Artificial intelligence and new technologies are driving the process of digital transformation. Courage and a pioneering spirit are needed if the associated opportunities are to be exploited. Business models and processes are undergoing a re-think. Creativity, ideas, openness and enthusiasm are becoming increasingly important success factors. The process of change must be proactively managed if we are not to be left behind by the digital transformation. We want to support our customers with an eye to the future. We regard ourselves as a one-stop IT service partner whose offerings include:
Our customers are always at the heart of all we do and we aspire to offer user-oriented solutions designed to make them even more successful.
Aareon once again successfully implemented its international growth strategy in fiscal 2019, posting another record result: the company’s EBIT (after strategic capital expenditures) was up 8.1 % at € 38.8 million (previous year: € 35.9 million). Operative EBIT– adjusted for non-recurring effects – increased by 10.6 % to € 41.6 million (previous year: € 37.6 million). We were also able to increase our consolidated revenues by 6.5 % to € 251.9 million (previous year: € 236.6 million).
Future success is dependent on current investment. Our research and development expenditure amounted to € 38.0 million in total (previous year: € 34.9 million), the vast majority of which was spent on the ongoing development of new functions and new digital solutions, the development of updates, and the maintenance and upkeep of existing functions. The Aareon Smart Platform was launched in Germany, France and the Netherlands in the fourth quarter of 2019. It enables customers to develop software solutions for apartment and property management and to integrate them into Aareon Smart World. Partners can also develop their own solutions and make them available in Aareon Smart World. Preparations for the 2020 market launch of our AI-based virtual assistant Neela got under way in 2019. The key success factors of research and development are innovative and user-centric cooperation with our customers and partners – for example through pilot projects, design thinking workshops and customer engagement programmes.
Aareon has been collaborating with the start-up scene for a number of years. In 2018, it established Ampolon Ventures (AV Management GmbH) with a view to testing its own business ideas in the market. An integral part of the Proptech scene, Ampolon Ventures aims to set up new ventures and to forge partnerships with ambitious company founders. 2019 saw the establishment of the first venture, OFI Group GmbH, Frankfurt am Main, which offers the digital office rental platform Ophigo. Aareon has a share in the PropTech Immomio (digital rental platform) in Germany and, as of 2019, in OSRE (digital platform for real estate transactions) in the Netherlands. It also has a stake as a strategic partner in blackprint Booster Fonds and blackprint Booster Fonds International, which support future-oriented start-ups in the real estate environment. In addition to the above initiatives, Aareon cooperates with a number of PropTech companies at international level.
Aareon invests in the ongoing technological development of its ERP software solutions. Future ERP product generations in all countries in which Aareon is active are to be rendered cloud-ready and compatible with new technologies. To this end, the company has been pressing ahead with developments such as Aareon QL.web in the UK, Incit Xpand Allweb in Sweden and Tobias 365 in the Netherlands, as well as providing regular new releases for existing product generations in all countries. Country-specific ERP systems form the core of Aareon Smart World, where they are linked to digital solutions. This enables our customers to establish their own digital ecosystem on the basis of their ERP system in accordance with the respective individual corporate strategy, while benefiting from a uniform database. In the second quarter, Aareon Nederland launched the new product generation Tobias 365 based on Microsoft® Dynamics® 365, while Wincasa, the leading integral provider of property services with 232,000 units, opted for RELion in Switzerland. The mse subsidiaries were renamed Aareon RELion in November. In Norway, Aareon won a major tender from housing company OBOS (around 233,000 units) with its ERP solution Incit Xpand. With 1,048 customers, Wodis Sigma has consolidated its standing as the industry benchmark in Germany. The volume of business from Wodis Sigma as well as SAP® solutions and Blue Eagle was up on the figures for the previous year.
Our customers are increasingly adding digital solutions to their own ecosystem on the basis of ERP solutions. This has led to another substantial increase in revenue from digital solutions, which was up 20 % on the previous year. There was particular demand in Germany for the Mareon Service Portal, Aareon Archiv kompakt, Aareon CRM (portal and app for tenants/owners) and Aareon Immoblue Pro (tenant acquisition solution). The ShareWorX® (case management) and Aareon CRM solutions proved particularly popular in the Netherlands. Around 50 new projects for digital solutions were signed off in France – the majority of them likewise based on Aareon CRM – and five French customers have already opted for the newly launched Aareon Smart Platform. The uportal, which provides self-service offerings for tenants, was in demand in Scandinavia. Aareon also provides a comprehensive portfolio of digital services for the utility sector on the German market, including the Aareon invoicing service, Mareon and Aareon Vacancy Management – a digital solution for energy suppliers, housing companies and providers of metering services that streamlines processes when residences change hands.
The successful international growth strategy also encompassed our ongoing internal optimisation, designed to boost organisational performance and profitability. Implementation of a new, Group-wide organisational structure featuring the three international divisions Market (consulting and sales), Operatives (ERP solutions and outsourcing business) and Digital Solutions and Ventures got under way at the start of April with a view to enhancing our market and customer orientation. By the end of the year, the target organisational structure had been implemented as envisaged in all country units. As part of the organisational adjustments and the planned development of further market potential in Austria and Switzerland, Aareon’s management in Germany also assumed responsibility for business in the Austrian and Swiss markets.
The focus of the work4future project in 2018 was on preparing for the introduction of a digital collaboration tool in the following year. The Aareon Group launch took place at the start of April, with the tool enjoying high levels of acceptance. It brings employees throughout the Aareon Group closer together by means of networking, transparency and dialogue. We reviewed the flexibility of our working-time models in 2018 in the light of our employees’ requirements and, in 2019, introduced a new company-wide agreement on off-site working options.
We intend to continue our international growth strategy. We will steadily expand our customer base in the ERP business and tap cross-selling potential for digital solutions. We will continue to market the newly launched Aareon Smart Platform and to integrate additional smart partners. We will also launch the first stage of our AI-based virtual assistant, Neela. Another focal point in the expansion of our portfolio of offerings will be the aspect of predictive maintenance, such as intelligent lift management. In addition, Ampolon Ventures will explore further venture opportunities and tap any potential that arises. We plan to supplement this organically generated growth inorganically through expansion of our M&A strategy. Our acquisition of the CalCon Group was effective as of 1 January 2020. The contract was signed in November 2019. We will press ahead with the project to integrate the CalCon Group’s solutions – epiqr for property condition assessment and the new AiBATROS® product generation – in Aareon Smart World.
New ideas result from openness and dialogue, and we appreciate being able to collaborate with our customers, business partners, employees and our shareholder, Aareal Bank, in thinking beyond perceived boundaries. This is the only way of identifying new opportunities and implementing them to the benefit of all those concerned. We thank all our stakeholders for this cooperation. We intend to continue this successful approach as an IT service partner of the housing sector and related industries in 2020.
Our outlook does not account for the potential impact that may result from the global outbreak of the coronavirus. Both society and the economy are facing new challenges in the wake of the coronavirus. Aareon takes its responsibility seriously and is therefore committed to making the best possible contribution to protecting customers, employees and their respective environments, all of which is aimed at preventing the further spread of this virus. Furthermore, our digital structures enable us to ensure operations will continue, by using digital and remote work arrangements. Due to the current situation in March 2020, our employees are working almost entirely from home. We are doing everything to ensure that we can continue to provide our customers with the service and quality that they come to expect from us.
Dr. Manfred Alflen
Dr. Imad Abdallah
Dr. André Rasquin
Christian M. Schmahl
Dr. Manfred Alflen
Chief Executive Officer, 4th from left
Dr. Imad Abdallah
Chief Digital and Ventures Officer, 1st from left
Chief Market Officer, 2nd from left
Dr. André Rasquin
Chief Operations Officer, 3rd from left
Christian M. Schmahl
Chief Financial Officer, 5th from left