To the shareholders

Managing Board ( r.): Dr. Jürgen Greschner (CSO), Jennifer Bodenseh (CFO), Dr. Gottfried Greschner (CEO), Matthias Kühn (COO)

Dear shareholders,

In view of the coronavirus crisis and all its negative implications, a look back at 2020 is naturally rather critical. All of us, as part of the init family, have been severely affected by the restrictions. A few of us were even infected with coronavirus, although luckily only with mild symptoms in most cases. Families with children in particular, were hit hard by the pandemic, as nurseries and schools were closed, which in turn meant that working from home became extremely challenging. Nevertheless, compared with other companies, we were able to continue working efficiently. As CEO, I am very happy to see that our employees have demonstrated exemplary commitment and great determination. We worked as a team and mastered many new challenges, and this spirit is also reflected in the motto of this year’s abridged report #INITtogether. I would like to thank everyone for this great achievement.

Therefore, despite all the general adversities that companies have had to face around the world, we can also present a successful result for 2020. The init group comfortably accomplished its growth targets for revenues and earnings. Revenues increased by over 15 per cent to around EUR 181m, a new record. Operating earnings (EBIT), which is one of our key performance indicators, increased by around 20 per cent to significantly above EUR 19m, thus reaching the upper end of our target corridor. Earnings per share, the key parameter for the distribution to our shareholders, improved from EUR 1.13 to EUR 1.50 and the init share gained a total of 46 per cent in value in 2020. Indeed, the share price continued to rise in 2021, reaching a historical high of EUR 41.20.

We are extremely satisfied with these results, especially considering that our customers, the public transport companies, were hit hard by the lockdowns, sustaining a massive drop in passenger numbers.

init’s digital innovations support public transport companies in numerous ways. This applies to smart ticketing solutions for which we are the market leader in Germany and the US with high growth rates, as well as for MOBILEguide, a passenger control system which is both an online solution as well as being used on railway platforms, and MOBILE-ITCS nextGen, a next generation innovative control system which uses artificial intelligence to increase efficiency in transport operations and enhance the travel experience.

We also see major market opportunities for our modular, web-based and scalable control system, an ITCS smart (Intermodal Transport Control System), which is tailored in particular to the needs of private fleet operators. What makes it special is that whilst maintaining sophisticated functionality, it offers public transport companies the advantage of lower investment costs for a standard version. The customer has the option to rent or lease the solution over a longer period which allows us to reach new customer target groups and secure a predictable source of revenue in the long term.

We also expect new opportunities in the rail sector for our MOBILE-ITCSrail solution that has been designed for rail systems. During 2020, we worked intensively on this development. Our first customer, Albtalverkehrsgesellschaft (AVG), will put this system into operation this year. AVG belongs to Karlsruhe Stadtbahn, which operates a rail network of over 500 km.

2021 will continue to be a year of transition due to the repercussions of the coronavirus crisis. However, growth trends for init have in fact improved, because the coronavirus crisis has given digitalisation an extra boost. Examples include passenger counting solutions which allow passengers to book vehicles that have sufficient available seating, easing passenger flows at stations and accelerating the introduction of contactless ticketing systems. As governments worldwide continue to push for the green transformation of the transport sector, the demand for digital solutions increases, for example in the development of electromobility and connecting mobility services in a single platform (Mobility as a Service, MaaS). init also developed the booking platform for the innovative mobility platform regiomove, in Karlsruhe.

Promising tenders and contracts can be expected in all these fields from which we in turn hope to generate further growth. Based on a cautious business plan, which also takes into account coronavirus related setbacks, we are forecasting stable growth for the current year. However, from 2022 onwards it should be possible to again reach our continuous annual growth target of 15 per cent on average.

We are continuing to work despite the effects of coronavirus to further strengthen the trust that you, our shareholders and the stock market, have placed in our sustainable growth prospects.

Sincerely yours,

Dr. Gottfried Greschner, CEO 

init innovation in traffc systems SE