Good afternoon, ladies and gentlemen. Welcome to our meeting, where we will publish the results of the Asseco Group for half one of twenty twenty-four. Just like every quarter, we are going to share with you some information on our activities. We will move through our financial results, and we will also take your questions. As always, this conference is attended by Vice President of the Board of Asseco Poland, Marek Panek, and Karolina Rzońca-Bajorek, Vice President and CFO of Asseco Group. Let's start with a summary of the group, and then we will move on to the financials. By the way, this conference is also available in English. Those of you following us live can also listen to the English version. Feel free to also send us any questions in either Polish or English.
We will do our best to answer all of your questions, irrespective of the language. Marek, please start discussing our activities.
Welcome, ladies and gentlemen. I will be happy to summarize H1 of 2024. That period has been quite successful for our group, and I'm sure we will reiterate that during this meeting, the evidence of which will be the numbers that you will see and that maybe you have already looked at in the report we published yesterday, so excluding the effect of foreign exchange differences, and we are going to stress on that, our growth of profit amounted to about 6%. This is great piece of news. This is, I think, a fair image of our business. Mind you, almost 90% of the revenues account for non-Polish customers, so this has to be converted into the Polish zloty.
This effect of foreign exchange differences is quite significant. Now, you can see here that sales was at the level of PLN 8.4 billion , which is quite similar to last year's result. Our operating profit, non-IFRS, amounted to PLN 981 million, non-IFRS net profit amounted to PLN 258 million, and net profit went up by 2% and amounted to PLN 235 million. I believe these figures form the best evidence to prove how successful and efficient we have been, so that half of the year is definitely successful one. Also, we've been implementing consistently our M&A strategy. This year, we purchased seven subsequent companies, and we will be happy to share more about them in a moment. We also have a very positive outlook for H2 2024. Of course, we will be observing the rest of the year.
We've consistently been building our order backlog. Right now, it's higher by 7% than the one that we showed you last year. Now, my role, as always, will be to briefly summarize business activities that we have undertaken. So I will start with the geographic segment. Have a look at this pie chart, which presents revenue flows from different segments. Poland amounted to about 12% of the revenue, and it went up by 2%. Asseco International accounted for about 25% of the whole revenue. This segment went up by 1%. Please mind you, that you can see here this effect of foreign exchange differences. Without this effect, that growth rate would be about 8%.
And Formula Systems, here we officially have reported - 3%, but again, if you look at foreign exchange differences, actually, it would have been + 6% in terms of the growth of sales, looking at the original currencies in which the sales is performed. What I'd like to draw your attention to for Asseco Poland is that we've been quite dominant in terms of growth. After all, the dominant company grew by 5% in terms of its sales in half one of the year, and the finance and the solutions for public institutions segments grew most significantly. So this is what we would like to stress today. Now, looking at the Asseco International segment, let me reiterate that we've had very good sales results in the payments segment.
For many quarters, actually, we've stressed that because that part of activity, payments, has been really growing very well, and here we also made additional purchases. We also welcome the fact that the sales of ERP solutions have increased. It's a very robust leg of our activity that has been observing a dynamic growth. And this, by the way, is Asseco Enterprise Solutions, operating in several countries and integrating, in a way, anything that goes on at Asseco in terms of ERP solutions. And the third part, Formula Systems segment, Matrix IT sales growth was very successful especially in one of the Israeli companies that operates in the Israeli currency. This company, by the way, is one of the largest IT companies present there. And we also welcome the development at Sapiens.
Sapiens dollar sales growth, and we are quite happy that, almost 70% of the revenue is constituted by repeat revenue generated by Sapiens. Just to remind you, Sapiens is one of the world leaders these days in terms of solutions for the insurance sector. Now, I'm sure you know very well this slide. This is the one that proves how diversified we are. You can see here the revenue broken down by individual segments in which we operate. That is, solutions for finance accounting to 32%, public institutions 20%, ERP 9%, and the remaining IT solutions, including telecoms, accounts for 17%, and the remaining over 20% accounts for infrastructure and others. This is still quite present in our sales structure, and I'm showing that to you to stress how diversified we are. Irrespective of individual segments, our sales is well-diversified.
We are not dependent on any single client, and you can see in the bottom of the slide that the 10 top customers only account for 11% of the revenue, whereas the largest customer accounts for only 2% of the revenues. So we can't speak here about any dependence on a single customer. Now, let me briefly describe the sectors in which we operate. Let me start with solutions dedicated to the world of finance, that is banking, insurance, and other financial institutions. In the whole group, we achieved sales to PLN 1 billion more zlotys, which is more than in the similar period last year. Again, remember about foreign exchange differences.
We also welcome a dynamic growth in Poland, + 15%, whereas the sales amounted to the figure you can see right now on the slide, and this is mainly driven by Asseco Poland, that serves the banking sector in Poland. Asseco Poland provides us with a very robust, stable stream of revenues for maintenance and development agreements, so this is a very important part of the business, proving how secure our business is. Every quarter, we, of course, enrich our list of customers. We add more and more new projects, which will, in the end, enlarge the maintenance stream. Moreover, we welcome the fact that the sales of software for leasing companies went up this year. Let me remind you that this is within Asseco Data Systems.
It's maybe not a very impressive business in nominal terms, but we are very happy about this growth and about the fact that we can win more and more customers, not only in Poland, also leasing companies that operate outside, outside of Poland. At Asseco International, we observed 3% growth of revenues, over 710 million PLN. And here, let me stress once again how dynamic the growth of this revenue is in terms of payments, especially in the e-commerce and card processing lines, and now let me move on to the next point, which is Formula Systems. Here, the number was about PLN 1.7 billion , and the main driver behind this growth is Sapiens, that I already mentioned, and Matrix, that serves many customers in Israel, especially, such as Mizrahi Bank. Now, let me move on to public institutions.
This is PLN 1.164 billion in sales, which is comparable to last year result. In Poland, we had + 7%, which is a great result that is mainly driven by huge projects carried out for public institutions. Let me just refer to some of them. It's Public Insurance Office, it's the Ministry of Justice of Poland, and some other huge actors. We've been having long-term relations with them, long-term agreements that we now execute. It also includes the healthcare system in Poland. Last year, this healthcare system drove a record-breaking result. This year, the sales is a little bit lower because some public aid programs for hospitals have been put on hold, but I believe this will be unblocked soon. At Asseco International, we observed a + 13% change in sales.
This is especially important for the utilities sector, the energy system, in other words, which includes public institutions. This is also mainly driven by our acquisition of company Asset, that produces and sells solutions dedicated to the energy sector.
We welcome the fact that we are also slowly but surely rebounding. We mentioned to you last time that there were problems in Slovakia and in the Czech Republic, in the public segment. Now, the situation is improving, and hopefully, these sales will grow in the next quarters. And finally, Formula Systems, almost PLN 1 billion in sales. The main contributor behind this growth was Matrix IT, the largest Israeli company that serves many huge institutions from the public sector. Partly, this is also due to Magic Software. This company in Israel and in the U.S. also cooperates with public and health institutions. Now, ERP solutions. Here we are talking about PLN 750 million in sales, almost in the whole group.
Don't worry when you look at Polish figures, because these are really quite marginal numbers that only refer to one company, DahliaMatic, that in fact deals with deployment of solutions for third parties in ERP. Let's concentrate rather on the developments at Asseco International and Formula. At Asseco International, our sales amounted to PLN 440 million, almost, which is +5%. Without the foreign exchange differences, that growth would have been even more dynamic. We welcome the fact that our group involves producers of Asseco ERP solutions operating in Poland, in Germany, in Slovakia, and Czechia, and in several other countries. And finally, Formula Systems. Here, our sales amounted to PLN 255 million. This is mainly driven by Matrix IT, with its ERP solutions and third-party solutions that are deployed mainly in Israel.
The other IT solutions here are almost PLN 1.4 billion sales. In Poland, it's flat. The sales of PLN 100 million or over PLN 100 million is the result of our activities, first of all, in Asseco Data Systems. Here, I mean, our products and services related to so-called trust services. Here, we have also classified the project that we are leading for Polkomtel. This is a cooperation with the Cyfrowy Polsat group that right now is under the name of Polsat Plus. Formula Systems. Here we have Matrix and Magic, the companies which are having activities of services for entrepreneurs and body leasing, which are broadly understood IT services, both on Israeli and American markets.
This consists of PLN 1.26 billion of income from this sector. I mentioned acquisitions, and I mentioned at the beginning that seven new companies joined in our group. The truth is that three of them joined in the first quarter that we are reporting right now, and four remaining ones are acquisitions that we have done in the third quarter, which means that after the end of the period that we are discussing right now, but we still want to mention those. We want to present them because I believe that those are very interesting acquisitions, especially the one that has been done by Asseco South Eastern Europe when it comes to payment sector, because this is a company which strengthens our activities in this sector.
We have gotten to a very exotic part of the world, such as India and Dubai. We have invested there. It was only one owner who we bought the shares from, and we believe in those markets. Those are main markets that are dynamically growing, and we believe that those are going to strengthen our Payten section. When it comes to acquisitions which happened in the first half a year, those are all acquisitions that were done by our colleagues from Israel, two from Israeli market, and one from American market. You can read more about them in the presentation or in the report that we have published. This was my last slide, and I want to give the floor to Karolina. Thank you very much for your kind attention. Thank you.
As always, I'm going to talk about finances. We are going to begin with a look at the lower part. My first speaker spoke about income, what was happening there. Here, I want to underline that the... We were consequent in implementing the growth strategy. The average growth in income has been 10% in the last years. A similar level of 9%, what we are earning on most, which is programming and own services. EBITDA, PLN 1,266,000,000, and CAGR, PLN 626 million. We are finishing the year with the net result of PLN 258 million.
This is the result of the fact that the structure of contributions in the last years has been till 2024, and also looking at the end of 2023. Before, we've had much more dynamic growth in the companies which are contributing to the group, in the with a smaller percentage, because of the fact that they have simply smaller number of shares. But we also have, in this year's results, a debt, but we are going to discuss that in a minute.
When it comes to the source of the numbers that you can see, compared to what we have showed in the similar period of 2023, if you take a look at the income from sales, as Marek has already mentioned, what is very important is the result that is because of the calculations of currency exchange. The fact that the Polish currency is very strong causes a leak of over PLN 625 million income, but this is simply because of those calculations. When it comes to how much we grew from the organic point of view in this half a year compared to the previous half a year, this is over PLN 400 million.
We are very happy about the acquisition in growth of income, because this is over PLN 100 million, and this is how we are reporting PLN 8 billion, or almost PLN 400 million income. When it comes to the non-IFRS operating profit, starting with what we've been reporting in 2023, we have to take into account again the results of currency exchange. It is -64 , almost, million. We have sold property and immovable property, where we have profited a +PLN 14 million. This is one of that we want to be transparent about and remind you of. Organically, to the results of the quarter, we are adding PLN 431 million, and from acquisitions, PLN 17 million on the level of non-IFRS operating profit.
Here, I want to draw your attention to the fact that the acquisitions were of a very good quality. Out of PLN 100 million of income, PLN 17 million of income from the operational activities in the first quarter seems to be a very good result. When it comes to the net result, in the past half a year, we've shown PLN 260 million, and here we've mentioned the loan before. We remember that at the end of Q3 of 2023, we have taken a loan, and this is why our balance in the yearly scale is burdened with the payments, and this is why we have PLN 29.3 million of payment. This is because of the interest.
Then the income from the sale of immovable property, + PLN 11 million, if we reduce it by the tax, and then the almost PLN 16 million of results without sales of property of Asseco Poland alone, and this gives us a total of PLN 258 million for the first half a year of 2024. If we take a look at the whole picture of the balance sheet, we are showing, of course, the results in the currencies that we were reporting it in the previous quarter. On the right-hand side, you can see the scale of growth on the corresponding levels, not taking into account the differences of currency exchange, to take a look at the whole picture of the business without the result of the currency exchange.
Now, here, as we've been underlining, we are working on profitability. As I here want to draw your attention to the profitability of EBITDA, over 15% in the first half a year, that seems decent. Also, profitability of non-IFRS operating profit is 11.7%. Here we are really trying to make sure that we have good rates. Like taking into account a one-time event in this or the previous half a year, when it comes to topics related to M&A, we've had a slight drop because of the corrections related to PPA and SBP. This is why the income from operational activity is on a very decent level of 1.8. So here we are very happy.
When it comes to what is happening under the operating profit, here the dynamics are probably smaller than we've expected. This is because of the fact that Formula is getting rid of the debt, and in Asseco Poland we have a higher cost of interest, and this is related to the lower results of the Formula. We still have hyperinflation that is impacting us. We have to remember about the Turkish economy this year. It's efficient taxation that corresponds to our expectations, 21.6%.
This all is, as we've mentioned, the result of net income, non-IFRS net profit of PLN 735 million, and non-IFRS net profit attributable to shareholders of the parent companies is PLN 258 million. Marek already mentioned, but I want to underline that there is this division to the biggest units that are in our group. We are very happy that we have improved operational results in Asseco Poland. Here we've mentioned that it was a very good half a year for banking and finances, and a very good half a year for public administration. Slightly worse results when it comes to companies, but there is nothing to worry about.
We have to remember that all the time we have ongoing work on topics related to energy sector, where we are adapting our software to the sector requirements. We are still negotiating the contracts, and here we have taking into account the costs related to production of software to the result of the to the balance, but we will have to wait for the result, so we will have to wait a bit for the results. We are not worried, though, about those numbers, because we believe that within the next twelve months we will have results that we will be able to catch up.
The slightly lower Asseco Data Systems results, here we have prolonged a timeframe when it comes to projects, especially those from smart city segment. This was. This had an impact, and we took it into account of the balance of the first half a year. This is why we have a lower balance than in the same period of last year. In the remaining companies, we have similar trends in the whole as in the whole last year. Those are very good results of Asseco Cloud, GST, Novum, but it's around zero when it comes to DahliaMatic company. There is a pressure when it comes to the Koncern Asseco company results. We still observe an improvement compared to last year, minus fourteen million of contribution when it comes to the smaller segments.
When it comes to Formula Systems, Matrix IT is an outstanding quarter when it comes to this company. A lot of additional sales of very good profitability for the public sector, especially. Magic has slightly decrease of income from year to another. I want to underline that last year they lost a very big client in U.S.A, and they are catching up, and they are on the good path to fill this gap up with other topics. If we are looking at the timeframe of Q2, Q4, Q1, Q2, they are improving the results, but when you compare half a year to half a year, then we still have something to catch up with.
Maintained profitability and very good results in United States and in Europe, and in the remaining companies, slightly worse results. We have to remember that probably the only company that suffers from the results of geopolitical conditions is a company that we have bought over two years ago, and this causes a slightly worse contribution when it comes to operational profits. When it comes to Asseco International segment, especially on the Central European market, we have very good situation. When it comes to results in Czech Republic, we also have certain stability with good forecast when it comes to Slovakia, and we have a very good result from this ERP segment.
When it comes to Southeastern European market, our Balkans have very good situation when it comes to payment, but the fact that the growth of operational growth year by year is decreasing a bit. It is caused by the fact that we have to take into account a one-off of EUR 1.7 million taken to the balance as a reserve in one of the companies that we have recently acquired. This is a company that we have purchased around a year ago, so it's a recent acquisition, so here we have to take into account this provision, and here we have certain activities, and this is the Q2.
In the Western European market, we have a stable situation, but here we have taken into the balance over PLN3 million of provision for the remaining payments of Asseco PST. Here we have a very safe approach to this topic. It looks like in the longer timeframe, we will be fighting for those numbers. We need to book this impairment in our books. This is what we've done in our reporting, so this is the situation broken down by regions. We are happy about our robust cash flows. Looking at the last 12 months, it's 117% of cash conversion ratio in group. For Formula Systems, it's 107%, at International, 109%, and Asseco Poland, 174%.
I mentioned that at the end-of-year conference, I said that this cash flow will go to Asseco Poland, mainly from the public segment in Q2 and a little bit in Q3, and this is what has just happened. Look at just Q2 on its own.
We've seen that in some analysis, the situation in terms of cash flow is much better at Asseco Poland, whereas it's a bit poorer at Formula Systems segment. For Asseco International, the situation, it's, I would say, quite comparable to the last Q2. Look, let's have a look at the balance sheet for a moment, and I would say this: the situation is stable when it comes to our liquidity. We keep monitoring the basic KPIs related to net cash and debt. We are on the safe side, in line with our predictions. For some time now, we've been also showing you the proportional recognition in the books. Oh, and by the way, looking at the upper part of the page, we are looking at the companies that have consolidated shares, just like in the whole profit and loss account.
The effect of exchange rate differences was not as painful. We see some growth rates here and not drops. Excluding these changes, the dynamics is quite similar. It's + 6% when it comes to sales revenues, + 10% non-IFRS operating profit, contributed operating profitPLN 348 million, roughly, which is quite similar in terms of profitability. Also, at your request, we are presenting the situation also in proportional recognition, and you can see that we have indebtedness in Asseco Poland sector, but it's been stably serviced without any challenges. The final piece of information from me is this, looking at our orders, order backlog, well, we have + 7% in terms of fixed rates, proprietary software and services, almost PLN 13 billion . Broken down by segments, it's + 9% in terms of Asseco Poland. We have a double-digit growth in public administration segment.
In terms of Asseco International, it's +10% of order backlog, which is proportionally broken down by Central and Southeastern Europe, and Formula Systems segment, +6%. That's it from me, actually. Thank you very much, Karolina. Thank you, Marek, for all the information you've provided us with. Now, let me move on to open a Q&A session. Ladies and gentlemen, it's your time. Feel free to give us questions, and we've had some. The first one is the share of Asseco Poland and ACP revenues driven by AI. How much have then they been growing? In which areas, public segment or industry, are they generated most? AI revenues. Artur, it seems like it's your pet topic, isn't it? Well, I would say this: most of the revenues, up to 100%, is generated still by human intelligence, not AI yet.
But to be fair, of course, we have a number of initiatives where AI is being deployed, yet these revenues are not... can't be identified yet quite clearly. These initiatives are mainly driven at improving efficiency, so it's about automation of certain processes, like information gathering a`nd code creation. On the other hand, we also want to apply certain solutions, certain tools that are offered to customers. At this point, however, we can't identify that as a separate category. Hopefully, and looking also at how this trend of AI is now gaining pace, one day in the future, we will be able to give you some more details.
I'd like to say this: there are many initiatives where we have appointed a special person or even a team that are responsible for AI projects at Asseco Poland, but not only in Poland, that also refers to the whole group. So we hope that at the next opportunity, we will be able to share with you some more particular information on how AI has been driving our results. So question number two is about our own shares. Well, the priority of the board seems to be to sell shares purchased as part of SBB, or at least the part thereof. Looking at the current sales dynamics and good perspectives for the years to come in terms of the public and EU funds, don't you think that by writing off these shares, you could create more value for shareholders?
I believe that this thesis, that our priority is to sell shares, is not very truthful. Our priority, actually, is to generate good value for our shareholders and to secure their business. Therefore, this is not sure. We don't know yet whether our shares will be up for sales. We've been observing the situation on the capital market. The decision that will be taken, and it has not been taken yet, will definitely be based on what is most favorable to our shareholders. We are looking at the debt, at the loans that we've taken. Let me just remind you that our CEO, at the last year conference, said that write-off is also a probable scenario. So I beg to differ with the thesis of the author of that question. Right, let's move on to the next question.
6% year-on-year, second quarter revenue decline in Asseco Poland segment, despite indicated 10% growth in financial year 2024 order backlog?
Shall I speak Polish, English? Please stick to Polish. This is actually a one-off effect. We don't look at quarters in separation. We need to look at it in a broader context. The drop, the decline in this quarter is driven by the dominant company, Asseco Poland and part of Asseco Data Systems. I think this affects, to the same extent, both these segments, public and finances, and banking. Sometimes these are just those point effects. So I think you should not be too preoccupied with these numbers. We still believe that the perspective, the prospect for the next half of the year for Asseco Poland, in terms of the revenues and the order backlog, is by far positive, and this is our approach.
Next question: Asseco Poland, looking at the second half of the year, can you expect an increase of the profit net compared to half two of the previous year? We need to specify this, what we mean by the definition of the net profit, because let's remember that first half of that year, well, we need to define whether this includes dividends or not. In this year, we had more revenues from dividends booked than in the previous half of the year, but year-on-year, it should be quite comparable in terms of the scale. Still, let me remind you that in the previous half of the year, 2023, we saw a huge influence of the cost of debt. It was PLN 15 million-16 million.
This year, however, it will be even higher, and it will amount to about PLN 30 million, the debt service cost, so we will probably do whatever we can to fill in this gap, and we will look, hopefully, into the Enterprise segment. Please bear in mind that these two periods are not fully comparable for the reasons I've just quoted. Thank you. Next question: When are you going to sell your own shares or write them off, and what criteria will be taken into account when taking the ultimate decision? We are not prepared yet to provide you with a clear deadline. We keep observing the developments on the capital market, looking at two aspects. First of all, at the valuation of Asseco Poland itself. Here, the situation has improved quite largely recently.
The second aspect is that we need to observe the trends which are happening as we speak. So we work really hard to improve the recognizability and our and the understanding of our companies in the eyes of international investors. This process will take some more time, but anyway, it's a process that will generate the value for the current shareholders, irrespective of whether we decide to sell or write off our own shares. As I said, we need some more time, and it's about a couple of months before the decision is taken. Thank you very much. No other questions have been sent to us so far. Do we have any questions here from people present in the room? None. So we are still waiting a moment, just in case any one of you still has a question. You still have the possibility to ask a question.
No, so it seems we've exhausted the topic. We've exhausted the topic. We have no more questions from you, and let me assure you that in case you come up with some additional questions that will puzzle you, you can always contact our investor relations department. We are always at your disposal, and see you at the next meeting, at the next conference that will be organized after Q3. I hope we will see you there. Thank you for your attention today, and see you soon. Bye.