init innovation in traffic systems SE

  • WKN: 575980
  • ISIN: DE0005759807
  • Land: Deutschland

Nachricht vom 25.03.2019 | 16:00

init innovation in traffic systems SE: In 2019, init expects a turnaround in earnings and a further increase in revenues

DGAP-News: init innovation in traffic systems SE / Key word(s): Annual Results/Dividend

25.03.2019 / 16:00
The issuer is solely responsible for the content of this announcement.

- Record incoming orders of EUR 161.8m in 2018 (previous year: EUR 139.4m)
- Target revenues for 2019 set at EUR 145m (2018: EUR 135.7m)
- Operating earnings should increase to EUR 7.5m in 2019 (2018: EUR 6.4m)
- Growth potential through innovative solutions for e-ticketing and electromobility

Despite heightened global economic risks, the Managing Board of init innovation in traffic systems SE (ISIN DE 0005759807) expects further, sustainable growth in revenues. For 2019, the worldwide leading provider of planning, dispatching, telematics and ticketing solutions for buses and trains is targeting an increase of over 6 per cent to EUR 145m (2018: EUR 135.7m). Following the record incoming orders of EUR 161.8m (previous year: EUR 139.4m) in the past financial year, the company has an order backlog (as of 31 December 2018) of EUR 142.6m (previous year: EUR 117.0m). "Our primary goal, however, is to achieve a turnaround in the development of operating earnings and to increase the profit in the current year again", announced the Managing Board today at the annual results press conference.

init benefits from e-mobility and e-ticketing

The Managing Board continues to see high growth potential in the interlinking of digitisation and mobility, which forms the core of init's business model. Investments in the expansion of public transport should increase in all countries. Governments have set goals worldwide for the use of zero emission vehicles and e-mobiles in public transport. However, this poses new challenges to transport companies in planning, operation and fleet management. From the basis of information for fundamental decisions via charging management and range forecast through to the conditioning of vehicles, init is the only provider to offer an integrated solution. "We are in an excellent position particularly in the growth areas e-mobility and e-ticketing", said the Managing Board.

Digitisation is changing people's mobility behaviour and the demands they place on transport companies. Particular importance will be attached to the simple and easy purchase of tickets by passengers (smart ticketing). "This requires an efficient background system that includes tariff management, revenue clearing, simple integration of third-party systems and various identification media as well as the setting up of a multimodal mobility platform. For this purpose, init offers a wide range of end devices, internet-based applications and apps, and as a leading technology leader, therefore benefits from the above-average growth in this market segment", forecasts the init Managing Board.

Record investments

The environment in which this is happening is changing at an ever increasing pace. In order to remain successful, this requires constant innovation and higher investments by technology leaders like init. "Our company accomplished this feat on its own in the previous financial year with investments of EUR 11.5m - excluding new developments paid by customers. The additional expenses this entailed affected our earnings, but they are expected to have a sustainable positive effect on growth."

The Managing Board is not satisfied with the operating earnings (EBIT) of EUR 6.4m (previous year: EUR 8.6m) achieved in 2018, which was below expectations, due among other things to the write-downs required on an investment in the US. The EBIT margin in the group thus dropped to 4.7 per cent (previous year: 6.6 per cent). The net profit decreased to EUR 2.4m (previous year: EUR 3.6m). Thus earnings per share for 2018 came to EUR 0.24 (previous year: EUR 0.37).

The Managing Board pursues a balanced dividend and growth strategy. As the business profit in the past financial year decreased, but the requirements with regard to forward-looking investments resulting from the fast technological transformation remain high, the Managing Board deems it necessary to adjust the dividend payment accordingly. A reduction in dividends to EUR 0.12 per share will be proposed to the Annual General Meeting on 15 May 2019.

By contrast, init achieved its budgetary target with record revenues of EUR 135.7m. A share of 70 per cent of total revenues was generated outside Germany (previous year: 72.6 per cent), with North America being the strongest market, where revenues increased to EUR 49.9m (previous year: EUR 46.5m). Revenues in Germany also increased significantly compared to the previous year to EUR 40.6m (previous year: EUR 35.8m).

Cash flows multiplied - upward trend

The Managing Board considers the business performance in 2018 as satisfactory overall. Along with record revenues, this assessment is primarily based on the large number of new orders received and the strong improvement in operating cash flows. At EUR 12.8m, operating cash flows increased manifold in comparison to the previous year (EUR 2.1m).

In addition to numerous new orders in a single-digit million range, particularly for ticketing solutions, the biggest project in the group's history was acquired. The Central Puget Sound Regional Transit Authority (Sound Transit), Seattle, US, awarded init a contract for the delivery and operation of a next generation ticketing system. This project contract comprises a volume of around USD 50m over four years. Additionally, a further eleven one-year options for the operation and maintenance were already ordered. Hence, the total contract value amounts to USD 90m, securing calculable and recurring revenues for init over multiple years.

Internationally, the market for init products is still characterised by a large number of new tenders. "Additionally, our long-term customer relationships secure a stable business base for init, as they normally lead to follow-up orders and maintenance and service contracts. We recorded incoming orders of more than EUR 50m in 2018 as a result of additional deliveries, maintenance contracts and order extensions alone", declared the init Managing Board. "The target range for incoming orders in 2019 is between EUR 150m and EUR 160m with a view to securing ongoing positive business performance."

The full annual report of init innovation in traffic systems SE is available in the internet under the section Investor Relations > Financial Reports.


Person making the notification:
Simone Fritz
Investor Relations

25.03.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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