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Cint Group

Quarterly Report Aug 17, 2021

2902_ir_2021-08-17_89065979-9abd-4a8a-b370-7c6f3c437ec0.pdf

Quarterly Report

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Interim Report January – June 2021

Strong organic growth & continued progress on the M&A strategy

Financial highlights April – June 2021

  • Net sales increased by 45.5 percent to EUR 31.7m (21.8). Organic growth excluding currency effects was 48.0 percent
  • Gross profit amounted to EUR 16.5m (11.1) with a gross margin of 51.9 percent (51.0)
  • Adjusted EBITDA amounted to EUR 5.2m (3.7) with an adjusted EBITDA margin of 16.3 percent (17.0). Should the FX impact on revaluing operating balance sheet items have been excluded, the adjusted EBITDA would amount to EUR 6.1m (3.8) and the margin 19.3% (17.6)
  • Adjusted basic and diluted earnings per share amounted to EUR 0.01 (0.04)

Financial highlights January – June 2021

  • Net sales increased by 39.4 percent to EUR 59.9m (43.0). Organic growth excluding currency effects was 44.1 percent
  • Gross profit amounted to EUR 31.0m (22.5) with a gross margin of 51.7 percent (52.3)
  • Adjusted EBITDA amounted to EUR 10.7m (6.9) with an adjusted EBITDA margin of 17.9 percent (16.0) Should the FX impact on revaluing operating balance sheet items be excluded, the adjusted EBITDA would amount to EUR 10.8m (6.8) and the margin 18.1% (15.8)
  • Adjusted basic and diluted earnings per share amounted to EUR 0.04 (0.01)

Significant event during the second quarter

• On 1 June, Cint acquired GapFish GmbH, a Berlin based market research company that operates one of the largest online panel communities for the DACH region

KEUR 2021 2020 2021 2020 2020
Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
Net sales 31,744 21,821 59,890 42,967 98,284
Gross profit 16,460 11,135 30,957 22,487 50,966
EBITDA 5,737 3,719 8,861 6,793 13,311
Adjusted EBITDA 5,163 3,720 10,698 6,889 16,273
FX gain/loss on operating items -955 -115 -150 103 -629
EPS, basic and diluted 0.02 -0.07 0.01 -0.20 -0.45
Adjusted EPS, basic and diluted 0.01 0.04 0.04 0.01 0.27

Comments by the CEO

Cint's positive momentum from previous quarters continued into Q2. Net sales in the second quarter 2021 increased by 45 percent to EUR 31.7m compared to EUR 21.8m in the same period last year. Organic growth (excluding currency effects) was 48 percent with all of our regions contributing positively to this development. This growth rate is higher than our average annual growth rate during the last two years, but should also be seen in the context of the relative slow-down during the first half of last year, following the outbreak of Covid-19.

When adjusting our results for items affecting comparability this quarter (specifically, a loan forgiveness related to Covid in the US and transaction costs for the acquisition of GapFish), our adjusted EBITDA amounted to EUR 5.2m (3.7) in the quarter corresponding to a margin of 16.3 (17.0) percent. On a rolling 12-month basis, we improved our adjusted EBITDA margin by 3.5 percentage points from Q2 last year, which is a strong indicator of the scalability of our business model with strong sales growth translating into improved profitability.

The tech-enabled customer segment continues to grow strongly, showing a year-over-year growth rate of 56 percent in the quarter, driven by overall positive development from customers that have been with us for many years, as well as from new logos.

Our second customer segment, the established insights companies, increased sales by 39 percent compared to the same quarter last year. This growth is spread relatively evenly across geographies and most customers and shows that we are continuing to increase our share-of-wallet in this segment.

At the end of July, we announced that NPD Group, a globally leading market research group, will be licensing Cint's platform to manage its sampling and data collection process. The Cint platform is architected to support enterprise scale market research organisations, and we are excited to help leverage the benefits of programmatic sampling and project automation.

I would like to take the opportunity to welcome our new colleagues and customers from GapFish, a leading panel company in the DACH region. Readers will recall that we are actively looking to extend our value proposition through M&A – to supplement our strong organic growth. The acquisition of GapFish, which we completed in June, is the next step in the realisation of the strategy outlined in our IPO earlier this year. Together with GapFish, we are now able to offer our global customers enhanced access to high quality and unique consumer audiences in the DACH region.

We have had a very strong first half of 2021. While the year-on-year comparables will be more challenging during the second half of 2021, we still feel very comfortable delivering a top-line growth rate for the full year in line with the financial target. We are also developing well towards our target of achieving 20 percent EBITDA margin in the medium term.

Although some countries have made rapid advancements in vaccinations, the global pandemic is very much an ongoing phenomenon for many colleagues, customer and partners. We continue to support colleagues affected by Covid. In parallel, we are working on an appropriate "backto-the-office" strategy for when circumstances allow.

Finally, I would like to thank our Cinters, partners and customers around the world for their continued hard work, and hope that all readers are able to recharge batteries over the summer.

"The changes in the market are opening up significant opportunities for Cint"

Key Ratios for the Group

KEUR 2021 2020 2021 2020 2020
Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
Net sales 31,744 21,821 59,890 42,967 98,284
Net sales growth 45.5% 36.1% 39.4% 39.8% 36.6%
Organic net sales growth 41.2% 17.6% 37,2% 19.9% 27.3%
Organic growth excl ccy effects 48.0% 17.0% 44.1% 19.1% 29.5%
Gross profit 16,460 11,135 30,957 22,487 50,966
Gross margin 51.9% 51.0% 51.7% 52.3% 51.9%
Capitalised development cost 1,946 1,524 3,825 3,287 6,377
Operating Expenses -12,670 -8,940 -25,921 -18,981 -44,032
EBITDA 5,737 3,719 8,861 6,793 13,311
Items affecting comparability -574 1 1,837 96 2,962
Adjusted EBITDA 5,163 3,720 10,698 6,889 16,273
Adjusted EBITDA margin 16.3% 17.0% 17.9% 16.0% 16.6%
FX gain/loss on operating items(1) -955 -115 -150 103 -629
EPS, basic and diluted 0.02 -0.07 0.01 -0.20 -0.45
Adjusted EPS, basic and diluted 0.01 0.04 0.04 0.01 0.27
Net Working Capital 13,405 4,544 13,405 4,544 4,904
Operating Cashflow 3,138 5,368 -1,240 8,069 12,395
Net Debt(+) / Cash(-) -44,346 6,242 -44,346 6,242 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

SECOND QUARTER AND FIRST SIX MONTHS OF 2021

Sales and earnings

Net sales in the quarter increased by 45.5 percent to EUR 31.7m (21.8). Sales from GapFish, acquired on 1 June 2021, added EUR 0.9m to group sales in the reporting period. Organic growth was 41.2 percent and organic growth excluding currency effects was 48.0 percent. Net sales in the first six months increased by 39.4 percent to EUR 59.9m (43.0).

Gross profit in the quarter increased by 47.8 percent to EUR 16.5m (11.1) and the gross margin amounted to 51.9 percent (51.0). Gross profit for the first six months amounted to EUR 31.0m (22.5) and the gross margin amounted to 51.7 percent (52.3).

EBITDA in the quarter amounted to EUR 5.7m (3.7) and the EBITDA margin amounted to 18.1 percent (17.0). Deducting items affecting comparability for the period, i.e. in total EUR 0.6m relating to US PPP loan forgiveness and acquisition related transaction cost, the adjusted EBITDA amounted to EUR 5.2m (3.7) and the adjusted EBITDA margin amounted to 16.3 percent (17.0). Should the FX impact on revaluing operating balance sheet items have been excluded, the adjusted EBITDA would amount to EUR 6.1m (3.8) and the margin 19.3% (17.6).

EBITDA in the first six months amounted to EUR 8.9m (6.8) and the EBITDA margin amounted to 14.8 percent (15.8). Deducting items affecting comparability for the period, i.e EUR 1.8m (0.1) the adjusted EBITDA amounted to EUR 10.7m (6.9) and the adjusted EBITDA margin 17.9 percent (16.0). Should the FX impact on revaluing operating balance sheet items be excluded, the adjusted EBITDA would amount to EUR 10.8m (6.8) and the margin 18.1% (15.8).

The operating profit in the quarter amounted to EUR 3.7m (2.0) with an operating margin of 11.6 percent (9.1). Operating profit in the first six months amounted to EUR 4.9m (3.4) with an operating margin of 8.1 percent (7.9).

Profit for the quarter amounted to EUR 2.7m (1.9) and EPS (basic and diluted) amounted to EUR 0.02 (-0.07). Profit for the first six months amounted to EUR 4.0m (1.4) and EPS (basic and diluted) amounted to EUR 0.01 (-0.2).

Cash flow

The group's operating cash flow before changes in working capital in the quarter amounted to EUR 6.6m (4.7) and the net cash flow, including EUR 17.7m relating to the acquisition of GapFish, amounted to EUR -17.1m (6.4).

The group's operating cash flow before changes in working capital for the first six months amounted to EUR 8.3m (6.4) and the net cash flow amounted to EUR 44.8m (7.6).

Investments

The Group's investments in tangible fixed assets amounted to EUR 0.2m (48k) in the quarter. Investments in intangible fixed assets amounted to EUR 1.9m (1.6) and consisted of capitalised development costs for the platform, investments into new features and functions to support future growth. The Group's investments in tangible and intangible fixed assets in the six-month period totalled EUR 4.9m (4.3).

For details on the depreciation and amortisation for the second 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 -1.0m (0.1) due to currency fluctuations. Net sales during the first six months were impacted by EUR -2.1m (0.2).

The revaluation of balance sheet items had a negative impact on the total operating expenses of EUR 1.0m (- 0.1) during the quarter. For the first six months, there was a negative impact of EUR 0.2m (+0.1). This impact is included in both EBITDA and adjusted EBITDA.

Regional Development

Americas

Net sales increased by 41 percent to EUR 14.0m (9.9). Sales growth was driven by a high level of new customer acquisitions 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.

EMEA

Net sales increased by 52 percent to EUR 15.1m (9.9). Sales growth was driven by a strong customer intake and growth in the existing customer base. The acquisition of GapFish added EUR 0.9m to sales in the quarter.

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 34 percent to EUR 2.6m (2.0). The APAC region remained strong during the quarter, with many customers seeing a good development.

The APAC market is the fastest growing region. The region is less developed than the Americas and EMEA and is 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 second 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 amounted to 2,960 by the end of the second quarter 2021. This corresponded to an increase of 461 compared to the same period last year and 445 compared to year-end 2020. All regions contributed positively to this development.

Customer segment development

Established insights companies

Net sales increased by 39 percent to EUR 19.3m (13.8) in the second quarter 2021.

Tech-enabled insights companies

Net sales increased by 56 percent to EUR 12.5m (8.0) in the second quarter 2021.

Customer segment net sales (KEUR)

Average customer tenure

As at end of the second quarter, the average revenue adjusted customer tenure was 6.8 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 93 million. The number of completes has increased strongly 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 second quarter, the total number of connected consumers was 155 million, an increase of eleven million since year-end 2020. 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 51.7m (6.9m as at year end 2020) and a total debt of EUR 7.3m (13.4). Total net cash amounted to EUR 44.3m at the end of the second 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 quarter, Cint was authorized forgiveness of its remaining pay-check protection program loan from the US government, amounting to EUR 0.9m (USD 1.1m). 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. GapFish conducts over 2.5 million surveys annually within the DACH region. Through the acquisition, Cint got access to GapFish's more than 300 global customers and could welcome more than 40 new employees.

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.

In the 12 months period ended on 31 March 2021 GapFish had revenues of EUR 8.0m, gross profit of EUR 4.7m and EBITDA of EUR 1.3m. The compounded annual growth rate was 26.3 per cent 2018 – 2020. The enterprise value of EUR 28.0m corresponded to a 2.7x multiple on expected net sales 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.

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

At the end of the period, the Group's equity amounted to EUR 229.8m 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 427 (285). The average number of FTEs for the second quarter was 396 (294). The total number of employees was 299 (229) at the end of the period. The average number of employees during the quarter was 271 (236)

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.

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.

In total, the warrant program comprised of 17 individuals and 3,546,282 warrants. If subscribed in full, the increase in share capital will not amount to more than SEK 354,628 and the maximum number of warrants that may be subscribed by the participants corresponded to approximately 2.6% of the total number of shares outstanding (as of the date of the program). Total cost for the program during its term is not expected to exceed EUR 425,000.

A share savings program was launched in the second quarter and will let all employees participate with a maximum investment of SEK 100,000 per employee and those who retain the shares during the program's term of three years and also remain employed, will be eligible for one (1) additional free share, a matching share, for each three (3) shares purchased. Full allotment of matching shares would mean that the total number of shares under the program will amount to no more than 200,092 shares, corresponding to approximately 0.15 percent of the total number of shares outstanding. The cost will be accounted for in accordance with IFRS 2 and is not expected to exceed EUR 1.4m assuming 100 percent allotment. In addition, the cost for social security charges are calculated to approximately EUR 354,000 per year under customary assumptions.

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 June 2021, the total number of shares and votes was 137,221,803

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 - 1.0m (-0.5) in the second quarter and SEK -9.9m (- 1.2) in the six-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 238.5m, to be compared with a ratio of 98 percent and a cash balance of SEK 5.6m by end of December 2020.

Financial Calendar 2021

Interim Report Q3 9 Nov 2021

Conference call and web presentation of the Q2 report

CEO Tom Buehlmann and CFO Joakim Andersson will present the results through a telephone conference which will be held at 10.00 CEST on 17 August. The conference call will also be webcast.

Telephone numbers and access code

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

International: +44 203 936 2999 Sweden: +46 10 884 80 16 Access code: 347 609

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

2021 2020 2021 2020 2020
KEUR Note Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
Net Sales 4 31,744 21,821 59,890 42,967 98,284
Cost of services sold -15,283 -10,687 -28,933 -20,480 -47,318
Capitalised development cost 1,946 1,524 3,825 3,287 6,377
Personnel expenses -7,831 -5,791 -16,272 -12,321 -26,805
Other operating income -18 -72 1,240 155 -497
Other external expenses -4,820 -3,077 -10,899 -6,815 -16,730
EBITDA 5,737 3,719 8,861 6,793 13,311
Depreciation 7 -344 -294 -674 -592 -1,192
EBITA 5,392 3,425 8,186 6,201 12,119
Amortisation and impairment 7 -1,709 -1,444 -3,326 -2,797 -5,828
Operating profit/loss 3,683 1,980 4,861 3,405 6,290
Net financial income/expenses 9 -181 440 490 -1,463 -2,791
Earnings before tax 3,503 2,420 5,351 1,942 3,500
Income tax expense -817 -561 -1,345 -559 -613
Profit/loss for the period 2,686 1,860 4,006 1,382 2,886
Profit/loss for the period
attributable to:
Parent Company shareholders 2,686 1,860 4,006 1,382 2,886
2021 2020 2021 2020 2020
Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
Earnings per share before and after
dilution, EUR
0.02 -0.07 0.01 -0.20 -0.45

CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

2021
Apr-Jun
2020
Apr-Jun
2021
Jan-Jun
2020
Jan-Jun
2020
Jan-Dec
Profit/loss for the period 2,686 1,860 4,006 1,382 2,886
Other comprehensive income
Items that may be transferred to income
Exchange differences on translation of
foreign operations
1,028 -300 920 -2,232 -3,620
Other comprehensive income for the
period
1,028 -300 920 -2,232 -3,620
Total comprehensive income for the
period
3,714 1,560 4,926 -850 -734

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

2021 2020 2020
KEUR 30 Jun 30 Jun 31 Dec
ASSETS
Non-current assets
Goodwill 122,429 102,016 100,714
Other intangible assets 49,324 35,876 36,214
Right-of-use assets 3,021 2,831 2,869
Equipment, tools and installations 770 599 606
Other financial assets 254 238 234
Deferred tax assets 4,457 5,237 5,226
Total non-current assets 180,256 146,797 145,862
Current assets
Accounts receivable 35,619 20,939 27,282
Current tax assets 63 10 81
Other receivables 239 43 31
Prepaid expenses and accrued income 18,412 13,977 19,539
Cash and cash equivalents 51,665 10,158 6,909
Total current assets 105,998 45,127 53,842
TOTAL ASSETS 286,254 191,924 199,704
2021 2020 2020
KEUR 30 Jun 30 Jun 31 Dec
EQUITY
Total equity attributable to the
shareholders of the parent company 229,767 139,046 139,162
LIABILITIES
Non-current liabilities
Borrowings 2,520 5,008 5,366
Lease liabilities 1,882 2,115 1,811
Deferred tax liabilities 8,131 5,297 4,878
Total non-current liabilities 12,533 12,420 12,055
Current liabilities
Lease liabilities 1,049 619 959

Other financial liabilities 1,868 - - Account payables 15,131 7,389 12,446 Bank overdraft facilities - 8,658 5,310 Other current liabilities 2,058 5,280 4,688 Accrued expenses and deferred income 23,847 18,512 25,084 Total current liabilities 43,954 40,458 48,486

TOTAL EQUITY AND LIABILITIES 286,254 191,924 199,704

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-Jun 1 382 1 382
Other comprehensive income -2 232 -2 232
Total comprehensive income -2 232 1 382 -850
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 June 2020 1,300 143,383 -8,009 2,372 139,046
Profit/loss for the period Jul-Dec 1,504 1,504
Other comprehensive income -1,388 -1,388
Total comprehensive income -1,388 1,504 116
Closing balance, 31 December 2020 1,300 143,383 -9,397 3,876 139,162
Profit/loss for the period 4,006 4,006
Other comprehensive income 920 920
Total comprehensive income 920 4,006 4,926
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 programme 1,953 1,953
Total transactions with shareholders of the
parent company:
118 85,561 85,679
Closing balance, 30 June, 2021 1,418 228,944 -8,477 7,882 229,767

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

KEUR 2021
Apr-Jun
2020
Apr-Jun
2021
Jan-Jun
2020
Jan-Jun
2020
Jan-Dec
Cash flow from operating activities
Operating profit/loss 3,683 1,980 4,861 3,405 6,290
Adjustments for non-cash items 2,977 2,883 3,712 3,454 6,309
Interest received 3 5 3 10 25
Interest paid - -174 -51 -256 -337
Income tax paid -47 -39 -253 -176 -625
Cash flow from operating activities
before changes in working capital
6,617 4,656 8,272 6,437 11,663
Cash flow from changes in working
capital
-3,479 712 -9,512 1,632 732
Cash flow from operating activities 3,138 5,368 -1,240 8,069 12,395
Cash flow from investing activities -19,827 -1,606 -22,594 -4,292 -7,881
Cash flow from financing activities
Bank overdraft facility - 37 -5,310 1,498 -1,842
Repayment of lease liabilities -323 -246 -583 -494 -973
New shares issue - 2,850 75,572 2,850 2,850
Transaction cost new share issue -86 - -2,983 - -
Proceeds from share-based incentive
program
- - 1,953 - -
Cash flow from financing activities -409 2,641 68,649 3,854 35
Net cash flow -17,098 6,403 44,816 7,631 4,549
Decrease/increase of cash and
cash equivalents
Cash and cash equivalents at the
beginning of the period
68,688 3,756 6,909 2,570 2,570
Currency translation difference in
cash and cash equivalents
75 - -60 -42 -210
Cash and cash equivalents at the
end of the period
51,665 10,159 51,665 10,159 6,909

CONDENSED PARENT COMPANY INCOME STATEMENT

KSEK 2021
Apr-Jun
2020
Apr-Jun
2021
Jan-Jun
2020
Jan-Jun
2020
Jan-Dec
Net sales 8,606 - 27,513 - 26,850
Personnel expenses -6,152 - -14,534 - -5,033
Other external expenses -3,477 -522 -22,868 -1,199 -23,377
Operating profit/loss -1,023 -522 -9,889 -1,199 -1,559
Result from financial investments
Interest expenses and similar
profit/loss items
-1 -45 -30 -77 -181
Total net financial items -1 -45 -30 -77 -181
Earnings before tax -1,024 -567 -9,919 -1,276 -1,740
Taxes for the period 339 122 2,161 274 186
Net loss/profit for the period -686 -445 -7,758 1,002 -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 Jun
2020
30 Jun
2020
31 Dec
ASSETS
Non-current assets
Shares in subsidiary 1,631,025 1,373,148 1,373,148
Ch Intercompany receivables 273,458 - -
Deferred tax assets 11,215 12,672 2,586
Total non-current assets 1,915,698 1,385,821 1,375,734
Current assets
Intercompany receivables 116,161 - 44,759
Prepaid expenses and accrued income 8,493 770 116
Total current receivables 124,654 770 44,875
Cash and cash equivalents 238,454 30,123 5,574
Total current assets 363,107 30,893 50,449
TOTAL ASSETS 2,278,806 1,416,714 1,426,183
2021 2020 2020
KSEK 30 Jun 30 Jun 31 Dec
EQUITY AND LIABILITIES
Total restricted equity 13,722 12,531 12,531
Total non-restricted equity 2,235,204 1,392,780 1,382,229
Total equity 2,248,926 1,405,311 1,394,760
Current liabilities
Accounts payable 8,384 112 1,180
Intercompany liabilities 14,826 10,522 5,894
Other liabilities 2,025 - 5,480
Accrued expenses and deferred income 4,645 769 18,869
Total current liabilities 29,880 11,403 31,423
TOTAL EQUITY AND LIABILITIES 2,278,806 1,416,714 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 17 August, 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 Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
Americas 14,026 9,939 27,029 19,205 44,909
EMEA 15,089 9,924 27,608 19,877 44,171
APAC 2,629 1,958 5,253 3,885 9,204
Total 31,744 21,821 59,890 42,967 98,284
2021 2020 2021 2020 2020
Net sales by customer segment Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
Established insights companies 19,289 13,846 37,055 27 742 62,897
Tech-enabled companies 12,455 7,975 22,835 15,225 35,386
Total 31,744 21,821 59,890 42,967 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
Apr-Jun
2020
Apr-Jun
2021
Jan-Jun
2020
Jan-Jun
2020
Jan-Dec
Earnings per share before and after dilution,
EUR
0.02 -0.07 0.01 -0.20 -0.45
Calculation of earnings per share:
Earnings attributable to Parent Company
shareholders, KEUR
2,686 1,860 4,006 1,382 2,886
Interest attributable to preference shares,
KEUR
- -3,743 -2,580 -7,041 -15,782
Total 2,686 -1,883 1,425 - 5,659 -12,896
Weighted average number of ordinary
shares
136,830,300 28,332,353118,909,720 27,990,862 28,844,591
2021
Apr-Jun
2020
Apr-Jun
2021
Jan-Jun
2020
Jan-Jun
2020
Jan-Dec
Adjusted Earnings per share before and
after dilution, EUR
0.01 0.04 0.04 0.01 0.27
Calculation of adjusted earnings per share(1):
Earnings attributable to Parent Company
shareholders, KEUR
Adjustment for items affecting
2,686 1,860 4,006 1,382 2,886
comparability(2), KEUR -456 1 1,459 76 2,352
Add-back of amortization of intangible
assets from acquisitions(2), KEUR
492 623 1,080 1,231 2,431
Total 2,722 2,484 6,545 2,689 7,669
Weighted average number of ordinary
shares
136,830,300 28,332,353118 909 720 27 990 862 28,844,591

(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 for improved comparability going forward.

(2) Net of tax effect.

7 Depreciations and Amortizations

KEUR 2021
Apr-Jun
2020
Apr-Jun
2021
Jan-Jun
2020
Jan-Jun
2020
Jan-Dec
EBITDA 5,737 3,719 8,861 6,793 13,311
Depreciations -344 -294 -674 -592 -1,192
EBITA 5,392 3,425 8,186 6,201 12,119
Amortization of capitalised
development cost
-1,069 -633 -1,919 -1,194 -2,663
Amortization of acquired assets -641 -811 -1,406 -1,603 -3,166
Operating profit/loss 3,683 1,980 4,861 3,405 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 acquisition analysis is preliminary and may be adjusted in the coming quarters. 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.

KEUR GapFish
Goodwill 20,210
Other intangible assets 11,512
Other fixed assets 303
Short term receivables 2,218
Cash and cash equivalents 2,674
Short and long term liabilities -6,750
Purchase consideration 30,167
Paid by new share issue 5,275
Unpaid purchase consideration 4,508
Paid purchase consideration 20,384
Cash and cash equivalents in the aquired company 2,674
Paid purchase consideration net of cash and cash equivalents in the aquired
company 17,710

9 Financial income and expenses

2021 2020 2021 2020 2020
Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
Interest income 0 5 3 10 25
Interest expenses 44 -725 -241 -1,554 -2,052
Realised and unrealised currency
effects -224 1,160 728 81 -763
Financial income/expenses net -181 440 490 -1,463 -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
sales.
Adjusted operating profit/loss in relation to net
sales. To readers of financial reports, the
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
panelists in the last 12 months
-
Alternative Performance Measures, KEUR 2021 2020 2021 2020 2020
Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
Net sales previous period 21,821 16,035 42,967 30,740 71,951
Net sales current period 31,744 21,821 59,890 42,967 98,284
Net sales growth 45.5% 36.1% 39.4% 39.8% 36.6%
Whereof acquired net sales previous period - - - - 2 082
Whereof acquired net sales current period 939 2,960 939 6,122 9 346
Net sales excluding acquired net sales previous 21,821 16,035 42,967 30,740 69,869
period
Net sales excluding acquired net sales current 30,805 18,861 58,952 36,845 88,938
period
Organic growth 41.2% 17.6% 37.2% 19.9% 27.3%
Of which currency effects -1,001 79 -2,063 184 -1,216
Organic growth excluding currency effects, % 48.0% 17.0% 44.1% 19.1% 29.6%
Net sales 31,744 21,821 59,890 42,967 98,284
Cost of services sold -15,283 -10,687 -28,933 -20,480 -47,318
Gross profit 16,460 11,135 30,957 22,487 50,966
Gross margin 51.9% 51.0% 51.7% 52.3% 51.9%
Net sales 31,744 21,821 59,890 42,967 98,284
Operating profit/loss 3,683 1,980 4,861 3,405 6,290
Operating margin, % 11,6% 9.1% 8.1% 7.9% 6.4%
Amortisation and write-offs of acquisition-related
intangible assets 641 811 1,406 1,603 3,166
Amortisation of capitalised development expenses 1,069 633 1,919 1,194 2,663
EBITA 5,392 3,425 8,186 6,201 12,119
EBITA margin, % 17.0% 15.7% 13.7% 14.4% 12.3%
Depreciation of tangible non-current assets 344 294 674 592 1,192
EBITDA 5,737 3,719 8,861 6,793 13,311
EBITDA margin, % 18,1% 17.0% 14.8% 15.8% 13.5%
Items affecting comparability
Compensation related costs
0 0 0 0 70
Strategic projects 340 0 3,178 91 2,738
Other -914 1 -1,340 5 154
Items affecting comparability -574 1 1,837 96 2,962
FX gain/loss on operating balance sheet items -955 -115 -150 103 -629
Adjusted operating profit 3,110 1,981 6,699 3,501 9,252
Adjusted operating margin, % 9.8% 9.1% 11.2% 8.1% 9.4%
Adjusted EBITA 4,819 3,425 10,024 6,298 15,081
Adjusted EBITA margin, % 15.2% 15.7% 16.7% 14.7% 15.3%
Adjusted EBITDA 5,163 3,720 10,698 6,890 16,273
Adjusted EBITDA margin, % 16.3% 17.0% 17.9% 16.0% 16.6%
Adjusted EBITDA, excl FX gain/loss on
operating balance sheet items 6,118 3,835 10,848 6,787 16,902
Adjusted EBITDA excl FX gain/loss on operating 19.3% 17.6% 18.1% 15.8% 17.2%
balance sheet items, %
Accounts receivable 35,619 20,939 35,619 20,939 27,282
Other current receivable 18,441 14,019 18,441 14,019 19,569
Accounts payable -15,131 -7,361 -15,131 -7,361 -12,446
Other current liabilities -25,524 -23,053 -25,524 -23,053 -29,502
Net working capital 13,405 4,544 13,405 4,544 4,904
Bank overdraft facilities 0 8,658 0 8,658 5,310
Other interest-bearing liabilities (Borrowings) 4,388 5,008 4,388 5,008 5,366
Lease liabilities – Long term 1,882 2,115 1,882 2,115 1,811
Lease liabilities – Short term 1,049 619 1,049 619 959
Total interest-bearing debt 7,319 16,400 7,319 16,400 13,446
Cash and cash equivalents 51,665 10,158 51,665 10,158 6,909
Net debt -44,346 6,242 -44,346 6,242 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 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2
Net sales 31,744 28,147 31,603 23,714 21,821 21,146 23,590 17,621 16,035
Net sales growth, % 45.5% 33.1% 34.0% 34.6% 36.1% 43.8% 59.2% 40.1% 19.8%
Gross profit 16,460 14,497 16,449 12,029 11,135 11,353 12,806 9,659 8,411
Gross margin, % 51.9% 51.5% 52.1% 50.7% 51.0% 53.7% 54.3% 54.8% 52.5%
EBITDA 5,737 3,124 2,892 3,625 3,719 3,074 930 1,619 1,108
EBITDA margin, % 18.1% 11.1% 9.2% 15.3% 17.0% 14.5% 3.9% 9.2% 6.9%
Adjusted EBITDA 5,163 5,535 5,539 3,844 3,720 3,169 3,069 1,798 1,356
Adjusted EBITDA margin, % 16.3% 19.7% 17.5% 16.2% 17.0% 15.0% 13.0% 10.2% 8.5%
Non-recurring items -574 2,411 2,647 219 1 95 2,139 179 248
Operating profit/loss 3,683 1,177 1,045 1,841 1,980 1,424 -644 202 -78
Operating margin, % 11.6% 4.2% 3.3% 7.8% 9.1% 6.7% -2.7% 1.1% -0.5%
Rolling 12-month
Net sales 115,207 105,285 98,284 90,271 84,178 78,392 71,951 63,183 58,142
Gross profit 59,435 54,110 50,966 47,322 44,953 42,228 38,794 33,710 30,665
EBITDA 15,379 13,361 13,311 11,348 9,342 6,731 4,833 3,663 2,924
Adjusted EBITDA 20,082 18,638 16,273 13,802 11,756 9,392 7,421 5,085 4,527
Gross margin, % 51.6% 51.4% 51.9% 52.4% 53.4% 53.9% 53.9% 53.4% 52.7%
EBITDA margin, % 13.3% 12.7% 13.5% 12.6% 11.1% 8.6% 6.7% 5.8% 5.0%
Adjusted EBITDA margin, % 17.4% 17.7% 16.6% 15.3% 14.0% 12.0% 10.3% 8.0% 7.8%

The Board of Directors and the Chief Executive Officer hereby confirm that this interim report for the period January-June 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 17 August 2021

Cint Group AB (publ)

_____ _____
Niklas Savander, Chairman of the Board Tom Buehlmann, CEO
_____ _____
Anna Belfrage, Board member Daniel Berglund, Board member
_____ _____
Antonia Brandberg Björk, Board member Kaveh Rostampor, Board member
_____ _____
Rickard Torell, Board member Cecilia Qvist, Board member

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 report has not been subject to review by the company's independent auditor.

This disclosure contains information that Cint Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and information that Cint group AB (publ) is required to make public pursuant to the Swedish Securities Market Act. The information was submitted for publication, through the agency of the contact persons set out above, at 08:00 CET on 17 August 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.

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 June 2021, Cint had a global footprint of over 155 million connected consumers across more than 130 countries and more than 2,900 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 June 2021, the Company had 427 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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