Subject:

Information on the impact of the COVID-19 coronavirus pandemic on the operations of the R22 Group

Legal basis:

Art. 17 sec. 1 MAR – inside information.

Content:

The Management Board of R22 S.A. with its registered office in Poznań (the “Company”, the “Issuer”), in connection with recommendations of the European Securities and Markets Authority (ESMA) and the Office of the Polish Financial Supervision Authority, hereby provides information on the impact of the COVID-19 coronavirus epidemic on the operations of the Issuer and its Capital Group.

R22’s priority is to ensure the safety of all employees and associates of the R22 Capital Group. Accordingly, all employees have the possibility of working remotely, which does not adversely affect the operational activities of the R22 Capital Group, the quality of customer service or the handling of sales processes, the vast majority of which are conducted online.

The Company is observing increased use of digital customer communication channels, in particular:

– approximately a 3-fold increase in SMS traffic observed in the last week (11-17 March this year) compared with the average traffic level since the beginning of the year (omnichannel communication segment)

– an increase of approximately 50% in traffic on the VoIP platform compared with the average traffic level since the beginning of the year (telecommunications segment)

The Company is not experiencing a negative impact of the current situation on sales of services and tools offered by the R22 Capital Group. In addition to the increase in digital communication traffic described above, the Company is also observing increased interest in solutions supporting remote work, including virtual PBX systems. However, these products do not constitute a material source of the Group’s revenue. The online channel is the main sales channel for R22 solutions.

The most significant business risk for the Company related to the current pandemic is the possibility of an increased number of insolvencies in industries directly affected by the situation. The R22 Capital Group provides services to customers from virtually all sectors of the economy, which materially diversifies this risk. In the Company’s opinion, many companies may currently place greater emphasis on online communication with their customers and on the growing importance of e-commerce in retail.

At the same time, Profitroom S.A. is observing a decline in bookings made through the Booking Engine module, resulting from a significant decrease in tourist and business traffic at hotels and affecting Profitroom’s commission revenue. Profitroom S.A. is an associate of the Issuer in which the Issuer holds 29,42% of the shares. Accordingly, the results of this company are not currently consolidated and do not affect the Issuer’s cash flow. The Company assumes that this is a temporary situation and that a scenario involving an increased number of domestic bookings in the summer season is likely.

The Company assumes that the current situation in the online communications market is temporary and is related to crisis communications conducted by both businesses and local authorities. However, in the long term it may positively affect the pace of digitalisation and automation of business processes in many industries, which may translate into increased demand for technology solutions offered by the R22 Capital Group.