Special announcement – Gloster joins forces, taking its international business model to the next level

Special INFORMATION
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Gloster Infocommunications Public Limited Company (company registration number: 13-10-042012; registered office: 2142 Nagytarcsa, Csonka János Street 1/A, Building A/2; hereinafter: the Company, Gloster) hereby informs its esteemed investors of the following in accordance with applicable laws, in particular Act CXX of 2001 on the Capital Market (“Tpt.”) and the General Rules of the Budapest Stock Exchange.

Gloster is stepping up its game, taking its international business model to the next level

Focus on International Growth, AI, and the Cloud

The Company is shifting its focus to the intensive organic growth—supported by acquisitions—of its operations in the English, German, and American markets. Gloster will finance these rapid growth opportunities through the sale of its System Integration business unit—which operates exclusively in the domestic market—and the real estate serving that unit; the parties signed an agreement to this effect today.

The purpose of this significant investment, funded from the Company’s own resources, is to enable the Company—in order to realize its ambitious growth plans—to focus exclusively, unlike in the past, on the dynamic development of its international sales team and on the market launch of its new AI and cloud-based digitalization products. In the future, Gloster will primarily focus on larger-scale international digitization projects in which it possesses unique expertise, has specialized industry experience, employs innovative development methodologies, can offer solutions utilizing the latest artificial intelligence, and which are much more profitable than domestic projects.

Gloster is focusing on international expansion rather than domestic public procurement

The goal of streamlining its portfolio and implementing its new business model is to combine the unique technological expertise of the Cloud division and the International Software Development division—which has been proven abroad—thereby making the Company even more competitive in winning new international digitalization projects. Gloster expects that, as a result of the transaction, the proportion of exports and foreign currency revenue will rise significantly next year, which will enhance the Company’s financial stability and increase its profitability. Domestic public procurement revenues will no longer form part of Gloster’s revenue by 2026, and the EBITDA margin is expected to rise as early as 2025. Management expects that international expansion will accelerate average annual growth, with Gloster’s export revenue reaching 75% by 2027.

“One of the keys to our success has been making good decisions quickly. This is the only way we can preserve everything we’ve achieved so far. We expect real growth to come from the technological expertise we’ve gained in recent years and the continued intensive development of our international client base,” added Viktor Szekeres, founder and chairman of the board.

Funding and Management: Significant Resources Will Be Made Available to Support the New Model

With the signing of today’s agreement, the Company is selling its System Integration business unit—which serves the domestic market[1]—as part of a portfolio streamlining effort, as its operations no longer align organically with the long-term growth strategy supporting international expansion. The sale of this business unit will free up not only financial resources but also management resources. The Group’s administrative burdens and operational complexity will be significantly reduced. With the discontinuation of these activities, decision-making processes in the other two business units will accelerate, and the time required for internal coordination will decrease. Concurrent with the sale of the companies belonging to the Systems Integration business unit, Gloster also sold the real estate that housed them; as a result, the infrastructure and administrative costs associated with maintaining the business unit will be eliminated. The company will also invest the proceeds from the sale of the real estate into its international expansion.

Effective today, the positions of Domestic Operations Director, Head of the Systems Integration Business Unit, Head of Domestic Sales, and Head of Domestic Services at Gloster Infokommunikációs Nyrt. will be eliminated. The Company’s Board of Directors remains unchanged. Gloster will continue its international growth story with two business units: the International Software Development and Cloud business units.

At the same time as signing the share transfer agreement, the parties also signed a strategic cooperation agreement in which they committed to continuing to support each other’s activities on a commercial basis. Ongoing collaborations between the Company and Gloster Networks Kft. will continue as stipulated in the agreement, and Gloster Networks Kft. will continue to operate on the domestic market under its current company name (for the time being). The closing period for the agreements began today, and the closing is expected in the spring of 2025.

They are exploring further acquisition opportunities

With experience from eleven transactions , Gloster’s management continues to actively seek value-creating acquisition opportunities that support the company’s growth strategy and strengthen its international presence. They are primarily targeting domestic and European companies that have significant growth potential in the areas of cloud-based services, big data, and artificial intelligence, as well as strong technical expertise and an international customer base. Such acquisitions not only accelerate growth but also create synergies within Gloster’s existing technology portfolio, while enabling entry into new markets and the expansion of customer relationships.

Following the signing of today’s transaction, the Company’s Board of Directors will update its strategic plan by February 28, 2025, taking into account changes in the economic environment.

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About Gloster

Gloster is a broad-spectrum international IT service provider listed in the BSE’s Standard category. Over the course of its more than 20-year history, it has evolved from a hardware-focused garage startup into a software-focused international mid-sized company. Thanks to Gloster’s aggressive growth strategy, it has completed eleven transactions since 2018 and expanded its operations into the areas of systems integration, cloud solutions, and international software development services. The group currently employs a team of nearly 350 people; according to its audited consolidated financial statements for 2023, its revenue was 10.3 billion forints, its adjusted EBITDA was 976 million forints, and its net income was 414 million forints.

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Nagytarcsa, December 12, 2024

Gloster Infocommunications Plc.

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Further information:

Dr. Adrienn Karlovich-Szabó

investor relations officer

karlovich.szabo.adrienn@gloster.hu

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[1] The following companies were sold as part of the System Integration business unit: Gloster IT Security Kft. (registered office: 2142 Nagytarcsa; Csonka János u. 1/A. A/2.; Company Registration No. 13-09-203488); Gloster Networks Kft. (registered office: 2142 Nagytarcsa, Csonka János u. 1/A. A/2.; Company No. 13-09-202159); and its wholly owned subsidiaries, Cableline Technologies Kft. (registered office: 2142 Nagytarcsa, 1/A. A/2, Csonka János Street; Company Registration No. 13-09-182301); and Gloster Telekom Kft. (registered office: 2142 Nagytarcsa, 1/A. A/2, Csonka János Street; Company Registration No. 13-09-208675);