Talkpool chair: “Our corporate strategy is coherent and geared for growth”

Talkpool Featured, August 30th, 2021

Interview with Magnus Sparrholm, Chair of the Talkpool Board of Directors, on the company’s growth development and future perspective. Originally published in German, https://small-microcap.eu/talkpool-ag/

Magnus Sparrholm, Chair of Talkpool, is very satisfied with the business development of the Swiss network and IoT company in an interview. He expects the pace of growth to remain high in the second half of the year.

In the second quarter of 2021, Talkpool increased its revenue by 28 percent and achieved an EBITDA of more than 380,000 euros. Are you satisfied with the business development?
Magnus Sparrholm: We are very pleased with the second quarter. All our businesses have performed well and contributed to growth. One point I would like to highlight in particular is the positive margin development. We were able to increase the EBITDA margin from 3.7 percent in the prior-year quarter to 6.1 percent. All of this gives us confidence for the second half of the year.

In your view, what were the biggest milestones in the past quarter?
Sparrholm: In the second quarter, we spent a lot of time integrating NPT into our Swedish IoT subsidiary. In addition, we were able to recruit an expert for the merged company in Andreas Göth, who has many years of experience in this business. All of this has paid off. Our IoT business for intelligent building technology in Sweden is doing extremely well. We have now reached a critical mass and a relevant size in the Swedish IoT market. We are convinced that Andreas Göth is the right person to take our Swedish IoT business even further. Another milestone was the completion of the sale of our subsidiary Nordic IoT Networks AB (NIOT) to Netmore Group. The Netmore shares that Talkpool received through the divestment were sold at a significantly higher price than we had expected. The third highlight I would like to mention is the strong turnaround of our business in Pakistan. Despite a highly competitive market, we were able to land numerous orders there in recent months. For example, we signed a network testing contract with one of the country’s largest mobile network operators worth the equivalent of around EUR 700,000 per year. This puts us in an excellent position should we decide to sell our Pakistan subsidiary LCC.

Why sell?
Sparrholm: Talkpool’s long-term strategy is to scale back its involvement in developing countries and focus the business on Europe and America. If the price is right, we will therefore consider selling Talkpool Pakistan. We have already received offers, by the way.

The COVID pandemic has affected the production and delivery capacities of many telecommunications and IT companies. Did Talkpool also experience bottlenecks or are any foreseeable?
Sparrholm: Thanks to well-planned stock levels, we did not experience any disruptions in the fulfilment of our orders. No bottlenecks are foreseeable for the rest of the year either.

In Spain, Talkpool was involved in a project aimed at improving indoor air and thus preventing the spread of the Corona virus. Was the project a success and are there plans to get more involved here?
Sparrholm: A double yes. Based on the success of this and other pilot projects, we want to develop further in the field of indoor air quality and control. To this end, we have formed an alliance with our partner companies Redytel, Netmore and Senseair. This gives us even more ability to be successful in this area.

In Germany, Talkpool recently won new framework contracts for network planning and network documentation worth €1.025 million. Do you anticipate further orders?
Sparrholm: Absolutely. Germany has promising growth potential due to the pent-up demand for fast networks. We therefore want to further expand our market presence and our range of services in Germany. This applies in particular to network planning and documentation of fiber optic connections and 5G sites. Without going into detail: Orders similar to the one mentioned are already in the pipeline.

How do you assess the further prospects for Talkpool for the rest of the year. Will the strong growth continue?
Sparrholm: If everything goes smoothly, we will be able to maintain the high rate of growth. We currently expect sales to increase by between 25 and 30 percent in the second half of the year, and our profit margins should continue to improve.

Talkpool’s shares have also been traded on the Frankfurt Stock Exchange since June 2021. What speaks for the share?
Sparrholm: Talkpool is a company that is broadly positioned with its network services and IoT solutions and has many years of experience and a competent workforce in these businesses. We are active in future markets such as the Internet of Things, digitalisation, 5G and green technologies. Our corporate strategy is coherent and geared towards growth. All of this should also benefit our shareholders in the long term.

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