mVISEAG
WanheimerStr66|40472Düsseldorf,Germany
Tel.:+49211781780-0|Fax:+49211781780-78
GroupAnnualReport
2016
1
GroupannualreportofthemVISEfortheperiod1
Januaryto31December2016
Thegroupmanagementreportshouldbereadtogetherwiththeconsolidatedfinancialdata
andthedatapresentedintheAnnextotheconsolidatedfinancialstatement.Thefollowing
illustrationsarebasedonaseriesofdatawhichhavebeenpresentedindetailintheAnnex.
Inaddition, thegroupmanagement reportcontains statements focusedon the future, i.e.
statements, which are based on certain assumptions and corresponding current plans,
estimatesandforecasts.Forward-lookingstatementsarevalid,onlyforthetimeperiodwhen
they aremade. Themanagement ofmVISE AG undertakes no obligation to revise and/or
publish forward-looking statements underlying this document whenever there is new
information.Forward-lookingstatementsarealwayssubjecttorisksanduncertainties.The
ExecutiveBoardofmVISEAGpointsout thatavarietyof factorsmay lead toa significant
variation in achieving the target.Major factors aredescribed indetail in the section "Risk
report".
AconsolidatedfinancialstatementaccordingtoHGBwascreatedfirstvoluntarilyforthefiscal
year2016,thusnocomparativefiguresareavailableforthepreviousyear,becausenogroup
planninghadbeenundertakenfortheyear2016.
1.1 BasicsoftheGroup
1.1.1 Groupstructure
InadditiontotheparentcompanyinDüsseldorf,mVISEAG,JustIntelligenceGmbH,Hamburg
isincludedintheconsolidatedfinancialstatementasof01.10.2016:
Since2014,mVISEAGhassharesinJustIntelligenceGmbH,Hamburg.Thesharewasincreased
from33.4%to50.1%inSeptember2016.Thiswasfurtherincreasedto78%inJanuary2017.
Acontractualarrangementwasalsomadefortheremaining22%.Theeconomicconsolidation
ofthecompanieswasfromQ4/2016.
Just Intelligence GmbH was established in 2011 within the framework of an MBO
(ManagementBuyout)fromoneoftheleadingGermancustomerserviceproviders.Today,
thecompanystandsforintelligentdataanalysisandworkforcemanagementsolutions.With
the multi-award-winning software ICC, Just Intelligence offers one of the most powerful
systemsforplanningandmanagementofcontactcentres.
1.1.2 BusinesstransactionsofmVISEAG
mVISEAG,establishedinDüsseldorf,isaproviderofITservicesandproductsrelatedtomobile
businesssolutionsprimarilyinGermany.Thecompanywasfoundedintheyear2000andhas
decades of experience in the project and consulting environment. Since 2015, mVISE AG
positionsitselfasaclearlyfocusedsubject-matterexpertforITconsultingandITsolutionsand
ispartnerforitscustomersintheareaofmobiledigitisation.Buildingonitsownexpertisein
thefieldofmobiledatatransmission,mVISEAGconcentratesonthecoretopicsofmobility,
2
virtualisationandsecurity,andprovidesappropriateadvice,complexindividualsolutions(B2B
apps) aswell asCloud-based standardproducts for theareasofmobile sales support and
workforcemanagement.
Byspecialisinginthethreefieldsofmobility,virtualisation(cloudcomputing)andsecurity,all
questionsrelatingtothemobilisationofbusinessprocessescanbeansweredforthecustomer
fromasinglesource,startingwithanalysisofthecondition,theneedandthepotential,about
thechoiceandimplementationofaproperinfrastructure(forexample,clouddesign)andthe
developmentofaspecificsolution,includingaspectssuchasaccesscontrol,onlineidentity
managementanddataprotection.
1.1.2.1 Consulting
Centralcomponentofcompanystrategyistheconsultingarea,whichwaslaunchedin2015
with the formation of a specialised consultant team.As on 31.12.2016,mVISEAGhad 51
employees in the area of consulting, and now it has offices in Düsseldorf, Frankfurt and
Hamburg.Theaimistobeabletolocallyserveexistingcustomersintheregion.Well-known
companies, such as Vodafone Group, Telekom Commerzbank, Deutsche Bank, Sparkasse
organisationsoreventheMunicipalServicesinDüsseldorfandDuisburgarecustomers.
3
In addition to classical, personal orders,mVISE AG also increasingly concludes fixed-price
orders,knownas"managedservices".Thisapproachisestablishedinparticularinthefieldof
cloud-computingsolutions,andwillalsobeextended in thecontextofother innovative IT
infrastructurescenarios.BothmVISEaswellasthecustomerbenefit fromamoreefficient
implementation of the consulting contracts by using personnel synergies. In addition,
managed service contracts significantly enhance the achievement and maintenance of
customerloyaltyandincreasethefeasibilityofplanningsales.Inthereportingperiod,mVISE
AGhasalreadyachievedaboutaquarterofthetotaloperatingoutputbycarefulmanagement
ofsuchcontracts.
Furthermore, new workshop formats could be developed in the cloud and security
environment.Thesestandardisedconsultingproductsenableasimple,focusedresponsefrom
newandexistingcustomersandthusopenupadditionalsalespotentialandlong-termproject
scenarios.Inparticular,theresponseofnewcustomersshowedthattheworkshopformatcan
beusedasadooropenerforsubsequentcontracts,sothatprospectivecustomerswithlow
budgetorunclearimplementationstrategycaninitiallyconvincethemselvesofthequalityof
mVISEservices.Severalnewcustomerprojectscouldalreadybewoninthisway.
1.1.2.2 Products&Solutions
Based on the consulting, which often works as a door opener to the customers, mVISE
developedcustomisedsolutionsthatmobilisebusinessprocessesandproductsofcustomers.
Thereby,itfocusesonissuesinsalesandfieldservice.Untilnowtheintegrationofcustomers,
suppliers and partners was in focus, but this is shifting increasingly towards linking and
communicationofdevicesandproducts.Aparticularlysuccessfulexampleofsuchasolution
isthe"BoschToolboxapp",whichlinkswiththeBoschproductcatalogueandadealersearch
for numerous functions (measurement camera, construction documentation, shop report)
thatareusefulforworkmen.Theapp,whichfulfilsanimportantcustomerloyaltyfunctionfor
Bosch,hasreceivedseveralawards,includingtheGermanDesignAward2015,andhasalready
beendownloadedover3milliontimesfromAppStores.
Intermsofsolutions,mVISEbenefits fromawealthofexperiencefromavarietyofearlier
projects.Sonumerousappshavebeendevelopedinthepastforcustomers,suchasAustrian
Airlines, McDonalds, DEVK Insurance and Kaldewei. In recent years, the current strategy
focuses on complex solutions that map complete business processes and require deep
integration with the customers' core systems. Different from simple marketing apps, a
comprehensiveexpertiseisnecessaryforthis.TheresultisthatmVISEisincreasinglyseenby
industrialcustomersasapartnerandisintegratedatanearlystageinproductdevelopment,
inordertoprovidesolutionsforasafe,reliableandapp-basedSmartphoneconnectionwith
devicesandtools.
Based on the experiencewith the development of numerous customer-specific solutions,
mVISEhasdevelopedacatalogueapp,whichhasbeenplacedinthemarketunderthename
SalesWizardasaspecificsoftwareproduct.Thesoftwareensuresthatallsalesdocuments
andproductinformationareavailableinthelatestversion,andallowsmuchmoreeffective
presentations than would be possible with paper-based catalogues or brochures. In the
reportingperiod,theproducthasbeenfurtherdevelopedandthenewversionisintroduced
4
in the market under the name SaleSphere. In contrast to Sales Wizard, SaleSphere is
completely designed as a significantly standardised and scalable cloud product, and also
allowssimpleintegrationwiththecustomers'ITcoresystems(ERP,CRM,PIM).Thisisalsoa
crucialdifferencecomparedtomanycompetingproducts.Inaddition,ahighvaluehasbeen
placedondataprotection.WithSaleSphere,mVISEAGpursuesapuresoftware-as-a-service
model(SaaS).Apartfromasmallinstallationandintegrationfee,onlymonthlyfeesapplyto
thecustomers,dependingonthenumberofconnectedusers.
MVISEispursuingasimilarstrategywiththesecondproductICC,acloud-basedsoftwarefor
planningandcontroloftheuseofemployeesincallcentres.ICChasbeendevelopedbyJust
IntelligenceGmbH inHamburg, inwhichmVISE isamajority shareholder sinceSeptember
2016.
1.1.3 BusinesstransactionsJustIntelligenceGmbH
Just Intelligence GmbH was established in 2011 within the framework of an MBO
(ManagementBuyout)fromoneoftheleadingGermancustomerserviceproviders.Today,
thecompanystandsforintelligentdataanalysisandworkforcemanagementsolutions.With
the multi-award-winning software ICC, Just Intelligence offers one of the most powerful
systemsforplanningandmanagementofcontactcentres.
1.1.4 Controlsystem
ThemanagementoftheparentcompanymanagestheinterestsoftheGroupduringregular
managementmeetingsofthecompanyaswellasthroughinformalcoordinationbetweenthe
SupervisoryBoardandtheExecutiveBoardandwithinthecommittees.Inaddition,topicsare
regularly discussed in frequent management meetings with the participation of
representativesfromallareasoftheGroup.TheExecutiveBoardcontrolstheGroupwiththe
helpofamanagementinformationsystemwithanintegratedperformanceanalysis,including
a detailed current projection of the funds required and their use. The Executive Board
essentiallycontrolstheGroupanditsdevelopmentthroughthefollowingfinancialandnon-
financialperformanceindicators.Inthiscontext,asustainabledevelopmentoftheGroupis
ofgreatvalue.TheaccuratepresentationoftheGroup'searnings,assetsandfinancialposition
islistedunderpoint3.2.4.
1.1.4.1 Financialperformanceindicators
Sales/totaloperatingperformance
ByfocusingofmVISEonscalableproductsandtechnologies,thesalestrendplaysanimportant
roleincorporatemanagement.Thereorganisationthattookplaceandtheexpansionofsales
team takes this into account. The personnel and strategic development and expansion of
differentdistributionchannelsformedthebasisforfuturesalesgrowth.Therefore,theoverall
goalofmVISEAGisinthedifferentiationandbalancingofanoptimalsalesmixofconsulting,
5
solutions and products. In the latter two areas, the (further) development of innovative
products and solutions is an important part of the business ofmVISE. The corresponding
developmental activities are regularly initiated in-house, so that the total operating
performancealsoplaysanimportantroleforthecorporatemanagementinadditiontothe
sales.
EBITDAmargin
mVISEattachesgreat importancetothesuccessfulmonetisationof itsproductandservice
portfolios. The aim is to achieve a profitable growth. Against this background, EBITDA
representsan importantrole incorporatemanagement.TheEBITDAmargin isdetermined
fromoperatingprofitbeforedepreciations,interestsandtaxesdividedbysalesrevenues/total
operatingperformance.
Operativecashflow
Theoperativebusinesstransactionsoftheareasandtheresultinginflowoffundsrepresent
themain source of liquidity. Accordingly, the operative cash flow is an important control
parameterformVISE.Basisoftheoperativeplanningisthelonger-termliquidityforecast,for
which short and medium-term forecasts are updated every month. mVISE includes all
consolidatedsubsidiariesinthisplanning.
1.1.4.2 Non-financialperformanceindicators
Orderreceipt
AkeycontrolparameterformVISEistheorderreceipt.Insales,fixedtargetsarespecified,
which are subject to regular controlling, on the basis of which the appropriate sales and
marketingmeasuresarederived.ThevolumeofordersonhandisusedbytheExecutiveBoard
asanindicatoroffuturebusinessdevelopment.
Innovationmanagement
Digitisation is forcing companies to reviewanddevelop theirbusinessmodels in anopen,
flexibleandinnovativemanner.AsproviderofITservicesandmobilebusinesssolutionsinthis
environment,theadvancedtechnologicalandprofessionaldevelopmentofthecompanyand
itsproducts isessential forthebusinesssuccessofmVISEAG.SomVISEcurrentlypursues,
amongotherthings,aseriesofextremelyinnovativeprojectsintheenvironmentofInternet
of things (IoT).Another important stepwas the recentdevelopmentof the SaaS software
"SaleSphere",whichprovidesamobilesalessupportbasedonthelatestcloudandsecurity
technologies,andgettingtheEnterpriseMobilityAwardisaconfirmationoftheinnovative
abilityofmVISEAG.Alreadyin2015,themVISEsolution"BoschToolbox"hasexcelledwith
the German Design Award. In 2016, mVISE could get the second place in the Enterprise
MobilityAward.ThisshowsthatmVISEverywellconnectstechnicalcomplexitywithappealing
design.
Qualifiedemployees
6
Core of the business success ofmVISE AG is the high level of expertise of its employees.
QualifiedandmotivatedemployeesarecriticalsuccessfactorsformVISE,inparticularbecause
oftheincreasingcompetitionforITprofessionals.TheExecutiveBoardconsidersensuringa
qualified personnel placement as its essential task. So mVISE AG has invested heavily in
recruitingactivitiesinthepastyear.Amongotherthings,afreelancereventwasconducted
forthefirsttimeinendJunewithaverypositivefeedbackfromparticipantsandcustomers.
Inthecurrentfiscalyear,mVISEhasalreadysucceededagaininattractingnewemployeesin
theareasofsalesanddistributionanddevelopment,andmVISEwillcontinuetoexpandthe
recruitingactivitiesinthefuture.Atargetedtrainingisconducted,inordertobeabletomeet
thepresent-dayrequirementsaswellas the futureones.Thehighqualityofproductsand
solutionsaswellasproficientadvice fromcustomers isanessentialpartof thecompany's
success.Specificmotivationandimprovementprogrammes,togetherwiththepossibilityof
activeparticipationofthecompany,complementtheoverallsystem.
1.1.5 Researchanddevelopment
Theadvancedtechnologicalandprofessionaldevelopmentofthecompanyanditsemployees
isessentialforthebusinesssuccessofmVISEAG.
Thereforein2016,substantialeffortsweretakentofurtherdeveloptheproductSaleSphere,
inordertomakeitmarket-readyin2016.Companiesthatovercomechallengesofdigitisation
throughdigitalprogrammesandmaintain,orevenexpand,theirsalesorganisationsprofitably
in this situation, double their revenueand their productivity on an average. SaleSphere is
orientedtowardsdigitisationofthesalescycle,inordertooptimiseitinasustainablemanner
andtostrengthenthevalue-addedchaininsales.ThesolutionofmVISEprovidesthesupport
neededindiversifiedmarketsfortheintegrationofcomplexandextensiveproductcatalogues
onmanagedsalessituations,ordermanagementandstructuredpreparationandfollowupof
deadlinesuntiltheintegrationinenterpriseplanningsystems.
Further,theshareinJustIntelligenceGmbHwasincreasedto50.1%.WithitsapplicationICC,
JustIntelligencehasafrontrunnerapplicationtocontrolthemanpowerplanningandcontrol
ofcallcentres.
Inthereportingyear, thedevelopmentalefforts focused inparticularonvirtualisationand
provision of cloud-capability to the products, as well as the development of additional
functions.
1.2 Economicreport
1.2.1 Overalleconomicdevelopments
Despitepoliticaluncertaintyandhigherinflation,theworldwideeconomicdevelopmenthas
improved during the reporting period. While the Euro area and Japan are already in a
moderateupswingforsometimenow,theeconomicrecoveryhasgatheredmomentumsince
thesummerof2016evenintheU.S.andthedevelopingcountries.Withsignificantincrease
in rawmaterial prices, the determining factors for the rawmaterial-exporting developing
7
countrieshasimproved,andthegovernmenthasadoptedstimulatingmeasuresinChina.The
imageofasignificantupswingintheworldeconomyisalsoconsistentwiththefactthatthe
worldtradestronglyralliedattheendoftheyear,afterithadmoreorlessstagnatedthrough
muchoftheyear.
Even the German economy,which, according to the spring report of the leading German
economicresearchinstitutesimprovedby1.9percentin2016comparedtothepreviousyear,
benefitedfromtheincreasingdynamismoftheworldeconomy.Especiallyinthesecondhalf
of the year the economy developed positively, driven by declining unemployment, low
interestratesandalowexternalvalueoftheEuro.ThustheGermaneconomyisnowinthe
fifthyearofamoderateupswing,although thedynamismof theeconomyremains lowas
comparedtopreviousupswingphases.Thisissupportedbythefactthatthebuoyancyforces
come far more from consumer spending than from investments and foreign trade. In
particular,thecompanyinvestmentscontinuedtoimproveinarestrainedmanner.However,
surveys of companies regarding capacity utilisation suggest that the overall economic
productioncapacitieshavenowslightlyexceededthenormalload.
Accordingtothespringreport,theGermaneconomyshouldhaveagaingainedmomentumin
thefirstquarterof2017.OnanaverageinJanuaryandFebruary,theindustrialproduction
wassignificantlyabovethelevelofthelastquarterof2016,thesituationisassessedtobeno
longerasgoodasforthelastsixyearsaccordingtotheifoeconomictestinMarch,andthe
business expectationshave againbrightenedup.All in all, in their community reports the
leadingGermaneconomicresearchinstitutesassumeafurtherincreaseinthegrossdomestic
productby1.5percent in theyear2017. Thus the institutes raise their assessmentof the
previous autumn slightly. That the forecast is lower than the last year's increase is solely
becausetheavailableworkingdaysarelessbythreeinthecurrentyear.Inparticular,exports
willgainmomentumdueto the improvedglobaleconomicenvironmentandtheexpected
depreciation of Euro. Even the investment activity should contribute more to increased
production.
Intheforecastperiod,theeconomicdevelopmentisexpectedtobeaccompaniedbyastrong
employment dynamics. At the same time, the domestic price rise should intensify. Risks
emanatemainlyfromtheuncertainUSeconomicpolicy.Ifthisshouldleadtoanisolationist
policy,thenthiswouldseverelydisrupttheglobaleconomicdevelopmentintheshortterm.
ThiswouldparticularlyaffectGermany.Disadvantageously,ariseininterestratesassociated
withtheexpectednormalisationofthemonetarypolicycouldalsohaveanaffect.Thiswould
pose significant problems, particularly to indebted nations of the Euro area, with
correspondingreactionontheGermaneconomy.Also,thecontinuingstructuralchangesin
Chinacouldalsofurtherleadtodownturnoftheworldeconomy.
1.2.2 Marketandmarketenvironment
The industrial development in the IT sector is analysed and evaluated by the Federal
AssociationforInformationTechnology,Telecommunicationsandnewmediae.v.(Bitcom).In
its autumn press conference in October 2016, the Digital Association expected a market
growthofinformationtechnologyby3.6percentto84billioneuros.AccordingtoBitkom,the
main growth drivers are the businesses of software providers, for whom the Association
8
forecastsanincreaseof6.2percentto21.6billioneuros.IThardwareisexpectedtogrowby
2.8percent to24.3billioneurosand thesalesof IT serviceshavesupposedly recordedan
increaseof2.7percentto38.2billioneurosin2016.
Themedium-sizedITfirmsremaincrucialforgrowth.AccordingtotherecentreportofBitcom
onmedium-sized IT firms, themedium-sized IT firmswere able to increase their sales in
Germanyby8percentto62billioneuroswithinayear.Thustheassessmentissignificantly
morepositivethanforthelargefirmswith500ormoreemployees,whichrecordedminus
twopercent.Accordingtothereport,themedium-sizedfirmsaccountfor33percentofsales
and54percentofemployeeswhoaresubjecttosocialinsurancecontributionregulationin
thedigitaleconomy.Alsoforthewholeyear2017,theconfidenceintheITindustryishigh,as
shownbythecurrentBitcomeconomicsurvey.Soeightoutoftenfirmsinthefieldofsoftware
(85percent)andITservices(83percent)countongrowingsales,whileonly5and9percent,
respectively,assumeadecline.ManufacturersofIThardwareexpectasalesincreaseoftwo-
thirds(65percent),whileeverysixthfirm(17percent)anticipatesadecrease.
Inparticular,thedigitisationoftheeconomyoffersgreatopportunitiesandprovidesmany
excitingtransformationprojectsinthemedium-sizedITfirms,whichcanexhibitherenotonly
its suitable expertise, but also its closeness to customer and marketability. The biggest
challenges lie in the integration of mobility in the company processes, as well as the
productionofITsecuritywhileapplyingmobility.Accordingly,thebudgetsprovidedforthe
integration of mobility in the company processes also increase. This emerges from the
EnterpriseMobilityStudy2015,whichalsomentions Industrie4.0,virtualisationandcloud
computingas themost important technology trends in thenext fiveyears.According toa
studybyCrispResearch,thecloudmarketalonewillincreasetoavolumeof13.4billioneuros
by2018.Theappsformobiledevicesareutilisedespeciallyintheareasofcollaborationand
customercommunication,andarethereforeusedinparticularbythedepartmentsofsales,
customerserviceandserviceprovision.SoaccordingtoastudybyBurdaCreativeonsales
communication of the future, two-thirds of the respondents foresee a large to very large
demandforthedigitisationofsalescommunication.Here,abetterorientationtotheneeds
ofthetargetgroupandagreaterconsolidationofthefloodof informationaredemanded.
Becauseeveninareas,wherethepenetrationofmobiledevicesishigh,onlyafewusersfully
exploittheexistingopportunities.
Overall, a slight growth in the digital investment could be observed in 2016 in Germany.
Therefore,thedigitaltransformationisstillalongwayinarrivinginanycompany.According
toBitcom'sCEOBernhardRohleder,approximatelyonlyhalfofthecompanieshaveadopted
acleardigitalstrategy.Also, inparticular,mostofthemedium-sizedcompaniestrytodeal
withdigitisationontheirown.Only18percentofcompanieswith20to499employeeshave
alreadytakenconsultingservicesforthedigitaltransformationoftheirownbusiness,while
just6percentareplanningthatforthefuture.Thisistheresultofarepresentativecompany
surveyonbehalfoftheDigitalAssociationBitcom.Inthecaseoflargercompanieswith500or
moreemployees,onlyabouthalfofthecompanies(49%)involveexternalconsultantsand22
percentofthosesurveyedhaveconcreteplanstodoso.Altogether,consequentlythereisstill
agreatneedformVISEAGtocatchupwithcorrespondingmarketopportunitiesintermsof
digitisation.
Thispleasantdevelopmentneverthelesshasadarkside,i.e.,thecontinuingshortageofwell-
qualified employees. Two-thirds of the companies belonging to the Bitcom industry (65
9
percent) expect their development to be hindered by the situation involving qualified
manpower.AccordingtoaBitcomstudy,currentlymorethan50,000ITjobscannotbefilled.
Otheradverseinfluencingfactorstobeconsideredarecrucialpoliticalsituations(33percent)
andthefundingconditions(11percent).
1.2.3 Significanteventsduringthereportingperiod
Successfullaunchoftheproduct"SaleSphere"
SaleSpherewas first introduced to awider public in June 2016 in the SalesManagement
CongressinBerlinandpresentedtoshareholdersintheannualgeneralmeetinginJune.The
multimediaproductcatalogueisafurtherdevelopmentoftheexistingsolutionSalesWizard.
Itservesasdigitaltoolboxforsales,inordertospeeduptowardstheendandtosupporta
sustainablepositivecustomerloyalty.ThusSaleSphereisanexpressionofthestrategicfurther
developmentofmVISEAGtothesolutionpartnerformobiledigitisation.Thiswasconfirmed
in October 2016 by SaleSphere getting the Enterprise Mobility Award. The mobile sales
applicationwonthesecondplaceinthecategory"BusinessProcessMobilisation".
MajorityshareholdinginJustIntelligenceGmbH
InSeptember2016,mVISEAGincreaseditsshareholdinginJustIntelligenceGmbH,Hamburg
fromtheearlier33.4%to50.1%.Theincreasewasmadethroughcashamountingto180,000
EUR from the authorised capital ofmVISE AG. The shareholdingwas further increased in
January2017to78%byissuing210,000sharesinthecontextofanincreaseinfixedassets
from approved capital of mVISE AG. A contractual arrangement was also made for the
remaining22%.Thecashcomponentwasprovidedfromitsownliquidassets,whichshows
theincreasedfinancialstrengthofmVISE.Theconsolidationofthecompanieswasdonefrom
Q4/2016.
Just Intelligence GmbH was established in 2011 within the framework of an MBO
(ManagementBuyout)fromoneoftheleadingGermancustomerserviceproviders.Today,
thecompanystandsforintelligentdataanalysisandworkforcemanagementsolutions.Just
Intelligence'sclienteleincludesleadingmediahouses,tourismcompanies,customerservice
andeCommerceserviceproviders.Thesecustomerscanbeaddressedinthefutureevenwith
mVISE products and services.More synergy effects result from the joint development of
cloud-based SaaS models. Thus, for example, in the reporting period, a corresponding
extensionofthemultipleaward-winningsoftwareICCwasmadeforplanningandcontrolling
ofcontactcentres.Here,inthefuturesynergiescanbefurtherenhancedthroughtheexisting
marketing and sales capacities of mVISE. Also about eight software developers of Just
Intelligencewillbeutilisedinthefuturetooptimisetheresourcesevenincasesofprojects
andproductdevelopmentofmVISE.
Capitalincrease
To finance furtherorganicgrowthand to strengthen theequitybase, theExecutiveBoard
decidedon11March2016,withtheconsentoftheSupervisoryBoard,toincreasetheshare
capitalofthecompanybyissuingnewshares.Withintheframeworkofprivateplacement,
10
250,000 shares from the authorised capital, excluding subscription rights of shareholders,
wereissuedtoaninstitutionalinvestor.Theshareswereallocatedatanissuepriceof1.52
EURpershare.Aftertheregistrationofthecapital increaseinthetraderegister,theshare
capitalofthecompanyincreasedfromEUR7,914,052.00toEUR8,164,052.00.
1.2.4 Earnings,assetsandfinancialposition
3.2.4.1 Overallpresentation
Sincetheconsolidatedfinancialstatementwaspreparedforthefirsttimevoluntarilyupto
31.12.2016,therearenocomparativefiguresforthepreviousyear.Theindicatedprevious
yearfiguresrelatetotheindividualfinancialstatementsofmVISEAGforfiscalyear2015.
Inthepastyear2016,themVISEgroupcouldincreaseitssalesrevenuetoEUR7.9millionand
achieveatotaloperatingperformanceofaroundEUR9.0million.Inthiscase,salesgrowthis
primarilyduetothe furtherexpansionof theconsultingarea.Thepositivedevelopment is
reflectedintheamountofearning.Allearninglevelsareclearlyinthepositiverange.EBITDA
wasEUR1.2million,andtheEBITDAmarginwas14.8%.ThebottomlineisaGroup'snetprofit
ofEUR0.6million
EventheimprovedoperativecashflowtotheextentofEUR1.1millionshouldbecertainly
highlighted.Inall,despiteinvestmentstotheextentofEUR1.77million,apositivetotalcash
flowwas achieved.With an equity ratio of EUR 48% and free of long-term liabilities, the
balance sheet structure ofmVISE AG is still robust and offers sufficient scope for further
organicandinorganicgrowth.
1.2.4.2 Resultsofoperations
Orderhistory
Thereorganisationandexpansionofsalesteamisalreadyshowing initialsuccess.Thefirst
salescampaignforSaleSpherewassetupin2016,whichshowsthatthereisagreatneedfor
mobilesalesapplicationswithsimpleintegrationintocoresystemsofcompanies.Anagency
wasalsocommissionedtosupportsales.Theambitioustargetforthefiscalyear2016toreach
anorderreceiptofEUR6.0million in theareaofconsultinghadclearlyexceededEUR7.4
million as on 31.12.2016,with the result thatmVISE AG has started the new yearwith a
comfortableordersituation.
Salestrend
In theyear2016, theGroupsalesamounted toEUR7.89million (2015:EUR4.94million),
wheresalesamountingtoEUR6millionintheareaofconsulting(2015:EUR4million)and
salesamountingtoEUR3.1million(2015:EUR1.6million)intheareaofproducts&solutions
could be achieved. Consideration of the change involving stocks amounting to EUR -0.16
million, and consideration of the areas of sales/management/consolidation aswell as the
11
own-work capitalisedamounting to EUR1.26million, showa total operatingperformance
amountingtoEUR9.00million(2015:EUR5.86million)fortheyear2016couldbeachieved.
Trendofexpenses
Inthepastfiscalyear,thepurchasedexternalservicesamountingtoEUR1.89million(2015:
EUR1.02million)couldbeachieved.ThepersonnelcostsamountedtoEUR4.69million(2015:
EUR4.17million),withashareofpersonnelcostsamountingto57.9%(2015:84.3%).Other
operating expenses totalled EUR 1.45million (2015: EUR 1.56million), primarily including
expenditureintermsofoccupancycosts,vehiclecosts,advertisingandcapitalmarketcosts,
aswellasthefeesforauditingandlegaladvice.Inthefiscalyear2016,thedepreciationsof
tangibleandintangibleassetsamountingtoEUR0.70million(2015:EUR0.43million)could
beachieved.
Researchanddevelopment
Duringthereportingperiod,theresearchanddevelopmentexpensesamountingtoEUR0.1
million(2015:EUR0.0million)couldbeachieved.Thedevelopmentalactivitiesmainlyfocused
on innovative activities within the framework of a sponsored prototyping for automated
driving.
Trendofearnings
Ultimately,theshareofservicesprovidedwithownemployees,togetherwiththeiraverage
utilisation, could be significantly increased.Material usage sharewith respect to the total
operatingperformancewasthussignificantlyreducedwithcorrespondinglypositiveeffecton
theEBITDAmargin.
Inthereportingperiod,EBITDA(earningsbeforeinterest,taxesanddepreciations)amounting
toEUR1.2million(2015:EUR-0.76million)couldbeachieved.Asaresult,theEBITDAmargin
amounted to 14.8%. In the fiscal year 2016, the EBIT (earnings before interest and taxes)
amountedtoEUR0.47million(2015:EUR-1.19million),withanEBITmarginamountingto
5.9%.
Duringthereportingperiod,thefinancialresultwasEUR-0.05million(2015:EUR-0.19million)
andtheGroupresultbeforetaxwasEUR0.64million(2015:EUR-1.37million).Consideringa
taxexpenditureofEUR0.01million,thereisasignificantlypositivenetprofitfortheGroup
amountingtoEUR0.63million(2015:EUR-0.40million).
1.2.4.3 Netassetsituation
Short-termassets
On31December2016,theshort-termassetsamountedtoEUR1.72million,wherethestocks
(unfinishedservices)amountedtoEUR0.11million(31December2015:EUR0.27million),the
receivablesfromgoodsandservicesamountedtoEUR1.15million(31December2015:EUR
0.73million),othershort-termassetsamountedtoEUR0.18million(31December2015:EUR
0.15million)andthestockofcurrencyandcurrencyequivalentsamountedtoEUR0.27million
(31December2015:EUR0.07million).
12
Long-termassets
Long-termassets on thebalance sheet date amounted to EUR3.06million (31December
2015:EUR1.52million),ofwhichEUR0.08millionaccountedfortangiblefixedassets(2015:
EUR0.05million),EUR2.97millionaccountedforintangibleassets(2015:EUR1.00million)
andEUR0.01accountedforfinancialinvestments(2015:EUR0.46million).
Short-termborrowedcapital
On31December2016,theshort-termborrowedcapitalamountingtoEUR3.51million(31
December 2015: EUR 1.30 million) could be achieved.While the payables for goods and
services amounted to EUR 0.66 million (31 December 2015: EUR 0.60 million), the total
payablestocreditinstitutionsamountedtoEUR0.43million(31December2015:EUR0.00
million),thedownpaymentsreceivedamountedtoEUR0.02million(31December2015:EUR
0.16million)andotherpayablesamountedtoEUR1.01million(31December2015:EUR0.54
million).TheprovisionsonthebalancesheetdateamountedtoEUR1.4million(31December
2015:EUR0.62million).
Equitycapital
On31December2016,theequitycapitalofthemVISEGroupamountedtoEUR3.26million
(31December2015:EUR2.27million).WhilethesharecapitalamountedtoEUR8.16million
(31December2015:EUR7.91million),thecapitalreserveamountedtoEUR13.78million,the
carriedforwardlossamountedtoEUR-19.3million(31December2015:EUR-18.90million)
andtheannualnetprofit(afterminorityinterests)amountedtoEUR426million(31December
2015:EUR-0.40million).
1.2.4.4 Financialposition,fundsflowstatementandliquidity
Fundsflowstatementandliquidity
Inthepastfiscalyear,thenetcashflowfromoperatingactivitiesamountedtoEUR1.14million
(2015:EUR0.33million).Theoperativecashflowincludes,amongothers,theoperatingprofit,
aswellasthechangesinoperatingshort-termworkingcapitalandthusprovidesinformation
on theprofitabilityof thebusinessoperations. Improvementcanbeseenespecially in the
positiveannualnetprofitanditshowsamarkedpositivedevelopmentandtheprofitabilityof
mVISEfrombusinessoperations.
ThenetcashoutflowfrominvestmentactivitiesamountedtoEUR1.77millioninthereporting
period(2015:EUR1.06million).Thecashflowfrominvestingactivitiesincludesallcashflows
frominvestmentsanddisinvestments.Suchinvestmentsintangiblefixedassetsamountedto
EUR0.05million(2015:EUR0.03Mio.),theinvestmentsinintangibleassetsamountedtoEUR
1.27million(2015:EUR0.73million).Further,investmentwasdonebywaysofincreasingthe
shareholdinginJustIntelligence.
ThenetcashflowfromfinancingactivitiesamountedtoEUR0.82million inthefiscalyear
2016(2015:EUR2.12million).Thepositivebalanceresultedinreceiptsfromraisingloans,as
wellasfromthecapitalincreaseundertaken.
13
Thus,therewasapositivetotalcashflowofEUR0.18millionforthefiscalyear2016(2015:
EUR0.0million).Currencyandcurrencyequivalentson31December2016amountedtoEUR
0.27million(31December2015:EUR0.07million).
Investments
Inthepastfiscalyear,investmentsmadeweretothetuneofEUR1.77million(2015:EUR1.06
million).OfthatEUR0.05million(2015:EUR0.03million)wasintheformoftangiblefixed
assetsandEUR1,2.7million(2015:EUR0.73Mio.)wasintheformofintangibleassets.For
themostpart,investedfundswereusedforfurtherdevelopmentoftheproductsSaleSphere
andICC,aswellasfortheacquisitionofsharesinJustIntelligence.
Forthefiscalyear2017,furtherinvestmentstothetuneofaroundEUR1.5millionin
tangiblefixedassetsandintangibleassetshavebeenplanned.Intheseinvestments,the
majoritemsrelatetofurtherdevelopmentoftheproductsofSaleSphereandICC,aswellas
investmentinacquisitions.
Employee(s)
Qualifiedandmotivatedemployeesareanessential asset formVISE.During the reporting
period, the number of employees increased from 64 on 31 December 2015 to 81 on 31
December2016.Thissignificantincreasehasseveralreasons:Oneofthereasonsisthatmany
newpersonswere recruited in thegrowing consultingbusiness andanother reason is the
majority shareholding of Just Intelligence GmbH. On an average, 70 employees had been
employedintheGroupinthefiscalyear2016(2015:60).
Ordersituation
ThetotalvalueofordersofmVISEAGattheendofthefiscalyear2016wasEUR3.4million,
whichwaswellabovethepreviousyear'slevel(31December2015:EUR1.4million).Ofwhich
85%(2015:92%)wasintheareaofconsulting,whiletheremaining15%wasintheareaof
products&solutions(2015:8%).Inall,theExecutiveBoardforeseesagrowingordervolume
inboththeareasinthecurrentfiscalyear.
Financialmanagement
mVISEAG'sfinancialmanagementiscommittedtothecoreobjectiveofhavingatalltimes
sufficient liquidity reserves,minimizing financial risks and safeguarding financial flexibility.
Basis for safeguarding liquidity is an integrated financial and liquidity planning. Basically,
mVISE AG involves all consolidated subsidiaries in this planning. Basis of the operative
planningisthelonger-termliquidityforecast,inwhichshort-termandmedium-termforecasts
are updatedmonthly. The operative business transactions of the areas and the resulting
inflowoffundsrepresentthemainsourceofliquidity.Tosafeguardliquidity,themVISEGroup
additionally uses various internal and external financial instruments. So, in the fiscal year
2016,amongotherthings,operatingfundcreditagreementamountingtoEUR500,000was
concludedwiththeDeutscheBank.Alsothecashcapitalwassuccessfullyincreased,inorder
tofinancefurtherorganicgrowthandtostrengthentheequitybase.Withtheavailablecapital
structureandthefinancingmeasurestaken,mVISEAGhascreatedtheessentialatmosphere
forthefuturefinancingaccordingtotheExecutiveBoard.
14
1.2.5 RemunerationSystemsoftheManagement
3.2.5.1 RemunerationoftheExecutiveBoard
On31.12.2016,theExecutiveBoardofmVISEhadthefollowingmembers:
ManfredGötz,Dipl.inComputerScience,Ratingen,BoardMember
RainerBastian,Dipl.inPedagogy,Düsseldorf,BoardMember
Please refer to the specific details given in Annex for the individual remuneration of the
ExecutiveBoardmembers.
1.2.5.2 RemunerationoftheSupervisoryBoard
On31.12.2016,theSupervisoryBoardhadthefollowingpersons:
AchimPlate,Dipl.ing.,Glückstadt,ChairmanoftheSupervisoryBoard,ManagingDirectorof
SPSWCapitalGmbH,Hamburg
FranziskaOelte,Lawyer,Hamburg,DeputyChairmanoftheSupervisoryBoard,Chairmanof
theSupervisoryBoardofhello.deAG,Berlin
Malte-MatthiasvonderRopp,Dipl.inBusiness,Cologne,MemberoftheSupervisoryBoard,
MemberoftheAdvisoryCommitteeofclickworkerGmbH,Essen
HenningSoltau,Hamburg,ManagingDirectorofSPSWCapitalGmbH,alternatememberof
theSupervisoryBoard(since27.08.2015)
Mr. Plate and Mr. Soltau are not members of other statutory supervisory boards or
comparabledomesticandforeigncontrollingbodiesofbusinessenterprises.
The total remuneration of the Supervisory Board in the reporting year, excluding the
reimbursementofexpenses,amountedtoEURO25,000(previousyearEUR20,400).Please
refertothespecificdetailsgiveninAnnexfortheindividualremunerationoftheSupervisory
Boardmembersduringthereportingperiod.
1.2.6 Otherinformation
Compositionofsubscribedcapital
ThesharecapitalofmVISEAGamountstoEUR8,374,052.00andisdividedinto8,374,052,000
no-parvalueshares,whicharebearersharesandhaveaproportionalamountofEUR1.00per
shareofthesharecapital.Allshareshavethesamevotingrightsanddividendrights.Shares
heldbythecompany,fromwhichthecompanyderivesnorights,areexcluded.Therightsand
obligationsof theshareholdersarise inparticular fromtheprovisionsof theLawonShare
Companies,andinparticularfrom§§12,53aff.,118ff.and186AktG.
Restrictionsconcerningvotingrightsortransferofshares
15
Restrictionsonvotingrightsofsharesmayarisefromlegalprovisions(§§71b,136AktG).
However,fortheExecutiveBoardtherearenorestrictionsonexercisingofthevotingrights
ortransferofshares.
Shareswithspecialrights,whichconfercontrollingpowers
mVISEAGdoesnothaveshareswithspecialrights,whichconfercontrollingpowers.
Typeofvotingrightcontrol,ifemployeeshaveequitiesanddonotdirectlyexercisetheircontrol
mVISE AG has not issued any share, from which the control rights cannot be exercised
immediately.
StatutoryregulationsandprovisionsoftheStatutesontheappointmentanddismissalofExecutive
Boardmembersandtheamendmentofstatutes
TheappointmentanddismissaloftheExecutiveBoardmembersaregovernedby§§84and
85AktGaswellas§5oftheStatutes.Accordingtothelegalprovisions(§179paragraph1
AktG),anyamendmenttotheStatutesrequiresaresolutionofthegeneralmeeting.Forthe
resolutionsofthegeneralmeeting,asimplemajorityissufficient,aslongastheLawonShare
Companies does not impose as a requirement larger majority for amending individual
statutes.Inaccordancewith§10paragraph2oftheStatuteofthecompany,theSupervisory
BoardisauthorisedtoamendonlythoseStatutes,whichpertaintoitsjurisdiction.
PowersoftheExecutiveBoardtoissueorbuybackshares
According to§4,paragraph8of theStatutes, theExecutiveBoard isauthorised,with the
consentoftheSupervisoryBoard,toincreasethesharecapitalofthecompanybyuptoEUR
3,872,026,00.00till8June2021throughone-timeormultipleissueofnewsharesagainstcash
orcontributioninkind(ApprovedCapital2016).
Pursuantto§4paragraph9oftheStatutes,thesharecapitalhasbeenconditionallyincreased
byuptoEUR2,000,000.00byissuingupto2,000,000newbearershares(conditionalcapital
2016). The conditional capital is increased, only inasmuch as the holders of optional or
conversionrightsorthoseentitledforconversionoroptionalexercisebasedonwarrantsor
convertiblebonds,whichareissuedorguaranteedbythecompanyorasubsidiarygroupof
thecompanyduetotheempowermenttill8June2021adoptedbythegeneralmeetingon9
June2016undertheagendaitem8,makeuseoftheiroptionalorconversionrightsor,asfar
astheyarecommittedtotheconversionorexercisingoftheoption,fulfiltheircommitment
totheconversionorexercisingoftheoptionorifthecompanyexercisesarighttovote,grant
ordinarysharestothecompanywhollyorinpartinsteadofthepaymentofasumofmoney.
According to § 4 paragraph 11 of the Statutes, the share capital has been conditionally
increasedbyuptoEUR283,387.00(ConditionalCapitalV).TheConditionalCapitalVisused
forthefulfilmentofsubscriptionrights,whichareissuedtomembersoftheManagementand
employeesof thecompany inaccordancewith theresolutionof thegeneralmeetingon9
August2010,aswellastheamendmentdecisionsofgeneralmeetingson29August2011and
29January2015.Theconditionalcapitalisincreasedonlyinsofarastheholdersoftheissued
subscriptionrightsexercisetheirsubscriptionright.
According to § 4 paragraph 12 of the Statutes, the share capital has been conditionally
increasedbyuptoEUR500,000.00(ConditionalCapitalVII).TheConditionalcapitalVIIisused
forthefulfilmentofsubscriptionrights,whichareissuedtomembersoftheExecutiveBoard
16
and employees of the company, as well as members of management and employees of
affiliatedcompanieswithinthemeaningof§§15,17AktGinaccordancewiththeresolutions
ofthegeneralmeetingson28June2012,27August2015and9June2016.Theconditional
capitalisincreasedonlyinsofarastheholdersoftheissuedsubscriptionrightsexercisetheir
subscriptionright.
Essentialagreementsofthecompany,whicharesubjecttotheconditionofachangeofcontrol
followingatakeoverbid
Therearenosuchagreements.
Compensationagreementsofthecompany,whichhavebeenconcludedwithmembersofthe
ExecutiveBoardoremployeesinconnectionwithatakeoverbid.
TherearenocompensationagreementswiththemembersoftheExecutiveBoardorwiththe
workersinconnectionwithatakeoverbid.
1.3 RiskandOpportunityReport
1.3.1 Riskmanagement
Risks refer to the general possibility that internal or external events occur that have an
unfavourableeffectonthenetassets,financialpositionandresultsofoperationsofmVISEAG
anditssubsidiaries,respectively,ortheoccurrenceofwhichjeopardisestheachievementof
settargetfigures.ThebusinessoperationsofmVISEAGareexposedtoamultitudeofrisks
whichareinextricablyassociatedwithcorporatepolicy.Thechancesandrisksresultingfrom
business activity are constantly defined and evaluated by the board of directors. The
monitoring,analysisandevaluationaswellascontrolofrisksareessentialelementsofthe
managementandleadershipinstruments,asabsolutelyrequiredbyart.91,section2ofthe
CompaniesAct.Therisksarenotquantified.Categoricallyrulingoutorfundamentallyavoiding
specialrisksisnotintended.Risksareminimisedortransferredtothirdpartiesifpossibleand
ifitmakessensefromabusinesspointofview.
mVISE AG has introduced risk management and control systems in order to recognise
developmentsinadvancethatcouldjeopardisethecontinuedexistenceofthecompany.The
reviewofrelevantbusinessriskswiththeireconomiceffectsisperiodicallyevaluatedbythe
management.Thedetectedrisksaredividedintoriskcategoriesandtakenintoconsideration
in the strategic corporateplanning.Essentialbusinessdecisionsaremadeby theboardof
directorsincoordinationwiththesupervisoryboard.Theefficiencyoftheriskmanagement
systemismonitoredandevaluatedregularly.Ifopportunitiesforimprovementaredetected,
thesewillbepresentedtotheboardofdirectorsandimplementedwithoutdelay.
Inrelationtothefinancialreportingprocess,theinternalcontrolandriskmanagementsystem
hasbeenfullyintegratedinthequalityassuranceprocessofthegroup.
1.3.2 Risks
ThemajorrisksthatarerelevantformVISEaredescribedhereinafter:
17
Economyandworldpolicies
ThebusinessactivityofmVISEissubjecttoeconomicinfluences.Majoreconomicrisksliein
the follow-up to a further intensification of the refugee crisis in Europe and a political
destabilisation of the EU thatmay be associatedwith that, the expansion of warlike and
terrorist actions in and near Europe as well as stagnating economic growth in China. In
additiontotheanticipatedeconomicfluctuations,eventsintheseareasofriskhaveagainand
again negatively influenced the investment confidence of companies and investors in the
DACHregioninthepast10years.
Marketandcompetition
TheincreasingglobalcompetitionontheIT-servicesmarketaswellasinthesectorsofour
customersgeneratesconstantpressureatthepricelevel.Fallingpricescanaffectouryield.
Delayedreceiptsofpaymentaswellasinsolvenciesofcustomercanresultinpaymentdefaults
anddirectlyinfluenceouryieldandourcashflow.
Innovationmanagement
ThefurtherdevelopmentandestablishmentonthemarketfortheCloudproductsSaleSphere
andICCrequireconsiderablefinancialinvestment.Theprofitcontributionthatisanticipated
tocomefromtheseinvestmentsfortheyear2017andfollowingyearsdependslargelyonthe
marketmaturityof the cloud-specific billingmodels (Pay-per-use) for thenotifiedproduct
targetgroups.
Personnelrisk
Qualified and motivated employees are critical for the success of mVISE. The company
competes for highly qualified specialists directly with other companies. It becomesmore
difficult to recruit employeesdue to the increasing competition for qualified experts. This
couldlimitthegrowthopportunities.
Projectrisk
mVISEAGassumesoverall project responsibility for its customers. Erroneousprice and/or
time estimates of fixed price projects can affect the profit. Poor quality can give rise to
warrantyobligations.Theprojectcontrollingismonitoredanddevelopedconstantlyinorder
tominimisetherisks.
Dependenceofcollaborationsandimportantpartners
Forthepurposeofwinninghigh-margindevelopmentprojects,itiscriticalforsuccesstobe
able tooffer and implement short-termprocessing ina competentmanner. TheSolutions
departmentrevealedtheneedforcoveringtheshort-termpeaksindemandbycompetent
andreliablepartners.Iftheprovisionofsuchresourcesresultsinseveredelaysorifthequality
ofthedeliveredproductisinsufficient,thismayhavedetrimentaleffectsonthenetassets,
financial position and results of operations. Inorder tominimise this risk, the company is
workingtogetherwithseveral trustedpartnersandmanages theseriskscloselyduringthe
projects.
18
Financialrisks
Takingintoaccounttheliquidassetsthatareavailableattheendoftheyear,therearerisks
thattheanticipatedoperativecashflowinthefiscalyear2017willnotreachtheextentor
doesnotdevelopattheanticipatedpointintime.Thefurtherimprovementofthefinancial
resourceswillmakeadditionalexternalfinancingcomponentsessentialinordertoimplement
thenecessarymeasurestotheplannedextentandwithintheplannedtimeframe.Forthis
purpose,aconceptwascreatedbasedonequitycapitalandborrowedcapitalmeasuresthat
istobeimplementedinfiscalyear2017.
1.3.3 Opportunitiesmanagement
The markets that are relevant for mVISE are subject to constant change which could
continuallyresultinnewopportunities.AsignificantfactorforthesuccessofmVISEAGisthe
promptidentificationaswellascorrectassessmentandexploitationoftheseopportunities.
Thismayrefertobothinternalandexternalpotentials.Anopportunitiesmanagementsystem
isnotinplaceatmVISE,i.e.thepotentialforopportunitiesisnotquantified.Theanalysisof
theopportunitiesfallswithinthescopeofresponsibilityoftheboardofdirectors.Theanalysis
of opportunities produces the strategic orientation of the business and the operative
measures to be derived from it. The opportunities that present themselves are always
associatedwithrisks.Itisthetaskofriskmanagementtoevaluateandreducetheserisks,if
possible.Inprinciple,mVISEstrivesforanadequatebalancebetweenopportunitiesandrisks.
1.3.4 Opportunities
The main opportunities of mVISE AG are described hereinafter. However, this list only
represents an extract of the available opportunities. Moreover, the assessment of the
opportunitiesiscontinuallysubjecttochanges,astherelevantmarketsandthetechnological
environmentareconstantlydevelopingfurther.Atthesametime,newopportunitiescanalso
arisefromthesedevelopments.
Increasingdigitalisation
Opportunitiesarisefromthedevelopmentoffurtherimplementationofmobiledigitalisation
inenterprisesunderIndustrie4.0andthenetworkingofmachinesanddevices(M2M&IoT).
Thecontinuousincreaseindigitalcommunication,forexampleviadigitalmedia,platformsor
networked devices, is leading to an increasing pressure to digitalise. Due to the dynamic
technologicaldevelopmentintheITsector,newapplicationsandneedsareconstantlyarising.
Digitalisation presents great social opportunities and opens up enormous potentials for
furthervalueaddition.Thisrequiresenterprises,primarily,toquestiontheirbusinessmodels
openly, flexibly and innovatively and to develop newones. The technology leaders in the
industrial sectorsareengaged in large-scale researchanddevelopmentprojects to further
develop intelligent control systems usingmobile technologies andmore secure andmore
flexibleinfrastructures.
19
EnterpriseMobilityconceptsandprogramsareakeycomponentofthefuturestrategyandIT
budgetinmanyenterprisesofallsizes.Combinedwithflexiblecloudtechnologiesandrobust
securityconcepts,EnterpriseMobilityisalsoactuallybecomingseriouslyimplementablefor
manycompanies.Therapidlygrowingtechnologicalcapabilitiesofdevicesandtheprojected
increaseinthevolumeofdatatransferredalsodemandfromenterprisescontinuedexpansion
andflexibilityofcapacities inenterprise IT.Virtualisationandespeciallycloudtechnologies
arecurrentlyregardedasakeystrategyforsolutions,butarestillataninitialstageinmany
companies.With its prioritymix,mVISE currently has auniqueofferingon theGerman IT
servicemarketforovercomingthischallenge;andwithitsvastandlong-yearsofexperience
incloudprojects,mVISEoffersthenecessarysupportforconfidentdecision-makingforthe
right cloud strategyand its consistent implementation. Thus,mVISEwasable toacquirea
seriesofinnovativeprojectsintheInternetofThings(IoT)environment.Thiscouldpositively
influencethenetassets,financialpositionandresultsofoperationsofthemVISEGroupinthe
future.
IncreasingsensitisationaboutITsecurity
Inaddition toprotectionofperson-relateddata,progressivedigitalisation requires further
measures in the area of IT security. With the arrival of mobile technologies in business
processes and product lines, the activity around security attacks and the production and
applicationofmalicioussoftwareisalsogrowingworldwide.Thedemandofenterprisesfor
reliable, up-to-date IT protection will have to continue to adapt to this threat potential
constantly,ifcompaniesdonotwanttofaceexistentialrisks.Evenonthepoliticalfront,data
securityandsovereigntyhavebeenanongoing issue,not just since theemergenceof the
hackerpracticesofintelligenceservices.Withthecurrent,explosiveglobalpoliticalsituation,
sabotage defence for IT systems is becoming an increasingly urgent area of intervention,
especiallyincompaniesoperatinginglobalisedanddiversifiedmarkets.
Last but not least, for the end customers of the enterprises, the comprehensible security
strategyoftheenterprisesisanimportantbasisfortheendcustomers'trustinusingmobile
technologies.Asamobilitypioneerandsecurityspecialist,mVISEistheidealpartnertobuild
this trust through well-thought-out concepts. Thus, mVISE has implemented intelligent
encryption mechanisms already in the first version of SaleSphere, which impressively
demonstrates thepossibilitiesofdefenceagainst interceptionmethodsofAsiancharacter.
TheincreasinginterestinITsecurity,alsodrivenbymediaattention,andthegrowingdemand,
as a consequence, also brings along increasing competition. This is to be taken into
considerationintheassessmentofopportunities.
Increasingregulation
Thenetassets,financialpositionandresultsofoperationsaswellasbusinesstransactionsof
thecompanyareinfluencedbythechangesintheeconomicandotherpoliciesinGermany,
andintheEuropeanUnion.Similarly,theotherpoliticalor legalchanges,especiallydueto
changesinlaws,canaffectthenetassets,financialpositionandresultsofoperationsofthe
mVISEGroup. The regulatory authorities, for instance in the banking sector, havedefined
features, which amodern IT infrastructuremust have from a regulatory perspective. For
instances,banksshouldbeinapositiontocarryoutadhocstresstestsaswellasgenerateup-
to-date,completeanddetailedbalancesheetdataanddatarelatedtothebusinesspartners
20
fortheentirebank.Tobeabletodothis,theITinfrastructuremustbeinapositiontomeet
therequirementsforriskreporting.Thisisnotthecaseeverywhere,whichiswhybankshave
tosignificantlyincreasetheirITbudget, inordertobeabletomeetthecurrentandfuture
requirements. mVISE was able to acquire a series of renowned new customers from the
bankingandsavingsbanksector.Eveninotherareas,morestringentrequirementsarebeing
imposedonITinfrastructure.Thecontinuationofthisdevelopmentcouldpositivelyinfluence
thenetassets,financialpositionandresultsofoperationsofthemVISEGroup.
Increasingestablishmentofownproductsandsolutions
TheoverarchingobjectiveofmVISE is further differentiation and striking a balance for an
optimal revenue-mix of Consulting, Solutions and Products. After the very successful
developmentofthebusinessareaConsulting,Strategie2015+envisagesmarketingofown
softwareproductsinthemediumtolong-term.Buildingonthelongyearsofexperiencein
creating and operating the catalogue app "SalesWizard", mVISE has developed the new
standardproduct "SaleSphere",which, as a freely configurable cloud-based solution, from
nowonsupportstheentiresalesprocess,andisavailableonthemarketsinceMarch2016as
Release1.Inadditiontothis,mVISEissteppingupitseffortsintheareaofSolutionstoacquire
additional,interestedcustomersandprojects.WiththecontinuingfocusofSolutionsonthe
corethemesofMobileProductivityandConnectivityaspartofstrategicenterpriseprojects,
referenceable,innovativesolutionswithsignificantmarginsarealsoexpectedtobecreated.
The increasing establishment of own products and solutions in the market could have a
positiveinfluenceonthenetassets,financialpositionandresultsofoperationsofthemVISE
Group.
Focusingonlargeorders
Attheendofreorientation,mVISEAGis increasinglyfocusingonhigh-marginfuturetopics
andlarge-volumeprojectsintheconsultingarea.Majorexistingcustomersarenowfollowing
thisstrategyandhaveinvolvedandcommissionedmVISEinstrategicprojects.Productivity
tools,suchasthemarket-leadingandmultipleaward-winningmVISEworkmen-app"Bosch
Toolbox",areleadingthewayfortheenterprisemobilitystrategyofthecompaniesandtheir
conceptsforthefieldservicesupport.
With the conclusion of valuable outline agreements with major customers and the
corresponding commissioning of large-scale projects, the business area Consulting has
providedanexcellentbase fora continuous rise in salesandearnings. Theexcellent sales
positioningforthesecustomersensuresthecommissioningofinternalspecialistsandallows
significant scaling of business with the support of external partners. Accordingly, further
expansion of the consulting business on the basis of stronger key accounts could have a
positiveinfluenceonthenetassets,financialpositionandresultsofoperationsofthemVISE
Group.
Opening-upofnewtargetmarkets
InthesolutionsareaofmVISEAG,smallerappprojectsareincreasinglyreplacedwithcomplex
B2Bsolutionprojects,with theeffect thatamorestableand long-term involvement takes
placeinstrategicprojectsofthecustomer.Basedonitsexperienceasapioneerfordevice
controlthroughmobiledevices,suchassmartphonesandtablets,mVISEhasnowgaineda
prominentplaceamongthesuppliersofdeviceconnectivityandconfirmedthiswiththeinitial
21
project orders. This opens up formVISE a completely new targetmarketwithB2Bdevice
manufacturers,whomustmeettherequirementsoftheirprofessionalend-usersintermsof
easeofcontrol,freedomfromfaultsandincreasingobligationsconcerningdocumentation.
Amongotherthings,mVISEwillbeworkinginthecomingyearswithleadingmanufacturersof
the automotive industry on a research and pilot project funded by the German Federal
Governmentonthesubjectof"automateddriving"andwillbecollaboratinginthedefinition
andgenerationof industrial standards,where itwillbesolely responsible for thesub-area
smartphonecontrol.Accordingly,asuccessfulreorientationoftheareaSolutionsinhigher-
valueB2Bapplicationswillhaveapositiveinfluenceonthenetassets,financialpositionand
resultsofoperationsofthemVISEGroup.
Opening-upofnewsaleschannels
InAugust2016,themVISE'ssubsidiaryJustIntelligenceGmbHhasenteredintoapartnership
with4com,themarket leader incloud-basedinboundandoutboundsolutions incustomer
service,andthusopenedupanimportantnewsaleschannel.Withinashortperiodoftime,
thepartnershipwith4comhasresultedintheinvolvementofinitialcustomersandnumerous
otherrelevantleads.Inparticular,thehighlevelofsatisfactionof4comwiththesupportand
service of Just Intelligence marks the current and future cooperation. Accordingly, the
expansionofcooperationwith4comandtheestablishmentofadditionalnewsaleschannels
couldshowapositiveinfluenceonthenetassets,financialpositionandresultsofoperations
ofthemVISEGroup.
Inorganicgrowth
Inaddition toorganicgrowthopportunities,mVISEAGalsoseeksopportunitieswithin the
frameworkofcollaborationsandtakeovers.So,mVISEAGincreaseditsshareholdinginJust
IntelligenceGmbH,Hamburgfromtheearlier33.4%to50.1%.Synergyeffectsexist,among
other things, in product development and capacitymanagement aswell as in the area of
marketing and sales. The Executive Board ofmVISE AG is constantly exploring interesting
collaboration opportunities even for the future and is having discussions with potential
partners for complementing the mVISE Group. The successful implementation of further
acquisitionswouldhelp inexpandingthepreviouslyachievedmarketpositionofmVISEAG
and could accordingly have a positive influence on the situation of assets, finance and
revenuesofthemVISEGroup.
1.3.5 Assessmentofthemanagementconcerningtheoverallriskandopportunity
situation
In a summary analysis of the opportunities and risks that could have influence on the
developmentoftheGroup,theExecutiveBoardarrivesatapositiveconclusion.Inboththe
businessareasConsultingandProducts&Solutions,sufficientopportunitypotentialexists,in
order tobeable tomake thecompanygroweven in the future,and thedefined risksare
discernibleandmanageable.At thetimeofpreparingthis report, thereareno identifiable
risks,individuallyandwholly,whichcouldendangerthecontinuedexistenceofthecompany.
22
TheoperativemanagementoftheGroupactswithawarenessofrisksandconsistentlytakes
measures toavoidpotential risk.At thesametime,exploitationof theexistingand future
opportunitiesispursuedwithawiderangeofactivities.
1.4 Forecastingreport
Followingthesuccessfulrestructuringandthepositivecourseofbusinessin2016,thegrowth
rate should continueeven in the current fiscal year.Basically, thedetermining factorsare
positive:Theeconomicenvironment isstableandtheproductsandsolutionsofmVISEare
compatible with the global trends such as the digitisation of business processes and IT
security.TheGrouphasbeenacknowledgedaspioneerintheareaofmobiledigitisationand,
therefore,ithasastableandreliable(current)customerstructure.In2017,thefocusisalso
onthefurthergrowthintheconsultingbusiness.Forthis,initialmeasurablesuccessesinthe
licensingbusinessarestrivedfor,bothwiththeproductsforsalessupport(saleSphere)aswell
asafurtherexpansionofthelicensesaleswiththesolutionsformanpowerplanning(ICC).In
order to enlarge market position achieved so far, mVISE AG would like to again achieve
inorganic growtheven in2017. In this case,potential targets shouldhavea strongprofile
complementarytothemVISEGroup,similartoJustIntelligenceGmbH.
1.4.1 Developmentsinthebusinessareas
Startingwiththefiscalyear2017,thebusinessareashavebeenre-structured.Becausethe
development of customer-specific solutions is closely linked with the accompanying
consultingactivity,boththebusinessareasConsultingandSolutionshavebeenmergedasthe
areaProfessionalServices, forwhichManfredGötz is incharge.Sincethebeginningofthe
year, theproductbusiness thus formsan independentarea, forwhichRainerBastian is in
charge.
ProfessionalServices
As part of the growth strategy, mVISE AG started in 2017 a new consulting location in
Hamburg.For theestablishmentof thebranchoffice,wehaveanexperiencedmanager in
AndreasBehrens.Withthenewlocations,theproximitytocustomersincreases,whichshould
have a positive influence in getting new customers. The demand for technical know-how
continuestobehigh,andtheordersituationisaccordinglygood.Inorganicgrowthcouldhelp
inenhancingtheabilitytodeliverandfurtherenlargethecriticalsizeatindividuallocations
andalsofortheentirecompany.
Products
Inthemediumandlongterm,thedevelopmentandmarketingofownsoftwareproductsplay
agreaterrole.Theproductsalesisrelevant,especiallyfortheachievementofahighmargin.
The interest in the existing products is high, already in the current fiscal year numerous
promising appointments have taken place with potential new customers and the first
23
SaleSpherepilot-customercouldbeobtained.Buthere,itwasalsoseenthatthesalescycles
toobtainandconnectnewcustomersarelongerthanwhatwasoriginallyexpected.Basedon
the current pilot projects and advanced licensing discussions, we, however, assume first
visiblesuccessforthefiscalyear2017.Forthis,thepartnershipofJustIntelligenceGmbHwith
4com,themarketleaderincloud-basedinboundandoutboundsolutionsincustomerservice,
should also contribute. Beyond the existing products and partnerships, the mVISE
managementalsoactivelyandcontinuouslyevaluatestheintegrationofmeaningfulproduct
additionsinthemarket.
1.4.2 Netassets,financialpositionandresultsofoperations
Basedontheabove-describeddevelopment in the individualbusinessareas, theExecutive
Board,therefore,reaffirmsthegrowthandprofittargetsatGrouplevel.Underthecondition
ofstablecompetitivestructuresandmarketprices,absenceoflossoflargecustomersaswell
as continued positive development in the relevant target markets, the Executive Board
expectsforthefiscalyear2017,fromtoday'spointofview,atotaloperatingperformanceof
over14millioneuros.Here,JustIntelligenceGmbHisexpectedtocontributearound10to15
percent of the planned total operating performance. In addition, this forecast does not
consideranyhigher sales fromtheproductarea.Overall, theExecutiveBoardassumesan
EBITDAmarginof15to20percentforthefiscalyear2017.
Düsseldorf,15May2017
TheBoardofDirectors
ManfredGötz,BoardofDirectors
RainerBastian,BoardofDirectors
24
Consolidatedannualfinancialstatementaccordingto
theCommercialCode
2.1 Consolidatedbalancesheet
25
26
2.2 Profitandlossstatementforthefiscalyearfrom01.01to
31.12.2016
27
2.3 Cashflowstatement
0
2.4 Developmentofthefixedassetsforthefiscalyearfrom01.01to31.12.2016
FixedassetstableI
Procurementandmanufacturingcosts
Statuson
01.01.2016
Accrualsbasisof
consolidationAccruals Transfers Disposals
Statuson
31.12.2016
Intangibleassets
I.self-createdindustrialpropertyrights €1,314,011.23 €1,403,195.00 €1,256,413.69 €0.00 €0.00 €3,973,619.92
II.paidconcessions,industrialproperty
rightsandsimilarrights €541,015.77 €27,268.08 €659.52 €0.00 €223,555.37 €345,388.00
III.Goodwill €150,000.00 €0.00 €584,709.18 €0.00 €734,709.18
Total €2,005,027.00 €1,430,463.08 €1,841,782.39 €0.00 €223,555.37 €5,053,717.10
Tangibleassets
I.Othertangibleassets,furnitureand
officeequipment€630,112.81 €30,894.75 €53,632.36 €0.00 €417,932.10 €296,707.82
Total €630,112.81 €30,894.75 €53,632.36 €0.00 €417,932.10 €296,707.82
Financialassets
I.Holdingsinaffiliatedcompanies €0.00 €0.00 €7,423.17 €0.00 €0.00 €7,423.17
Total €0.00 €0.00 €7,423.17 €0.00 €0.00 €7,423.17
Total €2,635,139.81 €1,461,357.83 €1,902,837.92 €0.00 €641,487.47 €5,357,848.09
1
FixedassetstableII
Depreciationforfixedassetsaccumulated Bookvalues
Statuson
01.01.2016
Accrualsbasisof
consolidationAccruals Transfers Disposals
Statuson
31.12.2016 01.01.2016 31.12.2016
Intangibleassets
I.self-createdindustrialproperty
rights€456,433.23 €619,024.00 €570,413.69 €0.00 €0.00 €1,645,870.92 €857,578.00 €2,327,749.00
II.paidconcessions,industrial
propertyrightsandsimilarrights€426,818.77 €18,841.50 €71,557.10 €0.00 €223,241.37 €293,976.00 €114,197.00 €51,412.00
III.Goodwill €115,000.00 €0.00 €24,745.15 €0.00 €0.00 €139,745.15 €35,000.00 €594,964.03
Total €998,252.00 €637,865.50 €666,715.94 €0.00 €223,241.37 €2,079,592.07 €1,006,775.00 €2,974,125.03
Tangibleassets
I.Othertangibleassets,furniture
andofficeequipment€579,427.81 €19,586.68 €32,017.43 €0.00 €416,700.10 €214,331.82 €50,685.00 €82,376.00
Total €579,427.81 €19,586.68 €32,017.43 €0.00 €416,700.10 €214,331.82 €50,685.00 €82,376.00
Financialassets
I.Holdingsinaffiliatedcompanies €0.00 €0.00 €0.00 €0.00 €0.00 €0.00 €0.00 €7,423.17
Total €0.00 €0.00 €0.00 €0.00 €0.00 €0.00 €0.00 €7,423.17
Total €1,577,679.81 €657,452.18 €698,733.37 €0.00 €639,941.47 €2,293,923.89 €1,057,460.00 €3,063,924.20
0