init innovation in traffic systems SE
Digital transformation specialist init at the beginning of its next growth phase

• Incoming orders for the 2023 financial year at a new record of EUR 225m
• Revenue and earnings targets for 2023 financial year achieved
• Incoming orders already at the previous year’s level
• Managing Board forecasts double-digit growth in the current year

init innovation in traffic systems SE (ISIN DE 0005759807) is at the beginning of a growth phase. After winning two major projects (Atlanta and London) with a volume of over EUR 200m in the last two months alone, the global digitalisation specialist for buses and trains is expecting a new record level of incoming orders in 2024, the Managing Board announced today at its annual press conference and analysts’ meeting.

The latest international contract wins are particularly pleasing as they are projects that will last a number of years, with associated maintenance and service contracts terms of more than ten years. “This provides us with a solid foundation to continue growing our business,” states the Managing Board.

New records set

init managed to close the last 2023 financial year with a record order backlog of EUR 175m (previous year: EUR 164m), providing it with a good basis for the coming year. An important element in this success were follow-up orders from long-standing customers in Germany and the United States. In the 2023 financial year, the init group won new orders with a total volume of EUR 225m (previous year: EUR 214m), once again setting a new record.

This also applies to revenue, which grew by 10.2 per cent in 2023 to EUR 211m (2022: EUR 191m). This figure was in line with expectations, as was EBIT, which amounted to EUR 21m, matching the previous year’s figure, despite inflation-induced hikes in purchase costs and the additional sales expenses incurred to win new projects.

With development expenses of EUR 20m in 2023, init spent over 20 per cent more than the previous year (EUR 16m) on the basic development of new products (unrelated to customer orders) and refinement of existing products for the digital transformation of public transport.

The consolidated net income of EUR 15m is approximately 8 per cent below the previous year (EUR 16m). Given that EBIT remains more or less unchanged, the decline can be attributed to a higher net interest expense in the wake of rising interest rates.

Dividend expected to rise to 0.70 cents

“The business model of init innovation in traffic systems SE has proven to be very resilient over the course of 2023, a year that was plagued by external crises. The early change of course in our value chain and the discernible growth trends in the market for init solutions allowed us to largely achieve our growth targets,” summarises the Managing Board in its Annual Report.

This success should also benefit shareholders. The Managing Board will therefore propose an increase in the regular dividend to 0.70 cents per share (previous year: a regular dividend of 0.60 cents plus a special dividend of 0.10 cents) at the Annual General Meeting scheduled for 6 June 2024.

AI drives the digital transformation and stimulates the market for init solutions

According to the Managing Board, the market for init solutions, which comprise integrated intelligent mobility solutions for buses and trains, is undergoing a major global transformation and expanding into new territory. This is characterised by trends such as digital transformation, electromobility, mobility as a service, smart ticketing and the increasing use of artificial intelligence. The latter requires suitable tools in order to collect, prepare and analyse the volumes of data available (in real-time). init has been using AI to optimise planning and dispatching processes for transport fleets for many years now. Our experience in data management that we have gained in successful projects with over 1,100 transport operators provides init with a sustained competitive advantage. Whether historical or real-time traffic data, ticketing data, timetable information or fleet management, incredibly detailed data is available and, after consulting with customers, this is used in selected areas with init software solutions to train the algorithms used in day-to-day operations.

“To keep their systems functioning properly and to prepare for future challenges, the kinds of products and services that we develop, implement and operate are of vital importance for transport operators. In the context of global efforts to transform transport systems, we have already registered a rising number of tenders for international digital transformation projects,” reports the init Managing Board.

“Our digital solutions contribute to combating climate change. We support public transport operators with hardware and software to help them achieve their climate goals and climate neutrality. This is a topic that will determine global public transport planning for years to come. Investment programmes aimed at combating climate change, reducing greenhouse gases and delivering the transition to sustainable transport are high on the political agenda everywhere. They open up sustainable growth opportunities in our market for integrated planning, dispatching, telematics and ticketing solutions for buses and trains. Due to the very positive development of the market, init also participates in larger and ever more complex tenders. As a leading global provider, init can benefit from this in the long term,” adds the Managing Board in its report.

In its planning for the 2024 financial year, the init Managing Board therefore projects double-digit growth in revenue and earnings. “Based on the existing order backlog, we forecast revenue to grow to between EUR 240 and 260m. EBIT should then amount to between EUR 24m and EUR 28m. If the financing prospects for our customer base of transport operators remain positive – which is indicated by the increasing number of investment programmes – then it is possible that growth will accelerate in the coming years,” emphasised the Managing Board in its forecast.

The full 2023 annual report, the presentation used in today’s annual press conference and analysts’ meeting and our 2023 ESG (Environmental, Social and Governance) Report can be found on our website.