Thursday, May 19 2022

LETTER FROM THE PRESIDENT

Dear shareholders,

2021 has been a very favorable year for ASEE Group (including Payten). The Group has grown both organically and through acquisitions, improved its profitability and broadened its skills in many areas of activity.

ASEE Group generated more than 250 million euros of its revenue for 2021, achieving a 9% increase compared to the previous year, while its operating result improved by 22% and amounted to almost 40 million euros. Our main revenue driver was Payten Group which recorded a 12% growth in sales and also the highest increase in operating profit, up to 34%.

Expansion – new markets, new skills

Pursuing our expansion strategy, in 2021 we successfully completed seven business acquisitions through which we increased our expertise, market share and expanded our portfolio with new products and solutions in the following areas: artificial intelligence and machine learning, e-Commerce solutions for e-commerce and mobile stores and marketplace platforms, digitization and management of business processes, traffic management and Smart City solutions, as well as solutions for the telecommunications industry. In 2021, we also achieved organic growth by conquering new markets with our existing products and services. In Egypt, we participated in the digitization of a bank by implementing our Live Virtual Branch solution dedicated to virtual banks. In Portugal and Colombiawe have launched a network of independent Monri payment terminals, and Kyrgyzstan, we have started the implementation of our Nestpay ver. ACS 2.0 at Demir Kyrgyz Bank.

Digital transformation and consolidation

Last year, we continued to observe the growing demand for solutions that support banks in the process of digital transformation. This has given us an upward push in sales and implementations of our proprietary Digital Origination solution to offer online banking products and services, as well as security solutions. The Central and Eastern European region saw the continuation of consolidation processes in the banking sector, where we provided technological support, among others, for the mergers of NLB Montenegro with Komercijalna Banka MNE, NLB Serbia with Komercijalna Banka, Raiffeisen banka Srbije with Agricultural creditor Eurobank with Direktna Banka, and from Payten, our subsidiary Smartcard completed the full consolidation of the card processing business in the merger of OTP with Vojvodanska banka. In addition, one of the major projects in the Banking Solutions segment was the establishment of a central banking system for Halkbank in Serbia.

Improve efficiency

In the dedicated solutions segment, we succeeded in both expanding the scale of our operations and improving their efficiency. We signed more contracts to sell our proprietary solutions, such as BPM, Live, ABC, and Loyalty. For example, in addition to the aforementioned Live Virtual Branch implementation for a bank at EgyptAnadolubank based in Turkey chose the ASEE Live Digital Customer Onboarding solution, Ziraat Participation Bank chose our Fidelity Asset Management solution, while our ABC solution that provides support in business process management has been delivered for public administration clients in Serbia such as the Ministry of Finance, Pension funds, Health insurance institutionand the Ministry of Social Affairs and Employment. Additionally, it should be noted that we have improved our ABC platform with AI tools through the acquisition of Things Solver, a company specializing in artificial intelligence and machine learning. We are working on integrating AI and ML tools into our other strategic products.

Dynamic growth of e-Commerce

Within our Payten businesses, the strongest revenue growth in 2021 was recorded in the business segment dealing with the maintenance of point-of-sale terminals (up to 4.4 million euros) and in e-commerce. The pandemic period has created favorable conditions for the development of e-Commerce. This translated into strong financial results from our online payments division in 2021, during which Payten processed over 1.2 billion transactions. A significant increase of 130% was also achieved by the business in charge of sales to merchants, in particular the independent network of point-of-sale terminals (IPD) and electronic cash registers (ECR). I am convinced that the solutions for creating online and mobile stores as well as marketplace platforms, which complement our payment solutions and have appeared in our product portfolio following recent acquisitions, will contribute to the continued growth of the dedicated business. to non-financial customers.

Future prospects

In 2022, we will pursue the growth strategy of recurring revenues and transactional activities, further increasing the share of our own products and services in the sales structure of ASEE Group, and we strive to expand our business both organically and through acquisitions. We will also develop new products and add cutting-edge features to our existing solutions, including using the potential of artificial intelligence and machine learning tools. In addition to implementing our expansion plans, we will also make continuous efforts to improve the efficiency of our operations.

Finally, I would like to thank our employees, customers and partners for an extremely successful 2021. I invite you to read the management report on the operations of ASEE Group where you can find more details about our achievements in 2021 and our plans for the future.

Piotr Jelenski,

CEO of Asseco South Eastern Europe SA

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