Results of Asseco Group

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2 Results of Asseco Group H August

3 Asseco Group in H Double-digit revenue growth of the Group sales higher by nearly PLN 0.5 billion than in the comparable period last year. Continued strong growth of our foreign market operations. Stagnation in the public institutions market in Poland. Delays in projects under the new EU financial perspective. Strengthening our sector-specific competence through new company acquisitions. Completing the reorganization of our business structure in Poland. 3

4 New organizational structure in Poland PROPRIETARY SOFTWARE ERP and SFA INTEGRATION CONSULTING AND IMPLEMENTATIONS 46.47% 100% 100% Expert in software solutions for various sectors. Focusing on proprietary software and services. Solutions for small and medium-sized enterprises and sales force automation (SFA). Focusing on own ERP software. Solutions for local administration and entities that are not served by Asseco Poland. Focusing on IT infrastructure. Specialization in third-party solutions. Focusing on consulting and implementation services. 467 mpln in revenues* 81 mpln in revenues* 194 mpln in revenues* 79 mpln in revenues* 2,800 people 650 people 1,000 people 300 people * Pro-forma revenues for H1 2016, i.e. taking into account our new organizational structure 4

5 Consolidated financial highlights for H ,771 mpln Sales revenues +14% 506 mpln EBITDA +9% 143 mpln Net profit +4% 3,020 mpln Proprietary software and services +11% 362 mpln EBIT +9% 6,980 mpln Order backlog for % 5

6 Asseco Group in H geographical regions Polish market Favourable impact from company acquisitions and higher sales of our subsidiaries compensate for the public market stagnation. Israeli market Dynamic revenue growth achieved by Magic Software and Sapiens. New acquisitions and raising of revenue guidance for the full year Central European market Positive effects of completed company acquisitions. Growing sales in the ERP segment. South Eastern European market Growing revenues of the infrastructure segment. Further outlays for software development and sales of proprietary solutions. Western European market Favourable effects of the acquisition of Exictos. Stable growth in the banking sector, higher sales of IT infrastructure in Spain. Eastern European market New contracts and continued implementation of existing projects. Impact of terminated cooperation with a key customer (high base effect). Polish market 835 mpln +9% Central European market 330 mpln +40% Western European market 290 mpln +6% Consolidated revenues PLN 3,771 million Eastern European market 34 mpln -19% South Eastern European market 260 mpln +18% Israeli market 2,053 mpln +16% 6

7 Higher share of foreign operations in the Group s sales revenues mpln 22% 3,771 mpln 1,901 1,899 2,099 2,539 2,935 78% H H H H H H Revenues from Poland Revenues from foreign operations 7

8 Higher share of foreign operations in the Group s operating profit + 27 mpln 36% 362 mpln 64% H H H H H H Poland Foreign operations 8

9 Revenue structure strong diversification into sectors 21% Sales revenues 3,771 mpln 41% ,021 1,161 1,045 1, ,463 1,156 1,452 1,532 39% H H H H H General Business Banking and Finance Public Institutions 9

10 General Business sector Sales revenues (in millions of PLN) H H Change Polish market % 1,161 1,045 1,162 1,452 1,532 Israeli market % Central European market % South Eastern European market % Western European market % Eastern European market % H H H H H Asseco Group* 1, , % Effects of new company acquisitions in the Central European market and in Poland. Growing revenues from ERP solutions in Poland (ABS) and in the region of Central Europe. Impact from the sale of Matrix42 in the Western European market (offset by banking business). * Figures after consolidation eliminations. 10

11 Banking and Finance sector Sales revenues (in millions of PLN) H H Change Polish market % ,021 1,156 1,463 Israeli market % Central European market % South Eastern European market % Western European market % Eastern European market % H H H H H Asseco Group* 1, , % Strong results of Sapiens: new contracts and acquisitions. Expanding cooperation with banks in Israel. Effects of the acquisition of Exictos in the Western European market. Continued organic growth. Impact of terminated cooperation with a customer in Russia mitigated by new contracts. * Figures after consolidation eliminations. 11

12 Stagnation in the public procurement market in Poland Example of the healthcare sector Number of awarded tenders: Applications/Implementations in the 1st and 2nd quarter % Value of awarded tenders: Applications/Implementations in the 1st and 2nd quarter [in thousands of PLN] 54, ,468-99%

13 Public Institutions sector Sales revenues (in millions of PLN) H H Change Polish market % Israeli market % Central European market % H H H H H South Eastern European market % Western European market % Eastern European market Asseco Group* % Stagnation in the market of public procurements in Poland. Favourable impact from execution of long-term agreements and maintenance contracts. Significant economic improvement in the Czech Republic and positive effects of acquisitions. Higher sales of IT infrastructure and software in Israel (Matrix IT). * Figures after consolidation eliminations. 13

14 Consolidated order backlog for 2016 In comparison to the order backlog presented in August Sales revenues +17% Proprietary software and services +14% 5,975 6,980 5,027 5, Figures in millions of PLN. Value of the order backlog for 2016 as at 22 August 2016; value of the order backlog for 2015 as at 21 August 2015 (adjusted by the data of Matrix42). 14

15 Contracts signed in H Public Institutions 846 General Business 994 Number of contracts signed in H ,742 Banking and Finance 1,902 1) Asseco Group, excluding retail products. The figures include contracts, orders and annexes. 15

16 Financial information

17 Robust growth in revenues and operating profit H H Δ Q Q Δ Revenues 3, , % 1, , % Proprietary software and services 3, , % 1, , % Gross profit on sales % % Gross profit margin 23.5% 24.3% -0.8 pp 23.1% 24.2% -1.1 pp Selling costs % % General and administrative expenses % % Other operating activities Operating profit % % Operating profit margin 9.6% 10.1% -0.5 pp 9.2% 9.8% -0.7 pp Operating profit non-ifrs % % Operating profit margin non-ifrs 11.0% 11.4% -0.4 pp 10.5% 11.1% -0.6 pp EBITDA % % EBITDA margin 13.4% 14.0% -0.6 pp 12.9% 13.7% -0.8 pp 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 17

18 Robust growth in revenues and operating profit H / Change H vs. H Sales revenues** Proprietary software and services** Operating profit (non-ifrs) Polish market % % % Israeli market 2, % 1, % % Central European market % % % South Eastern European market % % % Western European market % % % Eastern European market % % % Asseco Group* 3, % 3, % % * Figures after consolidation eliminations. ** Revenues generated in individual markets include sales to external customers as well as inter-segment sales. 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. 18

19 Robust growth in revenues and operating profit Q / Change Q vs. Q Sales revenues** Proprietary software and services** Operating profit (non-ifrs) Polish market % % % Israeli market 1, % % % Central European market % % % South Eastern European market % % % Western European market % % % Eastern European market % % % Asseco Group* 1, % 1, % % * Figures after consolidation eliminations. ** Revenues generated in individual markets include sales to external customers as well as inter-segment sales. 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. 19

20 Reconciliation of operating profit and net profit H H Δ Q Q Δ Operating profit % % Interest expense Foreign currency transactions Other of which: gain/loss on transactions associated with company acquisitions reversal of a write-down on a loan granted to Matrix42 Inc Pre-tax profit % % Income tax % % Share of profits/losses of associates Profit/loss from discontinued operations Net profit % % Net profit attributable to shareholders of the parent company % % Figures in millions of PLN 20

21 Generated cash flows Asseco Group Asseco Poland H H H H CFO CAPEX* Free cash flow** Cash conversion*** 66% 79% 8% 71% * Excluding investments in investment property, net of grants received. ** CFO+CAPEX. *** Free cash flow / non-ifrs EBIT. 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. 21

22 Stable liquidity position (Asseco Poland) As at 30 June 2016 ST LT Cash and financial assets Debt and finance lease: Bank loans Assets serving as bank loan collateral* Finance lease liabilities Net cash (ST) Inventories + ST receivables ST liabilities** Net operating assets (ST) Available bank loan facilities Figures in millions of PLN * The book value of real estate serving as bank loan collateral ** Inventories + short-term receivables + short-term prepayments short-term liabilities excluding bank loans and finance lease liabilities 22

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