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201. Bull, Bear & Beyond – Sirma: executive interview
2 Plays15 days ago
In this interview, Sirma CFO Yordan Nedev discusses the company’s long-standing focus on innovation, enterprise software and AI, its strong track record of delivering complex, mission-critical IT projects and its positioning as a resilient, internationally oriented European technology group.
Founded in 1992, Sirma is a software technology partner and an early pioneer in AI technologies. With over 33 years of experience, the company combines deep vertical knowledge with cutting-edge AI to support industries the world relies on, including banking, insurance, healthcare, transportation, logistics, retail, travel and hospitality, and the public sector.
Sirma specialises in custom software development, systems integration and IT consulting, delivering complex solutions for clients globally. Its AI-driven offerings, including the Sirma.AI Enterprise platform, are designed to turn complex data into actionable insights while supporting security, compliance and operational efficiency.
The company is listed on the Bulgarian Stock Exchange (BSE: SGH) and, more recently, on the Frankfurt Stock Exchange (FSE: SIRM), as it continues to grow recurring SaaS revenues while pursuing steady organic expansion and selective acquisitions.
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Transcript
Introduction and Company Overview
00:00:07
Speaker
Hello, Klaus Schinkler of Edison Group. It's my pleasure to welcome Jordan Nadev, CFO of CIRMA Group Holding, to talk about the company and its outlook. CIRMA Group Holding is a Bulgarian IT services and software company with a strong foundation in AI.
00:00:22
Speaker
Welcome, Jordan. Pleasure to have you. Thank you. to kick things To kick things off, can you explain what kind of business is at CIRMA's core and what how you managed to stay relevant and grow over the past three decades?
00:00:38
Speaker
Okay, so we we start with a deep dive. ah Well, I would think that, and as far as I know, from inception the company has been always been after the the novelty.
00:00:55
Speaker
to the thing that hasn't been so far. Maybe that's why it was initially called CIRMA AI back in 1992.
00:01:09
Speaker
And I've been working with the company for more than 20 years and sitting on the board for about 12 or 13 already.
00:01:20
Speaker
And I've seen quite some things and how do people behave and what's the approach towards clients and projects.
Innovation and Pre-Listing Strategy
00:01:29
Speaker
And what I've seen is that up until the company got listed on the Bulgarian Stock Exchange, KPIs didn't mean much.
00:01:43
Speaker
It was all about ah being ahead of time, delivering no matter what, and feeling like you do something for yourself.
00:02:01
Speaker
I'll try to explain. There is no project that I know about that's been started and not finished at Sirma. Not a single one. uh and i've seen it go like many meters under the water in terms of financials and still even though it's clear that if we stop and pay penalties much better than continuing in delivering we've never stopped we always delivered uh and
00:02:36
Speaker
And am absolutely certain that this is something unique for Sirma. Otherwise, yes, software, but but software that is, again, i'll I must say it again, it software that is ahead of time.
00:02:52
Speaker
This is what's in the core of SIRMA. Our verticalization is not by someone's decision, it's it's it's natural. it's In these 34 years we've done so many projects in in banking, in in in insurance,
00:03:13
Speaker
um Through acquisitions we've accumulated a knowledge and expertise in in other verticals like the transport and logistics, in hospitality a lot. We serve some of the greatest hotel chains on earth.
00:03:32
Speaker
And yeah, that that's probably it. We know how to deliver in certain verticals. It's quite
International Focus and Industry Expertise
00:03:43
Speaker
interesting. You were very international right from the start and you focused on AI already when it was not very much a big, big theme. So how would you say has this shaped to be the company you are today?
00:03:58
Speaker
Fortunately, we started international and probably at that time it was the only possible way, actually. I wouldn't think that in the early 90s in Bulgaria there were many possibilities variety projects for for standalone independent companies.
00:04:18
Speaker
So having a partner that's living in North America, actually, and this was the idea, this partner to help out with the sales on this market, Canadian and in the States. And it worked out.
00:04:34
Speaker
And actually the the first projects
00:04:40
Speaker
actually were carrying quite some technologies related to this early artificial intelligence stuff. um like expert systems and early days neural networks that were applied in in some of the one of the coolest actually that I always share is a example would be the one
00:05:08
Speaker
that
00:05:11
Speaker
tendered by the the National Revenue Service of Canada and they required the company rendering the service to to optimize their systems in a way that the citizens of Canada would be able to actually reduce their tax payments.
00:05:33
Speaker
So the one that benefits orders you to do it in a way that their revenue is diminished if if you look at it this way. So that their citizens feel better that they've done the job right. And yes, it required certain amount of of artificial intelligence tooling from that time. now you You're specifically targeting European organizations with with your platform.
00:06:05
Speaker
How is it designed to meet the requirements with regard to data sovereignty, regulation, safety and the hybrid IT t environment more generally?
00:06:17
Speaker
Well, actually... ah
00:06:21
Speaker
I'm not certain I can answer in much detail here because we are a European Union company and not only that but we are scrutinized by a lot of government organizations all over and ah most of all ah being public in europe in Europe not only, but European Union on on both, on two actually stock exchanges already.
00:06:48
Speaker
The second one since quite recently, but um now we comply with with that regulations as well. We are a company that operates in in Europe, it's a European company and we comply with all standards that pertain to Europe.
00:07:05
Speaker
only because many of these are they they they have ah actually no power and no sense in in other geographies far away where the the the thread that I mentioned comes from mostly what is the current status of the commercial rollout and how do you see CIRMA AI Enterprise contributing to the revenue mix going going forward In Europe we have several use cases for insurance companies, for for the public administration as well, and there we are tendering against the likes of IBM.
00:07:47
Speaker
And we must say that in it it seems like we are We better suited to win, actually. And it is um not only because the data sovereignty and the the data stuff that we were talking about, which is extremely important, especially in Europe, But it's also about some differences in technology, in the way you tackle problems, ah the way will you actually deliver solutions to the problems that the the client has has come to searching for for for
Competitive Edge and Technological Approach
00:08:30
Speaker
solution. And in certain instances it turns out that, okay, for small parts, but maybe major for the project, we are better than the than the big guys.
00:08:44
Speaker
And in Europe especially, that's combined with the sovereignty thing and and data issues, sometimes we come up with with the logical choice.
Future Growth and Revenue Strategy
00:08:59
Speaker
Looking ahead, can you outline your growth plan and strategic priorities, both looking at organic growth as well as acquisitions? Sure. First of all, I think something stayed unanswered from the from the previous question ah regarding the application of our SIRMA.AI enterprise platform. And from there comes one of our major streams that we are expecting in the longer run. in terms of SaaS revenue.
00:09:35
Speaker
So we expect the our recurring revenue to increase to about 60-65% of total revenue ah within probably five years from now. It's currently about 40%. It's been forty forty four depending on the quarter and then the projects we have. But let's put it 40, so we're heading towards getting it to 65, predominantly on the basis of the usage, sale and application of the SIRMA.AI enterprise platform. From there on, ah yes, we ah we believe that our organic growth would continue to be at around 10% per annum.
00:10:27
Speaker
ah This is something that we are caught quite comfortable with and we've seen that we can actually maintain it after ah sorry year after year for the past at least decade. So 10% is doable, absolutely feasible and and we actually do it year after year and see no obstacles to continue doing it for the foreseeable future.
00:10:54
Speaker
ah In terms of acquisitions, ah we believe that there will be another spike probably already this year, 2026. due to an acquisition, if not for sure next year, because there are always some uncertainties.
00:11:14
Speaker
ah and And then our next acquisitive growth would come after we raise capital, probably through the Frankfurt Stock Exchange, probably no much earlier than two years from
Dual Listing and Market Expansion
00:11:31
Speaker
now.
00:11:31
Speaker
We touched on this briefly already. Very recently you successfully dual listed on the Frankfurt Stock Exchange. Can you elaborate a bit on the strategic rationale behind it and how you see this listing, dual listing support your future growth? Actually, ah i hope it would be a somewhat a strange answer and to your question, ah because our first and foremost goal of going to Frankfurt and being double listed was to to be able to acquire more clients, more business from the Dach region, obviously. ah It's been a strategic goal for CIMA for a long time to to be presented better on the business environment in the DAH region, German-speaking region meaning.
00:12:24
Speaker
And we saw this opportunity as a good one because we had even smaller but still a good experience from being listed on the Bulgarian Stock Exchange. We saw with some of our clients and and also international ones, not not just Bulgarian, that they cared about our listing in terms of being more confident with us.
00:12:51
Speaker
Because indeed, being in the European Union, we are quite heavily scrutinized by all the regulators that that actually regulate the listed companies. So it turned out to be a good selling point.
00:13:06
Speaker
Plus, which is even more strange, than the ESG thing, because we are ESG champions in Bulgaria, especially among the software companies, and it matters a lot as well, especially for the big European institutions like the ECB. Being on Frankfurt Stock Exchange, we certainly believe that that ah we'll be more visible for the German-speaking businesses.
00:13:34
Speaker
ah If we present ou ourselves well, which is something that lies on our on our shoulders, ah we will ah not only be more visible but more credible as well.
00:13:48
Speaker
And ah we truly believe that it would raise our opportunities in getting more business. We need broader investor base in order to create more liquidity for our stock, in order to be more ah investors attractive,
00:14:15
Speaker
hence be able to raise capital to fuel our further growth and development plans. Jordan, thank you very much for the interesting insights.