Interim Report, January – September 2020

July – September 2020

• Net sales increased by 46 percent to SEK 1,777.7 million (1,216.4). Organic growth was 35 percent.
• Gross profit increased by 40 percent to SEK 480.6 million (343.6). Organic growth was 24 percent.
• Adjusted EBITDA1 increased by 53 percent to SEK 226.0 million (147.6).
• Adjusted EBIT2 amounted to SEK 210.7 million (131.5).
• Profit after tax for the quarter amounted to SEK 96.4 million (68.7).
• Diluted earnings per share were SEK 1.56 (1.27).

January – September 2020

• Net sales increased by 44 percent to SEK 5,023.8 million (3,494.9). Organic growth was 31 percent.
• Gross profit increased by 45 percent to SEK 1,387.6 million (954.2). Organic growth was 27 percent.
• Adjusted EBITDA1 increased by 57 percent to SEK 586.8 million (374.0).
• Adjusted EBIT2 amounted to SEK 541.2 million (337.9).
• Profit after tax for the period amounted to SEK 229.9 million (179.8).
• Diluted earnings per share were SEK 3.88 (3.34).

“In late October, Sinch announced the Conversation API for multichannel, interactive business messaging. It is a way for businesses to add new and powerful capabilities, without adding complexity, and we are excited to bring it to market.” – Oscar Werner, CEO

Significant events during the quarter

• Sinch completed the first stage in the acquisition of ACL Mobile Ltd (ACL) on 1 September. The total consideration is INR 5,345 million (approx. SEK 630 million). The acquisition is financed with existing cash reserves and debt facilities. Headquartered in Delhi, India, the company has 288 employees and is a leading vendor of cloud communications services in India and Southeast Asia.
• Sinch launched a new Conversation API on 29 October, a single endpoint for interactive communication across a range of popular messaging channels like WhatsApp, Viber, RCS and SMS. The product gives businesses a simple way to future-proof their customer communications with support for current and future messaging channels.
• The small Voice and Video segment remains impacted by Covid-19, as a decline in travel has caused lower demand from app-based ride hailing companies. The overall impact on Sinch remains modest, however, since volumes in Messaging have increased. 

Significant events after the end of the quarter

• Sinch closed the acquisition of SAP Digital Interconnect (SDI), a unit of SAP, on 1 November. The total cash consideration amounted to EUR 225 million and was financed with existing cash reserves and available credit facilities. SDI offers cloud communications services and serves more than 1,500 enterprise customers worldwide. The customer base includes many of the world’s most highly valued companies, including leading tech companies, banks, payment gateways, retailers and mobile operators. For the 12 months ended 31 March 2020, SDI recorded revenues of EUR 340 million, gross profit of EUR 94 million and Adjusted EBITDA of EUR 15.4 million. Headquartered in San Ramon, California, the business has about 330 employees in 20 countries.

¹ EBITDA excluding items affecting comparability. See page 3 for a specification of items affecting comparability.

² EBIT excluding items affecting comparability and 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 3 November at 14:00 CET. Please ensure you are connected to the phone conference by calling in and registering shortly before the conference begins.

Sweden:                    +46 8 566 426 51
United Kingdom:       +44 33 3300 0804
United States:          +1 631 913 1422

Access code:             345 565 62#

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
+46 72 245 50 55
thomas.heath@sinch.com

Roshan Saldanha, Chief Financial Officer
+46 73 660 24 19
roshan.saldanha@sinch.com

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 and the Swedish Securities Market Act. The information was released for publication on 3 November 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.

Attachment

• Sinch_2020Q3_ENG