Sinch Ab · OMXSTO:SINCH

Sinch Ab — Merger or Acquisition (June 2020)

16 slides from Sinch Ab's merger presentation, Jun 15, 2020

  1. Slide 1: Acquisition of ACL Mobile

    Acquisition of ACL Mobile 15 June 2020 Oscar Werner CEO Roshan Saldanha CFO Thomas Heath Chief Strategy Officer & Head of Investor Relations

  2. Slide 2: Sinch at a glance

    SEK 5.6bn SEK 646m SEK 37bn 766 33 countries with revenue in the Adj. EBITDA in the Market Cap people local presence past 12 months past 12 months 40 billion Publicly listed on Customer engagement through mobile technology engagements per year NASDAQ in Stockholm Scalable cloud communications Servin

  3. Slide 3: Track record of profitable growth

    Track record of profitable growth 3,500 • Focus on Gross profit since pass- 3,000 ACL through revenues vary between 2,500 geographies SEK million SDI 2,000 • 54% gross profit growth in Q1 20, Wavy of which 36% organic 1,500 Synergies • Acquisitions of Wavy, SDI and 1,000 ACL Mobile adding significan

  4. Slide 4: Growth markets

    Growth markets Messaging CPaaS Application-to-Person (A2P) messaging is used Communications Platform as a Service (CPaaS) across the world for ever-more use cases allows businesses to easily integrate messaging, voice and video services into their own applications • USD 17 bn market size for A2P SMS

  5. Slide 5: Playbook for profitable growth

    Playbook for profitable growth • Empower businesses to leverage rich and conversational messaging Software- • Increase our software value-add (CPaaS) in addition to our connectivity offering as-a-Service • Increase stickiness with maintained scalability • Ensure leading direct global connectivity wi

  6. Slide 6: Leveraging M&A to meet strategic objectives

    Leveraging M&A to meet strategic objectives • Complementary technology that fits our strategic product roadmap Technology & • Go To Market-ability in relevant products and geographies Go To market • Increased software value-add with higher gross margin • Future growth drivers • Acquire sticky custom

  7. Slide 7: Strategic acquisitions

    Strategic acquisitions Founded as CLX Networks IPO One brand 2016 2017 2018 2019 2020 2008 Technology & Innovation Go To Market Voice, video, Personalized Rich messaging, Conversational AI Next-generation verification video Low code tools messaging Scale and SAP Digital Interconnect SMS profitabilit

  8. Slide 8: Deal rationale

    Deal rationale • Leading cloud communications provider in India and Southeast Asia • Strong customer base with leading position in Banking & Finance ACL Mobile • Significant scale with 47 billion business messages handled in the past 12 months • 288 employees in India, UAE and Malaysia • Significant

  9. Slide 9: India

    India • 2nd largest mobile market in the world with a population exceeding 1.3 billion1 India India • 1.2 billion mobile subscribers2 and ~50% smartphone penetration • World’s highest data usage per smartphone3 at 9.8 GB/month • Rapidly digitalizing economy; second only to Indonesia4 • World’s large

  10. Slide 10: ACL Mobile Axiom

    ACL Mobile Axiom • Founded in 2000 • Enterprise communications platform to intelligently orchestrate real-time communications with • Cloud communications platform for real-time customers across multiple channels communications over SMS, WhatsApp, IP Messaging and voice • Used by over 30 banks and fi

  11. Slide 11: Strengthening our global connectivity offering

    Strengthening our global connectivity offering 350+ direct mobile operator connections Sinch Tier 1 Super Network ACL adds direct connections to all mobile operators in India, UAE and Malaysia Tier 1 Connectivity for: • End-to-end control • Enhanced security • Speed and throughput • Improved redunda

  12. Slide 12: Financial leverage

    Financial leverage Pro forma net debt/Adjusted EBITDA 3.2 • Pro forma calculation include last 12 months of Adj EBITDA for 2.7 acquired entities 2.2 • Financial target is to maintain Net debt < 2.5x adjusted EBITDA over time • Pro forma Net debt/Adj EBITDA of -0.8 -1.0 -0.9 3.2x is within the constr

  13. Slide 13: Integration process

    Integration process Deal scouting Signing Closing Due diligence Integration planning Integration phase • Purchase agreement signed March 2020 • Transaction closed October 2019 • Regulatory approval process is ongoing • Platform integration ongoing • Expected to close H2 2020 • Integration planning t

  14. Slide 14: Rising message volumes

    Rising message volumes Number of transactions per month (billions) 4.0 • Acquisition of TWW and myElefant 3.5 adding significant volumes in October-November 2019 3.0 • Significant volume increase in 2.5 March 2020 partly related to 2.0 Covid-19 1.5 • Growth from existing customers, 1.0 new customers

  15. Slide 15: Financial targets

    Targets: Financial targets • Adjusted EBITDA per share to grow 20% per year • Net debt < 2.5x adjusted EBITDA Adjusted EBITDA per share, rolling 12 months over time 14.0 12.0 Performance: 10.0 • Adjusted EBITDA per share grew 52% in Q1 20, measured on a rolling 8.0 12 month basis 6.0 • Net debt/EBIT

  16. Slide 16: Thanks!

    Thanks! Copyright© 2019 CLX Communications AB (publ). All rights reserved. NDA Confidential. 16

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