Loudspring publishes preliminary information for 2021 and new targets as well as Basic Information Document and Investor Memorandum in relation to its rights issue

Loudspring Oyj
Company release, inside information
28 February 2022, 20.10 (EET)

In relation to the rights issue of approximately EUR 2.5 million (the “Offering”) published by Loudspring Oyj ("Loudspring” or the “Company”) on 17 February 2022, Loudspring has prepared the Basic Information Document and the Investor Memorandum which are now available on the Company’s website at www.loudspring.earth.

The Basic Information Document and the Investor Memorandum contain the following previously undisclosed targets and unaudited preliminary financial information for Loudspring and its portfolio companies Eagle Filters Oy ("Eagle Filters”or ”Eagle”) and Nuuka Solutions Oy ("Nuuka”) for the financial year ended 31 December 2021.

Financial information

The following tables present some of the Company's unaudited preliminary financial information for the financial year ended 31 December 2021 and financial information from the audited financial statements for the financial year ended 31 December 2020. The Company's financial statements have been prepared in accordance with the Finnish Accounting Standards (“FAS”). Loudspring does not report consolidated accounts as Loudspring and its subsidiaries are regarded as a minor group in accordance with Chapter 1, Section 6 a of the Finnish Accounting Act.

Financial performance and targets of Eagle 

Eagle Filters companies comprises the parent company Eagle Filters Oy and its subsidiaries Eagle Filters DMCC, Eagle Filters Inc. and Plus-E Oy. The reported figures are Eagle Filters Oy’s, as Eagle does not prepare consolidated financial statements. The figures previously reported in semi-annual and annual reports of Loudspring have been estimates of the combined Eagle companies’ revenues. 

In 2021, Eagle Filters Oy’s revenue increased by approximately 27% compared to 2020. Revenue in 2021 was lower compared to targets due to a delay of one EUR 0.5 million customer delivery from December to Q1 2022, and overall difficulties in sourcing materials. However, the revenue grew to approximately EUR 2.9 million in 2021 (unaudited estimate). Eagle Filters Oy's production costs have been higher than expected in 2021 due to high one-time costs related to ramping up own production, as well as heightened material and logistics costs due to the pandemic. These costs coupled with a growing order book have increased the need for working capital.

In 2021 Eagle Filters Oy’s EBITDA was EUR -2.5 million (unaudited estimate), improving from EUR -1.5 million in H1 to EUR -1.0 million in H2. The sales and order backlog for 2022 was on the date of this Investor Memorandum EUR 1.8 million and the offers and qualified sales pipeline for 2022 is significantly higher than at the same time during the previous year. The target for 2022 is EUR 4.5-6.0 million revenue*.  Eagle has been able to improve its sales margins during H2 2021 and aims to improve sales margins further, which will alongside targeted revenue growth lead towards positive EBITDA.

As part of the transformation into an industrial company, Loudspring will simplify the company structure and administration, optimise capital structure and reduce overhead costs.

*The targets are not financial guidance and will only be in general updated on an annual or semi-annual basis. Deviation from these targets will not trigger a positive or negative profit warning. 

Financial performance and targets of Nuuka

Despite the pivot and the pandemic, Nuuka’s total SaaS revenue 2021 is estimated to have grown 25% to 1.01M€. Total revenue 2021 is estimated to have grown to 1.37M€ (+5%) (unaudited estimate). Total revenue growth was slightly below target due to the pandemic and the pivot to new offering, as Nuuka withdrew completely from higher churn and cost residential markets. As an outcome, substantial onboarding revenues from residential markets were no longer generated. Nuuka has now focused solely on public and commercial buildings that drive higher deal size, growth and margin. 

During Q4 Nuuka’s total quarterly revenue grew 50% to 460k€ compared to Q3. Growth was driven by new products and largely based on onboarding revenue growth which will secure further Monthly Recurring Revenue (“MRR”) growth in H1-2022 as onboarding precedes SaaS revenue. As a result January 2022 MRR grew to 93k€. During the last five months, Nuuka has signed and agreed 10 new customers, including e.g. signing a gross area of almost 200.000 m2 during the first days of 2022.

Full year 2022 Nuuka targets for ARR (Annual Recurring Revenue) to reach over 1.6M€. Total revenue is targeted to grow to 2.5M€ (+80%)*. Nuuka is confident of reaching this target as over 90% of the SaaS target will come from existing customer contracts, agreed current customer extensions and small planned upsell to current customers.

Loudspring believes that it will be able to exit Nuuka in a reasonable timeframe on attractive terms. Loudspring owns 42.3% of Nuuka issued shares, and 37.3% fully diluted.

Loudspring entered into an agreement to sell 18,1% ownership in Nuuka in February 2022 for EUR 2 million. After completion of the transaction the remaining shareholding of Loudspring in Nuuka Solutions is 24,2%.

*The targets are not financial guidance and will only be in general updated on an annual or semi-annual basis. Deviation from these targets will not trigger a positive or negative profit warning. 

Significant changes in the Company’s financial position

Significant changes during 2021

• Loudspring has funded Eagle Filters growth with loans totaling EUR 3.3 million.
• Loudspring sold some of its shares in Enersize Oyj. Loudsprings ownership at year-end 2021 was 7.1%.
• Loudspring sold its ownership of 24.0% in ResQ Club Oy to a consortium of Finnish private investors. The sales price was EUR 1.5 million and the impact on the result for the period was EUR -76 thousand. 
• Loudspring increased its ownership in Eagle Filters to 100% in H2 2021. 
• Loudspring executed directed share issues of EUR 0.9 million in total in November-December 2021.

Significant changes during 2022

• The Company has received subscription commitment payments of approximately EUR 1.3 million in relation to the Offering.
• Loudspring entered into an agreement to sell 18,1% ownership in Nuuka in February 2022 for EUR 2 million. After completion of the transaction the remaining shareholding of Loudspring in Nuuka Solutions is 24,2%. The transaction is expected to have a positive impact of appx EUR 1 048 000 on Loudspring's result. The investment company purchasing the shares has made a commitment to also invest EUR 1 million into Nuuka's share issue subject to Nuuka shareholders' meeting's approval.

Working capital statement

After the completion of the Offering Loudspring Oyj has estimated that it has sufficient working capital for its business operations for at least the next 12 months.

Objectives and strategy

Loudspring focuses on Eagle Filters’ business and aims to exit other holdings. The medium to long term objectives for Eagle Filters are as follows:

• 30%+ average annual growth
• 20% EBITDA to revenue

LOUDSPRING OYJ

IMPORTANT NOTICE

This release or the information contained therein shall not be distributed, directly or indirectly, in Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or the United States. The information contained in this release do not constitute an offer of, or invitation to purchase any securities in any area, where offering, procurement of or selling such securities would be unlawful prior to registration or exemption from registration or any other approval required by the securities regulation in such area. This release is not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended, and the rules and regulations issued by virtue of it. Loudspring has not registered, and does not intend to register, any offering of securities in the United States. No actions have been taken to register the shares or the offering anywhere else than in Finland.

The information contained herein shall not constitute an offer of, or invitation to purchase any securities in any jurisdiction. This release is not a prospectus and does not constitute any offer, invitation or investment advice to subscribe for or purchase securities. Investors should not subscribe for or purchase any securities or make any investment decisions referred to herein except on the basis of information contained in the basic information document issued by Loudspring.
 

For more information:

Jarkko Joki-Tokola, CEO, Loudspring Oyj. Tel. +358 40 637 0501, jarkko@loudspring.earth

Erik Penser Bank AB, Certified Adviser. Tel. +46 8 463 83 00, certifiedadviser@penser.se

Loudspring Oyj discloses the information provided herein pursuant to the Market Abuse Regulation ((EU) No 596/2014, ”MAR”). The information was submitted for publication by the aforementioned person on 28 February 2022 at 20:10 (EET).

Loudspring in brief  

Loudspring is an investment group focused on saving natural resources. Our strategy is to focus on the ownership and governance in Eagle Filters where we see a clear path to a long term profitable and scalable business, and divest more opportunistic higher risk investments, transforming into an industrial company. Our customers saved 125 000 tons CO2 emissions during 2020 using our technology, which equates to the CO2 carbon footprint of 12 000 Finns on average. 

The company group is listed on First North Growth Market Finland under the ticker LOUD and on First North Growth Market Stockholm under the ticker LOUDS.

www.loudspring.earth

LinkedIn: https://www.linkedin.com/company/loudspring/

Twitter: @loudspring

IG: @loudspring_earth

FB: @loudspringco