Asseco Poland is a founder-led IT software and services holding — proprietary banking and public-sector software plus long-tenured maintenance contracts (concluded for indefinite periods with termination notice), consolidated across the Formula Systems and Asseco International sub-groups. Adjusted consolidated ROIC of 16.3% against an 8% WACC produces genuine economic profit of +PLN 812m on a PLN 9.7bn capital base.
The critical subtlety is the NCI trap: reported consolidated net profit (PLN 3,628m) is dominated by minorities (68.6%) and by the one-off Sapiens disposal gain. On a continuing, attributable-to-parent basis true owner earnings are ~PLN 718m LTM, and NCI is ~42% of group equity — so the parent captures a little over half of the headline return. Every per-share read here uses attributable earnings.
Capital allocation is sound at the top (net cash ~PLN 3.6bn, steady dividends) but the acquisitive edge is fraying: a second consecutive year of goodwill write-downs (PLN 145m FY25, chiefly ASEE/Touras in India/UAE) says the acquired book is not reliably earning its cost of capital in the weaker CGUs.
Anchoring on attributable owner earnings of ~PLN 718m LTM at ~20x, plus the ~PLN 3.6bn net-cash pile (PLN 44/share), fair value is ~PLN 220 — roughly 18% above the PLN 186 price. Stripping the cash, the operating business trades at ~16x attributable earnings, undemanding for a franchise earning 16% ROIC.
Base PLN 220 (+18%) on a re-rate toward fair value; bull PLN 260 as core IT-services growth and the software mix compound attributable earnings; bear PLN 155 if goodwill write-downs recur in the fragile CGUs and IT budgets tighten, compressing the multiple.
The market pays today’s enterprise value for roughly -26.0% NOPAT growth over 5 years. The business earns 16% on capital against a 8% cost of capital (spread +8.3 pp); the no-growth value is PLN 335/share (180% of price), so the rest is priced-in growth.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | PLN 260 | -11% | +40% | 35% | Core IT-services growth + software mix compound attributable earnings |
| Base | PLN 220 | -18% | +18% | 45% | Re-rate toward fair value on attributable earnings + net cash |
| Bear | PLN 155 | -35% | -17% | 20% | Goodwill write-downs recur; IT budgets tighten; multiple compresses |
| Prob-weighted | PLN 221 | — | +19% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 439 | 480 | 509 | 556 | 590 | 683 |
| 7.25% | 379 | 411 | 433 | 469 | 495 | 566 |
| 8.00% (base) | 335 | 360 | 378 | 406 | 426 | 480 |
| 8.75% | 302 | 322 | 336 | 359 | 374 | 416 |
| 9.50% | 276 | 292 | 303 | 321 | 334 | 366 |
Green = fair value above the current price of PLN 186.15. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
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Consolidated ROIC 16.3% vs 8% WACC with EP +PLN 812m — durable value creation from a sticky software installed base.
~PLN 3.6bn net cash post-Sapiens funds dividends, buy-ins of minorities, and bolt-ons without dilution.
Indefinite-term IT-maintenance and outsourcing contracts give a visible, high-retention cash-flow core.
~18% below fair value on the honest attributable read plus net cash — a real margin of safety.
Cash could be deployed to lift the parent's share of group economics, closing the NCI drag.
Asseco is a founder-led IT compounder earning well above its cost of capital with a fortress net-cash balance sheet, trading ~18% below fair value on the honest attributable-earnings read. BUY, medium conviction; base target PLN 220 (+18%).
The conviction cap is governance-and-structure: 42% minorities dilute the parent's share of returns and a recurring pattern of goodwill write-downs in the acquired CGUs is the key watch-item. A clean impairment-free year would support an upgrade.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| LTM revenue (continuing ops) | 17,135 | FY IS p.4 / Q IS p.6 note 5.1 | FY2025 continuing 16,779.8 − Q1'25 restated 4,043.8 + Q1'26 4,399.4. Continuing operations only — Sapiens revenue reclassified to discontinued (note 2.10 restatement removed 533.1 from Q1'25 revenue). |
| LTM operating profit / EBIT (continuing) | 1,741 | FY IS p.4 / Q IS p.6 | FY2025 1,615.0 − Q1'25 restated 386.3 + Q1'26 512.6. Continuing ops; Sapiens operating profit (83.8 in Q1'25) excluded via note 2.10 restatement. |
| Net income attributable to PARENT (continuing, LTM) | 718 | FY IS 'Attributable to Shareholders of the Parent, from continuing operations' p.4 note 6.6 / Q IS p.6 | FY2025 continuing-to-parent 617.8 − Q1'25 128.5 + Q1'26 228.4 = 717.7. NOT total consolidated NI (FY reported total 3,628.5 incl. 2,467.0 Sapiens-disposal discontinued). Continuing consolidated NI is 1,347.3 (parent 717.7 + NCI 629.6). |
| DISCONTINUED-OP split reconciliation (Sapiens) | 2,467 | FY IS p.4 note 3.11 / Q note 2.10 restatement p.20 | Sapiens sold 17 Dec 2025 (loss of control), classified discontinued per IFRS 5. FY2025 discontinued NI 2,467.0 (of which 520.9 to parent, 1,946.1 to NCI — disposal gain). Q1'25 restatement note 2.10 reconciles EXACTLY: as-reported EBIT 470.1 − discontinued 83.8 = 386.3 continuing; as-reported continuing NI 350.1 − 70.5 = 279.6. All flow figures encoded continuing-only. |
| NCI split of consolidated net income (FY2025) | 2,490 | FY IS p.4 / note 7.7 | FY2025 total consolidated NI 3,628.5 split parent 1,138.7 / NCI 2,489.8 (NCI took 68.6% of consolidated — dominated by Sapiens disposal gain to NCI 1,946.1). On CONTINUING basis: parent 617.8 / NCI 543.7. LTM continuing NCI 629.6. NCI is ~42% of group equity (5,697.9 of 13,484.8, Q1'26 BS p.9). |
| Goodwill impairment (FY2025) — post-tax add-back | 145 | Note 6.3 other operating expenses p.63 / note 7.5 impairment tests p.93 | ASEE Group (Touras India + Touras UAE) 132.1m + ACE/XANTA 0.6m (Asseco International) + Nextbank 12.3m (Asseco Poland). In other operating expenses. Non-tax-deductible (tax recon p.94 adds 28.9m to tax for impairment non-deductibility). SECOND consecutive year (FY2024 was 24.7m). Post-tax add-back = full 145.0. |
| Intangible/PPA impairment ZAP customer relations (FY2025) — post-tax add-back | 71.5 | Intangibles note p.75-76 (business-combination column impairment) | Impairment of ZAP Group customer-relations recognized in PPA (Formula Systems segment). Part of FY2025 total intangible impairment 89.7m; residual ~18.2m other items excluded from clean add-back. Added back post-tax. |
| Impairment-test assumptions (discount rate / growth / headroom) | 0 | Note 7.5 impairment tests + sensitivity p.92-95 | FCFF value-in-use, 5-yr detailed forecast (2026-2030) + residual. Post-tax discount rates applied in model: Formula Systems 7.7-8.0% (residual 8.4%), ASEE 9.4-10.4% (residual 10.9%), Asseco Central Europe 7.8-7.9%. Pre-tax rates up to 12.8% / 13.5% residual. Headroom (limiting CAGR to reach carrying value): ASEE only −23.4% (thinnest — just impaired), most CGUs deeply negative or infinite (large headroom). ASEE/Touras is the fragile acquisition capital. |
| PPA amortization (LTM, KEPT in opex) | 200 | FY segment non-cash items p.49 / Q p.33 | FY 207.0 − Q1'25 52.3 + Q1'26 45.1. Amortization of acquired intangibles from business combinations (customer relations, backlog, tech). mttssn does NOT add back — recurring roll-up cost. |
| Share-based comp (LTM, KEPT in opex) | 63.2 | FY segment non-cash items p.49 / Q p.33 | FY 65.3 − Q1'25 13.6 + Q1'26 11.5. Stock-option plans (Matrix / Magic / Sapiens-legacy). Kept in opex. |
| Capitalized development spend (FY2025) | 64 | Development-projects note p.76 | Internally-generated software capitalized (Asseco Poland 18.7 + International 33.6 + Formula 11.7). mttssn expenses it (R&D reversal). vs FY2024 75.5m. |
| Amortization of internally-generated software (FY2025) | 76.6 | Intangibles roll-forward, 'Internally generated software' column p.75 | Amortization charge FY2025. Net vs capex 64.0 = +12.6 pretax R&D reversal. |
| Internally-generated software NBV + dev-in-progress (removed from IC) | 273 | Intangibles roll-forward NBV 31 Dec 2025 p.75 | Internally-generated software NBV 215.1 + development projects in progress 58.0 = 273.1 removed from IC (capitalized_rd_removal). Externally-financed capital only. |
| Total equity (31 Mar 2026) | 13,485 | Q BS equity p.9 | Parent 7,786.9 + NCI 5,697.9. Includes +63.7m translation reserve (OCI, stripped). |
| Non-controlling interests (31 Mar 2026) | 5,698 | Q BS equity p.9 note 6.4 | ~42% of group equity. Retained in IC (consolidated basis). |
| Interest-bearing debt (31 Mar 2026) | 2,818 | Q BS p.9 note 6.10 | 1,420.7 non-current + 1,397.6 current bank loans/borrowings/debt securities. Leases excluded. |
| Cash and bank deposits (31 Mar 2026) | 6,581 | Q BS p.8 note 6.8 | Large net-cash post-Sapiens disposal. 342.7 operational (2% rev), 6,238.0 excess subtracted from IC. |