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 2024 Annual Report. The past year was a milestone for the Company and
the Group on the road to international expansion, which opens up new opportunities for scaling the business. The record high
results confirm the effectiveness of the measures taken, while providing a solid basis for the Company's continued growth.
In 2024, PragmaGO surpassed the PLN 100 million revenue threshold and generated its historically highest unit revenue at PLN
102.5 million (+31.4% year-on-year, with operating expenses higher by only 12.2%), which translated into an operating result of
PLN 47.1 million (+50.3% year-on-year) and helped generate a net profit of PLN 7.8 million, compared to a net profit of PLN 6.6
million for 2023 (+19.6%).
We have consistently strengthened growth momentum in the current year. Revenues in the second quarter of 2024 increased by
8.3% compared to the first quarter of 2024, in the third quarter they recorded a further increase of 8.9% compared to the previous
quarter, and in the last quarter of the year they grew by another 7.2%. The result was driven by a 7.4% increase in revenues in the
factoring segment and an 81.9% year-on-year increase in the loans segment. Noteworthy is the growing effect of operating
leverage: operating expenses are growing significantly slower than revenues and have reduced the ratio of risk costs to revenues
to 35.8% 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 436.1 million compared to PLN 310.2 million
as of December 31, 2023 (+40.6% y/y). This growth was achieved thanks to the growing number of customers using our
services (20.8 thousands, +24.5% y/y), as a result of the 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 Company maintains a safe level of debt for the financial services sector - net financial debt as of
December 31, 2024 was 263% of equity, with a level of 400% allowed according to PragmaGO's financial covenants. The
Company's assets are characterized by high liquidity: total cash inflows from financial assets amounted to PLN 2,138.9 million in
2024, which is a very high value of inflows compared to net financial debt at the end of the period of PLN 367.2 million.
We are pleased to note that the Company's bonds invariably enjoy a high level of interest, PragmaGO received proceeds of PLN
217 million from the bond issue 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 shares in Bucharest-based TELECREDIT
IFN SA (brand name Omnicredit), which is the Romanian market leader in digital factoring for the SME sector. This is PragmaGO's
first foreign investment, and the very good performance of the acquired company confirms the accuracy of the investment
decision and provides a solid basis for positive forecasts for the unit. 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 abroad, which is expected to translate into increasing profitability of the Unit's operations. We thank our investors for
the confidence 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.
