Letter from the President of the Management Board of PragmaGO S.A..
De
ar Sirs,
We are pleased to place in your hands the PragmaGO Group's 2024 Annual Report. The past year was a milestone for the Group
on the road to international expansion, which opens up new opportunities for scaling operations. The record high results confirm
the effectiveness of the actions taken, while providing a solid basis for the Group's continued growth.
In 2024, the Group surpassed the PLN 100 million revenue threshold and generated its historically highest consolidated revenue
at PLN 113 million (+45% year-on-year, with operating expenses higher by only 28%), which translated into an operating profit of
PLN 52.3 million (+64% year-on-year) and allowed the Group to achieve a net profit of PLN 11 million against a net profit of PLN 7
million for 2023 (+59%).
We have consistently strengthened growth momentum in the current year. Revenues in the second quarter of 2024 increased by
11% compared to the first quarter of 2024, in the third quarter they recorded further growth of 8% compared to the previous
quarter, and in the last quarter of the year they increased by another 12%. The result was driven by a 29% increase in revenues in
the factoring segment and an 85% increase in the loans segment compared to the previous year. Noteworthy is the growing
effect of operating leverage: operating expenses are growing significantly slower than revenues and have decreased to 37% of
revenues for the 4 quarters of 2024. The ratio of risk costs to revenues remains stable. The results achieved are due to a
significant increase in the scale of operations: assets as of December 31, 2024 increased to PLN 560 million compared to PLN
360 million as of December 31, 2023 (+56% y/y). This growth was achieved thanks to, among other things, the acquisition of the
Monevia and Telecredit Subsidiaries, the growing number of customers using our services (21.6 thousand, +30% y/y), as a result
of growing awareness of the PragmaGO brand, the attractiveness of its products, and the efficiency of our distribution channels,
especially the efficiency of our Embedded Finance model and its Merchant Cash Advance and PragmaPay deferred payment
products for e-commerce buyers (BNPL B2B), in which we are the clear market leader in Poland.
Despite its growing scale, the Group maintains a safe level of debt for the financial services sector - net financial debt as of
December 31, 2024 was 269% of equity, with a level of 400% allowed according to PragmaGO's financial covenants. The Group's
assets are characterized by high liquidity: total cash inflows from financial assets amounted to PLN 2,335.9 million in 2024, a
very high value of inflows compared to net financial debt at the end of the period of PLN 386.7 million.
We are pleased to note that the Company's bonds invariably enjoy a high level of interest, the Group received proceeds from the
bond issue of PLN 217 million in 2024, and at the same time we carried out measures to optimize the maturity structure of bond
liabilities through early redemptions.
An important event in the life of the Group was the signing of an agreement to acquire TELECREDIT IFN SA, based in Bucharest
(brand name Omnicredit), which is the Romanian market leader in digital factoring for the small and medium-sized business
sector. This is PragmaGO's first foreign investment, and the very good performance of the acquired company has contributed to
the Group's earnings and balance sheet total. The factoring and lending portfolio of the Romanian Company amounted to PLN
42.3 million at the end of 2024. The net profit generated in 2024 amounted to PLN 5.6 million, of which PLN 275 thousand related
to the period since taking control. We expect the company's factoring business to continue to grow rapidly, and we plan to build
on its embedded finance segment in the Romanian market.
In the coming periods, we expect to see further growth in turnover, portfolio size and continued efforts to allow the company to
expand overseas, which is expected to translate into increasing profitability of the Group's operations. We thank our investors for
the trust they place in us.
Sincerely, Tomasz Boduszek,
President of the Management Board of
PragmaGO S.A.
This document is a translation of the original document written in Polish. In case of any discrepancies,
doubts, or
interpretation issues, the Polish version shall prevail and be considered binding.
