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Annual Report 2016

Control system

The technotrans Group’s internal control system has the purpose of overseeing implementation of the corporate strategy. The control system basically comprises regular strategic discussions within the Board of Management and in-year planning discussions – including investment and personnel planning aspects – with the individual managing directors of the companies, as well as a monthly analysis of their respective business performance. The system seeks to identify deviations as early on as possible so that swift action can be taken as appropriate. Over and above this, the individual managing directors monitor and analyse their respective markets and specific competitive environment and report to the Board of Management on material changes to it, and on the opportunities and risks. The Board of Management submits regular reports to the Supervisory Board.

technotrans AG and its group companies are controlled first and foremost on the basis of revenue and earnings ratios (EBIT margin). Corporate planning as a whole is furthermore based on cash flow. Financial control at technotrans is performed using quantified financial goals. These include financial ratios such as the equity ratio, gearing and free cash flow (the latter consists of the cash flow from operating activities less the cash payments for investment in operating activities).

The following table provides an overview of key financial and control indicators for the technotrans Group:

    2015 Forecast
2015 Management
Report
2016
adjusted
adjusted
forecast
Quarterly
Communication
Q3 2016
2016
Revenue € million 122.8 126-132 132.5 150.0151.8
Technology € million 81.4 84 - 88 89.7 102.5103.6
  % 66% 68% 68%
Services € million 41.4 42 - 44 42.8 47.548.2
  % 34% 32% 32%
EBIT € million 9.0 9.5 - 10.5 10.0 9.5 - 10.59.7
  % 7.3% 7.5% - 8.0% 7.5% 6.3% - 7.0%6.4%
Technology € million 2.1 2.9
  % 2.6% > 3% 2.8%
Services € million 6.8 6.8
  % 16.5% stable margin 14.2%
Free cash flow € million 8.5 > 5 -12.6

In essence, the Board of Management gauges success by means of financial performance indicators. The revenue and profit of the group and segments are the most important performance indicators used in evaluating the business performance.

The Board of Management of technotrans AG assesses developments in the year under review as overall positive. To summarise, technotrans achieved its original and revised targets for 2016. The revenue growth of the technotrans Group amounted to € 29 million, representing an increase of 23.6 percent on 2015. After stripping out the acquisitions, the group achieved organic revenue growth of around 8 percent and thus slightly exceeded the original forecast for the 2016 financial year.

Operating profit (EBIT) grew in absolute terms by € 0.8 million (equivalent to +8.7 percent) to € 9.7 million. This meant both the range of the original forecast for 2016 and the forecast adjusted in autumn 2016 to € 9.5 to 10.5 million following the acquisition were achieved.