Init Innovation In Traffic : Outlook at the annual results press conference

init to focus on digitisation and mobile phone ticketing as growth drivers

- In the wake of acquisitions, revenues expected to increase to
around EUR 120 million in 2017 (2016: EUR 108.6 million)
- Higher expenses for research and development especially in
the areas of digitisation, electromobility and autonomous driving
- EBIT margin set to rise again sharply from 2018 after a decline in 2017
- Incoming orders of EUR 120 to 130 million targeted for 2017

Karlsruhe/Frankfurt, 29 March 2017. init innovation in traffic systems SE (ISIN DE 0005759807) is poised to benefit from new growth drivers in the market for planning, dispatching, telematics and ticketing solutions for buses and trains. Digitisation, electromobility, the networking of transport systems, the security of data communication and autonomous driving are creating new sales prospects for init products. In 2017, the Managing Board is therefore expecting revenues to increase to around EUR 120 million (2016: EUR 108.6 million) and incoming orders to total between EUR 120 million and EUR 130 million, as announced at today's annual results press conference in Frankfurt.

'Our customers, the transport providers, require assistance and solutions from us when it comes to digitisation, Big Data and Industry 4.0. For this reason, we are currently seeing a greater readiness on their part to look more closely at our products. In order to exploit these opportunities, we have stepped up our research and development activities and made acquisitions to strengthen our position in areas of future growth', explained init CEO Dr Gottfried Greschner as he summarised the company's strategic agenda for 2017 and 2018.

init is the leading provider of smart ticketing systems in Germany and the US
'We are currently involved in pioneering research projects concerned, among other things, with the interoperability of transport systems, cost-effective charging infrastructure for electromobility, the integration of autonomous driving buses and the security of control systems. By making acquisitions in the business of smart ticketing we became the leading provider in Germany and the United States in 2016 - in a business area with high growth rates. Furthermore, with our new subsidiary inola we successfully opened up a high-growth area of business in the optimisation of logistical processes, even beyond public transport. 2017 will therefore be a key year with numerous technological and economic challenges that present an extraordinary number of opportunities', Greschner said.

As a result of rising R&D expenses, a 35 per cent increase in the number of employees to more than 700, which was partially due to acquisitions, and the planned completion of lower-margin projects from recent years, operating earnings before interest and taxes (EBIT) in the init Group for the current year are expected to fall to between EUR 5 million and EUR 7 million (2016: EUR 11.6 million). However, this figure is anticipated to rise again sharply starting in 2018.

Stable growth path owing to global trends
On the heels of the second-largest amount of incoming orders in the company's history totalling EUR 128.7 million (2016, order backlog as at year-end: EUR 111.4 million), the init Managing Board expects a similar level to be achieved in 2017. In addition to positive factors such as strong growth in the area of mobile phone and smart ticketing, the trend towards the digitisation and networking of transport systems and additional potential from the acquisition of technical services (processing of payment transactions, service, maintenance) for transport providers, the Managing Board also sees increased global economic risks for 2017, in particular from the so far unpredictable policies of the new US government and its consequences for international companies such as init.

'Rarely since the company was founded in 1983 have political influences on the business of the init Group been as difficult to gauge as they are for 2017. On the other hand, the market for init systems is in a state of technological upheaval that will give rise to new customer needs and sustained additional growth potential. Furthermore, global growth trends for public transport remain intact. Forward-looking investments have allowed us to set a decisive course for the future. We therefore believe we are well prepared, even in a fiercely competitive environment, to maintain our position on a sustained basis as the world's leading provider of planning, dispatching, telematics and ticketing solutions for buses and trains and to continue to pursue a stable growth path', reported the Managing Board in his outlook.

In view of this, the Managing Board and the Supervisory Board propose to the Annual General Meeting, to be held on 24 May 2017, an increase of the dividend for financial year 2016 by 10 per cent to EUR 0.22/share. This is intended to send a signal with regard to the company's growth prospects while also strengthen the company's substance for necessary future investments.

The annual report of init innovation in traffic systems SE can be found online at www.initse.com.

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