Shareholder's Newsletter: August 2020

NEW YORK, Sept. 1, 2020 /PRNewswire/ --

Dear Shareholders,

This Shareholder's Newsletter is coming to you when most countries have opened up to some extent from lock down due to the Covid-19 Pandemic, but the situation is still not stable. We hope you all and your families are safe and healthy!

Share structure of UCP

Due to the ongoing Covid-19 situation the Board of directors have decided to push the earlier planned shareholder's meeting to decide on share structure to a later time this year.

Local Planet International Ltd (LPI)

We have no specific news to report for Local Planet International.

Tre Kronor Media Stockholm and Gothenburg

Covid-19 still has impact on the business. The total media spending in the Swedish market is down 23.9% year to date the end of July compared to last year according to statistics from Sweden's Association of Media Agencies. Media spend decreases in all media channels.  Several of our clients have also held back on their media activities due to the uncertainty that has been in the market. Other clients, like Lyko (e-retail), Hornbach (DIY), Advisa (Loan/financial) and Kronfågel (food/groceries) are still doing very well and are holding up their media turnover.

TKM Stockholm's media billings the first half year 2020 decreased with approximately $10 million, compared to the same period last year. Revenues are down 17% and Operative costs are down 18%. Overall, the entity generated a loss during the first six months of the year.

We have worked intensively to increase revenues through sales of current and new competitive services, offering clients' solutions improving their return on investment in marketing and media, as well as providing support and services to current clients in the uncertain market during the first half year. We discern the result of our efforts as both June and July shows results better than expected, both months generating an EBT close to break-even. We still believe we will reach the full year forecast and deliver a positive EBT for the full year 2020.  

TKM Gothenburg's business development has also been affected by the situation as growth has been slowed down. It is only the entity's second year (started in March 2019) and the entity is still under build up. Despite the tough market TKM Gothenburg has signed up several new clients and improved its billings, revenues and EBT compared to last year. The first half year the entity is still behind versus budget. TKM Gothenburg continues to strive for growth and has several ongoing leads.

During the second quarter of 2020 TKM Stockholm and Gothenburg have contracted the following new clients:

70% of the staff is still on short time furlough 20% i.e. working 80% of full time. We do receive a short-time work allowance from the Swedish state, as staff does not have to take the full pay cut due to the cut down on working hours. We have for now decided to continue the short time furlough until year end. This said, if the business picks up sooner, we will reverse this decision. We have to date not made any new hires.

Other developments:

TKM starts a new Amazon agency together with Maze-One Nordic

Together with Maze-One Nordic Tre Kronor Media will start a jointly owned pure Amazon agency for the Swedish market during the fall. Maze-One is a full-service Amazon agency with several years of experience in helping clients on Amazon and other marketplaces. Maze-One has offices in Amsterdam, London, Copenhagen, Oslo. Amazon has announced that it opens in Sweden in September 2020.

Norway, Oslo

Tre Kronor Media is currently evaluating to open an office in Oslo with a partner or by itself during Q4.2020.

Tre Kronor Media Denmark, Copenhagen

Covid-19 hit the market in March when Denmark shutdown practically the whole country. Staff has been returning to the office – after working from home – now in August.  It has been a tough period especially as many of our clients are operating within business sectors most affected by the social distance policy and restrictions on travelling, events etc. However, we have managed to keep momentum and have been working to close this gap and limit the drop through new assignments and clients. By the end of June, our media billings were down 10 percent and our revenues 4 percent compared to the first six months last year. Regardless, for the period ending June 30, 2020, the EBT is in line with last year, through the steps we have taken to limit the operating costs.  

The market in Denmark has slowly started to recoup after the lockdown in Denmark, however there is still slight hesitation in the market of what to expect for the fall. Nevertheless, in TKMDK business has started well after the lockdown and vacation. We are starting campaigns for our new client Hello Fresh and have some exciting new biz projects in the pipeline. We are also starting campaigns for another new client called Aire Ancient Baths who opens in Copenhagen soon. We are looking forward to an exciting fall and are full of energy and enthusiasm to continue our focus on winning new clients as well as serving our current clients with excellent services.   

Local Planet Nordics

Covid-19 is still impacting business and will most likely continue to do so at least for the rest of the year. The turnover and revenue are lower than usual, and we are behind last year as well as this year's budget. In July we can see a small improvement and we continue to work intensively to win new clients and assignments, although in the current market it is significantly more challenging. We have one new client Peroni (via Hello Trouble UK), since the last Shareholder's Newsletter. The downturn has also affected existing clients' businesses resulting in lower media investments and a hesitation to decide on future marketing activities due to the prevailing uncertainty in the market. We do detect higher activity among clients in the market now in August and we are hesitantly positive about the next coming months.

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

SOURCE United Communications Partners Inc.

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