Dear Shareholders,

On behalf of the Management Board of Comarch I am pleased to present the report on the activities of Comarch Group. The Group has achieved development and financial goals established for the year 2017, despite of difficult market conditions and despite of increased operating costs. In the past year, the revenues from sales remained at the similar level to that achieved in 2016 and amounted to PLN 1,102.5 million. Operating profit amounted to PLN 35.8 million, while net profit was PLN 42 million. The Group’s EBIT margin amounted to 3.2%, while the net margin to 3.8%.

 In 2017, the Comarch Group’s expansion on development of new and improvement of existing IT products increased. Expenditure on research and development has now exceeded 16.3% of sales revenue, which has been financed mostly from Comarch’s own resources. The Comarch Group intensively developed a new generation of loyalty systems and ERP systems, solutions related to the Smart City. The Group also continued R&D works in the field of IT solutions for medical industry (Telemedicine, including project “The City of Health” and HIS systems) and related to the development of proprietary solutions in the fields of hardware and services based thereon (Internet of Things). The Group also continued to improve the other products offered. In 2017, the Group focused on development of service-oriented IT solutions – Comarch is one of the market leaders in this field. In 2017, a private, unified and flexible computing cloud with the highest security standards of Comarch Enterprise Cloud Platform (IaaS and PaaS) was launched based on the Comarch Data Center infrastructure. Thanks to this solution, Comarch clients will be able to benefit from sharing IT infrastructure costs, increase efficiency, full control over their resources while optimizing the reliability of access to corporate data and maximizing the flexibility of their IT solutions. In connection with this project, the Group expanded its infrastructure, during the last year the investment in modern Comarch Data Center in Lille in France was completed.

 Investment in human capital is an essential element for the further development of the Group. At the end of 2017, the Comarch Group hired 5,541 employees worldwide and it is the largest employer among IT companies in Poland. The annual student internship program has brought particularly positive results, thanks to which the Comarch Group is perceived as one of the first choice employers on the domestic labor market in the IT industry. Thanks to the completion of subsequent infrastructural investments such as the construction of office buildings in Kraków and Łódź, the Group could significantly increase the quality of offered workplaces in the past year.

 With a wide and comprehensive range of modern IT solutions and high quality services, Comarch is now regarded as one of the top software producers on the international markets. The Group is able to successfully acquire and implement the largest IT contracts, an example of which is the choice in the past year of Comarch for the contractor to provide support services, operation and maintenance of the Comprehensive Information System ZUS, that is The Polish Social Insurance Institution). In 2017, the Group successfully continued its growth strategy based on the diversification of its operations between various industry segments, development of its own products and their sale on the global market. The Management Board of Comarch emphasizes that the Group has been incurring significant expenditures in the development and maintenance of the global sales network (Global Business Center) for several years, thanks to which international brand recognition and Comarch offer are growing, which effectively supports offering the Group's solutions in new markets. In the previous year, the Group established new subsidiaries: Comarch Japan KK with its registered office in Tokyo and Comarch Saudi Arabia Co. with its registered office in Riyadh, as well as the acquired company Geopolis sp. z o.o., producer of GIS systems with its registered office in Toruń. Further equity investments are planned for 2018 both on the domestic and foreign markets.

 The Group’s Management Board shall make every effort to successfully implement the mission of selling Polish engineers’ innovative technological ideas around the world. In addition to its core business, Comarch pursues a policy of corporate social responsibility and engages in activities for the protection and reconstruction of national heritage, actively supports non-governmental organizations and charity activities, is a patron of culture, art and sport. In 2017, Comarch became a co-founder of new organs and a project to revitalize the musical space at the St. Mary's Church in Krakow.

 Comarch S.A. is in a perfect starting position to strengthen its market position in the following years as a global provider of IT solutions and thus achieve an increase in 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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