Asseco Poland Sa Unsp/Adr

Good afternoon, ladies and gentlemen. We'd like to welcome you very cordially to the results conference, which is about the results of the SECO in the first half of 2026. As always, we'd like to introduce you or show you the activities of our group and the financial results. And so, Karolina is joined by Orek, the CFO of the group. We'll talk about the results, and we'll start with the activities of the group, which will be delivered by Marek Panek, the vice president of the group, and we'll ask you at the end to send your questions, and we'll try to field all of your questions. And you have basically a tab where you can pose your questions during the course of today's conference. We'll go ahead and ask you to pose your questions. We'll try to field all of them, and I'll ask Marek to kick off with our presentation. Thank you very much, ladies and gentlemen. And as a matter of tradition, I'll begin with a business sort of summary of what's happened in the first half of 2026 in the Asseco Group. I think the best summary is slide number three which you now see on your screen. These are figures which illustrate the results of our company in this period we're discussing. So we have revenue of $9,250,000,000. which is a 16% increase from half year to half year. Our operating profit grew by 38%. It's exceeded $1,080,000,000 and net profit at the end of the day is $430,000,000. And so we have an increase of in excess of 52%. So I think we can all be very satisfied with these results. We're certainly very satisfied with these results. And then we'll show you the breakdown Revenue by operating segments and so for many years you've been familiar with this breakdown we'll begin with the second Poland segment then we have a second international and formula systems and so we have increases in we have 70% increase in Poland so we've exceeded 1 billion 300 million in revenue a second international has slightly slower growth, about 9%. Here we have $2,372,000,000 in revenue and the fastest growing segment is Formula Systems with an 18% increase. almost five billion six hundred million in revenue let me remind you of the proportions and so begin with the right side and so formula systems is giving us sixty percent international 26% and the remaining 14% comes from our activities on the Polish market and so if we look at revenues broken down by our major product groups you can see on the right side we have basically a bar graph which shows you that we have double digit growth in all of our segments we have solutions for finance We have nearly 2 billion in revenue with an 11% increase. We see the fastest growth in solutions for public institutions at nearly 30%. We're in excess of 2.5 billion. Here I'd like to emphasize that this is our biggest segment. This is generating some 27% of our total revenue. and then we have the other product groups we have ERP solutions other IT solutions infrastructure plus other other solutions and so we have growth of 17% 10% and 11% respectively so commentaries here unnecessary we're pleased with all of our product groups across the board we've posted very substantial growth it's important that we have this diversification in terms of customers so we can say the share of the top 10 gives us 13% of the group's revenue whereas the largest client in the group represents 2% of our revenue so the conclusion to be drawn is that we're not dependent on any single question so our operations are highly diversified and as a matter of tradition we'll sum up the three product groups where we're operating and we'll begin with solutions for finance here we have nearly 2 billion in revenue and you know some 11% growth and the biggest contributor is Seco International I've been used to formula systems but after we sold Sapiens Sa Unsp-Adr Sa Unsp-Adr here we've grown the fastest in payment it's more or less flat year-on-year and we can say that as Seco Central Europe and PSC are doing quite well and this is the financial sector so in Poland we have 16% growth so 360 million exceeded let me remind you that in Poland this is a Seco Poland and our division that does some banking solutions and then we have data systems we also have solutions for leasing and this has grown very dynamically but if you look at the banking Seco Poland Sa Unsp so we've signed a large contract with BGZ the National Development Bank and that was done this year and this is a contract that we're going to be running over the next several years and formula systems it's exceeded 800 million in revenue for the financial sector so that's some 17% growth if we compared the interim periods of six months to six months after Selling Sapiens the major contributor of course is a major IT company and so that's why we look at it as an entity after its merger business combination with the other company and so as I've mentioned previously this is a segment the largest segment size 27% in the total of the group and it's the most quickly growing so we have a 30s nearly 30% growth in we had two and a half billion in sales revenue in the first half of the year solutions for public institutions and you can see that a psycho international is growing the fastest we have 322 million in sales and a 33% increase and here we're very pleased because we've been able to build our position in terms of delivering solutions in Czech Republic and Slovakia for public sector and so one and a half years ago two years ago we had mentioned that there was some stagnation we've been able to rebuild our position shore it up and we're very pleased with that having done that and so in Poland if we look at that 27% growth and sales of nearly 740 million A big contribution was made by the health sector, the health service. We had mentioned that one quarter ago that we started to run projects linked to the KPA, the National Development Program, and so this went into the second quarter of the year, and we've been able to see very strong growth Vibrant growth in this segment I would add here that we have more than 150 hospitals which were covered by the program where customers of Sa Unsp Poland so in a natural way this is something that's conducive to revenue it's generating revenue for us and in public we also have large-scale projects for the biggest public institutions in Poland and so the energy sector And that's why we believe that this growth has taken place, and that's why we're satisfied. So in formula systems, we have 1,447,000,000. So the growth is some 29%. So we're talking about matrix, but not only that. has increased revenue for public institutions. if we look at our ERP solutions in turn we had sales of 934 million Swatis and this was a 17% growth if we compare the two interim periods of six months each and so you don't see a second Poland here so we can say as of the first quarter of this year it's not here because the company automatic which is representing a second Poland has been moved to the Sa Unsp-Adr Sa Unsp-Adr Sa Unsp-Adr Sa Unsp-Adr because we do have some pretty substantial growth. We're also pleased with the Seco Business Solutions. Those of you who attended the conference of that company know what that stems from. NMF Formula Systems is nearly $370 million in revenue. with a 25% uptick in terms of growth and this ensues from a number of different spots within the formula because different companies are delivering solutions of the ERP grade and so also of third companies if we look at acquisitions and the activity in 2026 we've been joined by nine companies one company from Poland which is my comp this acquisition was done after the balance sheet date we're showing it here and we've actually described this transaction in our financial statements and so then we have the Seneca companies a small company from Vietnam that's an outsourcing company and we've talked about that at the previous conference because this is something that was done after the balance sheet date and then we have Rantec Computing which is a new purchase a Portuguese company and this was from Ezequiel PSC so this is a company that's operating in the Portuguese speaking markets it's a small acquisition but quite intriguing it did software Sa Unsp-Adr Sa Unsp-Adr in terms of software for HR and payroll processes and then we are continuously strengthening and bolstering the group of NIPO which basically was listed in Tel Aviv last year and then we have two other companies that have joined us and this is it's called formula infrastructure that's the working name I think it would be better to just call it Formula Engineering because these are specialist companies that are dealing less with maybe software but they're doing engineering work and it's a very interesting concept and we very strongly believe in that and that would be about it from my side and I'll give the floor at this time to Karolina

As far as the financial information is concerned, Marek has covered revenue in a great detail. Therefore, I will focus on five years CAGR on revenue. Revenue in total 6% CAGR. Revenue from Software and Preparatory Services 7% annual CAGR EBITDA 1.5 Billion Zloty for non-APRS treatment you see that it grows faster than the revenue in terms of CAGR and non-IFRS. I beat 1 billion 214 million with the CAGR of 12% and the net CAGR non-IFRS net profit is 485 million for the first six months of 2026. If you compare the first half of the year to year, we can tell that this is the very first time since two years when we were supported by the foreign exchange rates. So we have the positive impact here 284 for sales and just 29 for non-IFRS operating profit. in terms of contribution organic contribution it's 855 million for sales revenue year to year and looking at the non-IFRS operating profit it's 243 million and acquisitions after the 30th of June 2025 so this is the delta from the acquisition transactions 121 million for sales revenue and 35 million for operating profit. So it just proves that the profitability of the newly acquired companies is very much similar to the organic profitability numbers, which is good news. Now, net profit again, non IFRS, the greatest contribution or I should say the greatest delta to net profit comes from Asseco Poland and here we are 125 million in positive terms and Asseco International is the second contributing segment with 34 million followed by inter-segmental adjustments plus 12 million is within the group and minus 4 is the adjustment for formula system segment but let's keep it in mind that because of the sale of sapiens we had a major loss of revenue So if you look at like for like treatment, Sapiens would contribute 18 million, or they did contribute 18 million during the first six months of 2025. So the delta is just minus four, which means that we were able to a large extent cover the loss of revenue resulting from the sales of Sapiens by our group. Other companies helped bridge that gap. So when we look at PLN, so comparing six months to six months, revenue up by 16% and revenue from software and proprietary services 17%. Dynamics are even higher for Q2. EBITDA non-IFRS is up by 27% six months to six months. as much as 33% for Q2 2026. We keep on improving profitability of 1.5 percentage points at the consolidated level. Now, when we take a look at the proportional treatment, then we will see that both dynamics and profitability improves even greater. 33% is non-IFRS operating profit and 32 percent quarter to quarter and profitability is even better 1.7 and 1.8 percentage points respectively and the standard operating profit that is reported is 38 percent six months to six months this is the dynamics Q2 is 43 percent compared to Q2 2025 and the improvement of profitability is 1.9 and 1.7 percentage points respectively. Now, let me revisit this slide. On the right-hand side, we highlighted the dynamics that were cleared of the FX effect. Now, moving further, below EBIT we see that we are doing quite well with our cost management and cost control of our interest. The debt within the group is up slightly, but because of the cash surplus, we are able to have more revenue from income. So our cost income actually is greater than the cost. This is important because it means that we will have cash from the sale of our own cash, but also we have cash from Sapiens sale, so the interest income comes from Polish segment and the formula systems. I think that looking down, there is nothing interesting happening. Perhaps I should offer a short commentary on the effective tax rate and the tax due for Q2. Right here, we can see the impact on our performance in Q2 2026. So this is the tax on the dividend paid by Sapiens. At the beginning of June, the company collected $51 million, actually slightly less. because there is a withholding tax. But what we see in the PLN is 19% tax on the dividend. To some extent, this is what's held at source, and the other part has to be taxed later within the company. So in the PLN, we have to show 19%, and this is on over 190 million zloty. Therefore, the effective tax rate for Q2 is fairly sizable. In terms of our participation in the loss and profit of the associated companies, this is mostly the effect of the Israel transformations and transactions. And the net result for shareholders is 460 million, 52% in the standard treatment. And for Q2, it's 38% up. Therefore, I think that we would like to see such dynamic every quarter. That would be really nice. We have to really keep it in mind that this is quite a spectacular picture. We will address the underlying reasons for such a spectacular performance. I think that this slide deserves more attention. Asseco Poland, this is the Marek company. The revenue has been growing and the operating profit has been growing even faster. Our EBITDA after six months is quite sizable, over 800 million. And what Marek has already highlighted is important to mention. This is a one-off effect because we were able to take advantage of the recovery program. Excellent performance in the healthcare system that we are showing under the heading of the public institutions. And the other part of the public institutions business has been performing very decently. They had great year in 2025 and they continue the good trend. We also have some performance in banking and financial institutions sector and this is generated by Asseco Poland but let me remind you that we have a lot of banking business within Asseco in the south of Europe and on top of it we have the Portuguese company that has main business focus on Africa but in Poland and in the south eastern Europe banking sector is taking advantage of the regulatory changes about elixir and some other formal requirements that the entire banking sector has to comply with. And therefore, we show very good profitability for this sector. And as a result, it drives our revenue and it also improves the profitability here and there. And we also see excellent situation within the power sector. Again, the past year was very good. and this positive trend continues throughout 2026. Let me throw your attention to the fact that when you look at our operations in Poland, we nearly doubled non-IFRS operating profit, and this is due to the excellent performance of Asseco Data Systems. Here we are taking advantage of the momentum within the public institutions sector, very good performance of the leasing sector, but also the system and the trusted services sales where the main product so far has been the electronic signature. Right now triggered the new kind of demand for the new type of services, which is the electronic stamp. As a result, we were able to grow our revenue and improve operating profit. Formula system segment, another record high quarter or matrix. Here we are showing both companies after the merger. It was not a merger, it was really the consolidation process because we are not going to fully merge the two companies, namely Matrix IT and Magic. But we show them in one line because Matrix is currently consolidating Magic starting from 2026. Excellent results for Israel business and also for the US business and within the European Here is mostly public segment or public institutions as the main driving force. And as Marek mentioned, the entire public institution sector across the group looks very well. As far as other companies are concerned, Formula Infrastructure, which we prefer to call Formula Engineering, is showing strong performance. Mishpal is also doing very well. So all these businesses that we continue to build as the new pillars for their formula are performing very well. And we are really happy to see the performance of international segment. In Central and Western Europe, we see major growth a lot of this growth is generated by the ERP segment and our ABS is doing great in Poland but we also see improved profitability in ERP company in Germany and this is where we have a core business located within the public institution sector and this is Africa Central Europe and also Slovak and Czech companies new contracts and the contracts that gave us some headache over the past few years are now getting back on the right trajectory and hence improved revenue. So this is the Western Europe, so we are showing the ASECO Spain. Let me say that for ASECO Spain, we had to actually make some impairments for inventory. So we do have a one of effect over 18 million lorries. So it's inventory impairment. So in this case, we are sort of underperforming a bit, but otherwise, South Eastern European markets also doing well. And so Asta Group, excellent performance within the banking sector, very good payment segment performance, and we are looking forward to a new project for the segment of the dedicated solution.

If we look at cash that's been generated, I think we can be pleased with the ratio. If we talk about 105% cash conversion, in terms of EBITDA, so it seems to be a pretty decent 113% in the Saeco Poland segment, 133% in the Saeco International, and a little bit worse, around 84% in Formula Systems segment. If we take a look just at this interim period, the cash generated is a little bit softer in the first half of the year than in the second half of the year. and this is a seasonal phenomenon with us so this LTM is I think pretty a good actor it reaches and so I think the cash generation is quite good it's especially good in a psycho international we also have good in the first half or in a psycho Central Europe it's also very good in southeastern Europe if we look at a psycho Poland the cash generation in Q2 is much better than it was in the first quarter of the year but at the same time I would continue to say that I would expect that improved cash generation at the end of the year we have a tradition of invoicing around Q3 and then collecting the cash in Q4 at the beginning of Q4 and that's one of the reasons Why these trends look the way they do but in formula systems we have Objectively if I said the it was a six-month period in matrix IT that had a poor cash generation period it was negative and So this was a result of the fact that first they had a lot of factoring transactions at the end of last year and and so they collected cash earlier and now the results were recognized and there was no cash and so the ratio basically deteriorated the second contributing factor was as well as that the major client in the public institutional sector pays after contracts are completed and they pay late and this is a structural program because some of that needs to be managed and so there's no danger in terms of this not being collectible but basically the money is flowing in late and what we have that awareness that that this number this figure could look a little bit better and so the cash generation and matrix will clearly improve I think in q4 q3 in Israel is a more difficult period Sa Unsp of FX differences gains and losses in the shekel dollar FX pair and in proportional results where formula has a much lower impact as a result the translation impact is much smaller and we have better organic results and so 384 million and in revenue and 165 in terms of operating profit of a non IFRS ilk and then we had 41 and then 11 in terms of EBITDA for acquisitions and so in a proportional recognition we have much better growth rate we have much better growth rates we've improved the profitability much more and this is a result of the fact that that when we do the proportional recognition, we can say the saeco Poland and the saeco international are much more important, have greater gravitas, and that's why we can see that it's a difference of roughly three percentage points. And so I think this is a wonderful result if we talk about the improvement in the interim periods from one year to the next. And if we look at the cash flow, so again, better, it's 121% at the group, and 113%, international is 133, and then we have the formula system segment is 93. This is a result of Matrix, which had a softer quarter, has a lesser impact, and that's why the results are much better. The commentary on these results in terms of cash generation, we can say that we are clearly pleased with cash generation, how it's fleshed out. But as I said, some things are cyclical in nature, some of the phenomena. And so we believe that the overall year results will be very good. And in the final slide, in my section of the presentation is the order backlog. So if you look at the fixed exchange rates for software and services, they're going by some 12% year-on-year. If you look at variable exchange rates or floating exchange rates, it's 18%. And so in Sa Unsp Poland, it's up 21%. And I think that's a great growth rate. And the best, Sa Unsp Data Systems has the best results than Sa Unsp Poland. and then you sometimes ask why is a component well this growth rate is because of backlog growing for public institutions and the second is banking and finance and the backlog and in corporates is as a slightly negative growth rate there's no reason to be worried about that because in the corporate sector we have long-term contract science and even if the growth rate is not enrapturing then next year we can say it will be it will deliver results and now we just have to complete the contracts perform the contracts as written and but I would say that things look very very decent if we look at the second international we have 10% growth in fixed exchange rates and 11% in variable exchange rates and in formula systems it's 10 and 20% and a proportional recognition basis we can say that the results are better so it's 14% growth in fixed exchange rates for the whole group and 16% for variable exchange rates and so you can see here the growth rate in formula has led to the difference between fixed and variable exchange from 9 to 19% so 21% in a cycle Poland 10% in a cycle international and plus 11 and then 9 and 19 for formula systems and so I think we can pretty much wrap up thank you very much Catalina thank you much Marek as you can see these results are record-breaking in terms of this interim period there's very good results we've received a large number of follow-up questions and I will try to respond to your questions and so let me ask you what part of your improved operating margin and cycle has been delivered by improving market conditions and to an extent is it your organizational efficiency and process efficiency gains well that's a very tough question to respond to because It's not something that you can't do more revenue if you don't improve efficiency of your organization in the processes, especially if we took a look at headcount not growing. In some cases, headcount is flat and we have more revenue. So I think I can give the following commentary. Well, we do have some effects as a result of regulatory changes. We have a challenge to call everything a one-off because if we say something is a regulatory change in one quarter and then we had regulatory changes in another quarter in another area, or that we have some EU funding and things like that basically our business is so highly diversified that we're able to benefit from the good market conditions and basically we're trying to match or align our resources to that to improve our efficiency and so these individual areas of improvement are organized in such a way that we're going to have recurring income in the future and so I had mentioned this and I think Marek also referred to that that we had a spectacularly good situation in the health sector health service and we're utilizing the fact that our customers are spending money from the national recovery program and then there was an accumulation of that in Q2 but of course we're trying to sell that we have maintenance or follow-up care additional services in in line with what we're selling and so we're trying to convert one-off expenditures into a business model for the future and if everything is taking place in terms of improving your efficiency then its somehow upheld it sustains because its possible thats one of the best reasons that it's it's good to try to sustain your efficiency the fact that you've been able to do at least once that Frank very much then we have another question I would happily participate in a second business and solution conferences but unfortunately that company doesn't organize and conferences for investors from is it a change a possible We will pass on that information to the management team in Eyer. That's not the case. They don't organize conferences. They do. You just have to physically walk in and join the conference. So we invite you to join us. Well, we have the problem that most of you are online, and we would like for you to join us in person, but we can see that there is interest in visiting us onsite. I would rather not comment that directly.