Formula Systems (1985) (FORTY) Investor Presentation summary

Company overview

• Leading Israeli IT and software services holding group with over 20,000 IT experts and presence in ~40 countries.

• Part of Asseco Poland S.A., the 6th largest IT services company in Central Europe.

• Listed on NASDAQ and Tel Aviv Stock Exchange; major subsidiaries also publicly traded.

• Portfolio includes Matrix IT, Sapiens, Magic Software, TSG, and several private companies in IT, security, payroll, and digital services.

• Invests in digital transformation, cybersecurity, cloud, analytics, and insurance technology.

Strategy and business model

• Focuses on organic growth and strategic acquisitions, targeting mature, stable businesses with recurring revenue.

• Acquisitions emphasize majority control, operational synergies, and retention of management autonomy.

• Mission centers on improving quality of life through technology solutions for people and businesses.

• Decentralized business model with hands-on supervision and strong financial discipline.

Financial performance

• Consolidated revenues grew at an 8.6% CAGR from 2017–2023, reaching over $2.6 billion in 2023.

• Adjusted EBITDA CAGR of 12.1% (2017–2023), with 2023 ADJ EBITDA at $313 million and margins around 12%.

• Maintains stable leverage: debt to ADJ EBITDA at 2.3x and debt to capital at 29% as of Q3 2024.

• Conservative cash management with $511 million in cash and $513 million in debt as of September 30, 2024.

• Dividend receipts since 2017 total $331 million, with subsidiaries following high payout policies.