Sinch AB (publ): Year-end report January – December 2019

Year-end report January – December 2019

October – December 2019

• Net sales increased by 34 percent to SEK 1,540.7 million (1,151.3). Organic growth in local currency was 17 percent.
• Gross profit increased by 42 percent to SEK 439.9 million (309.9). Organic growth in local currency was 23 percent.
• Adjusted EBITDA¹ increased by 82 percent to SEK 199.5 million (109.4).
• Adjusted EBIT² amounted to SEK 185.7 million (104.1).
• Profit after tax for the quarter amounted to SEK 94.7 million (103.5).
• Diluted earnings per share were SEK 1.73 (1.93).

January – December 2019

• Net sales increased by 26 percent to SEK 5,035.6 million (3,986.6). Organic growth in local currency was 17 percent.
• Gross profit increased by 38 percent to SEK 1,394.1 million (1,008.4). Organic growth in local currency was 26 percent.
• Adjusted EBITDA¹ increased by 56 percent to SEK 573.5 million (367.1).
• Adjusted EBIT² amounted to SEK 523.6 million (344.8).
• Profit after tax for the year amounted to SEK 274.5 million (179.5).
• Diluted earnings per share were SEK 5.06 (3.35).

“Our strategy is to grow our business both organically and through acquisitions. In the fourth quarter we pulled both these levers and delivered record gross profit and EBITDA.” – Oscar Werner, CEO

Significant events during the quarter

• Sinch acquired 100 percent of the share capital in myElefant SAS on 4 October. Based in Paris, myElefant has built a cloud-based software platform for mobile engagement. The company pioneered the use of mobile landing pages and was an early adopter of conversational messaging technologies like RCS, Facebook Messenger and WhatsApp. Upfront cash consideration amounted to EUR 18.8 million (SEK 203.3 m) with an additional cash earnout of up to EUR 3 million if certain gross profit targets are met. The acquisition was financed with Sinch’s available credit facilities.
• Sinch acquired 100 percent of the share capital in TWW do Brasil S.A. on 23 October. The company is the third-largest provider of enterprise messaging services in Brazil. TWW serves more than 3,000 businesses including leading Brazilian companies in banking and finance, retail and education. The purchase consideration was BRL 180.8 million (SEK 422.4 m) on a cash- and debt-free basis. The acquisition was financed with Sinch’s available credit facilities.
• Sinch issued senior unsecured bonds on 19 November in the total amount of SEK 750 million. The bonds have a tenor of five years and a floating interest rate of 3 months STIBOR plus 250 bps. The transaction generated strong investor interest and the issue was oversubscribed. Sinch's existing bank loan was renegotiated in connection with the issue and the parent company's shares in subsidiaries are no longer pledged as collateral.

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 amortization.

Invitation to phone conference

Sinch will present the interim report in a phone conference on 20 February at 9:00 CET. To participate in the phone conference, please call any of the following numbers and enter the code 137 392 85#.

Sweden: +46 (0) 8 566 426 51
UK: +44 (0) 333 300 08 04
USA: +1 631 913 14 22

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. The information was submitted for publication on 20 February 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.