Asseco Poland. Company Presentation. June, 2018

Transcription

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2 Asseco Poland Company Presentation June,

3 Asseco at a glance Present in 53 countries Founded in 1991 The largest IT company in Poland Traded on the WSE, included in the WIG30 blue chip index International presence Over 23,000 highly commited employees 6 th largest software & services vendor in Europe 1,845 meur sales revenues in meur operating profit in ,9 bln EUR market capitalization 3

4 Areas of Activity Finance Public Sector Enterprises Banks Insurance companies Brokerage houses Investment funds Leasing companies Factoring companies Central administration Local administration Healthcare International organizations Social services Uniformed services Education Telecommunication Energy sector Utilities Gas sector Manufacturing, Trade and Services FMCG Multimedia 4

5 Track Record of Successful Acquisitions More than 65 successful acquisitions since 2004 Increased revenues and profitability of acquired companies Experience in integrating knowledge of local markets, customer relations and innovative solutions Asseco expands in Poland (Softbank and Prokom acquisitions) Expansion into markets in Western Europe Expansion in Scandinavia Entrance into South Eastern Europe Asseco Poland acquires Formula Systems Asseco SEE expands in Turkey Asseco acquires Necomplus Group Asseco Poland merges with ABG SA Asseco Georgia acquisition R-Style Softlab acquisition in Russia 2014 Asseco Kazakhstan acquisition Asseco in Nigeria Exictos joins Asseco Successful bid for Infovide- Matrix 2016 Expansion in Israel Roshtov Software TSG acquisition StoneRiver acquisition in the U.S. Macrologic acquisition Slovak CEIT joins Asseco Michpal Micro Computers acquisition in Israel 2004 Asseco acquires Slovak AssetSoft

6 Proprietary software 6

7 Main focus: proprietary software and services (pro form * ) 2017* % % 8,703 mpln 8% 12% Proprietary software and services 6, % 6,351 Third-party software and services % 627 Hardware and infrastructure 1, % 950 0% Other sales 3-26% 4 Sales revenues 8, % 7,932 * including the revenues in the Israeli market for the period non-consolidated by Asseco Group, i. e. VIII-IX 2017 Figures in millions of PLN. 7

8 Products adapted to different client needs Dedicated solutions Comprehensive solutions for various sectors Standard software packages Cloud solutions Solutions designed to individual customer needs Solutions designed and developed for several large and medium-sized customers Standard solutions for a large number of small and medium-sized customers Solutions available to customers online 8

9 Federation model 9

10 Federation model of growth The model comes from unique M&A s approach Asseco Group is a group of quasi-independent subsidiaries Asseco usually buys more than 50% of equity but rarely 100% In principle we keep the people, managers and products after the acquisition Asseco is present in supervisory board or board of directors of acquired companies Asseco Poland is the leader of the Group 10

11 Advantages of federation Local expertise and experience Knowledge of clients, environment, specifics Locally well-known, trusted products Local people with local language Being fair to local government (taxes, employer) Possible synergy effects within the whole Asseco Group Support entrepreneurship 11

12 Geography - our offices worldwide The Asseco Group 12

13 Diversification 13

14 Strong top line diversification between businesses 2017* % % 8,703 mpln 82% Foreign Domestic 21% 8,703 mpln 40% General Business Banking and Finance Public Institutions 3, % 3,128 3, % 3,062 1,838 +6% 1,742 39% Sales revenues 8, % 7,932 * including the revenues in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX years: average customer tenure for our top 5 clients 14%: 10 biggest customers accounts for 14% of revenues 14

15 Long term growth 15

16 Consistently strong financial performance (pro form * ) Revenue (PLN millions) 4,960 5,529 5,780 6,232 7,256 7,932 8,703 2,787 3,050 3,238 1, PF* EBIT (PLN millions) PF* Source: Company data * including the results in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX 2017 and excluding impact of recalculation of: i) amortization charges on intangible assets recognized in purchase price allocation as well as ii) costs of share-based payment transactions with employees resulting from regain of control over Formula Systems 16

17 Asseco Poland's dividend yield vs WIG20 companies One of the highest in comparison with WIG20 companies 8,0% 7,0% 6,0% 5,0% 4,0% 3,0% 2,0% 1,0% 0,0% 5.9% Asseco Poland's dividend yield vs WIG20 companies *Dividend yield calculated on the day of its payment in

18 Consistent implementation of our dividend policy Over PLN 1.67 billion paid dividends mpln DY: 1.1% DY: 1.4% DY: 3.1% DY: 2.9% DY: 4.1% 2.41 DY: 5.0% 2.60 DY: 5.7% 2.90 DY: 6.3% 3.01 DY: 5.0% 3.01 DY: 5.9% DY:6.7% ** * *The dividend payment for 2017 was approved by Annual General Meeting on 25th April The dividend was paid out on 7th June ** Dividend yield as at 7th June

19 Shareholder structure Stable and long term shareholders (including CEO)* Number of shares and votes at GMS Voting interest at GMS Aviva Pension Fund 12,485, % Adam Góral 8,083, % PZU Pension Fund 4,281, % NN OFE 4,171, % Other shareholders 53,979, % 83,000, % Other shareholders 65.03% AVIVA BZ WBK Pension Fund 15.04% Adam Góral 9.74% PZU Pension Fund 5.16% NN Pension Fund 5.03% 19

20 Financial information

21 Consolidated financial highlights 2017 (pro form * ) PLN 8,703 m Sales revenues +10% PLN 6,992 m Proprietary software and services +10% PLN 1,014 m EBITDA -5% PLN 685 m EBIT -11% * including the results in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX 2017 and excluding impact of recalculation of: i) amortization charges on intangible assets recognized in purchase price allocation as well as ii) costs of share-based payment transactions with employees resulting from regain of control over Formula Systems 21

22 Simplification of the Asseco Group s structure Israeli market Polish market Foreign markets Formula Asseco Poland Systems 26.31% 100.0% Asseco International Establishment of Asseco International: Separation of Asseco Poland's operating activities from those conducted for the benefit of the Group's development, as well as more effective management of the Group's international development. Building the Asseco Group's value on the basis of its international assets the establishment of a holding company with the prospect of dynamic development and the possibility of its public offering on international markets. 22

23 Israeli market Polish market International markets Formula Systems 26.31% Asseco Poland 100.0% Asseco International Sapiens 48.67% % Asseco Data Systems 92.81% Asseco Central Europe 51.06% Asseco South Eastern Europe Exictos 69.40% 49.50% Matrix IT 47.15% Magic Software Dahliamatic ZUI Novum % 51.00% 49,91% 50.00% Asseco Enterprise Solutions 96.94% Asseco Lithuania 46.47% Asseco Spain 70.32% Asseco Business Solutions 55.00% Asseco Denmark Michpal % SKG 60.00% 51.00% Asseco Kazakhstan 65.00% Necomplus 70.00% Peak Consulting TSG 50.00% 49.00% R-Style Softlab 51.00% Asseco Nigeria 51.00% Asseco Georgia The Group s key companies, share in capital 23

24 Booking profit from the investment in Formula Systems Asseco Poland buys 51% stake in Formula Systems for PLN 427 million Asseco Poland as a shareholder: Dividends received Sale of 20% stake in Formula Systems Total PLN 96 million PLN 367 million PLN 463 million Asseco Poland holds 26% stake in Formula Systems worth PLN 570 million Gained PLN 463 million from the investment and still holds a stake worth PLN 570 million. Remains the largest shareholder of Formula Systems and executes control over the company. *) As at December 31,

25 Rising share of foreign market in the Group s revenues (pro form * ) 18% Revenues* 8,703 mpln 23% 1,473 1,604 2,544 2,951 1,979 1,839 1,883 3,649 4,399 5,166 1,979 4,293 1,763 1,677 1,769 1,650 1,559 1,559 59% PF* 2017** Polish market Israeli market Other international markets & adjustments * Pro form i.e. including the revenues in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX 2017 ** Official i.e. excluding the revenues in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX

26 Rising share of foreign operations in the Group s operating profit (pro form * ) 31% EBIT* 685 mpln 27% % PF* 2017** Polish market Israeli market Other international markets * Pro form i.e. including the revenues in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX 2017; and excluding impact of recalculation of: i) amortization charges on intangible assets recognized in purchase price allocation as well as ii) costs of share-based payment transactions with employees resulting from regain of control over Formula Systems ** Official i.e. excluding the revenues in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX 2017 and including impact of recalculation of: i) amortization charges on intangible assets recognized in purchase price allocation as well as ii) costs of share-based payment transactions with employees resulting from regain of control over Formula Systems 26

27 Revenue structure strong diversification into sectors (pro form * ) 21% 39% Revenues* 8,703 mpln +10% 40% 1,838 1,742 1,738 1,668 1,491 1,505 2,688 3,062 3,409 3,040 2,031 2,214 2,258 2,513 2,829 3,128 3,456 3, PF* 2017** General business Banking and Finance Public Institutions * Pro form i.e. including the revenues in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX 2017 ** Official i.e. excluding the revenues in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX

28 The Asseco Group in 2017 geographical regions (pro form * ) Polish market Development of exports of products for the Banking and Finance sector. Supporting customers in their adaptation to legal changes in the Banking and Public sectors. The first signs of recovery in the public market. Israeli market Increase in the scale of operations on international markets - new companies in the Group, including US StoneRiver. Other international markets Expanding the offer of IT products and services for the industry through the acquisition of Slovak CEIT. Further dynamic development in the ERP sector - the Central European market. Double-digit increase in ASEE's operating profit and its stable revenues. Sales growth in the payments segment, improved results in the banking and integration sectors - the South Eastern European market. Sales growth in all three key sectors - the Western European market. Other international markets +4% 2,020 8,703 mpln +10% 5,166 1,559 Polish market -6% Israeli market** +17% Total revenues including consolidation adjustments ** Excluding the Israeli market revenues in the period non consolidated by the Asseco Group, i.e. in the period of August-September 2017 the revenues amounted to PLN 4,293 million, i.e. -2% lower than in * Including the Israeli market revenues in the period non consolidated by the Asseco Group, i.e. in the period of August-September

29 The Group's development - new acquisitions in the Group Purchase of stake by Asseco Central Europe Slovakian producer of innovative solutions, among others, in the field of industrial automation and robotics. The dominant area of the company's activity are R&D activities for the automotive industry Purchase of stake by Formula Systems Michpal MicroComputers Israeli company operating in the market of HR and payroll software. Purchase of stake by Asseco Bussines Solutions Polish producer of software for companies and businesses, specializing in the production and implementation of proprietary ERP software. Purchase of stake by a company from the Magic Software Group A company offering services in the field of application development, business analysis and education. Purchase of stake by Sapiens International American manufacturer of advanced insurance software (Sapiens). Purchase of stake by Sapiens International (Q1, 2018) American software producer specializing in solutions for insurance companies. 29

30 General business sector (pro form * ) Change Polish market % Israeli market 2, , % Other international markets % Central European market % South Eastern European market % Western European market % Eastern European market % Revenues (in mpln) 2,258 2,513 2,829 3,128 3, Asseco Group** 3, , % Increase in revenues in the general business sector, driven by international markets. Sales growth and further development of the ERP segment in Poland and Central Europe. * Including the revenues in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX ** Data including a consolidation adjustment. 30

31 Banking and finance sector (pro form * ) Change Polish market % Revenues (in mpln) Israeli market 2, % Other international markets % Central European market % South Eastern European market % Western European market % 2,031 2,214 2,688 3,062 3,409 Eastern European market % Asseco Group** 3, , % Double-digit increase in sales of Sapiens in 2017 thanks to an acquisition on the American market. Improved results in Central Europe (ACE) and Western Europe. * Including the revenues in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX ** Data including a consolidation adjustment. 31

32 Public institutions sector (pro form * ) Change Polish market % Israeli market % Revenues (in mpln) Other international markets % Central European market % South Eastern European market % Western European market % 1,491 1,505 1,738 1,742 1,838 Eastern European market Asseco Group** 1, , % Impact of drop in orders and stagnation in the public tender market in Poland. Higher sales and stronger position and in the public sector in Israel. Significant growth of sales on the Western European market. * Including the revenues in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX ** Data including a consolidation adjustment. 32

33 Consolidated order backlog for 2018 In comparison to the order backlog presented in March, 2017 Sales revenues 0% Proprietary software and services -2% 5,467 5,459 4,988 4, If calculating backlog 2018 with fx rates for backlog 2017: +9% Sales revenues/ +7% Proprietary software and services Figures in millions of PLN.; Value of the order backlog for 2018 as at March 13, 2018; value of the order backlog for 2017 as at March 13, 2017 (adjustef for R-Style Softlab) 33

34 Plans for

35 Formula Systems Remains the Asseco Group's strategic investment. Synergy in the promotion and sale of products: for Asseco Poland: in entering the US market for FS's companies: in development in the countries where the Asseco Group s companies have been operating (in particular in the insurance sector - Sapiens) The scale of joint operations is significant when selecting the Asseco Group's companies as providers of IT solutions, as well as when cooperating with global partners. Formula Systems Sapiens Matrix IT Magic Software Michpal TSG 48.67% 49.50% 47.15% % 50.00% 35

36 Asseco International A holding company whose objective is to manage and develop the Asseco Group's companies on foreign markets. The leader of the project is Jozef Klein, CEO of Asseco Central Europe, the Entrepreneur of the Year 2017 in Slovakia. The Management Board is composed of managers from Poland: Przemysław Sęczkowski, Marek Panek and Rafał Kozłowski. The Supervisory Board is composed of Adam Góral, Piotr Augustyniak and Jacek Duch. Asseco International 51.06% Asseco South Eastern Europe 96.94% Asseco Lithuania 51.00% Asseco Kazakhstan 49.00% R-Style Softlab 50.10% Asseco Enterprise Solutions 92.81% Asseco Central Europe Asseco Spain 70.32% 65.00% Necomplus 51.00% Asseco Nigeria Exictos 69.40% 55.00% Asseco Denmark 70.00% Peak Consulting 46.47% Asseco Business Solutions 51.00% Asseco Georgia 36

37 Our approach to acquisitions Asseco is interested in companies that allow for increasing competences in specific sectors and for entering new geographical regions Preferred sectors: Finance and banking ERP Healthcare Cyber security Preferred geographical regions: Europe all countries US - banking sector We are interested in technological companies which: Generate profits Offer development prospects Develop proprietary IT products Offer attractive valuations Offer engaged and motivated management teams Start-ups offering technological products and experienced IT teams 37

38 Our goal: long-term and stable growth The Asseco Group - European software producer established and developed by the Poles 1. We rely on our proprietary software and related services. 2. We focus on the business needs of our customers. 3. We develop high cross-sector competences. 4. We employ the best programmers and IT specialists. 5. We cooperate with global suppliers of technology and IT solutions. 6. We build value for our shareholders and share successes in the form of dividends. 7. We are a socially engaged company supporting the development of the Polish economy. 38

39 Financial Information 39

40 Growth in revenues 2017 PF* Δ PF* Δ Q Q Δ Revenues 8, , , % -1% 2, , % Proprietary software and services 6, , , % -2% 1, , % EBITDA 1, , % -14% % EBITDA margin 11.6% 11.8% 13.5% -1.8 p.p p.p. 11.6% 12.5% -1.0 p.p. Operating profit non-ifrs % -16% % Operating profit margin non-ifrs 9.4% 9.5% 11.1% -1.7 p.p p.p. 9.8% 10.4% -0.6 p.p. PPA & SBP*** % +40% % Operating profit % -24% % Operating profit margin 7.9% 7.5% 9.7% -1.8 p.p p.p. 6.5% 9.0% -2.5 p.p. Figures in millions of PLN * including the revenues in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX 2017 and excluding impact of SBP&PPA recalculation due to regain of control over Formula Systems **Non-IFRS figures including adjustments for: i) income recognized in purchase price allocation, ii) amortization charges on intangible assets recognized in purchase price allocation as well as iii) for the costs of share-based payment transactions with employees *** PPA i.e. amortization charges on intangible assets recognized in purchase price allocation ; SBP i.e. costs of share-based payment transactions with employees 40

41 Reconciliation of operating profit and net profit -80.1: impairment of goodwill in segment Public Administration in Asseco Poland -15.9: write-down for the investment in Sintagma -2.1: write-down for the investment in Asseco Georgia -1.1: write-down for the investment in Asseco Kazakhstan -0.9: write-down for the investment in Asseco Nigeria +76.2: revaluation of shares in Formula Systems to fair value +0.5: other transactions Δ Q Q Δ Operating profit % % Interest expense Foreign currency transactions Other of which: gain/loss on transactions associated with company acquisitions : result on loss of control over Formula Group (before tax) -40.9: write-down of deferred payment from the sale of shares in R-Style Softlab and result on sales -4.8: other transactions gain/loss on transactions associated with company sales dividends paid to non-controlling shareholders Pre-tax profit % % Income tax % % effective tax rate 15.7% 24.9% 8.1% 26.0% -39.7: write-down for the investment in associate R-Style Softlab +2.0: other Share of profits /losses of associates ,496% Net profit % % Net profit attributable to shareholders of the parent company % % Figures in millions of PLN 41

42 Financial results of regions and subsidiaries Sales revenues Operating profit Net profit contribution to Asseco Poland 2017 PF* PF* Polish market** 1, , , Asseco Poland (excl. dividends, excl. one-offs; PF 2016)** Asseco Business Solutions Asseco Data Systems (PF 2016)** Other companies impairment of goodwill in public segm. (officially in A. Poland) elimin. of interco. loan write-offs in A. Poland (no impact on cons. result) 23.9 other consolidation adjustments Israeli market 5, , , Matrix IT 3, , , Magic Software Sapiens Int. 1, Other companies result on sale of shares and fair valeu remeasurement of Formula Systems consolidation adjustments Other international markets 2, , , Central European market South Eastern European market Western European market (excl. write-offs) Eastern European market (excl. write-offs) adjustments (write-offs related to WE and EE markets) Consolidation adjustment Asseco Group 8, , , * * including the results in the Israeli market for the period non-consolidated by Asseco Group, i.e. VIII-IX 2017 and excluding impact of recalculation of: i) amortization charges on intangible assets recognized in purchase price allocation as well as ii) costs of share-based payment transactions with employees resulting from regain of control over Formula Systems 42 ** For the companies from the Polish market, the 2016 data are pro forma figures, ie taking into account changes in the structure of the market

43 Generated cash flows Asseco Group Asseco Poland CFO , CAPEX* Free cash flow** Cash conversion*** 87% 93% 73% 75% Figures in millions of PLN Non-IFRS figures including adjustments for: i) income recognized in purchase price allocation, ii) amortization charges on intangible assets recognized in purchase price allocation as well as iii) for the costs of share-based payment transactions with employees * Excluding investments in investment property, net of grants received. ** CFO+CAPEX. *** Free cash flow / non-ifrs EBIT 43

44 Legal disclaimer The contents of this presentation are copyright protected and constitute proprietary information. All texts, graphics, photographs, sound, animations and videos, as well as their layout in the presentation are protected under the Act on copyright and related rights as well as by other applicable regulations. Unauthorized use of any materials contained in this presentation may constitute an infringement of copyright, trademark or other laws. Materials available in this presentation cannot be modified, reproduced, disclosed or performed in public, distributed or used for other public or commercial purposes, unless it is expressly permitted in writing by Asseco Poland S.A. Copying for commercial use, distribution, modification or acquisition of the contents of this presentation by third parties is strictly prohibited. This presentation may include references to product and service offerings of third parties. The terms and conditions for the use of third-party products and services are defined by such third parties. Asseco Poland S.A. will in no way be responsible or liable for the conditions or consequences of using such third-party products and services. The data and information contained herein constitute general information only. This presentation has been prepared with the help of Inscale company products. The name and logo graphic of Asseco Poland S.A. are registered trademarks. Any use of these trademarks shall require prior express consent of Asseco Poland S.A 2017 Asseco Poland S.A. 44

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