OTRS : Annual Report OTRS AG 2021

GROWTH

ANNUAL REPORT

2021

THE

OTRS

GROUP

The OTRS Group & Its Service Management Solutions

The Group comprises OTRS AG and its six subsidiaries: OTRS Inc. (USA), OTRS S.A. de C.V. (Mexico), OTRS Asia Pte. Ltd. (Singapore), OTRS Asia Ltd. (Hong Kong), OTRS do Brasil Soluções Ltda. (Brazil) and OTRS Magyarország Kft (Hungary).

OTRS AG is the manufacturer and the world's largest service provider for the help desk and IT service management software OTRS and OTRS On-Premise.

OTRS and OTRS On-Premise are the OTRS Group's answers to market demand for exclusive packages for professional use, consisting of individual features coupled with specially adapted services. The service portfolio includes process design, implementation, customizations, application support, corporate security and managed OTRS services.

OTRS is fully managed help desk software and provides solutions for the areas of customer service, IT service management and corporate security. This includes platform management on the hardware side; implementing updates and upgrades; and holistic application management, i.e. useage, administration, the implementation of necessary patches, general and security-critical upgrades.

We stand for established, individually configured solutions - regardless of company size, sector or choice between a cloud version or a variant operated in a customer's own data center. Our offering, therefore, includes both a fully managed and an on-premise solution.

OTRS AG has been listed on the Frankfurt Stock Exchange since 2009 and has been part of the Basic Board segment since 1 March 2017 (ISIN: DE000A0S9R37, WKN: A0S9R3).

OTRS is used by companies worldwide to optimize their service delivery, increase customer satisfaction and reduce costs by using an integrated solution. Our customers include companies and organizations such as the German Federal Office for Security in Information Technology (BSI), the Max Planck Institute, Toyota, TUI Cruises, Lufthansa, Airbus and Porsche.

Further information on OTRS Group products and services can be found at www.otrs.com.

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LETTER TO

SHARE

HOLDERS

Dear Shareholders,

‏

We have had an extraordinary fiscal year - one that presented itself in various ways. While the COVID pandemic continued to generate uncertainty, we were, nonetheless, able to end fiscal year 2021 with great success. Our revenue exceeded EUR 10 million for the first time in the company's history.

This success is as a result of having a clear business strategy and a forward-looking product and service portfolio. As a solution-as-a-service provider, we believe in flexibility and give companies the freedom to be successful. Digital structures that incorporate standardized processes and make communication transparent create freedom for the creativity that helps companies to grow. Change processes at companies take time and require sustainable investment, but we are seeing that the opportunities of digitalization have the upper hand and our customers want to seize these opportunities.

Revenue surpasses EUR 10 million

In fiscal year 2021, OTRS AG generated revenue of EUR 11,043 thousand (previous year: EUR 9,708 thousand), representing revenue growth of 13.8 %. It is still our company's strategy to increase the predictability of revenue by achieving a high share of recurring revenue. Recurring revenue climbed by

11.2 % to EUR 9,845 thousand in the reporting year (previous year: EUR 8,855 thousand) and accounted for 89.1 % of total revenue in 2021 (previous year: 91.2 %). Recurring revenue results from existing contracts with fixed terms, which are usually renewed after they expire. Increasing it enhances planning certainty and opens up economies of scale. This way, income can be increased while the consumption of resources climbs at a slower rate. Other revenue - essentially consulting revenue - increased from EUR 854 thousand in the previous year to EUR 1,198 thousand. EBITDA increased slightly to EUR 2,395 thousand in fiscal year 2021 from EUR 2,308 in the previous year with an operating cash flow of EUR 2,511 thousand. EBIT amounted to EUR 1,710 thousand after EUR 1,761 thousand in the previous year. OTRS AG's earnings per share amounted to EUR 0.62 in fiscal year 2021 (previous year: EUR 0.63). The equity ratio of 37.6 % (previous year: 35.6 %) rounds out a generally robust balance sheet.

For the first time in the past year, we distributed a dividend of EUR 0.07 per eligible share. We would like you, our shareholders, to share once again in our successful fiscal year 2021. At the Annual General Meeting on 21 July 2022, we will, therefore, propose a dividend of EUR 0.15 per eligible share. Our goal is to continue our dividend policy on the basis of sustainable growth moving forward.

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The IT and software market offers ample opportunity for this. While the pandemic meant major challenges for many companies - including for us - it was another source of stimulus for digitalization. Backlog potential was revealed and the major benefit of digital tools became clear. Our solutions are thus being met with high demand. These are good environmental conditions for further growth.

Honed product strategy taking effect

The foundation for this is formed by our product strategy. We have honed this and decided not to release a further Community Edition. There is a clear focus on the cloud version of OTRS. This decision has paid off significantly in terms of OTRS awareness, and it energized demand at the start of the year in particular. At the same time, we saw a rise in our loyalty rate that confirms our assumption that we are moving in the right direction. The significance of outsourcing areas of IT has increased for many companies and will continue to play a major role in the business world. Managed services support the optimal allocation and utilization of resources, which enhances profitability and increases operating efficiency.

2021 presented us with clear signals for growth. We were able to successfully continue on our chosen strategic path and have achieved key milestones. We will continue to focus our competencies and energies on designing and implementing a holistic solution management approach. This way, we will help our customers rise to their challenges in a way that allows them to exhaust all potential growth - today and tomorrow.

Continuing our growth trajectory

We are forecasting revenue growth of 7 % despite the COVID pandemic. The forecasted total revenue for fiscal 2022 will thus amount to around EUR 11.8 million. We are thus continuing our trend of continuous moderate growth.

I would like to take this opportunity, on behalf of the entire Management Board, to thank our employees for their dedication and hard work in 2021. This success would never have been possible without the passionate OTRS team.

And I thank you, our shareholders, for the confidence you have placed in us. We hope that you will continue to accompany us on our journey.

Sincerely,

André Mindermann

Chief Executive Officer

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