Cint Group AB (publ)

Good morning. Thank you for joining everybody at Q2 Results. The way that we're going to do this is that we'll walk through the deck. So I will start off and I will talk through the first dozen slides or so, and then I will hand over to Niels Bohn, our CFO, who will walk through the financials in more detail. Let's start with slide one. So slide one is the same as before. This is the SIN exchange. Basically, we join panel providers who provide access to millions of respondents to companies that want to get their surveys answered. So we are the world's largest survey exchange. And just on that, size is important because in any marketplace the buyers go to where uh there's the most choice the most supply the the where they can get access to large amounts of people or niche audiences and suppliers or panel providers go to where uh there are the most buyers because they get the best price in there and they obviously um get to monetize their panels so size is important which is why We've said here that that is the world's largest. So let's move on to slide three. Broadly, it's sort of a low drama quarter in terms of the, you know, the economics of the company. As we've said here, stable sales, what we mean by stable, I'm talking year over year. We're pretty flat year over year. There's some, obviously behind that, there are some puts and calls. In particular, the media measurement business continues to have a very strong performance. Very pleased with the way that that's going. And as I've said in the report, we're investing more there. We think that there's more opportunity and we are we are going harder at that part of the business. And the Sint exchange is no secret that the the consolidation of Lucid and Sint in particular, but also Lucid, um p2 sample and gap fish um is complicated it's extremely complicated and it's and we have a very clear plan and we're executing our plan step by step but we are the the nature of this kind of work means that we're very internally focused or rather more internally focused than one would ordinarily be when you're not integrating large bits of technology um so that has an impact on our ability to innovate and really push that side of the business forwards, which is why there's so much focus internally from me and the rest of the management team on integrating these technologies. Once we have got that done, we enter a whole different phase of the life of this company. There's incredible focus internally and extraordinary levels of work going on to integrate this complicated technology stack. So it is progressing. There are a couple of small delays in certain areas. The new, what gets called internally user interface, but really it's the applications in exchange. We're rebuilding it. We're rebuilding the front end. We're rebuilding the user experience. We're taking years and years of learning and baking into a new product. We launched it internally in Q1. We're testing it with customers, and they've just been more bugs than we were expecting. We've fixed nearly all of them now, but it's more complicated than we expected once we started road testing it. There's a few months delay on that, and then there's a couple of months delay on the panel management system that will allow us to plug in different types of panels, different types of communities of suppliers, of respondents. So it's a hugely important piece of the new SYN exchange. That's a couple of months late, but it's going to launch in Q3. So there's lots of amazing work going on, but there's a couple of delays in a couple of areas, but nothing that is not unexpected in a project of this scale. And then the final two points here, migration of managed services customers is on plan. So managed services customers, this is where we use our product and our technology on behalf of our customers. So that's going super well. And then finally, we took out about a million dollars a month, even close to a million euros a month in Q2 from our cost base. 10% of the cost, the personnel cost for the company, which we've taken the cost of that exercise in the P&L in Q2. So the redundancy payments are all accounted for in Q2, but obviously that benefit starts to kind of accrue in Q3 and beyond, because that will happen in June. So, but that's a nod to our, you know, very diligent work on cost management. So if we go to next slide, please, slide four. Figures in brief, as I said, nothing too dramatic here. Obviously, we want to get the company back to growth. I mean, there's no secret there. And we didn't. Q2 was not a growth quarter. Now there was a, we deprecated, we turned off the P2 sample platform in Q2. And it's a complicated thing to sort of describe the impact of that, but basically the traffic that was going through that platform was routed through to the SYN platform. we missed a couple of things during that migration or when we turned that off, which caused some of the programmatic buyers to not be able to programmatically buy basically, or they weren't getting the right price through the platform. The programmatic buyers that were using the P2 sample platform weren't getting the right data through the API on the SYN platform, which we think it's hard to actually I'd be absolutely kind of confident on this number, but we think it's a minimum of two million impact in net sales in Q2. Now, if that was an error, like, you know, hands up, we made mistakes. That was that was an error, self self-inflicted, as it were. But if that hadn't have happened, you know, the company would have, we think, been marginally in growth for Q2. But it did happen. So let's not get away from it. The impact of that, though, was mainly in May, a little bit in June, and we think will be nowhere near the magnitude of what we saw in Q2 going forward. So we're pretty confident that we've pretty much solved that problem. But as I said in the report, this is a complex process and you know, we can't predict everything that's going to happen. And there might be other issues as we as we deprecate platforms, turn things off, unify our tech stack and move all of our customers onto it. And as I said, to get to a new phase of innovation and growth. So, yeah, the numbers are there on the screen. I mean, I won't read them out because it's self-evident. But as I said, net sales, slight decline there. Good cost control, but we took significant amount of redundancy costs in Q2. Next slide, please. Slide five. Focus on product integration and customer migration. I've said this already, but it really is, and I said this when I came into the company, the mantra that we have internally is consolidate, standardise and optimise. That's the phase. We're still in that phase. We're getting through it. As I said, I'm super proud of the team and all the work that's going on. It's extraordinarily difficult, but everybody is really working very diligently and we have a very clear plan. And as I said earlier on, there's a couple of delays in two particular areas, but in general, everything else is on plan. And also, you know, decommissioning, deprecating one of the four platforms that were there when I joined, getting that done is a landmark moment. And then we've got, you know, we've got, we've already deprecated Gatfish, we've deprecated P2 sample now, we've got the last job now, which is integrating SYNT and Lucid and releasing our new application. And that, as I said, is the core focus and then migrating our customers. So final point here, investment in automation, AI, and the new state exchange give customers feedback on the feasibility of getting their surveys answered, saving them time and money. We've spent a lot of time, our data science team has spent a lot of time on this feasibility feasibility functionality in particular. So what this is, is a customer comes in, they have a complex request or a complex survey that they want to get answered, and they've got a whole bunch of different respondents that they want to have answer that survey. And we are able to tell them, how quickly they can get it done and for what price ahead of time. And this is the best in the market. It's driven by pretty advanced AI and it works super well. And it also works extremely quickly, which is important for programmatic buyers. So very proud of that work. And that was rolling out in the new platform. which is just a small hint to the fact that we're not just consolidating, we're not just sort of cleaning up, we're actually innovating as well. And that leads us on to the next slide, slide six, media measurement. More resources are going into this part of the business because it is performing super well. It's high margin, it's high growth, and we think there's more to come here. So just I've called out three things that we're doing here, adding social media data, insights from social media data, as well as the ability to measure digital display ads out of home, so in public. So this is a new functionality that we added during the quarter, and we've also upgraded the reporting to analyze the results that come back using more advanced techniques, AI. So just very briefly, the media measurement business is super interesting because we ask the people who have actually seen the ads, we can match through cookies and mobile ID devices and hashed emails, the people that get served advertising, digital advertising, via Trade Desk, Amazon, Netflix, Disney, and so on, We can ask them before, during and after the campaign, their opinion about the brand. So this is about brand uplift. And as we have the world's largest exchange, so we have the ability to get to the most number of people. And so we're in a unique position here to actually give brands the sort of emotional response, the brand uplift data around their around their advertising. So obviously you've got behavioural data, you know, click here and buy and so on and so forth. That's that's obviously very important. But so is brand and so is attitudinal data. And Cint is in an amazing position to be able to deliver this attitudinal data at scale. And it's obviously that part of the business is doing extremely well. But I just want to give a little bit of a flavour of what this media measurement business is. We occupy a very interesting and quite unique space within this sort of area of understanding how your paid media is performing. If we move, so Nils, do you want to take it from here on the financial update?

Yeah, thank you. You can go to the next slide, please. And the next one. Yeah. So just as a reminder that we changed our reporting format as of Q1. It's the same slide as we showed last time, but it didn't get picked up everywhere completely. So I thought it's good to remind everyone. So we have the net revenue recognition instead of the gross revenue recognition that we had before. And in terms of costs, we have the function-based income statement right now instead of cost-based. And we have a new measure called EBIT A and not EBIT DA to also include depreciation and basically give a better representation of the company performance. Next slide, please. So overall, the numbers we just saw already briefly with YAS as well. You can see here the seasonality pattern that we usually have. So Q1 was low, as it's always one of the weakest quarters or the weakest quarter. So we had a nice rebalance in terms of revenues. Year on year, it was still down. However, without this temporary supply issue of the migration of suppliers, we would have shown a small growth. But it is what it is, as Jas mentioned as well. on the gross profit side, you see also the nice rebounds compared to Q1 in particular. Year on year, it's still a little bit lower in terms of margin. There are two items in here. One is what we call direct labor costs. That's people working directly with the projects basically and with the clients making sure that the projects are happening. And the other part is hosting costs and hosting is the bigger one. This deprecation of P2Sample that also triggered the revenue issue of 2 million, it's also going to save costs on the hosting side actually, which will be visible more on Q3 onwards. So it is overall a net positive. It's just that right now during this migration, you lost on the revenue side and you don't see the full savings yet. And going to the right on the EVTA, you see also a good improvement, both compared to the last quarter and also year on year, despite the slightly lower gross margin. And this is due to lower operating expenditure, of course. Let's go to the next slide, please. So here you have the usual split between Synth Exchange, the main core business, and Media Measurement. It's similar as what we've seen in the previous quarter since Media Measurement is growing quite rapidly, and that's ongoing still, whereas Exchange is in decline. On the right, you see the regional split, and you also split out now from the Americas. the media measurement business because it's mainly in the Americas. So therefore, the Americas actually look quite stable here and here. However, that includes lots of the media measurement business. And without that, it would also have shown a decline similar to the other regions. Maybe we can go to the next page. There we have the overall P&L. We already touched upon the numbers, of course, briefly until EBIT A. I think there's not so much to add. There's a lower cost in OPEX, in particular, G&A. R&D expenses were a bit higher than last year. That has to do with lower capitalization of that work. So that's also what you will see later in the next page. Overall, 7 million EBIT A instead of 6.3. And then we have items affecting comparability that I need to highlight. So the so-called NRIs, non-recurring items. Here we have two categories this time. So we used to have only one category related to the acquisition of Lucid and the integration of that. And that one we always said was going to end in Q2 24, which is where we are right now. And that's exactly what happened as well. So this is the final time that you will see NRIs related to debt. It was 2 million, 2.0 million. And the other part is what Yas also briefly mentioned already. We had this reorganization that we announced externally on July the 1st. 2.9 million NRI is related to debt. That's a provision for expected severances. So that's one of that also shows up here is mainly non-cash in Q2 and coming later, like during Q3, maybe a little bit in Q4 in terms of cash. So overall, EBIT still including all those effects also improves a little bit. Next slide, please, on the cash flow. So overall, that cash flow was kind of stable, so it was 500K minus as compared to minus 10 million last year. So that's a big difference. You see the different elements. Operating cash flow improved by 3.3 million, and that was including 0.3 million higher interest payments. So it would have been 3.6 better year on year without that effect. Then the second element is, of course, the working capital. So there we had a minus of 2.2 million compared to 8 million minus last year. So that's better year on year, mainly driven by accounts payable. And then here you see the cash flow from investing activities, which is mainly the capitalized developments. Both what I mentioned before at the P&L as well. So that's lower than last year. So we capitalized less of the R&D costs, and therefore you see a small increase of R&D costs in the P&L and lower amounts here. Yeah, overall cash, 30.8 million rounded. And then that's, yeah, that's maybe also good to highlight actually. We also had another loan amortization payment of 2.3 million in Euro. That was the second one. We had the first one in Q1 and the second one now in Q2. So therefore, the debt amount is less. Net debt, of course, goes together with cash and increased to 79.5 million. Next page, please. This is my final one. It's about working capital deep dive. It's a bit of a mixed picture, so you can see that it's decreased compared to the previous quarter by 2.5 million in absolute amounts, and also compared to customer spend, it went down from 10.4% to 9.7%. However, when you look at the drivers, you see that cost receivable increased by a lot, by 10.9 million, and account payables by even more, and therefore the net effect Um, it's positive, but of course the thing that I'm personally focused on the most is cost receivable and bringing that down. So this is one of the main areas that I'm working on with not just the finance team, but also together with commercial team, even with, uh, also other teams involved to bring this down. It's, it's a complex, um, uh, kind of structural issue, but we are, um, getting down to the bottom of it and there are so many elements. that are coming together to improve this. However, you don't see it yet in the numbers here. And the good news is that we are not in dispute with clients about that they don't agree with the invoices. It is more of finding ways of how to get them paid and efficiently getting them paid structurally also going forward. Yeah, so I think overall, quite confident that we can solve this over time, but As you can see here in the numbers, it's not shown yet. I think that's actually my final slides and we can go back to Giles.

Thank you, Niels. I'm going to repeat what I said earlier on because this is the focus of the company. Slide 15, please. Consolidate, standardize, optimize, create a company that is um lean and efficient and um able to then refocus on innovation and uh building uh building technology that will will drive the company forward so it's the same message we're still in the middle of it um but it is going it is going pretty much apart from a couple of small areas to plant and as i said earlier on i'm you know very grateful to my team and the rest of the company for the uh the work that's going on it really is um you can't see it from the outside but um it is work we're working incredibly hard to to make this happen so um yeah it's a very sort of repeat of what i've been saying for a while um but hopefully uh that gives some confidence that we are actually doing it because we are um so i guess let's move to q a uh because um we've said i think all we need to say thank you if you would like to ask a question please press star followed by one on your telephone keypad if you would like to remove your question please press star followed by two

When preparing to ask your question, please ensure your phone is unmuted locally. Our first question goes to Thomas Nilsson of Nordea. Thomas, please go ahead.

Yes, hello. I have two questions. First, in terms of the reduction in sales of €2 million in Q2 due to panel providers not being on the new platform, what do you expect in terms of effects in the second half of the year from this And secondly, networking capital is still very high as a percentage of total customer spend. What trends do you see here in networking capital? And do you see any risks of bad debt in accounts receivables, which now stand at 109 million euros? Thank you.

I'll take the first one, Nils, and then maybe you can answer the second. We, as I said earlier on, we think that this particular issue is pretty much in the rearview mirror. So it's difficult. I don't have an estimate of the impact in Q3 or Q4, but we think we're pretty much back to kind of normal sort of operations after the deprecation of P2 samples. Yeah, we think that this issue is pretty much behind us. Niels, on the AR?

I'll take the second one. Yeah, so as I mentioned, indeed, I agree and we all agree that it's still quite high. We do take bed-dead provision every month. And so we are, I think, good with that as well. As I mentioned as well, we are not in any major disputes about the amounts. So from that perspective, I'm quite confident that it's all collectible, in particular with the bigger clients. They're also quite healthy companies. Many of them also share their financials publicly. So from that perspective, and also the way they collaborate with us on solving this problem, because it's a strong collaboration with clients, obviously also here. I don't see major risks from that perspective, of course. There's never zero risk in life, but overall, no major bet that risk in here. And also, as I mentioned at the beginning, we already take this bet that allowance as well. I hope that answers your question.

Okay, thank you very much.

Great, thank you. The next question goes to Predrag Sabinovic of Carnegie. Predrag, please go ahead.

Thanks, operator. Thanks for taking my questions. Let's start with OPEX. I think if we look at the underlying OPEX trend, it's improving. So is this the level you have here, do you think that is representative going forward? Can this kind of OPEX improvement stick I think you call out your decommissioning some platforms. So that suggests that this could be a new normal. Is that correct?

Yeah, there are two elements to my answer. So short one is yes, that's correct. And indeed, we have deprecated one part of the systems. It's not the biggest part, but it will help. That part will be seen in... cost of service assaults in the gross margin. And the second thing to the answer, second part is that we just have this reorganization announced, right? And that has not been shown yet. So that will come during, yeah, Q3, as of Q3, I have to say. So this, yeah, we have a strong cost focus and we keep on focusing on costs in general where we can optimize, we will optimize and it's like a strong focus of the whole company.

Yeah, and do you want to say a little bit more about that, the cost takeout, Niels, the quantum and the fact that, you know, just repeating that that wasn't even in Q2, right? That is net new cost reduction for Q3 and beyond.

Exactly. It's mostly in the commercial team, so it would be here in the P&L, in the sales and marketing expenses line. It's about 900K a month in euros, so 10.9 a year, as we expect from this, at least. That's going to come and be visible going forward.

Thanks. Okay. A follow-up question then on cash flows. There is a free cash flow improvement definitely from the last quarter. But if we just look at the deltas between the accounts receivables increased quite a bit sequentially and then payables, there's also a big change. If you can just discuss these changes, is there anything you want to flag or we should be aware of? Because they're quite big on a sequential basis.

Yes, exactly. I think overall, I already discussed it a little bit before, of course, maybe the combination between accounts receivable and accounts payable, what's maybe good to know is that many parties can be on either side from us. So we have them as a supplier and a customer at the same time, and often we discuss both sides together in parallel so that we make sure that we can clear both things at the same time. And then in the meantime, sometimes that means both are going up, right? And then both can go down within one week once we have kind of sorted the administration out on both sides and can wire each other money. So that's maybe one additional element that's not so obvious from the numbers themselves. Other than that, another factor that I didn't mention yet is that June is our strongest revenue month generally of the year, of the year so far, I mean, because of course IQ4 will be better seasonally speaking. But yeah, so June has the highest revenues so far in the year. And of course we took the snapshot on June 30th of the accounts receivables as well. So that includes a lot of the newer revenues in there too. And that's another element that drives it up like always then in at the end of Q2.

Yeah. Okay. And the final question I think was in the last quarter you discussed, I believe it was both Netflix and perhaps Disney as well as customer wins within media measurement. If you could walk us through your expectations with those customers now that it's passed some time. what can they bring, why they chose you, the opportunities around this partnership?

Well, we're not going to give guidance on the specifics, on the numbers. We've not done that before, and we actually don't break that out in the internal forecast to that level of granularity on a month-by-month or quarter-by-quarter basis. but i'll sort of repeat what i said before the the reason why they that those um companies chose us uh is is there it's not a fluke it's not there's good reason and and i i'll kind of refer you to my answer earlier on which is we have the ability to ask the people that see the ads before during and after the campaign questions around brand kind of perception at a scale that nobody else can do. So it really is a very kind of you know, advanced and important solution that we can give to the media evaluation sort of use case or industry or advertisers in general. So, yeah, it's, it's, it's a very good product. It's a very, it's a, yeah, it's no fluke that it's, that it's performing the way that it is.

All right. Nice. Thanks so much. Thank you.

Thank you. The next question goes to Daniel Eberg of Handels Banking. Daniel, please go ahead.

Thank you, operator, and hi, Giles and Nils. I have a question first on, you mentioned that you more or less do a rebuild on the same Lucid platforms and that you also add new features on top of this. Can you give us more on the launch date and also if possible, if you use a lot of external IT consultants, et cetera, that will be less needed ahead, and if any magnitude is possible to give.

So launch date is, we don't have a specific launch date that we've gone public with, but it's Q3. We have a lot of our suppliers, especially the most important ones, all the panel providers, uh who who are plugged in to the new syn exchange um and you know we're very happy on on the panel provider side um we have we're adding bits of functionality to the platform that will get it to a point where we can roll out to to more and more customers for them to use themselves rather than us using it uh for them um the second piece of your question external consultants um uh we're doing all of this work ourselves right these are internal teams so um as as they finish the work then they can move on to innovation and you know uh extending functionality and so on and so forth so that's what i say about consolidate standardize optimize and then and then we put ourselves in the position to really focus the r d department on innovation which is going to have a you know significant medium to long-term impact

Thank you. And if I may also ask you on the revenue per complete on the decline and mitigate some of the volume uptake, obviously. So my question is, is this mostly due to lower pricing on average, or is it more about less complex questionnaires as a trend?

Well, those two are very related, right? So it's both of those two things. And in particular, the polling questions. So for the US election, for example, and in the UK as well, but more in the US, the questions that pollsters ask tend to be shorter. and therefore sort of cheaper from a cost per interview perspective. So that I think has had an impact. We haven't done the analysis to say exactly what, and it would be quite difficult to do, but the shorter interviews are obviously cheaper and the shorter interviews

tend to be more in that you know there's more of them uh in in polling make sense okay so if you would yeah of course but if you would do an apple with to apply you know the same it's supposed to give some kind of full park price reduction in the market and the range sorry i did not say that say that again please Now, if you're just for the different complexity, would it be possible to say anything about the Apple-to-Apple price decline that might be there?

Yeah, we haven't done that analysis. I mean, so I would say that it's reasonably stable. Yeah, I mean, one of the things that we will look at from an ongoing perspective is how we can bring in more choice on the panel side in order to give our buyers the ability to access what, you know, higher value respondents and different, you know, not just general population. And so these are all these are sorts of things that we're looking at in order to sort of drive higher cost per interview.

Perfect. I mean, it was a funny question on media measurement, uh, uh, uh, obviously mostly in the Americas, but, but, uh, how is the potential to, to bring this on more on today back in the media?

Um, for sure there's potential, um, the, the it's, um, It's structurally setting this up. We have to do a deep integration with the platforms. So it's, you know, that makes it very, very sticky, obviously. But it's not something that you can just sort of press a button and throw enormous resource at it and expect it to sort of just roll out automatically, as it were. We build it sort of brick by brick. We do have a team that we, I think, started last year from memory in EMEA. And we've also started to deploy commercial folks in APAC. So we are looking to expand, but we still see huge potential in the US.

Perfect. Thank you.

Have a great summer. Thank you.

Thank you. And as a reminder, if you would like to ask a question, please press star, followed by one on your telephone keypad. The next question goes to Charlie Brennan of Jefferies. Charlie, please go ahead.

Great. Thanks for taking my questions. I'll do three if I can. Firstly, can I just go back to the working capital issue? we've spoken about it a bit already, but can you just remind us what the targets are that you're working towards and how much extra working capital do you think is tied up in the business that doesn't need to be there?

Yeah, I can take that indeed. I think, yeah, so overall, it's of course dependent always on customer spend, right, as well and the revenue level. So if you take the current situation where we are, I would say a reduction of about 15% should be possible structurally. So yeah, you can calculate that from the 109 basis here. However, to get there, that will not go in a straight line, but client by client, right? But yeah, that should be possible in there.

Just to be clear, is that 15% of the net working capital, so we're focused on 5 million euro?

I was referring to accounts receivables. Then it depends on payables that develops as well. It's hard to be super exact here, right?

This is directional. Secondly, can I just ask about the overall market environment? You're broadly suggesting that growth will be flattish this year. What do you think the market's growing at? And when you try and re-accelerate since, I'm just trying to get a sense of whether you're relying on the market needing to re-accelerate or whether there's a obvious opportunity for you to reclaim some market share?

Yeah. Look, I think both. I like to focus on what I can control rather than market dynamics. And I've only been in this market, as it were, since April last year. So I'm probably whatever I say is take it with a grain of salt because I don't have years and years of experience, but I do know that the sentiment from the board is that there's a sense that SYNT was more susceptible to the macro environment than was somewhat expected. So I think from a market perspective, the sentiment is, as the market improves, so will send. And then from reclaiming, that's really around, the way I think about that is, around the innovation of the product and what we can offer to the market. And we have tons of ideas on how we can improve our offering and either reclaim, as it were, as you said, some areas of loss or net new because the boundaries and market research, as it were, are somewhat blurry and it's not, it's difficult to say okay there's this market there's we have buyers and suppliers who are the same company so it's not easy to put a sort of a hard line around but my view is that we will innovate around product and we will get very disciplined around the commercial organization and that will drive performance of the company you know standard stuff basically

Okay. And then lastly from me, you very helpfully tried to simplify some of the communication to us. And I think I appreciate the move to net revenues and EBITDA. Just against that backdrop, what was the rationale of using EBITDA as the primary performance metric in your latest LTIP scheme? I guess the difference between EBITDA and EBITDA is going to be some of the depreciation. At some stage, we're going to see some of these intangible assets reflected through the P&L. If you achieve the sort of 15% EBITDA targets for your LTIPS, what does that relate to in terms of EBITDA growth?

Yeah, that's a very good question. Neil, I don't know if you know the answer to that. Well, there's a bunch of things in there, Charlie, aren't there? Your question was why EBITDA and not EBA. My answer to that, and Neil, you might have a slightly different point of view, but is that it's for consistency and ability to actually give shareholders year on year sort of comparables. So it was really in order to make it somewhat easy to present to the market. That's my view on that. There was no other real reason. I don't like EBITDA. I think you can just muck around with it far too much. I like simple metrics, as you said, Charlie, that give a very clear read on how the business is performing. But that's my answer on that. There was no other reason. But Niels, you might have a different point of view.

Yeah, no, exactly. And I think why the program of the LTIP is still on EBITDA is simply because of a timing issue. Because we had to get the shareholder approval in place, of course, and that was already done on a communication of EBITDA, which was the metric that we were still on by then. And then at the end... We could not or did not want to confuse people anymore by changing also that in there. So I have not modeled it out separately, like what it means exactly one-on-one in EBITDA. But of course, both are moving in the right direction, right? And we are going to optimize no matter what for EBITDA as well. Meaning we take the overall R&D expenses into account and make sure we optimize those. kind of regardless of capitalization of those costs and depreciation of those costs. This is how we look at it internally anyway. But yeah, this is more for a practical reason that we have the EBITDA in the LTIP and EBITDA in the reporting.

I'll put my hands up and say I'm not particularly good at forecasting, depreciation schedules. Exactly. Is there anything you can do to help us in the scaling of depreciation going forward?

Yeah, I would have to get back to that. It's also dependent on the whole R&D roadmap for the next few years. We're talking a long period here. I think maybe Gelsje didn't touch upon it too much, but we are working towards a strategic plan for the next few years. And then also it becomes more concrete and more clear for us what exactly we will be working on. And then in particular, we'll be working on also with the R&D team, which is the capitalization part that then will be depreciated as well. So it really depends on the projects that they will work on in terms of innovation, right? That's what the capitalization is. But before you can make any forecast of the depreciation schedule in itself, you need to forecast what they're going to work on. That's even more interesting at this stage. But I appreciate the question.

Okay, I'll leave that to your budgeting then. It's going to be a lot better than mine. Good luck for the rest of the year. Thank you. Thank you, Charles. Thanks a lot.

Thank you. We have no further questions. I'm going to hand the call back over to Giles for any closing comments.

Yeah, thank you for joining us today. As Neil said, we're working on a three year plan. I mean, that's obviously an ongoing thing, but we're putting a lot of effort into that right now. And as we start to shift our gaze towards post integration, live post integration, and a return to a more innovative innovation mindset um and along with that we will um we'll do a you know a more of a look forward market day with with um uh with with updated targets in in q4 um so just kind of end on that but uh Well, a final thing to say is that, as I said at the beginning, somewhat of a low drama quarter is our view on Q2, but it masks a ton of work that is going on inside the company to create a unified platform and set us up for medium to long-term success. And thank you, everybody, for joining, and thank you for your questions.