[Company Representative] (Asseco South Eastern Europe): Level of 4%. Another quarter of good cost control. This is another Q1 when we see that there is no big growth on net revenues level, rather on good cost control. Payments are the key growth engine after slower H1 of the year. EBIT growth is by EUR 3.2 million. One-off adjusted, so without effect of previous year ones. Another good quarter, but flattish for banking. Slight growth of revenues and operating profit. But to recall, last year Q3 was the Q1 when we significantly improved performance of banking segment. For Dedicated Solutions, this was not spectacular quarter, declining year over year, mostly due to missing projects in Bosnia and Herzegovina in this area of the utilities solutions and roads. To recall, last year we had an output call year. So the one which was based for calculations and payments during 2026.
[Company Representative] (Asseco South Eastern Europe): We had many spectacular projects realized during Q3 and even more during Q4 2025. When talking about operating cash flow, very good. We are very satisfied from the amount of operating cash generated as well as conversion of operating profit or EBITDA to operating cash flow. What I will comment in more details a bit later. Traditionally, some statistics about transactionality of payment business. As for IPD and this processing of physical cards, it is very good. 37% growth in IPD, 11% growth on classic card payments processing. But we have decline in e-commerce, which is due to those banks in Turkey who decided to go to in-source payment gateway and use their own solution. But we have talked about this on our previous conferences for a few times already. Let's move to results.
[Company Representative] (Asseco South Eastern Europe): Q3 numbers as they are in financial statements excluding hyperinflation, effect show 7% growth of operating profit and as I said, 77% growth of operating profit. This is of course including weak base. So one-off in India and Dubai. If you look excluding this, we have growth of revenue by 3% and growth of operating profit by 4%. Those one-offs in 2025 Q3 were EUR 4.1 million on revenues and an operating profit, 7.5. When we look below at net profit, here growth is slightly higher, 9% year over year. This is mainly thanks to financial activity. We have their growth year over year by EUR 1.7 million. There are three major reasons of this change year over year. Two negative ones. One is FX and interest, which balance is lower by 300K. Then we have positive impact of lower cost of put liabilities revaluation.
[Company Representative] (Asseco South Eastern Europe): It is EUR 3.8 million positive effect. But we have higher cost of dividends paid to non-controlling interests. So, in case of those entities which are consolidated using present ownership method. The cost of those dividends are higher by EUR 1.8 million. We have also higher income taxes, and this is related with both capital gains. So those intra-group dividends which we distributed during Q3 and regular operating profits and distribution of this result between geographies, those with higher interest rate versus tax rate versus lower. When we look at those one-off adjusted results by segment, you can see that payment shows growth, EUR 3 million growth, and almost EUR 2.7 million growth of operating profit with increased profitability from 17% to 21%. If we look at total numbers as in financial statement, with everything included, no adjustments here.
[Company Representative] (Asseco South Eastern Europe): We have growth in payment by EUR 7 million and on operating profit by EUR 10 million. From where it comes in payment? Actually, we have three business lines with growing revenues, ECRs and IPD. Those lines where we sell directly to merchants and e-commerce and processing, showing growth of EUR 4.3 million. Higher revenues in ATMs and flat in POS. As for ECRs and IPD, this growth is mostly in Slovenia and Croatia. These are the biggest contributors, both on revenues and on operating profit. When we look at e-commerce and processing, I think we have EUR 4.3 million higher revenues, out of which EUR 4.1 is effect of one-off 2025. We can say that excluding this one-off effect, growth of revenues is EUR 0.2 million, which is mostly in Portugal and Egypt, with slight decrease in Serbia.
[Company Representative] (Asseco South Eastern Europe): When we look at operating profit, in e-commerce, it is higher by EUR 8.6 million, whereas the effect of one-offs was EUR 7.5. It means that organically, on the current business, the growth is EUR 1.1 million, despite revenues growth only by EUR 200,000. It means improved cost control and profitability in e-commerce. In case of ATMs, the growth is mainly related to equipment deliveries, ATM deliveries, which were higher this year in Serbia, Macedonia, Slovenia, and Bulgaria. This was partially compensated by lower deliveries in Romania. This translated to growth of operating profit by EUR 600,000 in ATM business. In case of POS, we have flat revenues, but looking a bit more deeper, there is drop in Spain, Croatia, and LATAM, which was compensated by higher revenues in Serbia, Czechia, Slovakia, and Albania. Looking at operating profit, despite flat revenues, some improvement of efficiency and higher EBIT by EUR 300,000.
[Company Representative] (Asseco South Eastern Europe): Coming back to other segments, as I mentioned, banking, another good quarter. Growing revenues, EUR 1.4 million, and higher operating profit by EUR 400,000. This is mostly thanks to core banking solutions in Southeastern Europe, in Serbia, Macedonia, and Montenegro. With slight decline in security portfolio, mostly in Turkey, where we have InACT, this anti-fraud solution. Dedicated Solutions, the worst business line in terms of performance in Q3. We have drop of revenues by EUR 1.4 million. This is composed of two effects. One is drop on own solutions by EUR 3.5 million, partially compensated by resale of third-party solutions. This drop of own solutions is Bosnia, what I already mentioned. The lack of those big projects for utilities or intelligent transport solutions. Partially compensated on top-line level by third-party deliveries of third-party solutions, equipment, or software.
[Company Representative] (Asseco South Eastern Europe): Such revenues does not transport into net revenues and operating profits because of CoGS, what is natural in this business. This drop of operating profit is even higher than drop of revenues. This was by segment, and how it looks by geographies. Southeastern Europe, flattish. There is this drop of result in Bosnia and Herzegovina, what I already mentioned twice. This was compensated by different other geographies, like Croatia, where Dedicated Solutions and payment was better. Macedonia, thanks to banking, or Serbia, thanks to banking, payment, and Dedicated Solutions. In Central Europe, we have nice increase of revenues and also increase of operating profit. This is thanks to banking, mostly in area of core banking solutions, but also thanks to Dedicated Solutions, which was a bit better than last year.
[Company Representative] (Asseco South Eastern Europe): In Western Europe, another quarter when results are flattish, but there is different structure of those revenues. Growing e-commerce and ECRs in Portugal and Spain, respectively, and drop in this more traditional POS business or BPO services. Turkey. On revenue, it is almost flat, but a pretty big drop of operating profit. But this is not due to Payten. We have drop in this business line responsible for a payment gateway for big banks. Here we have drop, as we mentioned, to clients who in-source. But this drop was compensated pretty much by two things. One is, say, directly to smaller clients, merchants, and second, serious cost optimization. So on operating profit, it is classic Payten. Problematic is Dedicated Solutions where we have leasing and spend management solutions, and those units have weak performance in Q3. LATAM, rather flat.
[Company Representative] (Asseco South Eastern Europe): India, Dubai, this effect of one-offs from last year, but okay, they continue to generate losses. This Q3, and how it look accumulated after three quarters, I would say picture is pretty similar, and probably you remember our results from H1. Revenue grow by 5% and operating profit by 38%. So really nice improvement. Even if we exclude one-offs related to India and Dubai, which are both 2025 and 2026. Because to recall you, in Q3 this year, we have written off remaining part of assets recognized during purchase price allocation software and also remaining part of goodwill. So, the growth is 38%, including. On net profit is slightly lower, 11%, but it is not due to any write-offs because they are pretty comparable both years. It is mostly due to dividends paid to non-controlling interest, to minority shareholder.
[Company Representative] (Asseco South Eastern Europe): As you remember, in Bosnia last year, we had spectacular results, and during 2026, those results are distributed in form of dividends to shareholder. We have there minorities, so part of those dividends went in our P&L. And increase of dividends costs in 2026 versus 2025 is EUR 4.5 million. Of course, taxes are also higher, but this is more or less in line with growing cooperating profit without increase effective tax rate. Looking by segments, two main drivers. Payment, growing Payment and Banking, while Dedicated Solutions is dropping year over year. In Payment, we have growth in those two lines, delivering solutions to merchants. We have also growth in e-commerce and processing, but slightly lower revenues in more classical lines of delivering and servicing ATMs and POS.
[Company Representative] (Asseco South Eastern Europe): But despite the drop of revenues in ATM and POS, we have growth of operating profits in both lines, in POS by 600K and in ATMs by 300K, on cumulated numbers. In case of Banking, after this spectacular H1, also Q3 contributed a bit positively. So we have here growth almost EUR 8 million on revenues and EUR 6 million on operating profit with significantly improved profitability. Majority of this growth is on core banking solutions, mostly Serbia, Macedonia, and Romania, plus on other solutions in Croatia. And Dedicated Solutions, it is very similar to Q3 comments. So Bosnia is the major driver for drop, plus issues in Turkey, which I mentioned when comment Q3 results by geographies. And how it looks by countries for three quarters accumulated, growing South Eastern Europe but drop in Bosnia, what I already commented.
[Company Representative] (Asseco South Eastern Europe): Other countries, very good, growing year-over-year, similar in Central Europe. Slightly drop in operating profit in Western Europe. Still valid, this comment about change of structure, so more e-commerce and ECR business with bigger results, dropping those traditional lines. And improvement on UAE, Dubai, due to write-offs from, and one-off bookings from previous year. This is about result by countries. And cash flow. I mentioned that we are very satisfied with cash flow generated this year. After three quarters, more than EUR 61 million of operating profit generated. It means 91% of EBITDA to operating cash flow conversion. Very solid. Of course, part of this generating cash flow, we invested. When talking about CapEx, it is slightly lower than last year, especially the one for projects or equipment for outsourcing our own networks. But we spent more on M&As.
[Company Representative] (Asseco South Eastern Europe): These are not new acquisitions, not new companies, but we have bought out a minority stake in one entity in Bosnia, one in Albania, one in Portugal. So, we reached 100% stakes. Plus, on top of this, small earn-outs for controlling stakes acquired in previous years. And what else increased is dividends paid to minorities. I commented this from P&L side, that we have more cost, is of course also visible on cash flow level. When we look at last 12 months amount of operating cash flow is almost EUR 197 million cash generated during last 12 months, with conversion rate from EBITDA 95%. Of course, this leads to very strong liquidity situation. EUR 70 million of cash in Group end of September. Lower short-term loans than end of last year. Also, lower liabilities related to M&A.
[Company Representative] (Asseco South Eastern Europe): Despite payment of those things, net cash higher by EUR 20 million than end of last year. We feel very strong here and we are very satisfied from the level of cash generation in last quarters. As for outlook, traditionally we present backlogs. This time those backlogs for Q4 are slightly lower than it was in 2025, 3% on margin one level. This drop is mostly due to those parts of this banking and Dedicated Solutions. Here we have backlog lower by 13%, whereas in Payten, it improved and is 9% higher than last year. Why like this? Again, I will mention Bosnia and those big projects we had during Q3, Q4 last years. As those projects were delivered in Q3, Q4, obviously they were already in backlog. So backlog only due to those projects, was higher by EUR 6.4 million in Bosnia.
[Company Representative] (Asseco South Eastern Europe): Excluding this effect, backlog is slightly growing in this banking and Dedicated Solutions. Okay. This is how it looks. Despite this backlog, which is not very high, we are optimistic. We see Q4 positive, and there is nothing that would worry us when seeing analyst consensus for this year, how they see us on full-year numbers. Having said that, I am open for any questions. If you have, you can drop message on chat. I will try to answer, or maybe you can raise hand and ask question. Before waiting for questions, with M&As, we are looking for targets, but I think we are more selective, let us say. We implemented more conditions which need to be fulfilled to decide for transaction, with very deep going into understanding of how many clients targets have, if there is big concentration.
[Company Representative] (Asseco South Eastern Europe): We want to avoid this type of entities, not to generate risk. Anyway, we have few processes open. I don't think any of them will be completed still this year, but beginning of next year, it might happen. We have, of course, still some open M&A liabilities, as you saw on this liquidity slide. So this short-term part for next 12 months is more than EUR 10 million. There is a high probability that some part of this will be still realized this year. Okay. If there are no questions, because I don't see any questions, then thank you for joining. I invite you to one-on-one communication. You can contact us, and we'll be happy to discuss. Thank you and goodbye.
