Preface of the
Management Board

Dear Readers,

Shaping tomorrow’s world today: “Pioneering Tomorrow” sums up Aareon’s ambition. The past fiscal year in particular has seen us set the course for the years to come in a number of signi­ficant ways. We want to help our customers leverage future opportunities, which is why we have invested extensively in the further user-centric expansion of our Aareon Smart World portfolio – taking account of new technologies such as artificial intelligence. We spent € 52 million on research and deve­lopment (2020: € 42 million). We also started to implement our Value Creation Program developed together with share­holders Aareal Bank and Advent International. As regards another strategic objective, that of inorganic growth, our six acquisitions in 2021 put the spotlight on our professional Mergers & Acquisitions (M&A) and Post-Merger Integration (PMI) orga­nisation. Although the Covid-19 pandemic continued throughout the year, we succeeded in posting a record result with adjusted EBITDA of € 67 million (previous year: € 62 million), thanks to our stable business model. We achieved a 4 % year-on-year increase in consolidated revenues, which reached € 269 million (2020: € 258 million).

Aareon Smart World expanded: course set for the future

The country-specific ERP solutions are at the heart of the Aareon Smart World portfolio and offer significant cross-selling potential, as our customers establish their own company-specific digital ecosystem in the course of their digital transformation process. As a reliable, forward-looking software partner, we have started to raise our ERP systems to a new level of development over the past two years, ensuring that future product generations will be cloud-enabled and available as software as a service. What’s more, the deployment of new technologies such as Business Intelligence will enable the development of further user-centric functionalities for our customers that offer real added value. A pioneering role has been played by the new product generation Wodis Yuneo, launched in 2020 and marketed intensively throughout 2021 – among other things in conjunction with measures from our Value Creation Program. The latter included offer packages tailored precisely to demand and offering a varied scope of services, as well as the use of software as a service from the Aareon Data Centre. The new product generation also performed impressively in the ERP Architecture category at the “ERP System of the Year” competition run by the Center for Enterprise Research. Further new ERP product generations are being developed for the UK and France.

In addition to solutions for the housing industry, Aareon also offers commercial real estate (CRE) management solutions, such as the ERP systems REMS in the Netherlands and RELion in Germany, Austria and Switzerland. As part of the planned further penetration of this segment, we have implemented a CRE Competence Centre.

In the Digital Solutions product group, the focus was on the development and marketing of new applications as well as on cross-selling. PrediMa, the new AI-based solution for the predictive maintenance of property holdings, is currently at the marketing stage. Like Aareon’s virtual assistant Neela, PrediMa is a digital solution that leverages artificial intelligence. We have also developed and started to market the Digital Agency, an end-to-end solution designed to support the entire tenant life cycle. In Germany, the revised Heating Costs Ordinance gave rise to important new legal requirements. Thanks to the interaction between the CRM portal / app and vacancy management solutions from Aareon Smart World, we were quickly and easily able to offer our customers an EED-compliant application to satisfy the property industry’s new information obligations vis-à-vis tenants.

The issue of reducing CO₂ emissions is now being debated on the international political stage and presents the sector with a number of challenges. At Aareon, our objective is to help our customers meet energy efficiency targets with our solutions. Aareon subsidiary CalCon Deutschland GmbH, for instance, has launched its digital solution AiBATROS® for energy and CO₂ analysis, enabling managers to develop their property holdings in a targeted and future-oriented fashion by means of an automated energetic renovation process. And Aareon’s subsidiary Ampolon staged the Decarbonize Real Estate Challenge for start-ups with a view to providing a platform for further innovative solutions for the reduction of CO₂ emissions.

Even though we are already looking ahead to the future, let us cast our minds back to the past briefly at this point. The 20-year anniversary of Mareon marked a very special milestone: the service portal was the Aareon Group’s first web-based digital solution and the starting point for the establishment of digital ecosystems. Mareon is still successfully connecting property companies with tradespeople to this day, having dealt with over 30 million orders in process-optimised, paper-saving fashion.

Value Creation Program: implementation successfully under way

Our Value Creation Program is designed to accelerate Aareon’s growth. One focus of its implementation in 2021 was the switch to process-oriented offer packages that are tailored to customers’ demands and simplify the product offering. Another focal point was the changeover from on-premises to SaaS or subscription services, making software use even more convenient for customers as well as offering them greater planning reliability. This resulted in a higher percentage of recurring sales revenues at Aareon. The associated marketing got under way in Germany for the new ERP product generation Wodis Yuneo. Numerous customers have already opted for both the offer packages and for an SaaS model. Another key project was the optimisation of market access and market organisation (go-to-market strategy), with the aim of acquiring new customers and tapping into new market segments. Measures for the increased automation of marketing processes have already been implemented on the basis of an analysis of the status quo. Other aspects of the Value Creation Program included the investigation of nearshoring options and the optimisation of operative processes in software development.

Inorganic growth through M&A: six acquisitions completed

With a view to realising inorganic growth potential, Aareon’s management is constantly assessing possible acquisition targets and identifying opportunities that are then pursued systematically over time. The Transactions & Corporate Deve­lopment and Post-Merger Integration teams are responsible for successful acquisitions and their integration in the Aareon Group, working closely with the relevant specialist departments to this end. We ultimately acquired six companies in 2021. In Germany, Austria and Switzerland (DACH region), we added the ERP system immotion® to our ERP product portfolio with the acquisition of GAP Gesellschaft für Anwenderprogramme und Organisationsberatung mbH (GAP-Group), Bremen, in October. Munich-based wohnungshelden GmbH was acquired in August. This start-up offers a software solution that can be used by housing companies to digitalise their entire letting process, so its acquisition enables Aareon to develop its cross-selling potential.

In the UK, Aareon tapped into a new segment – the SMB market – with three acquisitions. It closed the deal to take over Arthur Online Ltd., London, in January, having signed the contract in December 2020. This company offers a SaaS ERP solution for property management. The acquisition of Tactile Ltd. (Fixflo), London, in May enabled Aareon to add property repair and maintenance software to its UK product range. And July saw the acquisition of RentPro Ltd. and Curo Software Ltd., both based in Warrenpoint and operating under the name Tilt Property Software (Tilt).

In the Netherlands, Aareon tapped into the market segment for property management under the German Residential Property Act (WEG) in May with the acquisition of BriqVest B.V. (Twinq), Oosterhout, a provider of software for the shared ownership property management sector. This acquisition offers cross-selling potential with solutions from Aareon Smart World.

Outlook: generating further added value for tomorrow

In 2021, we created an excellent basis on which to step up the pace of our growth. We will continue with our intensive marketing efforts in respect of the new ERP product generations, benefitting from the automation of marketing processes as we go. This is likewise true of the digital solutions. We are making good progress in our ongoing transformation into a company that offers software as a service and here, too, will redouble our efforts. We will also continue to implement the other sub-projects of our Value Creation Program.

Our successes in M&A will be continued, with the conclusion of further takeovers in the pipeline. The cross-selling and synergy potential generated by the companies acquired in 2021 will be pursued further. In January 2022, for instance, BriqVest B.V. (Twinq) was merged with Aareon Nederland B.V. The UK companies we acquired will be brought together in Aareon SMB Hub UK Ltd. for the newly tapped market segment of small and medium-sized property companies under higher-level management.

The future challenges for the sector are many and varied: a reduction in CO₂ emissions, affordable housing, demographic change and new ways of working and living. As a technological leader and industry expert, we want to be the driving force behind the development of solutions for the future in collaboration with our customers and partners. We extend our warm thanks to all those involved in this development process for their ground-breaking cooperation.

Best regards

Dr. Manfred Alflen

Dr. Imad Abdallah

Sabine Fischer

Dr. André Rasquin

Christian M. Schmahl

Management Board

Dr. Manfred Alflen

Chief Executive Officer

Dr. Imad Abdallah

Chief Digital and Ventures Officer

Sabine Fischer

Chief Market Officer

Dr. André Rasquin

Chief Operations Officer

Christian M. Schmahl

Chief Financial Officer

Online Journal