In This Article:
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Net Sales: SEK28.5 billion over the last 12 months.
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Gross Profit: SEK9.6 billion over the last 12 months; 1% organic growth in Q3.
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Adjusted EBITDA: SEK3.6 billion over the last 12 months; 13% margin in Q3.
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EBITDA Margin: 11% in Q3.
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Operating Cash Flow: SEK437 million in Q3.
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Cash Conversion: 61% from adjusted EBITDA on a rolling 12-month basis.
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Net Debt to Adjusted EBITDA: 1.6x, down from 2.2x a year ago.
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Gross Margin: Stable with a slight increase of 10 basis points year-on-year.
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Free Cash Flow: SEK293 million in Q3.
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Regional Performance: Americas gross profit up 1%, EMEA down 3%, APAC up 12% in Q3.
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Product Category Performance: Applications gross profit up 6%, API Platform up 2%, Network Connectivity down 5% in Q3.
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Cost Savings: SEK335 million run rate savings achieved by Q3.
Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sinch AB (CLCMF) achieved SEK335 million in run rate savings, exceeding their initial target of SEK300 million.
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The company reported strong cash flow generation with SEK437 million in operating cash flow for the quarter.
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Net debt to adjusted EBITDA ratio improved to 1.6x, down from 2.2x a year ago, indicating successful deleveraging.
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Sinch AB (CLCMF) continues to see growth in the APAC region, with a 12% increase in gross profit.
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The company is optimistic about the potential of RCS (Rich Communication Services) as a future growth driver, especially with Apple's recent support for RCS messaging.
Negative Points
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Sinch AB (CLCMF) reported only a 1% organic growth in gross profit, which is at the lower end of their expectations.
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The company anticipates flat to slightly negative growth in gross profit for Q4, with a slow start to 2025.
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Increased competition in the Americas, particularly in the SMS business, has led to pricing pressures.
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The company's API Platform experienced a slowdown, impacting overall performance.
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Sinch AB (CLCMF) is not achieving the growth rates in revenues and gross profit that they aspire to, despite healthy profitability and cash flow.
Q & A Highlights
Q: Can you discuss the increased competition in the Americas region, particularly in the SMS business? A: Laurinda Pang, CEO: The increased competition is from established players, not new entrants. We've retained business with longstanding customers, albeit at slightly lower price points.
Q: What factors are contributing to the slow start expected in 2025? A: Laurinda Pang, CEO: The slow start is due to internal changes within Sinch, not market conditions. We are seeing positive indicators like pipeline growth and increased order sizes, which should drive growth as we stabilize.