Dear Shareholders,
On behalf of the Comarch Management Board I am pleased to present the report on the activities of the Comarch Group. In 2018, the Group significantly increased the scale of its operations and improved its profitability. Revenue from sales increased by 21.7%, i.e. PLN 244.5 million compared to 2017, and reached PLN 1,370 million. Operating profit amounted to PLN 87.5 million, while net profit PLN 30.6 million. Operating profitability in 2018 amounted to 6.4%, compared to 5.2% in the previous year.

Last year there was a dynamic growth in sales of the Comarch Group proprietary software, as well as related services.
The products for telecommunications companies, for Public sector and ERP systems were especially popular among customers. Thanks to a wide and comprehensive offer of modern IT solutions and high-quality services, the Comarch Group is the largest national software producer and one of the leading IT providers in the country and on international markets. In 2018, the Group successfully continued its growth strategy based on the diversification of its operations between various industry segments, the development of its own products and their sales on international markets. The Management Board emphasizes that the Group, by investing in subsidiaries for several years, incurs significant expenditures in expanding and maintaining the global sales network, thanks to which, international recognition of the Comarch brand and offer increases, which effectively supports the sales of the Group's solutions in new markets. In the previous year, the Group included new subsidiaries - Comarch Mexico S.A. de S.V. with its registered office in Mexico, 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 with its registered office in Bangkok has started its operating activity. For 2019, the Group plans to continue its expansion, both on the domestic market and on foreign markets.

In 2018, Comarch Group made significant investments in new and existing IT products. Expenditures on research works exceeded 13.2% of revenue from sales, they were financed mainly from own funds. The Group was intensively developing
a new generation of loyalty, telecommunications and ERP systems, as well as, in the field of IT solutions for medicine and the Internet of Things (Internet of Things). The Group also continued to improve the other products offered. In the past year, the Group put special emphasis on the development of sales of IT solutions in the service model - Comarch is one of the market leaders in this field. Comarch Group intensely develops a private cloud computing Comarch Enterprise Cloud Platform (IaaS and PaaS) with the highest security standards, based on the infrastructure of Comarch Data Center. Thanks to this solution, Comarch products can be offered in an optimal way for customers, providing benefits from sharing IT infrastructure costs, increased efficiency, reliability and maximum flexibility.

In the past year, the Comarch Group strengthened its position as one of the largest employers in the IT sector in Poland.
At the end of 2018, the Group employed over 6,000 people in Poland and abroad. As every year, the student internship program has brought positive results, thanks to which the Comarch Group is perceived as one of the first choice employers in the domestic labor market in the IT industry.

The Management Board of the Group endeavor to successfully implement the mission of dissemination of created
in Poland innovative technical ideas around the world. In addition to its business operations, the Comarch Group implements the policy of corporate social responsibility and engages in activities for the protection and restoration of national heritage, actively supports non-governmental organizations and charitable activities, is a patron of culture, art and sport. In 2018, Comarch Group continued to support the construction of new organs and the project of revitalizing the musical space at St. Mary's Basilica in Krakow.

I am convinced that, thanks to the very good financial condition, Comarch Group will in the next years strengthen its market position as a global provider of IT solutions, creating added value for shareholders, customers, employees and the entire
socio-economic environment.

Professor Janusz Filipiak
President of the Management Board
Comarch S.A.

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