NEW YORK--(BUSINESS WIRE)--CI&T (NYSE: CINT, “Company”), a global digital specialist, today announces its unaudited results for the fourth quarter of 2021 (4Q21) and audited results for the year ended December 31, 2021 (2021), in accordance with International Standards on Auditing (ISAs). 4Q21 and 2021 financial results are presented in accordance with International Financial Reporting Standards (IFRS). For comparison purposes, we refer to the results for the fourth quarter of 2020 (4Q20) and for the year ended December 31, 2020 (2020).
4Q21 Operating and Financial Highlights
- Net revenue reached R$456.8 million, a 72% growth compared to 4Q20.
- Net revenue growth in constant currency was 69% over 4Q20.
- Net profit was R$43.8 million, 49% higher than 4Q20.
- Adjusted EBITDA was R$101.8 million, with an adjusted EBITDA margin of 22.3%.
- Adjusted net profit totaled R$47.7 million, 62% higher than the same quarter of 2020.
2021 Operating and Financial Highlights
- Net revenue was R$1,444.4 million in 2021, up 51.0% year-over-year.
- Pro forma net revenue of R$1,617.4 million, 39.4% higher than in 2020.
- Pro forma net profit for the year was R$129.0 million, up 13% compared to 2020.
- Pro forma adjusted EBITDA was R$380.5 million, with an adjusted EBITDA margin of 23.5%.
- Pro forma adjusted net profit totaled R$160.1 million, equivalent to a pro forma adjusted net margin of 9.9%
- CI&T generated R$214.4 million in cash from operating activities, 37% higher compared to the amount of R$156.9 million recorded in 2020, and 66% cash-conversion from adjusted EBITDA.
- CI&T ended the year with 5,564 employees, a net addition of 2,345 employees in 2021.
- The number of clients with annual revenue above R$1 million grew from 58 in 2020 to 94 in 2021, a net addition of 36 new clients, and the net revenue retention rate (NRR) was 128% in 2021.
A word from our CEO
We are delighted to end 2021 with robust results, outperforming our growth guidance for the quarter and year in our first year-end as a public Company. Our net revenue grew 51% in 2021 year over year, with a solid adjusted EBITDA margin of 22.4%. This growth was boosted by higher demand from existing clients, the addition of new clients to our portfolio combined with our selective M&A strategy. We added 36 new clients with annual revenue above R$1 million, totaling 94 in 2021. Our top 10 client concentration reduced from 67% of our net revenue in 2020 to 54% in 2021. We are also providing strong growth guidance for 2022. What a great year, and I'm very proud of what we've done as CI&Ters, as a team.
It is worth looking back to understand how we will move forward: founded in 1995, CI&T has 27 years of consecutive growth and profitability. From 2006, the emblematic year we launched CI&T in the USA, to 2016, we had an organic CAGR of 30% in revenue. From 2016 on, we introduced three new growth forces: [1] a domain-driven Digital Strategy as a core component of our offering; [2] our Growth Unit business architecture, fostering a scalable entrepreneur organizational model; and [3] a programmatic approach for M&A as an enduring new capability focused on a flow of selective and strategic acquisitions. As a result of those moves, we are accelerating our annual growth pace: 41% in 2020, 51% in 2021, and guiding at least 56% in 2022. To operate at this new pace, we are constantly increasing our investments in hiring, training, and leadership development while keeping solid margins and cash conversion rates.
Now let's move our eyes forward. And yes, there are clouds in the sky: the global economy is yet to recover from a devastating pandemic, and we have a new set of geopolitical threads on the table. In parallel, "software continues to eat the world," enabling unprecedented and radical changes in society, values, and consumer behaviors. Digital is the answer to reconnect companies to a new breed of consumers. The result is a secular demand for digital services in the corporate world and an extraordinary opportunity for a decade of high growth for CI&T.
As CEO, my primary mission is to harmonize the interlinked needs of our stakeholders: we will increase our transformational impact through digital for our clients. And we will continue to do that by fostering meaningful and fast careers in a psychologically safe environment where people can fulfill their personal purpose and ambitions. Our talent density enables a long-term value creation journey for our shareholders by way of high growth and profitability. And for our communities is about solving complex human problems, fostering diversity and inclusion, and ESG in a broader perspective, concretely contributing to making a better world. It's the equation of building a company that makes sense through the lens of the future and not the past.
With these foundations, we are confident we are on the right track. Here is my special gratitude to all CI&Ters that provide this incredible environment of joy and accomplishment at CI&T. A warm thank you to all our clients, partners, investors, and stakeholders that believe in our audacious ambitions as a company.
Through hardships to the stars!
And stay safe.
Cesar Gon
Comments on the 4Q21 and 2021 financial performances
Net Revenue
Revenue (in BRL thousand) |
4Q21 |
|
4Q20 |
|
Var. 4Q21 x 4Q20 |
|
2021 |
|
2020 |
|
Var. 2021 x 2020 |
|
Net Revenue |
456,794 |
|
265,367 |
|
72.1% |
|
1,444,380 |
|
956,519 |
|
51.0% |
In 4Q21, net revenue was R$456.8 million, an increase of 72.1% compared to 4Q20, of which 40% was organic growth. Net revenue in constant currency grew 69% in the comparable period. This performance was attributed to our expansion of current contracts, combined with the addition in the quarter of 19 new clients with revenue above R$1.0 million in the last twelve months, from 75 to 94 clients.
In 2021, CI&T’s net revenue was R$1,444.4 million, an increase of 51.0% year-over-year. Net revenue growth in constant currency was 47.0% and the net revenue retention rate was 128% in 2021, demonstrating the recurrency and resilience of our business.
We reduced our top one and top 10 client concentration from 21% and 72% in 4Q20, respectively, to 16% and 54% in 4Q21, and we diversified our revenue breakdown by industry verticals. While all segments presented significant growth, Technology, Media and Telecom (TMT) and Retail and Manufacturing were the verticals that grew faster in terms of revenue from 4Q21 compared to 4Q20.
| Net Revenue by industry - % in 4Q21 | Net Revenue by client - % in 4Q21 | |||
| Financial services | 31% |
Top Client | 16% |
|
| Food and beverages | 20% |
Top 10 clients (ex-top 1) | 38% |
|
| Pharmaceuticals and cosmetics | 15% |
Other Clients | 46% |
|
| Technology, media and telecom | 13% |
|||
| Retail and manufacturing | 8% |
|||
| Education and services | 5% |
|||
| Others | 8% |
|||
In terms of geography, Brazil and the U.S. continue to be our most relevant markets. The U.S. operation recorded the fastest growth rate of 50% organically in 4Q21 compared to 4Q20.
| Net Revenue by geography - % in 4Q21 | |
| Brazil | 50% |
| United States | 45% |
| Asia | 3% |
| Europe | 1% |
Cost of Services Provided
Gross Profit (in BRL thousand) |
4Q21 |
|
4Q20 |
|
Var. 4Q21 x 4Q20 |
|
2021 |
|
2020 |
|
Var. 2021 x 2020 |
|||||||
Net Revenue |
456,794 |
|
|
265,367 |
|
|
72.1 |
% |
|
1,444,380 |
|
|
956,519 |
|
|
51.0 |
% |
|
Cost of Services |
(294,746 |
) |
|
(166,294 |
) |
|
77.2 |
% |
|
(935,732 |
) |
|
(600,866 |
) |
|
55.7 |
% |
|
Gross Profit |
162,048 |
|
|
99,073 |
|
|
63.6 |
% |
|
508,648 |
|
|
355,653 |
|
|
43.0 |
% |
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Depreciation and amortization
|
8,764 |
|
|
5,995 |
|
|
46.2 |
% |
|
31,884 |
|
|
24,085 |
|
|
32.4 |
% |
|
Stock Options |
1,582 |
|
|
76 |
|
|
1981.6 |
% |
|
1,930 |
|
|
139 |
|
|
1288.5 |
% |
|
Adjusted Gross Profit |
172,394 |
|
|
105,144 |
|
|
64.0 |
% |
|
542,462 |
|
|
379,877 |
|
|
42.8 |
% |
|
Adjusted Gross Profit Margin |
37.7 |
% |
|
39.6 |
% |
|
-1.9p.p |
|
37.6 |
% |
|
39.7 |
% |
|
-2.2p.p |
|||
In 4Q21, the cost of services provided totaled R$294.7 million, an increase of 77.2% compared to 4Q20, and the gross profit was R$162.0 million. Eliminating the depreciation and amortization and stock option expenses, the adjusted gross profit in 4Q21 was R$172.4 million, with an adjusted gross profit margin of 37.7%.
In 2021, the cost of services provided was R$935.7 million, an increase of 55.7% compared to 2020, and the gross profit reached R$508.6 million. Adjusted gross profit totaled R$542.5 million, with an adjusted gross profit margin of 37.6%, compared to 39.7% in 2020. The decline in gross profit margins is explained mainly by employee promotions and compensation adjustments that were postponed during the first year of the pandemic, aligned with current market conditions and our continuous investments in our people to foster a higher pace of growth.
SG&A and Other Expenses
SG&A expenses (in BRL thousand) |
4Q21 |
|
4Q20 |
|
Var. 4Q21 x 4Q20 |
|
2021 |
|
2020 |
|
Var. 2021 x 2020 |
|||||||
Selling |
(27,752 |
) |
|
(25,815 |
) |
|
7.5 |
% |
|
(89,654 |
) |
|
(65,093 |
) |
|
37.7 |
% |
|
General and administrative |
(58,685 |
) |
|
(22,861 |
) |
|
156.7 |
% |
|
(151,681 |
) |
|
(81,161 |
) |
|
86.9 |
% |
|
SG&A expenses |
(86,437 |
) |
|
(48,676 |
) |
|
77.6 |
% |
|
(241,335 |
) |
|
(146,254 |
) |
|
65.0 |
% |
|
Other income (expenses) net(1) |
1,716 |
|
|
(538 |
) |
|
- |
|
|
(22,210 |
) |
|
(959 |
) |
|
2216.0 |
% |
|
Impairment loss on trade receivables and contract assets |
1,533 |
|
|
(191 |
) |
|
- |
|
|
(497 |
) |
|
(196 |
) |
|
153.6 |
% |
|
SG&A and other operating expenses |
(83,188 |
) |
|
(49,405 |
) |
|
68.4 |
% |
|
(264,042 |
) |
|
(147,409 |
) |
|
79.1 |
% |
|
(1)Include Research and technological innovation expenses |
||||||||||||||||||
Selling, General and Administrative (SG&A) expenses grew 77.6% in 4Q21 compared to 4Q20, mainly due to (i) an increase in people expenses, associated with new hires and the strengthening of the Human Resources, Finance, Administrative and Legal teams, (ii) IPO, M&A and accounting advisory services and related expenses and (iii) higher depreciation and amortization expenses due to the recognition of intangible assets related to the acquisition of Dextra. These incremental expenses are mainly related to M&A activities and to the IPO, which occurred in November 2021. In 2021, SG&A expenses grew 65.0% in relation to 2020, due to the same reasons explained above.
Other net expenses in 2021 totaled R$22.2 million, due to the impairment of intangible assets in the amount of R$21.9 million recorded in 3Q21, a non-cash and one-off effect that are not related to Dextra core ongoing services and shall not impact CI&T nor Dextra operations going forward.
EBITDA and Adjusted EBITDA
EBITDA (in BRL thousand) |
4Q21 |
|
4Q20 |
|
Var. 4Q21 x 4Q20 |
|
2021 |
|
2020 |
|
Var. 2021 x 2020 |
|||||||
Net profit for the period |
43,828 |
|
|
29,401 |
|
|
49.1 |
% |
|
125,957 |
|
|
127,654 |
|
|
-1.3 |
% |
|
(+) Net financial expense |
8,130 |
|
|
1,417 |
|
|
473.7 |
% |
|
34,232 |
|
|
15,453 |
|
|
121.5 |
% |
|
(+) Income tax expense |
26,902 |
|
|
18,850 |
|
|
42.7 |
% |
|
84,417 |
|
|
65,137 |
|
|
29.6 |
% |
|
(+) Depreciation and amortization |
18,251 |
|
|
7,429 |
|
|
145.7 |
% |
|
48,354 |
|
|
29,882 |
|
|
61.8 |
% |
|
EBITDA |
97,111 |
|
|
57,097 |
|
|
70.1 |
% |
|
292,960 |
|
|
238,126 |
|
|
23.0 |
% |
|
EBITDA Margin |
21.3 |
% |
|
21.5 |
% |
|
-0.3p.p |
|
20.3 |
% |
|
24.9 |
% |
|
-4.6p.p |
|||
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Stock Options |
1,838 |
|
|
201 |
|
|
814.4 |
% |
|
2,531 |
|
|
934 |
|
|
171.0 |
% |
|
Consulting expenses (1) |
3,821 |
|
|
108 |
|
|
3438.0 |
% |
|
9,177 |
|
|
428 |
|
|
2044.2 |
% |
|
Government grants |
(1,063 |
) |
|
(253 |
) |
|
320.2 |
% |
|
(2,481 |
) |
|
(1,571 |
) |
|
57.9 |
% |
|
Impairment |
77 |
|
|
0 |
|
|
0.0 |
% |
|
21,895 |
|
|
0 |
|
|
- |
|
|
Adjusted EBITDA |
101,784 |
|
|
57,153 |
|
|
78.1 |
% |
|
324,082 |
|
|
237,917 |
|
|
36.2 |
% |
|
Adjusted EBITDA Margin |
22.3 |
% |
|
21.5 |
% |
|
0.7p.p |
|
22.4 |
% |
|
24.9 |
% |
|
-2.4p.p |
|||
(1)Include R$18 thousand from indemnity expenses in 4Q20 and 2020 |
||||||||||||||||||
In 4Q21, EBITDA was R$97.1 million, 70.1% higher than 4Q20. Adjusted EBITDA in the quarter was R$101.8 million, an increase of 78.1% compared to 4Q20. Adjusted EBITDA margin was 22.3% in 4Q21, slightly above the adjusted EBITDA margin of 21.5% reported in 4Q20.
The reported EBITDA in 2021 was R$293.0 million, an increase of 23% in relation to 2020. Adjusted EBITDA was R$324.1 million, 36.2% higher than in 2020. Adjusted EBITDA margin was 22.4% in 2021, below the level of 24.9% reported in 2020, when the result benefited from lower costs and expenses during the first year of the pandemic.
Net Financial Expenses
Net financial expenses was R$8.1 million in 4Q21, compared to R$1.4 million in 4Q20, mainly due to new debt in the amount of R$650 million incurred by the Company in July to finance the Dextra acquisition, which will mature in 2026. In 2021, net financial expenses totaled R$34.2 million, an increase in relation to the R$15.4 million expense in 2020. Interest on loans increased from R$10.3 million in 2020 to R$29.7 million in 2021 due to the increase in the gross debt position, as explained above, combined with the increase in interest rates (CDI) during the year. Income from financial investments grew from R$2.6 million in 2020 to R$4.3 million in 2021.
Depreciation and Amortization
Depreciation and amortization expenses totaled R$18.3 million in 4Q21, an increase of R$10.8 million compared to 4Q20. In 2021, depreciation and amortization expenses reached R$48.3 million, compared to R$29.9 million in 2020, mainly due to the recognition of intangible assets related to the acquisition of Dextra in 2021 in the amount of R$148.5 million from customer relationships, non-compete agreement and brands.
In addition, the Company recognized R$595.7 million in goodwill from the acquisition of Dextra, which is expected to be deductible for tax purposes, considering the merger of Dextra and CI&T that occurred on December 2021.
Net Profit and Adjusted Net Profit
Net Profit (in BRL thousand) |
4Q21 |
|
4Q20 |
|
Var. 4Q21 x 4Q20 |
|
2021 |
|
2020 |
|
Var. 2021 x 2020 |
|||||||
Net profit(loss) for the period |
43,828 |
|
|
29,401 |
|
|
49.1 |
% |
|
125,957 |
|
|
127,654 |
|
|
-1.3 |
% |
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consulting expenses (1) |
3,821 |
|
|
108 |
|
|
3438.0 |
% |
|
9,177 |
|
|
428 |
|
|
2044.2 |
% |
|
Impairment |
77 |
|
|
0 |
|
|
0.0 |
% |
|
21,895 |
|
|
0 |
|
|
- |
|
|
Adjusted Net Profit |
47,726 |
|
|
29,509 |
|
|
61.7 |
% |
|
157,029 |
|
|
128,082 |
|
|
22.6 |
% |
|
Adjusted Net Profit Margin |
10.4 |
% |
|
11.1 |
% |
|
-0.7p.p |
|
10.9 |
% |
|
13.4 |
% |
|
-2.5p.p |
|||
(1)Include R$18 thousand from indemnity expenses in 4Q20 and 2020 |
||||||||||||||||||
In 4Q21, net profit was R$43.8 million, 49.1% higher than 4Q20. Adjusted net profit reached R$47.7 million, an increase of 61.7% compared to 4Q20. The adjusted net profit margin reduced slightly from 11.1% in 4Q20 to 10.4% in 4Q21, mainly due to higher depreciation and amortization and financial expenses, as explained above.
In 2021, net profit totaled R$125.9 million, 1.3% lower than in 2020. The adjusted net profit was R$157.0 million, 22.6% higher than in 2020. The adjusted net profit margin was 10.9% in 2021, a reduction of the level observed in 2020, explained mainly by the increase in the cost of service provided and higher expenses with depreciation and amortization and financial expenses.
Cash Flow from Operations
In 2021, CI&T generated R$214.4 million in cash from operating activities, 37% higher compared to the amount of R$156.9 million recorded in 2020. Deducting payment for income tax and interest on loans, borrowings and leasing, net cash from operating activities was R$132.4 million, an increase of R$31.4 million in relation to 2020.
Investments on acquisition of property, plant and equipment and intangible assets represented R$29.9 million in 2021 and R$21.4 million in 2020, and are mainly related to IT equipments for the growing number of employees.
Indebtedness
CI&T ended December 31, 2021 with a financial net cash position of R$145.8 million, composed of a gross debt position of R$788.7 million and R$934.5 million in cash, cash equivalents and financial investments, including the net proceeds of our IPO. Lease liabilities amounted to R$81.9 million at the end of the quarter. Currently, 34% of the total debt is USD denominated and 66% is denominated in Brazilian Reais, which is linked to the Brazilian interest rate, CDI.
Business Outlook
We expect our net revenue in the first quarter of 2022 to be at least R$485.0 million, a 64% growth compared to our net revenue of R$ 296.3 million in the first quarter of 2021.
For the full year of 2022, we expect our net revenue to be at least R$2,250 million or USD433 million, a 56% growth compared to our net revenue of R$1,444 million in 2021. In addition, we estimate our adjusted EBITDA to be at least 20% for the full year of 2022. This guidance for 2022 assumes an average exchange rate of 5.20 Brazilian Reais to the U.S. dollar for the full year.
These expectations are forward-looking statements and actual results may differ materially. See "Cautionary Statement on Forward-Looking Statements" below.
Pro forma financial highlights, including the Dextra acquisition as if the acquisition had occurred on January 1, 2021
- Pro forma net revenue of R$1,617.4 million, 39.4% higher than in 2020.
- Pro forma net profit for the year was R$129.0 million
- Pro forma adjusted EBITDA was R$380.5 million, with an adjusted EBITDA margin of 23.5%.
- Pro forma adjusted net profit totaled R$160.1 million, equivalent to an adjusted net margin of 9.9%
Pro Forma Income Statement (in BRL thousand) |
2021 |
|
2020 |
|
Var.
|
||||
Net Revenue |
1,617,339 |
|
1,160,555 |
|
39.4 |
% |
|||
Costs of services provided |
(1,038,939 |
) |
(717,701 |
) |
44.8 |
% |
|||
Gross Profit |
578,400 |
|
442,854 |
|
30.6 |
% |
|||
SG&A |
(277,293 |
) |
(210,678 |
) |
31.6 |
% |
|||
Other income (expenses) net (1) |
(23,499 |
) |
(1,047 |
) |
- |
|
|||
Operating profit before financial income |
277,608 |
|
231,129 |
|
20.1 |
% |
|||
Net finance expense |
(64,654 |
) |
(58,825 |
) |
9.9 |
% |
|||
Profit before Income tax |
212,954 |
|
172,304 |
|
23.6 |
% |
|||
Income tax expense |
(83,910 |
) |
(57,702 |
) |
45.4 |
% |
|||
Net profit for the year |
129,044 |
|
114,602 |
|
12.6 |
% |
|||
(1) includes impairment loss on trade receivables and contract assets and research and technological innovation expenses. |
|||||||||
Pro Forma Non-IFRS Financial Measures (Unaudited)
Please refer to the appendix for non-IFRS financial adjustments.
Pro Forma (in BRL thousand) |
|
2021 |
|
2020 |
|
Var.
|
|||
Adjusted Gross Profit |
617,334 |
|
471,584 |
|
30.9 |
% |
|||
EBITDA |
349,387 |
|
295,716 |
|
18.1 |
% |
|||
Adjusted EBITDA |
380,509 |
|
296,767 |
|
28.2 |
% |
|||
Adjusted EBITDA Margin |
23.5 |
% |
25.6 |
% |
-2.0 |
|
|||
Adjusted Net Profit |
160,116 |
|
116,290 |
|
37.7 |
% |
|||
Adjusted Net Profit Margin |
9.9 |
% |
10.0 |
% |
-0.1 |
|
|||
The unaudited pro forma condensed statements of profit or loss for the year ended December 31, 2021 is based on (a) the audited consolidated statements of profit or loss of CI&T Inc for the year ended December 31, 2021; and (b) the unaudited financial information of Dextra Tecnologia for the period from January 1, 2021 to August 9, 2021 and gives effect on a pro forma basis to the Dextra Acquisition as if it had been consummated on January 1, 2021.
The transaction accounting adjustments totaled a negative effect of R$28.8 million in the pro forma net income in 2021, and it relates to (a) amortization expense of intangible assets (customer relationship, brand and non-compete agreement), (b) estimated interest expenses on the new debt to finance the Dextra acquisition, and (c) expected income taxes based on the pro forma adjustments. Please refer to the table Pro Forma - Statement of profit and loss (Unaudited) below.
Conference Call and Webcast Information
Cesar Gon, Bruno Guicardi, Stanley Rodrigues and Eduardo Galvão will host a video conference call to discuss the 4Q21 and 2021 financial and operating results on March 10 at 8:00 a.m. Eastern Time / 10:00 a.m. BRT. The earnings call can be accessed at the Company’s Investor Relations website at https://investors.ciandt.com or at the following link:
http://investors.ciandt.com/investors-info/events-and-presentations/CIT-4Q21-Earnings-Call.
About CI&T
CI&T is a global digital specialist, a partner in end-to-end digital transformation for 100+ Large Enterprises & Fast Growth Clients. As digital natives, we bring a 27-year track record of accelerating business impact through complete and scalable digital solutions. With a global presence in 8 countries with a nearshore delivery model, CI&T is the Employer of Choice for more than 5,500 professionals in strategy, data science, design, and engineering, unlocking top-line growth, improving customer experience, and driving operational efficiency.
Basis of accounting and functional currency
CI&T maintains its books and records in Brazilian reais, the presentation currency for its audited consolidated financial statements, and the functional currency of our operations in Brazil. CI&T prepares its audited consolidated financial statements in accordance with IFRS, as issued by the IASB.
Non-IFRS Financial Measures
We regularly monitor certain financial and operating metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. These non-IFRS financial measures include Adjusted Gross Profit, Adjusted Gross Profit Margin, EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Profit for the period, Adjusted Net Profit Margin for the period, Net Revenue at Constant Currency and Net Revenue Increase at Constant Currency, and should be considered in addition to results prepared in accordance with IFRS, but not as substitutes for IFRS results. In addition, our calculation of these non-IFRS financial measures may be different from the calculation used by other companies, and therefore comparability may be limited. These non-IFRS financial measures are provided as additional information to enhance investors’ overall understanding of the historical and current financial performance of our operations. Please refer to the previous pages for reconciliations and explanation of the reconciliation items for Non-IFRS measures and see appendix below "Reconciliation of Non-IFRS measures Pro Forma, including the Dextra acquisition as if the acquisition had occurred on January 1, 2021" for reconciliations of our Non-IFRS measures to the nearest IFRS measure.
We monitor our net revenue at constant currency and net revenue increase at constant currency. As the impact of foreign currency exchange rates is highly volatile and difficult to predict, we believe Net Revenue at Constant Currency and Net Revenue Increase at Constant Currency allow us to better understand the underlying business trends and performance of our ongoing operations on a period-over-period basis by eliminating the effect of fluctuations in the exchange rates we use in the translation of our Net revenue in foreign currencies into Brazilian reais.
CI&T is not providing a quantitative reconciliation of forward-looking Non-IFRS Adjusted EBITDA to the most directly comparable IFRS measure because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort. These items include, but are not limited to, stock-based compensation expense, acquisition-related charges, the tax effect of non-IFRS adjustments and other items. These items are uncertain, depend on various factors, and could have a material impact on IFRS reported results for the guidance period.
In calculating Adjusted Gross Profit, we exclude cost components that are not related to the direct management of our services. For the periods herein, the adjustments applied were: (i) depreciation and amortization related to costs of services provided; and (ii) stock options compensation plan expenses.
In calculating Adjusted EBITDA, we exclude components that are not related to the direct management of our services. For the periods herein, the adjustments were: (i) consulting expenses related to corporate reorganization and initial public offering expenses, as well as mergers and acquisitions activity; (ii) government grants related to tax reimbursement in the Chinese subsidiary; (iii) stock options compensation plan expenses; and (iv) the impairment related to the discontinuation of certain investments made by Dextra on certain in progress intangible assets related to digital platforms following the closing of the Dextra acquisition. CI&T does not expect a continuing impact in its operations related to this impairment.
In calculating Adjusted Net Profit, we exclude cost components that are not related to the direct management of our services. For the periods herein, the adjustments applied were: (i) consulting expenses related to corporate reorganization and initial public offering costs, as well as mergers and acquisitions activity; and (ii) the impairment related to the discontinuation of certain investments made by Dextra on certain in progress intangible assets related to digital platforms following the closing of the Dextra acquisition. CI&T does not expect a continuing impact in its operations related to this impairment.
We calculate Net Revenue at Constant Currency and Net Revenue Growth at Constant Currency by translating Net revenue from entities reporting in foreign currencies into Brazilian reais using the comparable foreign currency exchange rates from the prior period. Net Revenue Retention Rate is calculated by dividing Net revenue, less Net revenue generated from new clients in a given year, over Net revenue from the previous year. Cash conversion rate is calculated by dividing cash generated from operating activities over adjusted EBITDA.
Cautionary Statement on Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, which include but are not limited to: the statements under "Business outlook," including expectations relating to revenues and other financial or business metrics; statements regarding relationships with clients; and any other statements of expectation or belief. The words “believe,” “will,” “may,” “may have,” “would,” “estimate,” “continues,” “anticipates,” “intends,” “plans,” “expects,” “budget,” "scheduled,” “forecasts” and similar words are intended to identify estimates and forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements represent our management's beliefs and assumptions only as of the date of this press release. You should read this press release with the understanding that our actual future results may be materially different from what we expect. These statements are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from results expressed or implied in this press release. Such risk factors include, but are not limited to, those related to: the current and future impact of the COVID-19 pandemic on our business and industry; the effects of competition on our business; uncertainty regarding the demand for and market utilization of our services; the ability to maintain or acquire new client relationships; general business and economic conditions; our ability to successfully integrate Dextra; and our ability to successfully execute our growth strategy and strategic plans. Additional information concerning these and other risks and uncertainties are contained in the "Risk Factors" section of CI&T's registration statement on Form F-1. Additional information will be made available in our annual reports on Form 20-F, and other filings and reports that CI&T may file from time to time with the SEC. Except as required by law, CI&T assumes no obligation and does not intend to update these forward-looking statements or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Consolidated statement of profit and loss, including Dextra as of August 10, 2021 |
|||||||||||
(in BRL thousand) |
|||||||||||
|
Three months ended December 31, |
|
Full year ended December 31, |
||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
|
|
|
|
||||||||
Net Revenue |
456,794 |
|
|
265,367 |
|
|
1,444,380 |
|
|
956,519 |
|
Costs of services provided |
(294,746 |
) |
|
(166,294 |
) |
|
(935,732 |
) |
|
(600,866 |
) |
Gross Profit |
162,048 |
|
|
99,073 |
|
|
508,648 |
|
|
355,653 |
|
|
|
|
|
|
|
|
|
||||
Selling expenses |
(27,752 |
) |
|
(25,815 |
) |
|
(89,654 |
) |
|
(65,093 |
) |
General and administrative expenses |
(58,685 |
) |
|
(22,861 |
) |
|
(151,681 |
) |
|
(81,161 |
) |
Research and technological innovation expenses |
- |
|
|
(810 |
) |
|
(4 |
) |
|
(3,462 |
) |
Impairment loss on trade receivables and contract assets |
1,533 |
|
|
(191 |
) |
|
(497 |
) |
|
(196 |
) |
Other income (expenses) net |
1,716 |
|
|
272 |
|
|
(22,206 |
) |
|
2,503 |
|
|
|
|
|
|
|
|
|
||||
Operating profit before financial income and tax |
78,860 |
|
|
49,668 |
|
|
244,606 |
|
|
208,244 |
|
|
|
|
|
|
|
|
|
||||
Finance income |
26,395 |
|
|
14,957 |
|
|
69,816 |
|
|
47,808 |
|
Finance cost |
(34,525 |
) |
|
(16,374 |
) |
|
(104,048 |
) |
|
(63,261 |
) |
Net finance expense |
(8,130 |
) |
|
(1,417 |
) |
|
(34,232 |
) |
|
(15,453 |
) |
|
|
|
|
|
|
|
|
||||
Profit before Income tax |
70,730 |
|
|
48,251 |
|
|
210,374 |
|
|
192,791 |
|
Income tax expense |
|
|
|
|
|
|
|
||||
Current |
(32,008 |
) |
|
(24,434 |
) |
|
(95,375 |
) |
|
(66,912 |
) |
Deferred |
5,106 |
|
|
5,584 |
|
|
10,958 |
|
|
1,775 |
|
Net profit for the year |
43,828 |
|
|
29,401 |
|
|
125,957 |
|
|
127,654 |
|
|
|
|
|
|
|
|
|
||||
Income attributable to: |
|
|
|
|
|
|
|
||||
Controlling shareholders |
- |
|
|
- |
|
|
125,957 |
|
|
127,654 |
|
Non-controlling interests |
- |
|
|
- |
|
|
- |
|
|
- |
|
Earnings per share |
|
|
|
|
|
|
|
||||
Earnings per share – basic (in R$) |
- |
|
|
- |
|
|
1.03 |
|
|
1.06 |
|
Earnings per share – diluted (in R$) |
- |
|
|
- |
|
|
1.01 |
|
|
1.04 |
|
Consolidated statements of financial position |
|||||||||||
(in BRL thousand) |
|||||||||||
Assets |
December 31, 2021 |
|
December 31, 2020 |
|
Liabilities and equity |
December 31, 2021 |
|
December 31, 2020 |
|||
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
135,727 |
|
162,827 |
|
Suppliers and other payables |
33,566 |
|
15,312 |
|||
Financial Investments |
798,786 |
|
- |
|
Loans and borrowings |
164,403 |
|
75,377 |
|||
Trade receivables |
340,519 |
|
196,256 |
|
Lease liabilities |
21,214 |
|
14,569 |
|||
Contract assets |
134,388 |
|
50,625 |
|
Salaries and welfare charges |
234,173 |
|
141,794 |
|||
Recoverable taxes |
7,785 |
|
1,016 |
|
Accounts payable for business combination |
48,923 |
|
- |
|||
Tax assets |
2,810 |
|
2,117 |
|
Derivatives |
535 |
|
5,392 |
|||
Derivatives |
896 |
|
8,837 |
|
Tax liabilities |
13,345 |
|
6,078 |
|||
Other assets |
29,994 |
|
12,874 |
|
Other taxes payable |
5,423 |
|
3,279 |
|||
Total current assets |
1,450,905 |
|
434,552 |
|
Dividends and interest on equity payable |
- |
|
30,677 |
|||
|
|
|
|
|
Contract liability |
13,722 |
|
9,987 |
|||
|
|
|
|
|
Indemnity |
- |
|
628 |
|||
Recoverable taxes |
3,046 |
|
3,099 |
|
Other liabilities |
13,669 |
|
7,899 |
|||
Deferred tax |
31,989 |
|
15,152 |
|
Total current liabilities |
548,973 |
|
310,992 |
|||
Judicial deposits |
3,079 |
|
3,083 |
|
|
|
|
|
|||
Other assets |
2,974 |
|
2,494 |
|
Loans and borrowings |
624,306 |
|
13,853 |
|||
Property, plant and equipment |
57,721 |
|
38,771 |
|
Lease liabilities |
60,674 |
|
60,659 |
|||
Intangible assets |
738,803 |
|
18,166 |
|
Provisions |
633 |
|
161 |
|||
Right-of-use assets |
73,827 |
|
69,765 |
|
Accounts payable for business combination |
36,803 |
|
- |
|||
Total non-current assets |
911,439 |
|
150,530 |
|
Other liabilities |
1,660 |
|
957 |
|||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
Total non-current liabilities |
724,076 |
|
75,630 |
|||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
Equity |
|
|
|
|||
|
|
|
|
|
Share capital |
36 |
|
68,968 |
|||
|
|
|
|
|
Share premium |
915,947 |
|
- |
|||
|
|
|
|
|
Capital reserves |
10,105 |
|
6,764 |
|||
|
|
|
|
|
Profit reserves |
125,957 |
|
109,308 |
|||
|
|
|
|
|
Other comprehensive income |
37,250 |
|
13,420 |
|||
|
|
|
|
|
Total equity |
1,089,295 |
|
198,460 |
|||
|
|
|
|
|
|
|
|
|
|||
Total assets |
2,362,344 |
|
585,082 |
|
Total equity and liabilities |
2,362,344 |
|
585,082 |
|||
Cash Flow Statement |
||||||
(in BRL thousand) |
||||||
|
December 31, 2021 |
|
December 31, 2020 |
|||
Cash flow from operating activities |
|
|
|
|||
Net profit for the year |
125,957 |
|
|
127,654 |
|
|
Adjustments for: |
|
|
|
|||
Depreciation and amortization |
48,354 |
|
|
29,882 |
|
|
Gain/loss on the sale of property, plant and equipment and intangible assets |
1,237 |
|
|
689 |
|
|
Interest, monetary variation and exchange rate changes |
45,627 |
|
|
7,789 |
|
|
Interest on accounts payable for business combinations |
3,091 |
|
|
- |
|
|
Interest on lease |
6,369 |
|
|
5,023 |
|
|
Unrealized loss (gain) on financial instruments |
3,084 |
|
|
(2,512 |
) |
|
Income tax expenses |
84,417 |
|
|
65,137 |
|
|
Impairment losses on trade receivables |
280 |
|
|
414 |
|
|
Provision for (reversal of) impairment losses on trade receivables and contract assets |
217 |
|
|
(218 |
) |
|
Write-off of intangible assets |
21,894 |
|
|
- |
|
|
Provision for labor risks |
472 |
|
|
(12 |
) |
|
Provision for indemnity |
- |
|
|
(18 |
) |
|
Share-based plan |
2,531 |
|
|
942 |
|
|
Exchange rate changes on indemnity |
- |
|
|
(4,324 |
) |
|
Others |
98 |
|
|
469 |
|
|
Variation in operating assets and liabilities |
|
|
|
|||
Trade receivables |
(102,300 |
) |
|
(47,848 |
) |
|
Contract assets |
(52,876 |
) |
|
(8,339 |
) |
|
Other taxes recoverable |
(13,806 |
) |
|
461 |
|
|
Tax assets |
(91 |
) |
|
507 |
|
|
Judicial deposits |
4 |
|
|
- |
|
|
Suppliers |
12,215 |
|
|
6,746 |
|
|
Salaries and welfare charges |
63,083 |
|
|
49,086 |
|
|
Tax liabilities |
(17,364 |
) |
|
(12,275 |
) |
|
Other taxes payable |
1,698 |
|
|
(407 |
) |
|
Contract liabilities |
1,922 |
|
|
(7,138 |
) |
|
Payment of share-based indemnity |
(628 |
) |
|
(43,354 |
) |
|
Other receivables and payables, net |
(21,054 |
) |
|
(11,435 |
) |
|
Cash generated from operating activities |
214,431 |
|
|
156,919 |
|
|
Income tax paid |
(64,150 |
) |
|
(47,044 |
) |
|
Interest paid on loans and borrowings |
(12,149 |
) |
|
(3,880 |
) |
|
Interest paid on lease |
(5,753 |
) |
|
(5,023 |
) |
|
Net cash from operating activities |
132,379 |
|
|
100,972 |
|
|
Cash flows from investment activities: |
|
|
|
|||
Acquisition of property, plant and equipment and intangible assets |
(29,907 |
) |
|
(21,391 |
) |
|
Financial investment application |
(784,915 |
) |
|
- |
|
|
Acquisition of subsidiary net of cash acquired |
(692,722 |
) |
|
- |
|
|
Net cash used in investment activities |
(1,507,544 |
) |
|
(21,391 |
) |
|
Cash flow from financing activities: |
|
|
|
|||
Share-based plan contributions |
1,282 |
|
|
- |
|
|
Issuance of common shares at initial public offering |
915,947 |
|
|
- |
|
|
Transaction cost of offering |
(55,874 |
) |
|
- |
|
|
Dividends paid |
(126,045 |
) |
|
(30,977 |
) |
|
Interest on equity, paid |
(6,288 |
) |
|
(4,276 |
) |
|
Payment of lease liabilities |
(17,656 |
) |
|
(15,500 |
) |
|
Proceeds from loans and borrowings |
740,596 |
|
|
144,269 |
|
|
Payment of loans and borrowings |
(75,196 |
) |
|
(88,107 |
) |
|
Net cash from financing activities |
1,376,766 |
|
|
5,409 |
|
|
Net increase in cash and cash equivalents |
1,601 |
|
|
84,990 |
|
|
|
|
|
|
|||
Cash and cash equivalents as of January 1st |
162,827 |
|
|
79,500 |
|
|
Exchange variation effect on cash and cash equivalents |
(20,949 |
) |
|
(1,663 |
) |
|
Cash reduction due to spin-off effect |
(7,752 |
) |
|
- |
|
|
Cash and cash equivalents as of December 31, 2021 |
135,727 |
|
|
162,827 |
|
|
Pro Forma- Statement of profit and loss (Unaudited) |
||||||||||||
(in BRL thousand) |
||||||||||||
|
CI&T |
|
Dextra |
|
Transaction Accounting
|
|
CI&T Pro
|
|||||
|
|
|
|
|
||||||||
Net revenue |
1,444,380 |
|
172,959 |
|
|
1,617,339 |
|
|||||
Costs of services provided |
(935,732 |
) |
(103,207 |
) |
|
(1,038,939 |
) |
|||||
Gross profit |
508,648 |
|
69,752 |
|
|
578,400 |
|
|||||
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||
Selling expenses |
(89,654 |
) |
(1,021 |
) |
|
(90,675 |
) |
|||||
General and administrative expenses |
(151,681 |
) |
(20,010 |
) |
(14,927 |
) |
(186,618 |
) |
||||
Research and technological innovation expenses |
(4 |
) |
- |
|
|
(4 |
) |
|||||
Impairment loss on trade receivables and contract assets |
(497 |
) |
92 |
|
|
(405 |
) |
|||||
Other income (expenses) net |
(22,206 |
) |
(884 |
) |
|
(23,090 |
) |
|||||
Operating profit before financial income and tax |
244,606 |
|
47,929 |
|
(14,927 |
) |
277,608 |
|
||||
|
|
|
|
|
||||||||
Finance income |
69,816 |
|
224 |
|
|
70,040 |
|
|||||
Finance cost |
(104,048 |
) |
(1,852 |
) |
(28,794 |
) |
(134,694 |
) |
||||
Net finance costs |
(34,232 |
) |
(1,628 |
) |
(28,794 |
) |
(64,654 |
) |
||||
|
|
|
|
|
||||||||
Profit before Income tax |
210,374 |
|
46,301 |
|
(43,721 |
) |
212,954 |
|
||||
|
|
|
|
|
||||||||
Income tax |
(84,417 |
) |
(14,358 |
) |
14,865 |
|
(83,910 |
) |
||||
Current |
(95,375 |
) |
(12,740 |
) |
14,865 |
|
(93,250 |
) |
||||
Deferred |
10,958 |
|
(1,618 |
) |
|
9,341 |
|
|||||
Net profit for the period |
125,957 |
|
31,943 |
|
(28,856 |
) |
129,044 |
|
||||
|
|
|
|
|
||||||||
Income attributable to: |
|
|
|
|
||||||||
Controlling shareholders |
125,957 |
|
31,943 |
|
(28,856 |
) |
129,044 |
|
||||
Net profit for the period |
125,957 |
|
31,943 |
|
(28,856 |
) |
129,044 |
|
||||
|
|
|
|
|
||||||||
Earnings per share |
|
|
|
|
||||||||
Earnings per share – basic (in R$) |
1.030 |
|
|
|
1.060 |
|
||||||
Earnings per share – diluted (in R$) |
1.010 |
|
1.030 |
|
||||||||
APPENDIX
Reconciliation of Non-IFRS measures - Pro Forma, including the Dextra acquisition as if the acquisition had occurred on January 1, 2021 (Unaudited) |
||||||
(in BRL thousand) |
||||||
|
2021 |
|
2020 |
|||
Pro forma Net Revenue |
1,617,339 |
|
|
1,160,555 |
|
|
Pro forma Cost |
(1,038,939 |
) |
|
(717,701 |
) |
|
Pro forma Gross Profit |
578,400 |
|
|
442,854 |
|
|
Pro forma Selling, general, and administrative |
(277,297 |
) |
|
(210,678 |
) |
|
Pro forma Impairment loss on trade receivables and contract assets |
(405 |
) |
|
(258 |
) |
|
Pro forma Other income (expenses) net |
(23,090 |
) |
|
(789 |
) |
|
Pro forma Operating profit before financial income |
277,608 |
|
|
231,129 |
|
|
Pro forma Net finance expense |
(64,654 |
) |
|
(58,825 |
) |
|
Pro forma Profit before Income tax |
212,954 |
|
|
172,304 |
|
|
Pro forma Income Tax |
(83,910 |
) |
|
(57,702 |
) |
|
Pro forma Net profit for the period |
129,044 |
|
|
114,602 |
|
|
Reconciliation of Pro forma Adjusted Gross Profit |
|
|
|
|||
Pro forma Gross Profit |
578,400 |
|
|
442,854 |
|
|
Adjustments |
|
|
|
|||
Depreciation and amortization (cost of services provided) |
37,004 |
|
|
28,591 |
|
|
Stock Options |
1,930 |
|
|
139 |
|
|
Adjusted Pro forma Gross Profit |
617,335 |
|
|
471,584 |
|
|
Adjusted Pro forma Gross Profit Margin |
38.0 |
% |
|
40.6 |
% |
|
Reconciliation of Pro forma EBITDA |
|
|
|
|||
Pro forma Net profit for the period |
129,044 |
|
|
114,602 |
|
|
Adjustments |
|
|
|
|||
Net finance expense |
64,654 |
|
|
58,825 |
|
|
Income tax expense |
83,910 |
|
|
57,702 |
|
|
Depreciation and amortization |
71,779 |
|
|
64,587 |
|
|
Pro forma EBITDA |
349,387 |
|
|
295,716 |
|
|
Pro forma EBITDA Margin |
21.6 |
% |
|
25.5 |
% |
|
Reconciliation of Adjusted Pro forma EBITDA |
|
|
|
|||
Pro forma Net profit for the period |
129,044 |
|
|
114,602 |
|
|
Adjustments |
|
|
|
|||
Net finance expense |
64,654 |
|
|
58,825 |
|
|
Income tax expense |
83,910 |
|
|
57,702 |
|
|
Depreciation and amortization |
71,779 |
|
|
64,587 |
|
|
Stock Options |
2,531 |
|
|
934 |
|
|
Consultant Expenses |
9,177 |
|
|
1,706 |
|
|
Government grants |
(2,481 |
) |
|
(1,571 |
) |
|
Impairment |
21,895 |
|
|
0 |
|
|
Indemnity |
0 |
|
|
(18 |
) |
|
Adjusted Pro forma EBITDA |
380,508 |
|
|
296,767 |
|
|
Adjusted Pro forma EBITDA Margin |
23.5 |
% |
|
25.6 |
% |
|
Reconciliation of Adjusted Pro forma Net Income |
|
|
|
|||
Pro forma Net profit for the period |
129,044 |
|
|
114,602 |
|
|
Adjustments |
|
|
|
|||
Business Consultant Cost |
9,177 |
|
|
1,706 |
|
|
Impairment |
21,895 |
|
|
0 |
|
|
Indemnity |
0 |
|
|
(18 |
) |
|
Adjusted Pro forma Net profit for the period |
160,116 |
|
|
116,290 |
|
|
Adjusted Pro forma Net profit Margin for the period |
9.9 |
% |
|
10.0 |
% |
|
NET REVENUE AT CONSTANT CURRENCY |
Three months ended December 31, |
|
Full year ended December 31, |
|||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
Net Revenue at Constant Currency |
448,375 |
|
265,292 |
|
1,408,679 |
|
958,142 |
|
