Dynamic development and consolidated revenues reaching PLN 10.7 billion – Asseco’s financial results in 2019
For the first time in history, Asseco's revenues exceeded PLN 10 billion. Sales in 2019 increased by 14.4% to PLN 10.7 billion, while operating profit went up to PLN 976 million, by 22.5% versus 2018. The Group developed intensively on foreign markets, where it generated 89% of sales. The foundation of its operations remains the sales of proprietary IT products and services, which last year amounted to over PLN 8.6 billion, accounting for 81% of consolidated revenues.
Asseco's revenues are diversified by sectors and in 2019 were divided into: banking and finance - 38%, general business - 38% and public administration - 24%. The Group is also geographically diversified and presents its results broken down by three segments: Asseco Poland (Polish market), Formula Systems (Israeli market) and Asseco International (other international markets).
The year 2019 was very successful for Asseco - for the first time we generated PLN 10.7 billion in consolidated revenues and PLN 976 million in operating profit. In line with our strategy, we focused on the production of proprietary software and provision of related services. Such revenues accounted for 81% of our sales. Foreign markets represented by the Asseco International and Formula Systems segments accounted for 89% of our revenues. This confirms that the consistently pursued vision of Asseco's development, focused on the production of proprietary software and acquisitions of companies engaged in it, is the right direction to build the strong Asseco Group and a good way to diversify our operations by sectors and geography, said Adam Góral, President of the Management Board of Asseco Poland.
The Formula Systems segment accounts for the largest portion of revenues generated by Asseco. In 2019 the Formula Group companies significantly improved their sales and profitability as a result of conducted acquisitions as well as consistent development on international markets and taking advantage of the economies of scale.
The Asseco International segment recorded an increase in sales revenues and operating profit in all of its major regions of operations, namely Central Europe, South Eastern Europe and Western Europe. The growth of Asseco Central Europe was driven by new contracts concluded with public and financial institutions in the Czech Republic and Slovakia. Following the strategy of economic and organizational independence of each of the operating segments, the Asseco South Eastern Europe Group achieved very good results in the segments of banking solutions, dedicated solutions and payments (Payten). The companies specialized in ERP solutions bought by Asseco Enterprise Solutions also improved their performance year on year.
The Asseco Poland segment signed new long-term agreements, worth several hundred million zlotys, with various public institutions (including the National Health Fund (NFZ), the Social Insurance Institution (ZUS), the Agricultural Social Insurance Fund (KRUS) and the Agency for Restructuring and Modernisation of Agriculture (ARiMR)). The Company continued to strengthen its position on the healthcare market by actively participating in the process of digitization of the Polish healthcare sector. In the area of banking and finance, the client portfolio was expanded and long-term service agreements were executed, ensuring a stable source of revenues from this sector.
At present, Asseco's consolidated order backlog for 2020 is PLN 7.6 billion in revenues, up by 22% versus the backlog presented in March 2019.
When it comes to Asseco's development prospects in 2020, I am aware that due to the SARS-CoV-2 virus pandemic, the whole world is now in a situation whose impact on the economy is difficult to estimate. We have taken all necessary steps to provide our employees with safe working conditions and our customers with full readiness to serve them and meet their obligations. We are also developing various scenarios of events to prepare Asseco for actions during and after the pandemic. In 2020 we will focus on further improvement of efficiency and simplification of the Group structure, continued development of competence areas and international expansion. There is no doubt, however, that this year will be very demanding on many levels, added President Góral.
Asseco Poland has been consistently building value for its shareholders and sharing profit with them. This year the Company's Management Board also recommended the payment of a dividend.
The Group's very good financial results in 2019 allowed us to recommend the payment of a dividend and to allocate PLN 250 million for this purpose this year. Asseco has been sharing its profits with shareholders for years and so far it has allocated PLN 2.2 billion for dividend payments, said Adam Góral.
The dividend amount recommended by the Management Board of Asseco Poland is equivalent to PLN 3.01 per share and translates into a dividend yield of 5.7% (as at March 23, 2020).