Well, good morning, everyone. Appreciate you coming in today to be a part of this investor presentation. And also, those of you who are online, welcome as well. Today, we're going to be talking about the Cint strategy, what we call Cint 2.0. We'll be also introducing and speaking about our targets in terms of our financial expectations. And finally, as we announced this morning, a little bit about our rights issue. My name is Patrick Comer. I'm the CEO of Cint, and I'm joined by Niels.
Good morning.
Our illustrious CFO. We are going to go through a presentation and then do Q&A after. If you have questions online, you can see a spot there to ask your questions now or at any time during the presentation. So feel free to bring up questions at this stage that we'll address at the end of the presentation during Q&A time. So with that, I'm going to get right in. Our agenda for today, first, we're going to relook at Cint as a company that's in two different industries. One is the survey business, but also media measurement.
Our investors have asked over many quarters to spend more time on media measurement because it's been a growing part of our overall revenue and the fastest-growing product within Cint.
We're going to go deeper into the opportunity and the details of how the media measurement business provides more TAM expansion for Cint. Then I'll ask Niels to come up to go through a Q4 update. And then after that, we'll go through what we call Cint 2.0, which is the strategy for Cint on a go-forward basis. Then we'll review our updated financial targets and speak slightly about our rights issue. And then after this, of course, we'll go through Q&A. So that's the rough agenda for this morning. So thank you all again for being here, and I'll dive right in.
Thanks, Niels. So at its highest level, and so those of you who may know us understand this quite well, but I think it's important to start as to what our fundamental Cint Exchange business has been.
Essentially, we offer customers, mostly on the B2B or brand side, in over 70 different countries, access to audiences. And these audiences are accessible through programmatic, which means real-time exchanges. And we provide deep matching, automation, and the ability to get profiling data for survey research globally. And we connect these B2B customers with over 300 million respondents in over 130 countries worldwide. So we are the world's largest survey exchange. Of course, Cint started in 1998, and we had our very large merger of Lucid in 2021 with around 800 employees on a global basis.
Going a little bit deeper into the overall Cint Exchange, at its core is the platform itself, which does the matching of survey respondents and surveys on a global basis.
Alongside that, we have media measurement, which uses the Cint Exchange for its speed and scale to provide the ad effectiveness and brand lift product to our customers, and it's important to note for these buyers, they access our products through three main methods. One is what we call managed services, mentioned on the slide as MS. This is where Cint provides and walks through and works with the customer directly. We may run the survey. We may actually provide the audiences directly.
Customers also use our user interfaces, both on the Cint Exchange side, but also the media measurement side, where they log into our platform in a SaaS environment and use our product themselves, and on a growing basis, we have APIs, where our customers integrate their platforms directly with us.
There's a direct integration between the Cint Exchange or our media measurement products to our customers' platforms themselves for a direct integration. Underpinning the Cint Exchange is our relationship with our suppliers. We have hundreds of different partners that we work with that provide all the audiences, some of which we host on our own Cint Engage platforms ourselves that are both proprietary and hosted, and then a large number of suppliers which are API integrated, which provide all these respondents to our customers on a worldwide basis.
This is the overall Cint offering, and we are at the center point of providing on a global scale the largest pool of respondents to our customers possible. What's interesting to note is we are critical to the overall market research value chain.
Just to do a walkthrough of how this may work, typically I talk about Coca-Cola being an important brand, and they may have a business question about a new product, a new service, a new advertising campaign, and they are going to first design the project, understand the research question, and how they're going to answer that question using survey research.
Once they have that project designed, they will go through a survey programming phase where they go into a platform like a Qualtrics, a SurveyMonkey, any of these global survey data collection platforms, and they will program that survey with all the questions that you've seen. That's where Cint comes in, is that they define as a part of their research project which particular audience they're looking for.
With Coca-Cola, it may be someone who drinks soft drinks or any of their other products, and they want that particular audience to answer those survey questions. We expose that audience, meaning who Coca-Cola is actually looking for, to all of our suppliers, and they will feed in respondents or users that fit that audience profile from their databases or for their capabilities. So we have the Cint survey platform that our customers use to identify and manage which audiences they're looking for.
And then we have local and global panel owners that can see which audiences are necessary and feed those users up into those surveys in order to fulfill those data collection obligations. Once that survey has been taken by dozens, hundreds, or thousands of users, you go through a data collection and analysis phase.
The data collection phase, the survey is live, data's collected and cleaned, and the analysis bit is where the researcher comes in and says, "Well, what does it all mean?" and then provides the answer back to the customer, in this case, Coca-Cola. That's the entire research value chain. What you can see here is that Cint plays an important critical role at the center, which is how you get the right audience to take the right survey at the right time. That's a critical part of the entire research value chain. Media measurement is similar but different.
In this scenario, you're not talking about a research question. You're talking about a campaign of advertising where you have a marketing manager who's actually launching a new campaign. It could be a Coca-Cola as an example. They want to understand how is that campaign performing?
Is it being received by your audience in the way that you expect in terms of a number of key KPIs that they are measured on: brand awareness, brand lift, brand effectiveness, and several more? It's critical to these marketing managers that the money that they're spending every single quarter on all these brands that you see globally are performing at a high basis. And the method by which they actually understand that performance is through media measurement. But it uses a similar value chain where they'll actually design a survey that will ask these questions.
They'll actually ask users who have seen the ad whether or not they were impacted by it. And so it uses a very similar value chain, but the purpose is different. This is for media measurement to understand the relative effectiveness and capability of a brand campaign.
Once again, what you'll see here is that Cint is at the middle of this entire value chain and critical in terms of the data collection to understand the effectiveness of brand campaigns globally. What you'll also notice is on either end, you have a different set of customers. Previously, you saw some brands, some market research agencies. In the media measurement space, we have a different set of customers that expands our overall TAM and addresses other types of the market. For example, Trade Desk is one of our key partners there. So let's go deeper into media measurement.
You might have seen over the past quarters a lot of growth and opportunity in that space, and I want to speak to this on a more detailed basis. So once again, we talk about that last sentence, your campaign in flight.
So that means once you've launched a campaign, once the advertisement is actually out in the market, how is it actually performing? And one thing to note is a lot of these campaigns will run for quite a period of time, months and quarters. And so while that campaign is in the market, the brand, the marketing manager wants to know how is it performing, how is it going? And this is critical for measuring not only which campaigns, which advertisements are doing well, but they may want to adjust on the fly. They may want to make changes so that they can get better performance.
It may be that a particular advertisement is doing better or a particular publisher or process is doing better, and they need to make changes over the lifespan of that campaign. And this is what we provide to our customers.
What you'll see here is this concept of additional brand lift measurement. But the last few words are critical: cross-platform. Cross-platform means across the different types of advertising that's possible today. Advertisement has gone through a rapid fracturing, meaning there are multiple new ways for you to show advertising. Years ago, it was just linear TV, out of home, etc.
Then with the advent of online social media, the different methods for you to show advertising to your consumers have grown exponentially, which means it's gotten harder and harder for the brands and their marketing managers to understand the effectiveness of their campaigns across all those different advertising options. So what we provide at Cint is cross-platform, meaning you can see the relative effectiveness of your campaigns across multiple platforms, which is a key value add to our customers as they're looking to understand how well their campaigns are performing.
And what you should know is that brand lift, which is the key KPI that we help our customers measure, is the number one priority for all performance metrics of our customers across the board. It is the key thing that they are looking for, and they may be measured on as a brand marketer as to how well brand lift is occurring across their advertisement. It is their key KPI, which just shows you a little bit of the criticality for them in understanding how it performs.
So going a little deeper into this, how has it been that Lucid measurement, what we call media measurement, has been so well performing over the past few years as compared to other competitors? And it's critical to note that we've been in this business since 2015.
We have a decade of experience providing media measurement to our customers, and we've been growing at a rapid rate since that time. And there are two key things that are driving success with our customers. One is scale. So what we offer to the market, which is different than our competitors, is the ability to measure smaller audiences or smaller campaigns. For example, let's say you have a small country or even a city within a country you're trying to measure because you may have different advertising campaigns in each region or in each city.
Historically, you could not run brand effectiveness in each of those smaller audiences. It was not able to do. But because the Cint Exchange has such large scale, we could provide measurement to smaller campaigns, to smaller audiences. We actually increased the TAM and size of market.
Brands who could not do this type of measurement, who wanted to, now could. So the scale of the Cint Exchange made it possible for our customers to now run brand effectiveness campaigns with a lot of different brands they could not do before. So the scale created the opportunity because no one else could do this reach. But also speed. As I said before, a lot of these campaigns run for months, even quarters in time.
And the historical timeframe to receive information back from our competition was in the weeks and months, which meant that you did not have a lot of time to adjust your campaign while it was in the middle of field. What we introduced was real-time feedback to brand managers about effectiveness. As soon as we start collecting data, we start exposing it to our customers.
And what that means is that they can make changes and understand the effectiveness of their campaigns at a much faster rate, which means the value of the KPIs are much more important to them because they can make changes on the fly. So these two things were critical to the success of the media measurement business. The scale of the Cint Exchange means we can go after smaller audiences, and our APIs and product meant that we can do it at a much faster pace, giving information to our customers faster than our competition.
These are the two critical things that allow us to do what our customers really want, which is optimization. They can make changes to their campaigns to make them more effective. Meaning, for example, if you're a brand manager, you may say, this advertisement on this site is better than this one.
I'm now going to put more money on this campaign, on this advertisement." The faster you know the difference between the two, the faster you can actually make that change. And so speed and scale are critical to the ways in which our media measurement product has been able to grow and gain traction with our customers over the past decade. It's important also to note that measurement that we offer is part of a much larger measurement landscape.
There are six different types of measurement that we have put in these six different buckets, and we offer this brand measurement, number three, and we see the ability to expand into the fourth. The reason I bring this up is we have market and product expansion beyond what we currently do.
So yes, we can have geographic expansion outside the U.S. into Europe and APAC, but we also have the ability to build and expand the types of measurement that we do in order to make this offering larger and to provide to more customers across the board. It's a growing area for us into the future. Now, I'm not going to go into all the details of the entire slide. You can get that later. But the key point I want you to remember is that the growth opportunity is quite substantial.
Also, in terms of how big is the overall measurement landscape, when we look at the slice that we are currently managing, that we currently provide product to, it's about $2 billion in TAM. When you look at all six, it's around $10 billion.
And what's critical about this, if you think back to the Cint Exchange, that TAM is about $4 billion. So just adding brand lift has increased overall TAM by 50%, but we have the opportunity to increase overall TAM by around $2.5 billion as we expand our entire product landscape within the measurement industry. So we see this as an opportunity for rapid TAM expansion and provide more opportunity for growth beyond the Cint Exchange, which we've seen historically.
What's important to note also is that this market for measurement has been growing about 9% per year, which is faster than the overall advertising rate. The advertising market's been growing around 6%-7% annually for a number of years now. This has been growing measurement at 9%.
Looking at our financials, it's quite clear to see that we've been growing in the 30%-40% range on an annual basis for about a decade, and that goes back to that speed and scale piece. By offering faster speed and better scale, it means that we've been able to provide measurement in a way that our competitors just can't keep up with, so we see two things here. One, we're growing faster than the overall market's been growing.
Secondarily, right now we're at a $2 billion TAM with the opportunity to expand to over $10 billion and a huge TAM uplift for Cint across the board beyond our original Cint Exchange product offering from the past. One thing also to note is that this market is mainly focused in the U.S. About 75% of all opportunity is within the U.S.
We do see opportunity to grow our revenues and expand across EMEA and APAC in the coming years. As I've stated before, we've done quite well in terms of growth in this media measurement business, particularly in our software and API products.
So we released our platform where our customers could log in and manage their projects themselves, but also the advent of API integrations, the first one being Trade Desk. And we've done multiple API integrations into the largest publishers and platforms in programmatic in the advertising space so that our customers can use our products within the DSPs and publishers that they work with today. What that means is it's very easy for them to add brand lift without even talking to us. It's very simple for them to scale with us.
And for smaller brands who may not our smaller on the engagement size can just add our product on a CPM basis quite quickly. So what you'll see here is that the CAGR, especially by our software and API products, has been incredibly strong, and we see that on a go-forward basis as well. People also ask, "Yes, you have a great TAM, but explicitly, what are the key areas that you look to go into in media measurement over the coming years?" So last year and this year is what we call future-proof. One is getting our fundamentals right in terms of expanding our UI API.
We've offered the ability for our customers to do a little bit of survey design in the product as well. We've seen that a rapid uplift of customers who want to do and ask very simple questions within our platform.
Also bringing in more data and identity partnerships. This helps with the cross-media aspects of it. For example, if we want to expose or see exposure within different types of media, social as an example, we need to integrate a third-party data set. And so a lot of what we've been doing this year is increasing our reach for cross-media by bringing in data partnerships that help understand the exposure. And also what we said before, social expansion. A lot of our customers are very interested in how their campaigns are running on social media, and our ability to offer that to them is critical in 2025, 2026.
We're looking at some very key areas, but maybe the most important is on the AI companion. What that really means is providing insights on the fly to our customers.
As I said before, speed and scale are one of the key areas of success for this business. The ability to provide insights early in a brand lift campaign is important, and those can be driven by AI. The other key piece, and I'll show this on the next slide. There are constantly new emerging channels for advertising. We have a highly fractured landscape. A good example is Amazon. Years ago, Amazon was not in the advertising space. Now it's one of the top advertisers in the market. This is a constant change where apps that did not do advertising suddenly turn to advertising as one of their core revenue profiles.
They all need a brand lift mechanism within their product suite, and we offer that to them, so all of our customers are looking to be able to now do brand lift in these emerging net new advertising platforms.
And then finally, in 2027, the big one for us is outcomes. So as you can imagine, as a brand manager, you want to know how well your campaigns are running. Are people inspired? Do they feel better about your brand after seeing your campaigns? But is that actually leading to outcomes? The primary outcome being purchasing, of course. So being able to provide both brand lift and also outcome measurement is critical to our customers in getting the full lifecycle in terms of how well their brands and campaigns are actually performing.
So what you see here is we have a three-year window of clear investment to grow our TAM, to grow our product capabilities, and really match where our customers want to be with media measurement over the next three years. And this has been a very data-driven approach.
This comes from eMarketer from the end of 2023, but it really shows to why our products are well positioned because we really cover off on a couple of the key areas. And there's a lot of words on this chart, but I'll point them out. Number one is a slowing U.S. economy, which primarily means they have smaller budgets. But number two is critical where it says cross-channel media measurement. As we spoke before, our ability to show a brand manager how their campaigns are performing across multiple different channels is important, including the emerging ones.
And that's one of our big value adds. The other key piece, what you'll see here, is understanding how they actually measure campaigns in a cookieless environment. So there's been a long discussion around the long-term success of cookies.
What we've done over the past three to five years is make sure that we're able to run campaigns regardless of whether cookies are available or not. This is very important to our customers. The last one is the emerging channels, what I said before. Not only cross-channel as they exist today, but as new channels emerge, Cint is usually one of the first ones to provide media measurement in those new channels. Looking beyond 2027, thinking about how we expand our TAM even further, we start, of course, in the brand measurement piece, number three here.
We see what we call incrementality, which is adding behavioral on top of perceptual. We have one, two, and five, and six, which could be organic and/or M&A. But all of this is in the overall plan to get access to this $10 billion TAM in front of us to expand from the world of brand measurement further out. So what we see here is that over the next three to five years, we have the ability to continue to grow the media measurement business because one of the key questions people ask is, how long can this 30% growth rate continue?
What we see is that the TAM and product expansion allows us to achieve those results. We are obviously incredibly excited about the media measurement opportunity at Cint. Over the past decade, we've created the expertise and the capability in-house to provide value to our customers, both in insights and product.
We see media measurement was one of the key ways that we're continuing to provide growth and value to Cint over a three- to five-year window. With that, I'll pause on media measurement. I want to move on to our Q4 results and invite Niels back onto the stage.
Thank you. Moving on to our trading updates for Q4. As you can see, sales were relatively flat. Same picture as that we had in the couple of previous quarters. It's again a split between Cint Exchange declining and media measurement growing. You see that media measurement was growing by 8%. That looks like a bit of a slowdown. However, it's affected by two factors. One was the U.S. elections that actually pulled forward the budgets into Q3, and that stopped obviously in Q4. The other one was that last year's Q4 was really strong.
So those two factors combined gave us the 8% growth, but overall, we're still quite confident in the media measurement business, as you've just heard from Patrick as well. And looking at the full year, as you can see, flat sales, but improved profitability. So the EBITDA margin went up from 17% to 20%, or SEK 4 million more profit. It's driven by two cost reduction programs that we had mainly on the personnel cost side.
So that was one in July that was announced and the other one in last December. Other than that, it's actually relatively stable. And yeah, I think that's actually the update that we have about the numbers. Moving back to Cint 2.0. Again. Not much of a break for you.
I'll take it. Thanks, Niels. So the other piece of the story is Cint 2.0, which is an update on our strategy. So starting in the middle of last year, we started deep work on how we view the growth of Cint over the next three years, which resulted in what we call Cint 2.0, which is going deeper into the growth trajectory of both media measurement, which we've spoken to a bit, and also the Cint Exchange and how we achieve what we call return to growth and return to success. It's important to understand a little bit of the history here as we see it. 2021 was a big year for Cint.
There was an IPO, which brought us to the public markets. We also did two acquisitions. You might forget about Gapfish, a key panel provider in Germany, but also a merger of equals scenario with Lucid. We started that integration in 2022, and of course, have been going through a consolidation and merger process through 2024.
2025 is a critical year with that as we will complete the migration and complete consolidation of systems within 2025. This is an unlock year for our company, which means we are no longer looking at the impacts of the merger and now looking only towards the future in terms of how we build and grow the business. 2026 is where we start having a reallocation of R&D resources. We're doing some of that in 2025, but 2026 is where we have a lot of net new product build because the migration and consolidation is over.
So there's a transition of R&D resources from a consolidation or migration point of view into innovation and product build, and we expect to be able to release in 2026 and 2027 a lot of the initiatives and products that you will see here today.
Cint 2.0 is a three-year process from 2025 into 2027, and we look to show you details of that strategy here. So on the left is our core vision, which is that we have the fastest access with the largest choice, the largest audiences, and the best quality in the industry. And these are the underpinnings of how we think about what we provide to our customers and also where we focus our investment and strategy on a go-forward basis. These are our three critical areas. Fastest access.
Obviously, we want the right user interface, but I'll pull down to not only have we had machine learning and artificial intelligence in the platform, but doubling down on that investment over a three-year window to increase the overall effectiveness of our platform.
One of our core KPIs for our business is what we call conversion rate, which is the probability that a user who's coming into our platform to take a survey is actually able to complete one. It's actually fulfilling the contract between supplier and buyer, is this conversion rate, and it underpins overall success, and we want to see that improving over a three-year timeframe. The other bullet, which is critically important here, is what we call productized use cases. Our number one productized use case is media measurement.
That's where we've taken the speed and scale of the Cint Exchange, created a very specific product for a different industry, and created new value and new TAM expansion for the company. We see the opportunity down the road to see more productized use cases. Largest choice.
This means having the most respondents, the most users available, the most audiences for our customers. And as you know, both the Cint Exchange and media measurement relies on large audiences globally as part of our key competitive advantage. What we intend to do there is two key things over the next three years. One, of course, diversify and increase our supply chain. That would seem pretty obvious. But the second one is this comprehensive data ecosystem.
What that means is our ability to integrate third-party data in order to provide better targeting of audiences or better information about audiences to expand the value and use for our customers. So data integration becomes critical to our ability to provide audiences to our customer. And finally, on quality. What's important to note today is that Cint has the largest, what we call, trust and safety team in the market.
Trust and safety are the individuals who look at how the market is performing and the relative quality challenges that may be facing. So we have the largest trust and safety team in the industry. We also have the largest R&D team dedicated to quality in the industry. And what that has meant is that over the past 24 months, our quality has dramatically improved to be much higher than the benchmark provided by industry associations. What that means is that we have and will continue to have best-in-class fraud detection capabilities and what we call market-leading reversal rates.
These are the three underpins of our entire strategic approach and will lead to a lot of our strategic thinking on a go-forward basis. The other thing that we think about as Cint is that we have two key products. One, as you well know, the Cint Exchange.
Obviously, we'll continue focusing on that. But separate and equal to is media measurement. And this is a change for us. Historically, we've really thought of our business as the exchange, the survey business, the sample business. And we also had this productized use case called media measurement was rapidly growing, and of course, we liked it and we invested in it. Now what we've done is moved them into equal partnership in how we think about the future of our business.
In practical ways, what that's meant is that the leadership of both the Cint Exchange and the leadership of media measurement are now a part of the management team so that we have the commercial view and the needs of both of those key business units in the management team on a daily basis.
Making media measurement an equal partner in the business, I think, is critical also when we view its TAM expansion and growth that we've seen over the last couple of years and what we expect to be able to do into the future. So again, the change of thinking from Cint's standpoint is from a singular business with a very fast-growing side project to that side project now growing up in maturity over the past decade to being an equal partner to our success. And we want to make sure we're investing and supporting that business in all the necessary ways to see continued growth.
We have these three strategic objectives. Obviously, we want to win in our core markets. In 2025, as I spoke to before, we are doing the consolidation of our platforms, migrating customers to the new Cint Exchange.
We also have three critical KPIs: conversion rates, which I spoke to, reversal rates, which I spoke to, but also focusing on customer satisfaction through this migration, and also, as I said before, taking our R&D expense, the time and talented individuals who've been focused on creating the new Cint Exchange and supporting the migration and able to convert them into innovation and product development into the future. We see key new avenues for growth. One, as we've spoken to before, is the media measurement business, but also, we have new revenue lines.
Data licensing is a critical one for us. We've done data licensing over the past couple of years, but we see the ability for expansion there, and secondarily is what we call premium supply. Premium means narrow or harder-to-reach audiences, typically defined as maybe healthcare or B2B, where the unit economics are much higher.
So this is a scenario where we can increase our relative unit economics by developing and supporting premium supply. Also, we have what we call innovation initiatives. Synthetic data in that scenario read the impact of generative AI on the market research industry. We understand that we are to play a leadership role in how synthetic data impacts the space and how we can support the relative growth of that sector. And also, data collaboration.
Data collaboration is where we take third-party data, integrate it into our platform, provide better audiences, or net new products to our customers. And finally, streamlining operations. This is mainly focused on 2025, but part of today we'll be talking about the need to improve our working capital, which I'm sure many of you are aware. It's critical to our success. It's something we're very focused on.
Secondarily is I'll speak in a moment to our go-to-market sales organization. So we need to adjust how we go to market, and my next slide will be specifically on that, and then overall, in 2025, operational improvement and operational efficiency. Some of those key areas, for example, have to do with ERP systems, NetSuite, and Salesforce, and other types of systems that are consolidating and becoming more efficient for the company. These are the key areas of success for the next couple of years. Now, when you look to the right, you can see the bar for media measurement being quite substantial.
People ask, "Where is the growth coming from the Cint Exchange?" What we talk about is getting back to par value with Cint Exchange, meaning we've seen decreases in the overall size of that business over the past couple of years, mostly driven by unit economics.
As an example, last year, we did about 200 million interviews within the Cint Exchange, up from the previous year. So the relative revenue challenges within Cint Exchange is not about demand decreasing, meaning customers are no longer looking for us to fulfill their survey obligations with sample. It's that the relative unit economics have decreased between 2022 to 2024, which is part of why premium supply is so important. Increasing our unit economics is so critical to the success of Cint Exchange.
So we look to as our main next strategic objective within Cint Exchange is to get back to par value and rely heavily on the media measurement business for growth in the short term. What we get excited about is our new go-to-market plan. We have not changed how we go to market as a unified company since the merger.
Right now, we're going through the go-to-market restructure, where we're doing our sales kickoffs and talking with each of our sales teams and sales leaders, really engaging with a couple of things. One, restructuring for success, but also talking to them about how to sell the new platform, the new Cint Exchange, and the premium supply, which is one of our key strategic objectives for 2025, 2026, and 2027. Go-to-market is critical for us.
We've also hired the leader of the commercial team for our Cint Exchange, Mr. Ben Hogg, someone who has decades of experience within the research industry, has led multiple growth initiatives within our sector, and who understands the international commercial needs of the organization. We're very focused on restructuring go-to-market. The way we're doing this is focusing on our customer segments versus regional.
In the past, we were focused on a sales team that would focus on, say, the US, on EMEA, and then on APAC, and they would try to sell all products to all customers within that region. We've seen success in our operations team by making it a global organization, where we focus on a singular sales team focused on a singular customer with a singular set of needs on a global basis. That's the change, going from regional to a segment approach, and we've identified five key segments that we think are critical. We have a plethora of small accounts.
We have our software customers. We have our mid-sized agencies and larger key accounts and our global market research agencies. But also a growing area for us is brands.
We believe that through restructuring our sales organization by bringing in the right leader for that team, that we will be able to empower our sales team to actually go out and sell the new Cint Exchange and also focus on those key strategic areas, premium supply, data solutions through collaboration, and also really be able to talk to our customers about something they're all talking about, which is the potential impact of AI on themselves and the rest of the industry. We need to be able to provide leadership and communication along those paths.
Our core mission that we talk about is to feed the world's curiosity. We talk about these key areas. 2025 is the closure of our consolidation and migration year, leading to innovation and build in 2026, and then launching a lot of new products and services in 2027.
The critical areas, as we've talked about, data collection, our data partnerships, having our brand lift studies, this media measurement business become more automated and across multiple new channels, and also streamlined access. We talked about premium and B2B respondents as our ability to increase and improve our unit economics across the board so that the volume of survey and sample provided in the Cint Exchange on a unit basis is even higher volume, higher value. That is a quick overview of the Cint 2.0.
What I get most excited about with this is, one, continued investment in the media measurement business, but two, understanding how we bring growth back to the Cint Exchange by, one, having the right go-to-market plan and the right sales strategy to engage with our customers, and two, making sure that we have the right products around premium, around synthetic data, around AI, and making sure that our sales teams understand that we have the new Cint Exchange, how to sell, how to promote, make sure that our customers understand the value of migration and adopting the new platform.
With that, I'll reintroduce Niels to talk about our financial targets.
Thank you.
Of course.
I'll go on to the financial targets, so we are announcing financial targets for the first time since the IPO, actually, so it's quite exciting. We have five different parts of it, five different components. First, starting with the sales growth, so we're aiming for at least 10% growth, organic growth, I have to say, and on the profitability side, we're going to aim for 25% EBITDA. We introduced also the leverage target for the first time. It will be a ratio of 2.5x. As you can see, we are talking about that it might be higher during M&A.
As you heard before, the Cint 2.0 strategy does not plan for any M&A at the moment, so that's more a legal disclaimer, let's say. Moving on to the dividend policy, that's unchanged, so we're not planning on any dividends in the short term.
And then we also introduce a sustainability target, net zero. In our case, that means travel is a big thing for us as a global company, and the other component has to do with hosting costs. Those are the two main items that we're working on. We also work on a lot of other things, but these are the biggest items for us. Yeah, that's it, actually, in terms of financial targets. So then I think we get Patrick back for the final piece before moving on to Q&A.
You don't give me much rest, Niels.
No, exactly.
One slide and then back on.
Should have done questions in between, maybe.
That's right. That's right. On the rights issue, which we announced this morning, as a precursor, this is a global presentation, and there are jurisdictional realities that we need to lean into. What that means is that we're not going to be able to talk in much greater detail about the rights issue.
What I recommend is that you go to our website, check out the press release there, other documentation on the rights issue itself. But what I can say, what we've already publicly spoken to, is one, we're doing a rights issue to raise SEK 600 million , split between two primary categories. One is debt repayment, about SEK 400 million , two-thirds of it.
Obviously, this will reduce our overall debt burden, but most importantly, it'll increase overall cash flow because of the reduction of interest payments that are required from that process, which is critical, we think, at this stage. The other third is really focused on, as we said before, fulfilling the vision of Cint 2.0 and providing financial flexibility to the business to get back to this 10% growth and this 25% profitability that we spoke to as financial targets in the midterm.
What's exciting for me is that 46% of our shares are already committed to this transaction, especially myself and Niels are also committed to this round. It's also important to note that a number of our investors are not allowed to talk about their engagement publicly.
We made an overall decision that we're not going to try to announce any shareholders at this time so that we don't confuse the market as to who's in or who's out. What we can say is that a number of our larger shareholders are obviously in order to achieve a 46% commitment at this stage. With that, we're going to move to Q&A. We're going to invite our COO, Mr. Brett Schnittlich, to the stage to do a little moderation for us. If you're online, you can go ahead and ask questions in the actual platform itself, and we look forward to questions in-house as well. But Brett.
Once again, thanks, Niels and Patrick. Moving on to the Q&A section, following up on what Patrick just said, if you're out there on the webcast, please feel free to add questions, and they'll be pushed out to me, and we can bring them to the group. We'll start with in the room. If there's any questions, and the microphone is on the way.
Perfect. Thank you, Victor Högberg from Danske Bank, so just on the financial targets, just the individual drivers, given the on-paper deceleration in growth rate in media measurement in Q4 versus Q3, and on your slide, it seems like you don't expect the change to add that much at all in terms of growth, so mathematically, it implies some 30% growth in media measurement. Is that the growth rate you're expecting for that segment, and is that what is built into the above 10% organic growth target?
That's a great question. The growth has to come from either Cint Exchange or media measurement. I pushed back on the concept that we're decelerating based upon Q4 financial, mainly because, as I said before, one, we had a pull forward of budget, both in the Cint Exchange and media measurement, from Q4 into Q3 based upon the election cycle in the U.S. But secondarily, the growth rate for media measurement in Q4 of last year was 50%.
So what we're not seeing is a deceleration of media measurement whatsoever. It's just a different comparable, a very large comparable as compared to this year. So the answer to your question is absolutely, we see ongoing growth rates of 30% in that range for media measurement into the future. Does that answer your question?
Yeah, absolutely. Okay. So on media measurement, just the competitiveness of the product you talked about, your setup, what about your competitors and competing solutions? How do you think your product fares and the roadmap you have for the next coming years, is that going to be enough to protect these 30% something growth?
I think we should both jump into that because Brett Schnittlich is our resident expert on media measurement. What you should know is 10 years ago, under Brett's leadership, we started the media measurement product. What I will say is that speed and scale, which is the core values of the media measurement product, no other competitor can match in that regard. But I'll let you answer the rest of it. Yeah.
No, to kind of go directly to your question, the media measurement product that we've built is truly a better mousetrap than what's out there currently in the industry. There have been some newer competitors that have shot up in the space, but again, they're quite early and don't come near to the quality, speed, or scale of what the Cint platform offers. I continue to believe that we have the truly leading product in the industry.
And just puts a text to it. What could change that in your position within the media measurement? It's from the market's perspective, kind of unknown still. This is the first deep target you provide us with it, so.
Yeah, I'll start with, I think, it's quite challenging to replicate the scale of Cint. So in order to provide that scale, I'm not sure how a competitor would actually go about doing it. And with that scale comes the speed. So I think those key aspects of the product suite are quite challenging for competitors to replicate. Now, they can build product that is quite elegant or nice.
They can focus on different aspects of measurement besides just brand lift because you saw those six different components as an example. So what we've seen is competition create user interfaces and other types of things that can be quite nice. The challenge, I think, again, is speed and scale. But you want to.
Yeah, no, if you would have asked this question a year ago, I would have had a very different answer. And that answer would have been about product because the newer competitors in the space, really what they're bringing to market is, as compared to the traditional way of doing ad effectiveness, they were bringing a better product to the space.
Over the past 12 to 18 months, the ad measurement product that we have since released is truly best of class. So while others came out and were attempting to leapfrog us on the product side, we've taken the last 12 to 18 months to quite honestly leapfrog what they have in the market today.
Okay. Thank you. Two questions from me before I leave the line. The OpEx plan for this year, for 2025, the press release in early December said that you plan to have OpEx roughly flat over 2024. Is that still the plan given what you presented today?
You want to take this?
Yeah. Yeah, that's still the plan indeed. So that was just released in December, of course. So that's not too long ago. So it's still the same plan.
Yep. Okay. Perfect. And just on the working capital side, burning issue, Q4, any updates on the working capital situation and the cash flow situation? You provided the P&L components in the trading update. But what about the cash flow components and what you're doing in specifics this year to improve it?
Yeah. Yeah, so the full Q4 report will come on February 19th, so it's still a couple of weeks out, not part of the trailing updates, therefore. What I can say overall, there's no big change in pattern compared to before. Also, of course, we have a big Q4 behind us, as you could see, in terms of absolute amount of sales, right, so this will also be reflected on the receivable side automatically, of course. However, we also have a couple of initiatives to tackle accounts receivable in particular.
It's a combination of things that will be around system consolidation, processes, and training people. And we're working on all of those with a bit more intensity than ever, I would say, and we're getting closer to the end of that, so I won't bore you maybe with the details here, but happy to take that offline.
Okay. Thank you.
Want to add something?
I was going to add that it's one of the key priorities of the business. We mentioned in our strategy that working on working capital cash flow is critical to our success.
Yeah.
Any other questions from the audience?
Yes. So Thomas Nielsen and Nordea. There were some quality issues way back with the percentage of refused service that was higher than the industry norm. How are those metrics trending now?
What we've done is gone from across the board, not just with Cint, but the industry had a high watermark of reversals going into Q4 of 2022 and the Q1 of 2023, and we've been leading the way of radically decreasing the level of reversals to below industry norms, which means we're better than the rest of the industry.
That's been a 24-month period, so I think we can maybe speak to the exact numbers at our next quarterly release, but what I can say is that there's been a dramatic decrease in the overall number and rate of reversals, and it's obvious to us when we compare ourselves to industry standards that have come out over the past two quarters that we're well above industry norms.
One more question from the audience.
Yes. Ina Djupsund, SEB. So a follow-up question on growth. So it sounds like it will still be a lot of focus on consolidation and efficiency in 2025 as well. And in 2024, we've seen quite a flat top line as a result of this. So I was wondering what's your take on what kind of growth can we expect already in 2025? What do you see there?
We've been challenged by growth in terms of the Cint Exchange over a number of quarters, while we've seen rapid growth with media measurement over those same exact quarters. Obviously, as media measurement's grown on a company level, it's gotten us closer to what I'll call even growth or flat and actually now increasing. Our focus, especially with the go-to-market plan, is to elevate that Cint Exchange from a decreasing to an increasing growth place.
The immediate next hurdle for us is to get back to par value, so that the decrease in the unit economics, we're able to balance that with increased volumes, but also with premium supply able to combat decreasing unit economics through that process.
So I see, yes, 2025 is still a consolidation year, but I see the potential for us to get back to not only par value in Cint Exchange, but also starting to grow in order to achieve that medium-term target of plus 10% growth across the board. We have to be able to do both.
We have another question from the audience.
Yeah. Thank you, guys. Ramil Koria, Victor's colleague at Danske Bank. Just one question from my side on the topic of cash flows. This dividend policy or the lack of dividend policy is phrased somewhat peculiarly because what you're saying is you intend to reinvest cash flows into growth initiatives, but 25% EBITDA margin. So is this a question of sort of deleveraging, amortizing on the remaining debt, or is it a question of retaining the cash?
Well, to put it this way, given the lack of free cash flows coming out of the business in the last few years, a more elaborative target on free cash flow generation for the coming few years would help. So I guess my question is, why haven't you provided the financial markets with more details about that?
So I heard three questions there. One is about free cash flow in terms of communication around free cash flow to the market. Second is around what are the objectives in the rights issue around cash flow, etc., as compared to debt repayment. And I think there was one more in there.
Yeah. So effectively, you'll have a chunk of debt, albeit somewhat postponed amortization of it. And then you have an EBITDA margin target, and you're talking about releasing net working capital in the future. So the cadence of that release, combined with a pretty high operating margin, should imply reasonably good free cash flows. So any color on that would be helpful towards us analysts as well as the investor community.
Are we going to start?
I can take this one. Yeah. Sorry for my voice. Yeah, despite what you say, so it's, of course, free cash flow will improve, right? But it will be over time. So it's not immediate. So in the short term, therefore, yeah, you won't see it right away, right? With the strategic plan, the growth will be towards 2027. And like we just heard from the other question as well, in 2025 will still be a year of migration and transition to that. And we will also be amortizing the loan further. So it will be $5 million per quarter. That's also communicated starting after the rights issue.
So it would be as of Q2, the end of Q2. So that's also part of that. So it's a bit deleveraging. And on top, we are quite a seasonal business, right?
So we still have these swings regardless of how working capital develops in an absolute sense. As a percentage of sales, you still need some buffers, of course, and to have the flexibility to actually execute on the Cint 2.0 strategy. So it's a bit of everything. Does it answer your question?
Yeah. It was an oddly phrased question, but thank you so much.
We got there. It's good.
Do we have any other questions from the audience? Doesn't look like that. So I'm going to go to from the webcast. Some of these are a little repetitive, but they're slightly different variations. So I'll start with this one, and this is for you, Niels.
Okay.
Why do you see the need to bring debt down to 1x when the target is below 2.5x?
So the target that we have set, the same with not just the leverage one, but also the growth one and the profitability one. First, we want to regain the credibility of the market, right? So we had two high targets before, after the IPO. So here, we want to regain trust and not have a target that we are right away really close to it and then potentially need to revise those targets. So with that in mind, the 2.5x is actually quite a normal threshold, I would say. So therefore, we are starting out with that one, let's say, if that makes sense.
Okay. Patrick, any other comments?
Sounds good.
All right. You mentioned AI in the presentation. Can you elaborate more around Cint's future overall AI strategy? And can you elaborate around additional areas, technologies, and your platform that will be affected by AI in the future, pros and cons?
There's a lot wrapped up in.
There's a lot there.
It may require a whole different presentation to go into all the aspects of AI impacting potentially Cint and the industry. What I will say is that we see Cint as providing leadership in this arena. Our customers are asking for themselves, A, how is generative AI going to impact the research process? And then secondarily, how is AI going to impact sampling, audiences, surveys, etc.? Our point of view is that we are going to be leaning in with our customers and providing them options and methods for them to experiment so they understand some of the outcomes.
I believe we're in the early stages of adoption and consideration of AI in our industry. That being said, we want to make sure that we are leading the way versus following because AI is potentially as transformational to the research space as the internet was 20 years ago. In that scenario, we want to be a leader in the tech and innovation, not waiting for it to occur.
Yeah. So following up on that, Patrick, you mentioned synthetic earlier. Can you elaborate more on the role that you believe synthetic will be playing in the industry as well as how we will be utilizing synthetic on the platform?
When people say synthetic, what they mean is the AI answering a survey question versus a human. So that's the difference in delineation there. What we hear from our customers is that today, they're concerned about the efficacy of AI answering questions versus humans, partly because what we call the half-life of data.
Given that a lot of survey questions are about opinions and opinions can change rapidly, they want to make sure that we're getting opinion information versus AI-driven training data. But there are use cases in research, especially around the edges today, where synthetic data may be an appropriate answer. For example, in the creative process, if you have 1,000 different brand messages, which of these bubble up to the top before I test them with humans? Cint's role, again, as I said before, is to help our customers experiment without having to change their entire research process.
We have the largest platform for supply of humans today. There's no reason why we can't participate in a role where we help provide synthetic supply to those researchers who are ready to experiment. What we're not saying today is that we think that generative AI is a huge growth vector for the business. It may become so in the future, nor do we believe it's going to be a scenario where a lot of our revenue is being replaced by or our sample is being replaced by AI. But as those use cases increase, we want to be in the scenario of leading our customers and helping them find the right path into that and through that.
Again, as AI can be as transformational to this sector as the internet was to the sector 20 years ago, we believe CINT can be at the forefront of that versus waiting for it to occur.
Beautiful. Another one for you, Patrick. Please elaborate on what you expect in terms of growth for Cint Exchange. How will you come back to growth? How important is your changed go-to-market strategy for growth to improve? Also elaborate on risks to growth and examples in technology disruption.
A lot of questions in there.
Yes.
I'll start with number one. Our key unlock for Cint Exchange growth is the consolidation of platforms into the new Cint Exchange. One of the challenges that our sales teams have had over the past three years now is that which platform do you sell? The legacy Cint platform, the legacy Lucid platform? Now we are selling the Cint Exchange, and new customers are coming right into the new exchange as we're migrating legacy customers into that platform as well.
So the number one unlock for sales for Cint Exchange is having a clear platform with clear value proposition to our customers, with our sales teams trained and ready to execute on that sales proposition. That's number one.
Number two is the go-to-market strategy, which is we have had a scenario where we're trying to sell all things to all people in all regions, and having a clear path for sales that's segmented around customer needs on a global basis is critical to being able to provide success with each customer segment across the board. So we see the transition from a regional process to a segment-led go-to-market plan as being really important. And third is these new areas of growth for Cint Exchange.
We talked about premium supply, which is primarily B2B, which increases the unit economics as one of those key areas, but also data collaboration. We talked about having third-party data that we integrate into the platform, which allows us to identify net new audiences or improve the value of particular audiences that improve the unit economics as well.
Those are two areas where we're providing new value to the customer, new talking points so that our customers have the net new thing to buy from Cint, so those three things are really consolidation, go-to-market, and our innovation in those areas, but to settle on the last key point, we have a net new leader, Ben Hogg, in our Cint Exchange who is an industry veteran who is able to lead this part of our business on a global basis, and we couldn't be more excited to have him on board.
Wonderful. Hold on. I'm just going through here. I'm not going to read the exact question because it's hard to read it as written. But I think the question basically comes down to, are we announcing a delay in the migration process?
No.
We had mentioned previously end of the first half, and there was a comment of something happening at the end of 2025.
We talk about there are multiple consolidations around ERP and parts of our system. But to be very clear, we talked about migration through the first half of 2025 onto a single technology stack. That's definitely occurring. There are other types of consolidation with some of our products in the back half of the year, but the mission of migration is still very much on track.
Beautiful. There is a question here about M&A. You mentioned opportunities for M&A to further expand the TAM, specifically around media measurement. If you were to go down this path, what type of company would you consider generally?
I think it's a little premature to talk about M&A at this stage. What I can say is that as we move past consolidation and migration in 2025 and we look at ways to increase the value of the business both through organic and inorganic means, M&A is going to be on the table. Now, we both know we've seen various targets both in the Cint Exchange side and the measurement side over the past number of years. We won't be shy about making the appropriate choices. I think it'd be challenging at this stage to talk about particular targets or opportunities.
Yep. So no new questions have come in. I'll ask the moderator out there. Are there any other questions? Oh, we've got one more question from the room.
Hi, Victor Högberg from Danske Bank. On the media measurement growth ambitions, just circling back to that, be it 30% higher, lower, whatever it's going to be, how dependent is that on new customers signing with you and then going live? I'm trying to get to what's the net retention with this business? What's the growth rate with existing customer base, with existing product roadmap without you adding something spectacular in it?
So you're asking what's the balance between net new customers versus existing customer expansion in order to achieve the growth rates within media measurement?
Yeah.
What I can say is I don't have the exact math in front of me. Obviously, you expect me to say both are important. What we've seen over the past couple of quarters is both are existing where you have growth within existing customers. You have net new customers that are onboarded, and when you think about our three different kind of methods or ways of engaging with the customer through services, through APIs, and through UI, a lot of our growth is coming on that UI side and API side.
What's helping us is that fracturing of the market actually helps our growth because as net new platform decides that advertising is going to be one of their core new revenue builds, for example, in the way that Amazon was a few years ago.
Once that occurs and they grow, they need a brand lift partner for their customers to understand the effectiveness of their brands on that platform. And we are by far the best platform for that. And we see a lot of growth into new platforms, not just new customers when those things occur.
Yeah. I'm going to follow up on what Patrick just said because some questions that we've had before, I think sometimes there's a little bit of a disconnect. So I'll try to explain it a little more clearly. Three basic types of clients, as Patrick just mentioned. So for instance, companies like The Trade Desk and Amazon, we call those new clients. But underneath those are potentially hundreds or thousands of clients that can utilize those platforms to do their advertising effectiveness media measurement.
So we see in front of us, just on the API side, not only the ability to add net new clients, more Trade Desks, more Amazons with the fracturing that's going on in the space right now. And what Patrick means by that is more and more companies who believe they do have unique data are getting into the business of becoming a DSP.
They're basically selling advertising themselves, allowing their clients to buy on their DSP platforms and then utilize us as a third-party measurement tool, allowing their clients to be able to monitor their effectiveness from platform to platform. The other side of that is kind of going down the long chain within those platforms.
So in the earliest days, you have the largest clients of those platforms utilizing our media measurement technology. But what we're starting to see with all of those platforms is, as time marches on, more medium and smaller-sized clients who didn't traditionally do advertising effectiveness because it was kind of out of their reach. It was an expensive thing for them to get from a large insights company are now being able to utilize this.
We've seen comparisons in the industry where, years ago, only the largest companies on the face of the planet were able to, for instance, do what used to be called CSAT, consumer satisfaction. Then you saw technology deliverables in the space through companies like Qualtrics and others that made it available to more and more companies. In the earliest days, it was just the largest brands that utilized it. As time marched on, we've gotten to a place where almost any brand that has a relationship with their client now does some form of CSAT because it's within reach for them to do.
Because of the strategy that we took with media measurement by, in essence, making sure that you could buy those measures at point of sale where you buy your media, we continue to see a longer tail of clients on those platforms utilizing the technology.
Okay. And two follow-ups on that. Sorry to just remain on the growth topic. But one of the reasons for the 8% growth rate now in Q4 in media measurement was the comparable last year. Q4 was strong, according to you, 50% it was. But you're going to meet those kind of comparables for the next couple of quarters as well, 35%-50% growth. Is that going to see growth in this range, or how will you accelerate to?
To be clear, we don't see a deceleration of our media measurement business. We don't see those tailwinds in our future. But we will have a better comparable in Q4 2025, right? But anyway, what I will say clearly is that we do not see a deceleration of our media measurement business in the near term, even with the growth rate and size hurdles increasing because of the success of that business over the previous quarters.
Okay. Last question on media measurement is, how entrenched is it with the exchange segment? Is it possible to, over time, have these two as two separate companies? Would that be preferable? Would that even be possible? Would you want to do it? It comes down to value of these two potential entities, but would it be possible?
Many people have brought up the potential of value unlock given the success of the media measurement business. It's not a strategic directive of business right now to achieve that result, but you can obviously see the growth of the media measurement versus the Cint Exchange and wonder what the options are here. What we can say is they are separate technologies and separate platforms.
The media measurement business utilizes the Cint Exchange, but it is its own separate product and technology stack, so we have flexibility, but to be super clear, we don't have the directive or the intention of doing that in the near term.
Okay. Thank you. Last question for Niels, the Q4 trading update. Just making sure, the SEK 12.7 million in EBITDA, is that the adjusted number or is it reported?
It's reported and it's the EBITDA, so the one that we.
Okay. So you need to add the non-recurrings on top of that to get to the comparable number, or?
Yeah. So it's without NRIs. I'm looking at the number without NRIs. They are below, right? We report them separately, the items.
Okay. Your way of doing it, this is the adjusted number, the 12.7?
I like that. Yeah. But it's not the adjusted one that we used to report in the past. I thought you were coming from that perspective. Yeah. No, so it's the exact same reported number that we have reported over all the quarters in 2024.
Just making sure. Thank you.
Yeah. Thank you.
Wonderful. All right. Wonderful. Are there any other questions from the audience? I'm just checking to see if there's any more from the web. And it looks like not. Oh. Hold on. I'm getting a hand. We see many differences in AI regulations and bureaucracies between China, Europe, and the U.S. What are the AI challenges for Cint on regulatory in Europe?
What I'll say is that when GDPR was released around privacy, there was concern how the U.S. market is to how we were going to handle that new regulatory regime. What we learned is that leaning into the regulatory environment and being a leader provides comfort and also credibility with our global brand partners. I think the same is true here. Understanding the regulatory environments across the board, leaning into them and making sure we can be successful with them will give credence to our global brand partners to being able to leverage our platform.
Perfect. All right. So if there's not any more questions from the audience, I'll pass it back to Patrick.
Thank you for your time and attention today. Obviously, we're excited about Cint 2.0. It was great to walk through a deep dive of the media measurement business. Of course, we announced our rights issue as of this morning and are invigorated by the opportunity to invest in the business to see our successful future. Thank you for your time and attention. I'll stand around for more questions on a one-on-one basis, but appreciate what you've done here today. Thank you so much.
Thank you.
Thank you.