Sinch Ab · OMXSTO:SINCH
Sinch Ab — Q1 2019 Earnings Presentation
18 slides from Sinch Ab's earnings presentation, May 17, 2019
Slide 1: Q1 2019 Investor Presentation
Q1 2019 Investor Presentation 17 May 2019 Oscar Werner CEO Roshan Saldanha CFO Thomas Heath Chief Strategy Officer & Head of Investor Relations
Slide 2: Sinch at a glance
Sinch ata glance We deliver customer engagement through mobile technology Scalable cloud communications platform for messaging, voice and video 100% consumer penetration Growing, global, multi-billion dollar market We serve 8 out of 10 of the largest US tech companies Software for mobile operators b
Slide 3: Growth markets
Growth markets (oe) Messaging Application-to-Person (A2P) messaging is used across the world for ever-more use cases * USD 17bn market size (MobileSquared), other estimates vary between USD 15-50bn « Large variation in usage between markets « We foresee continued growth in volumes and gross profit C
Slide 4: January - March 2019
January - March 2019 Gross profit grew 45% to SEK 289.5 million (200.0) Adjusted EBITDA of SEK 112.2 million (65.0) Adjusted EBIT excl. acquisition-related amortization of SEK 102.3 million (58.7) Profit after tax of SEK 57.8 million (9.2) Rising Gross Profit and EBITDA in all business units Organic
Slide 5: Continued growth in Messaging
Continued growth in Messaging Messaging (SEKm) ¢ Rising message volumes 800 * US tech companies fuel growth 600 * High demand for personalized video 400 * Positive currency effects 200 * Investments in next-generation 5 messaging Qi Q2 Q3 Q4 Qi Q2 Q3 Q4 Qi 2017 2018 2019 (oe) ™ Revenue ™Gross Profit
Slide 6: Rising message volumes
Rising message volumes 22 2.0 18 1.6 14 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Number of transactions per month (billions) ~Y elslalsls rel shal uli 2016 elslalslel rel shol fiz als 2017 4| 5 6| aloha nl 2018 ‘| A 3 2019 ¢ Growth with existing customers, new customers, new use cases * 13% organic growth’ in tr
Slide 7: Gross profit per transaction
Gross profit per transaction OPEX/transaction & Gross profit/transaction (SEK) 0.050 0.040 0.030 0.020 0.010 0.000 PA" See Nalsfalslelstsloholul slelslalslel all old ulsz 2017 —— GP/transaction (R3M) 2018 —— OPEX/transaction (R3M) Tals 2019 Revenue and gross margin depend on mix of terminating marke
Slide 8: Opex investments to capture growth
Opex investments to capture growth 60% 50% 40% 30% 20% 10% 0% Messaging EBITDA/gross profit WA tlolslalslelsTalolidul tlolalalslel lel sliduls 2017 2018 lols 2019 Revenue and gross margin depend on mix of terminating markets EBITDA/gross profit shows margin excluding mobile operator charges Growth i
Slide 9: Momentum in Voice & Video
Momentum in Voice & Video Voice & Video (SEKm) Growth fuelled by Number Masking 40 and Verification Working with key operators to offer our services in markets where we see demand 20 * Increased opex to handle new 10 customers and rising volumes Q Q Q3 Q Q Q Q3 Q4 Qi 10 2017 2018 2019 oe) ™Revenue G
Slide 10: Improved conversion of orders to sales in Operators
Improved conversion of orders to sales in Operators Operators (SEKm) 60 50 40 * Direct sales and sales through Ericsson partnership 30 ¢ Improved conversion of orders 20 to sales 10 ¢ Fluctuations in results as projects 0 are realized Qi Q2 a3 a4} at a2 a3 a4} ai 2017 2018 2019 (oe) ™Revenue Gross P
Slide 11: Financials
CA Q1 2019 Financials
Slide 12: Continued high Gross Profit growth
Continued high Gross Profit growth Acquisitions Organic* FX +13% +21% +7% SEKm 300 16° 290 . o9 wu Sf Om * 45% total Gross Profit growth _ Lt 250 . : 200 Bo 288 | * 21% organic* Gross Profit growth 200 = . we * Rising Gross Profit in all 150 business units 100 ¢ Growth in Messaging fuelled 50 by key
Slide 13: IFRS16
IFRS16 Closing Opening balance balance SEK million 12/31/2018 01/01/2019 Non-current assets 2,371.40 88.8 2,460.20 Current assets 1,254.90 -5 1,249.90 Total Assets 3,626.30 83.8 3,710.10 Equity 1,664.20 - 1,664.20 Non-current liabilities 841.6 58.9 900.5 Current liabilities 1120.50 24.9 1145.40 Tota
Slide 14: Income statement
Income statement a ai foi] SEK million 2019 2018 2018 R12M Net sales 1,101.80 858.6 3,986.60 4,229.80 Cost of goods sold and services -812.3 -658.6 -2,978.20 -3,131.90 Gross profit 289.5 200 1,008.40 1,097.90 Other operating income 26 22.5 109.6 113.1 Work performed by the entity and capitalized 61
Slide 15: Cash flow
Cash flow fo] SEK million 2019 2018 2018 R12M Cash flow before changes in working capital 85.9 32.5 223.6 277 Changes in working capital -47.8 16.3 81 16.8 Cash flow from operating activities 38 48.8 304.6 293.9 Net investments in tangible and 76 62 285 298 intangible assets Change in financial rece
Slide 16: Financial targets
Financial targets Targets: + Adjusted EBITDA per share to grow 20% per year Adjusted EBITDA per share, rolling 12 months + Net debt < 2.5x adjusted EBITDA 9.0 over time 8.0 7.0 5.0 Performance: 5. Lo + Adjusted EBITDA per share grew 7 45% in Q119, measured ona rolling _ 12 month basis 10 | * Net deb
Slide 17: Future growth
Future growth foe) Strong pipeline with several US-based, global tech companies Considerable interest in Personalized Video Strong pipeline in Voice and Video Investment in rich media, conversational messaging, RCS and OTT chat apps to capture market growth potential
Slide 18: Thanks!