Asseco Poland Solutions for Demanding Business
Financial results for the year 2010 Warsaw, 21 March 2011 Agenda
. 2010 Annual Summary
. Financial Results for 2010
. Operating Activities
. Financial Results of Subsidiaries
. Annex – Detailed Financial Results
1 Consolidated Financial Highlights for 2010
Consolidated sales Proprietary software 3 500 2 100 +4.7% +6.1%
3 000 2 000
3,238 2,068 2 500 3,050 1 900 1,975
2 000 1 800 2009 2010 2009 2010
EBITDA EBIT Net profit
750 +7.6% 750 450 +11.2% +8.3% 600 600 400
695 646 415 450 450 569 350 526 373
300 300 300 2009 2010 2009 2010 2009 2010
Figures in millions of PLN
2 Consolidated sales revenues, by products and sectors
2010 %∆ 2009
Proprietary software and services 2,068 4.7% 1,975
64% 17% Third-party software and services 558 8.1% 516
Hardware and infrastructure 592 9.4% 541
1% 18% Other sales 20 12.9% 18 Sales revenues 3,238 6.1% 3,050
2010 %∆ 2009
36% Banking and Finance 1,175 6.0% 1,108
Enterprises 1,037 -9.4% 1,144
Public Administration 32% 32% 1,027 28.7% 798
Sales revenues 3,238 6.1% 3,050
Figures in millions of PLN
3 Standalone Financial Highlights for 2010
Standalone sales Proprietary software 1 400 950 +23.4% +26.5% 1 100 800
800 1,168 650 813 946 643 500 500 2009 2010 2009 2010
EBITDA EBIT Net profit +45.3% 450 +10.3% 450 450 +7.6%
300 300 300
388 422 352 333 150 150 310 150 291
0 0 0 2009 2010 2009 2010 2009 2010
Figures in millions of PLN
4 Standalone sales revenues, by products and sectors
2010 %∆ 2009
69% Proprietary software and services 813 26.5% 643
23% Third-party software and services 266 2.5% 259
7% Hardware and infrastructure 82 126.9% 36
1% Other sales 8 -5.2% 9 Sales revenues 1,168 23.4% 946
2010 %∆ 2009
39% Banking and Finance 455 -23.0% 591
15% Enterprises 178 158.7% 69
Public Administration 535 86.7% 287
46% Sales revenues 1,168 23.4% 946 Figures in millions of PLN
5 Financial Liquidity
31 December 2010 31 December 2009
Asseco Poland Asseco Group Asseco Poland Asseco Group
Short-term and long-term debt -92.0 -335.3 -48.0 -132.6
Cash and cash equivalents 173.4 842.2 30.4 342.8
Cash – debt 81.4 506.9 -17.5 210.2
Trade accounts receivable 172.4 1,017.1 102.9 569.4
Trade accounts payable -51.2 -475.0 -59.3 -282.2
Inventories 4.7 66.7 1.1 45.7
Operating balance 207.3 1,115.8 27.3 543.0
mPLN Formula Systems 327.6 ACP 173.4 ASEE 100.1 ACE 89.5 ABS 59.4 others 92.2
6 Market Expectations for 2010
Sales revenues (consolidated)
3 500
3 000 102% 3,172 3,238 2 500
2 000 Consensus 2010
Operating profit (consolidated) Net profit (consolidated)
650 650
500 500
546 104% 569 350 350 116% 415 357
200 200 Consensus 2010 Consensus 2010
* Arithmetic average of forecasts made by 13 brokerage houses as at 13 January 2010; figures in millions of PLN
7 Agenda
. 2010 Annual Summary
. Financial Results for 2010
. Operating Activities
. Financial Results of Subsidiaries
. Annex – Detailed Financial Results
8 Historical Performance of Asseco
Earnings and dividends per share Continued improvement of net profit, [PLN] 5.88 6 5.43 5.47 both in total and on a per-share basis. 3-year compound annual growth rate (CAGR) of earnings per share equalled 4 3.48 19.1%; whereas, the rate of growth of dividends per share was 48.5% over 1.80 the last 3 years. 2 1.47 1.03 0.55 EPS DPS 0 2007 2008 2009 2010F
Total net profit and dividend payments 3-year compound annual growth rate 450,0 [PLN millions] 415.1 (CAGR) of total net profit equalled 373.4 31.1%; whereas, the rate of growth of 321.6 total dividend payments was 60,0% 300,0 over the last 3 years. 160.9 150,0 139.6 106.0 70.3 32.8 Dividend Net Profit 0,0 2007 2008 2009 2010F
9 Board of Directors
10 Asseco Group Business Units
Poland
Israel
íček Dor
Central -
Europe
. .
South Eastern ERP
Europe
Banking
Administration
Leader: Vacancy Leader:
Leader: Marek Grac Marek Leader:
Healthcare
Insurances
Leader: Roni Al. Roni Leader:
Leader: Marcus Marcus Haller Leader: Leader: Radek Lev Radek Leader:
DACH Piwowar Paweł Leader:
Leader: Zbigniew Pomianek Zbigniew Leader:
Telco & Utilities & Telco IT Infrastructure IT
South Western Public Europe
Northern Europe
11 Cross-Selling Initiatives
Year Proposed initiatives Successful initiatives In negotiation 2008 40 - - 2009 32 8 - 2010 103 10 - 2011 34 1 Total 209 19 88
12 Successful Mergers in Poland
General Effects of mergers of Total Selling administr. Asseco Poland, in mPLN expenses expenses • General administrative expenses expenses in 2010 were Asseco 2006 23.6 5.3 18.3 reduced to 39% of such Softbank 2006 37.4 6.6 30.7 expenses incurred by
Prokom 2007 195.8 47.0 148.8 individual companies Individual Individual companies companies before the merger before mergers before ABG 2009 54.9 13.0 41.9 Expenses before mergers 311.7 72.0 239.7 • Selling expenses in 2010 accounted for 73% of Expenses of Asseco 145.3 52.3 93.0 after mergers (2010) such expenses incurred by individual companies Synergy effects 166.4 19.7 146.7 before the merger Synergy effects (%) -53% -27% -61% • Total administrative and selling expenses in 2010 were reduced to 47% of such expenses incurred by companies operating separately
13 Significant Events
Issuances of shares of series I and J • 3,878,277 ordinary bearer shares of series I issued at PLN 54 per share. • 5,433,174 ordinary bearer shares of series J issued at PLN 50 per share.
Acquisition of Formula Systems • Asseco holds a 50.19% equity interest in Formula Systems and a 51.18% voting interest at its General Meeting of Shareholders. • The total transaction cost amounted to USD 145.3 million.
Construction of the Asseco Headquarters • Agreement with Bank Pekao SA for an investment loan in the total amount of PLN 200 million: • up to PLN 80 million for refinancing of the land purchase cost • up to PLN 120 million for financing of the net cost of construction • Agreement with AWBUD Sp. z o.o. for execution of the construction work • Investment project to be completed till 31 May 2012
Dividend for 2009 and proposed dividend for 2010 • Payment of a dividend of PLN 1.47 per share, the dividend right was acquired on 25 June 2010 • The Management Board recommends distribution of a dividend for 2010 in the amount of PLN 1.80 per share
Mergers of Asseco Poland with ABG, Asseco Systems and Alatus • Merger with ABG – registered on 4 January 2010 • Merger with Asseco Systems and Alatus – registered on 4 January 2011
14 Banking and Insurance Divisions
Successes in 2010 Key Accounts
. Gaining contracts for the implementation of mobile . Bank PKO BP systems at brokerage houses . PZU Insurance Group . Implementation of the def3000 system for IDEA . Bank Ochrony Bank Środowiska . Signing of the def3000 system maintenance . Bank Gospodarki agreements Żywnościowej . Implementation of numerous modules for: . ING Bank . e-Banking . Getin Noble Bank . anti-money laundering . Deutsche Bank PBC . reporting Allianz Bank . data backup . . cash circulation monitoring . Cooperative Banking . Renegotiation of contracts with cooperative banks Group for use and maintenance of IT systems
15 Public Administration Division Successes in 2010 Key Accounts . Concluding two 3-year agreements with the Social Insurance Institution for: . Social Insurance . maintenance of their Comprehensive Information Institution (ZUS) System worth PLN 400 million . Agency for Restructuring . development of their CIS worth PLN 240 million and Modernization of . Signing a 1-year agreement with the Agency for Agriculture Restructuring and Modernization of Agriculture for . Ministry of Interior and maintenance of their agricultural subsidies system Administration . Signing agreements with the National Healthcare . National Healthcare Fund and many hospitals for implementation of IT Fund systems at hospitals . Agricultural Social . Gaining a contract for construction of teletechnical Insurance Fund installations at the Centennial Hall in Wrocław . Central Statistical Office . Signing a contract for building a municipal broadband network in Elbląg
16 Enterprises Division
Successes in 2010 Key Accounts
. Gaining a 3-year contract from the Polish Telecom . Telekomunikacja Polska (Telekomunikacja Polska) for management of their Billing and Reporting applications . PTK Centertel . Lotos Group . Extending the framework agreement with the Lotos Group . PGE Dystrybucja . Implementation of billing systems for . Energa . PGNiG . PGNiG . PKN Orlen . Enion SA . Tauron . Implementation of ERP systems for . Vattenfall . Gigawat . Vattenfall . Tauron . PKN Orlen . Impel SA
17 Backlog of Orders for 2011 (in comparison to actual results for 2010) CONSOLIDATED Sales revenues Proprietary software
3 200 3 200
2 400 2 400
1 600 3,238 89% 2,888 1 600 112% 2,068 2,314 800 800
0 0 2010 2 011 2010 2011 STANDALONE Sales revenues Proprietary software 1 200 1 200
900 900
600 1,168 81% 600 944 84% 813 300 300 684
0 0 2010 2 011 2010 2011
Figures in millions of PLN
18 Agenda
. 2010 Annual Summary
. Financial Results for 2010
. Operating Activities
. Financial Results of Subsidiaries
. Annex – Detailed Financial Results
19 Formula Systems
Sales revenues EBIT Net profit +26.9% 600 +17.1% 48 48,0
400 32 32,0
550 47 -3.7% 469 37 200 16 /143/ 16,0 /1,389/ /1,669/ /110/ 19.1 18.4 /56.5/ /55.8/ 0 0 0,0 2009 2010 2009 2010 2009 2010
2010 %∆ 2009
75% Israel 413 /1,254/ 12.1% 368 /1,090/
13% United States 73 /222/ 88.0% 39 /115/
12% Other markets 64 /193/ 2.2% 62 /184/
Total 550 /1,669/ 17,1% 469 /1,389/
Figures in millions of USD, in brackets in millions of PLN restated at the exchange rates of USD/PLN 3.0371 for 2010 and USD/PLN 2.9596 for 2009; growth measurements based on the reported dollar amounts 20 Subsidiaries of Formula Systems
USD millions PLN millions Matrix 2010 %∆ 2009 2010 %∆ 2009
Sales revenues 430 12,1% 384 1,307 15.1% 1,136 EBIT 37 17.5% 31 112 17.8% 94 Net profit 24 10.3% 23 74 4.9% 70
Sapiens 2010 %∆ 2009 2010 %∆ 2009
Sales revenues 52 14.3% 46 159 17.3% 135 EBIT 7 25.7% 5 20 28.9% 16 Net profit 6 46.4% 4 19 50.3% 12
Magic 2010 %∆ 2009 2010 %∆ 2009
Sales revenues 89 60.0% 55 269 64.2% 164 EBIT 9 49.9% 6 28 53.8% 18 Net profit 9 51.8% 6 28 55.8% 18
Formula 2010 %∆ 2009 2010 %∆ 2009 Systems
Sales revenues 550 17.1% 469 1,669 20.2% 1,389 EBIT 47 26.9% 37 143 30.2% 110 Net profit 18 -3.7% 19 56 -1.1% 56
Figures restated in Polish zlotys at the exchange rates of USD/PLN 3.0371 for 2010 and USD/PLN 2.9596 for 2009
21 Financial Results of Subsidiaries
For 12 months ended Sales Sales Operating Operating Net profit Net profit 31 December 2010 revenues revenues profit profit for the year for the year in thousands of PLN 2010 2009 2010 2009 2010 2009
Asseco Central Europe Group 519,033 573,121 57,998 61,662 38,987 47,292 Asseco South Eastern Europe 503,153 436,654 55,113 55,745 47,659 38,276 Group Asseco DACH Group 160,787 144,747 13,886 (361) 11,855 3,793 Asseco South Western Europe 172,187 156,568 5,397 5,318 8,996 2,989 Group Asseco Northern Europe 81,539 98,651 10,252 12,008 8,044 9,053
Asseco Business Solutions SA 168,587 156,196 35,778 26,758 30,092 22,427
Combidata Polska Sp. z o.o. 84,476 48,050 21,412 8,153 17,011 6,161
Asseco Systems SA 311,024 222,488 15,419 21,542 6,971 24,696
ZUI Novum Sp. z o.o 23,404 20,850 3,936 3,437 3,238 2,776
ZUI OTAGO Sp. z o.o 11,666 9,544 3,118 4,231 2,585 3,582
ADH-Soft Sp. z o.o. 7,571 6,428 1,604 1,296 1,309 915
Other 49,726 40,038 4,010 515 2,025 392
Total 2,093,153 1,913,335 227,923 200,304 178,772 162,352
Figures in thousands of PLN, pro-forma – including financial results for the whole 2010. Historical Performance of Asseco
3 237,7 3 600 . 1991 – establishing of COMP Rzeszów. Przychody 3 050,3 . 2004 – IPO on the Warsaw Stock Exchange. 2 786,6 . 2004 – the first foreign acquisition (Slovak 2 400 company – AssetSoft). . 2007 – the Company merges with the WSE- listed Softbank. 1 282,4 1 200 . 2007 – commencement of an intensive expansion into the markets of Germany and 248,1 South Eastern Europe. 147,1 110,3 . 2008 – take-over of Prokom Software. 0 The subsequent merger brings significant 2004 2005 2006 2007 2008 2009 2010 cost reductions and improved efficiency. 600 569,0 . 2009 – investments in companies of the 525,5 494,3 West and North European markets. EBIT . 2010 – further reinforcement of the Group's 415,1 400 market position in West Europe. Zysk 373,4 321,6 Consolidation of companies operating in the netto same geographical regions and streamlining 236,6 of the Group's organizational structure. 200 . 4th quarter of 2010 – Asseco Group 160,9 becomes a global IT player owing to 47,3 the acquisition of Formula Systems, 30,2 19,5 the largest IT company in Israel. 14,4 23,9 52,9 0 2004 2005 2006 2007 2008 2009 2010
23 Agenda
. 2010 Annual Summary
. Financial Results for 2010
. Operating Activities
. Financial Results of Subsidiaries
. Annex – Detailed Financial Results
24 Consolidated Profit and Loss Account
in thousands of PLN 2010 2009 mPLN ACP, AS, Alatus 1,498.1 ABS 168.6 Sales revenues 3,237,733 3,050,252 6% Formula 152.6 ACE 509.6 Gross profit on sales 1,076,749 1,043,085 3% ASEE 450.3 Other 562.5 Adjustment -104.0 Selling expenses (226,586) (220,793) 3%
mPLN General administrative expenses (288,072) (302,290) -5% ACP, AS, Alatus 345.6 ABS 35.8 Other operating income 25,215 29,014 -13% Formula 19.5 ACE 64.7 ASEE 51.1 Other operating expenses (18,343) (23,506) -22% Other 66.5 Adjustment -14.2 Operating profit 568,963 525,510 8% mPLN Interest -9.3 Financial income 55,592 79,060 -30% Currency transactions -0.6 Debt notes PI 21.0 Financial expenses (127,593) (87,609) 46% Write-down Gladstone -9.4 Write-d. Asseco Spain -41.6 Write-down ACE -14.5 Result on dilution of shares in the subsidiary company n/d (4,173) - Cost of acquisitions -10.8 Other -6.9 Pre-tax profit 496,962 512,788 -3% mPLN ACP, AS, Alatus* 350.0 Share in profits of associated companies 2,035 1,608 27% ABS 14.0 Formula 4.3 Net profit for shareholders of ACE 15.1 415,099 373,365 11% Asseco Poland ASEE 23.0 Other 43.9 Adjustment* -35.1
*adjusted by dividends
25 Consolidated Balance Sheet
in thousands of PLN 31 December 2010 31 December 2009
Non-current assets 5,440,996 4,458,344 22% of which: 2,813,215 2,639,854 7% Intangible assets PLN’000 Acquisitions Goodwill arising from consolidation 2,173,718 2,178,972 0% Negative foreign exchange differences Current assets 2,455,810 1,287,417 91% Write-downs of which: 1,016,284 569,402 78% Trade accounts receivable
Cash 842,176 342,788 146%
Total assets 7,901,248 5,748,456 37%
in thousands of PLN 31 December 2010 31 December 2009
Shareholders’ equity 5,839,443 4,351,316 34% PLN’000 Non-current liabilities 628,342 468,947 34% Increase in liabilities due to put option (Statlogics) of which: Decrease in finance lease 227,121 30,552 643% Bank loans and debt securities commitments Decrease in liabilities due to Long-term financial liabilities 115,177 121,011 -5% acquisition of shares
Current liabilities 1,443,463 926,213 56%
of which: 108,140 102,082 6% Bank loans and debt securities PLN’000 Increase in debt due to Trade accounts payable 457,008 282,226 62% construction of new headquarters – Wilanów Financial liabilities 52,405 27,479 91% (expenditures incurred in Q1 2010) Total shareholders’ equity and liabilities 7,901,248 5,748,456 37%
26 Thank you for your attention
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