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Cint Group

Quarterly Report Oct 25, 2021

2902_ir_2021-10-25_d13700e2-d2e0-4b36-8d57-7d7c462ec4f9.pdf

Quarterly Report

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Interim Report January – September 2021

Yet another strong quarter

Financial highlights July – September 2021

  • Net sales increased by 44.6 percent to EUR 34.3m (23.7). Organic growth excluding currency effects was 34.0 percent
  • Gross profit amounted to EUR 17.5m (12.0) with a gross margin of 50.9 percent (50.7)
  • Adjusted EBITDA amounted to EUR 6.6m (3.8) with an adjusted EBITDA margin of 19.4 percent (16.2). Adjusted EBITDA, excluding the FX effect from the revaluation of operating balance sheet items, amounted to EUR 5.9m (4.2) and the margin 17.2% (17.8)
  • Adjusted earnings per share, before and after dilution amounted to EUR 0.03 (0.01)
  • Earnings per share, before and after dilution amounted to EUR 0.03 (-1.20)

Financial highlights January – September 2021

  • Net sales increased by 41.2 percent to EUR 94.2m (66.7). Organic growth excluding currency effects was 40.5 percent
  • Gross profit amounted to EUR 48.4m (34.5) with a gross margin of 51.4 percent (51.8)
  • Adjusted EBITDA amounted to EUR 17.3m (10.7) with an adjusted EBITDA margin of 18.4 percent (16.1). Adjusted EBITDA, excluding the FX effect from the revaluation of operating balance sheet items, amounted to EUR 16.7m (11.0) and the margin 17.8% (16.5)
  • Adjusted earnings per share, before and after dilution amounted to EUR 0.09 (0.04)
  • Earnings per share, before and after dilution amounted to EUR 0.04 (-3.17)

Significant events during the third quarter

• No significant events occurred during the third quarter

KEUR 2021
Jul-Sep
2020
Jul-Sep
2021
Jan-Sep
2020
Jan-Sep
2020
Jan-Dec
Net sales 34,280 23,714 94,170 66,681 98,284
Gross profit 17,457 12,029 48,414 34,516 50,966
EBITDA 6,547 3,625 15,407 10,418 13,311
Adjusted EBITDA 6,639 3,844 17,337 10,733 16,273
FX gain/loss on operating items 754 -373 605 -270 -629
EPS, before and after dilution 0.03 -1.20 0.04 -3.17 -0.45
Adjusted EPS, before and after dilution 0.03 0.01 0.09 0.04 0.27

Comments by the CEO

It has been another successful quarter for the company with strong growth momentum. Net sales in the third quarter 2021 increased by 44.6 percent to EUR 34.3m compared to EUR 23.7m in the same period last year. Organic growth (excluding currency effects) was 34.0 percent driven mainly by our tech-enabled customers and the EMEA region.

EBITDA, adjusted for items affecting comparability, amounted to EUR 6.6m (3.8) in the quarter corresponding to a margin of 19.4 (16.2) percent. We have increased profitability considerably during the last twelve months, mainly due to positive scale effects on higher volumes.

The tech-enabled customers continued to grow strongly, showing a year-over-year growth rate of 57.9 percent in the quarter, driven by overall positive development both from customers that have been with us for many years, as well as from new customers.

The established customers increased sales by 37.6 percent compared to the same quarter last year. This growth is spread evenly across geographies and most customers which shows that we are continuing to increase our share-of-wallet in this segment.

Strategic Initiatives

The integration work with our new colleagues at GapFish – a leading panel company in the DACH region (Germany, Austria and Switzerland) acquired in June 2021 - proceeds according to plan. The collaboration across the two organizations has been very positive, and we are now starting to go to market as one team with a richer combined offering than either company standalone.

We are making good progress on our M&A strategy and continue to see this as an important strategic focus area going forward.

Outlook

We have had a successful first nine-months of 2021 and expect to deliver a strong full year 2021, substantially exceeding our annual target of 20 percent organic growth. During our IPO roadshow, we talked about the importance of exceeding expectations, and we will most certainly deliver on that in 2021.

Looking beyond Q4, I am encouraged by the strong trading momentum that we see continuing into 2022.

Finally, I am also pleased to see more and more inperson activity starting to happen across the industry. Q4 2021 will see many trade events returning where we can meet our customers and partners face-to-face, of course with some caution. From October, we have also started welcoming our Cint colleagues back to our global offices. Still, our return-to-office rollout will be guided by our team's health & safety, travel, and networking preferences to ensure we maintain the right work-life balance for everyone.

"Another quarter of strong growth, ahead of our financial target"

Key Ratios for the Group

KEUR 2021
Jul-Sep
2020
Jul-Sep
2021
Jan-Sep
2020
Jan-Sep
2020
Jan-Dec
Net sales 34,280 23,714 94,170 66,681 98,284
Net sales growth 44.6% 34.6% 41.2% 37.9% 36.6%
Organic net sales growth 34.0% 31.9% 36.1% 23.9% 27.3%
Organic growth excl ccy effects 34.0% 35.6% 40.5% 24.6% 29.5%
Gross profit 17,457 12,029 48,414 34,516 50,966
Gross margin 50.9% 50.7% 51.4% 51.8% 51.9%
Capitalised development cost 1,920 1,334 5,745 4,621 6,377
Operating Expenses -12,830 -9,738 -38,751 -28,719 -44,032
EBITDA 6,547 3,625 15,407 10,418 13,311
Items affecting comparability 92 219 1,929 315 2,962
Adjusted EBITDA 6,639 3,844 17,337 10,733 16,273
Adjusted EBITDA margin 19.4% 16.2% 18.4% 16.1% 16.6%
FX gain/loss on operating items(1) 754 -373 605 -270 -629
EPS, basic and diluted 0.03 -1.20 0.04 -3.17 -0.45
Adjusted EPS, basic and diluted 0.03 0.01 0.09 0.04 0.27
Net Working Capital 14,952 4,431 14,952 4,431 4,904
Operating Cashflow 4,657 2,892 3,417 10,961 12,395
Net Debt(+) / Cash(-) -45,935 5,509 -45,935 5,509 6,537

(1) FX gain/loss from revaluation of operating balance sheet items have not been included in the Adjusted EBITDA

LTM Net sales (KEUR) & Quarterly Growth (%)

Group Financial Development

THIRD QUARTER AND FIRST NINE MONTHS OF 2021

Sales and earnings

Net sales in the quarter increased by 44.6 percent to EUR 34.3m (23.7). Sales from GapFish, acquired on 1 June 2021, added EUR 2.5m to group sales. Organic growth was 34.0 percent and organic growth excluding currency effects was 34.0 percent. Net sales in the first nine months increased by 41.2 percent to EUR 94.2m (66.7).

Gross profit in the quarter increased by 45.1 percent to EUR 17.5m (12.0) and the gross margin amounted to 50.9 percent (50.7). Gross profit for the first nine months amounted to EUR 48.4m (34.5) and the gross margin amounted to 51.4 percent (51.8).

EBITDA in the quarter amounted to EUR 6.5m (3.6) and the EBITDA margin amounted to 19.1 percent (15.3). Deducting items affecting comparability for the quarter, i.e. in total EUR 0.1m relating to cost for strategic projects, the adjusted EBITDA amounted to EUR 6.6m (3.8) and the adjusted EBITDA margin amounted to 19.4 percent (16.2). Adjusted EBITDA, excluding the FX effect from the revaluation of operating balance sheet items, amounted to EUR 5.9m (4.2) and the margin 17.2% (17.8).

EBITDA in the first nine months amounted to EUR 15.4m (10.4) and the EBITDA margin amounted to 16.4 percent (15.6). Deducting items affecting comparability for the period, i.e EUR 1.9 (0.3) the adjusted EBITDA amounted to EUR 17.3m (10.7) and the adjusted EBITDA margin 18.4 percent (16.1). Adjusted EBITDA, excluding the FX effect from the revaluation of operating balance sheet items, amounted to EUR 16.7m (11.0) and the margin 17.8% (16.5).

The operating profit in the quarter amounted to EUR 4.0m (1.8) with an operating margin of 11.5 percent (7.8). Operating profit in the first nine months amounted to EUR 8.8m (5.2) with an operating margin of 9.4 percent (7.9).

Profit for the quarter amounted to EUR 4.0m (0.8) and EPS (basic and diluted) amounted to EUR 0.03 (-1.20). Profit for the first nine months amounted to EUR 8.0m (2.2) and EPS (basic and diluted) amounted to EUR 0.04 (-3.17).

Cash flow and investments

The group's operating cash flow before changes in working capital in the quarter amounted to EUR 5.5m (2.5) and the net cash flow amounted to EUR -0.5m (-3.8).

The group's operating cash flow before changes in working capital for the first nine months amounted to EUR 13.8m (8.9) and the net cash flow amounted to EUR 44.3m (3.8).

The Group's investments in tangible fixed assets amounted to EUR 0.1m (28k) in the quarter. Investments in intangible fixed assets amounted to EUR 2.8m (1.8) and consisted of capitalised development costs for the platform, investments into new features and functions to support future growth. Cashflow from investing activities was also impacted by EUR 2.0m in the quarter related to closing adjustment of purchase price for the acquisition of GapFish GmbH done in the second quarter 2021.

The Group's investments in tangible and intangible fixed assets in the nine-month period totalled EUR 7.8m (6.1). Cash-flow from investing activities was also impacted by the acquisitions of GapFish GmbH and amounted to 19.7m (-) in the period.

For details on the depreciation and amortisation for the third quarter, please refer to note 7.

Currency effects

Due to the global nature of the business, the company is exposed to currency fluctuations with most of the net sales in USD and EUR and a large part of the operating expenses in SEK.

During the quarter, net sales were impacted by EUR -4k (-423k) due to currency fluctuations. Net sales during the first nine months were impacted by EUR -2.1m (-0.3).

The revaluation of balance sheet items had a positive impact on the total operating expenses of EUR 0.8m (-0.4) during the quarter. For the first nine months, there was a positive impact of EUR 0.6m (-0.3). This impact is included in both EBITDA and adjusted EBITDA.

Regional Development

Americas

Net sales increased by 40 percent to EUR 15.3m (10.9). Sales growth was driven by a high level of customer intake as well as a strong growth in the existing customer base.

The Americas is the largest market, accounting for well over 50 percent of the global insights market. North America is the most advanced market in terms of using consumer intelligence and where corporations spend the most to gather insights. An innovation culture permeates the region, which is undergoing several shifts and trends, such as an increased insourcing and adoption of direct digital solutions. The US has grown at a high pace as it is the main driver of tech-enabled solutions globally.

Cint's strategy in the US is to leverage existing size and scale, optimizing sales execution and continuing to grow with its customers as well as through M&A.

EMEA

Net sales increased by 53 percent to EUR 16.1m (10.5). Sales growth was driven by a strong customer intake and growth in the existing customer base. The acquisition of GapFish added EUR 2.5m to sales in the quarter. Excluding GapFish, the net sales growth was 29%.

The market is more fragmented than the Americas, with smaller Middle Eastern and African markets growing at a higher pace. The European region has a long experience in the survey field with a strong adoption of direct digital tools, i.e self-service models via tech-enabled insight platforms. There is an ongoing shift toward insourcing and adoption of direct digital tools reflected in the popularity and fast adoption of the self-service tools and insights software. With the acquisition of GapFish in June 2021, Cint has significantly strengthened its position in the large DACH region. Germany is the third largest market for market research, governed by some of the strictest data and privacy legislations in Europe.

Cint's focus is on maintaining the company's strong market position and exploring entries into new markets such as France, South Africa and Middle East.

APAC

Net sales increased by 28 percent to EUR 2.9m (2.3). The APAC region remained strong during the quarter, with many customers seeing a good development.

The APAC market is a fast-growing region, yet less developed than the Americas and EMEA and more fragmented due to cultural and language differences, forcing software providers to localise offerings to gain traction in local markets.

Similar to other markets, the insight market in the APAC region is undergoing a shift from offline to online, with direct digital-tools and software platforms acting as drivers of digitalisation, opening for significant market potential for such actors going forward.

Cint's focus continues to be on expanding customer reach, organically and structurally.

Net sales development per region (KEUR)

Operational Highlights

Repeat buying

As at end of the third quarter, 97 percent of Cint's customers made a purchase at least once per quarter on average during the last twelve months.

B2B customers

The total number of active customers was 3,042 by the end of the third quarter 2021. This corresponded to an increase of 516 compared to the same period last year and 527 compared to year-end 2020. All regions contributed positively to this development.

Customer segment development

Established insights companies

Net sales increased by 38 percent to EUR 21.5m (15.6) in the quarter.

Tech-enabled insights companies

Net sales increased by 58 percent to EUR 12.8m (8.1) in the quarter.

Customer segment net sales (KEUR)

Average customer tenure

As at end of the third quarter, the average revenue adjusted customer tenure was 7.0 years which is computed as the aggregate of each customer's tenure multiplied by respective share of sales the last twelve months.

Completed surveys

The total number of completed surveys during the last twelve months was 96 million. The number of completes has increased strongly during the last years as a result of increased volumes and onboarding of customers to Cint's Enterprise solution. Increased digitalization and the rise of tech-enabled companies has also led to increased number of completes.

Connected consumers

As at end of the third quarter, the total number of connected consumers (new and active in the last 12 months) was 145 million, an increase of 1 million since year-end 2020 and of 47 million since year-end 2019. The drivers to this increase were mainly:

  • Increased matching and volumes which benefits the panel partner's sales
  • Improvements of profiling data for partner's audiences
  • Improvements to the panel management technology
  • Seamless and quick API integration with current panel management solutions

Financial Position

The Group ended the quarter with a total cash position of EUR 51.1m (6.9m as at year end 2020) and a total debt of EUR 5.2m (13.4). Net cash was EUR 45.9m at the end of the third quarter compared to a net debt of EUR 6.5m as at year-end 2020.

Initial public offering

On 19 February, Cint's shares commenced trading on Nasdaq Stockholm following an initial public offering. The offering comprised 72,000,000 shares of which 10,555,555 were newly issued shares. The newly issued shares provided Cint with proceeds of EUR 75.6m (SEK 760m) before transaction costs.

Covid-19

In connection with the outbreak of the Covid-19 pandemic, Cint was granted government loans and tax payment deferrals amounting to a total of EUR 3.1m which was registered as part of the net working capital and included in other current liabilities in the balance sheet. During the second and third quarter, all such grants have either been forfeited or settled. Cint does not have any remaining outstanding Covid-19 related loans.

Acquisition of GapFish

On 1 June, Cint acquired GapFish GmbH, a Berlin based market research company that operates one of the largest online panel communities in the DACH region. The acquisition included 91 percent of the shares and was made at an enterprise value of EUR 28.0m on a cash and debt free basis (for 100 per cent of the shares). The consideration paid on closing was split into EUR 20.4m in cash and EUR 5.1m in newly issued Cint shares.

Long-term share-based incentive programs

On 18 February 2021, an extraordinary general meeting resolved to establish two share-based incentive programs: a warrant program and a share savings program. The vesting period of the share saving program starts in the beginning of Q4 2021. Please find details on these both programs in the Interim Report for January to June 2021.

Capitalisation

In order to enable a continued fast paced execution of the company's strategic priorities, Cint's financial position and liquidity was strengthened in connection with the IPO in February 2021 through a new share issue amounting to in total EUR 81.1m before transaction cost.

At the end of the period, the Group's equity amounted to EUR 233.1m to be compared with EUR 139.2m as at year end 2020.

Financing

In the first quarter 2021, Cint entered into an agreement on a new EUR 50m senior unsecured revolving credit facility with SEB. The credit facility is designated to be applied towards acquisitions, working capital and general corporate purposes.

Personnel & Organisation

At the end of the period, the total number of FTEs (employees and consultants) was 445 (303). The average number of FTEs in the third quarter was 435 (292). The total number of employees was 308 (229) at the end of the period. The average number of employees during the quarter was 303 (229)

Organisational Updates In July 2021, Marie-Louise Howett assumed the position as Chief Human Resources Officer and will be part of the company's senior executive team.

Shares

The number of shares and votes changed as a result of a split of each share on ten (10) shares (a so-called share split 10:1) and the share issue of in total 11,324,139 shares that was carried out in connection with the admission to trading of the company's shares on Nasdaq Stockholm on 19 February 2021.

On 1 June, as part of the purchase price for the acquired shares in GapFish, Cint issued 587,254 shares to the sellers.

As of 30 September 2021, the total number of shares and votes was 137,221,803

Nomination Committee

A nomination committee has been established ahead of the annual general meeting 2022. The committee consist of Robert Furuhjelm (Chairman) appointed by Nordic Capital, Jan Dworsky appointed by Swedbank Robur, Emma Viotti appointed by Handelsbanken Fonder and Niklas Savander in the capacity of Chairman of the Board of Cint Group AB.

Financial Calendar 2022

Year-end report 2021 22 Feb 2022
Annual report 2021 14 Apr 2022
Interim report Q1 3 May 2022
Interim report Q2 22 Jul 2022
Interim report Q3 27 Oct 2022

Financial Targets

On 23 November 2020, the company adopted the following financial targets and dividend policy:

  • Cint aims to maintain an annual organic sales growth of at least 20 percent
  • Cint aims to achieve an EBITDA margin of at least 20 percent in the medium term
  • Cint aims to reinvest cash flows into growth initiatives and as such will not pay annual dividends in the short term

Parent Company

The parent company's activities are focused on indirectly holding the shares in the operational group Cint AB and its subsidiaries. In addition, the parent company provides management services to the group which were scaled-up in the fourth quarter 2020 following the decision to list the company on Nasdaq Stockholm. At the end of the period, the parent company had 8 employees. The parent company has no external business activities, and the risks are mainly related to the operations of the subsidiaries.

The parent company's operating loss was SEK -0.4m (-0.5) in the third quarter and SEK -10.3m (-1.7) in the nine-month period. The parent company's financial position by end of the period, measured in terms of total equity in relation to total assets ratio, was 99 percent and it had a cash balance of SEK 200.2m, to be compared with a ratio of 98 percent and a cash balance of SEK 5.6m by end of December 2020.

Conference call and web presentation of the Q3 report

CEO Tom Buehlmann and CFO Joakim Andersson will present the results through a telephone conference which will be held at 11.00 CEST on 25 October. The conference call will also be webcast.

Telephone numbers

Please make sure you are connected to the phone conference by calling in a few minutes before the conference begins.

Sweden: +468-566 427 04 International: +44 333 300 9267 US: +1 631 913 1422 US-PIN: 1763 3011#

Link to the live broadcast: webcast. The report will be available at Cint™ Investors in connection with the publication. The presentation will be available in connection to the conference call and a replay will be available at the site later the same day.

FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED INCOME STATEMENT

KEUR Note 2021
Jul-Sep
2020
Jul-Sep
2021
Jan-Sep
2020
Jan-Sep
2020
Jan-Dec
Net Sales 4 34,280 23,714 94,170 66,681 98,284
Cost of services sold -16,823 -11,685 -45,756 -32,165 -47,318
Capitalised development cost 1,920 1,334 5,745 4,621 6,377
Personnel expenses -8,224 -6,476 -24,496 -18,797 -26,805
Other operating income 815 -319 2,055 -164 -497
Other external expenses -5,422 -2,943 -16,311 -9,759 -16,730
EBITDA 6,547 3,625 15,407 10,418 13,311
Depreciation 7 -391 -300 -1,066 -892 -1,192
EBITA 6,155 3,326 14,342 9,527 12,119
Amortisation and impairment 7 -2,197 -1,485 -5,523 -4,281 -5,828
Operating profit/loss 3,958 1,841 8,819 5,246 6,290
Net financial income/expenses 9 859 -837 1,349 -2,300 -2,791
Earnings before tax 4,817 1,004 10,168 2,945 3,500
Income tax expense -826 -210 -2,171 -770 -613
Profit/loss for the period 3,991 793 7,997 2,176 2,886
Profit/loss for the period
attributable to:
Parent Company shareholders 3,991 793 7,997 2,176 2,886
2021 2020 2021 2020 2020
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Jan-Dec
Earnings per share before and after
dilution, EUR
0.03 -1.20 0.04 -3.17 -0.45

CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

2021
Jul-Sep
2020
Jul-Sep
2021
Jan-Sep
2020
Jan-Sep
2020
Jan-Dec
Profit/loss for the period 3,991 793 7,997 2,176 2,886
Other comprehensive income
Items that may be transferred to income
Exchange differences on translation of
foreign operations
-642 -2,166 279 -4,398 -3,620
Other comprehensive income for the
period
-642 -2,166 279 -4,398 -3,620
Total comprehensive income for the
period
3,349 -1,373 8,276 -2,222 -734

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

2021 2020 2020
KEUR 30 Sep 30 Sep 31 Dec
ASSETS
Non-current assets
Goodwill 122,906 100,212 100,714
Other intangible assets 50,014 35,504 36,214
Right-of-use assets 2,728 2,559 2,869
Equipment, tools and installations 777 577 606
Other financial assets 252 231 234
Deferred tax assets 4,986 5,051 5,226
Total non-current assets 181,663 144,133 145,862
Current assets
Accounts receivable 38,144 22,840 27,282
Current tax assets 55 6 81
Other receivables 403 38 31
Prepaid expenses and accrued income 16,768 14,786 19,539
Cash and cash equivalents 51,098 6,286 6,909
Total current assets 106,468 43,955 53,842
TOTAL ASSETS 288,131 188,088 199,704
2021 2020 2020
KEUR 30 Sep 30 Sep 31 Dec
EQUITY
Total equity attributable to the
shareholders of the parent company 233,116 137,674 139,162
LIABILITIES
Non-current liabilities
Borrowings 2,520 5,044 5,366
Lease liabilities 1,668 1,904 1,811
Deferred tax liabilities 7,749 4,985 4,878
Total non-current liabilities 11,937 11,932 12,055
Current liabilities
Lease liabilities 975 564 959
Account payables 15,209 8,787 12,446
Bank overdraft facilities - 4,284 5,310
Other current liabilities 3,893 4,890 4,688
Accrued expenses and deferred income 23,001 19,958 25,084
Total current liabilities 43,078 38,483 48,486

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity attributable to the equity holders of the parent company
KEUR Share
capital
Additional
paid in
capital
Reserves Retained
earnings,
including
profit/loss
for the
period
Total equity
Opening balance, 1 January 2020 1,122 111,371 -5,777 990 107,706
Profit/loss for the period Jan-Sep 2,176
Other comprehensive income -4,398
Total comprehensive income -4,398 2,176 2,176
Transactions with shareholders of the
parent company:
New share issue
178 32,012 32,189
Total transactions with shareholders of the
parent company:
178 32,012 32,189
Closing balance, 30 September 2020 1,300 143,383 -10,175 3,166 137,674
Profit/loss for the period Oct-Dec
Other comprehensive income 778 710
Total comprehensive income 778 710 1,488
Closing balance, 31 December 2020 1,300 143,383 -9,397 3,876 139,162
Profit/loss for the period 7,997
Other comprehensive income 279
Total comprehensive income 279 7,997 8,276
Transactions with shareholders of the
parent company:
New share issue 118 86,043 86,161
Transaction cost net of tax -2,435 -2,435
Share based incentive program 1,953 1,953
Total transactions with shareholders of the
parent company:
118 85,561 85,679
Closing balance, 30 Sep, 2021 1,418 228,944 -9,118 11,873 233,116

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

KEUR 2021
Jul-Sep
2020
Jul-Sep
2021
Jan-Sep
2020
Jan-Sep
2020
Jan-Dec
Cash flow from operating activities
Operating profit/loss 3,958 1,841 8,819 5,246 6,290
Adjustments for non-cash items 1,930 1,281 5,642 4,735 6,309
Interest received 0 9 3 19 25
Interest paid -75 -29 -126 -285 -337
Income tax paid -313 -602 -566 -778 -625
Cash flow from operating activities
before changes in working capital
5,500 2,500 13,772 8,937 11,663
Cash flow from changes in working
capital
-843 392 -10,355 2,024 732
Cash flow from operating activities 4,657 2,892 3,417 10,961 12,395
Cash flow from investing activities -4,855 -1,782 -27,449 -6,074 -7,881
Cash flow from financing activities
Bank overdraft facility - -4,646 -5,310 -3,148 -1,842
Repayment of lease liabilities -316 -251 -900 -745 -973
New shares issue - 75,572 2,850 2,850
Transaction cost new share issue - -2,982 -
Proceeds from share-based incentive
program
0 1,953 -
Cash flow from financing activities -316 -4,897 68,333 -1,043 35
Net cash flow -515 -3,787 44,301 3,844 4,549
Decrease/increase of cash and
cash equivalents
Cash and cash equivalents at the
beginning of the period
Currency translation difference in
51,665
-53
10,158
-85
6,909
-113
2,570
-128
2,570
-210
cash and cash equivalents
Cash and cash equivalents at the
end of the period
51,098 6,286 51,098 6,286 6,909

CONDENSED PARENT COMPANY INCOME STATEMENT

KSEK 2021
Jul-Sep
2020
Jul-Sep
2021
Jan-Sep
2020
Jan-Sep
2020
Jan-Dec
Net sales 13,065 - 40,578 - 26,850
Personnel expenses -7,649 - -22,183 - -5,033
Other external expenses -5,790 -517 -28,658 -1,716 -23,377
Operating profit/loss -374 -517 -10,263 -1,716 -1,559
Result from financial investments
Interest expenses and similar
profit/loss items
- -60 -30 -137 -181
Total net financial items - -60 -30 -137 -181
Earnings before tax -374 -577 -10,293 -1,853 -1,740
Taxes for the period 67 108 2,227 382 186
Net loss/profit for the period -307 -469 -8,066 -1,471 -1,554

In the Parent Company, no items are recognized in other comprehensive income and, therefore, total comprehensive income for the period was consistent with income for the period.

As the Parent Company's functional currency is SEK, all parent company financials are reported in KSEK.

CONDENSED PARENT COMPANY BALANCE SHEET

KSEK 2021
30 Sep
2020
30 Sep
2020
31 Dec
ASSETS
Non-current assets
Shares in subsidiary 1,631,025 1,396,102 1,373,148
Ch Intercompany receivables - - -
Deferred tax assets 11,281 2,781 2,586
Total non-current assets 1,642,306 1,398,883 1,375,734
Current assets
Intercompany receivables 419,746 - 44,759
Other current receivables 3,642 -
Prepaid expenses and accrued income 6,116 401 116
Total current receivables 429,504 401 44,875
Cash and cash equivalents 200,154 1,829 5,574
Total current assets 629,658 2,230 50,449
TOTAL ASSETS 2,271,964 1,401,113 1,426,183
2021 2020 2020
KSEK 30 Sep 30 Sep 31 Dec
EQUITY AND LIABILITIES
Total restricted equity 13,722 12,531 12,531
Total non-restricted equity 2,234,897 1,382,312 1,382,229
Total equity 2,248,619 1,394,843 1,394,760
Current liabilities
Accounts payable 8,565 6 1,180
Intercompany liabilities 13 - 5,894
Other liabilities 2,613 6,263 5,480
Accrued expenses and deferred income 12,154 - 18,869
Total current liabilities 23,345 6,270 31,423
TOTAL EQUITY AND LIABILITIES 2,271,964 1,401,113 1,426,183

As the Parent Company's functional currency is SEK, all parent company financials are reported in KSEK.

NOTES

1 General information

Cint Group AB (publ) ("Cint"), Corp. Reg. No 559040-3217 is the Parent Company registered in Sweden with its main office in Stockholm at Luntmakargatan 18, 111 37 Stockholm, Sweden.

Unless otherwise stated, all amounts are in thousands of EUR (KEUR). Data in parentheses pertain to the comparative period.

This interim report was authorised for issue by the board of directors on 25 October 2021.

2 Summary of significant accounting policies

Cint applies International Financial Reporting Standards (IFRS) as adopted by the EU. The accounting policies applied are consistent with those described in the 2020 Annual Report for Cint Group AB (publ). This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting.

The Parent Company's interim report has been prepared in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2.

Segment reporting

Cint's chief operating decision maker (CODM) is represented by the chief executive officer (CEO) who monitors the operating result for the Group to manage the organisation and evaluate resources. The assessment of the Group's operation is based on the financial information reported to the CEO. The financial information reported to the CEO refers to the Group on a consolidated basis since the Group's offerings comprise the company's single platform. Therefore, the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements.

Earnings per share

(i) Earnings per share before dilution

Basic earnings per share is calculated by dividing:

  • the income attributable to owners of the Parent Company, excluding any dividends attributable to preference shares
  • by the weighted average number of ordinary shares outstanding during the period, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares.

(ii) Earnings per share after dilution

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

  • The after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and
  • the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares

3 Risk and uncertainties

An account of the Group's material financial and business risks can be found in the administration report and under Note 3 in the 2020 Annual Report. The current Covid-19 pandemic continues to affect all global markets and the Group is following the situation on continuously basis. As described in the sections "Comment by the CEO" and "The Group's Financial Position", no direct effects have been noted on the company's financial performance yet. No further significant risks are deemed to have arisen during the period.

4 Distribution of net sales

2021 2020 2021 2020 2020
Net sales by region Jul-Sep Jul-Sep Jan-Sep Jan-Sep Jan-Dec
Americas 15,278 10,941 42,307 30,146 44,909
EMEA 16,088 10,502 43,696 30,379 44,171
APAC 2,914 2,271 8,167 6,156 9,204
Total 34,280 23,714 94,170 66,681 98,284
2021 2020 2021 2020 2020
Net sales by customer segment Jul-Sep Jul-Sep Jan-Sep Jan-Sep Jan-Dec
Established insights companies 21,507 15,626 58,563 43,368 62,897
Tech-enabled companies 12,772 8,087 35,607 23,313 35,386
Total 34,280 23,714 94,170 66,681 98,284

5 Related party transactions

No transactions between Cint and related parties that materially affected the financial position or results have taken place, except for a transaction with shareholders in February 2021 in relation to a conversion of a loan of EUR 5.5m into new shares.

6 Earnings per share

2021
Jul-Sep
2020
Jul-Sep
2021
Jan-Sep
2020
Jan-Sep
2020
Jan-Dec
Earnings per share before and after dilution,
EUR
0.03 -1.20 0.04 -3.17 -0.45
Calculation of earnings per share:
Earnings attributable to Parent Company
shareholders, KEUR
3,991 793 7,997 2,176 2,886
Interest attributable to preference shares,
KEUR
- -4,345 -2,581 -11,251 -15,782
Total 3,991 -3,555 5,416 -9,076 -12,896
Weighted average number of ordinary
shares
137,221,803 2,969,832125,013,748 2,867,385 28,844,591
Number of potential shares from warrants 608,017 - 159,608 - -
2021
Jul-Sep
2020
Jul-Sep
2021
Jan-Sep
2020
Jan-Sep
2020
Jan-Dec
Adjusted Earnings per share before and
after dilution, EUR
0.03 0.01 0.09 0.04 0.27
Calculation of adjusted earnings per share(1)
Earnings attributable to Parent Company
shareholders, KEUR
3,991 793 7,997 2,176 2,886
Adjustment for items affecting
comparability(2), KEUR
72 - 1,532 - 2,352
Add-back of amortization of intangible
assets from acquisitions(2), KEUR 565 583 1,645 1,778 2,431
Total 4,628 1,376 11,174 3,954 7,669
Weighted average number of ordinary
shares
137,221,803 98,581,922 125,013,748 90,272,870 28,844,591
Number of potential shares from warrants 608,017 - 159,608 - -

(1) Following the conversion of preference shares to ordinary shares during the quarter, part of the IPO process, interest attributable to preference shares have been excluded from the adjusted EPS calculation and weighted numbers have been recalculated for improved comparability going forward

(2) Net of tax effect

7 Depreciations and Amortizations

2021 2020 2021 2020 2020
KEUR Jul-Sep Jul-Sep Jan-Sep Jan-Sep Jan-Dec
EBITDA 6,547 3,625 15,407 10,418 13,311
Depreciations -391 -300 -1,066 -892 -1,192
EBITA 6,155 3,326 14,342 9,527 12,119
Amortization of capitalised
development cost
-881 -702 -2,800 -1,895 -2,663
Amortization of acquired assets -1,316 -783 -2,723 -2,386 -3,166
Operating profit/loss 3,958 1,841 8,819 5,246 6,290

8 Acquisition of GapFish

On 1 June, Cint acquired GapFish GmbH, a Berlin based market research company that operates online panel community for the DACH region.

The contribution from acquisitions to Group revenue for the period was EUR 0.9m, with operating profit of EUR 0.4m. If the company had been owned for the full year, the company would have contributed revenue of approximately EUR 4.7m and operating profit of EUR 0.5m.

The purchase price allocation for GapFish GmbH is presented below. The surplus value reported as goodwill refers to the acquired company's future profit generation and the profit synergies that the acquisition entails and does not meet the conditions for separate accounting. Other intangibles amount to 11.5m and are primarily allocated to technology and customer relations. As per September 2021 the unpaid purchase consideration amounts to 2.5 m.

KEUR GapFish
Goodwill 20,182
Other intangible assets 11,478
Other fixed assets 303
Short term receivables 2,218
Cash and cash equivalents 2,674
Short and long term liabilities -6,739
Purchase consideration 30,116
Paid by new share issue 5,275
Unpaid purchase consideration 2,520
Paid purchase consideration 22,321
Cash and cash equivalents in the aquired company 2,674
Paid purchase consideration net of cash and cash equivalents in the aquired
company 19,647

9 Financial income and expenses

2021
Jul-Sep
2020
Jul-Sep
2021
Jan-Sep
2020
Jan-Sep
2020
Jan-Dec
Interest income 108 9 111 19 25
Interest expenses 115 -329 -126 -1,883 -2,052
Realised and unrealised currency
effects 636 -517 1,364 -437 -763
Financial income/expenses net 859 -837 1,349 -2,300 -2,791

10 Alternative Performance Measures

Certain information in this report that management and analysts use to assess the Group's development is not defined in IFRS. Management believes that this information makes it easier for investors to analyse the Group's earnings trend and financial position. Investors should consider this information as a supplement to, rather than a replacement of, the financial reporting in accordance with IFRS.

Alternative performance
metrics
Definition Reason for use of metrics
Net sales growth Change in net sales compared to
same period previous year.
The measure shows growth in net sales
compared to the same period during previous
year. The measure is a key ratio for a
company within a growth industry.
Organic net sales growth Change in net sales compared to
same period previous year
adjusted for
acquisitions/divestments.
The measure shows growth in net sales
adjusted for acquisitions during the last 12
months. Acquired businesses are included in
organic growth once they have been part of
the Group for four quarters. The measure is
used to analyse underlying growth in net
sales.
Gross profit Net sales for the period reduced
by the total cost of services sold.
Gross profit is the profit after deducting the
costs associated with providing the services.
Gross margin Gross profit as a percentage of
net sales.
The measure is an indicator of a company's
gross earning ability.
EBITDA Operating profit/loss before
depreciation, amortisation and
impairment.
Operating profit/loss before depreciation,
amortisation and impairment on tangible and
intangible non-current assets. The purpose is
to assess the Group's operational activities.
EBITDA is a supplement to operating income.
EBITDA margin EBITDA in relation to the
Company's net sales.
EBITDA in relation to net sales. To readers of
financial reports, the measure is an indicator
of a company's earning ability.
EBITA Operating profit/loss before
amortisation of intangible non
current assets.
Operating profit/loss before amortisation of
intangible non-current assets. The purpose is
to assess the Group's operational activities.
EBITA is a supplement to operating income.
EBITA margin EBITA in relation to the
Company's net sales.
EBITA in relation to net sales. To readers of
financial reports, the measure is an indicator
of a company's earning ability.
Operating profit/loss Profit for the period before
financial income, financial
expenses and tax
Net sales less total operating expenses.
Operating profit is relevant for investors to
understand the earnings trend before interest
and tax
Operating margin Operating profit/loss in percentage
of net sales.
Operating profit/loss in percentage of net
sales. To readers of financial reports, the
measure is an indicator of a company's
earning ability.
Items affecting
comparability
Significant and unusual items. Refers to items that are reported separately
as they are of a significant nature, affect
comparison and are considered unusual to
the Group's ordinary operations. Examples
are acquisition-related expenses and
restructuring costs.
Adjusted EBITDA Operating profit/loss before
depreciation, amortisation and
impairment adjusted for items
affecting comparability.
EBITDA adjusted for items affecting
comparability. The purpose is to show
EBITDA excluding items that affect
comparison with other periods.
Adjusted EBITDA margin Adjusted EBITDA in relation to the
Company's net sales.
Adjusted EBITDA in relation to net sales. To
readers of financial reports, the measure is an
indicator of a company's earning ability.
Adjusted EBITA Operating profit/loss before
amortisation and impairment and
not amortisation of intangible
assets from acquisitions adjusted
for items affecting comparability.
EBITA adjusted for items affecting
comparability. The purpose is to show EBITA
excluding items that affect comparison with
other periods.
Adjusted EBITA margin Adjusted EBITA in relation to the
Company's net sales.
Adjusted EBITA in relation to net sales. To
readers of financial reports, the measure is an
indicator of a company's earning ability.
Adjusted operating profit Operating profit/loss adjusted for
items affecting comparability.
Operating profit/loss according to the income
statement before items affecting
comparability. The measure is a supplement
to operating profit/loss adjusted for items
affecting comparison. The purpose is to show
the operating profit/loss excluding items that
affect comparison with other periods.
Adjusted operating margin Adjusted operating profit/loss in
relation to the Company's net
Adjusted operating profit/loss in relation to net
sales. To readers of financial reports, the
sales. measure is an indicator of a company's
earning ability.
Adjusted earnings per
share (EPS)
Profit/loss for the period adjusted
for items affecting comparability
(net of tax effect), add-back of
amortization of intangible assets
from acquisitions (net of tax effect)
and interest attributable to
preference share.
Adjusted EPS shows the company's
underlying operative profit generation
capability per share,
Net debt Interest-bearing non-current and
current liabilities less financial
assets.
The measure shows the Company's real level
of debt.
Net working capital Current assets less current
liabilities
The measure is used since it shows the tie-up
of short-term capital in the operations and
facilitates the understanding of changes in the
cash flow from operating activities
Repeat buying Customers that have made a
purchase at least once per quarter
on average during the last twelve
months
The repeat buying gives an indication on the
customer loyalty and stickiness of the offering
Average customer tenure The aggregate of each customer's
tenure multiplied by respective
share of sales the last twelve
months
The average customer tenure gives an
indication on the customer loyalty and
stickiness of the offering
Connected consumers Total registered as new and active
panellists in the last 12 months
-
Alternative Performance Measures, KEUR 2021 2020 2021 2020 2020
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Jan-Dec
Net sales previous period 23,714 17,621 66,681 48,360 71,951
Net sales current period 34,280 23,714 94,170 66,681 98,284
Net sales growth 44.6% 34.6% 41.2% 37.9% 36.6%
Whereof acquired net sales previous period - 2,082 - 2,082 2 082
Whereof acquired net sales current period 2,501 3,223 3,440 9,346 9 346
Net sales excluding acquired net sales previous
period
23,714 15,539 66,681 46,279 69,869
Net sales excluding acquired net sales current
period
31,779 20,490 90,730 57,335 88,938
Organic growth 34.0% 31.9% 36.1% 23.9% 27.3%
Of which currency effects -4 -423 -2,088 -264 -1,216
Organic growth excluding currency effects, % 34.0% 35.6% 40.5% 24.6% 29.6%
Net sales 34,280 23,714 94,170 66,681 98,284
Cost of services sold -16,823 -11,685 -45,756 -32,165 -47,318
Gross profit 17,457 12,029 48,414 34,516 50,966
Gross margin 50.9% 50.7% 51.4% 51.8% 51.9%
Net sales 34,280 23,714 94,170 66,681 98,284
Operating profit/loss 3,958 1,841 8,819 5,246 6,290
Operating margin, % 11.5% 7.8% 9.4% 7.9% 6.4%
Amortisation and write-offs of acquisition-related
intangible assets
1,316 783 2,723 2,386 3,166
Amortisation of capitalised development expenses 881 702 2,800 1,895 2,663
EBITA 6,155 3,326 14,342 9,527 12,119
EBITA margin, % 18.0% 14.0% 15.2% 14.3% 12.3%
Depreciation of tangible non-current assets 391 300 1,066 892 1,192
EBITDA 6,547 3,625 15,407 10,418 13,311
EBITDA margin, % 19.1% 15.3% 16.4% 15.6% 13.5%
Items affecting comparability
Compensation related costs - 70 - 70 70
Cost for strategic projects 92 - 3,270 91 2,738
Covid related US PPP loans - - -1,340 - -
Other - 149 - 154 154
Items affecting comparability 92 219 1,929 315 2,962
FX gain/loss on operating balance sheet items 754 -373 605 -270 -629
Adjusted operating profit 4,050 2,060 10,748 5,560 9,252
Adjusted operating margin, % 11.8% 8.7% 11.4% 8.3% 9.4%
Adjusted EBITA 6,247 3,544 16,271 9,842 15,081
Adjusted EBITA margin, % 18.2% 14.9% 17.3% 14.8% 15.3%
Adjusted EBITDA 6,639 3,844 17,337 10,733 16,273
Adjusted EBITDA margin, % 19.4% 16.2% 18.4% 16.1% 16.6%
Adjusted EBITDA, excl FX gain/loss on
operating balance sheet items 5,885 4,217 16,732 11,003 16,902
Adjusted EBITDA excl FX gain/loss on operating
balance sheet items, %
17.2% 17.8% 17.8% 16.5% 17.2%
Accounts receivable
Other current receivable
Accounts payable
38,144
17,164
-15,209
22,840
14,823
-8,742
38,144
17,164
-15,209
22,840
14,823
-8,742
27,282
19,569
-12,446
Other current liabilities -25,146 -24,490 -25,146 -24,490 -29,502
Net working capital 14,952 4,431 14,952 4,431 4,904
Bank overdraft facilities - 4,284 - 4,284 5,310
Other interest-bearing liabilities (Borrowings) 2,520 5,044 2,520 5,044 5,366
Lease liabilities – Long term 1,668 1,904 1,668 1,904 1,811
Lease liabilities – Short term 975 564 975 564 959
Total interest-bearing debt 5,163 11,795 5,163 11,795 13,446
Cash and cash equivalents 51,098 6,286 51,098 6,286 6,909
Net debt -45,935 5,509 -45,935 5,509 6,537

11 Historical quarterly financial information

The board of directors and executive management of Cint believes that the information provided below is of material importance to investors. Unless stated otherwise, the information and the calculations below derive from the Company's internal accounts and has neither been audited nor reviewed by the Company's auditor.

2021 2020 2019
KEUR Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
Net sales 34,280 31,744 28,147 31,603 23,714 21,821 21,146 23,590 17,621
Net sales growth, % 44.6% 45.5% 33.1% 34.0% 34.6% 36.1% 43.8% 59.2% 40.1%
Gross profit 17,457 16,460 14,497 16,449 12,029 11,135 11,353 12,806 9,659
Gross margin, % 50.9% 51.9% 51.5% 52.1% 50.7% 51.0% 53.7% 54.3% 54.8%
EBITDA 6,547 5,737 3,124 2,892 3,625 3,719 3,074 930 1,619
EBITDA margin, % 19.1% 18.1% 11.1% 9.2% 15.3% 17.0% 14.5% 3.9% 9.2%
Adjusted EBITDA 6,639 5,163 5,535 5,539 3,844 3,720 3,169 3,069 1,798
Adjusted EBITDA margin, % 19.4% 16.3% 19.7% 17.5% 16.2% 17.0% 15.0% 13.0% 10.2%
Non-recurring items 92 -574 2,411 2,647 219 1 95 2,139 179
Operating profit/loss 3,958 3,683 1,177 1,045 1,841 1,980 1,424 -644 202
Operating margin, % 11.5% 11.6% 4.2% 3.3% 7.8% 9.1% 6.7% -2.7% 1.1%
Rolling 12-month
Net sales 125,773 115,207 105,285 98,284 90,271 84,178 78,392 71,951 63,183
Gross profit 64,863 59,435 54,110 50,966 47,322 44,953 42,228 38,794 33,710
EBITDA 18,300 15,379 13,361 13,311 11,348 9,342 6,731 4,833 3,663
Adjusted EBITDA 22,877 20,082 18,638 16,273 13,802 11,756 9,392 7,421 5,085
Gross margin, % 51.6% 51.6% 51.4% 51.9% 52.4% 53.4% 53.9% 53.9% 53.4%
EBITDA margin, % 14.6% 13.3% 12.7% 13.5% 12.6% 11.1% 8.6% 6.7% 5.8%
Adjusted EBITDA margin, % 18.2% 17.4% 17.7% 16.6% 15.3% 14.0% 12.0% 10.3% 8.0%

The undersigned hereby confirm that this interim report for the period January-September 2021 provides a true and fair overview of the operations, financial position and results of the parent company and the Group and describes material risks and factors of uncertainties faced by the parent company and the companies in the Group.

Stockholm 25 October 2021

Cint Group AB (publ)

Tom Buehlmann, CEO

For more information, please contact:

Joakim Andersson, CFO Tel: +46 760 44 8330 Email: [email protected]

Patrik Linzenbold, Head of IR Tel: +46 708 252 630 Email: [email protected]

This disclosure contains information that Cint Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08:00 CET on 25 October 2021.

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.

Auditor's report

Cint Group AB (publ) org nr 559040-3217

Introduction

We have reviewed the condensed interim financial information (interim report) of Cint group AB (publ) as of 30 September 2021 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.

Stockholm, October the 25th 2021

PricewaterhouseCoopers AB

Nicklas Kullberg Authorized Public Accountant

About Cint

Cint was founded in 1998 and is a global software leader in the global insights market. Through its software platform, Cint allows corporations and market research agencies to obtain high quality insights, on a global scale, in a time- and costefficient way. Cint is positioned in the middle of the insights industry, connecting corporations seeking insights with connected consumers who are being incentivised to complete online consumer interviews.

As per 30 September 2021, Cint had a global footprint of over 145 million connected consumers across more than 130 countries and more than 3,000 B2B customers across 72 countries that use Cint to accelerate how they gather consumer insights and boost business growth. Cint's headquarters are located in Stockholm, Sweden, with 14 global offices including London, New York, Tokyo and Sydney. As per 30 September 2021, the Company had 445 FTEs.

The Company's business model comprises its proprietary software platform to provide instant access to the world's largest global network of connected consumers and to increase speed, efficiency and reduce cost for customers conducting insight gathering. The Company's back-end platform is built on micro services that provide a scalable architecture and facilitate fast, agile and continuous delivery of new functionalities. Cint operates a cloud-based multitenanted platform, implying capacity on tap with real-time up- and downscaling of data capacity and scalable product development processes. The multi-tenant platform structure entails several benefits, including cost efficiencies within maintenance and support, faster time to market for new functionality and broad adoption and gains amongst Cint's customer base.

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