Special announcement - Significant growth expected in Gloster's first half-year report

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) in accordance with applicable laws, in particular Act CXX of 2001 on the Capital Market.

In accordance with the Act (“Tpt.”) and the General Rules of the Budapest Stock Exchange, we hereby inform our esteemed investors of the following.

Significant growth is expected in Gloster's first-half report

Management expects significant growth in the second half of the year as well

Compared to the same period last year, Gloster’s management expects revenue of approximately 5.8–6.6 billion forints—a 35–45% increase—and half-year EBITDA of 490–610 million forints, as outlined in the Company’s first-half 2024 report to be published in September.

This strong performance was driven by the consistent, stable performance of the Cloud division, as well as the Software Development division’s successful transition of projects nearing completion into new, long-term contracts, supported by a steadily growing international sales presence.

The Company’s profitability is also expected to improve further as it successfully completed the final phase of several previous acquisitions in the first half of 2024, and the first stage of the merger[1] with Sytemfarmer Zrt. has also been completed, shifting the focus to integration and capitalizing on joint business opportunities.

Although the System Integration division’s half-year performance is expected to fall short of the planned level, the division is on the verge of a milestone, and management anticipates that implementation of several high-value projects will begin in the second half of 2024.

An encouraging sign regarding year-end results is that Gloster started 2024 with a record order backlog of 4,134 million forints, up 170%[2], and began[3] the second quarter of 2024 with an open order backlog of 3,470 million forints—a 137% increase—the fulfillment of which is expected to accelerate in the second half of the year. A further slight improvement is also expected from the initial results of the Gloster Level Up program[4] in the second half of 2024.

Consolidated, unaudited half-year financial data in millions of forints. The restatement of the results in accordance with IFRS is in progress; this restatement has no material impact on the financial results.

Management views the growth outlook for the second half of the year as encouraging as well , with one of the main drivers being the two previously announced software development orders totaling 15.7 million euros[5].

In the Cloud business unit, in the second half of 2024, growth is expected not only in traditional migration projects but also in both security and BizApps services. On the security side, these projects will primarily involve the implementation of Intune and Autopilot, while on the BizApps side, they will involve the delivery of custom Power Platform-based solutions.

In the International Software Development division, management expects to continue receiving new orders from all existing customers in 2024 . The direct sales presence in Germany and Sweden continues to strengthen, and the sales team has also expanded further in England; as a result, Gloster expects to secure new clients and significant new orders by 2025 thanks to these strengthened teams.

The improving half-year financial results, along with projects projected through the end of the year, provide a stable financial foundation for a successful close to 2024 and are also expected to provide the necessary coverage for the first dividend payment planned for 2026—factors that could lay the groundwork for the stock price to return to a growth trajectory.

ERSTE Investment Ltd. is tracking Gloster shares, with a target price of 1,183 HUF and a buy recommendation.

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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.

This prospectus was prepared by Gloster Infokommunikációs Nyrt. (headquarters: 2142 Nagytarcsa, Csonka János u. 1/a). This prospectus contains only factual information and reasonable conclusions based on reasonable calculations, which have been disclosed by the authorized parties in accordance with applicable legal obligations. Pursuant to Section 5(1)(9) of the Capital Markets Act (Act CXX of 2001 on the Capital Market), this prospectus does not constitute an “investment recommendation,” and pursuant to the Securities Act (Act CXXXVIII of 2007 on Investment Firms and Commodity Exchange Service Providers and the Rules Governing Their Activities), does not contain any analysis, recommendation, or other information regarding investment analysis, financial instruments, exchange-traded products, or their issuers, the disclosure of which, on its own or in any other way, could influence an investor to make their own or another person’s money or other assets, in whole or in part, dependent on the effects of the capital market. Gloster Infokommunikációs Nyrt. and its representatives assume no liability for investment decisions based on conclusions drawn from the information contained in this prospectus, nor for any adverse legal consequences or financial losses resulting therefrom.

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Nagytarcsa, September 3, 2024  

Gloster Infocommunications Plc.

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Further information:

Dr. Eszter Bassola

investor relations officer

bassola.eszter@gloster.hu

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[1] Hungary’s Largest Domestically Owned Microsoft Cloud Service Partner Is Established https://gloster.hu/uploads/befektetoknek/kozzetetelek/rendkivuli-tajekoztatasok/Letrejon-Hungary's-largest-domestically-owned-Microsoft-cloud-service-partner-65cef84f1e67d.pdf

[2] GLOSTER'S ORDER BACKLOG REACHES AN ALL-TIME HIGH https://gloster.hu/uploads/befektetoknek/kozzetetelek/rendkivuli-tajekoztatasok/Gloster-2023Q4-Order-Backlog-65cb92d210841.pdf

[3] Gloster's open order backlog hits another high https://gloster.hu/uploads/befektetoknek/kozzetetelek/rendkivuli-tajekoztatasok/Gloster-Order-Backlog-2024Q1-661907579c549.pdf

[4]A 200-million-forint annual business development program is launching at Gloster https://gloster.hu/uploads/befektetoknek/kozzetetel/rendkivuli_tajekoztatasok/28982-Rendkivuli-tajekoztatas_-Evi-200-millios-vallalatfejlesztesi-program-indul-a-Glosterben.pdf

[5] Gloster Wins a 15 Million EUR Industrial Software Development Contract from BMW https://gloster.hu/uploads/befektetoknek/kozzetetelek/rendkivuli-tajekoztatasok/Press-Release-Gloster-Wins-15-Million-EUR-Contract-from-BMW-6672898577f31.pdf