Slide 1: Q1 2023 Investor Presentation
Q1 2023 Investor Presentation 27 April 2023 Laurinda Pang, CEO Roshan Saldanha, CFO Thomas Heath, Chief Strategy Officer & Head of Investor Relations
Slide 2: Powering meaningful conversations through the Customer Communications Cloud
SEK 28.1bn SEK 9.0bn SEK 3.2bn 60+ net sales in the gross profit in the Adj. EBITDA in the countries with past 12 months past 12 months past 12 months local presence Powering meaningful conversations through the Customer Communications Cloud Scalable cloud communications platform More than 700 billi
Slide 3: Opening remarks
Opening remarks • Sinch CEO since 17 April, 2023. • 25 years of executive leadership experience. • Joined from recent position as President, Global Customer Success, at Lumen Technologies. Laurinda Pang CEO 3
Slide 4: Three priorities: Cost control, Cash flow, Growth
Three priorities 01 Cost control 02 Cash flow 03 Growth 4
Slide 5: First quarter highlights
First quarter highlights 01 02 03 Lower costs Profitability Growth initiatives • Continuing to execute on SEK 300 • Net sales growing 6%, Gross profit • Single organization for Messaging million Cost reduction program 8% and Adj EBITDA 10% and Email to accelerate product announced Q2 2022 integratio
Slide 6: Delivering on our cost reduction program
Delivering on our cost reduction program Adjusted Opex, SEKm • Benefiting from effects of Cost 1,600 reduction program launched Q2 22 1,434 1,460 1,456 1,426 1,400 1,336 • Q1 23 Adjusted Opex is 4% lower 1,200 than Q2 22 in constant currencies 658 1,000 583 643 690 641 excluding a 35m one-time item
Slide 7: Gross profit evolution
Gross profit evolution Gross profit, SEKm • Organic gross profit growth of -1% (in constant currency) Organic FX SEKm -1% +9% • Organic growth impacted by 2,500 189 2,260 reduced Messaging volumes and 2,096 -74 -13 56 6 the price negotiation with one of 2,000 our largest Messaging customers 1,500 th
Slide 8: Margin development
Margin development Gross margin & Adjusted EBITDA margin • Stable gross margin compared to Q1 2022 35% 33% 31% 32% 33% 33% 33% • Q2 2022 affected by SEK 162 29% 30% million reassessment of reserves 25% for accrued traffic costs 20% • Some difference in seasonality 15% between Gross profit and Opex 1
Slide 9: Income statement
Income statement Q1 Q1 SEKm 2023 2022 2022 R12M Net sales 6 927 6 550 27 722 28 099 Cost of goods sold and services -4 667 -4 454 -18 912 -19 125 Gross profit 2 260 2 096 8 810 8 974 • Currency effects increase Net sales, Gross profit and EBITDA Other operating income 98 135 611 574 Work performed b
Slide 10: Reduced DSO
Reduced DSO Days Sales Outstanding* 77 69 70 68 • Focused effort to reduce Accounts 62 60 Receivables continues to yield 56 results • DSO at 56, down from 60 in Q4 22 31 Dec 31 Dec 31 March 30 June 30 Sept 31 Dec 31 March 2020 2021 2022 2022 2022 2022 2023 *DSO = Days Sales Outstanding = (Accounts R
Slide 11: Cash conversion
Cash conversion Q1 Q1 SEKm 2023 2022 2022 R12M • Cash conversion* of 7%, with Adjusted EBITDA 834 760 3 124 3 197 R12M cash conversion at 60% Paid interest -127 -49 -279 -357 Paid taxes -199 -99 -560 -659 • Negative working capital caused by Other items -97 -46 -453 -504 decreased Accounts Payable C
Slide 12: Cash flow
Cash flow Q1 Q1 SEKm 2023 2022 2022 R12M Profit after financial items -75 111 -4 775 -4 988 Adjustment for non-cash items 684 554 7 167 7 297 Income tax paid Cash flow before changes in working -199 -99 -560 -660 • Cash flow from operating activities capital 410 566 1 832 1 676 at SEK 212 million in
Slide 13: Lower Net debt/Adjusted EBITDA
Lower Net debt/Adjusted EBITDA Net debt/Adjusted EBITDA • Three components affecting Net debt/EBITDA: 3.3 3.2 – EBITDA growth 3.1 2.9 – Cash generation 2.7 2.7 – Immediate currency impact on debt, but trailing impact on earnings • Expecting continued deleveraging from earnings growth and cash Q4 Q1
Slide 14: Financial targets
Financial targets Adjusted EBITDA per share, rolling 12 months Targets: • Adjusted EBITDA per share to grow 20% per year • Net debt < 3.5x adjusted EBITDA over time Performance: • Adjusted EBITDA per share grew 55% in Q1 23, measured on a rolling 12-month basis • Net debt/adjusted EBITDA of 2.7x exc
Slide 15: Three priorities: Cost control, Cash flow, Growth
Three priorities 01 Cost control 02 Cash flow 03 Growth 15
Slide 16: Cloud partnerships
Cloud partnerships • Sinch announced a strategic • Sinch awarded the Adobe Digital • Sinch launched Operator collaboration with Salesforce. Experience Technology Partner Connect for Partners, which of the Year Award. makes it possible for service • Centered around providers to provide voice communic
Slide 17: Thank you!
Thank you! To get in touch, contact: Ola Elmeland, Investor Relations Director investors@sinch.com