Slide 1: Q4 2024 Investor Presentation
Q4 2024 Laurinda Pang, CEO I N VES T O R PR ES EN T AT I O N Roshan Saldanha, CFO FEB 13, 2025 Thomas Heath, Chief Strategy Officer
Slide 2: Pioneering the way the world communicates
175,000+ 800bn+ 60+ Scalable cloud communications business interactions countries with platform for messaging, voice and email customers per year local presence Pioneering the way the world communicates SEK 28.7bn SEK 9.7bn SEK 3.6bn net sales in the gross profit in the Adj. EBITDA in the past 12 mo
Slide 3: Fourth quarter highlights
Fourth quarter highlights 01 02 03 New financial targets Stable performance Investing in growth • New financial targets announced at • Net sales growth of 3% and gross • Maintaining cost control enables Capital Markets Day on 20 profit growth of 1%, in constant resource allocation towards growth Nov
Slide 4: Overview
Overview Operating segments Product categories Expenditures Gross profit by region, R12M Gross profit by product, R12M Adjusted opex by function, R12M 21% 23% 48% 56% 23% 29% API Platform R&D Applications Sales & marketing Network Connectivity General & administrative Figures reflect rolling 12 mont
Slide 5: Performance by segment
Performance by segment Americas EMEA APAC • 5% year-on-year growth in • 2% year-on-year growth in Net • 5% year-on-year decline in Net sales but 5% decline in sales and 13% growth in gross Net sales but 8% increase in gross profit in constant profit in constant currencies. gross profit in constant c
Slide 6: Gross profit by product
Gross profit by product Gross profit, Q4 24 vs Q4 23, SEKm • Initiatives underway to improve 1,750 0% performance in API Platform and Applications 1,500 1,401 1,430 • Significant improvement to year-on-year performance in 1,250 Network Connectivity compared to preceding quarters 1,000 • API Platform
Slide 7: CMD highlights
CMD highlights CAPITAL MARKETS DAY 2024 1 2 3 Market Transformation Value creation Sinch is a global leader in the market We are reshaping our business We are focused on profitable and for Digital customer communications. to reaccelerate growth. sustainable growth, organically and through M&A. • Glo
Slide 8: Clarins increased engagement with RCS
Clarins increased engagement with RCS Standing out in a competitive market Clarins, a global leader in luxury skincare, needed a way to cut through the noise and create more engaging, personalized customer experiences. Full customer story Driving higher engagement with RCS at sinch.com. Using RCS, C
Slide 9: Financials
Financials 9
Slide 10: Net sales
Net sales Net sales, SEKm • Net sales in constant currencies increased by 3% year-on-year • Net sales increased by 3% on a reported basis • Americas up 5% year-on-year in constant currencies • EMEA up 2% • APAC down by 5% 10
Slide 11: Gross profit
Gross profit Gross profit, SEKm • Gross profit grew 1% year-on-year in constant currencies, and increased 2% on a reported basis • Americas down 5%, EMEA up 13%, and APAC up 8% in constant currencies • Applications up 4%, API Platform flat, and Network Connectivity flat in constant currencies 11
Slide 12: Network Connectivity
Network Connectivity Gross profit (SEKm) and organic gross profit growth, Network Connectivity, Americas • Price increases for legacy voice network connections impacted gross profit from Q1 24. • Improvement during 2024 after successful supplier negotiations and the passing on of remaining price inc
Slide 13: Stable gross margin at group level
Stable gross margin at group level Stable 50% gross margin at group level Regional 50% variations affect gross profit growth 41% 40% 40% 36% 33% 33% 34% 34% 34% 34% 33% 33% 33% Americas 35% EMEA 30% 30% 31% APAC 28% 20% 20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2023 2024 2023 2024 • Stable
Slide 14: Margin development
Margin development EBITDA margin, % 14% 13% • SEK 700m one-time provision 13% 13% 12% impacts EBITDA but does not 12% 12% affect Adjusted EBITDA 10% 11% 11% 11% • Integration and restructuring 11% totaled SEK 301 million in 8% 2024, in line with SEK 300 million expectation 6% 4% 4% 2% 0% Q4 23 Q1 24
Slide 15: One-time provision for historical non-income based taxes
One-time provision for historical non-income based taxes Revised assessment of Complex, global tax Not expected to affect historical tax exposure environment future profitability • Sinch has proactively initiated a • Sinch operates in a complex, • The provision relates to non- review of the company’
Slide 16: Strong cash conversion
Strong cash conversion Cash flow after investments, SEKm Cash conversion from Adj EBITDA, R12M • Net working capital causes variation between • Cash flow from operating activities after individual quarters. investments was SEK 2,355 million over the past 12 months. • Cash flow from operating activit
Slide 17: Reduced leverage
Reduced leverage Net debt/Adjusted EBITDA R12m* • Continued deleveraging with Net debt/Adj EBITDA now at 1.5x • Three components affecting Net debt/Adj EBITDA: 2.0 2.0 ‒ Adj EBITDA growth 1.7 ‒ Cash generation 1.6 1.5 ‒ Immediate currency impact on debt, but trailing impact on earnings Q4 23 Q1 24 Q
Slide 18: Well-covered debt maturities
Well-covered debt maturities Maturity schedule as of 31 December, SEKm • A bond loan of SEK 673m with 10,000 maturity in November 2024 was prematurely redeemed in October 7,500 • Available cash and committed credit facilities more than exceed loans maturing in 5,500 2025-26 5,000 • New 2-year USD 10
Slide 19: Financial targets
Financial targets Long-term Mid-term Financial Capital value creation financial targets leverage policy allocation Sinch’s Board of Directors By the end of 2027, Sinch Sinch’s financial leverage Cash generated from the measures targets to reach: policy is that: business will be used to: long term va
Slide 20: Thanks!
Thanks! For more information, contact: Ola Elmeland Investor Relations Director investors@sinch.com
Slide 21: Income statement
Income statement SEKm Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 2023 2024 Net sales 7 265 7 532 6 792 7 041 7 150 7 729 28 745 28 712 Cost of services sold -4 832 -5 006 -4 480 -4 655 -4 744 -5 147 -19 203 -19 027 Gross profit 2 433 2 526 2 312 2 386 2 406 2 582 9 542 9 685 Operating expenses -1 585 -1 70
Slide 22: Cash flow
Cash flow SEKm Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 2023 2024 Profit or loss before tax -26 -26 40 21 -5 963 -333 -152 -6 235 Adjustment for non-cash items 640 903 574 594 6 754 991 2 859 8 914 Income tax paid -127 -48 -57 -147 -99 -45 -600 -348 Cash flow before changes in working capital 487 828 557
Slide 23: Cash conversion
Cash conversion SEKm Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 2023 2024 Adjusted EBITDA 943 996 794 867 923 1 003 3 637 3 586 Net interest paid -159 -156 -131 -130 -117 -103 -587 -480 Paid taxes -127 -48 -57 -147 -99 -45 -600 -348 Other items -171 37 -49 -122 -14 -242 -342 -428 Cash flow before changes i