Aareon Group increases earnings and revenues

Mainz, 31 March 2020 – Aareon, Europe’s leading provider of systems and consulting services for the property industry and its partners in the digital age, posted EBIT of 38.8 million euros (after strategic capital spending) in 2019, up 8.1% year on year. Consolidated revenues also grew, rising by a substantial 6.5% to reach 251.9 million euros. The software provider was thus able to continue its strategy of profitable growth. As a result of the Aareon Group’s increasing international reach, revenues in its International Business segment rose by 5.7% to 92.7 million euros (previous year: 87.7 million euros).

ERP solutions – stable customer base

The Aareon Group offers country-specific ERP systems for the optimisation of IT-based business processes in the property sector. ERP business benefited from a stable customer base. Revenues grew by a slight 3.5% to 200.9 million euros. ERP solutions form the core of the Aareon Smart World digital ecosystem, and customers can integrate them with digital solutions. “Customers using an ERP solution from Aareon can supplement it with additional digital solutions – with a tenant portal or app, for example. That enables them to create their own digital ecosystems in accordance with their particular corporate strategies,” explains Aareon CEO Dr Manfred Alflen.

Digital solutions – double-digit growth

With an ERP solution as a basis, Aareon customers can add on further digital solutions to create or expand their own digital ecosystems. Revenues from digital solutions grew by a strong 20% year on year to 50.9 million euros. Aareon CRM, a customer relationship management system for property companies (portal and app for tenants/owners), is one example of a product for which demand is growing.

Collaboration with the start-up scene – first venture established

Ampolon Ventures (AV Management GmbH), the Aareon Group’s venture capital subsidiary, is a fixture in the PropTech scene with a strategy of entering into new ventures. 2019 saw the establishment of its initial venture, OFI Group GmbH, Frankfurt am Main, which offers Ophigo, a digital platform for office rentals. Aareon also holds investments in PropTech companies: in Immomio (a digital rental platform) in Germany and, as of 2019, in OSRE (a 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, both of which support future-oriented start-ups in the real estate environment. In addition to these initiatives, Aareon cooperates with a number of PropTech companies at international level

Research and development expenditure up

“Aareon sets great store by research and development,” underscores Dr Alflen. “Future success is dependent on current investment.” The advent of new technologies and artificial intelligence makes this statement truer than ever. In 2019, Aareon’s research and development expenditure came to 38.0 million euros (previous year: 34.9 million euros) and focused in particular on the development of new functions for existing IT solutions and on novel user-centric digital solutions. One result of this spending was the market launch of the Aareon Smart Platform, which enables customers to develop software solutions for apartment and property management and to integrate them into Aareon Smart World. Business partners – like PropTechs, for instance – can take advantage of the dedicated Smart Partner programme to supplement Aareon Smart World with their own solutions.

Growth continues – employee numbers higher

In sync with Aareon’s business growth, its workforce also rose by 3.2% to reach 1,631 at 31 December 2019. Of that figure, 717, or more than 40%, were employed in the International Business segment. A total of 466 employees were working at head office in Mainz as at year-end 2019 (previous year: 447). “We plan to expand our personnel capacity to match our corporate growth,” says Dr Alflen.

Outlook for 2020 – building on solid foundations

“We intend to continue pursuing our international growth strategy on the foundations laid in 2019,” says Aareon’s CEO. “We want to steadily expand our customer base in ERP business, tap cross-selling potential for digital solutions and add new solutions to our portfolio. At the moment, however, it is unclear what effects the global coronavirus crisis will have on our growth strategy.”

On the topic of potential acquisitions, Dr Alflen explains: “In addition to organic growth, we intend to grow inorganically by expanding our M&A strategy. We will assess the opportunities as they arise.” The company’s most recent takeover, of the CalCon Group, took effect on 1 January 2020. As Dr Alflen emphasises: “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 – into Aareon Smart World.”

Coronavirus – business operations continue

With reference to the coronavirus pandemic, Dr Alflen adds: “The coronavirus poses new challenges for both society and the economy. Aareon is taking its responsibility seriously and is committed to making the best possible contribution to protecting employees, customers and their respective environments in order to prevent the further spread of this virus. Thanks to our digital structures and robust business model, we are in a position to safeguard ongoing operations, continue customer projects and address enquiries from our customers. To this end, we are making use of digital and mobile work options as well as services such as ‘green consulting’. In view of the current situation, almost all our employees are working from home. We are doing everything to ensure that we can continue to provide our customers with the service and quality they have come to expect from us. Particularly in times of crisis, we can lend a helping hand to our customers with our digital solutions.”

Aareon Annual Report 2019 published

The Aareon Annual Report 2019 entitled "Pioneering Spirit" illustrates Aareon's claim to be a technology and industry leader, and to break new ground with the pioneering spirit of Aareon's employees, who stand behind every innovation. Practical stories show how Aareon creates added value for the property sector and its partners in the digital age.

Further information: Interview with Dr Manfred Alflen, CEO Aareon AG, at Expo Real 2019 about Trends and Technologies