Q2 2024 Sinch AB (publ) Earnings Call Transcript
Key Points
- Sinch AB (CLCMF) achieved an all-time high cash generation level, with over SEK1 billion in operating cash flow in Q2.
- The company repaid SEK881 million of debt in Q2 and SEK3.1 billion over the last 12 months, reducing the net debt to adjusted EBITDA ratio to 1.7 times.
- Gross margin continues to increase due to higher-margin products growing faster, improving the overall mix.
- The APAC region recorded a strong quarter with net sales up 7% organically and gross profit growth at 19%.
- Sinch AB (CLCMF) has made significant progress in its growth acceleration plan, realizing gross savings of SEK58 million in Q2, corresponding to SEK232 million on a full-year basis.
- The company recorded a slight organic revenue decline in the quarter, with gross profit growing only 2% on an organic basis.
- EMEA region recorded a 4% decline in gross profit on an organic basis compared to Q2 2023.
- The network connectivity product category in the Americas region experienced a decline due to reduced voice traffic and the impact of the 8YY toll-free reform.
- Operating expenses remain flat over the previous quarter due to sustained investment into transformation programs and inflation offsetting realized savings.
- The EBITDA margin is stable at 11%, which is lower than the company's longer-term aspirations.
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Welcome, everyone, to this Q2 earnings call with Sinch AB. My name is Thomas Heath, Chief Strategy Officer. And with me today, I have our CEO, Laurinda Pang; and our CFO, Roshan Saldanha. And with these opening remarks, I want to hand the word over to Laurinda.
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Thank you, Thomas. Let's turn briefly to slide 2 please. Sinch is pioneering the way the world communicates. Our customer communications cloud enables businesses throughout the world to reach and interact with their customers through all channels, including messaging, voice, calling, and e-mail.
We're built for scale and handle more than 800 billion unique customer interactions per year for more than 150,000 business customers. We are a global leader in our industry, and over the last 12 months, we generated SEK28.6 billion in net sales, SEK9.7 billion in gross profit, and SEK3.6 billion in
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