United Communications Partners Inc. Shareholder's Newsletter: 2020/21
NEW YORK, Jan. 12, 2021 /PRNewswire/ --
Dear Shareholders,
This Shareholder's Newsletter is coming to you when most countries are in a second wave of the Covid-19 pandemic. With the vaccines being rolled out there is now light in the tunnel although it will take some time before life for us all becomes more normal again. We hope you and your families are safe and healthy and continue to be so until this pandemic is over.
The pandemic has had an impact on our business in year 2020. It has meant that most of the staff are part-time, with employees working from home. Overall, the Company has managed the situation well, and despite the challenging situation it has been able to win several new clients in year 2020.
Annual meeting October 30, 2020
The annual meeting elected the proposed Directors for the board. The Board of Directors of the company now consists of Niclas Fröberg, Chairman (former Chief Executive Officer), Hakan Jerner, Chief Executive Officer, Lars Bönnelyche, Secretary/Investor relations, Kenneth S. Rosenthal, Chief Marketing Officer.
We welcome Hakan Jerner and thank Lars Blomberg for his services to the Company. Lars Blomberg has been Director of the Board since year 2014.
Share structure of UCP
The planned review of the Share structure of UCP has had to be pushed forward to year 2021.
Local Planet International Ltd (LPI)
We have no specific news to report for Local Planet International.
Tre Kronor Media Stockholm, Gothenburg, Malmo (Sweden)
Covid-19 still impacts the business. The total media spending in the Swedish market is down 17.7% year to date for the end of November compared to last year according to statistics from Sweden's Association of Media Agencies. Media spend decreased in all media channels, except in Online Video which is on par with last year. We have clients that have held back their media activities due to the uncertainty, clients that are doing well but are continuing to hold their media turnover, as well as some clients that are increasing their media investments as part of pushing their e-commerce business.
TKM Stockholm's media billings year 2020, based on preliminary FY figures, decreased with approximately $15 million (approx. 30 percent), compared to the same period last year. The major reason for the drop is the effect of the loss of one of the Company's top three clients in the end of December 2019, and not the pandemic. TKM has increased its sales of services not directly linked to media investments and won several new client contracts for media agency services generating revenues, which have compensated for clients holding back investments or freezing investments and activities in 2020. The new contracts will also offer revenue growth in year 2021. In year 2020, TKM won 16 new clients. In fact, the last quarter of the year TKM Stockholm won the following clients: Bacardi (Spirits), Skistar (Ski Resorts in Sweden, Norway, Austria) and Gustavsbergs Porslin (Porcelain), while enlarging its assignments with several other clients as Zoo.se and Lyko by adding new services and new markets.
April to December 2020, 70% of the staff in TKM Stockholm have been on a short-time schedule, working 80% of full time. TKM received a short time work allowance from the Swedish government, which means that the employees do not have to take the full pay cut due to the cut down on working hours. This has contributed to lower operating costs throughout the year. It has also given us the opportunity to secure staffing working with sales but also to service our current and new clients going forward. We have not made any new hires in year 2020.
The forecast for 2020 is still a positive EBT.
TKM Gothenburg's is continuing to strive for growth and has signed up several new clients and improved its billings, revenues and EBT compared to last yar. The last quarter TKM Gothenburg has won SIA Glass (Ice-cream producer) and enlarged its assignment with Shepherd of Sweden to new markets. The entity is still slightly behind versus budget for the year.
In October 2020, TKM established TKM Malmo to service clients in the southern parts of Sweden. TKM started the entity together with the advertising agency Reklambyran BK i Malmo, and Fredrik Perulf, former Head of Operations of Starcom Malmo. Both parties are well established and renowned in the market. TKM is the majority owner of the entity and is starting up its Malmo operations the first quarter of 2021.
We are very proud to announce that Tre Kronor Media in Sweden was, for the third year in a row, certified as a Great Place to Work in November 2020.
Local Planet Nordics
Local Planet has had a tough year in 2020. It lost one of its top three clients in January and despite huge efforts to win new clients the progress has been slow due to market situation. The turnover and revenue are lower than usual, and it is behind 2019 as well as the budget for 2020. It recently won one new client, Argo Gaming Group, and earlier this year it added Peroni to its client list. Local Planet continues to work hard to generate new business and management is optimistically positive about year 2021.
Tre Kronor Media Oslo (Norway)
On November 3, 2020, Tre Kronor Media entered a partnership agreement with Flokk Media AS. Flokk Media AS is a newly established media agency (in the beginning of 2020) with three professional co-owners active in the agency. The co-owners are all renowned in the Norwegian market and each have solid experience from positions at media houses, advertising agencies, as well as from other media agencies. Most importantly for the decision to enter a partnership is that the agency's approach and culture is a perfect match with Tre Kronor Media's. The agency is fast growing, and we have already started to co-operate on client assignments and in pitches. The cooperation will evolve further during year 2021 and we look forward to many new opportunities in the Norwegian market together. The partnership will strengthen Tre Kronor Media in future Nordic and International pitches.
Tre Kronor Media Copenhagen (Denmark)
Since March 2020, Denmark has had lock downs on and off. In January 2021, it is currently locked down again as there is a political discussion about implementing a curfew. This has of course impacted the market conditions. Media billings in the market 2020 sunk to a level below what it was when the market was hit by the financial crises in year 2008.
TKM Denmark has managed to keep momentum despite the situation and has been successful in selling consulting and support services to its clients, many severely affected by the social distance policy and restrictions on travelling, events etc., as well as providing services to several new client contracts during year 2020. Even if the media billings of the entity in is down compared to 2019, the result of the efforts on generating new revenues and measures taken to limit operating costs means that TKM Denmark is now forecasting a positive result for year 2020.
Maze-One (Sweden)
As informed in the Shareholder's Letter for August Tre Kronor Media is starting a jointly owned pure Amazon agency for the Swedish market. Since then, Peter Agoston has been appointed as Managing director for the agency, and he started his new position at Maze-One Sweden in December 2020. Peter Agoston comes directly from Amazon USA where he had a position as responsible for e-commerce and business manager with focus on growth of Amazons marketplaces.
Maze-One has already entered a contract to provide Amazon Services to Shepherd Sweden, a client working with Tre Kronor Media Gothenburg, encompassing six markets - Sweden, Norway, Denmark, Finland, UK and Germany.
Media Team Plus Joint Venture
This entity has been significantly growing since last year. The largest wins in 2020 are De Longhi (Both Traditional and Digital media agency services), that we started working with during the autumn 2020, and BMW (Digital services) that Mediaplus International won and where local markets will be rolled in step by step during year 2021. MTP is still in the race for several other clients' assignments together with Mediaplus International and it looks promising for year 2021.
Outlook for the upcoming year
We are cautiously looking forward to year 2021, as we now have strengthened our organization, improved and broadened our service offerings and sharpened our competitive edge in the market.
Our ambition is to grow our business this year, through billings, revenue and profits, even if it is highly likely the pandemic and its effects on the general market situation does not improve significantly until earliest the second half year. However, we are well prepared to meet the challenge.
On behalf of myself, the Board of Directors, and other partners, I want to thank all shareholders for your interest in and continued support of UCP.
Niclas Fröberg
About United Communications Partners
United Communications Partners (UCP) is a leading Nordic Region communication's group listed on the OTC Markets under the symbol UCPA. We are comprised of award winning innovative full-service media agencies located in the Nordics. With the client's needs always top of mind, UCP's mission is to grow our client's business exponentially, utilizing cautious strategy, smart client development and expert advice. The core of our expertise exists within our pioneering performance-based marketing, advanced digital capabilities, prominent business expansion success and creative deal structuring for our clients. For more information please visit our website: www.ucpworld.com
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SOURCE United Communications Partners Inc.
