CI&T Reports Strong Fourth Quarter 2021 and Full Year Financial Results

NEW YORK--()--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
(cost of services provided)

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.
2021 x 2020

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.
2021 x 2020

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
Adjustments

 

CI&T Pro
forma 2021

 

 

 

 

 

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

 

Contacts

Investor Relations Contact:
Eduardo Galvão
egalvao@ciandt.com

Media Relations Contact:
Zella Panossian
ciandt@illumepr.com

Contacts

Investor Relations Contact:
Eduardo Galvão
egalvao@ciandt.com

Media Relations Contact:
Zella Panossian
ciandt@illumepr.com