Jetty Interim Report July 1 – September 30, 2021
THIRD QUARTER 1 JULY – 30 SEPTEMBER 2021*
PERIOD JANUARY 1 – SEPTEMBER 30, 2021*
PROFORMA 1 JANUARY – 30 SEPTEMBER 2021**
* Regarding comparative figures in financial information: Jetty AB acquired all shares in Nowa Kommunikation AB on October 1, 2021. This acquisition will be reported according to the principles of reverse acquisition in the coming quarters, but as of September 30, Jetty AB is still reported independently.
**The pro forma report shows how the Group's consolidated income statement and balance sheet would have looked if Jetty's acquisition of all shares in Nowa Kommunikation AB had been completed as of January 1, 2021. ***Refers to a total comparison of all individual companies in the Group without eliminations for intra-group or adjustment for minority ownership. See summary page 20.
IMPORTANT EVENTS JULY 1 – SEPTEMBER 30, 2021
Swace Digital reduced its holding
Swace Digital reduced its ownership to 5,85 percent of the shares and votes in Jetty between June 30 and July 2. Before the sale, Swace Digital owned 10,03 percent of the capital and votes in Jetty.
Almi's moratorium on bridge loans
During the month of July, the company received a deferral from Almi regarding the Corona loan that the company received in July 2020 (500 thousand SEK), which means that the loan will be paid in 12 months instead of, as originally agreed, in July 2021.
Letter of intent regarding acquisition of Nowa Kommunikation AB
Jetty and its principal owner have on July 16 entered into a letter of intent with Nowa Kommunikation AB and its principal owner to acquire all shares in Nowa. The purpose of the potential acquisition is to improve the conditions for implementing Jetty's strategy. Payment for the acquisition will, provided that the transaction is completed, be made with newly issued shares in Jetty. Jetty's current owner will then own 20 percent of the shares in Jetty and Nowa's current owner 80 percent.
New listing test at Spotlight
Jetty is undergoing a new listing review at Spotlight Stock Market and the company will be moved to the observation list on July 20. This process is completely normal and the background is that it is considered to be a fundamental change for Jetty with the declaration of intent to purchase all shares in Nowa Kommunikation AB. The purpose of the listing review is to ensure that Jetty, in its new constellation, meets all listing requirements.
Agreement on acquisition of Nowa Kommunikation AB
On August 27, Jetty signed an agreement with Nowa Kommunikation AB and its main owner to acquire all shares in Nowa.
The SaaS solution is developing well
Sales of Jetty's SaaS solution, which was launched on June 29, are developing well and already have 40 users as of September 30. This is despite the fact that restrictions due to the pandemic have not been fully released during the period yet within Jetty's focused markets. The majority of the new users are trying a "free version" of Jetty's SaaS, so the number should be seen as an indication of the interest in the new service.
IMPORTANT EVENTS AFTER THE END OF THE PERIOD
The Extraordinary General Meeting on October 1 resolved the following:
• New board – re-election of board member Lisa Nilsson and new election of board members Gabriele Helmer, Hans Jacobsson, Rune Nordström and Stefan Winström. Hans Jacobsson was elected chairman of the board.
• For the period until the next Annual General Meeting, the registered accounting firm Öhrlings PricewaterhouseCoopers AB (PwC) was elected as the company's auditor. It was noted that Åsa Önfelt had been appointed by PwC as the auditor in charge.
• The meeting decided on new articles of association in accordance with the board's proposal.
The following adjustments were decided in the articles of association:
-New company name: Thinc Jetty Collective AB
-The company's registered office shall be in Gothenburg
-New business purpose
-New ranges for the number of shares and the size of share capital
The meeting resolved on a new share issue (share issue in kind) through a directed issue of a maximum of 94,369,148 new shares, which meant that 100 percent of the shares in Nowa Kommunikation AB were acquired. The company's share capital was increased by SEK 10,380,606.25 through the issue.
The acquisition of Nowa Kommunikation is completed and Anders Wallqvist takes office as new CEO on October 1st
• The acquisition has been finally completed and the Company has taken possession of the shares. The purchase price for the acquisition amounted to approximately SEK 82,5 million and was paid by allocating 94,369,148 newly issued shares in Jetty to the sellers. The sellers, i.e. the former shareholders in Nowa, will thus receive newly issued shares corresponding to 80 percent of all shares and votes in Thinc Jetty Collective through the Transaction.
• The company's board of directors appoints Anders Wallqvist as new CEO. Anders Wallqvist, who has been CEO and Group CEO of Nowa since its inception in 2005, has extensive experience in the development and sales of integrated services and systems within media and communication. Anders has a background from leading positions in, among others, Carat Express and Dentsu Aegis.
Relisting memorandum published on October 15 and the company's shares are returned to the regular list
The company will trade under its new name Thinc Jetty – short name “Thinc” starting October 20.
Letter of intent to acquire 70 percent of the shares in the media agency Context Media AB
On October 28, Thinc Jetty Collective entered into a letter of intent with the owners of Context Media AB to acquire 70 percent of the shares in the company. The purpose of the potential acquisition is primarily to strengthen the Group's presence in other parts of Sweden. Payment for the acquisition will, provided that the transaction is completed, be made with newly issued shares in Thinc Jetty Collective in combination with additional purchase prices based on the results of the financial years 2021 and 2022. If they are due, the additional purchase prices will be paid in a combination of cash and newly issued shares in Thinc Jetty Collective. Final agreements are expected to be implemented on December 1, 2021. The total fixed purchase price for 70 percent of the shares in the Company amounts to the equivalent of SEK 18,2 million.
Increased holding of shares in four already partly owned group companies
As of November 1, Thinc Jetty Collective has increased its holdings in four companies that were already part of the group as associated companies before the acquisition; Do Nothing Average Agency AB, Habermax AB, Tre Art Reklambyrå AB and Kunskapskraft & Media Sweden AB. The purpose of increasing the holdings is to consolidate the operations and increase the incentive for cooperation within the group. Payment for the acquired shares will be made with newly issued shares in Thinc Jetty Collective in combination with additional purchase prices based on the results of the financial years 2021 and 2022. If they fall due, the additional purchase prices will be paid in cash. The total fixed purchase price for all acquisitions amounts to the equivalent of SEK 3,5 million.
New agreements for Jetty
– Agreement with Malmö Festival for 2022 with option for 2023.
– Framework agreement with Interpride – the system is offered to Interpride's 400 members in 70 countries to use the software at a discounted price.
CEO has the floor
With the reverse acquisition of Jetty, Nowa has taken the step into the stock market world and created Sweden's only listed entrepreneur-driven communications agency group: Thinc Jetty Collective (Thinc). We are facing an incredibly exciting journey and I would like to thank you for a job well done and for the trust we have received. This first CEO's word is more about what is to come than what has been. Our financial report for Q3 so far only concerns the operations of Jetty AB, as the reverse acquisition took place on October 1. But as of today's date, the group consists of 12, soon to be 13 companies, - not just one like before. It is therefore natural that we tell you more about the whole and our new group.
Strong development in 2021
Jetty's sales have been strongly negatively affected by Covid-19, and therefore it is all the more pleasing that an agreement has been signed with Interpride (for 400 pride festivals globally), with several Norwegian customers and that we now have 40 new users in the newly launched SaaS solution. The prolonged pandemic and cancelled events meant that more and more contracts were cancelled – a trend that is now reversing. The goal of the future subsidiary Jetty is to reach a break-even result in 2022 after several years of significant investment in technology and the market and losses. The momentum we have gained after restrictions were lifted makes us increasingly confident in this. Notably in Q3, we have managed to reduce costs further compared to 2020. The Nowa Kommunikation group has also been affected by the pandemic. However, the companies' joint sales are now growing by a full 50% on an unadjusted basis to approximately SEK 120 million for Q1-Q3 and with an EBITDA of +SEK 2,3 million excluding Jetty. In addition, we have a strong quarter left to report, as Q4 is usually the best period for many of the Nowa companies. The times we live in now do not exactly encourage us to step up and invest, but that is exactly what we are doing. We know that our offering to the market is attractive – even in difficult times, we have managed to grow as a group and gain more and more agencies and customers. At the same time, existing customers are increasing their purchases. Examples of new customers during the pandemic are Volvo Group AB, Italian Tourist Office, City of Stockholm, Arbetsförmedlingen, City of Gothenburg and many more. Examples of customers who are buying more and more are Bubs, Defa, E-car Expo, Dahls, Andra AP-fonden, etc. After a two-year hiatus, we have also received bookings for Almedalen 2022 earlier than ever, where we normally have a turnover of SEK 5 million, in a single week. Even apart from short-term support, almost all companies are making a positive result, and we are particularly proud of the latest start-ups Now At Days Motion Pictures (film and audio production) and Grow Collective (sales company) which are start-up companies and in corona times are approaching breakeven in a short time. We are equally proud of the event companies Prodekor and Artiflex, both of which are making a profit in a sub-industry that has suffered severely.
Why the marriage between Jetty and Nowa?
Communication and technology are today like mud and long straws. We live with advanced technology around us and in our lives, basically 24/7. Letting the group develop in a technical direction is simply evolution, and the step together with Jetty was logical. The merger of the former Nowagruppen and Jetty is more than just an IPO or expansion of an existing company. It is also a new model for growth and a way to naturally tie together businesses with great coordination advantages, in an industry that is not used to this. Entrepreneurs often leave after about three years, but not with us. By developing our entrepreneurs as leaders, we have also laid the foundation for shifting ownership from a few to many over time. Thinc sees its role as a base for communication support for foreign customers who want to enter the Nordic region and Swedish customers who want to communicate outside the Nordic region, and who need help with everything within communication, in markets where we ourselves have limited representation. We dare to say that our history confirms our model. We create greater business benefit for customers when we collaborate. The communication and technology needs of customers are multifaceted and difficult to fully meet on their own. The business idea is based on collaboration and the motto “as little as possible, as much as required”. Customers either come directly to the specialist companies, who take help when needed, or to the group, which handpicks a team from among the companies to solve the task. The biggest challenge among customers today is to make everything fit together. To find the common thread both internally and externally. The technology and communication landscape is becoming more complicated and you need to make sure you have the cutting-edge expertise that is needed. And that is where Thinc is positioned perfectly. The only thing that is constant is that everything is constantly changing. Sometimes we experience change more clearly than before, and right now we are in a period of rarely seen change. The possibilities are endless, if you know how to manage them.
Changes and acquisitions
The plan is that as of January 1, 2022, we will move the Jetty operations to a new and 100 percent owned subsidiary called Jetty AB. In this way, Thinc Jetty Collective will become a pure management and holding company that can focus on developing the operational activities of all subsidiaries and associated companies optimally. Last but not least, we are very happy about our future deal with Context Media, which with its 10 employees in four locations is expected to make a fantastic profit of SEK 7 million on sales of SEK 90 million for 2021. Context Media complements the group extremely well with its stable earnings and growth on the corporate side, while at the same time being able to benefit from structural capital and new potential customers within the group. We hereby welcome all existing and new owners on an exciting journey towards the stars.
Gothenburg in November 2021
Anders Wallqvist, CEO
For further information, please contact:
Anders Wallqvist, CEO Thinc Jetty Collective AB
anders.wallqvist@thinccollective.se
This information is information that Thinc Jetty Collective is required to disclose under the EU Market Abuse Regulation. The information was submitted, through the agency of the above contact person, for publication on 19 Nov 2021.