Export and subscriptions increase cBrains revenue growth to 31%

The first half of 2021 shows really healthy development, both in Denmark and internationally, with 2 good quarters in a row.

In the first quarter, revenue grew by 30%, while revenue growth in the second quarter reached 33%. The growth is organic, and it is mainly driven by increased exports and sales of software subscriptions. The figures substantiate that cBrain manages to maintain and execute its long-term growth strategy.

In the first half of 2021, revenue has grown from DKK 57.2 million to DKK 75.1 million, corresponding to revenue growth of 31%.

Sales of software subscriptions have grown from DKK 27.6 million to DKK 38.6 million, corresponding to a growth in sales of software subscriptions of 39%. Software subscriptions thus account for 51% of total revenue against 48% in the same period last year.

In the Danish market, cBrain continues to gain market share and in the first half of the year has entered into agreements with e.g. Denmark's Environmental Portal, the Ministry of Food, Agriculture and Fisheries, the Ministry of Culture, the Ministry of the Interior and Housing and the Danish Agency for Housing and Planning.

As a supplier to i.a. The Danish Environmental Protection Agency is receiving a broad portfolio of F2-based solutions developed by cBrain, which support the authorities' work in relation to climate efforts, including both nature restoration and reduction of greenhouse gas emissions.

cBrain calls these types of solutions 'climate software' for public authorities, and they form a key element of cBrain's export strategy. The F2-based climate solutions support i.a. inspection, management of permits / decisions as well as grant schemes, including, for example, Natura2000 nature protection, grants for the extraction of carbon-rich lowland soils (Klima-Lavbund) and watercourse restoration.

The global fight against climate change is largely driven by governments and they are under great time pressure. Authorities around the world are therefore investing in solutions to support climate action that can be implemented quickly.

Denmark is a leader internationally, both in relation to digitalization and climate. As a supplier of climate software to public authorities, cBrain therefore has the opportunity to make its contribution to the global climate effort through the export of Danish solutions and experiences.

In June, cBrain thus won its first tender in South America. Here, cBrain will provide a solution to the authorities in Guyana, which has been developed in collaboration with the Danish Environmental Protection Agency. The solution supports compliance with the CITES Convention, which monitors and regulates international trade in endangered wildlife and plants, and has been acceded to by more than 180 countries.

The agreement in Guyana supports cBrain's investment in climate software for public authorities, including in particular that Danish climate solutions can be exported and reused internationally. In this case, in order to support the fight against biodiversity loss in the Amazon.

Internationally, cBrain can also welcome continued progress in the United Arab Emirates. Here, cBrain delivers i.a. a new professional system for the Ministry of Finance, which will support the Economic Substance Regulations (ESR). The ESR is part of the OECD's Framework Project Base Erosion Profit Shifting (BEPS), which aims to prevent tax evasion across borders, and in the spring the Ministry of Finance nominated the ESR solution for WSIS, a global United Nations award.

Projects such as the CITES project in Guyana and the ESR project in the United Arab Emirates underpin cBrain's CSR strategy and work to support the United Nations' 17 world goals, with a particular focus on world goals 16 (accountable institutions) and world goals 13 (climate action).

In Germany, cBrain announced in June the company's largest deal to date in the form of a software order, where cBrain will deliver between 5,000 and 10,000 F2 user licenses as well as a number of expansion modules and software maintenance. The agreement runs over 4 years, and the agreement will, depending on the time of delivery of user licenses and exercise of options, have a total value of up to DKK 250 million.

At the beginning of the year, cBrain announced an expected revenue growth of 15-20%. However, following a good first quarter, with revenue growth of 30%, cBrain raised its expectations for the year to revenue growth of 17-23%.

Second quarter, revenue growth reached 33%, which is why cBrain further raised its expectations for the year at the beginning of August, from a revenue growth of 17-23% to a revenue growth of 21-25%.

The largest part of cBrain's revenue comes from the sale of software and software subscriptions, and at the same time the vast majority of cBrain's costs are fixed. The increased revenue therefore leads to increased earnings.

At the beginning of the year, cBrain announced expected earnings before tax (EBT) of 10-15%. cBrain invests part of the increased earnings in i.a. export. At the same time, at the beginning of August, cBrain also raised its expectations for earnings for the year, from earnings before tax (EBT) of 10-15% to earnings before tax (EBT) of 14-16%.

cBrain has no loans, and cash and receivables amounted to DKK 85.6 million at the end of the half-year. cBrain thus has a solid financial position and the financial strength to maintain its growth plan.

Yours sincerely

Per Tejs Knudsen, CEO

Inquiries regarding this notice may be directed to

Ejvind Jørgensen, CFO, cBrain A/S, [email protected], +45 2594 4973

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