Good afternoon, everybody. You are a warm welcome to follow-up Telenom first half year report release. First, I will speak in Finnish. And after me, our CFO, Antti Auj, will continue in English. My name is Ottopekka Hooftalain.
Max Panke sector in Murros. Tembanen Oman Business Heian, Heian, to Ottam. LION, Dominae,
Hello, everybody, and welcome to follow Telenom's H1 release. This is CFO, Antti Hau, speaking. The 4 main points I'm going to cover in this presentation are as follows. The growth accelerated and our earnings improved during the first half quite expectedly. Our strategy implementation progressed.
I'm going to tell more about our strategic goals and what we have Dan regarding those targets during the first half of the year. I also comment on our expansion to Spanish market after the review period and then a little bit of the outlook for the rest of the year and future. Before going into our strategy, Reaper, I want to remind us of our vision, which is to provide unbeatable accounting and banking services for small and medium sized enterprises. As we can see, we are currently operating in Finland and Sweden, those countries being green. And today, the Spain.
We will be green as well since today is the closing day of our acquisition in Spain. There is that sun shining with the words Joy of Entrepreneuring, which is our slogan, our mission. We want to make our entrepreneurial customers' life more joyful by making their lives easier. The 3 red arrows there describe our core competitive advantages, one of them being the automation of accounting and payroll routines and other administrative routines, So bringing us efficiency. The other being easy routines for our customers by digitalizing their manual paper processes and saving our customers' time.
And the third one, after going through this automization, digitalization, our time is freed for care services. So we can be more proactive CFOs, controllers for our small entrepreneur customers. Last autumn, we had this Capital Market Day where we told a bit more deeply of our strategy and our strategic goals. And here in this slide, I want to summarize what we have done regarding each of our main strategic goal during the first half of the year. 1st, growth has always been in our ambition.
Growth is, of course, also a result of being successful in other targets. But growth as itself is considered an important target at Telenom Because when we grow, I would say, fast enough, our employees get new challenges and new opportunities to grow and to go forward and therefore stay in the house longer than if they didn't have these chances. We get new problems when we grow. And by solving those problems, we remain awake and we have to. And of course, especially talking about organic growth, if we can make a sale today, it means that we are doing something in the right manner And we are still relevant.
During the first half, we acquired 11 business entities either in Finland or in Sweden. And also the organic sales reached, I would say, the pre pandemic level. So we have pretty much recover from the corona. Of the internationalization, this is pretty much of the same. But when we want to maintain growth even in future, we also have to look at the international markets.
And we can see that what we have done in the Nordics It's taking place in many other places all over the world. And that's why it really makes also to look at the other markets because making growth is, of course, easier in a market which is early taking the first steps in its transformation. And yes, as mentioned, we expanded into Spain True and Acquisition. About the automation, we have long been working on this automation. And we have many times ask that can we further improve the level of automation in our core business?
And Yes, we can and yes, we have done it. Compared to last year, our automation level how we measure it in accounting business increased from 68% to 75%, pretty much meaning that 75% of the receipts were booked automatically. And then in payroll, we started our automation project as well, going from 0 as we measure it to 50% during the first half of the year. So a significant increase there. And all this has resulted, as we have told, we want to provide these care services, be more proactive with our customers.
And this has freed our accountants' time In a way that they have been able to increase this net sales coming from the consulting work done by the accountants. That's very important for us. And I think that when we are delivering better service deeper consultation to our customers. It has helped us to increase our Net Promoter Score, which was 55% compared to 48% last year. And also the customer retention improved positively.
So unbeatable customer experience being here at the topic. And also we renewed the customer interface, Tallinn Online, during the first half. And we are right now in the deployment phase with that. Then the small customer concept and Talion Light Entrepreneur concept. So in Finland, we brought the bank accounts and cards for the our Teliaska customers.
And in Sweden, we started piloting this Swedish counterpart, Contokale. And then these banking services, financing services, first, we submitted an application to get our own authorization as a payment institution. Currently, we are operating with the license of our partner. But getting our own authorization makes many things smoother and more efficient, also showing that we are quite seriously entering this business. In financing services, we are we have been piloting a new working capital loan.
And it's the point being there that we have this excellent database of our customers' finances, very detailed information which the banks and other institutions don't have. And based on that information, we believe that especially when we learn this business, we can make better credit decisions than other players. But yes, this is still small and really in piloting states, especially the digital distribution of the product we still have to improve. Our strategic goals, they are not separate from what's happening in the world. Here in this slide.
A short summary of the main megatrends having an impact on our business And also enabling our growth in Finland and other regions. First is digital transformation in our industry, which is Evident and in transformation, especially as we can see from the map, the Nordics being dark blue, meaning that we are quite long in this digital transformation. And then the rest being in other colors, showing that in those countries areas, we are taking the first steps in automizing and digitalizing our industry and there is a lot of room for growth. This Our market is also very fragmented and conservative, which means that an active and modern player has for several years from now room for growth. This increasing regulatory pressures in banking industry and in accounting industry like money laundering, GDPR and all kinds of other reporting responsibilities.
They have basically 2 impacts. First, the entrepreneurs, they need more assistance from outside there. We can help them. And the other point being that especially small accounting companies may feel the burden too heavy to carry alone. And therefore, the acquisition market most likely will remain reasonable for both parties for some years.
On the other hand, as we can read from the papers, paid work is more and more carried out as an entrepreneur, not as an employee. We can see this trend taking place in this platform industry. And when more and more people become entrepreneurs, either full time or part time. They need some solutions to take care of their financial routines. And there, the market as a total We'll most likely grow.
And this transformation in the banking sector, For example, opening the banking interface is making it easier for us and new players to enter the field. And also our belief in the fact that from the customers' perspective. It would be easier if they could get the banking services and accounting services from the same place. Then about the Spain. So we acquired this Avai Services in Barcelona, called Aval Landing actually there.
And this acquisition is our first STEP in Spanish market. We call it a bridgehead stage, meaning that we now have a company and the people there with whom we can start learning the market dynamics and kind of to make sure that the market is what we expect it to be. And after this phase, it being successful, we can go into accelerating growth And also bringing our own technology there. But now we are there in a learning mode. The company we bought, they have strong experience in international business, which is kind of interesting from our perspective.
They help companies to establish in Spain and all that. Kind of value added services in addition to traditional accounting services. So this fits quite well in our strategy as well. We think the timing is very good now. In Spain, we can see that it's really the digitalization has not quite yet started there.
But on the other hand, The government is putting pressure on companies to go digital pretty much in the same way that took place in Finland some 10 years ago when the government started requiring from its partners electric invoices to save their own costs and making things kind of more visible. And So this is going on in Spain. And as we know from Finnish experience that when the amount of electric invoices crisis. Even the smallest companies, they need to find solutions how to make these electric invoices and then they start needing a system. The pen and paper is not enough anymore.
So we believe that the timing is right to go there now. We have time to learn. And when the digital license really starts going big there. We are ready and set. Yes.
And about Spanish market, it's about 10 times to market. The accounting market there are about 10 times the market in Finland. So also it's a big market and which of course means that when we localize there our softer and whatever. So there is a lot of growth potential with relatively small fixed cost. Yes.
So we although certainly there are many differences in the Spanish market starting from the language and any small tactical issues are certainly different. But the main drivers and the main core strengths that we have like our ability to generate or digitalize and make our customers' life easy by automizing their accounting processes and then automizing the accountants work to become efficient and then our willingness to be more proactive in our in providing these care services. It seems and we believe that this also will work in Spain.
Then about the figures from the first half
of the year. So the net sales increased by 23% and accelerate, especially in the second half where the growth was almost 30%. Much of the growth, actually twothree of it Came from acquisitions and 1 third from organic sales. About the profitability, it also increased not quite 23%, but still fairly good 17%. And a couple of points behind this figure.
First, as we have often communicated, when we acquire a lot, The profitability of the acquired targets is typically much lower than our current rate of profitability. And then with some integration and other costs, during the 1st 3 years, the targets are less profitable than our existing business. So they burden a little bit of our profitability. But as our experienced souls, we are Very confident that we can bring them to our good current level with our existing business in 3 years. In Sweden, the same logic.
But as you know, we don't yet have our own production line, our own software in the Swedish market. So there the profitability growth will start when we bring our own System in the market. Yes. Also, we had some savings on the fixed costs pretty much due to this corona thing that less traveling and this type of expenses, so also having some impact. Great results are done by great people who work in a great working place.
We have for years had this cooperation with this great place to work company using their study to improve our employees' experience. And during the first half, we were ranked 4th time running as one of the best places to work in Finland, which we are very happy about, of course. But To become even better working place, we think that every survey has its also its own limitations. And we felt that now it's about a time to save the survey tool and partner to improve further our employee experience. And we're now partnered with this Sydney survey.
And in the Sydney survey, the main point is that we get more information like what are they are not standard questions being asked, but we get more information what are really the important questions we should ask from our personnel to become a better working place. But yes, you can read of Sydney more, if you like, in Internet.
Then about the financial outlook for the rest of the year
and a little bit of the future. So we keep our guidance the same, €80,000,000 to €84,000,000 revenue an operating profit, €14,000,000 to €16,000,000 Many of our acquisitions we had done in the past months, they don't have much impact for the rest of the year because of the timing and also for the fact that the autumn is the worst part of the year. Thinking of our future even beyond, we feel that there is The outlook for the growth and even profitable growth remains very good. We have this we have entered international markets. And as we know, the market is big and in its early stage of digitalization.
So with our experience from the Finnish market, we believe that we can keep growing in other countries as well. We continue even in Finland this organic growth and also this the acquisition growth. And we believe that because of this fragmentation of the market And it's conservativeness. This will continue for years. Then our new openings with the small company segment, the Stiljaskar and Light Entrepreneur Service, we can now enter and cover a larger part of the market than before and kind of serve the entrepreneurs from their first, first tiny steps to a bigger corporations.
And then by With the help of these banking and financing services, we can get some more revenue from the existing customers And maybe even more importantly, provide a better unbeatable customer experience for our customers. Thank you very much. Time for the questions. Guzumuksja?
Yes. Assi Nico
Voit. NAG.
Mr.