Asseco South Eastern Europe S A : Consolidated financial report for Q1 2024

Quarterly Report

of Asseco South Eastern Europe Group

for the period of 3 months ended 31 March 2024

Present in	PLN 367.1 million
23 countries	in sales revenues

3,939	PLN 47.0 million
highly committed	of net profit
employees	for Shareholders of
	the Parent Company

Quarterly Report of Asseco South Eastern Europe Group
for the period of 3 months ended 31 March 2024
FINANCIAL HIGHLIGHTS	5
INTERIMCONDENSEDCONSOLIDATEDSTATEMENT OFPROFIT ANDLOSS ANDOTHERCOMPREHENSIVEINCOME	6
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION	7
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	9
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS	12
EXPLANATORY NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	13
I. GENERAL INFORMATION	13
II. BASIS FOR THE PREPARATION OF INTERIM CONDENSED FINANCIAL STATEMENTS	14
2.1.	Basis for preparation	14
2.2.	Impact of the geopolitical and macroeconomic situation on the Group's business operations	14
2.3.	Compliance statement	15
2.4.	Functional currency and presentation currency	15
2.5.	Professional judgement and estimates	15
2.6.	Accounting policies applied	15
2.7.	New standards and interpretations published but not in force yet	16
2.8.	Changes in the presentation methods and in the comparable data	16
2.9.	Correction of errors	20
2.10.	Accounting effects of Turkey's status as a hyperinflationary economy	20

1. ORGANIZATION AND CHANGES IN THE STRUCTURE OF ASSECO SOUTH EASTERN EUROPE GROUP,

INCLUDING THE ENTITIES SUBJECT TO CONSOLIDATION	25
IV. INFORMATION ON OPERATING SEGMENTS	28
V. EXPLANATORY NOTES TO THE CONSOLIDATED STATEMENT OF PROFIT AND LOSS	31
5.1.	Structure of operating revenues	31
5.2.	Structure of operating costs	33
5.3.	Other operating income and expenses	34
5.4.	Financial income and expenses	35
5.5.	Corporate income tax	36
5.6.	Earnings per share	36
5.7.	Information on dividends paid out	36
VI. EXPLANATORY NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION	37
6.1.	Property, plant and equipment	37
6.2.	Intangible assets	37
6.3.	Right-of-use assets	38
6.4.	Goodwill	38
6.5.	Other financial assets	41
6.6.	Prepayments and accrued income	42
6.7.	Receivables and contract assets	43
6.8.	Inventories	44
6.9.	Cash and cash equivalents	44
6.10.	Lease liabilities	45
6.11.	Bank loans and borrowings	45
6.12.	Other financial liabilities	47
6.13.	Trade payables, state budget liabilities and other liabilities	48
6.14.	Contract liabilities	49
6.15.	Provisions	49
6.16.	Accruals and deferred income	49
6.17.	Related party transactions	50
VII. EXPLANATORY NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS	51
7.1.	Cash flows - operating activities	51
7.2.	Cash flows - investing activities	51
7.3.	Cash flows - financing activities	51

Asseco South Eastern Europe Group

Quarterly Report for the period of 3 months ended 31 March 2024 (in thousands of PLN)

3

VIII. OTHER EXPLANATORY NOTES	53
8.1.	Off-balance-sheet liabilities	53
8.2. Seasonal and cyclical business	53
8.3.	Employment	54
8.4. Significant events after the reporting period	55
8.5. Significant events related to prior years	55
SUMMARY AND ANALYSIS OF THE FINANCIAL RESULTS OF ASSECO SOUTH EASTERN EUROPE GROUP FOR
THE PERIOD OF 3 MONTHS ENDED 31 MARCH 2024	56
I. FINANCIAL RESULTS OF ASSECO SOUTH EASTERN EUROPE GROUP FOR THE FIRST QUARTER OF 2024	57
II. ANALYSIS OF FINANCIAL RATIOS	60
III. STRUCTURE OF THE STATEMENT OF CASH FLOWS	61
IV. INFORMATION ON GEOGRAPHICAL STRUCTURE OF FINANCIAL RESULTS	63
V. NON-RECURRING EVENTS WITH IMPACT ON OUR FINANCIAL PERFORMANCE	65
VI. AUTHORITIES OF ASSECO SOUTH EASTERN EUROPE S.A	65
VII. SHAREHOLDERS STRUCTURE OF ASSECO SOUTH EASTERN EUROPE S.A	65
VIII. OTHER INFORMATION	66
8.1. Issuance, redemption and repayment of non-equity and equity securities	66
8.2. Changes in the organizational structure of the Issuer's Group	66
8.3. Information on significant judicial proceedings	66
8.4.	Related party transactions	66
8.5. Bank loans, borrowings, sureties, guarantees and off-balance-sheet liabilities	66
8.6. Changes in the Group management policies	66

8.7. Agreements concluded by the Group and Company with its management personnel providing for payment of

compensations if such persons resign or are dismissed from their positions

66

8.8. Information on the agreements known to the Issuer which may result in future changes of the equity interests held by the

	existing shareholders and bondholders	66
8.9.	Opinion on feasibility of the Management's financial forecasts for 2024	67
8.10.	Information on monitoring of employee stock option plans	67
8.11.	Factors which in the Management's opinion will affect the Group's financial performance at least in the next quarter	67
8.12.	Other factors significant for the assessment of human resources, assets and financial position	67
INTERIM CONDENSED FINANCIAL STATEMENTS OF ASSECO SOUTH EASTERN EUROPE S.A. FOR THE PERIOD
OF 3 MONTHS ENDED 31 MARCH 2023	68
FINANCIAL HIGHLIGHTS	69
INTERIM CONDENSED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME	70
INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION	71
INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY	73
INTERIM CONDENSED STATEMENT OF CASH FLOWS	74

Asseco South Eastern Europe Group

Quarterly Report for the period of 3 months ended 31 March 2024 (in thousands of PLN)

4

Financial Highlights

Asseco South Eastern Europe Group

				3 months ended		3 months ended			3 months ended		3 months ended
				31 March 2024		31 March 2023			31 March 2024		31 March 2023
				PLN'000		PLN'000			EUR'000		EUR'000
	Sales revenues	367,056	380,064		84,945		80,857
	Operating profit	47,458	49,806		10,983		10,596
	Pre-tax profit	57,787	57,399		13,373		12,211
	Net profit for the reporting period			48,586		46,826			11,244		9,962
	Net profit attributable to Shareholders of the Parent			47,010		45,138			10,879		9,603
	Company
	Net cash provided by (used in) operating activities	(4,426)	43,615		(1,024)	9,279
	Net cash provided by (used in) investing activities	(13,633)	(16,372)	(3,155)	(3,483)
	Net cash provided by (used in) financing activities	(32,026)	(10,380)	(7,412)	(2,208)
	Cash and cash equivalents at the end of the period			259,649		313,112			60,371		72,013
	(comparable data as at 31 December 2023)
	Basic earnings per ordinary share for the reporting
	period attributable to Shareholders of the Parent	0.91	0.87	0.21	0.19
	Company (in PLN/EUR)
	Diluted earnings per ordinary share for the reporting
	period attributable to Shareholders of the Parent	0.91	0.87	0.21	0.19
	Company (in PLN/EUR)

The selected financial data disclosed in these interim condensed consolidated financial statements have been translated into euros (EUR) in the following way:

• Items of the consolidated statement of profit and loss and consolidated statement of cash flows have been translated into EUR at the arithmetic average of mid exchange rates as published by the National Bank of Poland and in effect on the last day of each month. These exchange rates were as follows:
  o for the period from 1 January 2024 to 31 March 2024: EUR 1 = PLN 4.3211
  o for the period from 1 January 2023 to 31 March 2023: EUR 1 = PLN 4.7005
• The Group's cash and cash equivalents as at the end of the reporting period and the comparable period of the previous year have been translated into EUR at the mid exchange rates as published by the National Bank of Poland. These exchange rates were as follows:
  o exchange rate effective on 31 March 2024: EUR 1 = PLN 4.3009
  o exchange rate effective on 31 December 2023: EUR 1 = PLN 4.3480

In this report, all figures are presented in thousands of Polish zlotys (PLN), unless stated otherwise.

Asseco South Eastern Europe Group

Quarterly Report for the period of 3 months ended 31 March 2024 (in thousands of PLN)

5

Interim Condensed Consolidated Statement of Profit and Loss and Other Comprehensive Income

Asseco South Eastern Europe Group

	STATEMENT OF PROFIT AND LOSS				3 months ended		3 months ended
					31 March 2023
				31 March 2024
						(restated)
			Note		PLN'000		PLN'000
Operating revenues	5.1	367,056		380,064
Cost of sales	5.2	(269,535)	(280,322)
Allowances for trade receivables	5.2	(1,532)	(1,318)
	Gross profit on sales				95,989		98,424
Selling costs	5.2	(24,082)	(24,225)
General and administrative expenses	5.2	(24,449)	(24,533)
	Net profit on sales				47,458		49,666
Other operating income	5.3	475		722
Other operating expenses	5.3	(489)	(582)
Share of profits of associates and joint ventures		14		-
	Operating profit				47,458		49,806
Financial income	5.4	16,826		12,169
Financial expenses	5.4	(6,492)	(4,570)
Impairment loss on financial instruments		(5)	(6)
	Pre-tax profit				57,787		57,399
Corporate income tax	5.5	(9,201)	(10,573)
(current and deferred tax expense)
	Net profit for the reporting period				48,586		46,826
Attributable to:
	Shareholders of the Parent Company				47,010		45,138
Non-controlling interests		1,576		1,688
Basic and diluted consolidated earnings per share
for the reporting period, attributable to shareholders	5.6	0.91	0.87
of the Parent Company (in PLN)
	OTHER COMPREHENSIVE INCOME
	Net profit for the reporting period				48,586		46,826
	Components that may be reclassified to profit or loss				(16,512)		(7,588)
	Net gain/loss on valuation of financial assets		77		2
	Exchange differences on translation of foreign		(16,589)	(7,590)
	operations
	Components that will not be reclassified to profit or				-		-
	loss
	Actuarial gains/losses		-	-
	Total other comprehensive income				(16,512)		(7,588)
	TOTAL COMPREHENSIVE INCOME attributable to:				32,074		39,238
	Shareholders of the Parent Company				30,464		37,568
	Non-controlling interests		1,610		1,670

Asseco South Eastern Europe Group

Quarterly Report for the period of 3 months ended 31 March 2024 (in thousands of PLN)

6

Interim Condensed Consolidated Statement of Financial Position

Asseco South Eastern Europe Group

			31 March 2024	31 December 2023	31 March 2023
	ASSETS	Note		(restated)	(restated)
			PLN'000	PLN'000	PLN'000
	Non-current assets
	Property, plant and equipment	6.1	141,295	137,030	138,883
	Intangible assets	6.2	78,675	84,138	57,545
	Right-of-use assets	6.3	44,846	46,037	43,189
	Investment property		465	474	540
	Goodwill	6.4	875,391	877,195	797,518
	Investments accounted for using the equity		196	252	169
	method
	Other receivables	6.7	7,202	7,274	7,866
	Deferred tax assets		12,862	12,375	12,785
	Other financial assets	6.5	2,013	2,021	2,401
	Prepayments and accrued income	6.6	2,629	3,087	1,856
			1,165,574	1,169,883	1,062,752
	Current assets
	Inventories	6.8	76,309	97,872	74,105
	Prepayments and accrued income	6.6	54,900	53,904	54,744
	Trade receivables	6.7	180,618	299,114	207,028
	Contract assets	6.7	117,386	95,104	113,102
	Corporate income tax receivable	6.7	4,088	2,693	1,365
	Receivables from the state and local budgets	6.7	5,080	5,044	5,358
	Other receivables	6.7	89,112	79,663	26,180
	Other non-financial assets		8,107	2,952	12,147
	Other financial assets	6.5	1,399	1,174	385
	Cash and bank deposits	6.9	259,649	313,112	306,031
			796,648	950,632	800,445
	TOTAL ASSETS		1,962,222	2,120,515	1,863,197

Asseco South Eastern Europe Group

Quarterly Report for the period of 3 months ended 31 March 2024 (in thousands of PLN)

7

Interim Condensed Consolidated Statement of Financial Position

Asseco South Eastern Europe Group

			31 March 2024	31 December 2023	31 March 2023
	EQUITY AND LIABILITIES	Note		(restated)	(restated)
			PLN'000	PLN'000	PLN'000
	Equity
	(attributable to shareholders of the Parent
	Company)
	Share capital		518,943	518,943	518,943
	Share premium		38,826	38,826	38,826
	Transactions with non-controlling interests		(35,226)	(34,877)	(34,315)
	Other capitals		954	717	83
	Exchange differences on translation of foreign		(215,495)	(198,872)	(85,869)
	operations
	Retained earnings		837,677	790,667	711,607
			1,145,679	1,115,404	1,149,275
	Non-controlling interests		7,950	7,810	8,384
	Total equity		1,153,629	1,123,214	1,157,659
	Non-current liabilities
	Bank loans and borrowings	6.11	42,965	54,124	41,102
	Lease liabilities	6.10	29,795	29,724	26,656
	Other financial liabilities	6.12	176,809	174,055	91,990
	Deferred tax liabilities		8,895	9,340	7,165
	Provisions	6.15	3,858	3,906	3,554
	Deferred income	6.16	1,550	-	-
	Contract liabilities	6.14	10,985	10,690	7,668
	Other liabilities	6.13	47	47	62
			274,904	281,886	178,197
	Current liabilities
	Bank loans and borrowings	6.11	47,054	51,610	63,946
	Lease liabilities	6.10	16,417	17,704	18,501
	Other financial liabilities	6.12	45,857	58,928	60,839
	Trade payables	6.13	98,133	214,561	123,497
	Contract liabilities	6.14	137,838	158,114	143,014
	Corporate income tax payable	6.13	17,422	15,275	12,521
	Liabilities to the state and local budgets	6.13	28,230	50,849	24,120
	Other liabilities	6.13	100,228	102,856	35,268
	Provisions	6.15	5,344	6,688	4,263
	Deferred income	6.16	664	2,407	2,794
	Accruals	6.16	36,502	36,423	38,578
			533,689	715,415	527,341
	TOTAL LIABILITIES		808,593	997,301	705,538
	TOTAL EQUITY AND LIABILITIES		1,962,222	2,120,515	1,863,197

Asseco South Eastern Europe Group

Quarterly Report for the period of 3 months ended 31 March 2024 (in thousands of PLN)

8

Interim Condensed Consolidated Statement of Changes in Equity

Asseco South Eastern Europe Group

														Exchange		Retained		Equity
									Transactions with					differences on			attributable to
														earnings and				Non-controlling
				Share capital			Share premium		non-controlling		Other capitals			translation of			shareholders of				Total equity
											current net				interests
									interests					foreign			the Parent
														profit
														operations			Company
				PLN'000			PLN'000		PLN'000		PLN'000			PLN'000		PLN'000		PLN'000			PLN'000		PLN'000
	As at 1 January 2024			518,943			38,826		(34,877)		717			(198,872)		790,667		1,115,404			7,810		1,123,214
	(restated)
	Net profit for the reporting period	-	-	-	-	-	47,010		47,010		1,576		48,586
	Other comprehensive income	-	-	-	77	(16,623)	-	(16,546)	34		(16,512)
	for the reporting period
	Total comprehensive income			-			-		-		77			(16,623)		47,010		30,464			1,610		32,074
	for the reporting period
	Share-based payment transactions	-	-	-	160	-	-	160		-	160
	with employees
	Transactions with non-controlling interests
	(including contingent financial liabilities to	-	-	(349)	-	-	-	(349)	(1,314)	(1,663)
	non-controlling shareholders (put options))
	Dividend	-	-	-	-	-	-	-	(156)	(156)
	As at 31 March 2024			518,943			38,826		(35,226)		954			(215,495)		837,677		1,145,679			7,950		1,153,629

Asseco South Eastern Europe Group

Quarterly Report for the period of 3 months ended 31 March 2024 (in thousands of PLN)

9

Interim Condensed Consolidated Statement of Changes in Equity

Asseco South Eastern Europe Group

																Exchange		Retained		Equity
											Transactions with					differences on			attributable to
																earnings and				Non-controlling
						Share capital			Share premium		non-controlling		Other capitals			translation of			shareholders of				Total equity
				Note									current net				interests
										interests					foreign			the Parent
															profit
																operations			Company
						PLN'000			PLN'000		PLN'000		PLN'000			PLN'000		PLN'000		PLN'000			PLN'000		PLN'000
	As at 1 January 2023					518,943			38,826		(35,692)		(77)			(78,304)		666,469		1,110,165			8,515		1,118,680
	Net profit for the reporting period	-	-	-	-	-	199,964		199,964		7,966		207,930
	Other comprehensive income for the reporting	-	-	-	152	(120,568)	-	(120,416)	(944)	(121,360)
	period
	Total comprehensive income for the reporting					-			-		-		152			(120,568)		199,964		79,548			7,022		86,570
	period

Share-based payment transactions with employees

Transactions with non-controlling interests (including contingent financial liabilities to non-controlling shareholders (put options))

-	-	-	642	-	-	642	-	642
-	-	815	-	-	-	815	1,371	2,186

	Dividend	5.7	-	-	-	-	-	(75,766)	(75,766)	(9,098)	(84,864)
	As at 31 December 2023			518,943			38,826		(34,877)		717			(198,872)		790,667		1,115,404			7,810		1,123,214
	(restated)

Asseco South Eastern Europe Group

Quarterly Report for the period of 3 months ended 31 March 2024 (in thousands of PLN)

10