Sirma Group Holding

Sirma Group Holding expects stronger Q3 and Q4’16 to compensate for the slower Q2’16, CEO Tsvetan Alexiev said during the regular results online Investor Day held September 8th 2016.

The regular meeting with investors was focused on group H1’16 results.

Alexiev explained new system integration projects in Bulgaria and development on US sales will lead to boosting H2’16 performance as the Group has been working on expanding its sales and marketing capacity with the IPO funding.

Fewer services from public sector reduced H1 Sirma revenue

H1’16 Sirma revenue growth slowed down to 10.5% y/y from 17.3% y/y in Q1’16 on slower Q2 development. Sales in Q2’16 alone added only 4.2% y/y. Key factor for that was fewer than expected public sector services rendered, Alexiev said, which he expects to pick up in Q3 and Q4. Overall H1’16 sales stood at 16.1m while net income turned negative with a loss of BGN 194K on 10% y/y higher employee costs and 85% y/y rise in amortization on newly put in exploitation assets like the loyalty platform Loyax.

Management convinced sales growth targets will be met

Nevertheless, management expects to meet forecasts of 25% y/y rise in sales to BGN 40m, 30% rise in EBITDA and doubling of net income. H1’16 EBITDA rose 42% y/y to BGN 4.4m on 28% y/y rise in
capitalized expenses. The net loss of BGN 192K compares to a profit of BGN 375k a year ago.

Growing sales in US and UK

Alexiev also added US business growing faster than Bulgarian one with additional sales and marketing investments to boost cross selling in six key verticals for the Group – Fintech,

Manufacturing & Utility, Cultural Heritage & Media, Healthcare, Public Sector and Cross industry. US sales rose 40% y/y in H1’16 to 4.3m on new media and publish deals for Ontotext and key cyber security, system integration and services for Sirma Solutions. UK sales also advanced considerably, 80% y/y to BGN1.7m on deals with the BBC for Ontotext.

Watch the recording of the online Investor Day on 8th September 2016