Interim report January-March 2019
JAN 1st – MAR 31th 2019
- Net sales amounted to EUR 5 583 thousand (6 116), an 8.7 percent decrease
- EBITDA of negative EUR 88 thousand (507) and EBITDA margin of negative 1.6 percent (8.3)
- EBIT of negative EUR 199 thousand (400) and EBIT margin of negative 3.6 percent (6.5)
- Net earnings after tax of negative EUR 354 thousand (153)
JANUARY - MARCH KEY DEVELOPMENTS
- The commercialisation of Talkpool’s IoT platform is gaining speed with the order book developing favorably including a large order from a leading water meter manufacturer
- Delays and volatile demand in Saudi Arabia contributed very negatively to Q1 earnings
- The cash flow from operating activities over the period amounted to EUR 390 thousand
- The demand for Talkpool Netherland’s niche services continued to grow sharply over the period
- Restructuring and operational improvements in Haiti and Pakistan
- IoT research and development cooperation discussions initiated with leading Swiss Institutions
- Talkpool started a collaboration with “StadshubbsAlliansen”
- Tele2 and Talkpool transferred the common Gothenburg LoRa network to Nordic IoT Networks(Niot)
2019 will be the year when 5G takes-off. The first commercial networks are already being rolled out all over the world. Even if the connectivity and availability of devices will be limited for some time, 5G is here! The new networking standard is not just about faster smartphones. Higher speeds and lower latency will also make new experiences possible in augmented and virtual reality, connected cars and the smart home or any area where machines need to talk to each other constantly and without lag. For Talkpool this means new big opportunities within Network Services as well as in IoT and blockchain. Discussions with customers and partners are already ongoing and we expect to see the first 5G orders during the second half of this year. The growth in 5G is expected to be strong and continue over several years.
The first quarter of 2019 was back to the normal seasonal historical trend for Talkpool Group with a slower start of the year following the strong finish of the previous year, both operationally and financially, after the record Q1 of 2018 which was an exemption to this rule.
Group Revenue in Q1 was close to our expectations and our entities in Haiti, Netherlands and Germany contributed well as they were overperforming compared to budget. However, we did not reach the expected earnings this quarter due to a significant loss in Saudi Arabia.
The first phase of the Ericsson network installation project in Saudi Arabia was already delayed by the end of last year, but the situation deteriorated further in Q1. Due to a volatile and low demand for services the utilization of our staff was very low and that combined with high costs for resource mobilization lead to a loss of EUR 250 thousand in Talkpool Saudi Arabia in Q1.
The internal improvement activities reported in Q4 2018 continued in Q1 2019 and we prepared some of our low- performing market units for sale. These activities will generate long term costs savings and better profit margins in the group, but the restructuring costs are still a drag to group earnings.
The IoT market is also taking off this year as expected, but some of the verticals in the market need more time than expected to clearly define their IoT strategies. Talkpool provides IoT-solutions in mainly 3 areas within Smart Buildings: energy savings, damage prevention and indoor climate supervision.
To achieve energy savings, Talkpool’s solutions provide the information needed for customers to manage and reduce energy consumption, waste and leakages.
The business cases for waste and leakage are typically very strong. Talkpool’s smart floor drain together with our temperature and humidity monitoring solutions and smart water meters, form a complete package for damage prevention for e g Insurance companies and real estate owners.
Indoor climate supervision is getting more and more attention thanks to the research relating to the impact of poor indoor climate on human well-being and performance. Talkpool’s IoT-solutions make it possible to monitor and control indoor climate, by measuring temperature, carbon dioxide and particles in the air and feed this data into the building systems to control for example ventilation. Recent research by Cap Gemini highlights that smart metering and environment monitoring are two of the use cases where most value is expected to be created and these are key niches in Talkpool’s strategy.
In January Tele2 and Talkpool transferred the common Gothenburg LoRa network to Niot, which is a great boost to the total IoT infrastructure that Nordic IoT Networks manages, and it fits well with the company’s shared network strategy. A further step towards collaboration in the area of IoT networks in Sweden was taken in February as Talkpool started a co-operation with “StadshubbsAlliansen”; a collaboration between municipal urban networks, that promotes sustainable digitalisation of the smart society.
In April B Meters, a leading European water meter manufacturer, placed a major order worth of EUR 95 thousand for Talkpool’s IoT products that are compatible with B Meters’ mechanical water meters. B Meters produces almost 2 million water meters per year, and the trend goes towards making all these water meters smart. B Meters has taken the step to make their products smart with Talkpool technology.
In May Talkpool was awarded EUR 270 thousand from the Horizon 2020 project “Digital solutions for water: linking the physical and digital world for water solutions”. The project focuses on developing solutions for water management in the smart cities of the future. Talkpool will contribute with its expertise in IoT solutions, to develop the IoT technology and data security in the project. Climate change and urbanization have increased cities’ challenges for managing wastewater, storm water and flooding events. The total funding for the project is close to EUR 5 million, of which approximately EUR 270 thousand is allocated to Talkpool for its contributions. The project duration is 4 years and is part of the Horizon 2020 Research program, initiated by the European Union.
Erik Strömstedt, CEO
For more information contact:
Erik Strömstedt, CEO Talkpool
Phone: +41 81 250 2020
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. Moreover, Talkpool is one of few companies with actual solutions and contracts in place in the exciting IoT-market. FNCA Sweden AB, +46(0)8-528 00 399 email@example.com, is Talkpool’s Certified Advisor. 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 08.00 CET on May 28, 2019.