Group Asseco SEE – Management report Consolidated Standalone.pdf

Annual Report

of Asseco South EasteEurope Group

for the year ended 31 December 2021

PLN 1,147 million

Present in	in sales revenues
23 countries

PRESIDENT'S LETTER

Dear Shareholders,

2021 was a very favourable year for ASEE Group (including Payten). The Group grew both organically and through acquisitions, improved its profitability and expanded competence in many business areas.

ASEE Group generated more than EUR 250 million in sales revenues for 2021, achieving an increase by 9% compared to the previous year, while its operating profit improved by 22% and amounted to nearly EUR 40 million. Our key revenue driver was Payten Group which recorded a 12% growth in sales and also the highest increase in operating profit, by as much as 34%.

Expansion - new markets, new competences

Pursuing our expansion strategy, in 2021 we successfully carried out seven company acquisitions thanks to which we increased our expertise, market share and expanded our portfolio with new products and solutions in the following areas: artificial intelligence and machine learning, e-Commerce solutions for online and mobile stores and marketplace platforms, digitization and business process management, traffic management and Smart City solutions, as well as solutions for the telecommunications industry. In 2021, we also delivered organic growth by conquering new markets with our existing products and services. In Egypt, we participated in the digitization of a bank by implementing our solution Live Virtual Branch dedicated for virtual banks. In Portugal and Colombia, we launched a network of independent payment terminals Monri, and in Kyrgyzstan, we commenced the implementation of our Nestpay solution ver. ACS 2.0 at Demir Kyrgyz bank.

Digital transformation and consolidation

Last year, we continued to observe the increased demand for solutions that support banks in the digital transformation process. This gave us upward momentum in sales and implementations of our proprietary Digital Origination solution for offering bank products and services online, as well as security solutions. The region of Central and EasteEurope saw the continuation of consolidation processes in the banking sector, where we provided technological support, among others, for the mergers of NLB Montenegro with Komercijalna Banka MNE, NLB Serbia with Komercijalna Banka, Raiffeisen banka Srbije with Credit Agricole, or Eurobank with Direktna Banka, and on the part of Payten, our subsidiary Chip Card completed comprehensive consolidation of the card processing business in the merger of OTP with Vojvodanska banka. Moreover, one of the major projects in the Banking Solutions segment was the implementation of a core banking system for Halkbank in Serbia.

Improving efficiency

In the Dedicated Solutions segment, we managed to both expand the scale of our operations and improve their efficiency. We signed more contracts to sell our proprietary solutions, such as BPM, Live, ABC, and Fidelity. For example, in addition to the above-mentioned implementation of Live Virtual Branch for a bank in Egypt, Anadolubank based in Turkey chose the ASEE Live Digital Customer Onboarding solution, Ziraat Participation Bank chose our Fidelity Asset Management solution, while our ABC solution that provides support in business process management was delivered for public administration clients in Serbia such as the Ministry of Finance, Pension Fund, Health Insurance Institution, and the Ministry of Social Affairs and Employment. Furthermore, it is worth noting that we have upgraded our ABC platform with AI tools thanks to the acquisition of Things Solver, a company specialized in artificial intelligence and machine learning. We are working to integrate AI and ML tools into our other strategic products.

Dynamic growth in e-Commerce

Within our Payten operations, the largest revenue growth in 2021 was recorded in the business line dealing with maintenance of POS terminals (by as much as EUR 4.4 million) and in e-Commerce. The pandemic period created favourable conditions for the development of e-Commerce. This translated into robust financial results of our online payments division in 2021, during which Payten processed more than 1.2 billion transactions. Also a significant increase of 130% was achieved by the business line responsible for sales to retailers, including the independent network of POS terminals (IPD) and electronic cash registers (ECR). I believe that solutions for creating online and mobile stores as well as marketplace platforms, which are complementary to our payment solutions and appeared in our product portfolio as a result of recent acquisitions, will contribute to further growth of the business line dedicated to non-financial customers.

Future outlook

In 2022, we will continue the strategy of growth in recurring revenue and transactional business, further increasing the share of our own products and services in the sales structure of ASEE Group, and strive to expand our business both organically and through acquisitions. We will also develop new products and add state-of-the-art functionalities to our existing solutions, in particular utilizing the potential of artificial intelligence and machine learning tools. In addition to implementing our expansion plans, we will also make continuous efforts to improve the efficiency of our operations.

Finally, I would like to thank our employees, customers and partners for an extremely successful year of 2021. I invite you to read the Management Report on Operations of ASEE Group where you can find more details about our accomplishments in 2021 and plans for the future.

Piotr Jeleński,

CEO of Asseco South EasteEurope S.A.

Management Report on Operations of Asseco South EasteEurope Group and Asseco South EasteEurope S.A.