cBrain executes growth plan, remaining on target
Company Announcement no. 11/2024
cBrain executes growth plan, remaining on
target
Copenhagen, November 7, 2024
Driven by expanding partnerships and large contracts globally,
cBrain (NASDAQ: CBRAIN) intends to become a leading supplier of
COTS (commercial off-the-shelf) software for government. Based on
solid development in Denmark and a solid growing international
pipeline of customer projects, cBrain foresees significant growth
in 2025.
Commercial off-the-shelf (COTS) software redefines and
accelerates government digital transformation
Software for government digitization is one of the largest markets
globally. Currently, this market is dominated by major suppliers
who provide custom-built solutions by integrating best-of-breed
software modules and components. However, many of these projects
encounter significant challenges, often resulting in delays and
budget overruns due to the complexity of implementing best-of-breed
solutions.
cBrain is challenging the traditional government IT approach by
offering standard software, commonly known as commercial
off-the-shelf (COTS) software. Unlike custom-built, best-of-breed
solutions, COTS for Government offers substantial advantages to
customers in terms of quality, delivery speed, and reduced
implementation and maintenance costs.
Historically, government organizations worldwide have been
reluctant to incorporate standard software into their digitization
strategies. This hesitation often stems from internal IT
departments and procurement processes that are structured to work
with custom-built, best-of-breed solutions. However, several
government agencies, including leading Danish government
institutions, have recently started to adopt COTS, recognizing the
benefits of standardized software.
cBrain expects that the transition to COTS for Government will
significantly reduce the need for IT consulting services, prompting
a major shift in the global government IT industry.
F2 offers a unique value proposition
cBrain has invested more than 400,000 hours in developing F2. F2 is
a comprehensive and fully integrated digital platform designed from
the ground up specifically for government use. With its built-in
no-code/low-code configuration tools, F2 enables users without a
technical background to tailor the platform to meet specific
organizational needs and processes.
The quality and benefits of F2 are well-established. Almost all
Danish ministries have implemented F2 as their digital platform,
and F2 is used by more than 75 Danish government organizations.
Internationally, cBrain has successfully implemented F2 for
government organizations across five continents, supporting a range
of public sector areas such as business, climate and environment,
education, energy, family services, immigration, labor and market
regulation, science, social welfare, and taxation.
With the F2 digital platform, based on a strong reference
position in Denmark and a growing international presence, cBrain
intends to become a leading global provider of COTS for
government.
Growth plan
cBrain is executing its international growth plan with a financial
goal of reaching total revenue of 350 million DKK in 2025. This
goal is anchored in two primary revenue streams, referred to as
“Base” and “Stepping stones”.
The “Base” stream aims to achieve annual revenue growth of
10-15% by strengthening and expanding existing operations and
customer relationships. In parallel, the “Stepping Stones”
initiative aims to lift annual revenue growth to 30%, by increasing
contract values and winning larger international contracts.
cBrain continues to execute its growth strategy. This is
supported by a growing number of international pilot projects that
set the stage for significant “Stepping Stones” achievements and
builds a robust pipeline of opportunities. This includes pursuing
global opportunities across the USA, Europe, Africa, the UAE, and
India. In parallel cBrain continues to build a strong reference
position at the Danish home market.
In October, cBrain implemented F2 at two new Danish
ministries in just 3 weeks
The Danish government recently announced the creation of a new
Ministry for Elderly Affairs and a new Ministry for Tripartite
Affairs. Shortly after the announcement, cBrain contracted to
implement F2 as the digital platform for the two new ministries.
For both ministries, F2 was implemented in just three weeks. This
includes all the necessary functionality to operate a paperless
ministry, as well as organizational implementation and initial
training.
For many years, government ministries around the world have
struggled, and continue to struggle, with transforming themselves
into digital working environments. This is largely due to the
traditional approach to IT modernization, which relies on
custom-built solutions based on best-of-breed software modules and
components.
The two projects demonstrate the power of using COTS
(commercial-off-the-shelf) software for government. By using COTS
software for government, like the ready-to-run F2 digital platform
and configuring it for individual ministries, it is possible to
deliver and implement a complete, modern ministerial platform in
just a few weeks. By showcasing IT modernization in weeks rather
than years, these projects also highlight why Denmark has ranked
number one in the United Nations Global E-Government Index for
eight consecutive years.
Using AI to accelerate environmental
permitting
In September, cBrain spoke at the United Nations General Assembly
(UNGA) on a panel with representatives from, among others, the
United States White House. The event was part of UNGA Climate Week
and highlighted innovative solutions to meet global sustainability
goals.
Based on collaboration with the Danish Environmental Protection
Agency (Miljøstyrelsen), cBrain showcases how public-private
partnerships can accelerate the green transition. Using AI
technology, the F2 platform streamlines complex permitting
processes for green energy projects, driving faster progress, and
ensures that environmental standards are met.
Increased investments in the US
In July the White House Council on Environmental Quality (CEQ)
issued their report for the Congress on digital technologies for
accelerating permitting. In the report cBrain is recognized as a
leading example of technology modernizing environmental assessment
and reviews.
The report highlights cBrain's innovative digital solutions,
emphasizing our potential to improve the efficiency and
transparency of federal permitting processes, aligning with the
Presidential Administration's goals.
Permitting is a key to accelerating the green transition and
fight climate change. Being a recognized supplier of software for
government permitting offers cBrain a strong foothold to enter the
US market. cBrain therefore increases investments in the US,
expecting that this will materialize into orders during 2025.
Solid development in Germany
The implementation of F2 is integral part of a large modernization
project at Deutsche Rentenversicherung Bund in Germany, cBrain
continues to expand its activities. Based on the success, cBrain
seeks to open new large government customers in Germany.
Working with partners in Rumania and Ghana
In both Rumania and Ghana cBrain has successfully delivered F2 for
customers, who have gone live. For cBrain these projects are
important. They serve as first steps towards implementing the
F2-For-Partners strategy, accelerating growth by working with
partners. Working with the partners, cBrain is building a pipeline
of next orders which are expected to materialize during 2025.
India, Tamil Nadu
In 2023, cBrain announced a joint venture in India, cBrain
Kodumburar. The joint venture forms the basis for cBrain activities
in India.
During 2024 cBrain has signed a Memorandum of Understanding
(MoU) with the Government of Puducherry, for the sustainable
development of the territory, and signed a Memorandum of
Understanding (MoU) with the state of Tamil Nadu, aiming to
establish a digital administration for the state. cBrain continues
to work on these opportunities with an expectation that the first
projects will be initiated during 2025.
Government pilot project in Kenya
The Kenyan government has initiated an ambitious plan to digitize
and modernize Kenyan public administration. As part of this
project, cBrain has been invited to share best practices
experiences from the Danish ministries for the benefit of
accelerating the government digitization, transforming into
paperless working environments.
This involves a ministerial pilot project in Nairobi, which
cBrain has just initiated.
cBrain releases F2 Version 12
cBrain releases F2 Version 12 in November, the most ambitious
upgrade ever. cBrain has invested approximately 40.000 hours
developing the new version, and F2 Version 12 offers more than
1.500 new features and a number of important new modules.
With the new version, cBrain demonstrates its intention to
become a leader of commercial off-the-shelf (COTS) software
government.
As part of version 12, cBrain offers the F2 AI Assistant. The F2
AI Assistant is provided as part of the standard software, thereby
supporting almost all Danish ministries and more than 75 Danish
government organizations.
The F2 AI Assistant has been developed in collaboration with
Danish government organizations, including the Ministry of
Digitization and the Environmental Protection Agency. The F2 AI
Assistant has been trained on government data and supports specific
government use cases. Furthermore, it runs on-premise thereby
supporting government requirements, with respect to handling
personal data and GDPR, as well as government requirements with
respect to security and privacy.
Forecast for the year 2024
For 2024, cBrain forecasts revenue growth of 10-15% and earnings
before tax (EBT) of 24-30%. cBrain’s results show a strong positive
cash flow, providing the financial strength to execute its growth
plan.
Best regards
Per Tejs Knudsen, CEO
Inquiries regarding this Company Announcement may be
directed to
Ejvind Jørgensen, CFO & Head of Investor Relations, cBrain
A/S, ir@cbrain.com, +45 2594 4973
- Company Announcement no. 2024-11 (Q3 announcement)
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