Sinch AB (publ): Year-end report January – December 2020

Year-end report January – December 2020

October – December 2020

• Net sales increased by 95 percent to SEK 2,999.5 million (1,540.7). Organic growth was 43 percent.
  
• Gross profit increased by 81 percent to SEK 795.7 million (439.9). Organic growth was 37 percent.
  
• Adjusted EBITDA¹ increased by 63 percent to SEK 325.7 million (199.5).
  
• Adjusted EBIT² amounted to SEK 303.7 million (185.7).
  
• Profit after tax amounted to SEK 212.6 million (94.7).
  
• Basic earnings per share were SEK 3.48 (1.77) and diluted earnings per share were SEK 3.37 (1.73).

January – December 2020

• Net sales increased by 59 percent to SEK 8,023.3 million (5,035.6). Organic growth was 34 percent.
  
• Gross profit increased by 57 percent to SEK 2,183.3 million (1,394.1). Organic growth was 30 percent.
  
• Adjusted EBITDA¹ increased by 59 percent to SEK 912.5 million (573.5).
  
• Adjusted EBIT² amounted to SEK 844.8 million (523.6).
  
• Profit after tax amounted to SEK 442.5 million (274.5).
• Basic earnings per share were SEK 7.56 (5.12) and diluted earnings per share were SEK 7.32 (5.06). 

”We see a digital acceleration that drives usage of our products and contributes growth from the global
tech companies who leverage our platform to engage with their customers.” – Oscar Werner, VD

Significant events during the quarter

• Sinch closed the acquisition of SAP Digital Interconnect (SDI), a unit of SAP, on 1 November. The purchase consideration of EUR 225 million will be financed with cash reserves and available debt facilities. SDI offers cloud communications services and serves more than 1,500 enterprise customers worldwide. During the 12-month period that ended 31 March 2020, SDI generated sales of EUR 340 million, gross profit of EUR 94 million and adjusted EBITDA of EUR 15.4 million. Headquartered in San Ramon, California, the business has about 330 employees in 20 countries.
• A directed issue of 3,187,736 shares was executed on 30 November at a subscription price of SEK 1,050 per share and raised SEK 3.3 billion before issue costs for Sinch. After the issue, SB Management, a subsidiary of SoftBank Group Corp. became one of Sinch’s largest shareholders.
• Covid-19 is still having negative impact on the small Voice and Video segment. The overall impact on the Sinch Group remains modest, however, because volumes in Messaging have increased in parallel.

Significant events after the end of the quarter

• On 1 February Sinch closed the acquisition of Wavy for a total cash consideration of BRL 355 million and 1,534,582 new shares in Sinch. During the twelve-month period that ended 31 March 2020, Wavy generated sales of BRL 464 million (SEK 928m), gross profit of BRL 130 million (SEK 260m) and Adjusted EBITDA of EUR 48 million (SEK 96m). Headquartered in Brazil, the business has about 260 employees in 6 countries.
  
• Sinch announced on 1 February that Business Support Systems (BSS) products for mobile operators will be sold to Norway-based eRate. The sale aligns with a strategic decision to focus forward-looking investments around Sinch’s core segments and has not material financial impact on Sinch’s gross profit or EBITDA.
• Sinch announced on 17 February that it has entered into a definitive agreement to acquire Inteliquent, the largest independent voice communications provider in the United States, for a total cash consideration of USD 1,140 million. The acquisition broadens Sinch’s product portfolio and establishes Sinch as the leader in voice connectivity for both enterprises and telecom carriers in the US.

¹ EBITDA before depreciation, amortization and impairments 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 depreciation and amortization.

Invitation to conference call

Sinch will present the year-end report in a webcast conference call on 18 February at 14:00 CET. Watch the presentation at investors.sinch.com/webcast or call in and register a few minutes in advance.

Sweden: +46 (0) 8 566 426 51
United Kingdom: +44 (0) 333 300 08 04
USA: +1 631 913 1422
Access code: 402 586 91#

?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 40 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 18 February 2021 at 07.30 CET.

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• Sinch_2020Q4_ENG