Annual report 2021
Jan 1st – Dec 31st 2021
• Net sales amounted to EUR 24 502 thousand (21 221)
• EBITDA of EUR 1 139 thousand (957) and EBITDA margin of 4.6 percent (4.5)
• EBIT of EUR 727 thousand (492) and EBIT margin of 2.9 percent (2.3)
• Earnings after tax of negative EUR 334 thousand (-986)
Significant events during the year
• Talkpool acquired Nordic Proptech, one of Sweden’s leading Smart Buildings companies
• Talkpool’s IoT network company Nordic IoT was sold to IoT network operator Netmore
• The Group IoT Revenue reached 20% of the total Revenue
• Talkpool’s shares were introduced and started trading on the Frankfurt Stock Exchange
• Talkpool Germany was awarded two new planning frame agreements worth EUR 1m
• Significant customer contract signed with Ericsson USA for 5G roll out services in Puerto Rico
• Talkpool AG acquired 100% of the shares in Talkpool LLC
• Talkpool Pakistan received new orders for drive test and swap projects worth EUR 1 m
• Adjusted for extraordinary costs net earnings were positive in Q4 and in 2021
• Nordic Proptech signed an important IMD contract for engine heaters worth EUR 0.4m
• Talkpool Germany reached a new all-time high revenue during the fourth quarter
• Talkpool delivered the first international energy optimization solution together
with Myrspoven to Prague
CEO Comments
In 2021 Talkpool pursued its plan to shift focus geographically to Europe and Americas. The divestments of all Talkpool’s legal entities in Africa, except for the new Middle East & Africa hub in Tanzania, were finalized as planned and the negotiation of the agreement for the sale of Talkpool Pakistan and Saudi Arabia was near to closing by the end of the year. Europe was the fastest growing market in the Group and Talkpool’s US entity was reactivated to take care of numerous requests for services from customers on the flourishing US IT/Telecom market.
The decision to concentrate Talkpool’s offering on smart niche network services and smart building IoT solutions for energy, air and water showed in numerous new customer- and partner contracts, and the acquisition of Nordic Protech was a clear statement to the market regarding Talkpool’s strategy and focal point within IoT.
Financially 2021 was a year of consolidation and further cost reductions, but also of growth – acquired as well as organic. Talkpool Germany grew with 25% and Talkpool Netherlands with 20%. Together with Switzerland and Pakistan they generated EUR 2.1 million or 10% organic growth
in business area network services. Through the acquisition of the Swedish IoT company Nordic Proptech, EUR 2,7 million revenue was added in business area IoT, which reached EUR 4,2 million total revenue. Adjusted for extraordinary costs, Talkpool’s net earnings were positive in Q4 as well as in 2021.
The company also managed to deleverage through the repayment of unfavorable loans and conversion of convertible loans. The planned green bond was put on hold in November due to accounting standard adoptions but will be revisited again in 2022.
Network Services
In 2021 the demand for more bandwidth continued to drive the deployment of broadband networks globally. In telecoms the adoption of the latest industry trends such as 5G, AI and IoT constantly increased, which is shaping the future of the industry. The convergence of Network Services and IoT is one of the key drivers behind Talkpool’s digitisation strategy.
In the Netherlands, Talkpool won several orders for its new telecom tower foundation technology called “Sandy Grounds”. The innovation originates from work with Cellnex and after successful trials in the beginning of 2021, a number of larger orders were placed with Talkpool. Furthermore, our first Dutch 5G orders were booked and the niche Camouflage business activity picked up speed.
In Germany the planning and construction of new cellular sites and towers for 5G was initiated. Two different major American tower companies are supporting existing Telefonica/O2 and the new fourth operator 1&1 in building their new 5G Cellular sites. The 5G network deployment in Germany is creating a massive demand for civil works, as well as radio network and fiber broadband network services. Talkpool has already gained from the increasing demand from existing and new customers.
Talkpool has a long history of delivering advanced radio- and fiber network services in Germany, and the rest of the world, and we are now gearing up for the 5G system deployment. The convergence of Network Services and IoT in 5G will fuel the demand for smart towers solutions and cellular IoT connectivity with operators and tower companies in Germany, the rest of Europe and the USA.
In August Talkpool Germany secured a new framework agreement for network planning and documentation, worth EUR 1.0 million. The term extends into the 3rd quarter of 2023. Talkpool is thus further expanding its market presence and range of services in Germany. This now extends far beyond the planning and documentation of classic copper cable house connections to network planning and documentation of fiber optic house connections for private households, schools, offices and 5G sites.
As a step in Talkpool’s strategy to focus on highly developed and industrialized markets, Talkpool re-entered the US market. The 5G and fibre network implementations in the USA is creating a high demand for network expertise and services. To meet client requests for services on the US mainland and in the Caribbean, Talkpool acquired 100% of the shares in Talkpool LLC, which fully owns the operational Talkpool Services LLC entity.
Talkpool has long experience of delivering mobile network services to vendors and operators in the Americas and we are glad to enter the US market again. To support both the US market and the Caribbean in the best way possible the operational company Talkpool Services LLC has been relocated to Miami, FL.
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. 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.
In December Talkpool signed an important 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.
For 16 years Irish owned Caribbean mobile network provider Digicel has been one of Talkpool’s most important clients. Together with Swedish telecom vendor Ericsson Talkpool built the first mobile network for Digicel Haiti in 2006. Talkpool has since then managed and developed the nationwide mobile network, including the fibre optic transmission network, for Digicel.
The civil unrest in Haiti, that started in spring 2021, escalated as Haitian president Moïse was assassinated on July 7. A massive earthquake, reaching 7,2 on the Richter scale, and following tropical storms put the Haitian people and Digicel’s communication infrastructure to the test. Immediately after the earthquake Talkpool’s hardworking staff managed to restore the network in only two days. When the storm hit again, we mobilized our teams again.
Talkpool has supported Digicel Haiti through many difficult times and we will continue standing by their side and support them and the Haitian people with the recovery and restoration of the vital communication infrastructure in the future as well. We have done it several times before and we will do it again.
IoT
In March 2021 Talkpool AG acquired the Swedish IoT company Nordic Proptech (NPT). The acquisition was a strategic step to complement and reinforce Talkpool’s existing Smart Buildings business. NPT provided a strong customer base, profound experience and track record in residential properties automation and a strong sales organisation. Furthermore, the demand for NPT’s 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. Talkpool contributed with leading edge technology knowledge, own IoT products and prime commercial real estate customers to the co-operation.
In October NPT acquired 100% of the shares in Talkpool AB. The shares were paid with newly emitted NPT shares. Talkpool AG, majority owner of both Talkpool AB and NPT, now holds the majority of the new Swedish IoT company specialized in Smart Buildings. 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 smart building companies and up-selling of sustainable technology “as a service” to existing clients is part of Talkpool’s strategic plan going forward.
Focused sales activities in NPT during Q2 and Q3 generated an all-time-high order intake as well as all year high monthly revenues in Q4.
In October NPT 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 included delivery of components, installation, local internet connectivity, configuration of individual metering and billing and a service agreement for around 400 engine heaters.
After the acquisition of NPT, Talkpool’s smart building business reached 20% of Talkpool’s total revenue, which means that we reached a critical mass and a significant footprint in the Swedish IoT market.
Soaring energy prices at the end of the year made real estate owners and housing organizations brutally aware about the need for smart solutions to optimize the energy usage and minimize operating costs. It became 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. The awareness of the importance of air quality control also grew and the demand for IoT solutions in this field increased substantially, the indoor climate in school classrooms.
The Internet of Things has made it possible to equip existing buildings with wireless connected sensor devices. These sensor devices collect real-time data 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 Heating- and Ventilation (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 and optimize close to 2 million square meters of indoor building space. In Q4 we had the international break through as the first major HVAC solution was implemented in a commercial building complex in the Czech Republic.
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 has been 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.
In a market where a global shortage of electrical components due to Covid was hampering the production and delivery capacity of many telecom and IT companies Talkpool managed, thanks to well dimensioned stocks, to secure all deliveries in its order books, and no new bottlenecks are foreseen.
Start of a new year
In 2022 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 its Pakistani entity to ZT Group for a total of USD 3.7 million. The parties have agreed on the 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.
In March 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.
Talkpool’s long-term partner, B Meters, placed an order for 15.000 IoT communication devices, compatible with their water meters, with Talkpool in April. The order shows that demand for the product, first launched in 2018, keeps increasing, and the rollout of the product is reaching large scale.
After a period of extensive analysis and development work, Talkpool launched the world's first smart floor drain at the big construction fair Nordbygg in Stockholm in April. The product and the concept for early leakage detection was met with an overwhelming interest from insurance companies, property owners, installers, and industry associations, which indicates a great market potential.
The complete report is available on: https://talkpool.com/financial-reports/#investor
For more information, please contact:
Erik Strömstedt, CEO Talkpool
Tel: +41 81 250 20 20
[email protected]
About Talkpool
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
