2022 init growth targets still achievable

• Second quarter revenue up despite global materials shortage
• Incoming orders and order backlog significantly higher in the first half year
• Growth expected to accelerate in the mid term
• Investments in integrated system solutions increased significantly

According to preliminary figures for the first six months of 2022, init innovation in traffic systems SE (ISIN DE 0005759807) is well on its way to achieving the targets set for the full year. Although global disruptions to sourcing and supply chains also presented the digital transformation specialist for the bus and train sector with new challenges, slightly higher revenue was generated in the second quarter of 2022 than in the same period of the previous year (EUR 45.1m; Q2 2021: EUR 44.2m). Total revenue in the first half of 2022 therefore reached EUR 80.7m (H1 2021: EUR 84.7m) and was in line with planning. This also applies to earnings before interest and taxes (EBIT) which increased in the second quarter despite a rise in the cost of materials and personnel expenses. However, at EUR 2.9m, it was well down on the first half of 2021 (EUR 8.3m), as anticipated.

In light of growing risks, init Managing Board cautiously optimistic for the second half of the year

In its outlook for the second half of 2022, the Managing Board is cautiously optimistic in light of growing risks to the global economy. “We currently assume that our original planned forecast, which details revenue of between EUR 190 and 200m and EBIT of between EUR 15 and 20m, is still achievable. However, should the situation deteriorate due to the crisis and, in particular, the shortage of materials, our company will not be left completely unscathed”, states the init Managing Board.

In the first half of 2022 init was generally able to protect itself from this situation by pursuing an intelligent inventory policy and stocking up on materials well in advance. However, sharp cost increases could not be avoided. As an international player with operations on four continents and in various currency regimes, init was able to offset local supply bottlenecks more easily. “Thanks to our broad customer base of over 1,000 transport operators worldwide, we were able to cope with short-term volatility in regional markets and we were able to work on value-added contracts and projects which then positively impacted our earnings”, claims the Managing Board in its half-year statement. “The fact that we almost managed to reach our revenue and earnings targets in the reporting period despite all the supply related challenges and COVID related staff shortages and difficulties within the labour market is good reason for us to be satisfied”.

In terms of init’s business cycle, revenue and earnings will be stronger during the second half of the financial year. The Managing Board is very optimistic about the response to init’s innovations in the first half of the year. “This can be seen in the number of enquiries and requests to tender but also, more specifically, in the incoming orders”. As of 30 June 2022, incoming orders amounted to EUR 108.3m, which is well above the previous year’s figure (EUR 100.4m). Our order backlog increased to approximately EUR 170m (previous year: EUR 143m) and is at a very high level.

Market response to innovations gives cause for optimism

In the past few months, init has successfully installed an innovative contactless ticketing system in Nottingham, UK, signed a master agreement for a TaaS (ticketing as a service) solution for the entire US state of California, introduced the next generation of electronic fare collection for the wider Seattle region in Washington, US, and received the green light from the municipal transport operators of Rhein-Nahe GmbH, Bad Kreuznach, and Hameln-Pyrmont mbH (VHP), both in Germany, for an integrated solution for operations control and ticketing.

In the medium term, the Managing Board expects growth to accelerate. Globally, three-digit billions are currently available for the digital transformation of local transport and in particular, for the conversion of vehicle fleets to electromobility. “With our integrated software product suite eMOBILE, we can optimise all processes associated with electromobility for public transport operators. This is a key element of our nextGen innovation offensive with which our customers, public transport operators worldwide, can make a giant leap forward in terms of digital transformation”.

In addition, the Managing Board considers its chances in the latest bidding processes that init has participated in to be very promising. “We see substantial potential for further growth in the digital transformation of public transport infrastructure and the growing acceptance of integrated system solutions based on innovative technologies”, states the Managing Board in its outlook.

The half-year financial report will be available on the init website from 10 August 2022.

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