Year-End Report January - December 2021

October - December key developments

•         Talkpool achieved its highest quarterly revenue since the IPO in Mai 2016

•         Adjusted for extraordinary costs net earnings were positive in Q4 and in 2021

•         Talkpool Germany reached a new all-time high revenue during the quarter

•         Deutsche Telekom awarded Talkpool Germany a contract for a new region in the north of Germany

•         Very positive results from the IoT air4schools trials in Germany

•         Large tower service orders for Talkpool Netherland’s from major Tower company Cellnex

•         Increasing Camouflage solutions sales as Vodafone and T-Mobile built new sites 

•         All year high revenue and strong sales in Nordic Proptech thanks to extraordinary sales efforts

•         Talkpool formally consolidated its IoT companies Talkpool AB and Nordic Proptech in Sweden

•         TPAB delivered the first international energy optimization solution together with Myrspoven to Prague

•         Talkpool AG acquired 100% of the shares in Talkpool LLC and relocated the US company to Miami

•         A significant customer contract was signed with Ericsson USA for 5G roll out services in Puerto Rico

CEO Comments

The successful acquisition and consolidation of Nordic Proptech in the Talkpool Group has created value for Talkpool’s shareholders. For different reasons the value has still not been reflected in the Talkpool AG share price. Talkpool has over the years started and grown companies organically and in addition made 4 major acquisitions. In its portfolio of holdings in IoT and com tech companies, Talkpool AG currently has assets worth several times its market cap. In order to unfold the hidden values and leverage on its strength as an incubator, Talkpool AG will from now on increasingly focus on M&A and investments in innovative tech companies. In the search for innovations within IoT and digitization with focus on sustainability and ESG, Talkpool will cooperate with leading academic institutes in Europe and the USA. Talkpool will offer professional support in industrialization and go-to-market and an ecosystem of investors, sales partners and customers, to fuel the growth of the acquired companies. When the timing and the valuation is right Talkpool will exit, fully or partially, and reinvest the returns in new acquisition targets. Selling the Pakistani business to free up capital for new and more strategic investments is a first step in this new direction – and there is more to come.

Network Services

The global demand for internet connectivity over telecom- and data communication networks seems to be insatiable, and many countries are still lagging behind in their deployment of optical fiber, 5G and IoT infrastructure. Hence the demand for traditional network services will continue to grow. Talkpool is one of few independent professional services companies that offer a complete network services portfolio, including smart network services, to operators and vendors worldwide.

After having expanded its delivery capacity throughout the whole year Talkpool Germany reached all time high revenues in November. In addition to the new framework agreements for network planning and documentation, worth over EUR 1 million, that were signed in Q3, Deutsche Telekom awarded Talkpool Germany a planning contract for a new region in the north of Germany in Q4. The steady increase in business volume, service areas and geographic footprint in Germany is the fruit of a long and close partnership between Deutsche Telekom and Talkpool.

The countrywide 5G and fibre network projects in the US are also creating a high demand for network expertise and services. Talkpool’s decision to acquire 100% of the shares in Talkpool LLC and relocate the operational Talkpool Services LLC entity to Miami was a strategic step to get a foothold in the US leading edge tech market. Huawei is banned on the US market which has made it possible to maintain a healthy price level on communication network services.

In December Talkpool signed a significant service contract with Ericsson USA for the delivery of 5G roll out services in Puerto Rico. The project will run at least until the end of 2022 and the contract value for Talkpool will be at least USD 1,5m.

Talkpool has long history of delivering mobile network services to vendors and operators in the Americas, and we are glad to be back and work with the latest technology in the region. We have big plans to invest and grow in this expansive region again and we know from several request that our services are in high demand in the region.

Several add on orders from major tower company Cellnex made Talkpool Netherlands clearly overachieve its sales targets in Q4. The increase of 5G sites construction work from operators like Vodafone and T-Mobile also increased sales of the Camouflage concept solutions in the Netherlands.

Despite the continued unrest in Haiti, our staff continued to indefatigable maintain and improve the mobile network of Digicel. The previously announced optical fiber project worth USD 420k was initiated and in addition Talkpool was awarded a new small densification project by Digicel Haiti. Although the amount of extra work during the quarter was limited, business exceeded expectations.

IoT

In March 2021 Talkpool AG acquired the Swedish IoT company Nordic Proptech (NPTIS). The acquisition was a strategic step to complement and reinforce Talkpool’s existing Smart Buildings business. We spent Q2 and Q3 strengthening and restructuring the company and the efforts showed positive result already in Q3. In October NPTIS acquired 100% of the shares in Talkpool AB. The shares were paid with newly emitted NPTIS shares. Talkpool AG, majority owner of both Talkpool AB and NPTIS, now holds the majority of the new Swedish IoT company specialized in Smart Buildings. Together the two companies have been merged to a valuable market leading Smart Building company offering a complete eco-system for the digitization of buildings

Growth through 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.

Thanks to extraordinary sales activities in NPTIS during Q2 and Q3 an all-time-high order intake as well as all year high monthly revenues were generated in Q4.

On October 19 NPTIS signed an important as-a-Service agreement with a large Housing Association (BRF) west of Stockholm regarding the upgrade of their engine heater solution. The order value was around 4 MSEK. The contract includes delivery of components, installation, local internet connectivity, configuration of individual metering and billing and service agreement for around 400 engine heaters.

The steadily increasing energy prices have made many real estate companies take action to adopt innovations that make their buildings more efficient. It has become abundantly clear to many that now is the right time to invest in sustainable, energy saving innovations. This is particularly relevant for the real estate sector, which stands for 40% of global energy consumption.

Talkpool offers an HVAC optimization solution resulting in 10-25% energy savings. The Internet of Things has made it possible to equip existing buildings with wireless connected sensor devices. These sensor devices collect real-time data of parameters such as temperature, humidity, CO2 and particulate matter and this data is the foundation for a game changing innovation for the real estate industry: Talkpool’s HVAC optimization solution. When the sensor data is combined with energy tariffs, weather forecasts and additional external data and is fed into an Artifical Intelligence (AI) model the building heating/cooling and ventilation can be optimized based on the inputs, resulting in energy savings up to 25%, providing a strong financial- as well as environmental incentive.

Apart from the energy savings, the indoor climate is also significantly improved, as the heating, ventilation and cooling of the building is controlled in real-time based on actual sensor feedback from the building.

The energy optimization solution developed together with AI partner Myrspoven is well proven and already installed to control over 1 million square meters of indoor building space.  In Q4 Talkpool delivered the first international solution together with Myrspoven to a combined retail and office building in Prague.

In November Talkpool Germany launched its first end-to-end IoT solution for smart buildings. The so called air4schools solution is optimizing the air quality in classrooms while minimizing the energy cost for heating and ventilation. Wireless sensors measuring the CO2 and particles levels in the indoor air are connected to the air4schools ventilator that is installed directly in the windows of the classroom. The fans supply fresh air while letting out air with higher CO2 levels. The fans are equipped with ceramic cores that ensure 90 percent heat recovery. When designing “air4schools”, care was taken to ensure that the system works draft-free and almost noiselessly. This ensures that the students aren’t distracted by noise or low oxygen levels. The solution is successfully tested at two schools in Leipzig, Germany and further deployments are planned. While initially focusing on schools, the technology can also improve air quality in offices, conference rooms, public buildings, and private homes.

1st Quarter 2022

During the quarter Talkpool has continued to ramp up its 5G project activities in the USA with additional teams. New business opportunities with existing and new customers in the region keep emerging, so it’s up to our growth ambitions and capacity how much work we chose to accept.

In February Talkpool signed an agreement to sell 100% of the shares in its Pakistani business to ZT Group for total USD 3.7 million. The parties have agreed on terms and are expecting closing conditions to be met latest by the 30th of June 2022.

This transaction is an important step in Talkpool’s strategy to increasingly focus on investments in and growth of innovative technology companies in developed markets, mainly in western Europe and the USA. Talkpool AG will step by step develop into an incubator that is building value in its investments by offering an ecosystem of investors, R&D companies, tech partners and customers in the communications and property digitization industry.

The returns from the divestments will also be used to deleverage and lower the financial costs through payback of bonds and loans.

On March 3 it was decided that Talkpool's Swedish bond loan will be extended to December 31, 2022, with an option to repay on an ongoing basis. Half of the funds received from asset sales will go to amortization of the bond loan.

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 March 10, 2022

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