Sirma Group aims to become one of the significant European software companies, planning to achieve annual revenues of over 100 million euro within two to three years. This emerged at a media briefing, where CEO Tsvetan Alexiev discussed both the group's financial performance and its upcoming listing on the Frankfurt Stock Exchange, Europe's largest.
According to him the company's business strategy includes organic growth through software product development and systems integration, as well as acquisitions of businesses in sectors aligned with Sirma Group's focus. The company already operates in the financial and insurance sectors, transportation and logistics, healthcare, hospitality, as well as the packaging and measurement industries.
Strong results after consolidation
In 2024 Sirma began consolidating its six subsidiaries into a single company and according to Alexiev the process is about 90% complete. The main reason for this restructuring is to introduce a unified organizational process suitable for a company of its size (over 800 employees) and improve overall efficiency. Holding companies are often undervalued on the stock market due to their lack of operational activity, despite detailed quarterly reports.
With offices in eight countries, the company reported a 24% year-over-year revenue increase, reaching 100 million levs (about 50 million euro). EBITDA rose by 130% to 5.8 million levs, while net profit was just over 1.1 million levs, said Sirma Group CFO Yordan Nedev. For 2025 the company expects a further 20% revenue increase.
"Software companies of our size in Europe often failed to turn profit in 2024 and the same was true in 2023," Alexiev noted. After a post-COVID peak in 2021, and an even stronger 2022, the software sector saw a downturn. "At least that's what we're seeing from market research, which we're conducting as part of our acquisition efforts. Almost without exception, larger companies have struggled over the past two years and the outlook for 2025 remains unclear," he explained. Against this backdrop, a 2% net profit margin and 6% EBITDA margin may seem modest, but compared to companies operating at a loss, "we're doing excellent," he added.
Listing on the Frankfurt Stock Exchange
Through this move the company expects to increase its visibility and investor confidence, ultimately boosting its market valuation and share price. "We're not expecting miracles from the listing - like a sudden jump in share price - but we'll be the 16th software company on that exchange and not the smallest. We spoke with Shelly Group (whose shares are already traded in Frankfurt) and we know it'll take at least a year for the German investment community to recognize us. We need to build trust by delivering on our promises," Alexiev explained.
He added that being listed will also help the company close deals with global clients more easily. "Listing is not an easy procedure - it means the company is highly transparent, regulated and compliant with the rules," he said. "We traditionally work on the German market, understand the business landscape and are using consultants to ensure tangible stock exchange benefits - greater liquidity and less volatility in share prices."
Eventually Sirma expects to raise additional capital from the stock exchange, mainly to fund new acquisitions.
No suitable companies for acquisition
Revenue and profit growth allows Sirma to seek suitable companies for acquisition today. Last year it acquired Romanian firm Roweb Development but a planned deal to acquire a Danish company was not finalized due to its underwhelming performance, which did not meet the owner's expectations.
Sirma is particularly interested in software companies with revenues of 5 to 20 million euro and 100 to 300 employees. However, most companies in this range that are currently seeking outside investment are not profitable.
"We're currently seeing a phenomenon where we have the capability to acquire companies but the market - in terms of geography and size - lacks suitable targets," Alexiev noted. The focus remains on profitable firms operating in industries that are strategic for Sirma.
"We sell our services in 170 countries, with our main markets being the U.S., Scandinavia, and the DACH region (Germany, Austria and Switzerland). In 2024, 55% of our turnover came from Bulgaria, due to stagnation in Western markets. The UK and the U.S. were our second and third largest markets by revenue in 2024," said Momchil Zarev, director Growth at Sirma.
At the same time Sirma continues hiring in Bulgaria and other countries where it has offices, such as Albania and Romania. In these markets some companies are letting specialists go, so there's currently no need to acquire firms solely for their teams.
Sirma Group aims to become one of the significant European software companies, planning to achieve annual revenues of over 100 million euro within two to three years. This emerged at a media briefing, where CEO Tsvetan Alexiev discussed both the group's financial performance and its upcoming listing on the Frankfurt Stock Exchange, Europe's largest.
According to him the company's business strategy includes organic growth through software product development and systems integration, as well as acquisitions of businesses in sectors aligned with Sirma Group's focus. The company already operates in the financial and insurance sectors, transportation and logistics, healthcare, hospitality, as well as the packaging and measurement industries.
