ahead.
Yes, maybe some thoughts about the Swedish economy. As you said, it's 2% growth last year, and now there are many of these kind of items that the government is trying to push the economy up. This year, for example, the food VAT is coming down quite heavily. So have you seen any signs in your data that there would be some kind of lift-off on the consumer market?
We haven't seen those yet. Of course, we monitor and closely follow those, but the consumer confidence has nevertheless remained on low level also in Sweden, and the economic growth was like close to 1.5% or around last year, so below 2. But nevertheless, we haven't seen increases in lending activities of consumers so far, and of course, then the broker segment is something that impacts also our performance heavily, and that has also remained stable. However, we also see that there are a lot of actions that Swedish government is taking to support the consumer activity levels, so to say, and in that sense, we see 2026 development twofold, so to say. There are opportunities definitely if the economy starts growing and consumer confidence likewise and consumers start spending, so to say.
But at the same time, there are some regulatory changes still ahead. For example, the broker banking licensing that will become valid in July that then may push some of the players out of the market still.
Okay, okay. Thanks.
Okay, good. Thank you, Kimmo. And then we have Matti next. Please go ahead.
Yeah, thanks. I have three questions. First of all, if I continue with the SME Transformation in Sweden, when you talk about the profitability potential, I think that refers to 2027, right? Because for 2026, you are still going to have the normal sales commission. But of course, in 2027, if you apply the new model in which the contract basically renews itself and there is no commission for the sales partner anymore, then 2027 onwards, you should be basically a better profitability opportunity. I'm just, is that right?
Full impact will be seen in 2027, but how it works is that we have, let's say, 12-month subscriptions that renew month by month, so it depends on which month the renewal takes place. And ever since that renewal digital renewal next year takes place, then we no longer pay the commission, but of course it means that gradually we start seeing improving development towards the end of the year.
So it renews monthly. So basically.
So with the renewal when the customer contract has started, you can consider that it's rather equal throughout the year.
Okay. So basically, we should expect some improvement already during 2026.
We will see, yes.
Okay. Okay. Thanks for that. Then you talked about Swedish BI and you talked about new smaller customers, but I didn't get the segment, so.
Oh, sorry. Yes, I talked about that we have, you know, compliance is the area where we are looking for growth. And we have launched new services that we have talked many times during the past quarters there. And now we have signed first smaller customers there. So that was the comment I made and raised.
All right.
Still some more avenues, but we are getting some openings.
All right, and third question was, you said something about production for own use. So.
Yes.
What was that?
Meaning the capitalized own work that we report in our profit and loss. It in H1 still was declining compared to prior year respective quarters. But now, after the infrastructure consolidation has been finalized, we have again been able to allocate more of our internal resources into product development that we capitalize. And it means that the production for own use compared to prior year Q4 is somewhat improving. And that, of course, impacts profitability slightly positively. So just if you look at the quarter, you know, year-on-year trend on the cost lines.
So are you still capitalizing more than previously or less?
Our total, you know, CapEx levels are, as we have, you know, mentioned. It will be below 8 million EUR for 2025. But what we had as the issue in H2 and H1 is that we had the infrastructure consolidation, huge project ongoing. And that meant that our internal development, especially in IT, we were fully focused on that project. And they couldn't focus on the product development in, you know, the normal speed, so to say. And that meant that our p roduction for own use was in decline for quite many quarters. But now that trend has been turned and now our internal workforce is able to focus more on the internal or in the product development.
But overall, CapEx limits because it's a balance between how much we have external and internal and where we use our capacity. So that hasn't changed.
So your comment was about you are now having more resources to develop your own products, which is, of course, good.
Yes.
But it doesn't change the P&L in any way because you still have the cost. It's just for a different label. Did I understand that?
It changed, it changed the P&L because we capitalize those hours. We capitalize the costs.
Your capitalization is increasing.
We also have external consultants in our capacity. And at the same time, you know, in this year, we have taken actions to reduce the external capacity. But what will be visible is our own internal workforce is focusing more on product development.
Okay.
Total CapEx remains the same.
I still don't get it. I mean, in the P&L, if you reduce the capitalization on external IT projects, then of course, the burden is not going to be there yet before you make the amortization, right?
Yes. When you capitalize your cost, you get the P&L impact only when you amortize, yes.
Yes. So does the amortization become bigger or smaller or is it the same?
Are you referring to depreciations now, of course, because when you depreciate during a long period of time, that change is not, you know, visible in the same pace. So you depreciate the products within the lifetime of the expected products. And that amount is then dependent on how we have capitalized, you know, various products and implemented, you know, those to the markets in previous periods. But you can expect the depreciation level to be rather stable. So you have different components. You have external workforce. It may be that external workforce, i.e., consultants, they purely work for our capitalized projects. Then we have actually reduced external workforce, which is positive in cash flow, but has never been visible and reduces CapEx levels, but which hasn't been visible in P&L before the depreciation starts.
Then we have our own workforce. For example, in IT, we have developers. And then those hours that these IT developers spend on product development, those we capitalize. And it reduces our staff costs. And it's a line item called production for own use in our profit and loss. And then, of course, it becomes depreciation when the products are launched and those are depreciated during the lifetime of the product.
So in the short term, you capitalize more, which means that you show slightly higher profit, but then over time you depreciate or amortize that. So basically.
Our.
Is there a change in the cash flow pattern somehow?
No. We have our capitalized expenditure. If you look at our cash flow, we have actually decreased our capitalized expenditure because it's not only about our own workforce. It's also about external resources that never come to P&L. It only impacts cash flow if you only use these external resources for CapEx. So what we have now done is that we have optimized our total workforce, including consultants and own employees, and after the infrastructure consolidation has been finalized, we have been able now to focus our internal workforce more to the capitalized development. At the same time, we have taken already during the first half reductions in our external workforce. So if you look at our CapEx levels, those are actually decreasing compared to prior year.
When it's a balance between external and external, then, you know, we see improved profitability because we are using our workforce now in more productive ways, so to say, to develop products. While at the same time, we have reduced external capacity. We can take this, Matti, even offline if you want to. Happy to go through in more detail.
Yeah. Let's not stop here. Thank you.
Was that the final question from you, Matti?
Yes.
Yes. All right. Thank you very much. Any other questions from any other participants? I guess not. So thank you for all the good questions and thank you for joining us today. And we, of course, look forward to continuing the dialogue then in February when we publish our Q4 results. But until then, thank you and have a really good day.
Thank you.
Thank you.