Interim Report January - March 2021

 January 1^st – March 31^st 2021

• Net sales amounted to EUR 5 691 thousand (4 881)
• EBITDA of EUR 49 thousand (4) and EBITDA margin of 0.9 % (0.1)
• EBIT of negative EUR 48 thousand (-93) and EBIT margin of -0.8% (-1.9)
• Net earnings after tax of negative EUR 339 thousand (-527)

January ­– March key developments

• Group performance exceeded expectations in spite of lingering Covid-challenges
• Total Revenue passed a EUR 2M in March
• The IoT Revenue reached 18% of the total Revenue
• Both IoT companies (TPAB and HS) showed profit
• Strong come back in Haiti after the currency challenges in 2020
• The acquisition of 100% of the shares in Nordic Proptech and Home Solutions was formally closed
• International investment fund Sacculus acquired 35% of the Nordic Proptech shares from Talkpool AG
• High consulting costs for Talkpool AG related to the DD and acquisition of Home Solutions 
• The sale of IoT network company Nordic IoT to IoT network operator Netmore was finalized
• Talkpool signed a cooperation agreement with SmartFront for the delivery of smart buildings solutions
• The “Sandy Grounds” towers foundation success continued as 5 towers were built in the Netherlands
• Talkpool Pakistan won the Managed Services contract for the maintenance of the Safecity network 

CEO COMMENTS

With the arrival of the vaccines at the beginning of 2021, the hope for a new normal life after Corona started spreading in the global society and the global economy, which fuelled a faster recovery than anticipated. Talkpool is also starting a new chapter in 2021 with the implementation of phase 2 in its digitization and growth strategy. Thanks to the acquisitions of Home Solutions, we hit the ground running in Q1.

The acquisition and integration of Home Solutions in the Talkpool group rendered a lot of attention during the quarter and with the consolidation of Home Solutions in the group, the IoT revenue now makes up close to 20% of the total group revenue.

January and February are normally slow months, but this year both sales and orders booked in Q1 exceeded our expectations and our budget. All 8 focus markets, after the divestment of Uganda and Mexico, performed well. In particular Germany and Sweden.

The cost cutting activities in the group continued in Q1, but the one-off costs related to the due diligence, acquisition and financing of NPTIS had a negative impact on net earnings. Lock downs in Saudi, Pakistan and other markets also still had a negative impact.

Network Services

The demand for more bandwidth continues to boost the deployment of broadband networks globally. In telecoms the adoption of the latest industry trends such as 5G, AI/ML and IoT constantly increases, which is shaping the future of the industry. The convergence of Network Services and IoT is one of the key drivers behind Talkpool’s new digitisation strategy.

Since Deutsche Telecom, Talkpool’s biggest key customer in Germany, centralized its procurement function Talkpool is invited to all tenders nationwide in Germany. This opportunity combined with Talkpool Germany’s focused business development effort has multiplied the prospects in the sales funnel over the last few months. Our resources in Germany are already fully utilized so we will hire new network planning staff while negotiating the new projects to improve broadband internet connections to schools and other buildings. In order to further prepare for the higher order volumes, negotiations with several potential partners and subcontractors are also in progress.

For more than 15 years Irish owned Caribbean mobile network provider Digicel has been one of Talkpool’s most important clients. Talkpool was planning and building the network together with Ericsson in 2006 and has since then managed and continued to develop the complete nationwide mobile network including the fibre optic transmission network for Digicel. After the difficulties caused by the radical appreciation in Q4, Talkpool Haiti recovered as the Haitian Gourde returned to a more normal level in Q1. The close partnership continues, and the Haitian operations will remain one of Talkpool’s cornerstones in the future.

In the Netherlands, Talkpool won several orders for its new telecom tower foundation technology, amounting to Euro 220’000. The innovation originates from work with Cellnex and these are the first commercial orders after successful trials, and at least six times as many towers are forecasted only for 2021. Furthermore, our first Dutch 5G orders were booked and the niche Camouflage business activity picked up speed.

In 2020 Talkpool Pakistan successfully deployed security and communication equipment on 500+ locations for the Punjab Safecity through Huawei. The project included civil works as well as electrical installation and commissioning of the complete IP Surveillance network. In March Talkpool Pakistan won the Managed Services contract for the management and maintenance of the complete Safecity network for one year to start with.

IoT

With the acquisition of NPTIS/Home Solutions, Talkpool’s smart building business reaches approximately EUR 5 million revenue on an annual basis. This makes up close to 20% of Talkpool’s total revenue, which means that we have reached a critical mass and a significant footprint in the Swedish IoT market.

The acquisition of Homes Solutions is an important milestone for Talkpool and the start of a new phase in our growth plan. Home Solutions provides a strong customer base, 20 years of experience and track record in residential properties automation and a strong sales organisation. Talkpool contributes with leading edge technology knowledge, own IoT products and prime commercial real estate customers to the co-operation. Together the two companies will merge to a market leading high-tech Smart Building company with a strong sales force offering a complete eco-system for the digitisation of buildings. In Q1 Talkpool’s and Home Solution’s management spent significant time together on the integration of NPT in Talkpool and the preparation for scaling of the new common building digitization business.

The demand for Home Solutions’ services of measuring and managing natural resources such as air, water and electricity and water in individual apartments and premises is rapidly increasing stimulated by new regulations and the building digitisation boom. Acquisitions of further metering companies and up-selling of sustainable technology “as a service” to the many existing clients is central in Talkpool’s strategic plan going forward.

At the end of March international investment fund Sacculus acquired 35% of the shares in NPTIS/Home Solutions from Talkpool AG with the ambition to accelerate the growth of the company together with Talkpool.

At the beginning of March the sale of IoT network company Niot to Netmore was finalized. The hand-over of business and migration of the Niot Network to Netmore’s network was initiated. Talkpool and Netmore will continue in a partnership relation whereby Netmore assumes the network operator role (providing national coverage in Sweden) and Talkpool provides smart building solutions and network services. Furthermore Talkpool can provide network services for 5G agreements with large multinationals.

In January SmartFront signed an agreement with Talkpool for the delivery of end-to-end smart buildings solutions. SmartFront uses Talkpool’s solutions for the measurement of temperature, moisture and carbon dioxide in the building. SmartFront also uses Talkpool's moisture sensors to verify the moisture content of the façade in real time for early detection and prevention of damages to the building.

In November 2020 our Spanish IoT partner Redytel ordered 140.000 EUR worth of CO2 sensors from Talkpool. The IoT sensors were installed in public buildings in the Spanish cities Ponferrada, León and Boadilla to monitor and control CO2 levels in indoor public environments such as schools, libraries, museums and medical centers and make them available via apps and web. The CO2 levels are being monitored to minimize the risk for the spread of COVID19 to the public. The CO2 values are measured by Talkpool’s wireless sensors and sent to the cloud. The data is made accessible to the public by the placement of a QR code next to the sensor. Based on positive results plans are made to extend scope to private public places such as restaurants, cafes, gyms, etc.

With the public places monitored and controlled, the next objective has been the indoor environment of public transport. Since March Ponferrada is the first city with all its public buses monitored and CO2 levels made available to the public. Transport managers and bus drivers are now aware of the CO2 levels and can improve the use of ventilation system and keep doors open longer at bus stops. Passengers can plan their travels based on historical and current CO2 levels, and so the spread of Covid 19 is being reduced. Talkpool’s new sales strategy implementation was geared up in Q1 headed by the Group Chief Commercial Officer Aurelius Wosylus.
 
1st Quarter 2021

In April Talkpool, Redytel, Netmore and Senseair formed an indoor air quality alliance. IoT technology has allowed large scale deployment of sensors monitoring air quality in real time.

Based on positive initial results from the pilot projects in Spain and other locations, the parties have decided to form an indoor air quality alliance with the aim to provide solutions that can prevent the spread of Covid 19 and support a safe reopening of society.
The projects have so far improved the awareness and information about air quality levels and the risk of infection and actions have been taken to mitigate the risks.

In April Talkpool signed an agreement with Swedish real estate company Profi Fastigheter for the delivery of solutions for connecting smart properties and the services energy optimization, submetering and billing together with associated sensors and systems. Work is currently ongoing to connect about twenty of the company's properties in Stockholm and Gothenburg.


For more information, please contact:

Erik Strömstedt, CEO Talkpool
Tel: +41 81 250 2020
erik.stromstedt@talkpool.com

Talkpool provides IoT solutions and telecommunication network services globally. Through its cutting-edge technical expertise, long experience and agile business model, Talkpool offers global telecom vendors and operators high-quality services on short notice no matter the location. Talkpool offers end-to-end IoT solutions for smart buildings and cities with focus on environmental control, energy saving and damage prevention. Erik Penser Bank, +46 8 463 80 00, www.penser.se, is Talkpool's Certified Advisor. For more information www.talkpool.com

This information is inside information that Talkpool AG (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08.30 CET on May 20, 2021. 

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