Interim Report
Q1 January - March 2024
The quarter in brief
JAN 1ST - MAR 31ST 2024
- Net sales of EUR 3 974 thousand (compared to EUR 3 672 thousand in Q1 2023)
- EBITDA of EUR 434 thousand (162) and EBITDA margin of 10.9 % (4.4 %)
- EBIT of EUR 390 thousand (128) and EBIT margin of 9.8 % (3.5 %)
- Net Earnings After Tax of EUR 166 thousand (247) and net EAT margin of 4.2% (6.7%)
JANUARY - MARCH KEY DEVELOPMENTS
- Business as usual with no significant events or extraordinary influence. The first quarter is often the slowest period of the year
- The companies in Germany and Switzerland overperformed compared to the internal budget
- Launching "Reduce to the MAX" annual motto with an aim to increase efficiency and prepare for future growth. Simplification and alignment of the business to its original competence
- Continued cashlow pressure in all companies
- Talkpool received a binding bid for its Pakistani and Saudi businesses, but the bid expired in May 2024
- A share options scheme was launched in March. The scheme runs until 2031 with a first phase until mid-2025, and intends to inzentivize key staff and improve long-term profit margins
This report contains insider information that Talkpool AG is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication at 08:30 o'clock Central European Time on Friday the 31st of May 2024.
This is Talkpool
Talkpool works behind the scenes to plan, build and improve large communication networks. The company has relinqished its pioneering role in Internet of Things (IoT) and its attempt to develop own software and hardware. Instead, Talkpool intends to partner with Original Equipment Manufacturers to distribute, integrate and maintain technology that enhances telecommunication infrastructure.
Talkpool has global geographical reach and experience, but it has reduced its geographical focus to western Europe. Competences include planning, implementation, project management, optimization and maintenance of fixed and mobile telecom networks. After a turnaround period that has taken several years, a smaller and more focused business is now emerging.
ACTIVE | REGIONS OF |
OFFICE | DEPLOYMENT |
CLOSED/SOLD
BUSINESS IN 2023
SWEDEN
BELGIUM GERMANY
USA | |||
SWITZERLAND | |||
PAKISTAN
HAITI
DUBAI/UAE | ||
SAUDI ARABIA | ||
10.9
4.0
Net sales,
EBITDA margin
MEUR
26.6%
Gross margin
Talkpool Interim Report Q1 2024 | 2
Management Comments
The business is now in a stabilization phase after pivoting back to its core competency. The cashflow generated by the operation continued to increase in the beginning of 2024, and the operational trend has been positive for several years. Cash management continues to be in focus as the cash generated by the organisation is used to reduce loans, restructuring the business and do small investments.
Almost no new client contracts were signed, so the organisation could continue delivering ongoing business. The German fixed network planning operation continued to impress, and reached its best month ever in March 2024 thanks to increasing volumes of large planning projects work. The German organisation was reinforced with additional capacity during the quarter.
We're now preparing to integrate the Pakistani business into Talkpool as we still haven't been able to sell the Pakistani company.
We've made the first steps towards establishing a new strategy. We're planning to spend considerable time this year to create a German-centric overall growth strategy for Talkpool's global business. New long-term guidance targets and detailed information about how to reach the targets will be communicated as the business plan develops.
30 | ||
25 | GM % | |
20 | EBITDA % | |
15 | ||
10 | EBIT % | |
5 | ||
0 | EAT % | |
22Q1 | 23Q1 | 24Q1 |
-5 |
Profit margin development
30 | ||||
25 | GM % | |||
20 | EBITDA % | |||
15 | ||||
10 | EBIT % | |||
5 | EAT % | |||
0 | ||||
23Q1 | 23Q2 | 23Q3 | 23Q4 | 24Q1 |
Talkpool Interim Report Q1 2024 | 3
Financial development
KEY FIGURES
Q1 2024 | Q1 2023 | FY 2023 | |
Sales, € thousand | 3'974 | 3'672 | 15'607 |
Sales growth in % | 8.2% | -40.2% | -38.8% |
Gross profit, € thousand | 1'058 | 745 | 3'822 |
Gross margin | 26.6% | 20.3% | 24.5% |
EBITDA, € thousand | 434 | 162 | 1'980 |
EBITDA margin | 10.9% | 4.4% | 12.7% |
EBIT, € thousand | 390 | 128 | 1'806 |
EBIT margin | 9.8% | 3.5% | 12% |
SALES AND GROSS MARGIN
January - March
Revenues grew slightly to EUR 3'974 thousand compared to EUR 3'672 thousand in the same period last year although we're not attempting to grow this year. The growth came despite closing business in Belgium and ramping down in the USA and Saudi.
The gross margin increased to 26.6%. This is much better than 20.3% in the same period last year and 21.2% in the last quarter of 2023. We're targeting to continue improving margins to hopefully peak at 30% Gross Margin, 15% earnings before interest, tax, depreciation and amortization (EBITDA) and 10% earnings after tax (EAT) during a quarter this year.
EBITDA
January - March
EBITDA and EBIT are much higher compared to same period last year but lower compared to the last quarter last year. Talkpool's business has a cyclical characteristics with a slow start and a strong finish of the year. The operational margins are approximately twice the budgeted values.
NET PROFIT
January - March
The net earnings after tax (EAT) in Q1 2024 amounted to EUR 166 thousand compared to EUR 247 thousand in the same quarter 2023. The higher net earnings in 2023 were generaded by an extraordinary one-off event resulting in a financial net amounting to EUR 228 thousand, which can be compared to a financial net of negative EUR 59 thousand in Q1 2024.
The depreciation was increased to EUR 44 thousand, up from EUR 33 thousand in Q1 last year. Tax payments increased to EUR 166 thousand, substantially more than the EUR 109 thousand paid in Q1 2023. Increased profitability is the main reason for higher taxes. Most of the taxes are paid in Germany and Pakistan.
Talkpool Interim Report Q1 24 | 4
Financial position and cash flow
KEY FIGURES
Q1 2024 | Q1 2023 | FY 2023 | |
Equity ratio | 4.6% | -20.0% | 1.4% |
Return on equity | 102.3% | -19.4% | -1'450% |
Net cash/debt, € thousand | -1'918 | -1'988 | -2'071 |
Operating cash flow, € thousand | -96 | 1'370 | -32 |
BALANCE SHEET AND FINANCIAL POSITION
31 March 2024
The balance sheet continued to strengthen. The equity reached EUR 311 thousand. The consolidated Equity reached above zero at the end of last year after many years of negative equity. Past years' negative equity of several million Euros was mainly caused by Talkpool's unusual accounting practice to offset goodwill against equity. The deleveraging combined with improved financial performance has led to a positive equity development.
The net debt was reduced to negative EUR 1'918 thousand, down from negative EUR 2'071 thousand at the end of last year and over EUR 6'000 thousand in mid-2022. The operating cashflow is calculated as EAT + write-offs + Working Capital change from 1st of January 2024 until 31st of March 2024.
CASH-FLOW AND INVESTMENTS
January - March
Cash increased to EUR 1'361 thousand at the end of March 2024, from EUR 1'035 thousand at the end of last year. The operating cashflow of negative 96 thousand is a sign that the ongoing amortization of loans and settlement payments is putting substantial pressure on the cashflow. We turn down most new client business and cash-consuming activities remain closed in order to maximise cashflow.
OTHER DISCLOSURES
Accounting principles
The consolidated interim report is based on uniform accounting principles for all group companies. The parent company, Talkpool AG, is a Swiss company and is governed by Swiss law and accounting principles. The consolidated interim report has been prepared in compliance with the Swiss Code of Obligations (Art. 957 to 963b CO).
As per 31 December 2016, the group changed its goodwill accounting from capitalization and amortization to offsetting against equity. For further information regarding applied accounting principles please refer to the Talkpool annual report 2023.
SIGNIFICANT EVENTS AFTER THE PERIOD
No significant events after the period.
Talkpool Interim Report Q1 24 | 5
CERTIFIED ADVISOR
Swedish North Point Securities AB is Talkpool's Certified Advisor.
AUDITOR'S REVIEW
The company's auditors have not audited this report.
Chur, 31 May 2024
Magnus Sparrholm
Interim CEO Talkpool AG
Talkpool Interim Report Q1 24 | 6
Summary of financial reports
CONSOLIDATED INCOME STATEMENT
Jan - Mar | Jan - Dec | |||||
EUR | ||||||
2024 | 2023 | 2023 | 2022 | |||
Net revenue from goods and services | 3'973'729 | 3'671'712 | 15'606'987 | 25'497'641 | ||
Cost of sales | -2'916'123 | -2'927'119 | -11'784'690 | -19'031'310 | ||
Gross profit | 1'057'606 | 744'593 | 3'822'297 | 6'466'331 | ||
Selling expenses | -83'323 | -95'691 | -352'004 | -1'246'994 | ||
Administrative expenses | -595'422 | -523'578 | -2'436'185 | -4'554'320 | ||
Other operating income & expenses | 11'338 | 2'915 | 771'947 | -62'222 | ||
Operating result | 390'199 | 128'239 | 1'806'056 | 602'795 | ||
Financial net | -58'520 | 228'451 | -486'773 | 1'180'433 | ||
Profit before income taxes | 331'679 | 356'689 | 1'319'282 | 1'783'228 | ||
Income taxes | -165'988 | -109'461 | -531'090 | -543'091 | ||
Net profit | 165'691 | 247'228 | 788'193 | 1'240'137 | ||
Net income attributable to: | ||||||
Stockholders of the parent company | 164'324 | 261'538 | 790'705 | 1'222'802 | ||
Minority interests | 1'367 | -14'309 | -2'512 | 17'335 | ||
Other information | ||||||
Average number of shares | 6'778'097 | 6'778'097 | 6'778'097 | 6'6778'097 | ||
Earnings per share (no dilutive effects) | 0.02 | 0.04 | 0.12 | 0.18 | ||
Number of shares, end of period | 6'778'097 | 6'778'097 | 6'778'097 | 6'778'097 | ||
Earnings per share (no dilutive effects) | 0.02 | 0.04 | 0.12 | 0.18 | ||
Talkpool Interim Report Q1 24 | 7
Consolidated balance sheet
March 31 | March 31 | December 31 | |||
EUR | 2024 | 2023 | 2023 | ||
ASSETS | |||||
Current assets | |||||
Cash | 1'361'178 | 1'170'170 | 1'035'045 | ||
Trade receivables | 1'195'570 | 1'002'393 | 1'550'295 | ||
Other current receivables | 1'533'710 | 1'411'383 | 1'187'972 | ||
Inventories and unvoiced services | 1'271'400 | 1'076'728 | 1'168'190 | ||
Prepaid expenses and accrued income | 275'056 | 243'960 | 70'719 | ||
Total current assets | 5'636'914 | 4'904'633 | 5'012'221 | ||
Non-current assets | |||||
Other financial assets | 6'968 | 24'106 | 6'759 | ||
Investments in associates and financial | 478'235 | 467'774 | 501'589 | ||
assets | |||||
Intangible assets | 82'672 | 125'578 | 605'917 | ||
Property, plant and equipment | 624'526 | 613'364 | 116'453 | ||
Total non-current assets | 1'192'401 | 1'230'822 | 1'230'718 | ||
TOTAL ASSETS | 6'829'315 | 6'135'455 | 6'242'939 | ||
LIABILITIES AND EQUITY | |||||
Current liabilities | |||||
Trade payables | 1'215'029 | 1'134'430 | 1'180'967 | ||
Current interest-bearing liabilities | 1'997'536 | 1'246'064 | 1'766'856 | ||
Other current liabilities | 508'960 | 644'803 | 415'781 | ||
Accrued expenses and deferred income | 1'224'040 | 2'096'964 | 1'359'253 | ||
Total current liabilities | 4'945'564 | 5'122'261 | 4'722'587 | ||
Non-current liabilities | |||||
Non-currentinterest-bearing liabilities | 1'281'263 | 1'912'198 | 1'338'765 | ||
Provision | 291'549 | 330'606 | 91'716 | ||
Total non-current liabilities | 1'572'813 | 2'242'805 | 1'430'480 | ||
Total liabilities | 6'518'377 | 7'365'066 | 6'153'067 | ||
Equity | |||||
Stockholders' equity | 160'676 | -1'350'098 | -54'540 | ||
Minority interest in equity of | 150'262 | 120'487 | 144'411 | ||
subsidiaries | |||||
Total equity | 310'938 | -1'229'611 | 89'871 | ||
TOTAL LIABILITIES AND EQUITY | 6'829'315 | 6'135'455 | 6'242'939 |
As per 31 December 2016, goodwill acquired is no longer capitalized and depreciated, but offset against equity.
Talkpool Interim Report Q1 24 | 8
Consolidated cash flow statement
Jan - Mar | Jan - Dec | |||||
EUR | 2024 | 2023 | 2023 | 2022 | ||
Operating activities
Net earnings
+/- adjustment for items not affecting cash flow
+/- change in working capital
165'691 | 247'228 | 788'193 | 1'240'137 |
704'510 | -1'087'168 | ||
44'889 | -75'535 | ||
418'043 | -46'257 | ||
-306'532 | -744'865 |
Net cash flow from operating activities
Investing activities
Investments in property, plant and equipment
Sales/divestment of property, plant and equipment
Investments in intangible assets Sales/divestment of intangible assets
Inflow/outflow from change of financial assets
Dividends paid to minority
Sales of subsidiaries
-95'952 | 1'369'781 | -32'207 | 106'712 |
- | - | -109'199 | -206'645 | |
274'172 | - | |||
24'913 | 196'462 | |||
- | - | -12'621 | -53'763 | |
33'781 | 33'960 | 42'473 | - | |
17'793 | 102'966 | |||
23'145 | 892'101 | |||
- | - | - | -59'835 | |
- | - | - | 1'277'762 |
Net cash flow from investing activities
Financing activities
Net Issuance (repayment) of interest- bearing liabilities
81'839 | 325'925 | 1'009'216 | 1'060'485 |
373'281 | -2'211'644 | -1'463'968 | -1'012'753 |
Net cash flow from financing | 373'281 | -2'211'644 | -1'463'968 | -1'012'753 | ||||
activities | ||||||||
Currency translation effects | -33'035 | 159'253 | -4'851 | -136'914 | ||||
Net change in cash | -356'685 | 17'530 | ||||||
326'133 | -491'810 | |||||||
Cash, beginning of period | 1'035'045 | 1'526'855 | 1'526'855 | 1'509'324 |
Cash, end of period | 1'170'170 | 1'526'855 | ||
1'361'178 | 1'035'045 | |||
Talkpool Interim Report Q1 24 | 9
Changes in equity
Cumulative | Retained | Total | Total | |||||||
earnings - | ||||||||||
Share | Capital | Retained | equity | Share of | equity | |||||
foreign | Goodwill | |||||||||
excl. | minority | incl. | ||||||||
capital | reserves | translation | earnings | recognized | ||||||
minority | interests | minority | ||||||||
adjustment | directly in | |||||||||
EUR | interests | interests | ||||||||
equity | ||||||||||
Jan 1, 2023 | 275'735 | 8'383'131 | -1'773'186 | -5'075'333 | -3'136'239 | -1'325'889 | 169'752 | -1'156'136 | ||
Net earnings | - | - | - | 261'538 | - | 261'538 | -14'309 | 247'228 | ||
Foreign currency differences | - | - | 389'683 | - | -675'429 | -285'746 | -34'956 | -320'702 | ||
Mar 31, 2023 | 275'735 | 8'383'131 | -1'383'503 | -4'813'792 | -3'811'668 | -1'350'095 | 120'487 | -1'229'611 | ||
Jan 1, 2024 | 275'735 | 8'383'131 | -1'773'186 | -4'466'068 | -2'474'152 | -54'540 | 144'411 | 89'871 | ||
Net earnings | - | - | - | 164'324 | - | 164'324 | 1'367 | 165'691 | ||
Foreign currency differences | - | - | 50'893 | - | - | 50'893 | 4'484 | 55'377 | ||
Mar 31, 2024 | 275'735 | 8'383'131 | -1'722'293 | -4'301'744 | -2'474'152 | 160'676 | 150'262 | 310'938 | ||
As per 31 December 2016, goodwill acquired is no longer capitalized and depreciated, but offset against equity.
Talkpool Interim Report Q1 24 | 10
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Disclaimer
TalkPool AG published this content on 31 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 May 2024 07:02:03 UTC.