Gofore Aktie

Good afternoon, and welcome to Gofore's Q4 and Full Year Results Presentation. Intention today is to, of course, give you an idea of how we did in Q4 and last year in '25, but also to give you an idea of, in what shape Gofore currently is to face the challenges of the future because we expect there to be a lot of challenges also for the future.

Presenting today is me, I'm Mikael Nylund, the CEO of Gofore Group, and I will have some guests during the presentation with me. How we're going to do this is that we're going to start with Q4 and full year results and highlights from that. Then we're going to look at the financial highlights, then some outlook.

And to round this presentation off, we will talk about AI, the topic that, of course, a lot of investors are pondering about right now. So we'll have a few expert guests today here talking about what AI means for the consultancy business for digital consultancies.

But as I said, let's start with how we did in Q4. Q4 was rather good, I'm happy to say. Profitability-wise, we improved much from a weaker '25 and especially a weaker first half of the year. The year '25 was very much a tale of 2 halves, with a weak first half and then going into the second half after some corrective measures, a much stronger performance. And that was well rounded off in Q4 with a healthy profit margin.

Growth-wise, there's 2 important highlights, I think. First one is that we've had negative organic growth since the start of '24 and now versus in Q4, the first quarter where that negative development stopped. So organic sales pretty much at a plus/minus 0 situation. But also that the investments that we made because '25 was very much a year of big investments for us, have started to pay dividends. And overall, net sales growth was up 20%. So a significant growth from the Q4 before.

Shortly looking at that sentiment for Q1. We are cautiously optimistic, I would say. So expecting a little bit of tailwinds from the improving demand, and of course, especially expecting a positive development from the investments that we made with business in Finland being supported by a big acquisition in Huld and the business in DACH being supported by also a very big acquisition compared to the size of the business there in the Esentri. We will look a little bit more on these acquisitions also today.

We are in the midst of integration, so that will be a little bit of a strain on Q1 and on the customer hours that we can book for that period.

A little bit more on the Q4. As said, profitability was high, by far the highest profitability of the year at adjusted EBITA, 14%. Utilization rates were at a good level, highest level of the year, which is often the case in Q4 with a lot of kind of a busy calendar there.

As said, net sales increased by almost 20%. This is really important for us, and ended up at EUR 59.6 million.

We have also in Q4 made measures to support future profitability. So cost synergies from the Huld acquisition, which was closed in September -- beginning of September, have been implemented in Q4. The results will be more visible during '26 gradually from those decisions.

A one-off item basically was the compensation of EUR 3 million we got from an arbitration award for a dispute that we've had. And from this, most of it is as one-off items that affect previous years from '25 have been adjusted, but some of the arbitration award affects also the adjusted EBITA in '25.

We are still struggling a bit as is the industry as a whole with the customer price level. So pretty much level for the Q4 at minus 0.2% customer prices. Average salary change was plus 1.9% in Q4, but this mainly includes out of the ordinary one-off items. So I would look more on the full year development there being plus 0.9%. So pretty much balanced with the customer price situation, but not the situation that we would like. So customer price development is a major issue for Gofore, for the industry as a whole.

If we look at the full year situation, as I said, very much a tale of 2 halves, very different halves in H1 and H2, H2 being pretty decent half for us and goes more to show in which shape Gofore is for the started year, for the future years, and for the future challenges.

What happened in spring of '25 was that we made a major restructuring operation, and that has meant that our skill structure is better aligned with customer needs now in H2.

We've managed to reduce costs and we've maybe had a little bit better market situation as well with a little bit stronger customer demand in H2. Especially this is relevant for the private sector and manufacturing industry clients there and also based on our decision -- strategic decision to go into a new industry of Defense and Space, and security-related customers, also the demand in that area is quite healthy.

As said, we did investments in '25, and that's already visible in the numbers for '25, will be so in the future. But looking at the last 12 months pro forma revenue at the end of December, we see that we are at the level of EUR 250 million, which, of course, is due to and thanks to the acquisition of Huld and is an important milestone or important step on our growth journey.

Huld was the biggest acquisition we've done to date, and that's something that reflects also, of course, on the integration work. And as I said, we are expecting that to have a little bit of an effect on the beginning of this year when we are in the midst of the biggest operational integrations with Huldeans joining the Gofore organization now at the turn of January, February.

In December, we also announced the other investment in the DACH region by acquiring Esentri. And as promised, I will come back to a little bit more about the acquisitions next -- almost next in the presentation.

The Board of Directors has proposed a dividend of EUR 0.49 per share, a slight increase from last year, which is, of course, reflecting on the Board's also confidence that the weaker H1 was just a one-off situation, not the normal state of affairs for Gofore, and that we can improve for the future. And we are well positioned as we will go a little bit deeper into in the financial highlights also to use the balance sheet for further investments if we find suitable targets.

Again, '25 was very much a tale of 2 different halves. H1 was the most difficult half year for Gofore pretty much ever, and that was due to weak customer demand resulting in a big free capacity in a big bench.

We also, to add on top of that, we had some profitability challenges in certain projects, which were then handled in H1. And that we ended up in change negotiations in restructurings where we effectively made a layoff of 80 people, and that brought a EUR 2.4 million of savings and going forward from that. So that's the big reason why H2 was very much different from the first one. We had a better alignment of skills and expertise of our consulting force with the customer needs.

We had the cost reductions supporting the profitability. And we also improved on the delivery situation. So no big profitability challenges from projects in H2, although some tales affected H2 still. And as we see here, H2 is, again, in a more healthy double-digit profitability margin even though, of course, H2 includes the seasonally weakest quarter of the year in Q3. So that's a good sign for us.

For growth, the investments, I want to highlight once more the investments that we made during '25. In summer, we acquired Huld. And in December, we announced the acquisition of Esentri in the DACH region. And if you look at the situation in terms of like real growth in terms of last 12 months, pro forma net sales at the end of January, we are at EUR 228 million. So marked growth from what we've seen during '23, '24, '25, and that's important for the Gofore growth story.

Acquisitions. First, Huld, as said, the biggest acquisition to date, 400 experts added. That's a big amount of additional expertise to the Gofore crew at an enterprise value of EUR 54.5 million. A very strategic acquisition in the sense that this is something that we did to implement our strategy of going into the Defense and Space industry.

And Huld has a very long history of very niche expertise in the space area with satellite software, downstream data handling, situational awareness, and this is something that we see as such as a strong growth area, but also in terms of on converging needs from defense, security like national security, and then space technologies and industries. And space will be supporting the growth of our whole strategic industry of Defense and Space.

It's also a complementary investment into the, what we call the intelligent industry customer segment, a significant complementary investment there with almost doubling the number of experts there and especially bringing specific know-how of industrial cybersecurity, which is something that is a very growing area with these customers.

For cost synergies in Q4, we implemented the decisions that will ultimately result in around EUR 1.3 million in cost synergies during '26. So also important in that sense.

The other acquisition is Esentri, a German company supporting our DACH business, a German company based in Baden-Wurttemberg, and having operations as well in Switzerland and also Liechtenstein, with the Liechtenstein state, being a public sector customer there.

This is also, as I said in the beginning, a very significant addition relative to the DACH operation size, so doubles also that roughly. And we start the year of '26 now with 200-plus experts, and also a target of growing our business there in double-digit numbers.

Esentri brings a good customer portfolio and diversifies also the expertise that we have there. As part of Esentri Group, there's also a company called Impact Strategies, that kind of diversifies the expertise that we have in the DACH region into the same direction where we've gone over the years in the Finnish business. So bringing the advisory business, the management consultancy business with a specific focus on sustainability matters, which is something that German customers are very much interested in. So an important growth step on the DACH timeline of growth as well.

What is always important is that how we deal with the customers. And we are, of course, very happy that during '25 also, we managed to improve in that area. Many customers are operating under strict budgets, under kind of economic pressure themselves. So the demands are high. So in that sense, I'm super happy that we managed to improve the NPS score from 65% from the previous year to 68%. And a lot of our customers feel that we can meet or exceed their expectations, which is also, of course, super important.

The amount of returning customers was 93% and the amount of customers that we invoice over EUR 1 million per annum was one bigger than the year before. I think a good result also in the tough market conditions. So it goes to show that the strategic partnerships that we always try to build are ones that also hold up in the tougher market conditions.

And that brings me to the strategy part. No changes here, but important to remember and note that Gofore is focused on chosen strategic industries, those strategic industries being the 3 that I think I mentioned in the presentation already: Digital Society, Defense and Space, and the third one, Intelligent Industry.

We know the customer industries. We have a long history with all of them. We understand the customer industry-specific problems and the challenges, and we can help our customers solving them.

We're still very much committed to our geographical focus in Finland and DACH, and have been investing into the DACH region, as said. And we are working very hard, I think, and getting results out of improving the way we create value to our customers. The expectations are changing. They are quite high at the moment. And we believe that we are in a good place to build on the exceptional offering, and we will come back to that a little bit in the AI theme as well to tell to how Gofore as a whole is tackling the challenge that customers, of course, place on us also in terms of the AI transition.

And as I said, 3 strategic industries: Intelligent Industry, Defense and Space, and Digital Society. We are focused on these customer domains. We are focused on these customer problems in these domains that are domain-specific and different from each other. And that's why we can produce good value to all of our customers in these strategic industries.

Good. That was about Q4 and full year '25, and hopefully, also giving a little bit of an idea that we feel, at least, ourselves that we are in a good shape to tackle the future challenges.

And now for the financial highlights, which usually are given by the Chief Financial Officer. But today, I'm here giving also you the financial part of the presentation.

We are in the midst of a change in CFO. So outgoing CFO, Teppo Talvinko, is not available today, but we will have an opportunity to have a short introduction from our incoming CFO, so shortly to that.

But to start off with the net sales analysis. Big picture, of course, is that growth is driven by the Huld acquisition, which is reported in the numbers since beginning of September. There's an increase in volume, both on own crew sales and subcontractor sales.

Private sector sales was around 8% up year-on-year, again, driven to a large degree by the Huld acquisition. But there are strong areas which are growing and compensating for other areas which are not as strong. So like areas like cybersecurity, many areas of our advisory business are growing.

And here, we wanted to highlight also the simulator product sales, which increased 60% year-on-year. So a sizable increase there. And simulator products are especially for the Intelligent Industry customer segment, and an important part of our offering. So kind of augmenting the consultancy offering that we have for these customers with our own technology in areas which are important for all of the manufacturing industry clients, especially in the mobile work machines area where simulator technology is used in a lot of different scenarios, especially as virtualizing the product development.

So we are very happy that that area is on a growth track, and that also is an indication that the digitalization, the transition to more digitalized products from a very physical world where we've been only recently is ongoing in this customer segment.

Profitability-wise, again, I want to say that the important part here is that first half and the second half are very different from each other. Volume-wise, H2 was much stronger with, of course, Huld acquisition, again, a significant factor in that, but also the higher utilization rate resulting from a better fit between customer demand and capacity that we have.

Employee expenses up a little bit, of course, reflecting both on the restructuring, which was positive for the company and the Huld acquisition, which drives the volumes up and employee expenses are affected that way.

As mentioned earlier, the arbitration award of EUR 3 million, we have EUR 1.2 million of that improving H2 profitability. So the rest of the arbitration award was adjusted for as being affecting years before '25.

Balance sheet-wise, we are in a situation of strong KPIs still. Cash decreased slightly during the year. Maybe you could say that to a more healthy level of cash. And that's, of course, due to the big investments that we've made with the Huld investment being the main one here, Esentri as being -- or affecting January.

Interest-bearing debt increased, same reason behind, of course. And dividends of EUR 0.49 per share will be paid in normal order after the Annual General Meeting, if the meeting decides on these dividends. And this is also a sign or goes to show that we believe in the strong financial position that we have, that we are also able to pay rising dividends and that we consider the first half dip in cash flow and profitability as a kind of not normal situation in any way.

We have still the continued ability to invest when we find good targets during the year. And finally, the cash flow analysis showing strong operational cash flow, especially in H2, and this is something that we expect to continue into the current year as well.

Financing cash flow will be slightly more impactful, of course, in a negative way with the bigger debt position that we have with the changes in '25. And also dividends will be affecting the H1 cash flow and be impactful in that way.

But now, as promised, a presentation from our incoming Chief Financial Officer, welcome, Saara. Saara Ukkonen will be joining us in March. And it's nice to have you here today to present you to the investors. So tell us a little bit who is Saara Ukkonen.

Yes. Thank you, Mikael. And it's really exciting to join such a great company as Gofore. And just to say that my first experiences have been really, really great. So it's an agile company with very proven people, so I'm happy to join.

I have worked in the past couple of years in the IT industry. So I have been a CFO for a company called Witted, and then I also work for a company called Akkodis, which is part of Adecco Group. And I'm experienced in scaling and building the finance functions, improving the processes, enabling and driving profitable growth, and then also executing M&As.

And I have lived now a couple of years in Finland. Prior to that, I lived and worked several years abroad, in France and in the U.K., but happy to be back here. And I really look forward to bringing my experience and support Gofore in the next phases of growth.

As you said, you've been working in the IT industry for the last couple of years, and it's been a kind of a turbulent time that...

Yes.

...not only the Gofore numbers are showing that, but also the industry numbers showing that many companies kind of feeling the change in the economic climate, maybe even the changes in the technological landscape with AI and so forth, but I would say more of the economic climate.

So there probably will be a little bit of a winner and loser situation in this for the future. And I would like to ask you, what do you consider to be the success factors that make a company the winner in a turbulent period like this?

Yes. So I have a couple of points. I think one is adaptability. So as you said, the industry has been in the constant change and the technologies are also constantly changing. So the winners are the ones who are able to adapt and then transform.

Then I think one important point is focus on the client. So basically understanding the client needs and business problems, and actually helping to solve those and deliver real results rather than just technical work.

And then I think at the end, it comes down to having the best talent and best people. So who has the skilled and smart consultants that the client trust and want to employ again and again. So I think at least with those 3, you go quite far.

I think we understand each other quite well here. And I do believe that Gofore is well placed to deliver on those success factors. Thank you, Saara, for this presentation and looking forward to being with you here in the future results presentation.

Yes. Thank you. Me too.

And of course, at this point, I also want to take the opportunity to give huge thanks to Mr. Teppo Talvinko, who has been for 6 years my partner in crime up here and talking to investors on many occasions. It's been a pleasure working with you, Teppo.

Then next, let's look a little bit on the future, on the targets and outlook for '26. A reminder, Gofore has ambitious targets set by the Board in '24, in the midst of the little bit more difficult economic cycle, and we have not seen any reason to change this. This is what we believe in and want to work towards.

And if we look a little bit where we are right now, the growth target, we are actually on track. And that's, of course, at this point, thanks to the bigger investments that we've made during '25. But those investments are also super important for the coming -- for this year, for the coming years, organic growth. So I believe that they have not only made Gofore bigger, but they have especially made Gofore a lot stronger to compete for that growth that we will need in the future.

Profitability-wise, as I showed you, the second half of 2025 was closer to our profitability target. We are not there yet. We have a lot of work to do, but also we consider that we have the right tools here in place to take also our profitability in the coming years to the level that we have been targeting for, well, almost ever the 15% target being the longest living part of the target setting that we have.

Then if we look at the outlook a little bit, here, you will find Q1 performance drivers that we've included in the results report. But if we first look a little bit on the fundamentals, in Finland, we do see from the beginning of the fourth quarter, and we are estimating that the Finnish economy will grow in '26 and the growth will accelerate in '27. And these are important, of course, fundamentally wise, our -- for our growth.

And the same goes a little bit for the German economy. We've been, I would almost like to say, a little bit unfortunate with bad luck being -- focusing on the 2 countries in Europe that have been the weakest in the current economic cycle. So both Germany and Finland have been suffering in the last couple of years. But we also see that the German economy is expected to grow this year. Again, very, very important.

And especially for the Finnish growth, it is estimated to be driven by export industry -- by manufacturing industry. So that suits well with the customer segments that we are focusing on.

But looking a little bit on the shorter-term drivers here. Growth-wise, we, of course, have the capacity increases from the investments that we made from the acquisitions, and that's going to continue the growth in Q1. That's something that is almost certain.

On top of the acquisitions, we are expecting a little bit of total capacity growth also. We have areas where we recruit quite actively right now, and that's important. And then there's, of course, also the areas that are not yet at least in a similar and strong situation. But to have the capability areas that are growing, that's important, and we expect the net change here on top of the acquisitions to be positive in the first quarter.

Especially, we are counting on demand to pick up within the manufacturing customers and the DACH market. It's smaller here, but of course, we do also see that there will be growth during '26 in the Defense and Space industry.

Profitability-wise, we expect the good level or the kind of fundamental drivers for a good level to continue from Q4 to Q1. We've had, let's say, better transition of the year than we've seen in going from '24 to '25 or going from '23 to -- from '23 to '24 in terms of customer demand quite well holding up over the year change. And that's always a good signal for the coming year.

On the other hand, what we've highlighted in the report as well is that the absences during January have been on an unusually high level. So that will be also reflecting on the results for Q1 as will also do the integration work. So there is some integration work related to bringing together Huld and Gofore organizations operationally now, and that will result in a slight loss of customer work, and that will be reflected on the Q1 profitability. And nothing we are worried about. It's just something that has to do with the integration work and nothing structural.

January was reported as part of our full year report and let's say that's roughly in line with what I just said. Holiday period was a little bit of a surprise to us. Capacity developed as expected. We added to the capacity numbers, added Esentri. Otherwise, close to net zero change there, I think. A little bit of a positive change, but very small.

And I want to round off the outlook part with listing our priorities for '26. What we will be focusing on and what we also encourage the investors to look at. And first one is that we want to make sure that the integrations from the big investments in '25 are successful, and that we maximize the value of those investments.

We will see cost synergies realizing during '26, and we will also see business results improvements during '26 from both Huld acquisition in Finland and the Esentri acquisition in DACH or that's what we are targeting.

Secondly, what is super important is, of course, deliver on the turnaround in organic growth. We are now at 0 level looking at Q4, and looking forward, we want to see that as a trend, and of course, return to the positive organic growth track that's extremely important for our future performance. And this will especially be true in the DACH region where we are doubling -- we are targeting double-digit growth in terms of net sales in this year.

And thirdly, on the agenda and priorities is our slogan of rethinking consulting, which means the development of our offering portfolio, making sure that we -- with the chosen focus industries, we are in a place where we can develop unique value to our customers. And we've done a lot of work here and now is the time to reap the results of that and get the results actually visible in performance numbers.

So that's the 3-part priority list that we have set out for ourselves in '26. And that concludes the targets and outlook part. And as the last one, I want to welcome Tommi Rasinmaki and Osmo Haapaniemi here with me, and we will be talking a little bit about AI development. Welcome, Tommi and Osmo.

Thank you.

Thank you.

Osmo, you are the Managing Director and Founder of Valimo Studios, which we will come back to shortly. And Tommi, you are working in Gofore as the Head of Business in our management consulting part, which is also responsible for the AI advisory services that we do with our customers.

So good to have you here. And I will let the experts do a little -- much of the talking, but to start with kind of give the big idea of how we at Gofore approach the topic of AI, which is, of course, a big change for our customers. It's a big change for the digital consulting industry. Some even consider it to be a disruptive change. We'll see about that, I guess. But we are prepared, of course, to face big changes from there.

And what our playbook basically is to, of course, see to it that we upskill our workforce, that we are attractive to new talent because in times of change, of course, you want to make sure that you also get the new talent from the market.

Secondly, we develop our own AI offering and expertise, offer basically, that's where we want to position Gofore as a comprehensive partner in AI transitions for our customers. We think we are just -- have just taken the first small steps in these AI transitions with the customers, and they will need a lot of help in concluding the transition. So that's where we are strong.

Again, focusing on specific industries, that means also that we can give the AI technology, some specific value in the industry context and make sure that our customers get what they want from their AI investments. And kind of a plus 1 in the playbook is that we are, of course, looking at investment opportunities also in the AI context. And what we now have is Osmo here from our group company, Valimo Studios, which we have together with Osmo and Olli-Pekka Saksa founded, and that's an important addition to our portfolio.

So basically, building on that playbook, we're going to have this short discussion about AI development. And we're going to start with Osmo. And -- maybe you can tell us a little bit about what Valimo Studios is and why it exists?

Yes. Thank you, Mikael, and good to be here. So Valimo Studios is a new specialist company in Gofore Group, specializing in AI transformation. And our core mission is to help customers operationalize AI and that way create new business value out of the new technologic capabilities that we now have at hand.

And maybe a few words about me and Olli-Pekka, 20 years in the consultancy business and having led different consultancy businesses. And last year, we came together, talking about the transformation and the change to consultancy business, but even more importantly to customers' businesses. And we just saw that this is a kind of place, a situation that kind of requires a new approach also to the market. And that's why we decided to found a new company.

And overall, we see that as of now, technology is moving a lot faster forward and companies are changing. And that creates a kind of growing adoption gap. And now AI is moving from a kind of passive tool, Copilots, personnel productivity, more into agentic workflows and processes.

And most probably at some point, we will have AI as a kind of agents and coworkers working with us. And that creates a kind of a massive change for companies, and they need to rethink their processes, operations, technology landscape, and how all these enable them to serve their customers in the best possible way. And we try to build Valimo to kind of bridge this gap and help companies to kind of solve this challenge.

Yes. Thanks, Osmo, and great to have you in the group. Welcome like officially into the Gofore Group. You and we together talk about Valimo Studios as an AI-native consultancy as opposed to the, can we say, the legacy digital transformation consultancies. But to be honest, there are a lot of these AI-native consultancies popping up now every week or so. What makes Valimo different?

Yes. Maybe I'm not too fond of the term anymore. It's been kind of a little bit overused at this point. But if we start with what does it mean to us, I think it kind of starts from the company being kind of designed for the AI era, and we're leveraging AI in our internal ways of working and processes, more importantly in delivery, taking the kind of productivity benefits of the new technology to provide more value to the customers. And of course, a full focus on solutions that leverage AI to create that add-on value to the customers.

And then what differentiates us, when we were setting up the company, we were a little bit surprised that on the kind of new company field, there were companies focusing quite a bit to strategy part, and then to technology agencies and that. And we wanted to kind of take a kind of holistic approach. So we are building a company with multidisciplinary team from strategy to technology, and then to adapting those solutions. So maybe that's one area.

And then we have a team of super experienced consultancy business persons, and nobody knows where AI is in 2 years' time. And at least personally, I think that our biggest competitive advantage is the kind of agility and the speed we can learn and having a discussion with customer and learning something and then next day, having it kind of thought through and a part of our story. That's one.

And then, of course, Gofore. We want to have a kind of an industrial partner who can bring the credibility from the beginning. And then, of course, the scale when we kind of enter bigger transformation projects. And so those 3, I would say.

To me, that makes a lot of sense. I like it.

Tommi, as said, you are heading the management consultancy at Gofore. And as such, you see from the, let's say, holistic perspective, what our customers are actually doing, and at what phase their AI transition is. Can you tell us about Gofore's holistic approach to AI transition?

Absolutely. Thank you, Mikael. Well, our approach is comprehensive, as you mentioned. But let me try to cover it through our AI transition model called AI Beyond Tomorrow. And I think it's the best way to do it is through some concrete examples. So I think we can jump to that.

I think that what it takes to succeed in AI transition is about leading this kind of systemic vehicle, so not just the disconnected parts of it. And if we start looking at our framework from the bottom, at the basis, the Data and the Platform Foundation. And in practice, this means a lot of work with the data, data availability, data quality, also about the technical governance, meaning, and ensuring the controlled and secure environment for AI solutions development.

And to speed up our clients' work in this era -- this area, we have productized our services called the AI Landing Zone, which is the collection of best practices, how do you in practice to put up this kind of a platform and data foundation.

On top of that, you can see these 4 wheels, so to say. And if we start from the individual part, it is about the services like workforce upskilling, training services, also about the cultural change adoption, because things are moving really fast. You need a good innovation culture.

But one hot topic to take on that is the AI 1000 trainings. It's the training focused on -- for the management teams and Board members and business owners. Gofore is one of the founding partners of that training model, and it's been initiated by the AI Finland. And just last year, we were awarded as the Training Partner of the Year in the Finnish AI Gala as well.

And we've done multiple trainings for different kind of companies, from big to small, and it's been really, really great.

And one thing to mention, we have just announced today the strategic partnership with the AI Finland and their teams. So looking forward to even more close collaboration with them.

If we point out one thing from the organizational wheel, I would highlight the importance of the enterprise architecture. It hasn't gone anywhere. And I think it's actually even more important now when we are figuring out how we get AI into our organization operations and processes, and how do we develop that.

The business wheel, it's all about what AI really enables. It's about product and service innovations, ending up into new business models. And Gofore is really well positioned as we've been talking already that we've been quite systematically building our capabilities, the end-to-end capabilities, all the way from strategy work to the development and maintenance of these new type of innovations and solutions.

And of course, important part of it is the fourth wheel, digital development. And I think this is the wheel that is at the fastest disruption at the moment. But at Gofore, we help our clients to move towards the AI-native digital service production that runs on top of the AI platforms. So we can provide a clear path to this changing operating model.

And to me, I feel like the bottleneck is not anymore in the speed of coding. So we need to look at the whole life cycle of the digital development, starting from the, how we define the business needs, how we do prototyping coding, of course, as well all the way to how do we do it in the secured and controlled manner and ensuring the quality.

To run these wheels, we need an engine. So the AI transition engine is, this is the leadership that connects technology and people, sets direction and keeps the organization moving at the right pace as well.

So all in all, to get the AI investments paying off, you need to have the strong foundation, 4 wheels aligned, and a well-led engine.

Well put. And from both of you and from the things I hear from customers, I think we are now really entering the time when customers kind of realize that it's not just about adding a tool or adding a simple individual productivity tool like Copilot, which some people use and some don't, to be honest about that as well.

But when we go into the more complicated organizational holes, we have the enterprise architecture, as Tommi said, and Osmo mentioned, the kind of change need for processes. But for whole organizations and even individuals, we know that we are not always there, as individuals, the best to adopt new ways of working. And now we are talking about a lot of professions, a lot about -- a lot of roles in white-collar work that will be actually quite radically changing.

But Tommi, could you just mention a couple of concrete examples what we do with our customers in the AI sphere?

Absolutely. Starting from the -- our public reference city of Helsinki and their centralized application maintenance solution office, it's a great example. It might not be the most awesome case, but it's saving millions.

And the thing why it is saving millions, of course, bringing centralized maintenance solution is already efficient way, but we are bringing more and more AI into it. And of course, we're doing it in a kind of a gradual way, taking AI where it is bringing value right away, and we have great experiences on that and expecting to save even more and do it even more effectively, the maintenance there.

Another thing is to the AI governance models. We have been now doing kind of a comprehensive governance model for large enterprises. It means defining the roles and responsibilities, and also the processes on how to procure, develop, and operate AI solutions.

To mention a few others, I'm really excited about one strategy project that we have ongoing. It combines also the organization-wide coaching and learning into the strategy process. And I think it's actually a smart way to approach this, the AI strategy work, because it's all about adapting and learning new all the way along as you go. So not -- with AI, it doesn't work that you set the strategy and just implement it, you need to learn along the way.

And one other thing to mention, we're also leading the human side of change in one of the largest AI transformation programs in Finland. So there are a few. And there's a lot more, of course.

Yes. Yes. Interesting what the future brings. Before we go to the audience questions, just one short question to both of you. We are now in 2026, as you know. And 2026 might be the year when organizations on an average, there are leaders, of course, already start to invest more programmatically into AI, coming from kind of the capability building, the expertise or learning about what AI is and doing the more of the proof-of-concept type of projects to something bigger. Would you agree? Is 2026 the year when we see that?

We will definitely see at least the kind of a big jump forward in that. And at least in our customer discussions, the productization, finding the kind of bigger value lever cases in the organization and then starting to move those forward is kind of a very topical discussion that we are having. So definitely, I believe that we are moving forward.

And last year, we were still hearing that in some companies, majority of the AI investments were going to Copilot licenses and then they were just given to people and not much happened. And now clearly, there's more kind of this organizational productivity approach, which I think makes a lot of sense.

Yes. And I think even though it's one hype word more, but the agentic approach is really speeding up the production level implementation. And also we are now starting to see the investments in the public sector as well, more and more coming that is focused on AI.

And of course, they have been putting the investment budget 2 years ago, and now we can see the results and expecting to see a lot more in the coming year.

Public sector, on an average, it's a little bit behind the private sector, I guess. But when the wheels get turning, things will happen. Yes.

Let's go to audience questions.

We have Jaakko Tyrvainen, an analyst from SEB following us. And first question is that the financial markets are speculating that the AI-native software will disrupt the existing SaaS market. How are you expecting this to impact the IT consulting market?

I've been recently learning the mindset of the financial markets, I guess, with the sell first and ask questions later thing. So this is at least something that's happening there. But joke aside, I think at least the markets have kind of -- they are confused about this.

On the one hand, they say that SaaS software will be replaced by more tailor-made solutions. And at the same time, they are saying that there will not be a need for software development. So that's at least something that I'm a little bit puzzled about. Do you have something that you want to add to this question?

I wouldn't call myself as a kind of an expert in this field, but -- but I don't think that the kind of bigger SaaS products are going anywhere. Maybe the role is evolving, and they will definitely be there as a kind of a transactional and master of record type of systems. But it will be interesting to see how much companies start to build their own tailored workflows on top of those master of records, and kind of moving away from the UIs of those SaaS platforms.

And potentially, that, of course, means quite a bit of work for consultants like us to be there and help them redefine those processes and ways of working and then connect, for example, AI into those.

Yes. And if the trend really would be that SaaS market is dying, that would mean that we're going to replace those solutions by some customer tailor-made solutions, and that would be a big potential to go for and companies like us. So we can see this as an opportunity as well. But as mentioned, those players will be there in a form or another.

And I think we are a little bit kind of overreacting to the software development productivity topic. Even it's very fast to build stuff, the faster you build, the more you need to test and the more you need to do work on the kind of product management side and so on. So I don't think that to the overall workload, it's make sense.

And Jaakko's other question is related to that. How has the AI-powered code creation been so far visible in daily operations? Have you been able to speed up the outputs? And if you -- if so, have you or your customers benefited from the productivity gains?

Yes. And on the other hand, both Tommi and Osmo have been already referencing the kind of that code creation as such is not the only thing happening in a software development process. So when you speed up that and get the productivity gains from that, there will be other bottlenecks.

And typically, when the scale of projects of software development grow, then there are other bottlenecks that need to be addressed that are maybe even more important. AI can be helpful there as well. But it's not only about the software development productivity.

And in the daily operations, obviously, our software developers are AI-enabled, and we will be using AI tools, and we're really systematically building that capability to everyone in the software development.

Again, from Jaakko, a question, given the foreseeable productivity leap in code creation -- he's really into code creation, I see. How are you positioning against those rivals who trust offshoring in their delivery? For example, how large share of your billable hours are coming from software engineering, pure code creation, relative to larger international competitors?

Not commenting on the larger international competitors and what their share of code creation is. Ours is maybe comparing more to the domestic competitors. I think we have a little bit of a smaller share of pure code creation work, because we have the comprehensive offering and we have the advisory business.

We have the quality assurance business, and we have kind of all of the phases of the transition that customers need. So we are a little bit, I think, less dependent on the software creation capabilities going. That's not something that you can even put an exact number on, but let's say, 30% of the businesses is in that area.

Daniel Lepisto from Danske Bank asked that, what are the areas or segments where you are recruiting currently and seeing better demand?

Well, we'll be mentioning some examples, cybersecurity and especially strong in the manufacturing industry, and the kind of cybersecurity of more and more digitalized products and the cybersecurity of production, those are very important areas.

In the advisory arm of the business, there's several parts that are also recruiting quite heavily, including project management, which is often a kind of a good sign that the customer demand is there. There's happening -- there's things happening with the customers. They need project managers. So that's always a kind of a good more general sign. Data, AI part kind of the natural answer to that.

Daniel goes on to ask that, are you satisfied with your current Defense and Space capability now post Huld? Or could there be room for further M&A in this space?

And the answer is that we are actually quite satisfied. What we got with the Huld acquisition is both a customer portfolio, domain-specific knowledge for both Defense and Space. But especially, I think something that is often overlooked is the capability, the ability to operate in security-sensitive environments, which is about -- it's about, of course, expertise of the experts, but it's also about process-related stuff that needs to be adapted to the security sensitive environment.

It's about even premises, that you have the ability to work with security sensitive subjects. And these are not the subjects that are first -- when AI tools are brought in first, actually, quite often, it is not allowed to use the AI tools, and that's, of course, a security thing happening there and has to do also with another big topic that we haven't discussed today, maybe in future shows, but digital sovereignty and technological sovereignty of -- that I think has gone from being just a policy concept to being something actually really on the agenda of our customers.

From Daniel, again, can you discuss the positive outlook for your Defense and Space business in a bit more detail, especially when it comes to opportunities and potential collaborations ahead? Also what was the Defense and Space share of '25 sales through Huld?

We haven't disclosed exact numbers, so I won't do it here either. And of course, it's a little bit difficult to discuss in concrete terms the opportunities. But as we all know and for unfortunate reasons, investments into Defense, investments into Security are not the ones where public finances are limited. So that's an area.

And that's, of course, reflected then to the Defense equipment manufacturing part where, actually, we have quite a lot of organizations working in Finland with product development, both, of course, the domestic ones, but also the big European ones. A lot of them have product development operations in Finland being interesting customer opportunities for Gofore.

Then we have a question from [ Estie ]. How is agile and lean processes advisory nowadays? Is Data/Cloud, AI or Leadership taking major parts of customers' attention? Or do they improve on business agility too?

Tommi, do you have some viewpoints on this?

Yes, they are because, now maybe because of AI, the organizations are also evolving. And of course, we've seen a lot of change negotiations in the recent years to the economic situation probably, but also because the organizations are also changing. They're changing their operating models and the roles are evolving because more AI coming into it.

There was one study that stated that by the end 2030, there's 60% of the kind of job roles are different than nowadays. So we don't even know what the roles of the future are. So definitely, there's a need of different kind of consulting related to the agility and the overall management consulting.

So maybe you could even say that in a sense, there's nothing new with the change that AI brings. We've always lived in the changing world, but AI is only accelerating that, and every organization needs to live with the very fast paced change.

We've spent a little bit over an hour. I'm sorry we can't take all of the audience questions. This was all for today. Thank you for being with us in this results presentation stream and see you again.

Good day, and welcome to Gofore's First Half and Second Quarter Results Presentation. My name is Mikael Nylund. I'm the CEO of Gofore Group, and I'm here with Teppo Talvinko, our CFO, Chief Financial Officer.

Good to meet you.

We can take questions at the end of the stream. We will have a presentation first, and you will be able to ask questions on the streaming platform. So you can do that already during the presentation, and we'll take the answers at the end.

I'm afraid we are here to present a weak second quarter, even historically weak. But at the same time, we think it's really important, and we want to make sure today that you know and understand the corrective measures that we have taken and implemented during the second quarter to make sure that this quarter, the weakness is a one-off phenomenon like it is designed to be.

So firstly, there's corrective action that we've taken regarding profitability by Gofore standards, a very significant restructuring operation that resulted in the layoffs of 80 Goforeans and the decrease in capacity that comes from that, but also the increase in the utilization rate and the savings on employee expenses.

Secondly, regarding growth, we have made a very significant investment in -- that we announced in July. The Huld acquisition that was announced is a very significant investment and provides ample opportunity for us for future growth. And based on this, we are quite confident about the end of the year, the rest of the year and going forward from that, which you can also see from the -- for our standards, a difference from our earlier practices that we have given a guidance regarding the adjusted EBITA profitability for the full year, and we'll come back to that in the presentation a bit later.

In that sense, we hope that when we now present a weak second quarter, we can, at the same time, also present a quarter that has -- that will be the turning point and will be a return to our growth track that we at Gofore, of course, are accustomed to.

On this one slide, you can see looking at the last 12 months LTM net sales that the growth track is, of course, there after the Huld acquisition. And we think that the future times, they are exciting for Gofore and the Goforeans.

Back to second quarter now and the highlights from that. So net sales decreased 7.9%. That's a continuation of the weak market that we've seen since 2023. Adjusted EBITA followed net sales decrease and landed at 2.6%, 10% or 10 percentage point decrease from last year, which is super significant, of course.

And now if we can get our tech personnel here and put the monitor on, and we can continue after that, I think.

Sorry for the technical difficulties.

[Audio Gap]

Just one second, I think.

[Audio Gap]

I think we'll get the picture back in a while for us, and we can continue. As I said, adjusted EBITA decreased following the net sales decrease and was at 2.6%. And in addition to the decrease in net sales, there were problem projects that we have written about, reported about earlier also. And in 1 project, we had a significant write-down, which amounted to EUR 1.0 million. Teppo will go into detail about the EBITA bridge in the financial highlights section of the presentation.

And as of late '24, we have shifted our focus in regards to profitability from a cost control, cost savings strategy, which we quite successfully implemented during the beginning of the weaker market situation, '23 and '24. And decided that this cost savings, cost control strategy is not viable in the long run as we see that the weaker market situation continued into this year. So during this year, we have shifted that a little bit or quite radically actually. And as I mentioned in the beginning, during second quarter, we implemented a restructuring that resulted in the layoff of 80 people. And that's something that is a very different approach to the cost control strategy that we had earlier. And this quarter's profitability is also a reflection of the strategy change that we did. Those costs are now from the restructuring costs, they are now accounted in the second quarter results.

Another highlight, of course, from Q2, as always, is the interesting part of customer prices. We could report a small increase in customer prices, plus 0.3% without accounting for or adjusting for the projects that were exceeding -- the problem projects that were exceeding the work estimates. If we take the whole project portfolio, it's minus 4.5%, which includes the impact of the write-off also. So still, we are controlling, although a little bit struggling with the customer prices and average salary change was plus 0.6%. So a little bit more than that, but of course, quite controlled and balanced numbers.

A big highlight of the quarter was, as said in the beginning, the investment and acquisition of Finnish technology and design company, Huld. We will have a separate section in this presentation about Huld also.

As mentioned, second quarter included an unusual amount of one-off items. We will have Teppo going into detail into the euros of those one-off items. But to our understanding and how we see the situation and the market situation right now, corrective measures that we have already taken are there in place to fix most of, if not all of this problem situation. Once more, there's the billing rate fix from the restructuring and the layoff of 80 experts and the resulting reduction of free capacity and the resulting increase in utilization rate, which has been the biggest problem for us in the weaker market situation and increase of the bench capacity or the free capacity and with that, a weaker utilization rate.

We don't have any further write-down risks in our projects. That's something that we want to make clear to everybody. What we need to do is learn, of course, and improve and make sure that we deliver better customer value in the future.

And once more, the prices and the gross margin situation that's impacted by the weak market situation and the competitive situation. Especially in the public sector market, we see that the competitive situation has for a longer time been quite fierce and that, of course, is reflected on the prices. So taking that into account, we are happy that we could report a plus 0.3% adjusted customer price change, adjusting for the bad projects that were already described.

Some more details about the restructuring. After very good and quick swift change negotiations with our employee representatives as governed by Finnish law, a reduction of 80 people was implemented in the second quarter. This reduction of capacity is now reported in full in this quarterly report. No further reductions are planned at this time. The cost of implementing those reductions was EUR 1.2 million, and that those are also accounted for in the second quarter results. We expect savings on an annual basis of EUR 6.1 million from the reductions. And for this year, that will mean an estimated of EUR 2.4 million for the rest of the year. So significant savings that, of course, from an operative point of view, we will be seeing as higher utilization rate as healthier business based on higher utilization rate.

I think an important impact of the restructuring is also that the market fit of Gofore's exploring the longer weaker market situation that the bench capacity, the free capacity without projects actually started to accumulate to certain kinds of expertise. And with the restructuring, we have, of course, also renewed the expertise and removed the expertise that is not up-to-date and can replace that with more in-demand expertise for today's market and the future needs of our customers. So all in all, a tough period for Gofore going through these change negotiations and restructurings. But at this point, we see it as a success.

Looking at customers and considering the decline in net sales, I think we did well here. We won new clients, as mentioned on the slide, but especially, I think the idea of being the strategic partner for our big customers is still working well. We had a reduction of 1 significant over EUR 1 million per annum billing customer during the second quarter, which, as said, considering the net sales reduction, I think, is quite a good result. We do work well with our big customers, with our strategic customers, and we do good work for them. So that's, of course, super important.

As a little bit anecdotal data point, we can mention that our embedded software developers, which, of course, all of them work for the industrial clients, the Intelligent Industry customer segment because that's where the embedded software is developed. They are all sold out. So that's a good situation also from -- reflecting on the market situation at the end of the second quarter.

A big restructuring and layoffs are always also a risk, and we do take that risk very seriously because we continue to regard employee experience and the employee centricity of this company as a key competitor dictates. And the hard measure for I think how we have managed to do the big restructuring is the attrition rate. And that's something that we will be monitoring very closely now during the rest of the year and going forward. For H1, when we started these measures, there's nothing alarming. You will see on the attrition graph here in the lower right corner that the full attrition is on a high level, but that's, of course, a direct implication of the layoffs that we did. The more interesting figure in the chart is the unexpected levers figure, which is for the last 12 months is at 8.1%, a slight increase from the full year '24. But as said, nothing alarming yet, something that we will really be looking -- having a close look on.

As we have also communicated throughout the first half, we continue to recruit. The recruitment strategy is different from what we've used to in the times of rapid growth, but we have continued to recruit. I think a not insignificant number of 82 recruitees from -- in the first half also shows that. So we recruit the sought-after profiles and the expertise and other key personnel, and that's where the 82 number has come from.

At this point, I give over to Teppo, who will look more closely on the financial performance.

Thank you, Mikael. Okay. Next, I will walk you through our H1 financials. So we have faced challenges, as Mikael said in H1, but let's talk about those and also how to -- we will mitigate those.

So we saw that market demand had been changing for our services, and there was quite a big bench, and we saw that this was a permanent change in demand and in the situation. So a further analysis led to layoffs. And as a result, there has been a one-off cost effect in Q2.

Improved utilization rate will bring us closer to our 15% adjusted EBITA target. Better utilization and capabilities are a key way that we responded to these challenges.

Secondly, we identified some problematic fixed price projects, and we saw that there is a need for a better project scoping and better project management. We addressed this, and we have taken actions to improve our risk assessment and also project management related to this.

Price competition is there. But as Mikael said, if we exclude these result fixed projects, we see that the average prices for the whole portfolio increased 0.3% year-on-year basis. Right capabilities and offerings are our way forward for better price development.

Summarizing Q2 as one-off change with focus on betterment. Q2 took the hit, but we addressed serious project issues.

Then let's talk about H1. So Q1, we identified a market reality and learned about some fixed project issues. At the same time, we looked at growth. Q2 was actions, downsizing and strategic reassignment, improved project management together with the steps to growth. We expect that there will be payoff in second half. Changes should show a clear performance improvement in second half.

We actually shifted from reactive to strategic. Q3 and Q4 will be the proof points, higher utilization and better project outcome. And with the Huld acquisition, new strategic business lines.

We have excellent financial KPIs and our balance sheet position and strong cash flow after Q2 actions let us invest into organic growth and inorganic growth. We will also continue digital product life cycle and other offering developments. This all gives us a possibility to target new acquisitions beyond the Huld deal. Huld acquisition will be financed by bank loan, cash and share considerations. If we zoom up, so we have excellent financial KPIs after actions taken into Q2, and we are in a better position now to enter second half.

Thank you. The stage is yours.

Good. So what we want to next do is look a little bit closer on the M&A activity. And of course, in this case, it's about the Huld investment that we made in -- or soon after the second quarter.

If you have any questions regarding Teppo's part of the financials, just type them on the streaming platforms, we'll take them in the end.

So very, very excited about the acquisition of Finnish technology company, Huld. I suppose quite many of you saw the announcement in the summer, but we will go through the most important parts here and talk especially about the strategic rationale and the strategic fit of these acquisitions to go for growth strategy.

First of all, the basics of the deal, we will buy 100% of Huld or as it's actually called RDV Holding, and we'll take full ownership of the company as now probably by 1st of September when we get the approval from the competition authorities. Enterprise value of the deal was EUR 54.5 million. On top of the slightly lower purchase price, we will also restructure Huld's balance sheet. So that will also have an impact on the spending what the deal is about. 90% cash and 10% shares will be used as consideration. And Huld is around 400 employees. So for Gofore standards, a very big impactful acquisition, which we are aware, also includes a little bit more risk than a smaller acquisition, but we are really happy that we can get a significant impact to the strategic areas that we want. EUR 38 million in net sales in '24 and EBITDA on a quite healthy level of 15% in last year.

Huld, as said, is a Finnish company, so operations mainly in Finland and working mainly with Finnish customers, but also international customers and operations in Czech and in there -- in the Czech, it's located in Prague.

We find the strategic rationale quite clear with Huld. It has to do with Gofore growth strategy. First of all, we supplement what we have already built over the years at Gofore in Intelligent Industry. We double -- around double the workforce in Intelligent Industry. So we, of course, become a much more relevant partner for our big customers in that area. Some of those customers are shared, some are not. And we -- in that sense, also complement the customer portfolio. And we complement the offering. I will come back to that in the end.

And equally important, I think, is the strategic new areas that we now invest in. Huld has a long history in space sectors and also a history in defense work. So that significantly enhances our chosen growth path in the security customer segment.

Customers mentioned here, Finnish defense forces, also on the space side, a lot of publicly funded, mainly projects on a European level, but also some outside of Europe. So those are also projects that we see the security area being more and more integrated with space, traditional defense players and also the civil security side where Gofore is really strong. So combining these is something that we are extremely excited about and hope that this will be something that our customers will see as valuable.

Looking at as a graphical presentation, this is what we announced as Gofore strategic growth areas at the end of last year. So we added new growth areas at that time. We wanted to broaden the approach to the market as we saw a little bit of a slowdown in the traditional areas where we have been strong. And then we looked for potential targets in the market that could support this strategic choice. And we, of course, found Huld who are very strong in defense and security space and in the machines and vehicles area where -- which is what we have at Gofore called the Intelligent Industry customer segment. So we see that this is a clear and very obvious synergy case in the customer areas that we are going to serve. And as you see from the customer logos on the right-hand side, similar type of customers to Gofore also big customers with big potential where we can together be an even more relevant partner for these customers in their digital transformation.

So this is what we will get. We will continue working with the Gofore growth areas in digital society. We will build a very relevant offering and customer base in the security area, and we will double or significantly strengthen the Intelligent Industry volume, but also the offering there.

I think is important because it's about areas where we think we can really stand out from the competition. It's the safety and security area with digital security, cyber safety, functional safety areas, which are relevant for all Intelligent Industry customers that build more and more digitalized products, more and more autonomous products and so forth. There's also another area that will be added to the capability mix of Gofore with Huld, and that's about the product design and development area that Huld is also very strong in. So really exciting addition to Gofore and something that we see that fits the growth strategy that we came out with at the end of last year perfectly.

Last part of today's presentation is about targets and outlook, something that always, of course, we know interests you. Let's first look at the target part. And these are quite fresh long-term targets that Gofore's Board of Directors have chosen and these are something that, of course, remain in effect also after the first half, EUR 500 million in net sales by 2030, ambitious growth, both organic, where we need some help from the market for sure, and also M&A growth. And we've seen that the M&A market is quite active right now compared to a year ago, a very different situation. 15% adjusted EBITA profitability. And after a weaker first half, we are not going to be there this year. I think that's clear, and that's what's also reflected on the guidance that we gave now last week. And this is more of a long-term over-the-cycle target that we have, which I think historically, we've shown that we can achieve, and we are confident that we will also in the future.

Looking at the more outlook part of it. I think it's still early to say that there would be any kind of clear and like complete turnaround in the market. But it's also important to say that we see individual positive signals in each and every market area where we have operated. In the public sector, no material change this year, but investments continue and especially in the security area as expected. Gofore is winning more. So that's an indication of, of course, our own performance, but also that with market normalization, with industry overcapacity decreasing, I think we will see also a more normal competitive situation, especially, of course, regarding pricing, and that's something that we expect to happen quite gradually. There will be no like big individual turnover situations. It will be a gradual improvement.

As I already said, on the private sector side, we have these anecdotal data points, let's say, and one we think is important is that, the embedded software developers are fully booked right now. So that's a clear sign of intelligent industry. So machines and manufacturing customers being more active and investing more in their own product development.

In the DACH area, we are a very small player still, and that I think means for us that we are a little bit slower to catch hold of the improving market conditions, and that's why we also have indicated that the, let's say, turnaround in DACH sector will be a little bit slower than what we will see in Finland.

What I mentioned also on the previous slide is that, for the M&A market, there's a market difference from what we see in activity levels now compared to a year ago. So that, of course, provides opportunity. That also tells about the future, let's say, after this weaker market situation that it will be different from what we've used to. There will be winners, there will be losers. And Gofore is, of course, very strongly committed to being one of the winning side. But the M&A market, that's something that provides also future opportunities we assess right now.

If you look at the shorter-range outlook and on the Q3 performance drivers, growth-wise, I think it's quite clear that once closed, the Huld acquisition raises our capacity and will drive growth quite significantly. But also, we expect and see a slight improvement in business in -- especially in Finland.

We are now in the midst of August and returning from the holiday season, and that's always for a consultancy business, an important time and a very defining time also for how the autumn results will turn out. And we think that the situation looks quite good right now and is better than a year ago. So that's also a positive signal.

Profitability-wise, we have issued the guidance now for the full year adjusted EBITA, and we indicate that it will be between 8% and 10%. And that, of course, also means that there will -- we indicate an improvement from the first half. So this is also something that will affect Q3.

The utilization rate, we discussed that already at the beginning, the restructuring and the layoffs that we did have significantly reduced the free capacity and via that will improve or have improved the utilization rate, and that directly impacts profitability. We do not see any further write-down risks in individual projects. Price competition is more, we think, a longer-term game. In one quarter, it won't change one way or the other markedly. But with improved demand and with more normalized supply and demand situation in the industry, we think that there's also good opportunities to improve on the price development going forward if we are correctly placed -- positioned in the market and can be the strategic partner that we have shown that in the past that we can. So we are positive about the price development once we get a little bit of assistance from the market demand. For the DACH area business, we don't expect any material improvement in Q3 yet. So that requires a little bit more work.

And with that, we come to our second half priorities, something that we want to share with you now so that you can see that what we are working on because, of course, Q2 was a little bit of a surprise or a different quarter to many. So we want to -- by this also assure all of you that we are working on the correct things. We -- first of all, we are very focused on ensuring that the post-restructuring performance is on a healthy level. So that means that the utilization rate that increased immediately with the restructuring measures, that also something that holds.

We have a situation where our product, the expertise that we have is a little bit better fitting to the market needs than it was pre-restructuring. So this is something that we expect helps our growth, places us a little bit better in terms of pricing and also makes us a little bit more courageous in recruitment decisions. As mentioned already in the previous slide, we continue to work on the turnaround in the DACH business results.

Second priority for us is finding the synergies with Huld. We are a smart integration path. So the clearest synergies that we see in terms of businesses is that, we will double our size in Intelligent Industry volume. We will have a broader customer portfolio. And this will be something that supports our position as a strategic partner for those customers. And this is also reflected on the offering that we can provide our Intelligent Industry customers.

Secondly, there's the other part of the synergies to find the right kind of growth path in a very high level of growth ambition in the security area, including the defense and space areas, something that we will closely work together with Huld to find the right path and the right places to invest into future growth.

And, of course, thirdly, continue investing into new growth. I mentioned that the M&A market activity level is quite high now. So that's something that takes a lot of our time, and that's obvious opportunity for us for growth. So that's something that we are working on. And also a bold enough recruitment strategy is needed at this time. We have now a healthy level of free capacity. So it means that when the opportunity arises, we need to be bold in the recruitment strategy.

And with this, we conclude looking at the guidance that we issued last week. So I already mentioned that a couple of times, but just to once more tell about our guidance, which reflects the outlook that we have on the full year 2025, we expect adjusted EBITA profitability level of 8% to 10%, which, of course, means also a market improvement from the first half, and that is based on the measures that we have today explained to you and gone through in quite detail.

So now time for any questions from the audience.

We have some -- should I be looking at the published or the presenter side.

Thank you. Joni Grönqvist from Inderes asked that how fast after Huld consolidation, do you think you are ready for possible new acquisitions as balance sheet still gives you room and you say M&A market is more active now?

Well, that's something that we need to look at on a case-by-case basis. Even though the Huld acquisition is quite big on Gofore standards, it's still business-wise, it's quite focused on certain areas of business. So that, of course, also has an impact on this analysis when we will be ready for that. But as you say, we think it's important that we have the balance sheet to take hold of opportunities that arise from the markets right now, and that's what we want to do. So not rushing it, not taking too big risks, but we believe that, let's say, 3 months could be enough for the basic integration, and we could go into the next acquisition depending on what kind of company and what kind of business the next acquisition is.

Jaakko Tyrvainen from SEB asks, how fast the market in defense sector is evolving? Is the overall demand growing in the sector? Any comments on Huld's defense demand trends, if you can?

We are not, at this point, able and won't comment on what Huld sees in the market. We will come back to that, of course, as soon as possible when the transaction is completed. So I'm sure we'll have more information on this. But what we see from Gofore side is that, where we are strong also is, in the public sector. We see that public sector investments into security, be it defense, be it internal security, civil security, those are not areas where the savings are targeted at. So that's -- the investments are there.

Joni Grönqvist asked that how has Huld developed this year?

Huld -- majority of Huld business is still in the industry area. So without directly commenting on the Huld numbers, what we showed today is the LTM number for them. And what you notice from that is that, there's a slight decrease in net sales. And we think that, that reflects on the market in H1 quite well. So they are not safe from the market situation. They are not safe from the situation that Gofore also sees.

If we can assume and that's something that we won't go deeper into that the market in the industry is similar to Huld that Gofore is then the positive signals that we looked at today, the individual positive signals, I want to add, they are -- they should be also there for Huld.

[indiscernible] asked that could you give some color on how you use AI internally and on customer assignments in general? And in particular, how coding will change the number of developers -- why coding will change the number of developers needed and the required competence of those who will survive this disruption? I think it is meant here. How do you rate Gofore's readiness and edge versus key peers in this area?

Yes. Well, the impact of AI on especially coding is something that there's a lot of discussion in that area. And I would hold my judgment on where we are actually going as of yet. It's clear that AI will increase the average productivity of software development of coders. What is not clear, I think, is that, how much will this also drive new demand? I don't think there's a limit to how much software our world can and wants to use. We don't really see that yet. So increased productivity for sure, but I would think that the increased productivity also drives more customer demand. Our customers need the customized customer-specific solutions for them to build some competitive advantage in the market for their products, for their services. And that requires that they do software development. And I don't think that there's really kind of a hard limit of how much they would do that.

Having said that, of course, different experts are differently equipped to take advantage of these tools. What we want to do is help our people to take advantage of these tools. We want to also not just see kind of the state-of-the-art in terms of tooling and productivity. We also want always our experts and via that, our customers to understand the other sides of the coin so that we still continue to produce quality software, secure software also when AI is involved.

This is a really difficult question. I understand that it's on the -- many people want to ask it, but it's really early to give hard answers there yet. What we know that as of now, AI has really not decreased the demand for software developers in the market. So that's something that if it will happen, is for the future.

Jaakko Tyrvainen asks market level question, how much the use of AI has improved the productivity of software engineers? Are you seeing such productivity creating more overcapacity to the markets that is the amount of available hours growing more than the actual output demand?

As I just answered, no, we don't see that dynamic in the market now. And it's early to say how this will affect. I would be quite optimistic about customers having the need for further software, not having like a hard upper limit on how much software there is use for.

Jaakko Tyrvainen continues. You plan to keep Huld as an independent unit. However, what type of collaboration you are planning to harvest the sales synergies?

We don't want at this point to comment too much on the integration plans. But what we have said is that, for now, Huld will remain an independent unit. We see a lot of customer synergies, especially in the Intelligent Industry area, and we will do the integration measures that are necessary for us to be able to have those customer synergies. So not necessarily long-term independence as a target.

[ Pekka ] asked how large a part of Huld's revenue comes from defense sector?

At this point, I don't have exact numbers, and I don't want to comment on that. In the future, we might be able to give you a bigger or better understanding of these 2. Industrial customers are the biggest area of Huld's business.

Joni Grönqvist asked, can you describe Huld's nearshore capability and how you plan to develop it?

Huld has a small operation, a small unit that operates in Czechia in Prague. I would not describe that necessarily as a near-shoring operation. They have their own customers. They work mostly in the space business, which there's reasons why they operate in Prague. So Huld will not, in any like significant way, change the way that we have near-shoring capabilities. What we plan to do in the future remains to be seen, and we'll comment on that later.

Joni Grönqvist asked that, can you tell what kind of synergies you expect from Huld?

Yes. So the biggest expectation of synergies is on the customer side on developing customers that we together can serve better, where we can be more strategic partners for our customers. So that's the clear first priority. And that's what we will start working on as soon as possible. We will also be looking at cost synergies, but that's a secondary priority.

Joni Grönqvist asks, do you already have a post-holiday view of customer investment mentality?

Maybe not the mentality as such. What we do see is that, the utilization rate and the free capacity is on a healthy level. And as we mentioned in the Q3 drivers, it's a little bit better than a year ago.

Daniel Lepisto from Danske asks, what can you comment on Huld's operating performance in '25, minding that the revenues were declining, but margins were improving in '24?

As said, what we can comment on and what you can see from the presentation material today is that, for H1, there is a slight decrease in net sales. But at this time, we will not be commenting any more than that.

[ Vesa Heikkila ] asked that Huld has expertise in service areas, for example, product design and development that are not in your current service portfolio. How do you see the new service area affecting your business? And what kind of plans do you have for this new service area?

Yes. So as was presented, I think the 2 big areas of expertise that Huld significantly adds to Gofore, where we don't have anything or nothing substantial are, first of all, the security side of things, digital security, very important and for all of our industrial clients and a super important area, and that's something that we are very excited about. The other area is what [ Vesa ] also asked about the product design, more of the physical side of the products. And that's something that I think very well supplements the expertise and the offering that we have from before. So our customers will be able to get a more complete package of services from combined Huld and Gofore.

Jaakko Tyrvainen asked that the international business continued to show steep decline. What actions you are taking to stabilize this? And are there any signs of stabilization?

Well, the actions, I think, are quite clear. We are selling more. We are doing the business development that's needed to stabilize things. So as we have in earlier presentation also discussed is that, also and especially German clients or DACH clients of us have implemented savings in '24, especially continuing a little bit into '25, too, but especially '24. And on a year-on-year comparison, we have certain customers that -- where we have lost ground quite a lot. And from our learnings, it's quite typical of a smaller player in a market to be quite heavily affected by these kinds of situations and Gofore as a bigger player in the Finnish market and having big strategic customer relationships is a little bit more shielded from this quickly implemented savings.

So there's only one way to fix that, and that's to get new customers and develop that business, and that's what we are working on. We do have a long list of new customer relationships. So that's a very positive. What takes time is to develop those customer relationships into something more significant and contributing more to net sales. So that's what we're working.

And one more question from Jaakko. Your pricing, excluding the [ impaired ] project was fairly good. Do you believe we could see similar pricing going toward H2? Or have you had to adjust prices in the recent deals?

As I said in the presentation also, a single quarter is a short time for like average prices to really swing either way. We'll see if the turning point in pricing is now reached, depends on how the market will develop. But for us, it's clear that when the market turns, when we get tailwinds from the market, that will also be positive in terms of pricing. And we are confident that our position, that our offering, that our complete digital transformation offering is something that places us -- positions us well in terms of pricing. So better market demand will translate to better price development also. Whether it happens Q3, whether it happens Q4 or afterwards, we need to wait and see.

That's all, I think, yes. So thank you for your insightful interesting questions. Thank you for listening, and have a good day.

Thank you.