Asseco South Eastern Europe (ASE) Q3 2024 earnings summary

Executive summary

• Q3 2024 saw strong EBIT growth year-over-year, mainly driven by Payment Solutions, especially eCommerce, Processing, and POS-related services.

• Sales revenues for the 9 months ended 30 September 2024 reached PLN 1,209.5 million, up 5% year-over-year, with net profit attributable to shareholders at PLN 141 million, down 9% year-over-year.

• Dedicated Solutions remained weak but showed slight sequential improvement from Q2, with underperformance due to non-recurring items and project delays.

• New acquisitions in India, UAE, Ukraine, and Portugal contributed to revenue and EBITDA, reflecting ongoing expansion.

• Hyperinflation in Turkey required IAS 29 adjustments, impacting reported results and segment analysis.

Financial highlights

• Q3 2024 revenue rose 24% year-over-year to €103.7m; EBITDA up 18% to €20.8m; EBIT up 18% to €14.9m.

• For Q1-3 2024, revenue grew 11% year-over-year to €281.1m; EBITDA up 4% to €52.9m; EBIT flat at €35.9m.

• Operating revenues for 9M 2024: PLN 1,209.5 million (+5% year-over-year); Operating profit: PLN 154.6 million (-6%).

• Net profit after tax (NPAT) increased 17% year-over-year to €13.1m; Net profit: PLN 144.7 million (-9%).

• Acquisitions contributed €4.7m to Q3 revenue and €10.4m to Q1-3 revenue; new subsidiaries contributed EUR 3.4 million in EBITDA.

Outlook and guidance

• Backlog for Q4 2024 is higher year-over-year in all segments, indicating continued growth.

• 2024 full-year revenue expected to increase 8% year-over-year; margin improvement anticipated.

• Payten segment revenue for 2024 projected to rise 16% year-over-year, with margin up 23%.

• Management expects continued growth, especially in underinvested regions, with ongoing investments in R&D and new market entries.

• Key risks include geopolitical instability, regulatory changes, inflation, and currency fluctuations, especially in Turkey and Egypt.