Results of ASEE which were published yesterday. Let's traditionally go first to highlights what and I will comment in a few words what happened in Q3. Most of the comments will be specifically about Q3 only. During Q3, we decided to book significant non-cash write-offs and revenue reversals related to India and Emirates. It impacted operating profit, not non-cash, but operating profit - EUR 7.5 million. It obviously affected also the payment business unit. The reason for this is underperformance of operations. We already mentioned this after Q2 that we see some challenges and issues. In a moment, I will explain what exactly we have written off. When we exclude those one-off non-cash bookings, current business, current operations delivered solid EBIT growth year-over-year for Q3 only. It is 21% above 2024. Nevertheless, in payment, we have slowed down, and it is driven by three major areas.
First is slowdown in enterprise e-commerce business in Turkey. We already mentioned to you after Q2 that one of our clients, enterprise clients, switched the majority of transactions to his own payment gateway, in-house payment gateway. It also started during Q3 to happen for another big client who, it's not to the same extent, but he started to switch transactions in source. This directly hits revenues and impacts operating profit. After excluding one of those write-offs I mentioned in India and Dubai, we have a weak performance and drop year-over-year. Last year, results generated contributed positively, and this year, we have a negative impact, which results in a decrease in payment. Only in Q3, I'm not talking now about year-to-date figures, but in Q3, deliveries of POSs and ATMs, they were lower than previous year.
If we look at accumulated revenues, are there, but we have pressure on margins, especially in POS-related services and on deliveries which are done in Western Europe. From positives for payment, it was a stronger quarter for direct-to-merchant lines like ECR and IPD. Here we have revenues growth. More I will show in a moment. Significant improvement we noticed we realized in dedicated solutions. EBIT is significantly higher, and this is mostly thanks to deliveries of our own proprietary solutions targeted to utilities, mostly in this area. It was another good, in fact, very good quarter for banking, especially for core and channel business lines, thanks to own services which we delivered. This was the best quarter for banking for the last few years. For cash, year-over-year, cash flow improved significantly. I would say it is back on track after the 2024 issues we had.
The conversion of EBITDA to operating cash flow on the last 12 months view is really on a good level. Traditionally, we show some numbers about transactions, how many transactions we process in e-commerce, IPD, and processing. For processing in IPD, it looks good. For IPD, even very good. Growth year-over-year. We have slowdown in e-commerce, which is due to Turkey. Those two banks which switched part one, in fact, majority of transactions to in-house solutions, it affected this year-over-year value. On other markets, for other clients, we see some growth, but it cannot compensate those drops. Let's move to results. This slide, those of you who participated in previous calls or looked at our presentation probably know pretty well. This shows numbers as they were reported in financial statements. Two first columns, exactly what is there.
Another two is after excluding the effect of IS29 bookings, so hyperinflation. Those numbers show a slight drop on revenues and a pretty big drop on operating profits, almost 30% year-over-year. This drop, as I already mentioned, was generated by those write-offs and reversals. If we look at them, we have revenue reversal in India, which relates to accrued but not invoiced revenues to merchants. Due to the situation of those clients, the entity is not able to invoice those revenues as they will not be collected. We decided to reverse those revenues. We have some write-off of assets, EUR 1.7 million on operating level and additional EUR 1.4 million in financial activity. What was put through financial activity is write-off of deposits which were frozen by the enforcement directorate in India. In operating profit, we have some write-off of some receivables plus blocked cash.
We have more accounting things like on consolidation level, this I mean. Write-off of assets which we have recognized during allocation of purchase price. We recognize on that time two, let's say, families of software, one for payouts and second for payment gateway. The one for payouts, we decided to cover with allowance and write it off to zero as we don't see perspective for now to recover this value. The last column is effect of goodwill write-off and the reversal of earnout for majority stake, which we, looking at results, don't expect to pay. Taking all those adjustments, one of, I will underline, non-cash one-offs. Adjusted figures are in this, let's say, second section of the slide. We can see here that on adjusted level, we have increase of revenues by 2% with some change in structure. You will see this on later slides.
We have drop in POS and ATM on deliveries, so third parties. Also, in dedicated solution, we have a change of structure, drop in advanced infrastructure, so lower deliveries of third-party solutions and increase in own solutions. On operating profit, 21% growth year-over-year, so pretty good. On net profit, it is less, only 1%. What is the reason for this gap between two levels? It's mainly due to the effect of restatement of contingent considerations and put, mostly puts, put liabilities, of course, other than India and Dubai. This year, our liability resulting from put of minority shareholder of Dwelt in Bosnia, the valuation of this liability increased by EUR 2.8 million. This is related directly with better performance in Q3 and expected better performance for next quarter. You will see this in a moment on slides by geographics, how big improvement in Bosnia we have.
Additionally, last year, we had positive effect of revaluation of put options for BSTS and BitHut, which we don't have this year. Those two things, in total, is around EUR 5 million lower result. It's our bigger cost. This was partially compensated by two items. One, interest. On interest, we have a better, higher balance, + EUR 200,000. Previous year, we had EUR 1 million of costs related with dividends declared for non-controlling interest, which did not happen this year. To remind, some of the entities are consolidated using present ownership method. In this case, when this method is applied, dividends paid to minorities land in P&L of group. As for taxes, accurate is positive. We have taxes lowered by EUR 600,000 comparing to 2024 Q3. Two main reasons. One is tax benefits on R&D, which we accounted in Spain. We submitted the, of course, documentation to utilize them. Lower tax on intragroup dividends.
Those which we collected during the third quarter were not covered by withholding tax or local taxes. Effectively, we don't have this in P&L. For P&L figures, I will not go into details. The same pictures, similar year-over-year differences, so no need to comment. Let's move to business lines, how this looks. In payment, we have drop of revenues year-over-year by EUR 3.3 million and drop of operating result. A few words about revenues first. As I already mentioned, in ATM and POS, we have lower deliveries, and this is visible here. On ATMs, we have dropped EUR 3.4 million, but when we look at year-to-date data, we have growth. Similarly, with POS. The difference is in POS, margin on deliveries, especially in Western Europe, is shrinking.
For e-commerce processing, dropped by EUR 1 million, which is a mixture of three items: slowdown in Turkey, I already commented transactions switched to in-house solutions by two banks, significant drop in Dubai and India. Last year, in Dubai, we had some implementation projects to enterprises, to banks, and in India, we did have revenues to some merchants, but those for whom we later had to reverse revenues. In India, currently, dropped to a very low result, and we are rebuilding it again almost from scratch. Those things were compensated by increases in some other geographies. Net effect is dropped by EUR 1 million. ECR and IPD, I already mentioned that it is a pretty good quarter for those lines and growth EUR 1.8 million year-over-year, mostly in Southeastern Europe, Croatia, Serbia, but in lower scale, also Western Europe and Central Europe, specifically Romania.
As for operating profit, as you see, more or less half of result was generated by e-commerce processing and ECR. We have drop of result in e-commerce processing. It relates to Turkey, India, and Middle East, exactly the same geographies where we have drop of revenues. In ATM, we have drop of operating profit a bit due to those deliveries, so EUR 3.4 million lower revenues, also decreased margin, and also weaker performance of independent ATM network money get, especially in Albania. In POS, also a small drop of EBIT, EUR 300,000, mostly related to lower deliveries. Overall, coming back, EUR 2.7 million lower result in payment, of course, excluding one-offs. Let's move to asset parts. Banking, I already mentioned, spectacular quarter for banking, almost EUR 4 million higher revenues year-over-year, and result higher by EUR 2 million, reaching more than EUR 5 million. This is the best quarter since, I think, five years.
This is delivered mostly by Serbia, Macedonia, and in a bit lower part by Romania. It's thanks to core and channel solutions. Dedicated solutions, only EUR 1.3 million increase of revenues, but we have this change of structure. The decrease of third-party revenues and the increase of own revenues cast some business line where we have big operating leverage on this. Result is transferring to operating profit, as you can see, because we did have already resources available, and now we utilize them effectively on projects. The base was not, let's say, ambitious, and it was not easy to beat, but the increase is pretty nice, and it allowed us to reach this EUR 18.3 million operating profit. As for the geographies, a few words. The biggest growth we have in Southeastern Europe, this is the strongest region, EUR 4.7 million higher operating profit, mostly Bosnia.
I already indicated this, that this is related with this dwell and valuation of put option. Also, good Macedonia, thanks for banking. Central Europe, also thanks to banking. A bit of slowdown in Western Europe. If we look a bit more into detail, we have growing e-commerce here and ECRs, but slowdown in traditional POS-related services, apart due to the drop in deliveries, and also those which happen there with lower profitability than previously. Three geographies, let's say, problematic ones. Turkey, already said a few words. We have drop of revenues due to transactions which were switched to in-house solutions. This is transferred to operating profit. Previous two years, we had a perfect example of positive operating leverage. When transactions were growing, we could easily generate higher results. Now, with dropping one, it affects operating profit quite much. We initiated here a process of cost optimization.
We work how to adjust to new reality, but we need a moment to see results of those actions. India and Dubai, I already mentioned that business shrank significantly. As you see, EUR 200,000 revenues only in both geographies. This results in operating loss this year and even bigger drop year-over-year because last year, India and Dubai contributed around EUR 500,000+ together. This is about Q3. Moving to year-to-date figures, I will not go too much into details because the picture is pretty similar. When we look at total year-to-date figures before one-offs adjustment, we have growth of revenue by 7%, drop of EBIT by 4%, and net profit by 15%. Again, here we have effect of those restatements, revaluation of put liabilities, and contingent considerations.
We have from Q1 one-off of loss generated on sale of mob van, and the difference is on taxes which were in on year-to-date numbers, they are higher than in previous year. Looking at adjusted numbers, asset write-offs, PPA, and goodwill adjustments for one-offs are exactly the same. The first one, revenue reversal, is different. It's EUR 1.6 million, not EUR 4.1 million. This is because the difference, so EUR 2.5 million, it was reversal of revenues recognized in Q1, Q2 this year. Yes. On year-to-date figures, it has no impact. When we look at adjusted numbers, 7% top line growth and 10% on operating profit. We have operational growth on current business. Net profit - 9% and due to those reasons which I mentioned a moment ago. When we switch to results by operating segments, again, pretty similar picture. Yes. We have growing banking and dedicated solutions.
In banking, H1 was slightly positive with small growth. Now we've added the spectacular Q3. It looks very good. Accumulated EUR 2.4 million operating result growth on core and channel solutions mostly, as I mentioned. Dedicated solutions here on accumulated data, we have on revenue even drop year-over-year due to third parties, again, and increase in own. EUR 6 million higher result, reaching more than EUR 4 million. It looks good. This Q3 was really strong and contributed to accumulated numbers. Payment, last one. On year-to-date figures, we have growth in revenues in payment. This I already highlighted before. As you see, this growth is in all lines, despite challenges we have, especially in e-commerce and processing, where we have this drop in Turkey, India, and Dubai. Still, it's contributed to the growth of overall payment.
When we talk about operating profit, in POS, we see this pressure, especially in Western Europe, on margins, and we have drop of operating result. ATMs, we have drop on profitability of independent ATM deployment. We can say it is the same, like one-to-one as in Q3, as most of the result for this network is done during Q3. Here we have drop of around EUR 1 million, growing ECRs and IPD, and big drop, most of the total drop of result is in e-commerce and processing. Why Turkey and India and Dubai? Let's look at how it looks by geographies. Again, very similar. Strong Southeastern Europe with growing Bosnia, but also growth for Croatia, which was not the case only for Q3. Macedonia, the same trend, so growing on accumulated data and Central Europe as well.
Western Europe, you see here this drop of result by EUR 1.3 million, and this is related with POS and shrinking margins, what I already indicated a few times. The biggest drops year-over-year we have in Turkey due to the reason I already mentioned, and also India and Dubai. This is about results. Now, a few words about cash flow. I already mentioned that we are satisfied with cash flow. It looks good. Operating cash flow for three quarters is almost EUR 39 million, what is significantly better than previous year. Last year was bad. We were struggling. It looks we are back on track. When we look at last 12 months' figures, EUR 74 million operating profit, more than in 2023. It looks good.
When we calculate conversion of EBITDA to operating cash flow, but EBITDA not the reported one, but adjusted for one-offs, the higher one, conversion is 93%, what seems to be very good. We had a lot of investments, mostly in infrastructure for outsourcing and on networks. Last 12 months, we invested EUR 15 million. This is mostly for POS and ATMs. For existing contracts, those which we signed a few years ago, 5, 7, 9, on which we reached the space of renewing the fleet and replacing with modern devices. As you see, comparing to 2023, 2024, we had big investments. Now, 2025, we also have them big. What is lower are spending investments in M&A. We have a significant drop. We bought only two small entities during this year so far. As for other outflows, like regular CapEx, it is pretty stable and nothing surprising here.
When we look at the liquidity situation, cash, EUR 53 million. This is a drop year-over-year, but we need to remember about those dividends. We had operating cash flow + EUR 40 million, but we paid the dividend to asset shareholders, but also to non-controlling interest of subsidiaries. It's like EUR 21 million, roughly. CapEx, EUR 15 million only this. No, EUR 15 million total year-to-date. M&A expenditures and servicing of debt. This consumed some part of cash. Other positions like short-term debt, short-term leases, dividends, nothing spectacular here. It's pretty flat. We have a huge increase in short-term M&A liabilities. This valuation of contingent considerations plus put options, mostly puts currently. It's not that we have some new ones. Simply those which were previously presented as long-term, they are now falling into this one-year gap.
The biggest amounts or biggest options in this amount are related with Dwelt, BSTS, Necomplus, and Eastern Pay. This is the majority of this value with some other smalls. As for operating capital, I don't think there is much to comment. This is what we managed to do. What we were, let's say, expecting and highlighting on previous calls is that we want to decrease a bit inventory, and we managed. This is it. As for outlook for Q4 and the development of the year, backlogs look good. We have a 20% increase of backlog on whole ASEE for Q4. For ASEE parts of banking and dedicated is 36% and lower for payment, 6%. Probably if you remember previous year or last two years, it was a rather opposite situation. We had more dynamic backlogs in payment. Now it's changed.
Quite a big impact on this is coming from Turkey and the switch of transaction, which we mentioned. In ASEE part, we have increase, which is mostly from dedicated solutions. Banking is growing as well, but the majority of growth is in dedicated. This is about results. Do you have any questions? You can put on Q&A. You can put on chat or maybe raise hand as well and ask. As for this India and Dubai, like answering one of the questions we did have on our morning call in Polish. On level of entities, we don't have any more big exposure in assets. Most of the things are already written off. Of course, some assets are, but not major ones. We have still exposure on group level, but on non-cash items. Yes.
We have around EUR 6.8 million goodwill, which is still on our balance sheet, not written off. We have EUR 1.8 million valuation recognized PPA, this is another software payment gateway. Based on impairment tests which we prepared, we still see potential to recover this value. For now, it is left on balance sheet. We have this challenge to rebuild the business and to get new clients to first cover operating losses. As you saw in Q3, it was - EUR 900,000. I expect Q4 it will be lower, but we need to catch this, so get new clients. For sure, what we changed in the approach is that we are now very strict in revenue recognition in India for merchant business. We don't allow any, literally any recognitions which are not invoiced to the client. We have implemented a very strict policy for writing off merchant receivables.
This mostly relates to India, but for Dubai as well, if we have this type. After 90 days, such merchant receivable is fully written off if not collected. Monica, Charles wants to ask a question, I think. Could you help with?
It's possible, yes, the policy.
It's possible.
Okay. Great.
Hey, guys, can you hear me?
Hi. Yeah.
Great, great. Just a follow-up on I don't really totally understand exactly what happened in Dubai and Turkey. Are we talking about the same, is this the same thing as the mob van issue? What was it? It was just aggressive accounting? Was it more than that? Was it fraud?
Okay. Let me do one by one. First, Turkey, what happened? We have four or five major clients in this enterprise part of payment gateway in Turkey. Our clients are big banks in Turkey for whom we process transactions. Two of those banks decided to build their own payment gateway solution in-house. It's not that they switched to competition. They simply built in-house solutions and switched transactions from us to their internal payment gateway. We lost transactions which were processed by us, and we lost our commission, which we earned on each transaction processed. Is it clear? Am I clear for Turkey?
That sounds like standard operational, you know, problems. It doesn't sound like it's a big issue.
We don't treat this as write-off. This explains operational drop of results in Turkey. Here we are not adjusting anything, just explanation why Turkey is lower. If we look here, we have this drop on Turkey. This is due to this.
Got it.
Okay. India and Dubai. In India, we have a different issue, which is also trust-related. As you remember, like previous quarters, I think since Q4 results, we were always mentioning collection of receivables is an issue. We are looking at this, we are worried, and we apply our standard policies. We did it. What we have figured out is that, and this somehow touched trust, the manager and the seller, they ran the business, which was very aggressive. Not direct clients of India operations, but indirect clients of clients were in high-risk merchants. On India level, there is increased pressure on government level to ban such things. Our clients fall in problems because they were hit by doing business in those areas. Yes, they fall in problems, and our India companies are not able to invoice those revenues to them. They were accrued only, so they were now reversed.
This is what happened. We do not have business with them anymore. We try to rebuild. We rebuilt sales organization, hired new sales, and tried to get new merchants from those non-high-risk sectors and step by step rebuild this. As you see, in Q3 numbers, the starting point is very low.
Okay.
This is about revenue drop. For write-offs, yeah, there was some, again, it's like related with clients. There was some control, and they blocked the funds. Our managers say they should be recovered, but it's already a few months, and they were not recovered. We prefer to be on the safe side and write them off. Based on information we gathered through different sources, it can take years to recover them. We don't see such an asset as, you know, having value. We want to be conservative, and we included write-offs.
Is this the same thing that happened in Dubai?
In Dubai, not. In Dubai, because in Dubai, the majority of business is enterprise business. Yes. Currently, we are struggling with lack of projects. There are no projects at all or very minor. This is the main problem. There is a problem which we mentioned already a few times, collection of old projects from 2024 and end of 2023, where we have open receivers. All those things which are still not collected are covered with write-offs currently. We push them to collect. If it will happen, if we manage to collect, it will have a positive impact.
Got it. Okay. These sound like these will be lapping issues for next quarter as well. Is that right?
Okay. I expect next quarter to have operating loss on this, hope lower than in Q3, this excluding one-offs. I hope there will be no one-offs. I already disclosed what is still exposure on goodwill and PPA. If there will be some thunderstorm scenario, something goes even worse, then we have still this exposure. Yes. For now, our best judgment is it will not happen. We still left those assets. Yes.
Okay. That's helpful. Maybe one more on a more positive note. The growth in free cash flow is really impressive. Can you talk a little bit about where that's coming from and whether that's a conscious new effort to improve cash generation or if that's maybe just a seasonal kind of thing that just happened by chance?
Oh, always this mixture. Let's be fair. Yes. Let's be fair. There is seasonality, there is luck, and there is also this constant pressure on cash, which we implemented on reviewing exposures on projects and pushing for invoicing, closing them. Also, we released EUR 10 million from inventories, so trying to keep more under control, buying upfront POS and ATM because it's all mostly this part. Yes, POS and ATM mostly. We always need to have some stock. It's necessary in this business. Last year, it was a bit too much. We have a few projects where we are currently in delivery with recognitions done, but not invoicing. I hope some of them will be closed and invoiced till the end of the year. Q4 should be good as well, I hope.
Great. Yeah, it's great to see. I've got plenty of other questions, but I'll hop in the queue and let others ask. Thanks.
Okay. Thank you. Any other question? We have something on chat, I think. Let me see. Constellation, will this result in any changes, particularly the management compensation? We are not aware about any changes right now. Of course, we know about the Constellation and that it was closed. They have a cooperation agreement with Adam Gural Foundation. For now, we are not aware of any specific changes and impact on the management compensation model. Key points arise during the morning presentation in Polish. This is about India, Dubai I shared. About Turkey, how we want to address Turkey and this drop. In the short term, like very short term, we are not able to match this, but we take two actions or two areas of actions.
On top of this enterprise business, which was so far the biggest in Turkey, we have also direct-to-merchant business in Turkey, running two models, one under financial institution license, another without license. Both are growing, and we want to push it even more to grow, to grow with a bigger amount, but of lower clients, smaller clients. Yes. To have this bigger, let's say, to have lower exposure on one big client. This is one area. Second, we already started. We are working on cost optimization in Turkey, but effects of this cannot be expected in Q4. It will take a few months to shrink the team and adjust to a lower volume of transactions. This is it. What else was asked for me to recall to? Growth of backlog in dedicated solutions. Can we expect this to continue next year?
Growth, yes, but percentage-wise, it will be difficult because the base is growing. We see projects for next year. This should generate some recurring revenues of maintenance once projects are completed, but we cannot expect the same percentage dynamics as this year. As for profitability, Q3 looked already nice. It is here. You see, it was 12%. Year- to- date, it's 5%. We see still some area for improvement of profitability and performance in dedicated, but we don't see an area to reach levels as banking. These are different types of softwares very often offered to the public where we have price pressure. There is a place for improvement from the 5% which we have, but not to where it is here, from this 5%, but not to the level of banking. This, what else? How can I help? Any other question? We have a question.
What do you expect to be your main growth driver of banking solutions in next year? Cost efficiency. Talking about operating profit, we really want to put a bigger focus on efficiency and cost of the teams. We see here some potential for improvement. As for projects top line, rather we don't see big projects, big, huge core banking implementations as we did have in 2023, 2024. I don't think this can happen, but small projects, different smaller models, yes. We see here an area for cost optimization. We also initiated work in this area. We put this as a part of the budgeting exercise, which was initiated recently, but we need a moment to complete this. Increasing sales in one to two years. Next year, I think we still have a place in dedicated solutions to grow. Banking, some increase, but nothing major.
With payment, the starting point for India and Dubai is very low, but we don't build much on this. We will push, but let's see. In payment, we see potential for growth in those direct-to-merchant lines. ECRs, IPD, and e-commerce. This is where we want to really focus and try to add additional value-added services to our existing clients, to utilize this client base we have with adding additional services. We are intensively working now on this and hope that some pilots will start soon in some new geographies. This is like on existing cost base, adding additional services, which should be quite effective in terms of profitability of this additional service. For this traditional POS and ATM business, we don't see some big place for growth, but also we don't expect some huge drops.
Pressure on margins is there, but we want to also look at costs and try to address this somehow. In overall, to summarize, in dedicated solutions and direct-to-merchant lines in payment, these are those areas where we see the biggest place. Positive banking, growing, but not some very big growths. Anything else? If not, then I invite you to one-on-one direct contacts. We are now after a closed period. Another closed period will start. I don't know exactly when, but usually around January 20th. We have pretty much time to talk next two months easily. Whenever you have questions, you can reach Monica, Piotr, Meisers, and we'll be happy to have a one-on-one call or meeting if you will be in Warsaw. We have one more question. What do you expect to be the most transformative trend for the banking solutions?
Tough one, honestly, but I think still all what is related to digitalization of relation with clients. This is where we see. This is what is presented in our core and channel solutions, channels business line. This is the place where we see a place for like replacing with new modern solutions. We've embedded some AI functionalities for which we have competence in our group. We try to combine this and sell together, like new AI-driven CRM systems, for example, for banks.