Dear Shareholders,

On behalf of the Management Board, I have the honour of providing you with a report from another year of operations of the Comarch Group. In 2018 the Group materially extended its scale of operations and improved its operational profitability. Sales revenues grew by 21.7 per cent or by PLN 244.5 million versus 2017 and reached the amount of PLN 1,370 million. Profit on operations amounted to PLN 87.5 million and net profit – PLN 30.6 million. Operational profitability in 2018 was 6.4 per cent versus 5.2 per cent a year earlier.

Last year there was a dynamic growth of sales of software developed by the Comarch Group and the related services. Customers were particularly interested in products for telecoms, or the public sector and ERP systems. Due to a broad and comprehensive offer of modern IT solutions and high service quality, the Comarch Group is the largest domestic provider or software and a leading provider of IT services in Poland and in international markets.

In 2018, the Group successfully continued its growth strategy consisting in diversifying its operations among various sectors, developing its own products and sale thereof in global markets. The Management Board stresses that for years the Group has been making major investments in expansion and maintenance of its global sales network as a result of which the Comarch brand and its offer has gained international recognition which effectively supports sales of Group solutions in new markets. Last year, the Comarch Group established new subsidiary companies – Comarch Mexico S.A. de C.V with its registered office in Mexico City, Comarch Yuhan Hoesa (Comarch Ltd.) with its registered office in Seoul and Comarch BV with its registered office in Rotterdam. In 2018 Comarch (Thailand) Limited, Bangkok started operations. The plans for 2019 provide for continued expansion – both domestically and abroad. In 2018 the Comarch Group made major investments in new and existing IT products. Expenditures on R&D were above 13.2% of sales revenues; they were primarily financed with the Company’s own funds. The Group was developing intensively a new generation of loyalty, telecommunications and ERP systems as well as IT solutions for medicine and Internet of Things. The Group also continued the enhancement of the other offered products. Last year the Group put special stress on developing sales of IT solutions in the service model – is a market leader in the area. The Comarch Group has been intensively developing the private Comarch Enterprise Cloud Platform (IaaS and PaaS) with top security standards, based on the infrastructure of the Comarch Data Center. With the solution, Comarch products may be offered in the best way for customers, providing benefits in sharing the costs of the IT infrastructure, improved performance, reliability and maximum flexibility.

Last year, the Comarch Group strengthened its position as one of the fastest growing employers in the IT sector. As at the end of 2018, the Group employed over 6000 people in Poland and abroad. Like every year, positive effects were generated by the programme of student internships as a result of which the Comarch Group is perceived as an employer of first choice in the IT sector. The Management Board of the Comarch Group has been making efforts to successfully implement the mission of propagating innovative technical ideas developed in Poland all over the world. Apart from business activity, the Comarch Group has been pursuing a corporate social responsibility policy and is getting involved for protection and revival of national heritage, has been actively supporting NGOs and charity actions, it is a sponsor of culture, arts and sports. In 2018 the Comarch Group continued its support to the construction of a new organ and the revitalisation project of music space in St. Mary's Basilica in Kraków.

I am convinced that relying on its good financial condition, in the future the Comarch Group will strengthen its market position as a global provider of IT solutions, generating value added for the shareholders, customers, employees and the entire social and economic environment.

Financial reports