CBrain A/S : Subscriptions increase cBrain’s revenue growth to 25%

The financial accounts for 2020 show a significant growth. This includes revenue, earnings, and especially the key figures for both sales of subscriptions and exports, which is central in relation to the growth plan.

Revenue has grown from DKK 96.4M in 2019 to DKK 120.1M in 2020, equaling a revenue growth of 25%.

Earnings before tax (EBT) has grown from DKK 10.8M in 2019 to DKK 20.1M in 2020, equaling to earnings of 17% and growth in earnings of 86%.

Sales of software subscriptions have grown from DKK 45.7M in 2019 to 63.8M in 2020, equaling a 40% growth in sales of software subscriptions.

This means that software subscriptions account for 53% of the total revenue. The remaining part of the revenue comes from the sale of hours in relation to delivery and support, as well as the sale of software licenses for customers, who choose to acquire F2 in the form of software licenses instead of renting F2 as a SaaS solution (software-as-a-Service).

Export has grown from DKK 13.6M to DKK 17.3M, corresponding to an export growth of 27%, which means that export makes up 14% of the total revenue.

Management is very satisfied with the continued development. The increased growth and revenue, combined with a continued influx of new customers in Denmark and internationally shows that cBrain continues to maintain and execute on its long-term growth strategy.

Digital solutions for the public sector represent one of the largest markets in the world. However, the market is characterized by a large number of suppliers building tailored solutions, typically based on software components and modules that are customized and integrated.

cBrain's growth strategy is based on F2. With F2, cBrain has proven what very few believed to be possible. In close collaboration with the Danish authorities, cBrain has designed and developed F2. A fully integrated standard software platform with all the features a government needs in management.

Based on F2, cBrain offer a standard software ready for operation, without the need for neither special programming nor a lot of consulting hours. It is groundbreaking and shows an entirely new method for government digitization. Furthermore, F2 can be delivered as a cloud service which eliminates the work related to operation.

Since 2018, Denmark has been ranked as the world's leading country in the United Nations E-government index. More than 75 Danish authorities, including 16 of out the 19 Danish ministries, have now introduced F2 as their digital platform.

This gives cBrain a very strong international reference position. In collaboration with, among others, the Trade Council under the Ministry of Foreign Affairs, cBrain offer governments around the world insight into the Danish solutions and furthermore the opportunity to reuse these solutions.

cBrain continues to develop its Danish reference position, as more and more authorities introduce F2.

In 2020 and until the beginning of 2021, cBrain has thus announced new agreements in Denmark with, among others, the Ministry of Industry, Business and Financial Affairs, The Danish Return Agency, the City of Copenhagen, the Danish Environmental Portal, the Ministry of Food, Agriculture and Fisheries of Denmark as well as the Ministry of Culture.

In spite of COVID-19, cBrain has managed to maintain and expand its international activities which has ensured a continued growth in exports.

In Germany, cBrain has in 2020 announced a number of large new framework agreements which means that cBrain has expanded its staff and employs around 20 people in the company's office in Berlin.

Additionally in 2020, cBrain could announce agreements with the UAE Ministry of Finance, a framework agreement in France with the French authorities, the completion of the first delivery in the USA to the USDA in Washington, and furthermore the first agreement in South America.

cBrain has a strong position in 2021 with an international user club of more than 100 different authorities and many different processes. They all run on the exact same platform and continually update to the newest version, which is completely unique and shows the strength of F2.

With this starting point, cBrain maintains its growth plan and has - on account of a solid balance and positive cash flow - the necessary economic strength.

In recent years, revenue has gone through a noticeable development where cBrain is experiencing a steeper growth curve, with revenue growth increasing from 4% in 2018 to 16% in 2019 and 25% in 2020. This supports cBrain's potential and long-term opportunities.

Based on known activities, cBrain expects a revenue growth in 2021 of 25-30% as well as earnings before tax (EBT) of 10-15%.

However, the expectations are associated with considerable uncertainty. One example is cBrain's export opportunities, which, in both the short and long-term, may provide the possibility to achieve higher growth rates.

It should be noted that revenue growth based on the sale of hours demands hiring more employees, whereas revenue growth based on the sale of subscriptions can largely be executed with the need of additional capacity costs.

The continued development between the sale of subscriptions and hours, as well as delivery speed for the individual projects, will affect the growth rates.

With best regards,

Per Tejs Knudsen, CEO