To the shareholders

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

Dear readers,  Dear shareholders,   

When a seasoned broker summarises the annual balance sheet of a company in a “clear buy!” recommendation that is a reason to celebrate. Our company, init innovation in traffic systems SE, is one such “clear buy”. We are doing everything to ensure it remains that way in future.

The past year was an excellent one for init. We hit all our growth targets despite all the global economic turmoil, and above all reported a strong increase in EBIT margin. At around EUR 156m, we achieved a new revenue record and revenue growth of around 15 per cent. EBIT more than doubled compared to the previous year and, at over EUR 16m, even slightly exceeded our adjusted guidance. At the same time, we achieved an important milestone with an EBIT margin of more than 10 per cent.  Incoming orders in 2019 show that this growth is not just a single event, but is sustainable.

At around EUR 160m, incoming orders are higher than the annual revenue, matching the record level of the previous year. And the trend is upward: The Board of Directors of the Metropolitan Transit Authority of Harris County (METRO), the public local transport provider for the region around Houston in Texas (USA), has announced that they will commission us to deliver an ID-based fare management system. This alone translates into a contract volume of well over USD 30m.

Such achievements prove that in the ticketing area, which has been expanded in a targeted manner in recent years, init enjoys a leading position on the competitive North American market. We want to assert and expand this position with further innovative products. The next step will be for passengers to purchase and pay for their tickets by showing their hands. This vein identification system is being developed by our subsidiary iris in Berlin. This will create a next generation of ID-based ticketing systems.

Our assistance system for vision, hearing or mobility impaired passengers is another example of our innovative power. The ASSISTIVEtravel app offers needs-based support for this group of passengers. The highly successful MAVIS pilot project in Singapore has since received numerous awards and is being increasingly offered in Europe. A fully new approach based on innovative technologies is also being used for the passenger guidance system that we are currently developing for high-traffic transport systems, for example in Asian mega cities such as Hong Kong. Here, passengers waste a lot of time because they gather in certain sections of platforms and trains, while other parts are almost empty. Our solution already shows on the platform where there is space. This helps passengers to position themselves in the right waiting areas in front of coaches with free spaces before the train arrives. If we manage to save just seconds at these stops, the transport company can save millions by better utilisation of the existing infrastructure.  

A completely new challenge for transport companies is the integration of the electric vehicles that are becoming more popular worldwide as integral parts of climate protection programmes. As a pioneer and sole provider on the market, init is capable of offering a comprehensive system solution comprising all operational processes of the application of electric buses.  

Like in our other init solutions, artificial intelligence is put to use here as well. Software using artificial intelligence was developed at init for the first time 30 years ago. Currently, machine learning software is being tested at our customer in San Francisco. The results show a significant improvement in punctuality (forecast). Our investments in pioneering technologies are starting to bear fruit. Against this background, we are in a good position to reach our average annual growth rate of 15 per cent in revenues. Of course, we will have to wait and see how the corona crisis affects the public transport sector. We nevertheless believe in our original planning. For 2020, we are targeting revenues of around EUR 180m. The improvement of EBIT margin will continue, and operating earnings will increase to EUR 18-20m.  

We want to share this growth with you, our shareholders, via an appropriate dividend. We are sure that in view of the demand for our products created by megatrends such as digitisation, smart mobility and climate protection, the init share will remain a “clear buy”.  

Thank you for the trust you have placed in us!

Dr. Gottfried Greschner, CEO 

init innovation in traffc systems SE