Asseco CE has recorded the most successful year in its history

ENTERPRISE INFORMATION SYSTEMS ACCOUNTED FOR THE LARGEST SHARE OF SALES, SAYS JOZEF KLEIN, HEAD OF THE COMPANY

Asseco has been on the market for 30 years. It started in Slovakia as a provider of IT solutions in the banking sector, to which it added other segments, while expanding into other markets. Today, it is active in seven European countries, but also has projects in Nigeria, Ghana, and Ethiopia. The implementation of software for a bank in Vietnam was a major experience for the group. The group has also managed to grow through acquisitions that enhance its portfolio, increase its share in an existing segment, and enrich it with new competences. Jozef Klein, Asseco CE CEO, explains what is behind last year's results and expansion and talks about the startups the company supports through Perry Talents Accelerator.

Last year was very successful for Asseco CE. The company increased revenues by ten percent, to EUR 310 million and added value grew at the same rate. The consolidated net profit reached EUR 37 million. What was the biggest contributor to these results?

Last year was the most successful year for Asseco CE Group in its 30-year history. The results were positive thanks to an organic increase in sales. All business segments contributed significantly to this, the best of which was the Enterprise Resource Planning (ERP) segment with sales of EUR 140 million. The consolidated net profit was also achieved thanks to the company´s increased efficiency.

Asseco CE has a number of countries under its umbrella. What are the key differences between them? Which segments are key?

Asseco CE Group includes seven countries, namely Slovakia, the Czech Republic, Hungary, Austria, Germany, Switzerland, and Poland where it covers only the ERP segment. We do not record the same level of development in every country. In the V4 countries, we have several segments covered, but the closest to each other are Slovakia and the Czech Republic, where we have been trying to develop banking and insurance segments since the company was founded. In the German-speaking countries, we continue to gradually increase our market share in ERP and utilities. Last year, Slovakia confirmed its extremely strong position in the group. We saw an increase in turnover in almost every sector. We are pleased with this success, as this is also a confirmation of the important role of Slovakia, which was the birthplace of entire Asseco Group.

The COVID-19 crisis put some IT businesses on hold or delayed them. At the same time, it has created growth opportunities through the development of new specific solutions. What impact do you expect this crisis to have on your business this year?

We cannot quantify the economic impact at this point. Instead of the projected revenue growth, we expect a decline. However, the events of recent months indicate and confirm the need to digitize processes and services, which is an area in which we feel competent. We expect IT development in every segment of the economy. We see a great potential in the utility segment in particular, which has not been affected by the pandemic to a greater extent. On the contrary, Industry 4.0 has been significantly affected by the crisis, especially the automotive sector where we have experienced a significant drop in business.

In the early days, Asseco's main focus was on banking. Even today, this segment accounts for a significant part of revenues. How is its share of revenues evolving and which other segments have been strengthening in recent years?

Historically, our first segment was banking where we won important customers such as Česká spořitelna, Slovenská sporiteľňa, and Poštová banka. Even after many years, our sales here are still growing. Last year, we increased them by fourteen percent year-on-year. This is mainly due to newly acquired clients. The massive digitization of services in this area was also spurred by the natural pressure from customers to use digital channels - mobile banking, internet banking, voice banking, Apple Pay, Google Pay, and others.

The company's growth is also the result of acquisitions. Last year, TurboConsult, a Czech company that supplies IT solutions for the financial sector, joined the company. Before that, it was Exe and CEIT from Žilina, active in industrial automation. Acquisitions increase the strength, performance, and market opportunities of brands. Which of them do you rate as the most successful and why?

Every acquisition is important for us. It either complements our product portfolio, increases our share in an existing segment, or enriches us with a new specific competence. This reduces our market risks. Right now, when the public segment in Slovakia is stagnating, we are balancing this shortfall with new projects for banking, ERP, and utilities. In hindsight, I consider the acquisitions of ERP companies in Austria, Germany, the Czech Republic, Slovakia, and Poland to be the most successful. Based on them, we formed an ERP holding company called Asseco Enterprise Solutions a few years ago. After initial caution and some scepticism, this ERP project has far exceeded even the boldest expectations.

In addition to established companies, Asseco CE also supports startups. Why did you decide to cooperate with Perry Talents Startup Accelerator?

We want to remain competitive and innovative, so we are looking for interesting ideas and projects that could expand our portfolio in the future. We invest our own resources in supporting talents that have the potential to succeed in the market. At the same time, it is one of our CSR activities, thanks to which we support brains in Slovakia and pass on our experience to them. Perry Talents Accelerator allows us to build synergy between this desire of ours and the smart young founders of the project. We too were a young startup in 1990 and today, we are thriving internationally.

Asseco CE is part of an international entity that operates in over 50 countries. You participate in tenders for the supply of IT systems for companies from emerging markets in the Middle East and also win them. Which projects have been key recently?

When entering countries outside Europe, you have to take into account not only different administration or laws, but mainly cultural differences. It is a very difficult process. My colleagues still mention entering African countries such as Nigeria, Ghana or Ethiopia. A big experience for us was the software implementation for a bank in Vietnam. For the sake of comparison, our largest bank has about three million clients and we implemented a system for a local medium-sized bank with more than twenty million clients there.

You have been CEO of Asseco CE for 18 years. You started as a programmer. How does logical and mathematical thinking help you in management, where do you combine it with people management, business, or strategy?

The job of a CEO is completely different from that of a programmer. As an intermediate step between a programmer and CEO, I held the position of project manager. I already felt the differences there. As a programmer, I was responsible for my own work; as a project manager, I added managing a smaller team of people, responsibility for the work of others, and strategy development. Today, for me, it's mostly working with people. I have to lead, motivate, and make decisions. At the same time, I feel responsibility to the customer for the performance of my people, ensuring that they still have a job to do in this challenging period, and in addition, I have to meet the expectations of shareholders. Experience and mathematical thinking help me a lot. Even though I no longer program, I understand the job and that is an advantage. Mathematical and logical thinking also helps me in business meetings and strategy setting, where a certain amount of combinatorics is welcome.

Under your leadership, the company has become one of the largest IT service providers in Slovakia and Europe. What has played the most important role during this journey?

The key moment was our merger in 2004 with Comp Rzeszów, a "local" Polish company headed by Adam Góral, our current Group President. Adam Góral is a visionary who is constantly leading us forward. I must also mention the successful IPO and SPO, i.e. the underwriting of shares on the WSE in Warsaw, which helped us raise funds for the growth of the company and its further acquisitions. It has also enabled us to grow to what we are today. But, for example, the recent delisting of our company from the Warsaw Stock Exchange has also been an amazing experience in the company´s life. At the same time, I need to emphasize that it is the people in the company what is particularly important for the success of Asseco as a whole. We can boast not only experienced professionals, but also people in the right place.

Jozef Klein (58) graduated from the Faculty of Mathematics and Physics of Comenius University in Bratislava, majoring in theoretical cybernetics and mathematical informatics. He has been working for Asseco CE since 1999. He has been the Chairman of the Board of Directors of Asseco Central Europe in Slovakia since 2002, and has held the same position for eighteen years in its Czech sister company. In both companies, he is also their CEO. He also holds important positions in Asseco Enterprise Solutions, Asseco International, and Asseco Group. In 2016, he received the EY Entrepreneur of the Year award.