nfg annual report 2012

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ANNUAL REPORT 2012 Missing Link Invented by nature. Enhanced by us. THE

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Page 1: NFG Annual Report 2012

AnnuAl RepoRt

2012

Missing Link

Invented by nature.Enhanced by us.

T h e

Page 2: NFG Annual Report 2012

Annual Report2012

Page 3: NFG Annual Report 2012

3

ConTenTs

04 – 05

MIssInG WhAT?

The story about the Missing Link

58

Key hIGhLIGhTs of 2012

Global expansion of our business

46 – 49

ouR JouRney

Thriving to become the leading IT solutions company

in Cee & beyond

50 – 53

ouR ThRee pILLAR busIness sTRATeGy

Improving the core, innovating, going global

54 – 57

fInAnCIAL ResuLTs 2012

performing in a challenging market

06 – 10

The MIssInG LInK VIsIonReshaping the role

of information technology

59

ouTLooK 2013

Considering the next key milestone

36 – 45

VALue pRoposITIon foR ouR CLIenTs –

bITe: business Innovation,

Transformation, execution

28 – 35

foReWoRd MAnAGeMenT

branislav Vujovic, Günther Meyringer, Georg schoder, dejan popovic

60 – 61

We CARe ...

... about the world & about you

62 – 63

oVeRVIeW neW fRonTIeR

GRoupGroup entities

at a glance

new frontier Groupnew frontier holding Gmbh

pottendorfer straße 23 – 25 / 4 / 3 / 21120 Vienna, Austria

phone: +43 (1) 890 46 23 10fax: +43 (1) 890 46 23 [email protected]

uId no.: ATu67663600Commercial Registry no.: fn 389543h Registered at the Vienna Commercial Court Legal form: Limited liability companyManagement team: Günther Meyringer, dejan popovic, branislav Vujovic

Concept & design: moodley brand identityText: moodley brand identity, Michael endlicher Illustrations: Thomas paster, Roland Vorlauferprint production: 08/16 printproduktion Gmbh

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Missing what?

We need to learn from history to lead into the future. We aim to understand the inspiring qualities of missing links. What they have in common. how they developed. And why it took them so long to emerge.

So it’s up to us to trigger off new things and to provide the evidence that we can always do better.

We are ambitious enough to try both.

54

Missing links have, amazingly, triggered off some of the great inventions of our age.

Missing links are friendly evidence and hidden reminders that we can do better.

Missing links can be found in all states of transition where ambitious beings are in search of New Frontiers.

Imagine yourself as an individual and we as a group as the next missing link for something new and great.

only history can tell us if we are successful because a missing link can only be awarded after the next stage has been reached and not during the intermediate phases.

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76

appear, they get whatever support they need online and then record their opin-ion on the whole process. This virtual world is personalized, simple, social and open, and enables collaboration.

It is reachable from anywhere at anytime and brings value and fun to users. It just feels good.

on Monday morning the same individuals revert to their corporate lives, using “big company IT”

that provides an inside out view on the business. This world is almost mystical-ly closed and protected; information-sharing between selected partners and clients being in most cases impossible owing to complexity and technical barriers. over the last decade “big company IT” tried opening up the new world by developing web interfaces to core applications. unfortunately most of these applications are nothing more than interfaces with the old transac-tional legacy system. Communication-sharing across organizations is still frequently limited to edI interfaces for supply chains and to e-mail for human to human internal and external com-munications.

so the real challenge is how to keep corporate IT for internal process opti-mization while using digital transfor-mation to open up your organization.

but the trend is unstoppable. While b2C enterprises are seeing more and more of their business moving online – replacing effectively physical distri-bution channels such as outlets and stores – b2b players are still relying on incumbent business models. financial institutions with long established branch networks are under pressure from virtual banks, whose infrastructures are little more than an online portal and efficient online marketing.

The direct impact of the increasingly uncertain and volatile economy is that ownership and long term asset allocation planning is being replaced by flexible and agile subscription, enabled by efficient online brokerage of services. startups are being founded in every corner of the globe with new ideas for digital mar-keting, digital sales, digital delivery and digital support.

The pressure on global enterprises to join this digital transformation is heavy – but how to sustain the old model while disrupting it?

Analyze the massive difference that has opened up between private life IT usage and IT in the corporate world over the past 2 – 3 years. Individuals are part of virtual worlds in social com-munities where they collaborate and communicate. They share multimedia content selected for them based on their interests and preferences.

They search for desired products and services, read the opinions of other us-ers and buy products with just “1 click”. They instantly download products or test services on the spot. If problems

This virTual

world is

personalized,

simple, social

and open,

and enables

collaboraTion.

the first, very visible force is the eco-

nomic downturn and the increased

volatility and uncertainty inherent in

our economic system. the second

force, while constantly apparent but

still overshadowed by the crisis, is the

massive transformation within the

digital economy. Most of the economy

is still relying on asset-based values

created during the industrial age.

the focus is on efficient resource and

asset allocation and optimized supply

chains. the leaders in that segment

struggle to understand, let alone to

embrace the transformation to the

digital economy.

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The Missing Link Vision Two main forces

have driven the economy in recent years.

BRAnIslAv vujovIcpResIdent,

neW FRontIeR GRoup

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98

new frontier Group’s The Missing Link

Like anthropologists, we need to find this missing link – the seamless con-nection between these two worlds. our mission is to come up with solutions enabling the digital transformation in three key areas:

˚ empowerment and engagement of employees

˚ empowerment and engagement of customers

˚ enabling business model innovation

I have seen many com-panies implement single solutions based on social tools and products but most of these projects fail to deliver the results anticipated.

our experience is that true transformation only happens if the solution addresses all three areas while simultaneously adjusting and changing core business processes.

The new way of doing things and the new style collaboration need to rein-force each other and ultimately create a new business model.

engagement and empowerment of employeesIn order to empower and engage em-ployees it is necessary to find a way to connect people, available information, and knowledge so that collectively they act more creatively and are more empowered than individually – a way of making people more responsive, more understanding of clients’ needs, better able to adjust processes, and able to do so faster.

To achieve employee empowerment and engagement our solutions and

tools are devel-oped with that idea in mind: To enable team or group collaboration, communities and participation of employees based on social meth-odologies. To use extended profiles of employees with skills, knowledge and experience as well as all official and internal certificates. social

components are included with micro-blogging, connecting and following colleagues. sharing knowledge, experience and expertise is part of the solution as well as ranking and searching based on voting, tagging, commenting and liking mechanisms increasing the value of information. It helps communicating and sharing group vision, strategy and goals and includes innovative brainstorming tools. engagement is supported with gamification and personalized informa-tion feeds.

our business Collaboration solution introduces new value propositions and combines social networks with digital channels, enabling our clients to address uncovered customer segments and to expand their geo-graphical reach while changing their cost of sales structure.

Combining employee engagement, client engagement and new digital business models we help you, our clients, to create your Missing Link into the digital economy.

Branislav Vujovic’president, new frontier Group

business model innovation

The ultimate objective of our Missing Link solutions is to enable our clients to develop new business models. our Cloud services brokerage solution, for instance, opens up a new line of business for telecom companies and enables them to offer infrastructure, platform and software solutions as subscription-based services.

our experience

is ThaT True

Transforma-

Tion only

happens if The

soluTion ad-

dresses all

Three areas.

engagement and empowerment of customersThe second pillar of digital trans-formation is to reshape customers’ commitment and engage with them in open and transparent collaboration. our solutions and services address the complete range of activities from performance marketing and targeted digital marketing to collaborative tools for new sales and delivery processes or cloud services brokerage. such social solutions help identify customers and prospects, deliver appropriate information easily, and actively inte-grate clients into sales, delivery and support processes. As examples, here are the requirements and benefits of the Missing Link collaboration tool:

Activelyengageclients

Accelerateknowledgediscovery

cross- organizationcollaboration

Increasepenetration

Improve branding

and image

pervasiveenvironment

Real time

Great user experience

Context- sensitive

rightsourcing of information

easy internal and external

content sharing

business workflow

integrationsocial

elements

Mobility –anytime

anywhere

private and secureworkspace

Characteristics of new frontier Group’s Missing Link solutions

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ibanking – new frontier Group’s Missing Link to transform online banking

Innovative solution that meets modern banking and marketing requirements

The basics of ibanking solutions are strict adherence to the defined standards. All security protocols in all forms of the client’s communication with the bank are followed, and mobile device standards are used consistently. based on this information, the solution generates content views that provide maximum quality on any device, in accordance with its capabilities and limitations. even the way a mobile phone or tablet is held in the hand is taken into account so that the content view will not be the same if a device is in portrait or landscape mode.

The ibanking solution appeared to be the most adaptable to our needs as a bank compared with the other solutions we considered, both in terms of an attractive solution for users (with the possibility of apply-ing it to the proper sales channel for our products) and in terms of the future development of IT technologies and their implementation. With this concept and applications develop-ment strategy, we do not anticipate, at some point in the future, encoun-tering a situation where, owing to obsolescence, the application would have to be completely changed.

With functionally and visually advanced forms, two-way commu-nications, multimedia… ibanking has evolved into an application with great potential. The application, with its flexible concept, offers a variety of services and capabilities that keep up with global trends. We expect our customers to accept the new application as a modern solution for their financial needs.

sAŠA BIlAnovIc ActInG heAd oF e-chAnnel sAles

depARtMent, RAIFFeIsenBAnk

The ibanking system that new frontier Group

implemented at Raiffeisen bank offers a completely

customizable interface and support for easier user

segmentation. The system is ready for integration

with the contact centers. It is completely interactive

and for the first time enables customers to display

graphical data in real time. It allows integration with

social networks like Twitter or facebook and youTube

service. It is usage intuitive: It enables one click payment,

supports categorization of expenses, and brings the

ATM and branches locator closer to the client. It offers

full support for modern mobile banking with high

levels of security and is browser-independent.

ReshApInG poRTALs To beCoMe InTeLLIGenT LInK To CLIenTs

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fRoM IndIVIduAL KnoWLedGe To CoLLeCTIVe InTeLLIGenCe

t h e

eukaryotesAbout 1,800 million years ago.

When evolution started there were living things that did not have a nucleus, namely prokaryotes. eukaryotes, i.e. living things with a nucleus evolved as a result of blending with bacteria. In the case of the eukaryotic cells, the meta-bolism accelerated and they were simultaneously able to use their energy more efficiently. so, for the first time, the prerequisites for the development of the complex cells of higher forms of life were created.

employee engagement

WhAt Is the IdeA BehInd youR MIssInG lInk solutIon?

We wanted to create a platform that is as easy-to-use as an iphone app and as interactive as facebook. That was the start of new frontier Group’s internal employee collaboration solution: brainpower. We used Microsoft sharepoint as a standard platform and enhanced it with features such as context-sensitivity and messaging. by doing that we created a highly intuitive and functional environment for employ-ees to share content, collaborate and engage with each other.

hoW WIll neW FRontIeR GRoup enABle the dIGItAl/BusIness tRAnsFoRMAtIon WIth thIs IdeA?

We believe that the three key competitive differentiators nowadays are the use of information, the sharing of knowledge, and collective

creativity. new frontier Group’s brainpower helps companies accelerate their transformation towards the knowledge-driven society.

WhAt WIll Be the IMpAct on clIents?

In the past, knowledge manage-ment systems have not yielded the returns expected because most of

the solutions were only conceived as knowledge repositories. With social

employee engagement solutions, we reshape the approach, focusing on

the engagement between employees to enable knowledge-sharing and

collaborative creation of ideas. We do not say that storage of information

is unimportant, but it plays a minor part because our solution is all

about sharing knowledge within an internal ecosystem.

dRAGAn cenIc pRoduct MAnAGeR & heAd oF BRAInpoWeR developMent, neW FRontIeR InnovAtIon

MARko stupAR desIGneR BRAIn poWeR,

neW FRontIeR InnovAtIon

fRoM Mono-CeLL To CoMpLex oRGAnIsM

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WhAt WIll Be the IMpAct on clIents?

We know that, by using nAxT eRp solutions, manual work and error intervention will be reduced significantly. In complex businesses it is crucial that everyone works on the same page and gets the same relevant information. so we included a single information database. dealers can rent their high value machines more efficiently and increase utilization, reduce service and maintenance times, and minimize downtimes. Companies can easily develop business processes applying to diverse vendors and suppliers and to multiple clients and partners.

István heRényI heAd oF R & d, XApt

deep process integration

fRoM IsLAnd AppLICATIons To A CoMpLeTe end-To-end busIness pRoCess soLuTIon

fRoM sIMpLe To CoMpLex oRGAnIsM

WhAt Is the IdeA BehInd youR

MIssInG lInk solutIon?

We developed the idea for nAxT during the eRp

project for the hungarian Caterpillar (CAT) dealer.

until then CAT dealers worldwide used a legacy

application to link their businesses with Caterpillar

(the equipment manufac-turer) and their clients

(purchase or rental clients). With nAxT, which is based

on Microsoft dynamics Ax deeply integrated into

Microsoft’s office productiv-ity suite, dealer clients

and their customers can collaborate across functions and organizations using the

same information base.

hoW WIll neW FRontIeR GRoup enABle the dIGItAl /BusIness tRAnsFoRMAtIon WIth thIs IdeA?

We included recent technologies such as Gps tracking, integration of bing and Google maps, mobile devices and big data analytics in our solution. These features and the continuous digital information flow, without technological barriers, from the producer to the end customers saves both time and money. In other words, companies using this digital workflow tool will move from simply operating to actually orchestrating their businesses. They will be able to turn their whole organization into a one-stop-shop enterprise by focusing on their clients rather than just dealing with complex business process adaptations.

foliage venationsSilur, between 443 and 419 million years ago.

ferns were the first plants which kept forming more and more complex foliage venations. The more such ramifications branched out, the more water and nutrients the plant could transport from its root into its leaves. so these became the sustainable source of nutrition – and thus provided the key to terrestrial animals spreading throughout the world.

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Client engagement

WhAt Is the IdeA BehInd youR MIssInG lInk solutIon?

discourse captures the current trend of social, collaborative and inter active communication that we all know from our private lives. We transformed that for business life. I believe this development will continue and solutions like ours will have a strong influence on how we will work together in the future.

hoW WIll neW FRontIeR GRoup enABle the dIGItAl /BusIness

tRAnsFoRMAtIon WIth thIs IdeA?

Let me put it like this: pure e-mail conversation is dead because it excludes social collaboration. As business

becomes more and more digital, companies need to develop their online communication channels beyond pure e-mail

interaction. With our social collaboration solution companies can engage with their clients more profoundly and present

personalized and individual faces while retaining full historical trails covering the details of their interactions.

To sum up: discourse turns every electronic conversation into a personalized experience.

WhAt WIll Be the IMpAct on clIents?

Companies using discourse as a social collaboration solution will

be able to service multi-channels more efficiently and effectively

within their organization but also with their customers and external

users. As I have learned from my experiences with our clients

already using discourse, their customers’ satisfaction and

engagement has risen sharply. They also report that the solution

leads to a reduction in servicing costs owing to better co-ordi-

nation mechanisms between all stakeholders.

fRoM push MARKeTInG To InTeRACTIVe CLIenT ReLATIonshIp

fRoM WATeR To LAnd

jARek syGItoWIcz FoundeR sMARtupz

t h e

RhyniaDevon, about 396 million years ago.

Rhynia, the first land plant, developed from the water plants that were prevalent until then. Their principal axis ran horizontally in the soil and the walls of the water-drawing cells were, for the first time, strengthened with a sort of simple stroma. evolution developed the decisive feature of their being able to grow vertically on land.

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GAŠpeR FecuR ceo nF cloud seRvIces BRokeRAGe

fRoM WATeR To LAnd

fRoM physICAL neTWoRK pRoVIdeR To CoMpLex seRVICes MARKeT pLACe

online market place

WhAt Is the IdeA BehInd youR

MIssInG lInk solutIon?

I assume that it’s widely known that the core idea of

cloud services solutions is to provide IT services over a

network, typically the Internet. We take it one step further.

for me, new frontier Group’s Cloud services brokerage is

the missing link between core internal IT solutions for

services provisioning and new and external services.

hoW WIll neW FRontIeR GRoup enABle the dIGItAl /BusIness tRAnsFoRMAtIon WIth thIs IdeA?

We provide an innovative cloud service solution for telecom services providers. I see an opportunity to bundle the core services of telecommunications companies (e.g. mobile phones) with internal services like laptop backup services via broadband access and external cloud services such as Google Apps as an essential part of the digital transformation process. That will help them extend their portfolios and attract new customers, while using existing capabilities.

WhAt WIll Be the IMpAct on clIents?

Clients will be able to open up new revenue streams and create new business models without too much upfront investment. As we know, the industry is under severe pressure from regulatory changes and competitive challenges. That’s where we want to make a contribution and bridge the gap between existing infrastructures and seize the opportunity to offer new services. using elastic pay-per-use models telecom companies can attract new client segments and create differentiated business models.

t h e

TiktaalikDevon, between 384 and 375 million years ago.

Leaves fell from the first deciduous trees into the shallow waters of lakes and rivers and attracted many small animals. but large fish failed to benefit from these spoils as they could not swim over to them. however, the Tiktaalik genus developed, for the first time, fins with joints and simple lungs. A substantial step towards being able to hunt on land was thus taken.

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AdApTInG And TRAnsfoRMInG

t h e

WalchiaCarbon, between 303 and 358 million years ago.

Walchia, as the descendant of the fern, developed cone-like structures and tiny scale-like leaves that soon looked like needles. The early conifer thus triggered off a quantum leap in the development of plants as they were no longer dependent on water to disseminate their seeds. from that time they began to be found all over the earth.

ReshApInG poRTALs To beCoMe InTeLLIGenT LInKs

To CLIenTs

BohuMíR zouBek heAd oF soFtWARe developMent, pRoFInIt

Intelligent portals

WhAt Is the IdeA BehInd youR MIssInG lInk solutIon?

The main idea behind the Missing Link solution we created is to maximize utilization of the existing non-life insurance core system by linking core system functionalities with a newly developed client web portal. Thanks to this solution, our customers can offer their clients well-designed and flexible portals at reasonable cost and their retail clients can receive attractive offers for travel insurance, home insurance and car insurance over the web.

hoW WIll neW FRontIeR GRoup enABle the dIGItAl /BusIness

tRAnsFoRMAtIon WIth thIs IdeA?

We will enable the digital business transformation by creating an easy-to-use environment for internal employees as well as

clients to access online information about products, offers and services. We find out every day that informing, positioning,

selling and servicing products and services online are critical capabilities for any company using multi-channels in their

business strategy.

WhAt WIll Be the IMpAct on clIents?

during the development of the product we thought “why not

develop something Lego-like?” With our flexible and intelligent

solution, companies have the opportunity to apply a module-

type approach with pre-built functions or “widgets”. In

addition, the modular approach allows them to customize and

individualize portals for specific client segments and even for

individual customers. In a world full of “copy-cat” operations,

I believe this approach allows competitive differentiation at a

fraction of the cost of pure customer development.

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fRoM RepTILe To bIRd

t h e

ArchaeopteryxJura, between 152 and 145 million years ago.

originally, dinosaurs could not fly. but theropodes, two-legged meat eaters, developed a fork leg from their merged clavicles, asymmetrical wing feathers and a first toe that pointed backwards – distinctly bird-like features. At the interface between lizards and birds, the Archaeopteryx was truly the symbol of a species that advanced into new dimensions.

fRoM one-sIze fITs ALL Web poRTAL To soCIALLy InspIRInG Info ChAnneL

WhAt Is the IdeA BehInd youR MIssInG lInk solutIon?

In the past company web portals have been used either purely for information or as extensions of their corporate IT solutions, i.e. enabling online transactions such as e-banking or travel sites. but most of these web applications treat all custom-ers in the same way and are “just another” front-end for accessing back-end applica-tions. We have applied three principles of social business applications: customization and personalization of the interface, integration of informational, transactional and social content in a flexible way and the use of big data analytics to provide specific customer insights. With this users obtain a completely new experience and companies engage freshly with different client segments.

WhAt WIll Be the IMpAct on clIents?

With our solution, banks have the flexibility to mix & match

financial information and upsell opportunities to the right customer segments.

And, which is in my opinion at least as important, it is easy-to-use and fun-to-use. When

customers obtain relevant information in a simple and

understandable way, we can be sure they will return to the

platform again and again.

dejAn petkovIc BusIness developMent MAnAGeR, sAGAIntelligent

portals and big data

hoW WIll neW FRontIeR GRoup enABle the dIGItAl /BusIness

tRAnsFoRMAtIon WIth thIs IdeA?

We know that people want to communicate using various channels (pC, tablets, smartphones, etc.). new frontier Group’s Intelligent portals are the next generation web

applications, supporting the migration of more and more clients to digital channels. With pre-built business widget

functionalities, companies can build tailor-made user experience for different client segments while complying

with strict security standards.

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AChIeVInG boTh busIness ResuLTs And exCITeMenT And InspIRATIon

Gamification WhAt Is the IdeA BehInd youR MIssInG lInk solutIon?

The idea for ulympix (your olympics) was born during the 2012 olympics in London. As we walked through the streets of the city, we thought about the possibility of combining business and gaming to inspire participants and spectators. We created new frontier Group’s ulympix to create links between brands, products and services and people’s natural sporting instincts.

hoW WIll neW FRontIeR GRoup enABle the dIGItAl /BusIness tRAnsFoRMAtIon WIth thIs IdeA?

for us, ulympix breaks new ground in customer engagement and loyalty because companies have the opportunity to go beyond

classic brand communication. It is an open gaming platform for individuals and social communities but also for corporations.

WhAt WIll Be the IMpAct on clIents?

As we have learned from the past, gamification can play a key role by stimulating awareness of the

online activities of companies. Through games, customers click more readily on brand websites

and their retention times increase. I believe that, by using an open

gaming platform, companies can reach a wider user audience and

promote their brands and products in more inspiring and exciting ways.

ACCoModATInG To boTh LAnd And WATeR

levent ozAlp MAnAGInG dIRectoR, optIIM

dAnIel loReR dIRectoR BusIness

developMent, optIIM

t h e

pakicetusEocene, about 50 million years ago.

As a result of the great continental displacements, new oceans formed in the habitats of many mammals. The wolf-sized pakicetus was the perfect example of a mammal adjusting to radically different environmental conditions. Its back teeth, ears and cranial cavity made it quite clear where it belonged – to the whale family. one step back – into water – was in fact a major leap forward into a superior existence.

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pAtRIck kARl MAnAGInG dIRectoR,

Beyond puBlIshInG

business model innovation

WhAt Is the IdeA BehInd youR

MIssInG lInk solutIon?

“Content is king” might somehow sound old-

fashioned but for me it is more important than

ever. everything is about creating, adapting and

storing information. how companies leverage their

information assets will be critical for their future

business strategies. Content will be an

essential new pillar in prospective business

models. It is up to us to create smart connections

between the physical and the digital world.

hoW WIll neW FRontIeR GRoup enABle the dIGItAl/BusIness tRAnsFoRMAtIon WIth thIs IdeA?

Think about content creation today: editors use computers before they print pages. designers use photoshop before they plot something. photographers take their pictures with digicams before they are printed in magazines. everything is created digitally before it is printed. our approach is to help our customers to stay digital in every corner of their organization - from sales to support. brochures, catalogues, magazines and service guides have faster delivery cycles and more timely information if delivered digitally. And, as a matter of fact, if nothing is printed then you don’t need to pay for print production! Well-designed digital information will not only increase its usage and acceptance among end customers but also give companies a unique position in the market. The value of the information provided moves to the center of the company’s digital business model.

WhAt WIll Be the IMpAct on clIents?

I have read that 95% of the fortune 500 companies are actively working on multi- channel publishing solutions with mobile apps. so the topic is hot. I believe that companies with a clearly defined digital content strategy will benefit from reduced costs of publishing and distribution while increasing the timeliness and quality of the content provided.

fRoM AnIMAL noIses To huMAn speeCh

fRoM pRInT To dIGITAL ConTenT As MAIn CoMMunICATIon VehICLe

t h e

homo sapiensPleistocene, about 100,000 years ago.

It is well known that homo sapiens differs from anthropoids not only in having an arched palate and a sunken larynx. The development of such anatomical differences was, however, what triggered off our trail-blazing power of speech. from them originated the entire universe of today’s communicative opportunities.

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collaboration platforms for internal and external collaboration, all of which are now in active use in world-class corporations.

If you want to make a quantum leap in unleashing the power of your organiza-tion, internally as well as towards your clients, then discover with us what new frontier Group’s Missing Link portfolio can do for your business.

This is what we call the Missing Link – IT systems created over the last 20 years have improved operational processes in an asset-driven world enormously (production planning – budgeting processes to allocate financial resources,…) but they have done very little to address the scarcest resource of the 21st century – turn-ing collective intelligence within and across organizations into knowledge and creativity for new innovation.

As new frontier Group and personally as the leader of the innovation team, we have together plotted a route to create this missing link for our clients – to create easy-to-use, intuitive solu-tions that will bring about new levels of engagement among employees (employee engagement), between em-ployees and clients (client engagement) and employees and partners (business partner engagement). In line with this vision, we now have in place a unique set of solutions such as digital publish-ing, online market place, and social

have you asked yourself lately why

browsing on the ipad and launching

the new app on sunday is so easy,

while on Monday morning you find

yourself back in a corporate It desert

of complex systems and applications;

a desert where the end-user seems

to be more the problem than the

solution and where technology

barriers across multiple corporate

applications make working together

a daily nightmare.

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dear clients, partners, IT consumers,

The Missing Link – helping our clients to generate new sources of revenue.

Branislav Vujovicpresident, new frontier Group

BRAnIslAv vujovIc pResIdent

oF the GRoup

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dear clients,

our new frontier Group bITe (business Innovation, Transformation, execution) solutions portfolio and offer addresses all three critical areas of value creation for our clients: providing true business innovation that brings about new rev-enue streams for our clients, solutions that transform their business processes and strengthen their competitiveness and, finally, driving IT efficiency to reduce costs while assuring services delivery.

during the year we concentrated on improving our business execution, adding incremental growth while improving our business mix to increase services and software to widen operat-ing margins. We grew revenue by 29%, increased functional margin by 13% and ultimately improved operating profit by 2% margin points, all this while investing an additional euR 5 million to extend our sales, delivery and R&d capabilities. our Microsoft-focused company xApT signed a multi-million eRp project agreement in Australia and, with this success, we are extending our geographical reach to Asia and Australia and are now a global IT solutions company.

Günther MeyringerChief executive officer, new frontier Group

In line with our focus on talent and business innovation, we already have a team of more than 100 people as part of our Missing Link innovation initia-tive. Its main purpose is to help you, our customers, in your transformation to the digital economy, creating new business models based on information and knowledge-driven services.

for 2013 we plan to reshape our go-to-market in two major areas. first, by strengthening our industrial alignment to have client management, portfolio and delivery capabilities more strongly linked to vertical industries; and, secondly, to promote more actively our Missing Link portfolio to our entire client base through dedicated solution teams. With these moves we believe we can further increase our value creation for our clients. our operating param-eters remain unchanged for 2013: to grow organically by at least 13%, to add the same top line volume (13%) through M&A if we can identify the right opportunities, and to operate at 10% operating profit while reinvesting incremental profit in the business.

GüntheR MeyRInGeRceo oF the GRoup

2012 was another year of the new

norm in our economy – a volatile

stop-and-go environment, where

operational crisis management is on

every executive’s daily agenda, while

strategic transformation is under-

stood to be mandatory for success in

the long run. As supplier and advisor

to large and medium-size enterprises,

we keep encountering this constant

conflict through changes in It budg-

eting cycles and It project approvals.

As new Frontier Group, we see our

sole purpose as assuring business

value for clients via technology-ena-

bled business transformation.

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focus on clients, focus on execution, focus on talent.

Page 18: NFG Annual Report 2012

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The 2012 financial statements again show strong performance on two main financial indicators:

The equity ratio remained at a strong 40% and the financial leverage, defined as net financial debts to ebITdA, remained below one. both indicators are the result of delivering profitable growth and managing the working capital efficiently.

In order to remain successful going forward, we will further increase the financial transparency of our business. As Cfo of new frontier Group I am working constantly with my team to increase our financial excellence as the foundation for our further business success and to increase our capabilities for making fast and right decisions in volatile and uncertain times.

We work on this financial excellence using three main drivers: simplicity, quality, and speed.

simplicity creates transparency, which is necessary in an increasingly complex environment. by providing the right amount of information, the manage-ment immediately pays attention to the critical value drivers.

GeoRG schodeRcFo oF the GRoup

Quality is an essential ingredient in our principle of decentralized entre-preneurship. The role of finance is not only to provide complete and correct information, but to add value, espe-cially by sufficient analysis. This in return assures the disciplined use of capital, accurate budgeting, efficient cost management, and therefore stable cash flows.

speed is also an essential requirement owing to the volatility of the economic environment, the fast pace of change in the IT industry, and regulatory com-pliance. The finance organization can achieve this by integrating the financial processes to make them efficient and seamless.

driving along these three areas, we aim for 2013 to improve our net working capital yet again, especially by managing the volume of work in progress better. We will also focus on process automation along the value chain of our services-driven business so that functional units (sales, deliv-ery, finance) can work more fluently together and collaborate more easily based on shared financial information.

I joined new Frontier Group in the

first quarter of 2012 at an exciting

moment, as the group was expanding

successfully in an economic environ-

ment that was still volatile, which

made the management of cash

flow and liquidity quite complex and

challenging.

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Georg SchoderChief financial officer, new frontier Group

dear clients, shareholders and business partners,

financial excellence as the foundation of business success.

Page 19: NFG Annual Report 2012

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At the core of our operating business

model is our decentralized entrepre-

neurial organization, whereby each

and every operating company oper-

ates in its market as an independent

entity, while new Frontier Group

headquarter gives clear direction

and guidelines and equips all entities

with new advanced processes as

they come out.

We see this as one of the main factors differentiating us from our global competitors – with this model we act faster and in a more localized fashion, we react more swiftly and are more responsive to our clients’ needs.

Acknowledging this model, we have implemented a few but very strict gov-ernance processes that truly allow us to “think globally – act locally”, while incorporating proper governance and preparing new frontier Group for a future open market listing.

All of our companies, small startups as well as large-scale integrators, are required from day one to report in accordance with IfRs and all group companies are externally audited on a yearly basis. We have an annual budgeting process as well as a quar-terly rolling forecasting process, linked to a monthly closure process in which each and every operating unit shares full financial transparency. The financial and legal teams of the operating companies are matrixed into the headquarter legal/governance team for proper governance and approvals. for 2013 we are also setting up an internal audit team, which will review operating companies on an ad-hoc basis.

even if we are not legally required to do so, we will continue each year to publicize our key operating parameters so that any of our business partners or clients may check our financial strength for themselves. We believe strongly that openness and transpar-ency combined with our field entre-preneurship is the best way to serve our clients while assuring corporate governance.

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Dejan PopovicChief Legal/Governance officer, new frontier Group

dear clients, stakeholders and business partners,

dejAn popovIc,cGo oF the GRoup

entrepreneurial freedom and responsible governance and compliance.

Page 20: NFG Annual Report 2012

3736

Value proposition for our clients – bITe:

chApteR I.

how can you leverage technology to innovate and create new revenue streams and new business models?

how can you leverage technology to improve our organizational competitiveness?

how can you continuously reduce IT service delivery costs while assuring availability and security of services?

In recent years, we have worked

continually to expand our solutions

portfolio and offer capabilities

organically as well as through M&A.

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While this is, of course, a never-ending process, we are pleased that we now have the most complete solutions port-folio in our core region of eastern eu-rope, Russia and Turkey. With the new frontier Group BITE Solutions Portfolio (business Innovation, Transformation and execution) we address our clients’ three most critical questions:

business Innovation , Transformation, execution

business Innovation

business Transformation

leverage information technology to create new revenue streams

and reshape your business models

leverage information technology to transform your company process and improve productivity and efficiency

new frontier GroupbITe portfolio

leverage information technology to deliver It services more securely and efficiently

business execution

bITe

Page 21: NFG Annual Report 2012

3938

business Innovation The

Missing Link portfolio for business innovation

With our business innovation portfolio

we operate at the forefront of 21st

century business enabling technology.

What goes through every day’s

press as social, mobile, analytical /

big data and cloud we have reduced

to tangible solutions and services

to enable your company’s digital

transformation. We have more than

100 professionals dedicated to this

topic ranging from GuI/user-interface

experts designing hot mobile apps

and cloud services experts building

flexible services delivery platforms

to collaboration experts supporting

the virtual global enterprise. In 2012

we added critical capabilities around

our Missing link vision and our

portfolio now includes the following

components:

brainpower – internal employee engagementbrainpower is our solution for internal collaboration within an organization. It is built on top of standard Microsoft sharepoint technology and uses the “one-click away” approach as the inter-face guideline. Microsoft sharepoint is a powerful but complex document management, workflow and collabo-ration tool; and with our brainpower interface the solution provides strong collaboration functionality with unprecedented ease-of-use. We have applied methods such as context-sensi-tivity, gamification and messaging to make the solution interactive and intuititive. The overall business objec-tive is to support the virtual enterprise and enable collective intelligence within companies.

discourse – external client engagementdiscourse is our social CRM to reshape the online connection between compa-nies and their clients. discourse enables a personalized and secure collaboration channel to clients beyond simple web portals. facebook can be used as an entry point for client companies, which is then transferred into a discourse Workspace for further secure collabora-tion between a customer and employees

within the company. because it has more collaborative components than pure e-mail, it improves the capacity to manage client relationship. Today classic CRM systems are still primarily internal sales forecasting systems but discourse is extending the CRM to real social collaboration with clients.

ibanking – online portalsibanking is the consequent application of all available social methods and takes web portals to the next level. based on pre-built functions through widget technology, clients can create web portal applications much faster. In addition it enables for the first time efficient customization of web portals for specific client segments or even for individuals without the need to create separate applications. All common channels such as facebook integration, video communication and external feeds can be integrated into a client portal. following the “anytime, anywhere on any device approach” the solution is available on the web as well as on smartphones. built initially for the financial services industry, the technology is flexible enough to be applied to any other vertical industry and we are actively working to expand the industry specific widgets for other industries.

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BIt

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engagementbanking

digitalcontent

Collaboration

performancemarketing

Cloud servicesbrokerage

Gamification

Targeted digital marketing

engagingand empowering

employees

engag

ing and empowering custom

ers

business modelinnovation

Page 22: NFG Annual Report 2012

4140

beyond publishing – digital content distributionToday, in many cases, information is created and prepared in digital form before then being published in physical form. but increasingly the question is why use physical at all? With wire-less, smartphones and tablets digital consumption is within continuous reach. With beyond publishing we address the three critical areas for digital content distribution:

˚ fast and easy creation of content for smartphones and tablets

˚ Management of the digital content in a library

˚ distribution of the digital content to end-user devices

both Interact – search optimizationno one will find your online presence unless you market and position it properly. having a leading position in popular search engine results is a must. With both Interact we help clients improve their search ranking results and make their online presence more successful.

nf Cloud services brokerage – online market placenf Csb is our solution to help our clients create online market places. It is currently optimized for telecom providers seeking to enlarge their portfolio and services and offer their clients base products and services beyond their own core offerings. nf Csb bridges internal IT systems of telecom providers such as billing and provisioning with external cloud solutions so that they can provide, service and invoice a bundled solution. As telecom and content providers’

markets con-verge, we see a strong need for brokerage solutions. nf Csb is now at work in this field.

our Missing Link portfolio comprises a stringent flow to enable our clients’ digital transformation:

wiTh our busi-

ness innovaTion

porTfolio we

operaTe aT The

forefronT

of 21sT cenTury

business

enabling

Technology.

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ulympix – gamificationGames are as old as our human history. Games, or gamification of processes and activities, are increasing the engagement of participants as well as strengthening the bonding to prod-ucts and services and ultimately to the brand/companies providing them. We apply gamification ideas to all our social solutions and with ulympix we have created an open platform to link individuals and communities with brands and companies.

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Ite

Clientengagement

solution platform

employeeengagement

business model innovation

Missing Link solution platform

Creating and leveraging the content

˚ digital publishing

˚ performance marketing

˚ Brainpower

˚ iBanking

˚ ulympix

˚ discourse

˚ cloud service Brokerage

Creating thetraction

Creating thesocialexperience

Creating themarket place

Page 23: NFG Annual Report 2012

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businesstransformation

Core application expertise for business transformation

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eRp / sCM / bpMWe are a recognized solution integrator for all major eRp platforms (sAp, Microsoft, oracle) with more than 350 consultants working in that field. We provide expertise from blueprint analysis to operational support covering the full eRp life-cycle. Industry-wise, our major activities are in the areas of energy & utilities, Industry&Manufacturing, Retail& distribution as well as Transportation.

CRM / collaborationparallel to our eRp team, we meanwhile have more than 150 CRM consultants deploying sAp, Microsoft and oracle based CRM solutions to our clients. from banking front-office solutions to energy CRM implementations we serve a wide range of clients and industries. based on our expertise, we can be platform-agnostic and choose what-ever technology best serves the client’s purposes.

document management /workflow managementprocess automation remains a major priority for many of our clients seek-ing efficiency improvements. With our consultants using standard eCM platform technologies, we support the whole document flow from capturing and managing/processing to archiving. In many cases we combine eCM and bpM solutions for complete process orchestration in complex business environments. Main customers are in the area of financial institutions, public sector and telecom.

Information management / middlewareWithin our information man-agement / middleware group we work with our clients to gain control over information assets as well as to create or-chestration between differentapplications. We have deep expertise in the fields of master data management and data quality management – two key requirements for successful eRp sCM/CRM projects.

bI / analytics / data warehousingIn most cases, our bI Team works extremely closely with our eRp and Information management teams. our consultants have deep project expertise in IbM Cognos, oracle hyperion and sAp business objects. our team is, in particular, strengthening expertise within the industry and providing more and more specifically tailored industry-related bI solutions, for example for fraud-avoidance for insurance companies.

portalsportals development was a core new frontier Group expertise even before we created our ibanking product. As more and more business models go online, we see an accelerated need for easy-to-use portals with rich func-tionality. only strong GuI design and interface experience coupled with deep development technology competence will lead to differentiation on the mar-ket. new frontier Group’s strength is where legacy applications need to be

opened up to new digital channels. We are one

of the few companies in our market that can provide full end-to-end integration from the back-end application to the front-end portal.

Custom application developmentWhile packaged applications are also gaining more and more traction in the Cee countries, Russia and Turkey, there are areas where customer develop-ment remains the primary choice. With three development centers in prague, bucharest and belgrade as well as off-shore capability in Russia, we can fulfil local market as well as large scale project requirements.

successful companies are on a

continuous quest for operational and

business excellence and It remains

a key change agent and efficiency

enabler. Within our portfolio, we

address the most critical application

areas for business transformation,

namely eRp and supply chain

management, data warehousing /

analytics and business intelligence,

document/workflow and business

process management, information

and content management, cRM,

portals and self service solutions

and customer-specific application

development. We have within new

Frontier Group more then 1000+

professionals from the business

consultant developing the process

blueprint to support consultants

managing complex application

environments. We support all key

application platform technologies

(Microsoft, sAp, oracle, IBM) so

that our clients obtain independent

and best-of-breed advisory services

from us. the main areas of expertise

are set out below:

we are a

recognized

soluTion

inTegraTor

for all maJor

erp & crm

plaTforms

(sap, microsofT,

oracle).

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Page 24: NFG Annual Report 2012

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business execution

Reduce costs, reduce risk, assure service levels

companies typically spend 2% – 5%

of their annual turnover on It services

delivery. Based on the growth of the

It environment every year a major

part of that is spent on “running the

business”, i.e. expenses required just

to maintain the current It environ-

ment, while the ability to invest in

“changing the business” projects is

reducing every year.

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We at new frontier Group understand that the detailed, down-to-earth work of optimizing the costs of IT are as critical as deploying the newest mobile app. More than 300 professionals are dedi-cated to delivering efficient IT. from providing virtualized environments to increasing resource utilization and taking over operational responsibility for clients’ environments, we provide a wide range of capabilities to help CIo’s and data center managers do “more with less” while assur-ing services delivery.

We have centered our activities around three major infrastructure areas:

˚ networking and communi- cation infrastructure

˚ Computing and storage infrastructure

˚ IT services management

based on The

growTh of The

iT environmenT

every year

a maJor parT

of ThaT is spenT

on “running

The business”.

The business execution area repre-sents around 50% of our total business and we see it as our objective to continue to provide full

system integration capabilities for our clients. by being able to provide a one-stop-shop experience, as well as acting as a vendor independent-integrator, we provide whatever the client needs for value creation from technology investments.

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ourjourney

chApteR II.

Thriving to become the leading IT solutions company in Cee & beyond

In August 2006 we embarked on the

(ad)venture to build the leading It

solutions company in our core target

territory of the cee countries, Russia,

turkey and the Middle east. using

an investing, partnership and organic

development approach, we have

made serial investments over the last

6 years.

We have invested in and now have legal representations in 16 countries. for business execution purposes, we have split our go-to-market into 7 business management entities:

In 2011 / 2012, we successfully entered the three strategic markets of Russia, poland and Turkey. The global expan-sion of the heavy equipment solutions business through us/Canada is also accelerating. We still see the economic environment as our main challenge for further growth but are confident that we have, with the seven territories, enough addressable market opportu-nities to maintain our organic target growth rates.

Revenue in euR 2012 2011

new Frontier World Wide 194,670,514 150,638,063

consolidation effects -7,768,696 -3,545,883

centrope (Austria, czech Republic, slovakia, hungary) 28,962,509 27,690,738

Black sea (Romania, Bulgaria) 47,550,031 62,876,696

Adriatics 52,767,883 55,544,141

turkey/Middle east 566,005 –

poland 602,155 63,591

us/canada 16,191,436 8,008,780

Russia/cIs 55,799,191 –

2006 2008 2010 20122007 2009 2011 2013

oc

to

Be

R

se

pt

eM

Be

R

Fe

BR

uA

Ry

ju

ly

MA

y

Ap

RIl

no

ve

MB

eR

no

ve

MB

eR

no

ve

MB

eR

de

ce

MB

eR

oc

to

Be

R

MA

Rc

h

de

ce

MB

eR

Creation of new frontier holding

profinit,entering

czech Republic slovakia

nf slovakia,entering

slovakia

saga,entering

serbiaMontenegroBosnia and herzegovinaMacedonia

smartupz,entering

poland

nf Cloud,expanding

czech Republic

Romsys,entering

Romania

xapt,entering

hungarycanadausA

both Interact,expanding

Austria

Commcord,expanding

poland

beyond publishing,entering

Austria

xapt pty,entering

Australia

xaptexpanding

Romania

nf Csb,entering

slovenia

nf poland,expanding

polandTechnoserv Consulting,

entering

Russia

optiim,entering

turkey

Au

Gu

st

Page 26: NFG Annual Report 2012

4948

Global Talent Map

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nf CsbMember since: 2012

employees: 6

core competence:

online market place

slovenia

beyond publishingMember since: 2012

employees: 2

core competence:

digital publishing

Austria

both InteractMember since: 2013

employees: 7

core competence:

performance Marketing

Austria

profinitMember since: 2007

employees: 200

core competence:

custom Application development,

Information Management

czech Republic

slovakia

nf CloudMember since: 2012

employees: 4

core competence:

virtualization

czech Republic

nf slovakiaMember since: 2007

employees: 30

core competence:

Information Management,

Business Intelligence

slovakia

smartupzMember since: 2011

employees: 10

core competence:

social collaboration

poland

Technoserv ConsultingMember since: 2012

employees: 527

core competence:

Application consulting,

custom Application development

Russia

nf polandMember since: 2012

employees: 2

core competence:

headquarter for poland

poland

CommcordMember since: 2013

employees: 36

core competence:

system Integration,

networking

poland

RomsysMember since: 2007

employees: 276

core competence:

system Integration,

Application consulting,

custom Application development

Romania

optiimMember since: 2012

employees: 8

core competence:

project porfolio Management,

collaboration

turkey

sagaMember since: 2009

employees: 378

core competence:

system Integration,

Application consulting,

custom Application development

serbia, Montenegro, Bosnia and herzegovina, Macedonia

xaptMember since: 2008

employees: 169

core competence:

Microsoft Business solutions,

eRp & scM & cRM

hungaryRomaniauscanadaAustralia

11

2

2

3

3

3

4

4

5

5

6

6

7

7

8

8

9

10

10

10

10

11

11

1213

1313

1

1

9

12

new frontier Group headquarterfounded: 2006

employees: 16

Austria

12

Page 27: NFG Annual Report 2012

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our three pillar business strategy

chApteR III.

As part of our search for excellence,

we build our business strategy on

few but critical principles:

Focus: We believe in a complex world

only clear focus enables manage-

ment, as well as those in the field, to

keep driving towards common goals

and objectives. Reviewing constantly

the focus and resetting it properly is

the key.

Continuous performance improve-

ments: progress is only achieved by

stretching ourselves to do better.

In categories where competitors are

leading we take them as the bench-

mark and try to understand how we

can close the gap. In areas where we

consider ourselves the leaders, we

seek to improve every year against

our own prior year performance. this

is underlined by clear performance

targets in every area earmarked for

improvement.

Entrepreneurship: Individual account-

ability, risk taking and empowerment

is at the core of our business execu-

tion model. We strongly believe this

allows us to be closer to our clients

and much faster in reacting to market

developments.

using these principles and reviewing our current status as well as our strate-gic aspirations, we have realigned our go-to-market along three core pillars:

Improving the core – new frontier solutionsThis is our core solutions business in Central and eastern europe, Russia, poland and Turkey. As the economic environment remains challenging, especially in the Cee countries, we continue to focus on operational excel-lence. We keep investing in client- facing personnel while working to keep back-office organizations stable to accommodate business growth through increased process automation. The group Ceo and Cfo, working with the local operat-ing company executive teams, define 12 and 24 month business objectives for execution. In 2012 we achieved revenues in our core business of euR 170 million and aim to

grow this by at least our basic organic growth target of 13% in 2013. Add-ing incremental business in poland through M&A, our 2013 target is euR 200 million.

Innovating and creating value for our clients – new frontier Innovationearly in 2013 we created new frontier Innovation, which serves as the focal management entity for all the major innovation and startup ventures new frontier Group is undertaking. several key innovation initiatives are now under way with optiim (Turkey), nf Csb (slovenia), beyond publishing and both Interact (Austria), smartupz (poland), nf d3 (serbia), ibanking (serbia) and ulympix (bulgaria), all of which are centered around our Missing Link solutions approach. We have already won contracts with major global telecom and financial services players, thus proving that we are heading in the right direction. our strategic objective is for this business to contribute mid-term at least 5% of own software Ip to our total revenue, adding therefore significant differentiation as well as profitability to our business.

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Improving the core, innovating, going global

This is our

core soluTions

business in

cenTral and

easTern europe,

russia, poland

and Turkey.

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profinit

nF cloud

nF slovakia

Romsys

sAGA

technoserv

consulting

nF poland

commcord

smartupz

optiim

ulympix

Beyond

publishing

Both Interact

nF csB

XApt us

XApt canada

XApt Australia

XApt hungary

XApt Romania

Taking our heavy equipment solution global – xApT Global equipmentbased on the success of our nAxT heavy equipment dealer solution in the united states and a key win in 2012 in Australia/Asia, we have decided to

take further steps to accel-erate the global growth of this business. A subsidiary in Australia was opened and we are investigating other international locations. While the development of the solution remains in hun-gary, the plan is to increase the us team’s headcount as the global delivery organiza-tion. further R&d budgets were allocated to extend our solution leadership; we tight-ened our co-operation with

Microsoft through an IsV agreement and Caterpillar formally announced our solution as one of three officially recommended solutions for CAT deal-erships. We finished 2012 revenues of euR 20 million with a significant part of own Ip (20%) and through our global expansion strategy we are targeting 30%+ organic growth rate for the coming years for the xApT Ge business.

M&AAll three focus areas will continue to use M&A as a strategy to accelerate growth and expand portfolio / capa-bilities and geographical markets. overall we continue to focus these activities on our core territory of the Cee countries, Russia, poland and Turkey – with the exception of xApT Ge, which we regard as a world-wide option. We maintain our overall M&A approach first and foremost to seek partnerships with strong business leaders to help them grow and develop their businesses going forward. This model clearly supports our entrepreneurial business manage-ment philosophy and creates value for ourselves and business owners joining new frontier Group.

a subsidiary in

ausTralia was

opened and

we are inves-

TigaTing oTher

inTernaTional

locaTions.

Page 29: NFG Annual Report 2012

5554

financial results 2012

chApteR Iv.

new Frontier Group has a majority

stake in all the companies in the

group and therefore consolidates the

financial results according to IFRs.

during 2012, new Frontier Group

continued to focus on client manage-

ment and delivery quality as well as

investing in innovation and filling up

the pipeline with acquisition projects

for 2013.

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performing in a challenging market

Consolidated Income statement 2012:In the financial year 2012, the revenue increased by 29.2% to euR 194.7 million (2011: euR 150.6 million), of which euR 55.8 million from TsC. Thus, with a share of 28.7%, Russia has become the biggest sales market in terms of turnover. The black sea region (24.4%) together with the Adriatic region (27.1%) also remained important sales markets. north America’s share increased further from 5.3% in 2011 to 8.3% in 2012.

Cost of goods sold (CoGs) decreased from 65.3% of revenue to 52.4%, fol-lowing the shift of revenue from third party products to our own products.

This also explains part of the 85.4% increase in staff costs together with a stronger focus on development and innovation. There was also the acquisi-tion of TsC, which accounted for 69.9% of the increase in staff costs.

The operating profit (ebIT) for the financial year 2012 increased by 40% to euR 13.0 million (2011: euR 9.3 million). This increase was reached not only by a significant increase in operat-ing profit (mostly TsC) but also by focusing on qualitative growth (gross margin, and profit) rather than pure top line growth.

The financial result includes the ex-change rate losses on financial assets and liabilities held or loaned in foreign currencies, involving an adverse effect of euR 2.3 million as well as an interest expense of euR 2.0 million. Together these led a financial loss of euR -0.8 million (2011: euR -4.7 million)

Consolidated balance sheet december 2012Total assets increased by 7.3% compared with the previous year and amounted to euR 191.9 million (2011: euR 178.9 million) as at 31 december 2012. The non-current assets remained at the same level of euR 73.5 million (2011: euR 74.2 million). Thanks to good AR management, the accounts receiva-bles were reduced by euR 5.7 million (9.9%), but at the same time accrued receivables increased by euR 13.9 million (2011: euR 0.4 million) owing to TsC having been included in the consolidation. Cash de-creased by 15.6%. Inventories increased by euR 10.0 million because of TsC. Those factors led to an increase of euR 13.8 million or 13.2% in current assets, from euR 104.7 mil-lion to euR 118.5 million.

The annual average working capital increased slightly from euR 23.3 million to euR 26.5 million, while equity increased by euR 5.3 million.

non-current liabilities increased from euR 25.7 million to euR 28.5 million. The main reason for this was the consolidation of TsC with euR 4.5 million financial nC liabilities. Also current liabilities in-creased from euR 82.0 million to euR 114.5 million, of which euR 23 million from TsC.

Liquidity and Working Capital december 2012new frontier Group’s liquidity situation is solid with a stable financing structure and an above-average equity position of 40%.

Long-term credit lines were agreed with existing and new financial part-ners, and consist of acquisition financ-ing and other financing for long-term investments. Another important aspect of the financing strategy for the operat-ing companies is to allocate the credit volume to several financial partners in order to stay independent of individual banks and spread the risk of refinanc-ing. The finance managers of our

subsidiaries were re-sponsible for controlling liquidity and guaranteeing optimal inter-est rates. In addition, the banking terms and conditions were continu-ously moni-tored and adjusted. The cash position at year end

of euR 26.7 million (2011: euR 31.6 million) remained strong because of the group’s successful working capital management and forms a solid basis for further development, investment and performance. net debt / ebITdA ratio increased in the year 2012 to 1.08 mainly because of financial liabilities in TsC.

new fronTier

group’s liquid-

iTy siTuaTion

is solid wiTh a

sTable financing

sTrucTure and

an above-

average equiTy

posiTion of 40%.

Page 30: NFG Annual Report 2012

5756

Liquidity and WoRking CapitaL deCembeR 2012 2011

Revenue per headcount 121,821 143,192

equity ratio 39.86% 39.83%

Working capital 31,505,675 22,662,735

ConsoLidated inCome statement 2012 2011

Revenue 194,670,514 150,638,063

cost of goods -101,927,030 -98,430,966

Gross margin 92,743,484 52,207,098

own cost capitalized 604,853 722,255

staff costs -58,793,342 -31,715,058

opeX -15,979,153 -10,469,374

other operating income 2,598,305 3,417,873

other operating expense -2,655,640 -2,643,316

EBITDA 18,543,272 11,486,164

depreciation and amortization -5,502,404 -2,159,670

EBIT 13,040,868 9,326,494

Financial income 4,243,638 3,786,697

Financial expense -5,041,856 -8,479,422

Financial consolidation process 9 38

Earnings before tax 12,242,659 4,633,808

Income tax expense -3,486,274 -1,109,649

Earnings 8,756,385 3,524,158

Headcount 1,598 1,052

ConsoLidated baLanCe sheet deCembeRIn euR 2012 2011

Assets

property, plant, equipment 3,393,944 2,719,694

Investment properties 437,326 1

Goodwill 53,325,121 52,738,356

Intangible assets 5,621,449 5,907,809

Financial assets 8,534,913 9,629,110

deferred taxes 2,161,817 3,248,564

other non-current assets 3 0

Non-current assets 73,474,574 74,243,534

Inventories 17,473,450 7,458,601

Accounts receivable 51,681,148 57,352,354

deferred expenses 4,180,444 5,189,139

Accrued receivables 14,248,951 383,367

other current assets 3,868,808 747,843

cash & equivalents 26,683,236 31,625,572

Financial current assets 336,960 1,892,306

Current assets 118,472,998 104,649,182

Total assets 191,947,572 178,892,716

Liabilities

equity share capital 1,000,000 1,000,000

Reserves 10,614,132 23,695,580

Retained earnings 24,408,550 36,279,702

earnings 5,313,215 1,074,564

non controlling interest 7,648,911 9,206,354

Equity and reserves 48,984,808 71,256,200

Financial non-current liabilities 27,098,551 24,372,941

Accounts payable non-current 426 462

deferred taxes 798,460 818,166

provision 551,712 458,500

other non-current liabilities 13,134 0

Non-current liabilities 28,462,283 25,650,069

Financial liabilities 20,062,709 12,745,455

Accounts payables 59,724,463 45,152,970

provisions, current 6,511,643 2,497,750

other current liabilities 18,646,790 10,757,332

deferred income 7,466,324 10,417,915

Accrued liabilities 2,088,552 415,026

Current liabilities 114,500,481 81,986,447

Total liabilities 191,947,572 178,892,716

financial data financial data

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Page 31: NFG Annual Report 2012

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Key highlights of 2012

outlook 2013

chApteR v.

chApteR vI.

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In 2013 we move into our 7th full year of operations. In 2012 we came very close to meeting our defined business objectives (revenue of euR 195 million versus goal of euR 200 million and ebITdA ration of 9.5% versus goal of 10%). In 2013 we plan to reach top line revenue of around euR 220 million organically and maintain our overall ebITdA margin target at 10%. Additional profit will be reinvested in our M&A and innovation strategy as well as in expanding our client-facing capabilities. We expect the economic headwinds to continue to blow against us, especially in the core Cee coun-tries, such that incremental growth will again have to be achieved by taking market share from competitors. We target accelerated growth from our Russian consulting and global heavy equipment business and count on off-setting potential short-term setbacks in countries such as hungary and Romania remaining under pressure against that. With our three pillar strategy we have set the scene for the coming years and are confident of sustaining our profitable growth path.

in 2013 we move

inTo our 7Th

full year of

operaTions.

As a major highlight of the year 2012 we want to emphasize the successful integration of Technoserv Consulting (TsC) in Russia, which is now our largest contributing operation in terms of revenue and profit. We also concen-trated across all companies on adapt-ing our mix towards more software and services and less resell-ing of third party products. The improvement in operat-ing margin (from 34% in 2011 to 47% in 2012) clearly underlines this change in the business mix and resulted in our ebIT profit growth of 40%. on the contracting side, the major win of xApT Ge in Australia with a multi-billion dollar industrial conglomerate is worthwhile emphasizing as it was a major step towards the global expan-sion of this business.

The successful

inTegraTion

of Technoserv

consulTing

(Tsc) in russia.

Global expansion of our business

Considering the next key milestone

Page 32: NFG Annual Report 2012

6160

We care… about you, our clients & business partners!even in our high-tech world, what mat-ters most to us are the people we work with and the relationships we have with our customers, business partners, shareholders,… with you!

based on our geographical coverage across 16 countries and the size of our operations,we now serve major local as well as global players in all key industries (financial services, Telecom, public&health, Industry&Manufactu-ring, Retail, Transportation & services, energy & utilities).

In order to understand better where and how we need to change and to improve our client services we have, in the online version of this annual report, included a detailed online survey with questions ranging from sales/presales through project delivery to post-project support.

only with candid and open feedback are we able to tackle critical client satisfaction topics. We would like to thank you, here and now, for the time you take to provide us with your valuable feedback.

Branislav Vujovicpresident, new frontier Group

Günther MeyringerChief executive officer, new frontier Group

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chApteRvII.

We care…As new frontier Group we are ambi-tious to uphold our responsibility as a corporate citizen. Throughout the organization, we strive to create a workplace for our more than 1600 employees that focuses on talent and skill development, encourages continu-ous learning and embraces diversity, equality and respect. Above this, we recognize our corporate responsibility by serving and supporting the commu-nities in which we operate.

* Who/unICef Joint Monitoring programme (JMp) for Water supply and sanitation. (2012). progress on sanitation and drinking-Water, 2012 update.

you can help, tooIn line with our aim to support the program Water for the WorldTM, we will donate 10 euR for every feedback form delivered to us! be part of our CsR program and help us help the world! All you need to do is to follow this QR code, take 5 minutes out of your busy day and complete our online questionnaire.

We care… about the worldeven in our modern world, 780 million people still lack access to clean water, an estimated 2,5 billion people are without improved sanitation.* Without water, life could not exist. In the devel-oped world, we often take access to safe water for granted. We sometimes do not realize how important it really is for nearly all aspects of our daily lives: health, food, energy, transportation,…

As new frontier Group we are com-mitted to be a contributing, socially responsible member of the communities we do business in, and beyond. This year, we chose the program Water for the WorldTM (www.waterfortheworld.net) to give back and make our contri-bution for a better world.

... about the world & about you

www.newfrontier.eu/survey

Page 33: NFG Annual Report 2012

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overview new frontier Group

chApteR vIII.

Group entities at a glance

Austria

beyond pubLIshInG GMbhentenplatz 1, 8020 Graz

Austria

boTh InTeRACT GMbhLendplatz 40, 8020 Graz

slovenia

nf Csb d.o.o.Korpska ul. 88, 1000 Ljubljana

poland

nf poLAnd sp. z o.o.ul. Grzybowska 80 – 82, 00-844 Warszawa

poland

CoMMCoRd sp. z o.o.ul. hoffmanowej 19, 35-016 Rzeszów

turkey

opTIIM Is ÇözüMLeRI A. s.sk Akasya 7 Villa L22 bahcesehir, Istanbul

turkey

opTIIM yAzILIM hIzMeTLeRI A. s.Astas Is Merkezi Atatürk bulvari begonya sok.no.5 – 6 zemin K.n.6, Çatalca, Istanbul

czech Republic

pRofInIT s.R.o.Tychonova 2, 160 00 praha 6

slovak Republic

neW fRonTIeR sLoVAKIA s.R.o.Mlynské nivy 54, 821 09 bratislava

czech Republic

nf CLoud, s.R.o.Tychonova 270/2, 160 00 praha 6

Romania

RoMsys sRL12 Menuetului street, d building, sector 1, bucharest business park, bucharest

serbia

sAGA d.o.o.ulica Milentija popovica 9, belgrade

Montenegro

sAGA CG d.o.o.sv. petar Cetinjski 1a, podgorica

Macedonia

sAGA MK d.o.o.e.Lorce nikolov 75, skopje

Republic of srpska

sAGA Rs d.o.o.Vozdovacka 1, banja Luka

poland

sMARTupz sp. z.o.o.ul. Grzybowska 80 – 82, lok.12100-844 Warszawa

Russian Federation

TeChnoseRV ConsuLTInG LLCValovaya street, house 8, building 1115054 Moscow

Russian Federation

bI TeLeCoM CJsb 5 Kashirskoye high-road, building 1 115230 Moscow

Bulgaria

uLyMpIx LTd.4 Gen. yosif V. Gurko, 2nd floor sredets Region, 1000 sofia

hungary

xApT hunGARy szofTVeR TAnáCsAdó KfT.Rétköz u 7., 1118 budapest

canada

xApT busIness soLuTIons LTd.8187 yonge str., suite 323 Thornhill, on L3T, ontario

usA

xApT CoRpoRATIon6303 blue Lagoon drive, suite 400 Miami fL 33126, florida

Australia

xApT soLuTIons pTy LTd. Level1, 25 Montpelier Roadbowen hills, QLd 4074 Queensland

Romania

xApT busIness soLuTIons, s.R.L.12, Menuetului st., business park building d, district 1013713 bucharest

Page 34: NFG Annual Report 2012

www.newfrontier.eu

Page 35: NFG Annual Report 2012