Asseco Poland Sa Unsp/Adr

Good afternoon, ladies and gentlemen. I'd like to welcome you very cordially to the conference dedicated to the results of the SECO Group for 2025. Today, at today's conference, we will summarize our operations for the previous year, for last year, and we'll also convey information pertaining to the backlog for the upcoming year, for the current year. During the first portion of the conference, we will have the presentation. The latter portion, we'll invite you for a Q&A session. We have the CEO, Mr. Adam Goro, and we also have who is the CFO of the group, and who is the vice president of the group. I'll go ahead and give the floor right now to Adam Goro. I would like to welcome you very cordially. I'm pleased that we're all here together, and above all, I see in the first row we see people who decided to be here physically in attendance and of course with full respect for all those persons who are participating remotely so I'd like to welcome everybody very cordially. So Arthur didn't emphasize that this is a special meeting because in a year And for me, this is going to be a totally new situation, of course, with the hope and looking to the future because I'm going to move into the supervisory board where I should be the chairman of the supervisory board. And so Asseco will always be with me. And this is my entire life, of course, outside of my family. But I treat this company as a member of my family. I'm going to have to... be vigilant because I want Rafael to be a leader with his attributes. He's a little bit different. We're different from one another. Of course, I have a guarantee of one thing, that he represents, espouses the same values, and that he's perfectly well prepared to run this company. And I'm sorry for saying that I believe that it was well run. But I think the company was in good hands and was well run. And having in mind that I have a good hand towards other people and it's managed by really great people. And so we come here in great sentiments. And these sentiments, of course, are somewhat toned down because I would like for the world to look a little bit differently. And there's a lot of... You know, bad people heading up some countries, and even though you have wonderful results, people are aware of their responsibilities, their liabilities, and it's a shame that the world has so much turmoil, but we don't have any impact over that. Today, up until now, the various wars have not obstructed us. I don't really want to talk about it. So we have our leader, on Friday I was talking quite a bit with your son, and when we hear that 12 times during the day that he had to go into the bomb shelter, then you become aware of what it means to think about a war. It doesn't matter who started the war. It doesn't matter who's at fault, who's the guilty party. We have to think about these people who are suffering in Ukraine and those people who are suffering in war, at the hands of war. And so these wars... I'm not going to say they are helping us or acting as a boost. I'm sorry, but during the pandemic period, I had hoped that these times would teach us something, that the leaders of the global leaders would understand, would grasp the concept that there's not that much that needs to be done in order for us to be totally disappeared. They have to understand that human life is of importance. And so that's all the more reason to be disenchanted. But thanks to the wonderful work of Tens of thousands of people in the SECO group are able to come here today and convey wonderful information. And the previous year was a great year. It was a record-breaking year. and the net profit of $1,139,000,000. We have these successful sales. We were able to sell at a good price and so we had, you know, basically 119% growth and so we made these decisions because we thought that Sapiens should have a new impulse and today jointly with advent we want to make sure that this impulse will continue to drive us forward and We hope that that 18% will have a huge loss of roughly 500 million of that 1 billion 139 is due to sapiens the risk which is also record-breaking is linked to the organic growth that we have achieved and so I'm pleased that that we are well-positioned in Poland and Central Europe, and you've been able to look at that, and we had a more difficult period. And I'm, of course, under a great impression that as we've been having seen the organization being run by Yusuf Klein, our leader, and so for me the test of his person as a manager, as an exceptional leader, this was the difficult time. when those countries, and we are dependent on government projects, it didn't seem that it wasn't spending money on IT, and it seemed that some of the substantial EU funds that were being allocated to the energy sector And then Joseph's ambitions led to a situation where it was a very difficult point in time for him. So I'm pleased that they were able to survive in this very difficult period. They were able to draw conclusions, and they were able to perceive the weaknesses of the organization, and they utilized that time in order to eliminate those weaknesses in today. They have a wonderful 2025, and today we believe very strongly that they will continue to prosper in 2026. So that group, in terms of what's linked to Asseco International, we have reasons to be proud. And in these difficult and challenging times, our teams in Israel, this is a global company, of course, has done very well. has coped very well, and so we've known for years that we have exceptional, wonderful people there. I remember, because I'm going to have a request when we talk about our stock exchange, I don't entirely understand this, that we're not able to vote on that 1.5% for my team. So, take a look at this. I was a person who was looking at the interests of the investors, the management, and the people working for this company. And if I'm going to be in the supervisory board, I'm not going to be able to operationally, I'm not going to be able to scrutinize these things. Ralph was going to do it. But these 95 people, for us, for the investors, this is the safety in terms of people fighting for the value of this company. And this is the time to... I urge you to look at this vote. Once again, it's really worth looking at closely. Do you know why we've been able to achieve such a great success in Israel? The first thing that I did was I met with Guy, and I gave him a certain number of shares. Of course, in the voting, I wasn't afraid that he's going to be the richest person in the world. Of course, I wished that to him. Look at the business we've been able to do there. Of course, those equities might not have been the deciding factor, but he had an incredible amount of motivation to run the company in such a way. Because we say that we're controlling somebody, but in our area, there's no bona fide control. As a leader, I'm dependent on thousands of people. in terms of how they're operating. And if that leader would want to do something, it would be possible to do that legally. And doing this simple maneuver, we were able to achieve a very simple and straightforward objective. And so the $143 million has paid back quickly, and I'm pleased that our investment in Israel is the largest Polish investment, and so we've only got good experience under our belt here. And some of you had given us heedings, warnings, that they're going to try to, let's say, maneuver you and somehow do something. We have a wonderful successor. Take a look at this case and think about my people, please. Think about them, who are totally deserving Of course, they've created this beautiful history of Hezekiah, and this is not a salary for the history. There is a portion of that is... but this is also remuneration for what they're going to do in the future. So I'd be grateful if you were to follow and embrace my thinking. I'll give the floor to Marek, and we'll drill down into some of the details, and we'll talk about the individual results. And then at the end, I'll take the floor. I'll go ahead and bore you a little bit more because I continue to think about the future of this company, and I'm going to tell you a little bit about how I see the future. So I'll give the floor to Marek. Thank you very much. So having in mind what Adam said earlier, that we still have the final section of the meeting during which Adam's going to want to speak to the future. I today will try to speak more succinctly and I'll take less time than usual, especially since the trends we've observed over the last three quarters were sustained, and nothing happened, nothing extraordinary happened in Q4, and I think this wouldn't be necessary to talk about. Let's talk about the profits. So Adam mentioned the net profit, which is $1 billion, nearly $140 million, but look at some of the other two numbers. So we have revenue at nearly $16.2 so it's 16 billion 780 million zlotys and this is a 12% increase year-on-year and they may have operating profit which is in excess of 1.6 billion zlotys and the increase here was 11%. As a matter of tradition, I will show you the split of our revenue by operating segments in terms of geographies and you can see this is not a mistake. that all three of our segments were growing at exactly the same pace of 12% year on year. And if you start on the right side formula group, which is the largest, and this is some 60% of our revenue, we've been able to achieve nearly the 10 billion Zloty watermark. And then we have international, which is some 27% of total revenue in the group. So we have 4.6 billion. And then we have the Polish segment, which is the second Poland segment. And we have nearly 2.3 billion in revenue. As I mentioned everywhere, we have across the board a 12% pace of growth year on year. We'll also show you the revenue by product groups. Here, I will not discuss this in great detail. You can see that all of our segments across the board are basically growing. In some cases, we're growing more quickly. In some cases, we're growing less quickly. All of the solutions that we have for public institutions, which represent 25%, so one-fourth of the total revenue of the group, We have very dynamic growth of some 15%. We're pleased with what's happening in the banking sector from the very outset of our operations as a sector. This is a very important and significant bulk of products or segment of products that we've been offering. So we have nearly $4.7 billion. So it's more than 8% increase. And so all of these things are pleasing to us. We're pleased with the diversification of our business. So the top 10 customers in the revenue of the overall group is a mere 12% of the total revenue of the group. So the largest customer represents 2% of total group revenues, so we're not dependent on any single customers or clients. And let me say a few words about our solutions for finance. We'll talk about the other segments as well. So we have across the group some $3.7 billion. We have in revenue an increase of nearly 5% year-on-year. And so you can see in the formula group up until now, it was always the leader and was the major contributor of revenue in the financial segment. Now it's number two. And that's as a result of the fact that Sapiens has been extracted because it was sold, as was stated previously. And of course... This formula system segment is still doing very well. So it's nearly $1.5 billion at 11% growth. Then we have Asseco International, which came in at $1.6 billion, which is 4% growth. And we have Southeastern Europe at NPST, which is our company in Portugal, which is operating in the Portuguese market, and then we have ESSECO Central Europe. So all of these businesses are growing well. Then we have, on top of that, ESSECO Poland. So this segment, ESSECO Poland segment, has a 10% uptick in growth. And here we're the market leader in terms of banking and lease companies. as well as brokerage houses. And so we're very pleased because this business for many, many years has developed nicely. If we think about our public institutions, the growth is much more dynamic than in the financial sector. So we have a 15% increase year on year, so it's more than 4.5 billion. And so we have the international segment Well, for a couple of reasons that's grown so fast, because it's the Czech and the Slovakian markets. And as you recall, we had a stagnation there in previous years. We've been able to rebuild our position, and so the revenue is substantially higher. And the same is true in southeastern Europe. in the balkan group and so 2024 was clearly a softer year and so we have experienced dynamic growth in on this revenue in poland our growth is nearly 20 so we came in at 1.2 billion in revenue so in poland you know we are the leader in terms of our solutions for public institutions we're a major player in terms of administrate public administration for the health service as well as for the power sector, where our position is a leadership position. And so we're very pleased that the business has grown at such a fast clip. And then we have Formula Systems, which you can see is the major contributor to the revenue in public institutions. It's seen 11% growth with revenue coming in at 2. nearly 4 billion Swatis.

like to cover today is ERP solutions. So these are our businesses within Asseco International. So as a matter of fact, it's Asseco Enterprise solution, ERP solution in Poland, Germany, Slovakia, Czech Republic. We see 8% growth and revenue over 1 billion zloty. You might have noticed that another line disappeared, Asseco Poland segment. But this is the reason. The reason is that Dalia Maric that used to be reporting to Asseco Poland was transferred to Asseco Business Solutions and now is part of the Asseco International segment. Therefore, it makes no further sense to show asset of Poland segment. In formula systems, we also have our ERP solutions at a lower scale, but we are very happy to see a 14% increase and revenue over 6 million zloty. We continue our acquisitions. Two slides to cover this story. Showing all the acquisitions completed last year as a component segment and as a kind of national segment and formula system segment likewise That was the greatest All together we had 13 new entries joining the group last year So we were keeping the pace from the previous years every year we have dozen or so new companies joining the group. And we continue our efforts as we speak. We are scanning the market. We are speaking to candidate companies, and we are looking for the best match. We have definitely more selective approach. We don't want to just build our mass, but we want to have and TVs that have specific features in terms of products and competence that they bring to the table. And obviously we have to look at the price that we need to pay and the return that we can get on each deal. Now, when we look at the formula, I have to emphasize that it was a special year for Formula Systems acquisitions and corporate governance involvement. In addition to the acquisitions that they made, you may recall, because we've mentioned that already, in Q1, this year. We reached the sort of final line. However, we've been working on it since 2024. Namely, the combination of metrics and magic were joined as one company. So today, they are the largest company in Israel and one of the top 10 IT service providers globally. That was a major project and it turned out to be very successful. We've already heard that Sapiens sale was a long project, a difficult project, but at the end of the year, very successful. And another sort of tier that we are building here, Lihpal, that's the new company that was listed on the Israeli Stock Exchange last year. This is mostly HR and payroll solutions, software companies and service providers. So we are happy to embrace that because we see a lot of growth potential here. So we see a lot of good prospects for the future. Guy has a lot of ideas. He has a healthy and sound pipeline of MLA projects, and I believe that he will be delivering that step by step. Thank you for your attention. Over to Karolina. I will briefly cover the financials. On the first slide, you see the key. Marek mentioned revenue, we are almost at 17 billion, and we remember that Sapiens was sold in December last year, so it was already excluded from the individual items of our P&L, so it was shown in one line as a discontinued business. Therefore, this is all comparable when you look at these numbers, it's comparable to prior periods. So over 16 billion of sales. Our own proprietary service is 12.6 billion and a nice growth of 7% in both items. and non-IFRS EBITDA, non-IFRS EBIT, eight and nine percent up, respectively, and it's 2.5 billion for EBITDA, and over two billion for non-IFRS EBIT. And non-IFRS net profit is 742 million, and CAGR, the best of the last five years, nine percent up. And for some time, we've been showing P&L items between the years. And here we are sharing this information again. You may see that there is less negative impact of the currency exchange compared to the prior years. There is still a negative impact, but not major, 48 million in terms of revenue and 4 million in terms of operating business and non-IFRS. We are truly happy about our organic results. 1.3 billion hours organic sales across the group and that was translated into 300 additional million operating profit, non-IFRS. And acquisitions is 452 million at the revenue line and 46 million at the operating and operating income non-IFRS. Net profit non-IFRS, we show which segments were the greatest delta contributors on an annual basis and we can tell that ASCO Poland is doing very well. The Mary company is showing exquisite performance that you may scrutinize in the standalone financial statement. Minus 11, so it's an inferior contribution from the formula system segment. The main reason is that SAPIENS was consolidated over the course of 12 months, but in Q4 we had first restructuring processes, and the cost of that charge the result for the Q4. And a second international contribution was 49 million more compared to the prior year. When you look at the entire P&L statement, we are happy about the dynamics. 11% growth year-to-year revenue on proprietary software and services, then over 15% non-IFRS EBITDA goes up, and 20% non-operating profit, non-IFRS, and 11% standard operating profit. And here there is a slight decline. when it comes to profitability year to year. But please note that it was just Q4. And the reason is in the line that you will find below, namely M&A. This is all one-off events. 67 million is the write-off at Formula Systems for ZAP company. They were not doing as well as we were projecting at the moment of the acquisition, so we decided to actually write out that asset. Some costs were generated by the transaction that Marek referred to, so the merger of Magic and Matrix is 67 million, and then we also had some write-offs from other companies, and 15 million was our own project, our own investment, goodwill and assets in next bank company. Now, what is happening below the operating profit line? Well, you can tell that we are efficiently managing our debt. We were decreasing debt year to year. Interest income, the costs of interest is less year to year. Currency line is mostly the formula. Formula is reporting in Sheklas, but they were paid for the Sapiens deal in US dollars. And the translation of the currency balance, even with the small exchange rate decrease, generated major foreign exchange impact. We may say that this is just an accounting impact. M&A I've already covered, and for some time we've been affected by hyperinflation, and that is Turkish business. And the share in profit of associates looks very nice, but this is... formula who's the main contributor we have the indexation of the under evaluation of the our investment in the company that was doing SPL but this year and therefore we have the step up and therefore we are showing better numbers in addition to that We have profit on the discontinued business or discontinued operations. So this is the accounting result that we show on sale of Sapiens. 500 million. This is what we show in the current report and this is distributed to the shareholder of the dominating company.

Now the Sapiens Group.