TALKPOOL INTERIM REPORT JANUARY – JUNE 2016

APR 1st – JUNE 30th 2016

• Net sales amounted to EUR 2 653 thousand (2 592), a 2.3 percent increase
• EBITDA of EUR -9 thousand (105) and EBITDA margin of -0.3 percent (4.1)
• EBITDA excluding IPO-related costs of EUR 135 thousand (105) and EBITDA margin of 5.1 percent (4.1)
• EBIT of EUR -34 thousand (86) and EBIT margin -1.3 percent (3.3)
• Net profit of EUR -98 thousand (36)
• Cash flow from operating activities amounted to EUR 51 thousand (47)

JAN 1st – JUNE 30th 2016

• Net sales amounted to EUR 5 109 thousand (4 827), a 5.8 percent increase
• EBITDA of EUR 75 thousand (141) and EBITDA margin of 1.5 percent (2.9)
• EBITDA excluding IPO-related costs of EUR 219 thousand (141) and EBITDA margin of 4.3 percent (2.9)
• EBIT of EUR 27 thousand (103) and EBIT margin 0.5 percent (2.1)
• Net profit of EUR -95 thousand (-59)
• Cash flow from operating activities amounted to EUR 72 thousand (-141)

APRIL - JUNE HIGHLIGHTS

• Successful listing on Nasdaq First North, Stockholm on May 24, 2016
• Establishment of majority owned JV in Mauritius and start up of fiber network deployment projects for Huawei
• Signing of partner agreement between TalkPool AB and Tele2 AB in Sweden for the deployment of an IoT network and provisioning of IoT services in greater Gothenburg
• Launching of the “IoT as a Service” concept based on the Ski School tracker trial in Laax, Switzerland
• Start up of the Telefonica 4G network roll out project activities with Nokia in Germany

 CEO COMMENTS

The second quarter of 2016 has certainly been one of the most eventful and exciting periods in TalkPool’s history with the listing on Nasdaq First North on 24 May as the major highlight. The IPO marked the start of a new growth phase for TalkPool based on acquisitions and new business in the emerging IoT market and we have already made good progress in both areas.

The Nasdaq First North listing has opened an array of long-term possibilities for TalkPool, but short-term it has had a slightly dampening effect on growth due to the vast amount of energy, time and management resources invested in the preparation and completion of the IPO. Preparations also included accounting standard and process development, rebranding and homepage development. We have seen delays in some projects in Africa and Mexico in our Network Service business, caused by external factors. As a result, and in combination with IPO related costs, our earnings for the first half of the year were somewhat lower than internal expectations. Although the nature of TalkPool’s business may cause revenue generation that sometimes varies from quarter to quarter, our expectations for the full year, as well as our five-year plan, remain solid.

The IoT business unit continued to develop positively during Q2. Our main IoT activities now span enabling IoT for smart buildings and cities, harbors and many verticals connecting machines that previously were considered economically unfeasible. A new concept called IoT as a Service has been positively received by the customer in our ski school tracker trial in Laax, Switzerland, and will be commercially launched during the coming ski season. We see a big future potential in this concept that will constitute one of the cornerstones in our IoT strategy going forward.

In May, TalkPool AB and the European telecom operator Tele2 announced their cooperation in enabling a dedicated LPWAN IoT network in greater Gothenburg. As part of the cooperation TalkPool AB will be responsible for IoT network deployment and design of M2M/IoT solutions, which will give customers in Gothenburg a forefront cutting-edge position in the upcoming era of digitization.

Other IoT projects in our order book are advancing according to plan. Some scheduling adjustments are of course normal in a developing and fast-growing industry such as IoT, but are well compensated by strong underlying market demand. Furthermore TalkPool is preparing for rapid technology shifts that are likely to transform the IoT market during coming years

The third quarter has started with several exciting discussions and contract negotiations with existing and new customers. TalkPool has also successfully initiated M&A cases in several markets to identify and evaluate potential acquisition candidates, within both Network Services and IoT.

In summary, TalkPool continues on a growth path with Network Services as our foundation and the emerging IoT business and JV partnering in strategic markets and service areas as drivers of growth.

Erik Strömstedt, CEO

  
FOR FURTHER INFORMATION, PLEASE CONTACT:

Erik Strömstedt, CEO                      
Telephone: +41 79 790 60 40
erik.stromstedt@talkpool.com

Hanna Rubensson, CFO
Telephone: +46 73 140 48 40
hanna.rubensson@talkpool.com

  
This information is such information that TalkPool is required to disclose pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication by the abovementioned contact person on 30 August 2016 at 17:00 a.m. CET.

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