Cint Group AB (publ)

And good morning, and welcome to the Q4 2024 results presentation for Ascent AB. My name is Patrick Comer. I'm the CEO. I'm joined here by Niels Boone, our CFO, and we're delighted to walk through our results with you. I think the overall headline is that there's no significant change from what we previously presented at our strategy presentation on January the 27th. So we'll be going through these details with you today. As a reminder, as to our business model, we are the world's largest survey exchange. Our primary business is the matching of survey respondents or users to the thousands of surveys that are run by our customers globally every single day. Alongside that, we also have a growing media measurement business, which has been capturing a lot of growth and attention with our company over the last several years. In terms of Q4, the overall story is flat, with further improvements to our EBITDA margin. We do have a slight decline in sales in our media measurement business, offset by lower sales in our CENT exchange. We've seen basically a pull forward of revenue from Q4 into Q3, based on the overall political polling environment in the US. Also, we have an ongoing platform unification and migration process that will be completed in 2025. In brief, our numbers. We had net sales and euros of 45.4, gross profit of 40.2, operating expenses of 27.5, and EBITDA of 12.7, all in line with expectations for what we previously announced as our numbers. some significant events during and after the quarter. I hope many of you were able to join us in late January as we talked about our new strategy, which we call CENT 2.0. We also talked about the rights issue, which we're in the middle of, as it were, where we're raising 600 million SEC, of course, subject to approval with our EGM. And also we announced our new financial targets, which were an update of our financial targets for the first time since our IPO in 2021. And reviewing those financial targets, I'd like to speak to them individually now. The first major target is the sales growth. So we're looking at a medium term organic annual sales of above 10%. Additionally, we look at profitability. We look to achieve and maintain an EBITDA margin of 25%. And we've added this leverage target of a net debt to EBITDA below 2.5x. Now, of course, we have to add the caveat that there might be some changes if there are an M&A acquisition. But to be very clear, that's not on the horizon at this time. We have not had a dividend policy in terms of paying out dividends expectation, and we'll continue that expectation on a go-forward basis. And we're also enthused about adding our sustainability target, aligning with Sweden's national climate targets and global best practices by 2045. So good to have our new medium-term financial targets out in the market today. Now moving on to the rights issue, looking at the overview of it and also the use of proceeds. As I mentioned before, it's approximately 600 million SEC. In the bullets, you'll see some of the details about the practice and process of it. We'll have an EGM actually this Friday to approve. But in terms of use of funds, about two-thirds or 400 million SEC will be for the debt repayment to reduce our overall costs. cost of debt, which will free up capital in the long term and reduce our interest payments and provide the opportunity for us to innovate and invest in our SENT 2.0 strategy. And then one-third of the balance, 200 million SEC, will be explicitly to our balance sheet and focused on our financial flexibility and the opportunity to invest and execute our SENT 2.0 strategy for an overall size of 600 million SEC. We were excited about announcing the rights issue on January 27th, explicitly because we had 46% of our shareholder base already committed to the round. And now I'd like to pass it over to our financial guru here, Mr. Niels Boone, to go through our financial update.

Thank you, and good morning, everyone. As Patrick already said, it's no surprise here. We gave a training update on January 27th and the numbers are the same. We just provide a bit more context and details in this section here. As a reminder, this is the last time that we have to say that we changed the P&L format last year during 24. You see the three changes. So we have net revenues instead of gross. We move from a cost-based to a function-based P&L structure. And we introduce the EBIT-A measure as the main profitability measure. So every number that you see for last year is done in a pro forma way to reflect these changes as well. Starting with the sales on the left, you can see I'm kind of talking constant currency. We had a decline of 4.4% that was driven by, as already mentioned, partly the elections in the US in particular, but also overall weaker demand in the market. Still kind of the same picture as we have seen in the previous quarters. Gross profits, similar compared to the quarter before. It's a bit below last year, and that's also on the back of lower sales because there's also a fixed cost element in there. So as a percent, therefore, it's a bit lower, but overall in line with expectations. And then on the right, you see the EBITDA, 12.7 million. That's higher than last year, both in absolute as well as percent margin, which is, of course, driven by cost savings that we had during the year because we have lower sales, but still nonetheless higher profitability. So in particular, we had cost savings announced in December as well. That's partly reflected in here, but will come out even more during 2025. Then going into the splits of sales, you see media measurement was growing by 8% in constant currency. The index change was down by 10%. That's a similar picture that we have seen across the year, except for maybe that media measurements used to grow faster, but that's also what we already discussed due to Two things actually, Q4 last year being really high and also the elections ending in Q3 more or less, so therefore a lower percentage growth rate here, but nothing that is concerning us, so it's still in line with our expectations. And on the right, we have the split by region. So you see APAC growing by 10% in a constant currency, and then EMEA down by 6%, and the US down by 5%. So I think also that is a relatively similar picture from what we've seen before in other quarters. And moving on to the full P&L, I think most numbers here we already spoke about at the high level. So you see the 12.7 EBITDA again, 28% margin. Maybe looking a bit at the full year, that's also good to look at. Of course, you see that we have about 4 million higher EBITDA profitability. on lower sales so this is overall a good like performance and improvement in terms of profitability and something that we're focused on quite a lot and yeah one thing to mention also is the 1.1 million impact from the bad debt allowance or the bad debt provision. We have a more sophisticated method now implemented and that led to this change in there. So it was good to mention that as well. And there was a bit of revaluation impact of 600k. Going to Cash flow. This is, of course, the most important in the end, right? It's all about cash. So this is the key slide, I would say. For the quarter, it was plus 2.5 million compared to minus 2.7 last year. You could see that the operating cash flow was actually below last year, but then we compensated a bit on the working capital side, being less negative than last year and therefore overall cash flow positive. If you look at the full year, you see operating cash flow before working capital being about 11 million better than last year. And this is, of course, ultimately what's driving everything below as well. Something we're really keen on to improve even further this year in 2025, but it's looking good already for 2024. You see working capital with negative impact a bit smaller than last year, but of course that we are working on to turn around. You will see that on the next slide after this. Cash flow from investing that has to do with capitalization of R&D expense in particular. So investing into new features, new platform, et cetera, for the future. And the cash flow from financing activities, you see that's more than last year. That has to do with down payments on the loan. Overall, we closed the year with 26 million cash in the account. And then the final one around working capital. So here you see that working capital increased a little bit, also as a percent of customer spend, which is the way that we look at it, driven by accounts receivable in particular. So that one increased by about 16 million, 1.6. At the same time, accounts payable also increased by 10 million. So that's kind of in line with what we've seen throughout the year because many of the parties' clients who are on the accounts receivable side are also a supplier on our other side for about two-thirds roughly. So this tends to move in line with each other. And therefore, overall, working capital is kind of similar. So it's slightly up, but also we had a strong Q4, of course, coming into that number. So it's by definition the highest point of the year. Having said that, of course, we are still focused on getting accounts receivable down overall. And this is one of the most important goals for this year as well. If not the most important one, we have a couple of most important ones, but this is one of them. I think that's actually what I have to say here.

Perfect. Well, thank you, Nels. So the reporting on financial in line with what we already presented, so no major change there. Good to get some greater details on cash flow and accounts receivable as well. We're excited about the future of CENT, especially with our new strategy of CENT 2.0. We think it's critical, of course, that we have a strong rights issue over the next coming weeks, and so appreciate your support as we move forward with that. And it's a big gear for us as we focus on this working capital, cash flow, revenue, and our new 2.0 strategy and the ongoing migration and consolidation of our systems. So appreciate your time and support, and we'll move to Q&A at this time.