Sinch AB (publ): Interim Report January – June 2020

Interim Report January - June 2020

April - June 2020

• Net sales increased by 38 percent to SEK 1,621.9 million (1,176.7). Organic growth in local currency was 27 percent.
• Gross profit increased by 43 percent to SEK 460.3 million (321.1). Organic growth in local currency was 24 percent.
• Adjusted EBITDA¹ increased by 55 percent to SEK 176.5 million (114.2).
• Adjusted EBIT² amounted to SEK 161.7 million (104.1).
• Profit after tax for the quarter was SEK 37.1 million (53.3).
• Diluted earnings per share were SEK 0.61 (0.98).

January - June 2020

• Net sales increased by 42 percent to SEK 3,246.1 million (2,278.4). Organic growth in local currency was 29 percent.
• Gross profit increased by 49 percent to SEK 907.0 million (610.6). Organic growth in local currency was 29 percent.
• Adjusted EBITDA1 increased by 59 percent to SEK 360.8 million (226.4).
• Adjusted EBIT2 amounted to SEK 330.5 million (206.3).
• Profit after tax for the period was SEK 133.5 million (111.1).
• Diluted earnings per share were SEK 2.19 (2.06).

'The advantages of cloud-based technology are now very tangible as governments and businesses find new ways of working during the Covid-19 pandemic' - Oscar Werner, CEO.

Significant events during the quarter

• The acquisition of Chatlayer BV for total consideration of EUR 5.6 million on a debt-free basis closed on 1 April and was financed with cash reserves. Chatlayer offers a cloud-based software platform to create advanced, multilingual chatbots that understand both spoken language and text-based communications.
• Sinch entered into a binding agreement on 5 May to acquire SAP Digital Interconnect (SDI), a unit within SAP, for total cash consideration of EUR 225 million. The acquisition was financed with cash reserves and available debt facilities. SDI offers cloud-based communications services in three segments: Programmable Communications, Carrier Messaging and Enterprise Solutions. During the 12-month period ending 31 March 2020, SDI generated sales of EUR 340 million, gross profit of EUR 94 million and adjusted EBITDA of EUR 15.4 million. Headquartered in San Ramon, California, SDI has about 330 employees in 20 countries. Execution of the transaction is subject to customary terms and conditions and the approval of competition authorities in several countries. The transaction is expected to close in the second half of 2020.
• On 15 June, Sinch entered into a binding agreement to acquire ACL Mobile Ltd (ACL) for total consideration of INR 5,350 million (approximately SEK 655m). The acquisition will be financed with a combination of cash reserves and debt facilities. Headquartered in Delhi, India, the company has 288 employees and is a leading vendor of communications services in India and Southeast Asia. During the 12-month period ending 31 March 2020, ACL generated sales of INR 4,959 million (SEK 607m), gross profit of INR 1,901 million (SEK 134m) and adjusted EBITDA of INR 480 million (SEK 59m). The transaction is expected to close in Q3 2020.
• A directed issue of 1,052,631 shares was executed on 15 June at a subscription price of SEK 665 per share. The issue generated keen interest and was directed at selected Swedish and international institutional investors. The issue raised approximately SEK 700 million for Sinch before issue costs.
• The negative impact of Covid-19 in the smaller Voice and Video segment continued due to a decline in travel that lowered demand from app-based ride-hailing firms.

¹ EBITDA before depreciation, amortization and impairments excluding items affecting comparability. See page 3 for a specification of items affecting comparability.
² EBIT excluding items affecting comparability and depreciation/amortization of acquisition-related assets. See Note 4 for a specification of depreciation and amortization.

Invitation to phone conference

Sinch will present the interim report in a phone conference on 17 July at 14:00 CET. Please ensure you are connected to the phone conference by phoning in to register a few minutes before the conference begins.

Sweden: [phone]
United Kingdom: [phone]
United States: [phone]

Access code: 27 56 118#

Register here to watch the presentation via Webcast: investors.sinch.com/webcast.

For additional information, please contact:

Thomas Heath, Chief Strategy Officer and Head of Investor Relations
[phone]
[e-mail]

Roshan Saldanha, Chief Financial Officer
[phone]
[e-mail]

About Sinch

Sinch develops digital tools that enable personal interaction between enterprises and individuals. Powered by the Sinch cloud communications platform, enterprises can reach every mobile phone on the planet - within a second or two - via messaging, voice calls and video. Several of the biggest enterprises in the world are using Sinch's advanced technology platform to communicate with their customers and Sinch is an established software supplier to mobile operators worldwide. Sinch has delivered profitable growth since it was founded in 2008. The Group is headquartered in Stockholm, Sweden, and has a presence in more than 30 other countries. The share is listed on Nasdaq Stockholm, XSTO: SINCH.

Note: Sinch AB (publ) is required to publish the information in this interim report pursuant to the EU market abuse regulation. The information was released for publication on 17 July 2020 at 07:30 CET.

This report is published in Swedish and English. In case of any differences between the English version and the Swedish original text, the Swedish version shall apply. This report has not been subject to review by the company's independent auditor.

Attachment

• Sinch 2020Q2_ENG