July – September 2022
Net sales increased by 83 percent to SEK 7,196m (3,938).
Gross profit increased by 164 percent to SEK 2,361m (896).
EBITDA rose by 416 percent to SEK 808m (157).
Adjusted EBITDA1 increased by 202 percent to SEK 901m (298).
The loss after tax for the quarter amounted to SEK -4,765m (266) and was adversely affected by a non-cash impairment of goodwill of SEK -5,000m.
Basic earnings per share were SEK -5.69 (0.37) and diluted earnings per share were SEK -5.48 (0.36).
Cash flow from operating activities amounted to SEK 727m (-491).
January – September 2022
Net sales increased by 86 percent to SEK 20,361m (10,970).
Gross profit increased by 147 percent to SEK 6,394m (2,585).
EBITDA rose by 296 percent to SEK 1,984m (501).
Adjusted EBITDA1 increased by 154 percent to SEK 2,165m (851).
The loss after tax for the period amounted to SEK -4,717m (454) and was adversely affected by a non-cash impairment of goodwill of SEK -5,000m.
Basic earnings per share were SEK -5.81 (0.63) and diluted earnings per share were SEK -5.44 (0.62).
Cash flow from operating activities amounted to SEK 1,535m (-143).
“I am pleased to see increased cost control now resulting in improved profitability and strengthened cash flow.”
– Johan Hedberg, Interim CEO
Significant events during the quarter
Sinch announced on 20 July that CEO Oscar Werner was stepping down with immediate effect. The board of directors has appointed Johan Hedberg as the interim CEO and has begun the recruitment of a new CEO. Johan Hedberg is one of the founders of the company.
Sinch announced on 31 August that Paul Perrett, President for Business Unit SMB (Small and Medium-sized Businesses), has decided to step down. Damien Tabor, CFO of Business Unit SMB, will be the interim Business Unit President until the recruitment of a permanent replacement has been completed.
Sinch announced on 29 September that SoftBank was selling its entire stake of about 5 percent in Sinch to Neqst D2 and co-founder/Interim CEO Johan Hedberg.
Impairment testing of goodwill resulted in a total impairment of SEK 5,000m. The impairment refers to Pathwire, a company acquired by Sinch in 2021, which has subsequently been reported in the Email segment. The impairment will reduce Sinch’s profit for Q3 but does not affect cash flow.
During the quarter, maturities have been extended to 2024 in term loans of SEK 3,000m.
Significant events after the end of the quarter
On 14 October, Sinch announced that Sean O’Neal had been appointed as the new President of Business Unit SMB and that Brett Scorza had been appointed as President, Business Unit Voice upon the retirement of Ed O’Hara. At the same time, Sinch also communicated that Business Unit Applications would be reorganized to focus on initiatives in interactive messaging and that Business Unit President Eduardo Henrique had chosen to leave Sinch.
Also on 14 October, Sinch provided further details about the previously communicated cost reduction program. The program is to achieve total gross savings of at least SEK 300m on an annual basis by means of reduced consultancy costs, lowered non-personnel related expenses and workforce reductions. Workforce reductions will affect about 150 people. Total restructuring costs are estimated at SEK 120m, most of which is expected to be charged to profit in Q4.
Sinch presented preliminary financial results and the impairment of goodwill related to Q3 2022 on 20 October.
1 Adjusted EBITDA is reported to clarify performance in underlying operations. See Note 2.
Invitation to webcast and phone conference
Sinch will present the interim report in a webcast and phone conference on Wednesday, 2 November at 14:00 CET. Watch the presentation at investors.sinch.com/webcast or call and register a couple of minutes in advance.
Sweden: +46 8 5051 6386
United Kingdom: +44 20 3198 4884
USA: +1 412 317 6300
Access code: 033 5637#
For further information, please contact
Mobile: +46 721 43 34 59
Chief Strategy Officer & Head of Investor Realtions
Mobile: +46 722 45 50 55
Chief Financial Officer
Mobile: +46 73 660 24 19
Sinch’s leading cloud communications platform lets businesses reach everyone on the planet, in seconds or less, through mobile messaging, email, voice and video. More than 150,000 businesses, including many of the world’s largest companies and mobile operators, use Sinch’s advanced technology platform to engage with their customers. Sinch has been profitable and fast-growing since its foundation in 2008. It is headquartered in Stockholm, Sweden, and has local presence in more than 60 countries. Shares are traded at NASDAQ Stockholm: XSTO:SINCH. Visit us at sinch.com.
Note: Sinch AB (publ), is required to publish the information in this interim report pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was released for publication by the contact person above on 2 November 2022 at 07:30 CET.
This report is published in Swedish and English. In case of any differences between the English version and the Swedish original text, the Swedish version shall apply.