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I
ANNUAL REPORT
2011
www.intershop.com
INTERSHOP Communications AG
Intershop Tower
07740 Jena
Germany
Phone: +49 3641 50 -0
Fax: +49 3641 50 -1111
info@intershop.com
www.intershop.com
FINANCIALCALENDAR 2012
Date
Event
February 22, 2012
Release of Q4 and FY financials 2011
May 9, 2012
Release of Q1 financials 2012
May 30, 2012
Ordinary Annual Stockholders‘ Meeting 2012
August 8, 2012
Release of Q2 and 6-month financials 2012
November 7, 2012
Release of Q3 and 9-month financials 2012
Investor Relations Contact:
INTERSHOP Communications AG
Investor Relations
Intershop Tower
07740 Jena
Germany
Phone: +49 3641 50 -1000
Fax: +49 3641 50 -1309
ir@intershop.com
www.intershop.com/investor-relations
Layout:
timespin - Digital Communication GmbH
www.timespin.de
annual report
2011
table of
contents
4
7
Key Figures For the group
letter to our stocKholders
group management report and report oF
intershop communications ag
Business activities and conditions
11
Result from operations, financial position and net assets
13
Research and development
17
Personnel
17
Management Board and Supervisory Board
18
Remuneration report
18
Risk report
20
Disclosures in Accordance with Section 289(4) HGB and Section 315(4)
25
HGB Plus Explanatory Report
Corporate Governance Declaration in Accordance with Section 289a of the HGB
Dependent Company Report
Events subsequent to the balance sheet date
Report on expected developments
25
25
26
26
consolidated Financial statements
31
32
33
34
Consolidated Balance Sheet
Consolidated Statement of Comprehensive Income
Consolidated Statement of Cash Flows
Consolidated Statement of Shareholders´ Equity
notes to the consolidated Financial statements
39
44
51
59
63
64
General Disclosures
Accounting Policies
Notes to the Individual Balance Sheet Items
Notes to the Individual Items of the Statement of Comprehensive Income
Notes to the Cash Flow Statement
Other Disclosures
responsibility statement
auditor’s report, group
Financial statements intershop communications ag
79
80
Balance Sheet INTERSHOP Communications AG
Statement of Operations of INTERSHOP Communications AG
notes to the Financial statements intershop communications ag
auditor’s report, intershop communications ag
report oF the supervisory board
corporate governance report
74
75
81
89
93
95
100
intershop shares
table of
contents
4
Key figures for the group
revenue
Revenue increased by 29% to
EUR 49.2 million due to the business
expansion with strategic customers
(Platinum Accounts) and the acquisition
of many new customers and projects.
net revenues in Keur
49,156
38,250
+ 29%
2010
2011
50,000
40,000
30,000
20,000
10,000
0
other 7%
licenses 11%
online MarKeting 7%
consulting &
training 55%
Maintenance 20%
share oF revenue
The Company’s highest revenue
generating area was the consulting
business with 55%, followed by the
maintenance business with 20%.
License share accounted for 11%.
distribution oF revenue by region
asia/pacific 16%
Intershop generated 44% of its revenue out-
side of Europe. The USA accounted for 28%
and the Asia Pacific region for 16%.
u.s.a. 28%
europe 56 %
KEy FIGURES FOR THE GROUP
INTERSHOP COMMUNICATIONS AKTIENGESELLSCHAFT
5
gross profit in Keur/
gross Margin in %
19,966
100%
80%
60%
40%
20%
0%
41%
41%
+ 27%
2010
2011
gross proFit
20,000
15,726
Gross profit increased by 27% to
EUR 20 million. The gross margin
remained unchanged at 41%.
ebit in Keur/
ebit Margin in %
2,627
2,246
6%
5%
+ 17%
2010
2011
3,000
2,500
2,000
1,500
1,000
500
0
15%
12%
9%
6%
3%
0%
group proFit For the year
There was an improvement in the
Group’s profit for the year from
EUR 1.9 million to EUR 3.0 million.
15,000
10,000
5,000
0
3,500
3,000
2,500
2,000
1,500
1,000
500
0
ebit
The result from operating activities
increased by 17% to EUR 2.6 million
with an EBIT margin of 5%.
earnings after tax
in Keur
3,040
1,865
+ 63%
2010
2011
Ludwig Lutter
Heinrich Göttler
Dr. Ludger Vogt
ManageMent
board
7
Dear Intershop stockholders,
At this time last year, we informed you of new record figures for revenue and operating profit and fore-
cast high investments and stagnating results for 2011. However, the development of our business was
again more dynamic than we had anticipated. Intershop benefits from the uninterrupted growth in the
e-Commerce industry, which is driven by the continuously increasing share of online revenue in the en-
tire retail business. It pleases us to report not only double-digit growth in net revenues for the fourth
consecutive year, but also a record result once again. In particular, a net revenue of EUR 13.6 million and
an operating result (EBIT) of EUR 1.1 million in the fourth quarter of 2011 strongly contributed to the
good overall performance for the year. In total, Intershop increased its net revenue in 2011 by 29% to EUR
49.2 million, thereby generating an EBIT of EUR 2.6 million. This is even more remarkable given that after
having increased the number of employees by 18% in 2010, we added another 31%, coming to a total of
470 employees as of the end of 2011. Related to that were the expenditures for research and development,
which grew by 59% to EUR 6.4 million. However, as a whole we succeeded in keeping the share of operat-
ing costs stable with a good 35%.
What are the reasons for the positive development in the past year? Once again, the success can especially
be attributed to our unique team of highly qualified and unbelievably dedicated employees. We therefore
give the highest priority to the thorough expansion of our team, without losing sight of the profitability
of the Company. Another reason for the positive development is the success we have had expanding the
cooperation with our Platinum Accounts, like the Otto Group, GSI Commerce and Telstra, as well as the
many newly acquired projects in Germany and other countries. In this regard, the measures carried out
for our growth initiative bore fruit. Improved market monitoring brought in a considerably higher number
of lead contacts and the new branches and partners in Europe have already generated new business. In
the result, revenue from licenses exceeded expectations with an increase to EUR 5.5 million. With this, we
achieved our core goals of the growth initiative for 2011, however, we want to continue to increase the
share in the current year.
An important milestone was the acquisition of an additional strategic partner for our alliance for e-Com-
merce. The focus of our cooperation with our partners was the development of our new e-Commerce
platform, Intershop 7, which was introduced at CeBIT in March 2012. The new platform has more inno-
vations than any previous release upgrade in the development history of Intershop’s standard product.
Therefore, we have high expectations for the sales potential of our new system.
We are well prepared for 2012, in which, based on current projections, Intershop will show profitable
growth again.
We thank you for your trust.
Sincerely,
Heinrich Göttler
Dr. Ludger Vogt
Ludwig Lutter
This annual report contains forward-looking statements regarding future events or
the future financial and operational performance of Intershop. Actual events or results
may differ materially from the results presented in these forward-looking statements
or from the results expected according to these statements. Risks and uncertainties
that could lead to such differences include Intershop’s limited operating history, the
limited predictability of revenues and expenses, and potential fluctuations in reve-
nues and operating results, significant dependence on large individual customer or-
ders, customer trends, the level of competition, seasonal fluctuations, risks relating
to electronic security, possible state regulation, and the general economic situation.
group ManageMent report
and ManageMent report of
intershop coMMunications
aKtiengesellschaft
11 Business activities and conditions
25 Disclosures in Accordance with Section 289(4)
13 Result from operations, financial position
HGB and Section 315(4) HGB Plus Explanatory Report
and net assets
25 Corporate Governance Declaration
17 Research and development
25 Dependent Company Report
17 Personnel
26 Events subsequent to the balance sheet date
18 Management Board and Supervisory Board
26 Report on expected developments
18 Remuneration report
20 Risk report
group ManageMent report
and ManageMent report of
intershop coMMunications
aKtiengesellschaft
BUSINESS ACTIVITIES AND CONDITIONS
11
summary oF the results From business activities during Fiscal year 2011
INTERSHOP Communications Aktiengesellschaft continued its profitable growth course in fiscal year 2011.
The Company shows a significant positive development of earnings on the Group level1, as well as on the
AG level2. With revenue growth of 29% to EUR 49.2 million, the Intershop Group exceeded its autumn fore-
cast of 20% to 25% revenue increase by 4 percentage points. The Company also performed significantly
better with regard to the operating result. Intershop’s operating result (EBIT) of EUR 2.6 million constitutes
an improvement of EUR 381 thousand or 17% compared to the prior year. As in prior years, the greatest
revenue driver was the consulting business. However, license revenues also grew at an above average rate
of 31% to EUR 5.5 million.
expansion oF alliance For online business
The strategy for building international alliances announced in 2010 was consistently pursued in the past
fiscal year. In addition to the strategic collaboration with the leading American provider of e-Commerce
and interactive marketing for major brands and retailers, a global technology group also joined as a part-
ner in 2011. In the pooling of expertise, Intershop expects significantly shorter development cycles for its
software platform and greatly increased innovation. In the alliance of leading international e-Commerce
players, Intershop’s management sees a good chance to introduce the Company’s technology platform
to the market faster and to implement product innovations in less time, especially outside of Europe. By
„code sharing” within the partnerships, joint product development becomes a competitive advantage for
all partners alike.
Focus on new shop soFtware intershop 7
Together with the partners of the newly formed alliance, the main focus in fiscal year 2011 was the devel-
opment of the new shop software, which was introduced at CeBIT in March 2012. With over 1,500 new
features, developed on the basis of a market investigation and in close collaboration with 150 online retail-
ers worldwide, the e-Commerce software „Intershop 7” offers a powerful tool for extensive multi-channel
distribution. Compared to its precursor, Enfinity Suite 6.4, the important changes in Intershop 7 have to do
especially with the improved internationalization, multi-channel connections, campaign and promotion
management, as well as the buying behavior analysis of customers in online shops. This will allow shop
managers to easily configure websites, campaigns or test versions, instead of programming them or hav-
ing them programmed. This way, they have complete control of their business at all times and can respond
quickly and flexibly. The worldwide sales launch of the new software, which will be offered as a license and
a Software-as-a-Service (SaaS) solution, will be in the first quarter of 2012.
group structure and operating activities
INTERSHOP Communications Aktiengesellschaft, which is domiciled in Jena, is the parent company of the
Intershop Group. As of the reporting date, December 31, 2011, it directly holds 100% of the shares in Inter-
shop Communications, Inc., San Francisco, USA; the online marketing subsidiary SoQuero GmbH, Frank-
furt, Germany; the e-Commerce (SaaS) service provider The Bakery GmbH, Berlin, Germany; and Intershop
Communications Australia Pty Ltd., Melbourne, Australia, as well as other non-operational former sales
companies. In Germany, INTERSHOP Communications Aktiengesellschaft has branch offices in Stuttgart,
Nuremberg, Hamburg and Ilmenau. The subsidiaries SoQuero GmbH and The Bakery GmbH are domiciled
in Frankfurt am Main and Berlin, respectively. In 2011, branches were opened in London, Milan, Amster-
dam, Stockholm and Paris as part of an extensive sales campaign.
Intershop is a globally oriented provider of integrated e-Commerce solutions. The focus of its service range
is the Intershop e-Commerce software, which was brought to the market in 1996 as the first standard
1 “Intershop,” the “Company”
2 The “AG” or “single entity”
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 12
software for e-Commerce worldwide. Intershop’s main business areas are divided into Licenses as well as
Services, Maintenance, and Other. Services is broken down into the segments of Consulting and Training,
Maintenance, Online Marketing, and Other (full service and The Bakery business).
Intershop’s business model includes the orchestration of the entire e-Commerce process chain from the
design of the online shop to implementation of the software platform and delivery of goods, i.e., fulfill-
ment. The focus of Intershop’s offering is the shop manager, who is responsible for the e-Commerce activi-
ties of the customer. Intershop’s e-Commerce solutions should enable the shop manager to obtain the
best possible results at all stages of the e-Commerce process chain. In order to achieve this aim, the Com-
pany is continuously improving the software and systematically expanding and supplementing its range
of services through in-house developments or acquisitions. In March 2012, the Company introduced the
new version of Intershop 7 that it developed together with its partners and which will be launched in the
first quarter of 2012.
Intershop is one of the largest providers of e-Commerce solutions worldwide. More than 300 customers
sell their products via many electronic sales channels simultaneously by means of Intershop’s multi-site
technology. Among the Company’s customers are some of the largest online retailers worldwide, includ-
ing the Otto Group, telecommunications companies like Deutsche Telekom and Australia’s Telstra, as well
as the automobile companies BMW and Daimler. Measured in terms of transactions per day, the Company
has an extraordinarily powerful and scalable platform for online business. Intershop operates in Europe,
the United States, and in the Asia Pacific region (mainly Australia). In 2011, revenue with customers outside
of Europe came to 44%, which was at the same level as the prior year. The Enfinity platform is used in more
than 30 countries and is available in more than 20 different languages.
overall economy and industry
Growth in the global economy slowed down in the past year. According to the latest estimates of the
International Monetary Fund (IMF), the global economy grew by only 3.8% in 2011. In the prior year, the
increase in economic performance worldwide was still 5.2%; however this is based on the lower level
of 2009 that was influenced by the financial crisis. As in prior years, the growth drivers in 2011 were the
emerging and developing countries, whose output grew by 6.2%. China recorded an increase of 9.2% and
India’s economy grew by 7.4%. In contrast, Europe’s economy showed growth of only 1.6%. The American
economy was also not able to fulfill the optimistic expectations at the beginning of the year and only grew
by a good 1.8%, whereas the fourth quarter was considerably stronger. A significant growth differential
could be observed within Europe. According to the IMF, the economy in Germany realized growth of 3.0%,
while other European countries like Spain (+0.7%) or Italy (+0.4%) showed only weak growth rates. The
economies of Portugal and Greece contracted. Measured by gross domestic product, both countries are
suffering under a considerable debt burden. Overall, the solution for the European debt crisis will deter-
mine the future economic trend not only in the eurozone, but worldwide as well.
In 2011, there did not seem to be any indication of an end to the growth in the e-Commerce sector –
quite the contrary. The Internet is becoming increasingly important as a sales channel across the world.
According to market research information of Internet World Stats, around 2.1 billion people had access to
the World Wide Web in 2011. This represents around 29% of the world population. Since the year 2000, the
number of Internet users has increased more than sixfold and continues to grow. Around 80% of all Inter-
net users are in Europe, North America and Asia. In Asia, there were almost 100 million (+11.8%) more us-
ers within one year. Within Europe, Germany leads the field with over 65 million users. With the increasing
number of users and continuous development of purchasing possibilities on the Internet, the revenue vol-
ume from online business is also growing. In Germany, the Handelsverband Deutschland (HDE) [German
Retail Federation] anticipates online revenue of EUR 26.1 billion for all of 2011, representing an increase
of 10% compared to the prior year. However, based on international comparisons, the online market in
Germany still has considerable potential. According to a study by the consultancy firm, Pricewaterhouse
Coopers AG Wirtschaftsprüfungsgesellschaft, from December 2011, German consumers make online pur-
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 13
chases three times a month. In contrast, the average number of online transactions per month in China is
8.4, and in the United States it is 5.2. In addition, the increasing sales of smartphones and tablet computers
ensure dynamic growth in mobile internet usage. According to forecasts of the industry association BIT-
KOM, sales with mobile data services in Germany alone grew by 12% to around EUR 7.0 billion.
The German software market also showed positive development in 2011. Based on BITKOM estimates, rev-
enue in the segment in 2010 increased from EUR 15.4 billion to EUR 16.2 billion and this year it is expected
to grow by another 5.2% to around EUR 17 billion. According to forecasts made by the industry associa-
tion in June, in 2011 as a whole, the global IT market increased by 4.3% to EUR 963.4 billion. Important
guarantors of growth are also the major emerging markets China, Russia, India and Brazil, which continue
to invest massively in modern technology.
RESULT FROM OPERATIONS, FINANCIAL POSITION AND NET ASSETS
development oF revenue
In fiscal year 2011, Intershop generated net revenue of EUR 49.2 million. This represents an increase of
29% in comparison to the prior-year period. With this, the Company exceeded its forecast, which was just
increased in autumn 2011, by an „increase in revenue of 20% to 25%.” The reason for the strong increase in
revenue is the positive development in its business with major strategic customers (Platinum Accounts),
as well as the acquisition of many new customers and projects in the area of e-Commerce and online mar-
keting. In the fourth quarter of 2011 alone, the Company realized a net of around EUR 13.6 million, thereby
achieving its best quarter results of the last ten years.
With the strong revenue development in 2011, Intershop has continued its steady growth trend since
2008 with double-digit annual growth rates. All business areas contributed to the ongoing positive de-
velopment in the reporting period. The consulting business is still dominant, which, with a net revenue of
EUR 26.8 million, accounted for around 55% of total net revenue. With this, the area realized an increase
of 35% in comparison to the prior year. The license business also improved considerably in comparison to
the same period in fiscal 2010. In the past year, Intershop realized EUR 5.5 million in this area, representing
a gain of 31%. The segment „Other” (full service and The Bakery business) also showed strong growth with
EUR 3.4 million, which represents an increase in revenue of 70% compared to the prior year. This positive
impact was mainly because of new customer acquisitions, like the home shopping station Channel 21,
which uses the innovative transaction platform of The Bakery, Intershop’s subsidiary. Also in the online
marketing area, Intershop’s subsidiary SoQuero generated a significantly higher net revenue compared to
the prior year. The agency, which is domiciled in Frankfurt am Main, generated revenue of EUR 3.5 million,
representing an increase of 32%. Maintenance revenue also increased to EUR 9.9 million (+5.0%).
The overview below shows the change in net revenues:
in EUR thousand
licenses
Consulting/Training
Maintenance
Online Marketing
Other Revenues
services, maintenance and other
total net revenues
2011
5,500
26,807
9,899
3,504
3,446
43,656
49,156
2010
4,184
19,915
9,471
2,649
2,031
34,066
38,250
change
31%
35%
5%
32%
70%
28%
29%
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 14
Compared to the prior year, revenue for the single entity under German commercial law increased by 27%
to EUR 40.4 million in fiscal year 2011. License revenue for the single entity increased by 36% from EUR 3.7
million to EUR 5.0 million. Revenue from Services, Maintenance and Other came to EUR 35.4 million, repre-
senting an increase of 26% for the comparable time period. The primary reason was the revenues generated
with the Platinum Accounts.
wide range oF international customers
In fiscal year 2011, Intershop consolidated its cooperation with important existing customers and gained
many additional new customers. Agreements were extended with important Platinum Accounts and the
cooperation was further intensified. In addition to GSI Commerce the largest Platinum Accounts included a
global technology group, the Australian telecommunications group Telstra and the Otto Group. In Septem-
ber 2011, a contract was concluded with the global technology group for an initial period of ten years. The
agreement, which also includes licensing and consulting services, regulates the cooperation of the partners
in the development of Intershop products. In March 2011, the Otto Group, which has relied on Intershop
solutions for more than ten years, renewed its service contract with Intershop for an additional three years.
After Amazon, the Otto Group is the second largest Internet retailer and number one in the area of fashion
and lifestyle worldwide. Other top-selling major customers in the past year were Deutsche Telekom, Merck
KGaA and Daimler. The existing general agreement with Merck, the pharmaceutical and chemical group,
was extended for an additional three years in July 2011.
The most important new customers in the reporting period included the shopping station Channel 21
which, in addition to Intershop’s e-Commerce software, also uses the innovative transaction platform of its
subsidiary The Bakery and the online marketing services of SoQuero. The television station aims to capture
a leading position in the German home shopping market by interconnecting various distribution chan-
nels. One new international customer is the Red Wing Shoe Company, a US retailer of high-end footwear
and clothing. Intershop implements a complete e-Commerce solution for the well-established American
company that supports the extensive distribution network of Red Wing Shoes and multi-channel sales. Ad-
ditional important new projects in fiscal year 2011 included the extension of the contract with the Würth
Group, market leader for assembly and fastening materials, the new international B2B shop of hydraulic
specialist Bosch Rexroth, the accessories shop of the Mercedes-Benz brand, as well as the webshop of Mir
Knigi, the biggest Russian online bookstore. Examples of the innovative power of Intershop are a project for
integrating social networks in the webshop of the mail order business Baur, the expansion of the mobile
commerce platform of the do-it-yourself chain, Hagebau, as well as the newly developed SmartHome plat-
form of the RWE energy group, with which customers can control the energy efficiency of their electrical
appliances and heating. In 2011, Intershop won a total of 80 new customers and projects.
In 2011, Intershop began a growth initiative with the goal of attaining double-digit growth in revenue, as
well as above average growth in license sales. The core of this initiative is significantly improved market
monitoring through investments in lead generation. In this initiative, the number of leads was made meas-
urable by means of a new tool and a lead management process was introduced. Through the performance-
oriented, balanced use of search engines, direct mail and e-mail campaigns, a new inside sales organization,
and events for lead generation, the number of qualified leads in Europe could be greatly increased. The
result of the initiative was several new customers in 2011. Another core element of this initiative was set-
ting up distribution capacities for an additional direct distribution in several European countries, therefore
offices were opened in London, Milan, Amsterdam, Paris and Stockholm. New partners were acquired in
all countries, such as the Javelin Group in England, SMC Consulting and Reply in Italy, Symfony in Benelux,
as well as Valtec and Altima in France. In the result, the license revenue in Europe (excluding Germany) has
more than doubled and has had above average growth worldwide. The goals in 2011 were achieved. The
growth initiative will also be continued in 2012 and the sales and marketing organization will be strength-
ened further.
The new business in the area of licenses is important since it will result in future consulting and mainte-
nance services. With the new Intershop 7 software introduced at CeBIT 2012, the Company will also con-
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 15
tinue to focus on the increase of license revenue in the current year.
As in the prior year, Intershop also showed the highest rates of increase in the US market in 2011. With an
increase of 46% to EUR 13.8 million, the American market was the second most important region after
Europe. Business with European customers also grew considerably from EUR 21.3 million to EUR 27.5 mil-
lion. In contrast, the share of revenue in the Asia Pacific region increased only slightly by EUR 0.3 million to
EUR 7.8 million. Overall, compared to the prior-year period, the share of revenue generated outside Europe
remained stable at 44%.
earnings development
The table below gives an overview over the most important key figures:
EBIT (in EUR thousand)
EBIT margin
EBITDA (in EUR thousand)
EBITDA margin
Group annual profit (in EUR thousand)
2011
2,627
5%
4,514
9%
3,040
2010
2,246
6%
5,075
13%
1,865
change
17%
-9%
-11%
-31%
63%
In fiscal year 2011, Intershop achieved an operating result (EBIT) of EUR 2.6 million, which is EUR 0.4 million
more than in the prior-year period. With this result, the Group exceeded its forecast of an operating result
at the prior-year level. This means that the Company has been profitable for four consecutive years and
has continuously increased its profit over this period. Despite significantly increased expenditures due to
investments for resources and innovations, the EBIT margin of 5% was at the same level as the prior year.
EBITDA came to EUR 4.5 million, which corresponds to an EBIT margin of 9%. Depreciation and amortiza-
tion decreased from EUR 2.8 million in the prior year to EUR 1.9 million.
The net profit after tax was EUR 3.0 million compared to EUR 1.9 million in 2010. Earnings per share (diluted
and undiluted) of EUR 0.10 were 67% above the level of the prior year. The reasons for the positive devel-
opment of earnings were intact revenue growth, as well as a stable operating cost ratio of around 35%.
Gross profit increased by 27% to EUR 20.0 million. The gross margin of 41% was the same as the prior year.
Net operating income and expenses increased from EUR 13.5 million to EUR 17.3 million. The expenditures
for research and development contained therein came to EUR 6.4 million in 2011, after EUR 4.0 million in
the prior year. The growth is primarily a result of the higher personnel costs due to the increased number
of employees. Sales and marketing expenses amounted to EUR 6.7 million, up 56% on the previous year.
This is largely attributable to the considerable impact of the higher expenses for distribution partners and
intensified marketing activities as a result of the international sales offensive in 2011. The general adminis-
trative costs increased by 13%, which was primarily a result of higher personnel costs.
The financial result in fiscal year 2011 increased from EUR 0.01 million to EUR 0.09 million. Earnings from
income tax amounted to EUR 0.3 million. In the prior year, the tax expense came to EUR 0.4 million.
The net profit of the AG as reported in accordance with the German commercial law amounted to EUR
0.6 million in 2011 (prior year: EUR 1.1 million). Other operating income increased from EUR 2.3 million to
EUR 3.1 million. The government grants contained therein amounted to EUR 0.5 million (prior year: EUR 0.2
million). Expenditures for related services rose to EUR 10.0 million (prior year: EUR 5.6 million) as a result of
increased use of third-party services. Personnel costs for hiring new employees, especially in the research
and development area, increased to EUR 20.9 million compared to EUR 16.0 million in the prior year. Other
operating costs increased from EUR 10.0 million to EUR 12.5 million. Other interest income of EUR 0.6 mil-
lion resulted primarily from affiliated companies. The result from ordinary business activities amounted to
EUR 0.4 million after EUR 1.7 million in 2010. Earnings from income tax in 2011 came to EUR 0.2 million
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 16
after a tax expense of EUR 0.5 million in the prior year. In total, the balance sheet loss in accordance with
German commercial law was reduced to EUR 7.9 million (prior year: EUR 8.5 million).
Financial position
In fiscal year 2011, Intershop generated cash flow of EUR 3.1 million from ongoing business activities. In the
prior year, the amount was EUR 7.4 million. The reduced cash inflow was primarily a result of the change
to the balance sheet item. The cash outflow from investment activities rose to EUR 3.1 million (prior year:
EUR 1.6 million), which can mainly be attributed to increased payments for investments in intangible as-
sets. The cash flow from financing activities was EUR 0.7 million. In the prior year, this amount was EUR 4.1
million as a result of various capital increases. In total, the net inflow of cash and cash equivalents in fiscal
year 2011 came to EUR 0.5 million. This resulted in cash and cash equivalents of EUR 16.9 million at the end
of the reporting period.
With the single entity, cash and cash equivalents increased by EUR 4.6 million to EUR 14.7 million. The cash
inflow resulted primarily from the loan repayment of a subsidiary.
net assets
Compared to the prior year, the balance sheet total of the Company increased by 14% to EUR 41.2 million.
On the assets side, intangible assets increased from EUR 8.5 million to EUR 9.7 million, which is primarily
attributable to the capitalization of software development costs. Property, plant and equipment increased
from EUR 0.7 million to EUR 1.1 million. In total, non-current assets amounted to EUR 11.8 million, up 15%
compared to the prior year. With current assets, particularly relevant was the closing date related increase
of trade receivables by 46% to EUR 11.8 million, which however is offset by high payments received shortly
after the balance sheet date. Cash and cash equivalents not subject to restrictions on disposal as of De-
cember 31, 2011 also increased slightly by 3% to EUR 16.9 million. In total, current assets increased from
EUR 26.0 million to EUR 29.4 million.
Equity increased by 15% to EUR 28.2 million in the reporting period, which resulted from the Group’s net
profits, as well as the slightly increased subscribed capital because of smaller capital increases due to the
exercise of employee options. The equity ratio improved by one percentage point to 69% as of year-end.
Non-current liabilities decreased by EUR 0.6 million to EUR 1.4 million, primarily due to lower deferred rev-
enues. Current liabilities increased by 21% to EUR 11.5 million mainly due to an increase in trade payables.
Like at year-end 2010, there were no financial liabilities as of December 31, 2011. In general, the net assets
of the Company are solid with an above average equity base for a medium-sized company.
The total assets of the single entity in the annual financial statements prepared in accordance with the
German commercial law increased by 11% to EUR 38.7 million as of December 31, 2011. Current assets
grew by a total of 15% to EUR 26.9 million, primarily due to the increased cash on hand, bank balances
(+46% to EUR 14.7 million) and trade receivables (+47% to EUR 8.1 million). The receivables from affiliated
companies included in current assets decreased from EUR 5.7 million as of the closing date of the prior
year to EUR 2.2 million due to partial loan repayment of a subsidiary. Equity increased from EUR 27.4 mil-
lion to EUR 28.7 million. Provisions increased by 24% to EUR 5.0 million, as well as liabilities from EUR 2.2
million to EUR 4.4 million. The increase in liabilities can be mainly attributed to higher trade payables (EUR
1.1 million to EUR 2.5 million).
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 17
RESEARCH AND DEVELOPMENT
The expenses for research and development are mainly attributable to personnel costs in this area, includ-
ing third-party services. Both items increased due to the significant expansion of the workforce in fiscal
year 2011 and the integration of additional partners for software development. In total, expenses for re-
search and development in 2011 came to EUR 6.4 million, exceeding the prior-year figure by 59%.
The focus of the research and development activity in fiscal year 2011 was the development of Intershop
7, the next generation of Intershop’s e-Commerce platform, which will be distributed worldwide in the first
half of 2012. The new version will include a total of over 1,500 new features. The guiding principle of the
development strategy is „Enable the Shop Manager.” The result is numerous improvements and innovative
applications, especially in the areas of the multi-channel business, internationalization, as well as cam-
paign management and analysis. This also includes the new design preview, which gives the shop man-
ager a central management tool for all communication channels, like the web, portable communications
devices, branches, call centers, e-mail or social commerce. A so-called multi-application framework guar-
antees standardized views, content and promotional campaigns across all platforms. With a rule-based
Promotion Engine, marketing campaigns can be planned even better and managed according to budget.
The Intershop developers have built in multivariate analytical methods, which make it possible for the
shop manager to monitor the success of different layouts, navigation variations and discount promotions
at any time and thereby optimize business processes. The new software is based on an extensive market
analysis, as well as interviews with over 150 shop managers. Moreover, the experiences of our strategic
partners also contributed to the project, and all of the values created in the development of the Intershop
software, also in cooperation with partners, represent added value for Intershop that goes beyond the
balance sheet assets.
PERSONNEL
As of the balance sheet date on December 31, 2011, Intershop had a total of 470 employees worldwide.
Thereof, 384 account for skilled personnel in the technical areas, including especially R&D and consulting,
38 employees in sales and marketing, as well as 48 employees in administrative capacities. In the past 12
months alone, the workforce was increased by 111 employees. This was necessary in order to continue
the growth trend of the last few years in the future as well. The competition for highly qualified IT special-
ists presents significant challenges for medium-sized companies like Intershop. That is why the Company
especially relies on the cooperation with research institutions and the respective chairs of recognized
universities for the recruitment of skilled personnel, in order to secure talented young people as early as
possible. Intershop has been running an academic partner program for years, which by now includes 25
universities, including the University of Jena, the University of Applied Sciences Jena, the University of Leip-
zig and the Ilmenau University of Technology. The educational institutions receive a software license from
Intershop for educational and research purposes, extensive technical support, training of employees and
a dedicated contact person for their specific needs. In turn, Intershop receives information on the educa-
tional progress and current projects on a regular basis, as well as good access for the recruitment of gradu-
ates. At Intershop, the proportion of employees who are university graduates is above average with 74%.
The table below gives a breakdown of the Group’s employees by department:
employees by department (full-time equivalents)
12/31/2011
12/31/2010
Technical departments
(R&D and service functions)
Sales and marketing
General and administrative departments
384
38
48
470
289
34
36
359
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 18
The regional distribution of the employees shows only slight changes compared to year-end 2010. On
December 31, 2011, 94% of the workforce (442 employees) were employed in Europe, 5% (22 employees)
accounted for the branch in San Francisco, USA and just under 1% (6 employees) for the Asia Pacific region,
which are supported by a large number of employees from other regions, especially Germany.
Intershop Communications Aktiengesellschaft as a single entity had 384 employees as of the balance
sheet date (December 31, 2010: 289 employees).
MANAGEMENT BOARD AND SUPERVISORy BOARD
In fiscal year 2011, there were two personnel changes in the managing bodies of the Company, one in
the Management Board and another in the Supervisory Board. Ludwig Lutter was appointed member of
the Management Board effective April 1, 2011. As Chief Financial Officer at Intershop, Ludwig Lutter is in
charge of the areas of Finance, Mergers and Acquisitions, and IR, as well as the Operations, Legal and Hu-
man Resources departments. He will succeed Peter Mark Droste, whose contract expired on March 31,
2011. At the Company’s Ordinary Annual Stockholders’ Meeting on June 29, 2011, Tobias Hartmann, Chief
Executive Officer, Global Operations of GSI Commerce, Inc., was elected as new member of the Supervi-
sory Board effective July 1, 2011. The member in office up to that time, Michael Conn, left the Board as of
June 30, 2011.
REMUNERATION REPORT
Remuneration of the Management Board
The compensation of the Management Board comprises fixed and variable components. The fixed com-
ponents comprise the fixed salary and additional benefits, such as the non-cash benefit resulting from
the use of a company car, and are paid monthly. The variable, annually recurring remuneration is based
on various annual and multi-annual quantitative and qualitative objectives, whose assessment depends
on the degree achieved of the objective. The basis for assessment of the quantitative objectives that have
greater weight are the Group’s EBIT, revenue and share price. The qualitative objectives are based on stra-
tegic targets.
Total remuneration paid to the Management Board for fiscal year 2011 amounted to EUR 880 thousand
(2010: EUR 934 thousand), of which EUR 624 thousand (2010: EUR 528 thousand) accounted for fixed
remuneration and EUR 256 thousand (2010: EUR 406 thousand) for the variable components. The fixed
remuneration components include EUR 582 thousand for fixed salary and EUR 42 thousand for additional
benefits (2010: EUR 490 thousand for fixed salary, EUR 38 thousand for additional benefits).
The remuneration of the Management Board members is as follows:
in EUR thousand
Heinrich Göttler
Dr. Ludger Vogt
Ludwig Lutter
Peter Mark Droste
Fixed
remuneration
variable
remuneration
total
remuneration
2011
2010
2011
2010
2011
2010
212
201
159
52
624
189
164
-
175
528
100
100
56
0
256
90
90
-
226
406
312
301
216
52
880
279
254
-
401
934
New stock options were not granted to the members of the Management Board in the reporting year. The
members of the Management Board also do not own any stock options from prior years.
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 19
Membership on the Management Board ends in the event of the Company’s reorganization (merger, split-
up, or change in legal form). By way of compensation, the Management Board member then receives a
severance payment amounting to twelve months’ salary; if the remaining term of the Management Board
member’s contract is less than one year, the severance payment is reduced accordingly. The members
of the Management Board agreed to a non-compete agreement, which stipulates that the Company is
to pay compensation for one year. The compensation includes 75% of the last remuneration received,
excluding additional benefits. The compensation is not paid if Intershop cancels the non-compete agree-
ment within a specified period. In the event of illness, the Management Board agreements include an enti-
tlement to continued payment of the fixed basic salary for a period of six months up to a maximum period
until the end of the contract duration. In the event of the death of a member of the Management Board,
the surviving dependants are entitled to the monthly fixed basic salary for the month in which the death
occurs, as well as for the following six months. No member of the Management Board has been promised
further benefits in the event of the termination of his employment with the Company. No loans or similar
benefits were granted to members of the Management Board. No member of the Management Board re-
ceived any benefits from third parties during the fiscal year that were promised or granted because of his
position as a member of the Management Board.
Remuneration of the Supervisory Board
Upon resolution of the Annual Stockholders’ Meeting of June 29, 2011, the remuneration of the Super-
visory Board changed effective January 1, 2011, due to the amendment of section 13 of the Articles of
Association. The remuneration continues to include fixed and variable components. The fixed remunera-
tion is comprised of an annual fixed remuneration of EUR 12,500, as well as an attendance allowance of
EUR 2,500 per meeting or EUR 500 if a telephone conference is held in place of a meeting. In addition, the
members of the Supervisory Board receive a performance-related remuneration, as long as the result of
the operating activities (EBIT) reported in the approved consolidated financial statements of the Company
for the fiscal year concerned was positive and the established quantitative goals were reached: EUR 5,000
are granted, respectively if a) the EBIT of the prior year is achieved, b) the EBIT increased by more than
10% compared to the prior year, c) the EBIT increased by more than 20% compared to the prior year, and
d) there was an increase in revenue of more than 20% compared to the prior year. The chairman of the
Supervisory Board receives twice the amount of the fixed and variable remuneration. Supervisory Board
members who belong to the Supervisory Board for only part of the fiscal year receive remuneration pro-
portionate to the duration of their position. Expenses incurred by the members of Supervisory Board in the
performance of their duties are reimbursed by the Company.
In fiscal year 2011, the total remuneration for the Supervisory Board members came to EUR 161 thousand
(2010: EUR 78 thousand), of which EUR 101 thousand (2010: EUR 63 thousand) accounted for fixed remu-
neration and EUR 60 thousand (2010: EUR 15 thousand) for the performance-related portion. The remu-
neration of the Supervisory Board members is as follows:
in EUR thousand
Dr. Herbert May
James W. MacIntyre
Tobias Hartmann
Michael R. Conn
Members who left the
Supervisory Board in 2010
Fixed
remuneration
variable
remuneration
total
remuneration
2011
2010
2011
2010
2011
2010
53
24
11
13
-
101
5
9
-
1
48
63
30
15
8
8
60
1
3
-
0
11
15
83
39*
19*
21*
-
161
6
12*
-
1*
59
78
* The Supervisory Board member relinquished the remuneration entitled to him in accordance with the Articles of Association.
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft
20
The Supervisory Board members, James W. MacIntyre, Tobias Hartmann, as well as Michael R. Conn re-
linquished their total remuneration of EUR 78 thousand for fiscal year 2011 (of which EUR 48 thousand
account for fixed remuneration and EUR 30 thousand for variable remuneration). As a result of these relin-
quishments, the actual total remuneration to be paid for the Supervisory Board for fiscal year 2011 comes
to EUR 83 thousand (2010: EUR 65 thousand). Supervisory Board members James W. MacIntyre and Mi-
chael R. Conn relinquished their remuneration of a total of EUR 13 thousand for fiscal year 2010.
RISK REPORT
risK management system
Intershop operates in a dynamic market characterized by continuous changes and a wide range of associ-
ated business environment risks. At the same time, the Company faces risks arising from operating policies,
the Company’s structure, and the organization of internal processes that could endanger the Company’s
goals. Intershop is committed to the goal of protecting the property of its stockholders and safeguarding
its continued existence as the basis of its business activity. The Management Board has formally adopted
a risk policy designed to promptly identify unknown risks (early warning function) and to manage risks.
This policy describes and defines the methods and processes used in risk management throughout the
Company. A risk manual describing the risk management system was created, which is reviewed and, if
necessary, updated on a regular basis. Risks are defined as possible deviations from planned targets and
include both positive deviations (opportunities) and negative deviations (threats). The risk management
system focuses on potentially particularly serious negative deviations that could impact the Company’s
development and sharply reduce equity. The Company’s appointed risk manager informs the Manage-
ment Board about the Company’s risk situation on a regular basis (at least per quarter). Above and beyond
this, risk management organization is decentralized. The divisional managers in the individual business
areas are responsible for identifying and mitigating the risks in their divisions. They promptly report any
newly identified risks, or changes to existing risks, to the Management Board. In turn, the Management
Board also obtains information about the Company’s risk position as and when necessary. Flat hierarchies,
short communication channels, and a culture of open communication ensure that important risk infor-
mation reaches the Management Board without delay. In addition, central information systems help to
provide the Management Board with direct, timely, and regular information on risks associated with the
Company’s development. In the case of significant risks and risks that pose a particular threat to the Com-
pany’s continued existence, the divisional managers are required to provide the Management Board with
immediate and detailed information. The Management Board informs the Supervisory Board at least once
a quarter, but usually more often, about important developments at the Company.
The operational risk management process encompasses risk identification, risk assessment, risk aggrega-
tion, and risk mitigation.
To identify risks, the environment and the defined risk fields and risks within it are continuously monitored
by risk owners (usually the Intershop divisional managers), to which clearly defined business areas and all
possible risks arising from those areas are assigned at an operational level. Additionally, a risk inventory
is conducted on a yearly basis (with updates every quarter) during which already identified risks will be
reviewed, new risks captured and risk owners assigned. In financial control, a deviation analysis is per-
formed so as to identify deviations from targets. This uses financial accounting and control software by SAP
and customer relationship management (CRM) software by Siebel Systems and by Salesforce. If possible/
meaningful, all risks are assessed for probability of occurrence and, to the extent possible, for amount of
damage. Intershop’s total risk exposure is determined by aggregating the risks. Intershop applies risk miti-
gation measures that, depending on the point in time involved, reduce the probability of occurrence or
lessen the impact. It also distinguishes between preventive and reactive measures.
As part of its risk inventories in all departments of the Company, Intershop has identified all risks that could
influence the Company’s development.
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 21
business environment and industry risKs
Intershop is the European market leader in the highly dynamic market of e-Commerce solutions. That mar-
ket is undergoing constant change due to factors such as technological progress, changes in the compa-
nies’ IT landscape or new strategies and behavior patterns of the players in e-Commerce. In principle, there
is a risk that Intershop offers products and services that do not reflect the needs of customers or market
expectations. If the Company is not successful in monitoring the target markets adequately, sizing up the
competition and pursuing solution-oriented strategies, this could lead to a negative sales trend because
customers will go with competitors and it will be more difficult to gain new customers. Intershop counters
this risk through continuous market monitoring and analysis of customer requirements together with cus-
tomers, partners and market analysts. Therefore, the new Intershop software Intershop 7 was developed
together with the alliance partners, as well as on the basis of market investigations in cooperation with
150 online retailers worldwide.
strategic business risKs
Intershop’s key strategic goal is to develop the Company from a pure-play technology supplier into a full-
service provider covering the entire e-commerce process chain. The consulting services that Intershop
mainly provides as part of projects are a major line of business for the Company where customer loyalty
is a top priority. To be able to ensure customer loyalty, it is important to provide the quality the customer
demands, while at the same time keeping an eye on the costs. Failure to do so impacts on customer con-
fidence. Future contracts may be lost or the profit margin on projects permanently reduced. To counter
such events, resource planning is carried out for all projects. Regular reports document the current status
of projects. Intershop also manages this risk by maintaining a strong customer focus and continuously
monitoring customer satisfaction. It is therefore able to control the risks arising from projects.
With regard to the Intershop software, there is the risk of product defects, which is typical for software. Due
to development flaws, it could be that a product is defective and, especially in terms of product safety,
does not meet the requirements of the customer or market. Product defects could lead to potential or ac-
tual impairment of operations for customers and, with serious defects, acceptance of Intershop’s products
could be considerably diminished. Additional costs for Intershop were incurred in order to remove defects
and/or for possible legal disputes/compensation for damages with customers. In addition, a decline in rev-
enue is possible. The risk, however, is considered to be small because an extensive quality control process
minimizes the occurrence of undetected product defects.
Brand visibility also plays a central role for Intershop, as otherwise potential customers are unaware of the
Company as a possible solutions partner. This is mainly the case in countries outside Europe, although
Intershop also won new orders in the U.S.A. and the Asia-Pacific region in 2011. Intershop confronts this
risk by expanding the number of its staff in foreign markets as well as with a network of international sales
partners that contribute with all kinds of sales and marketing measures to raising awareness of the brand
Intershop.
perFormance risKs
Intershop is unable to rule out the possibility of deviations from planned targets as a result of the inef-
ficient organization of sales activities, failure to generate a sufficient number of new customers, or inap-
propriate marketing activities. This risk is countered through appropriate target models in sales, increased
training measures, and weekly reporting on the status of current sales activities, on the basis of which the
threat is considered small. Key measures include a forward-looking product policy, expansion of the prod-
uct portfolio across several markets, and ongoing product development focused on technological perfor-
mance. To achieve this, Intershop employs a highly qualified and motivated workforce.
Because the products are so complex, sales through partners is difficult. Especially on foreign markets, Inter-
shop is forced to rely on sales partners because the costs of establishing and maintaining its own sales struc-
tures are too high. To avoid the risk of partners not correctly advising potential customers, Intershop puts
its partners through a targeted training and selects them based on an extensive catalog of requirements.
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 22
human resources risKs
The performance and expertise of the employees and management personnel are key to the Company’s
success. There is also the risk, especially with employees in key positions, that if the employee goes to a
competitor, the specific knowledge of the employee will be used there. Furthermore, it is generally more
difficult to replace these employees. A loss of key personnel could lessen Intershop’s competitiveness and
economic success. These risks are counteracted through a modern personnel management with individ-
ual measures for personnel development together with an open company culture and flat hierarchies. In-
tershop has also shown in the past that personnel changes can be reduced with the measures mentioned,
a highly qualified workforce and an extensive network of external service providers, so that this risk can be
considered to be small.
inFormation technology risKs
Business processes at Intershop are based on information technologies. This means that there is a typical,
inherent risk of data loss. Moreover, Intershop is exposed to the risk of attacks on the software, which may
reduce its range of functions or availability to the customer. There is also the risk of information leaks to
competitors, which can create a competitive advantage for them. Existing information security measures,
as well as data protection procedures are enhanced on an ongoing basis so as to limit the risks associated
with IT-supported integration. Security policies and processes are updated regularly. Intershop considers
the probability of the risks in this area to be small.
The availability of third-party software that must meet market and customer requirements poses a further
risk. If the third-party software used is not available in good time or is defective, this may affect the operat-
ing result. This challenge is addressed by signing long-term supply agreements with third-party software
providers and continuously reviewing their quality. Intershop also has alternative providers in place.
Financial risKs
Because equity has been strengthened, Intershop is currently in a strong liquidity position and has the
financial resources to bear risks. It is not exposed to any significant interest rate or credit risk at the present
time, as it has no financial liabilities. Its activities abroad are exposed to currency risk in that revenues are
generated in U.S. and Australian dollars. Measures were taken to hedge foreign currency risks.
In order to at least limit the risk of defaults, Intershop regularly performs credit checks on customers. In
the case of larger contracts, this risk is also reduced by agreements on advance payments or progress pay-
ments based on the percentage of completion of the contract. Please also see section “Financial instru-
ment disclosures” in the notes to the consolidated financial statements.
other risKs
With Intershop 7, the Company is also introducing a new license model, which allows customers to lease
the software based on the number of transactions. This transaction-based leasing model is targeted at key
figures and the way of thinking of shop managers. However, for Intershop this means that compared to
the sales model, the earnings from licenses will be spread over several years, which could result in a slump
in license revenue in the year it is launched if many Intershop 7 customers choose this model. In turn, in
the following years, Intershop would benefit from the deferred license revenue, as well as from an even
stronger, long-term customer retention.
Intershop offers revenue-based or transaction-based billing models, especially in the area of full service
and The Bakery business. This poses a risk to Intershop’s profitability if the customer has low or decreas-
ing revenue or transactions over a longer time. In general, there is also the risk that revenue shares are
deferred. Intershop attempts to minimize the risk with contractual agreements on guaranteed minimum
revenue, as well as transaction volumes established beforehand.
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 23
The subsidiary, The Bakery GmbH, is in the development phase. The costs incurred will be covered by a
loan granted by Intershop. If The Bakery GmbH does not manage to achieve its planned figures for rev-
enue and profit, it runs the risk of insolvency. This would result in a loss of planned revenues for Intershop.
Intershop is counteracting this risk with increased sales activities, which are supported by marketing and
organizational restructuring measures.
The Company is a defendant in various legal proceedings arising from the normal course of business. The
Management Board assumes that there will be no major financial obligations for the Company resulting
from legal disputes other than the ones listed in the notes to the consolidated financial statements. Those
risks are covered by insurance respectively reserves were set aside as a precaution. Please also see section
“Legal Disputes/Contingent Liabilities” in the notes to the consolidated financial Statements.
Third parties could accuse Intershop of infringement of intellectual property rights, such as patents or
copyrights, and claim compensation for damages or also attempt to restrict the sale of Intershop software
in the future. This especially applies to the countries, in which software process patents exist. In order to
minimize risk in general, Intershop especially checks the compliance of the licensing terms of third parties
on a regular basis already in the development process.
Intershop generates around half of its revenues from major customers. Therefore, there is a risk that the
loss of one or more major customers may have an adverse effect on the Company’s results of operations.
Intershop considers this risk to be very small, however, as there are considerable time and financial barri-
ers facing customers who consider switching. Additionally, the risk is minimized because of the conclu-
sion of long-term contracts and a broad customer base. Projects are systematically analyzed on a regular
basis in order to be able to react early to any deviation from the plan. A project plan and a cost estimate
are prepared for the respective project before the project starts. Estimates and project progress are being
reviewed on a regular basis during the term of the project. Project Controlling calculates possible discrep-
ancies in costs, revenues and margin, project term respectively certain milestones and, in case of deviation,
proposes possible counter measures.
Changes to search engines’ ranking algorithms may make it impossible to offer search engine optimization
services. This may reduce online marketing revenues and have a correspondingly adverse effect on the
results of operations. The Company considers this risk to be very small, however.
Despite the worldwide economic recovery, the economic forecast for 2012 is fraught with uncertainties
that have to be taken into consideration when making decisions for future business developments.
opportunities
Intershop operates in a very dynamic market environment. New opportunities are constantly arising in the
e-Commerce sector. Identifying and using these opportunities without taking unnecessary risks is an im-
portant driver for the sustainable growth of the Company. That is why opportunity and risk management
are closely linked at Intershop. Opportunity management is part of the strategic planning process at Inter-
shop – the internal and external potential that can have a positive impact on the further development and
increase in value of the Company is evaluated on a regular basis. The main opportunities to highlight are
the following: Many companies need efficient sales and marketing channels to be able to withstand the
economic cost and sales pressure. Intershop offers alternative solutions for companies with its innovative
e-Commerce products and services. Customer satisfaction, which is of particular importance to Intershop,
provides a further opportunity. Regular surveys and long-term customer loyalty to Intershop confirm cus-
tomers’ high level of satisfaction. This could result in follow-up projects.
Intershop’s customer structure, with major customers accounting for a large proportion of total revenues,
provides the opportunity to continue generating revenues from these major customers, as they will be
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 24
less inclined to switch provider due to the financial and time barriers to switching.
Due to Intershop’s stable financial situation and established market position, it has the opportunity to be
selective in the acquisition of companies in order to grow strategically along the e-Commerce process
chain.
overall risK position
The overall risk position refers to the sum total of all the individual risks to which Intershop is exposed. No
risks have been identified that, either in isolation or in combination with others, may threaten Intershop’s
continued existence.
description oF the Key characteristics oF the internal control and risK
management system with regard to the consolidated Financial reporting
process
Intershop’s internal control system includes the policies, procedures, and measures introduced by the
Management Board to enable the organizational implementation of its decisions so as to ensure the ef-
fectiveness, cost-effectiveness, and propriety of financial reporting as well as adherence to the applicable
legal provisions.
The Intershop Group is divided into three business areas, whose various departments report to the Man-
agement Board member responsible in each case. The departments are divided into a number of cost
and profit centers, each with its own department head. The department heads are accountable either for
profits and costs or just for costs.
The business ordering and approval processes, including authorizations and threshold values, are set out
in the authorization directive („Global Authorization Policy”) introduced by the Management Board, which
is reviewed and, when necessary, updated on a regular basis. The authorization directive includes three
fields of regulation: the procurement of goods and services, offers to and agreements with customers, as
well as personnel matters. Defined processes must be adhered to before actions are carried out. If, for ex-
ample, goods are ordered or services are requested, or if existing contracts are amended or canceled, vari-
ous authorizations in the form of signatures must be obtained. The extent of the authorizations required
depends on the type of contract involved and the volume of the order. Information on finances and the
impact on the balance sheet, as well as on the budget must be provided, and alternatives (e.g., offers from
other suppliers or service providers) must be explained. No orders or commissions may be placed until the
relevant departments, department heads, and/or Management Board members have given their approval
as required by the policy. In addition to the authorization directive, Intershop has additional guidelines for
various areas, such as travel cost guidelines, cell phone guidelines and company car guidelines. These are
also reviewed and adjusted accordingly on a regular basis. Management Board meetings, which take place
at least once a week, discuss and monitor topics such as third-party commissions, among other things.
Accounting systems are used to report accounting transactions in the financial statements of the respec-
tive subsidiary. With the exception of one subsidiary, the parent company’s central Finance department
enters the data into the SAP system. Consolidation and the preparation of Intershop’s consolidated finan-
cial statements are performed centrally and manually by the parent company. The propriety of the data
taken over during the preparatory consolidation of the single-entity financial statements is checked, with
the principle of the separation of functions being applied. All consolidation adjustments are recorded and
documented in a separate file. As of fiscal year 2012, consolidation and preparation of the consolidated
financial statements will be done with central consolidation software. The Group’s accounting policies take
into account the requirements of the IFRSs, the Handelsgesetzbuch (HGB – German Commercial Code],
and the German principles of proper accounting. When preparing the consolidated financial statements,
internal controls are carried out to ensure the reliability of the single-entity financial statements used as a
basis and of the consolidated financial statements. The Group’s controlling will prepare a detailed analysis
every month to show the development of the Group, the single entities, as well as the cost and profit cent-
ers. Impairment testing of cash generating units is performed centrally at Group level to ensure the use of
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft uniform evaluation criteria. The preparation and compilation of the data used to prepare the notes to the
financial statements and the management report is also performed at Group level.
DISCLOSURES IN ACCORDANCE WITH SECTION 289(4) HGB AND SECTION 315(4)
HGB PLUS ExPLANATORy REPORT
25
At the balance sheet date, the Company’s subscribed capital amounted to EUR 30,170,984, composed of
30,170,984 no-par value bearer shares. Each share has a notional value of EUR 1. There are no restrictions
affecting the voting rights or transferability of the shares. In accordance with the authorization resolution,
the option holders who acquire new shares from Authorized Capital II, have to pledge, however, when
these shares are issued, not to sell the shares for a period of six months after exercise of the option.
As of the balance sheet date, GSI Commerce Solutions, Inc. of King of Prussia, PA, U.S.A. holds 26.15% of the
Company’s share capital. GSI Commerce, Inc. of King of Prussia, PA, U.S.A. through GSI Commerce Solutions,
Inc., indirectly holds a 26.15% interest in Intershop. eBay Inc., San Jose, California, U.S.A. indirectly holds
26.15% of the voting rights in Intershop through GSI Commerce Inc. and GSI Commerce Solutions, which
are under its control. Intershop has not been informed of any other direct or indirect share capital holdings
that exceed 10% of the voting rights as of the balance sheet date. Please see section Equity in the notes to
the consolidated financial statements regarding relevant notifications on voting rights.
There are no shares with special rights conveying powers of control, especially rights of appointment to
the Supervisory Board. As part of the employee stock option plans, employees do not have an interest in
the capital without being able to exercise their control rights directly at the same time.
The appointment and dismissal of members of the Management Board is governed by sections 84 and 85
of the AktG and Article 6 of the Articles of Association of the Company. According to the Articles of Asso-
ciation, the Management Board consists of one or more persons. The number of members of the Manage-
ment Board is determined by the Supervisory Board. Amendments to the Articles of Association are made
in accordance with section 179 of the AktG and Article 28 of the Articles of Association. Under the terms
of the latter, the Supervisory Board has the power to resolve changes to the Articles of Association that
affect only their wording and also, in particular, changes to the provisions governing the share capital cor-
responding to the respective amounts of capital increases from conditional capital and authorized capital,
and of capital reductions resulting from the retirement of shares.
For information on the powers of the Management Board relating to the issuance of shares, please refer to
the section entitled „Equity” in the notes to the consolidated financial statements, and to the notes to the
financial statements of INTERSHOP Communications AG. In addition, through a resolution of the Annual
Stockholders’ Meeting of December 14, 2010 and June 29, 2011, the Management Board is authorized to
acquire up to 2,479,379 of its own shares before December 31, 2012.
The Company is not party to any material agreements that take effect in the event of a change of control
following a takeover bid. In addition, the Company has not entered into any agreements with the mem-
bers of the Management Board or with employees for compensation in the event of a takeover bid.
CORPORATE GOVERNANCE DECLARATION IN ACCORDANCE WITH
SECTION 289A OF THE HGB
On March 13, 2012, Intershop’s Management Board issued a Corporate Governance Declaration in accord-
ance with section 289a of the HGB and published it on the Company’s website at http://www.intershop.
com/corporate-governance-declaration.html
DEPENDENT COMPANy REPORT
For the fiscal year 2011, the Management Board of INTERSHOP Communications AG has prepared a report
on the relationships with affiliated companies in accordance with section 312 of the AktG. This report also
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 26
describes the relationships with GSI Commerce Solutions, Inc. At the current time, the Management Board
proceeds on the assumption that no dependent relationship with GSI Commerce Solutions, Inc. exists.
However, the Management Board is conscious of the fact that this assessment depends on imponder-
abilities and uncertainties, especially possible majorities during future Stockholders’ Meetings, which can-
not be forecasted with certainty. Therefore, the dependent company report was voluntarily prepared as a
precaution. It contains the following final declaration:
“Intershop Communications AG received appropriate return service for the legal transac-tions, listed in this
report on relationships to associated companies, according to the cir-cumstances that were known at the
time at which the legal transaction was carried out, or the measures were met, and has not been informed
that the listed measures have not been met. Other reportable measures were not met or refrained in the
reporting period.”
EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
With the resolution of January 26, 2012, the district court of Jena appointed Bob van Dijk new member of
the Supervisory Board of the Company until the next Annual Stockholders’ Meeting. The previous Supervi-
sory Board member, James MacIntyre, resigned from his office as of January 31, 2012. Bob van Dijk is Vice
President of eBay Europe.
On March 28, 2012, Intershop announced that Australia´s leading telecommunications provider Telstra has
extended its existing service order with Intershop. The agreement extends a managed service order lever-
aging from the previous managed service agreement executed in the year 2009. The agreement includes
consulting, testing and support services around the installed e-commerce system based on the Intershop
software Enfinity. The contract has a term of three years and a total revenue potential for Intershop of
around EUR 11 million.
On March 28, 2012, the Company’s subscribed capital was increased by EUR 12,500 to EUR 30,183,484 due
to the issue of shares from Conditional Capital I.
REPORT ON ExPECTED DEVELOPMENTS
economic conditions
Most economic research institutes predict that the global economy will continue to slow down in 2012.
Given the European sovereign debt crisis, most of the global forecasts for all of 2012 were recently revised
downward. The IMF reduced its forecast for the global economy by 0.7% to 3.3%, with the World Bank ex-
pecting an increase of only 2.5%. Furthermore, both institutions are warning of high economic risks. The
IMF expects a slight increase of 1.2% in the gross domestic product of developed countries. Slightly bet-
ter growth of 1.8% is expected for the American economy compared to the other developed countries.
Affected by the slowing economy in developed countries, the forecast for the developing and emerging
countries is also weaker than in prior years. A growth of 5.4% is expected for the year as a whole.
The IMF expects a minimal growth of 0.3% for Germany this year, whereas the Kiel Institute for the World
Economy is somewhat more optimistic with a growth of 0.5%. Stronger economic growth in Germany of
1.5% to 1.7% is not expected before 2013.
Continued positive growth rates are forecast for the e-Commerce business. The rapidly growing number
of Internet users and broadband connections worldwide supports this expectation. The market research
agency IDATE estimates that close to 750 million connections worldwide will have broadband speeds by
the end of 2012. In addition, the number of mobile users and the revenue share of the mobile e-Com-
merce business will grow thanks to the sale of Internet-capable smartphones and Tablet PCs.
In January 2012, the European Commission set an objective stating that the share of online business in
relation to the overall business should be doubled in the EU Member States by 2015. Currently, accord-
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft 27
ing to Eurostat, the statistical office of the European Union, this share is still at 3.4%. In order to achieve
this, various obstacles, which have prevented faster growth up to now, should be removed. The European
Commission wants to facilitate access to Internet products and services across borders and eliminate the
problems with payment and delivery. In addition, the settlement of disputes and removal of illegal content
should be made easier, investments in wireless connections and permanent infrastructures supported and
the development of cloud computing services improved.
In Germany, the commercial association, HDE, expects an increase in revenue from e-Commerce of around
13% to EUR 29.5 billion in 2012. According to the industry association, BITKOM, revenue should increase
by 5.2% to EUR 17.0 billion in the German software industry. The European market research institute, EITO,
predicts that the European software market will grow by 4.6% to EUR 70 billion.
company outlooK
The year 2012 will be marked by a decisive milestone for Intershop. In the first quarter of 2012, the next-
generation e-Commerce platform Intershop 7 will be launched. Intershop expects the B2C site of a large
global IT group to go live as early as March, as well as a series of additional go lives over the course of the
second quarter that are based on the previous version of Intershop 7. The new platform has more innova-
tions than any other release update in the development history of Intershop’s standard product, the Enfin-
ity Suite. Therefore, management’s expectations are understandably high with regard to the international
sales potential of the new shop system. This is the first time that the alliance created by Intershop for
e-Commerce will come into play. Another factor that will determine the future development of the Com-
pany this year is the successful integration of many new employees. In the past year alone, the Intershop
team grew by 111 to 470 employees as of year-end 2011.
Intershop will continue the profitable growth trend that started in 2008. The acquisition of many new cus-
tomers, as well as the strengthening of the cooperation with our Platinum Accounts, some with long-term
general agreements, speak for this positive outlook. In Europe, there is intense competition for the best
e-Commerce solution on the market. In line with this, Intershop plans to further strengthen its technologi-
cal market leadership with the new platform. The number one strategic goal is to gain more market share
in a global license market that, according to the US market research company, Forrester, is estimated at a
volume of EUR 500 million. According to this, Intershop had a market share of 1% to 2% in 2011. The goal
is to increase its market share to 10% by the year 2016 and to compete with companies like IBM or Oracle.
statement on business developments For 2012 and 2013
Despite the difficult economic climate and ongoing euro crisis, the Management Board expects an in-
crease in net revenue of between 10% and 20% in fiscal year 2012. This constitutes a revenue margin of
EUR 54.1 million to EUR 59.0 million. Compared to 2011, Intershop also expects an increase in the operat-
ing result (EBIT) of between 10% and 20%. This corresponds to an earnings corridor of EUR 2.9 million to
EUR 3.2 million. This expectation already takes into account that the Management Board expects a non-
recurring negative result in the first quarter of 2012 due the high non-recurring costs that are planned in
connection with the upcoming market launch of Intershop 7. The same rates of increase for net revenue
and EBIT as in 2012 are forecast for fiscal 2013.
Jena, March 28, 2012
The Management Board
Heinrich Göttler
Dr. Ludger Vogt
Ludwig Lutter
Group ManaGeMent report and ManaGeMent report of InterSHop CoMMunICatIonS aktIenGeSellSCHaft consolidated
financial
stateMents
31 Consolidated Balance Sheet
32 Consolidated Statement of Comprehensive Income
33 Consolidated Statement of Cash Flows
34 Consolidated Statement of Shareholders´ Equity
consolidated
financial
stateMents
consolidated financial stateMents
intershop coMMunications aKtiengesellschaft
31
CONSOLIDATED BALANCE SHEET
in EUR thousand
Note No. december 31, 2011 december 31, 2010
assets
noncurrent assets
Intangible assets
Property, plant and equipment
Other noncurrent assets
Deferred tax assets
Restricted cash
current assets
Trade receivables
Other receivables and other assets
Restricted cash
Cash and cash equivalents
total assets
shareholders´ eQuity and liabilities
shareholders´ equity
Subscribed capital
Capital reserve
Other reserves
noncurrent liabilities
Other noncurrent provisions
Deferred revenue
current liabilities
Other current provisions
Trade accounts payable
Income tax liabilities
Other current liabilities
Deferred revenue
total shareholders´ eQuity and liabilities
(1)
(2)
(4)
(21)
(5)
(3)
(4)
(5)
(5)
(6)
(6.1)
(6.2)
(11)
(10)
(11)
(7)
(8)
(9)
(10)
9,741
1,098
24
895
0
11,758
11,794
676
67
16,884
29,421
41,179
30,171
7,753
(9,705)
28,219
78
1,344
1,422
1,029
5,580
579
2,763
1,587
11,538
41,179
8,517
705
28
895
72
10,217
8,099
1,112
383
16,390
25,984
36,201
29,582
7,630
(12,602)
24,610
303
1,751
2,054
807
3,255
472
2,775
2,228
9,537
36,201
32
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
in EUR thousand
gross revenues
Licenses
Services, maintenance and other
media costs
net revenues
Licenses
Services, maintenance and other
cost of revenues
Licenses
Services, maintenance and other
gross profit
operating expenses, operating income
Research and development
Sales and marketing
General and administrative
Other operating income
Other operating expenses
result from operating activities
Interest income
Interest expense
Financial result
earnings before tax
income taxes
earnings after tax
other comprehensive income
Exchange differences on translating foreign operations
total comprehensive income
note
no.
(12)
(13)
(12)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
January 1 to december 31,
2011
2010
5,500
49,878
55,378
(6,222)
5,500
43,656
49,156
4,184
40,042
44,226
(5,976)
4,184
34,066
38,250
(1,118)
(28,072)
(29,190)
(2,194)
(20,330)
(22,524)
19,966
15,726
(6,389)
(6,663)
(5,252)
1,676
(711)
(17,339)
(4,015)
(4,275)
(4,653)
821
(1,358)
(13,480)
2,627
2,246
92
(2)
90
2,717
323
3,040
(143)
2,897
33
(23)
10
2,256
(391)
1,865
174
2,039
Earnings after tax attributable to:
shareholders of intershop communications ag
3,040
1,865
Total comprehensive income attributable to:
shareholders of intershop communications ag
Earnings per share (EUR, basic)
Earnings per share (EUR, diluted)
Weighted average shares outstanding (basic)
Weighted average shares outstanding (diluted)
(22)
(22)
2,897
0.10
0.10
30,015
30,048
2,039
0.06
0.06
30,015
30,054
Consolidated FinanCial statements inteRsHoP CommuniCations aktiengesellsCHaFt
33
CONSOLIDATED STATEMENT OF CASH FLOWS
in EUR thousand
note
no.
January 1 to december 31,
2010
2011
cash Flows From operating activities
Earnings before tax
Adjustments to reconcile net profit/loss to cash used in operating activities
2,717
2,256
Financial result
Depreciation and amortization
Other noncash expenses and income
Allowances for doubtful accounts
Changes in operating assets and liabilities
Accounts receivable
Other assets
Liabilities and provisions
Deferred revenue
net cash provided by operating activities beFore
income tax and interest
Interest received
Interest paid
Income taxes received
Income taxes paid
net cash (used in) operating activities
cash Flows From investing activities
Restricted cash
Payments for investments in intangible assets
Purchases of property and equipment, net of capital leases
(90)
1,886
24
159
(3,854)
441
2.417
(1,049)
2,651
92
(2)
320
0
3,061
389
(2,634)
(870)
(10)
2,829
50
(1)
2,471
(1,109)
(198)
1,443
7,731
33
(24)
0
(390)
7,350
403
(1,516)
(460)
net cash used in investing activities
(3,115)
(1,573)
cash Flows From Financing activities
Cash received for unregistered stock
Expenses of cash received for unregistered stock
net cash provided by/used in financing activities
Effect of change in exchange rates on cash
net change in cash and cash equivalents
Cash and cash equivalents, beginning of period
(5)
cash and cash equivalents, end of period
732
(41)
691
(143)
494
16.390
16,884
4.506
(381)
4,125
174
10,076
6.314
16,390
Consolidated FinanCial statements inteRsHoP CommuniCations aktiengesellsCHaFt
34
CONSOLIDATED STATEMENT OF SHAREHOLDERS´ EQUITy
in EUR thousand
common shares
(Number shares)
subscribed
capital
capital
reserve
conversion
cumulative
cumulative
reserve
profit/loss
currency differences
intershop communications ag
equity attributable to
shareholders of
total
minority
interest
shareholders´
equity
balance, January 1, 2011
29,582,305
29,582
7,630
(93)
(14,930)
24,610
0
24,610
Total comprehensive income
Stock option expense
Issue of new shares
588.679
589
22
101
balance, december 31, 2011
30,170,984
30,171
7,753
(93)
(11,890)
2,278
28,219
0
28,219
balance, January 1, 2010
26,309,094
26,309
6,728
(93)
(16,468)
18,723
(327)
18,396
Total comprehensive income
Acquired Minority interest
Stock option expense
Issue of new shares
3,273,211
3,273
51
851
balance, december 31, 2010
29,582,305
29,582
7,630
(93)
(14,930)
2,421
24,610
0
24,610
O T H E R R E S E R V E S
2,421
(143)
2,247
174
3,040
1,865
(327)
2,897
22
690
2,039
(327)
51
4,124
327
2,897
22
690
2,039
0
51
4,124
Consolidated FinanCial statements inteRsHoP CommuniCations aktiengesellsCHaFt
35
in EUR thousand
common shares
(Number shares)
subscribed
capital
capital
reserve
conversion
reserve
cumulative
profit/loss
cumulative
currency differences
equity attributable to
shareholders of
intershop communications ag
minority
interest
total
shareholders´
equity
O T H E R R E S E R V E S
balance, January 1, 2011
29,582,305
29,582
7,630
Total comprehensive income
Stock option expense
Issue of new shares
588.679
589
(93)
(14,930)
3,040
2,421
(143)
24,610
0
24,610
2,897
22
690
2,897
22
690
balance, december 31, 2011
30,170,984
30,171
7,753
(93)
(11,890)
2,278
28,219
0
28,219
balance, January 1, 2010
26,309,094
26,309
6,728
(93)
(16,468)
Total comprehensive income
Acquired Minority interest
Stock option expense
Issue of new shares
3,273,211
3,273
1,865
(327)
2,247
174
18,723
(327)
18,396
327
2,039
(327)
51
4,124
2,039
0
51
4,124
balance, december 31, 2010
29,582,305
29,582
7,630
(93)
(14,930)
2,421
24,610
0
24,610
22
101
51
851
Consolidated FinanCial statements inteRsHoP CommuniCations aktiengesellsCHaFt
notes to the
consolidated
financial stateMents
39 General Disclosures
44 Accounting Policies
51 Notes to the Individual Balance Sheet Items
59 Notes to the Individual Items of the Statement of Comprehensive Income
63 Notes to the Cash Flow Statement
64 Other Disclosures
notes to the
consolidated
financial stateMents
notes to the consolidated
financial stateMents
39
GENERAL DISCLOSURES
The Company
INTERSHOP Communications AG (“Intershop”, the “Company”, the “Intershop Group” or the “Group”) is an
Aktiengesellschaft (German stock corporation) under German law. The Company’s registered office is at
Intershop Tower, Leutragraben 1 in 07740 Jena, Germany. The Company is listed on the German stock ex-
change in Frankfurt and is included in the Prime Standard.
INTERSHOP Communications AG is entered in the commercial register of the Jena Local Court under num-
ber HRB 209419.
Intershop develops and sells software solutions for the management of e-commerce transactions. The
Company also offers all related services, provides a comprehensive range of online marketing services, and
covers all aspects of online sales including fulfillment with its full-service business area.
The Company has prepared its consolidated financial statements assuming the Company’s continued op-
erations. As of December 31, 2011, the Company had cash and cash equivalents (including restricted cash
and cash equivalents) of EUR 17.0 million (December 31, 2010: EUR 16.8 million). The equity ratio as of the
balance sheet date was 69% (previous year: 68%). The Company does not have any financial liabilities (in
this connection, interest-bearing financial obligations to the capital market or credit institutes are consid-
ered financial liabilities). Please see also the Group Management Report.
Accounting principles (compliance statement)
In fiscal year 2011, Intershop Communications AG prepared its consolidated financial statements in ac-
cordance with the International Financial Reporting Standards (IFRSs) issued by the International Account-
ing Standards Board (IASB), and in accordance with the provisions required to be applied under section
315a(1) of the Handelsgesetzbuch (HGB – German Commercial Code).
The consolidated financial statements of Intershop Communications AG for 2011 (January 1, 2011 to
December 31, 2011) were prepared in accordance with the International Financial Reporting Standards
(IFRSs) valid at the balance sheet date and with the Interpretations issued by the International Financial
Reporting Interpretations Committee (IFRIC), as adopted by the EU.
For the fiscal year 2011, the following Accounting Standards and Interpretations were required to be ap-
plied for the first time:
• Amendments to ias 24 „Related Party Disclosures”
• Amendment to ias 32 „Financial Instruments: Presentation”
• Amendment to iFrs 1 „First-Time Adoption of International Financial Reporting Standards”
• Amendments to iFric 14 „IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Require-
ments and their Interaction”
• iFric 19 „Extinguishing Financial Liabilities with Equity Instruments”
The amendments to IAS 24 relate to the complete revision of the definition of related parties, as well as
the introduction of simplification provisions for entities that are under government control. There will not
be any significant effect to the disclosure requirements for the Company in fiscal year 2011, especially be-
cause it does not have such a controlling relationship.
IAS 32 was amended such that subscriptions rights, options and warrants for a fixed number of own shares
against a fixed amount in any currency must be reported as equity instruments, provided these are grant-
ed proportionately to all existing shareholders of the same class. The first-time application of the amended
IAS 32 did not have an effect on Intershop’s consolidated financial statements.
The amendment to IFRS 1 allows first-time adopters of IFRS to make use of an exemption for comparative
40
disclosures that end before December 31, 2009 according to IFRS 7 „Financial Instruments: Disclosures”.
Since Intershop is not a first-time adopter of IFRS according to IFRS 1, the amendment of IFRS 1 does not
have any effect on Intershop’s consolidated financial statements.
The amendments to IFRIC 14 relate to contribution plans that require minimum funding and for which
the Company makes prepayments to meet these obligations. Compared to the existing provisions, the
economic benefit of the prepayments, which lead to a reduction of prepayments in the future due to the
minimum funding requirements, will now be capitalized as an asset. The amendments do not have any
effect on Intershop’s consolidated financial statements since there are no such contribution plans.
IFRIC 19 regulates the accounting treatment of a financial liability of the debtor if newly negotiated con-
tractual terms allow him to extinguish the financial liability in full or in part by issuing equity instruments
and the creditor represents an independent third party. The first-time application of IFRIC 19 did not have
any effect on the consolidated financial statements of the Company.
Furthermore, the following improvements to IFRS in 2010 were to be applied as of fiscal year 2011:
iFrs
IAS 1
IAS 34
IFRS 1
IFRS 3
IFRS 7
amendment
Presentation of Financial Statements
Disclosures on Important Events and Transactions
First-Time Adoption of International Financial Reporting Standards
Business Combinations
Information about the Nature and Extent of Risks arising from Financial Instruments
IFRIC 13
Customer Loyalty Programs: Determination of Fair Value
The improvements listed had no material effect on the consolidated financial statements in the reporting
year.
Financial reporting for fiscal year 2011 has been prepared in accordance with the Standards and Interpre-
tations required to be applied and gives a true and fair view of the net assets, financial position, and results
of operations of the Intershop Group.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 41
iFrs
IFRS 1
IFRS 7
IFRS 9
IFRS 10
IFRS 11
IFRS 12
IFRS 13
IAS 1
IAS 12
IAS 19
IAS 27
IAS 28
amendment
effective for fiscal
year beginning
Severe Hyperinflation and Removal of Fixed Dates for First-time
Adopters
Financial instruments: disclosures
Financial instruments: classification and rating
Consolidated financial statements
Joint Arrangements
Disclosure of Interests in Other Entities
Fair Falue Measurement
Presentations of Items of Other Comprehensive Income
Income taxes: deferred taxes
Employee benefits
Separate financial statements
Investments in Associates and Joint Ventures
07/01/2011
07/01/2011
01/01/2013
01/01/2013
01/01/2013
01/01/2013
01/01/2013
01/01/2012
07/01/2012
01/01/2013
01/01/2013
01/01/2013
IFRS 9 deals with the classification, recognition, and measurement of financial assets and liabilities, and re-
places sections of IAS 39. IFRS 10 focuses on the introduction of a uniform consolidation model for entities
that is based on the controlling of the subsidiary by the parent company. The concrete implications of IFRS
9 and 10, as well as of the other Standards mentioned for the net assets, financial position, and results of
operations, as well as for the presentation of the Group have yet to be established.
Financial reporting for fiscal year 2011 has been prepared in accordance with the Standards and Interpre-
tations required to be applied and gives a true and fair view of the net assets, financial position, and results
of operations of the Intershop Group.
Assets and liabilities are generally measured at historical cost. The stock option plans are measured at fair
value.
The consolidated financial statements have been prepared in euros. Unless stated otherwise, all amounts
are given as thousands of euros (EUR thousand). Figures are rounded to the nearest thousand and totals
may not sum due to rounding.
The fiscal year of INTERSHOP Communications AG and its consolidated subsidiaries is the calendar year with
the exception of the subsidiary Intershop Communications Australia Pty Ltd in Australia, which has a differ-
ent fiscal year (July 1 to June 30). The income statement has been prepared using the cost of sales method.
On March 28, 2012, the Management Board of INTERSHOP Communications AG authorized the submis-
sion of these IFRS consolidated financial statements to the Supervisory Board. The consolidated financial
statements will be submitted to the electronic Bundesanzeiger (German Federal Gazette) and published
there. Additionally, they will also be available on the Company’s website.
Estimates and assumptions
Preparation of the consolidated financial statements requires management to make estimates and as-
sumptions that affect the amounts reported in the consolidated financial statements and the accompany-
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 42
ing notes. Estimates are based on past experience and other knowledge of transactions to be accounted
for. Actual results may differ from these estimates. As a result, estimates and the assumptions on which
they are based are regularly reviewed and assessed for their potential effects on the Company’s financial
reporting.
In particular, estimates are required to recognize and measure provisions for legal costs and litigation risks,
and guarantee provisions and provisions for income taxes, and for determining the value of the options
under the stock option plans as well as to assess the need for and measurement of impairment losses and
valuation allowances. An estimate for the degree of completion of contracts for fixed-price projects is re-
quired when determining revenues for consulting services.
Provisions are recognized and measured on the basis of financial estimates and data, as well as on the
basis of historical data and circumstances known at the balance sheet date. It must be probable that the
obligation to a third party will have to be settled. The actual obligation may differ from the amounts of the
provisions.
Certain assumptions were made in determining the value of the options under the stock option plans;
these are explained in the section entitled “Stock option plans”.
Goodwill is tested for impairment using the test described in the section entitled „Impairment of assets.”
Please refer to the “Revenues” section in the chapter entitled “Accounting Policies” for information on esti-
mating revenues.
Basis of consolidation
As of December 31, 2011, in addition to the parent company, the consolidated companies included the
subsidiaries Intershop Communications, Inc., SoQuero GmbH, The Bakery GmbH, Intershop Communica-
tions Australia Pty Ltd, Intershop Communications AB, Aktiebolaget Grundstenen 137724, as well as In-
tershop Communications Ventures GmbH. The subsidiary, Aktiebolaget Grundstenen 137724, which was
acquired in 2011, was a new addition to the consolidated companies in fiscal year 2011 and was consoli-
dated in accordance with IAS 27. No significant assets or liabilities were assumed.
The following list shows the subsidiaries of Intershop Communications AG and the Company’s respective
interest as of December 31, 2011:
Intershop Communications, Inc.,
San Francisco, U.S.A.
Intershop Communications Ventures GmbH,
Jena, Germany
Intershop Communications AB, Stockholm,
Sweden
Intershop Communications Korea Co. Ltd.,
Seoul, Korea
Intershop Communications Taiwan Co. Ltd.,
Taipei, Taiwan
SoQuero GmbH, Frankfurt/Main, Germany
The Bakery GmbH, Berlin, Germany
Intershop Communications Australia Pty Ltd,
Melbourne, Australia
Aktienbolaget Grundstenen 137724, Malmö,
Sweden
interest
in %
currency
equity*
net loss**
100
100
100
100
100
100
100
100
100
Euro
(914,728)
(318,531)
Euro
Euro
Euro
Euro
Euro
Euro
Euro
Euro
(2,195,858)
475,200
21,147
0
0
213,151
(1,049,381)
13,039
608
0
0
312,327***
609,036
2,602
5,603
0
* Equity as of December 31, 2011 is translated at the exchange rate as of the reporting date
** (Preliminary) net profit/loss for fiscal year 2011 is translated at the average annual rate
*** Net profit/loss before profit transfer to parent company INTERSHOP Communications AG
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 43
Effective June 29, 2004, the subsidiaries Intershop Communications Korea Co. Ltd. and Intershop Com-
munications Taiwan Co. Ltd. were sold together with two other former subsidiaries (Intershop Commu-
nications Hong Kong Co., Limited and Intershop Communications Singapore Pte. Limited) by way of a
management buyout; at this point, the control was transferred to the buyer and the subsidiaries were
deconsolidated. The shares of these two companies were still allocated to the parent company as of the
balance sheet date.
The dissolution of Intershop (UK) Ltd. (i.L.), London, Great Britain, was concluded as of December 20, 2011;
therefore Intershop no longer holds any shares in this company. The deconsolidation already took place
effective September 30, 2005.
The subsidiary SoQuero GmbH has fulfilled the necessary requirements pursuant to section 264 (3) of the
HGB and is exempt from the obligation to prepare, audit and publish its annual financial statements for
fiscal year 2011.
Consolidation methods
The consolidated financial statements of Intershop Communications AG include the consolidated results
of the Company and all its German and foreign subsidiaries over whose financial and operating policies
Intershop Communications AG exercises direct or indirect control. A company is included in the consoli-
dated financial statements from the date on which control passes to the Intershop Group. Deconsolida-
tion usually occurs on the date the subsidiary is liquidated or on the date control passes to a third party.
subsidiaries
Acquisition accounting for companies acquired from third parties is performed as of the date of acqui-
sition using the purchase method of accounting. Under this method, the assets acquired and liabilities
assumed are measured at their acquisition-date fair value. Any remaining positive difference between ac-
quisition price and fair value is capitalized as goodwill. Any negative difference is immediately recognized
as an expense. Transaction costs are recognized as expense. In subsequent periods, hidden reserves and
liabilities realized at the time of initial consolidation are carried, written down or reversed in accordance to
the treatment of the corresponding assets and liabilities. Goodwill will be reviewed for impairment at least
once a year during subsequent reporting periods and, in case of impairment, an unscheduled write-down
to the lower fair value is made.
Expense and revenues as well as receivables and liabilities between consolidated companies are elimi-
nated.
Foreign currency translation
Monetary items denominated in foreign currency in the local-currency single-entity financial statements
of the consolidated companies are measured at the closing rate. Translation differences are recognized in
income.
The functional currency for it’s the subsidiaries is the local currency of the country in which the subsidiary
is based. The Company’s functional currency is the euro. The financial statements of subsidiaries outside
the euro zone are translated using the modified closing rate method. Since from a financial, economic, and
organizational perspective, the subsidiaries conduct their business independently, the functional currency
is always the same as the company’s local currency. Assets and liabilities are translated using the closing
rate at the balance sheet date; income and expenses are translated at the average exchange rate for the
year. The difference resulting from currency translation is taken directly to equity and reported separately
in equity under other reserves (cumulative currency translation differences). Currency translation differ-
ences are reversed to income when a subsidiary is deconsolidated.
Transactions in foreign currencies are translated at the exchange rate prevailing at the date of each trans-
action. Nonmonetary items denominated in foreign currency are measured at historical exchange rates.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 44
Differences in exchange rates between the date of a transaction denominated in a foreign currency and
the date at which it is either settled or translated are recognized in the statement of comprehensive in-
come and are shown in “other operating income” or “other operating expenses.” Currency gains and losses
were EUR -253 thousands (2010: EUR 8 thousands).
The following table shows the significant exchange rates used for foreign currency translation:
currency
closing rate
average rate for the year
country
1 eur =
dec. 31, 2011
dec. 31, 2010
United States
Australia
USD
AUD
1.29
1.27
1.33
1.30
2011
1.39
1.35
2010
1.33
1.45
Goodwill
ACCOUNTING POLICIES
The accounting policies are applied uniformly throughout the Intershop Group and to all periods reported
in the consolidated financial statements.
In accordance with IFRS 3, goodwill resulting from consolidation is the excess of the cost of a business
combination over the Group’s interest in the fair value of the identifiable assets and liabilities and contin-
gent liabilities of a subsidiary, associate, or joint venture at the date of acquisition.
Goodwill is recognized as an asset and tested for impairment at least once a year in accordance with IAS
36. Goodwill is tested for impairment on the basis of cash-generating units. Goodwill is allocated to cash-
generating units. An impairment loss is recognized if the recoverable amount of the cash-generating unit,
which is the higher of fair value less costs to sell and value in use, is lower than its carrying amount (for
further details, see the section entitled “Impairment of assets”).
Impairment losses are immediately recognized in the income statement and not reversed in subsequent
periods.
Intangible assets
Purchased intangible assets, such as software, patents, and customer relationships, are capitalized at cost.
Intangible assets with finite useful lives are measured at cost less accumulated amortization, taking into
account accumulated impairment losses and reversals of impairment losses, and are written down using
the straight-line method. Their useful lives are generally between 2 and 3 years.
Intangible assets with an indefinite useful life, such as goodwill, are measured at cost less accumulated
impairment losses and tested for impairment both annually and when there are indications of impairment.
Please refer to the section entitled “Impairment of assets”.
Software development costs
Development costs for newly developed (software) products are capitalized at cost in accordance with
IAS 38 if a clear allocation of expenses is possible, and if both the technical feasibility and the marketabil-
ity of the newly developed products is ensured. Capitalization of software development costs generally
begins when the technological feasibility of the product is established; the Company defines this as the
development of a prototype as well as the development of a beta version of the software. Since 2008,
updates of Intershop’s standard software Enfinity have been issued regularly as releases. The capitalization
requirements under IAS 38 have therefore been met since 2008 and the software development costs are
capitalized. In the fiscal years prior to 2008, the costs were recognized directly as an expense in the income
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 45
statement. Capitalized software development costs include direct staff costs for employees, ancillary staff
costs, directly attributable payments for third-party services, and an appropriate percentage of reasonably
identifiable overhead costs. The relevant amount is amortized using the unit of production method over
the planned useful life of the product beginning from the time when the software release concerned is
made available to customers.
Research costs may not be capitalized in accordance with IAS 38 and are therefore recognized directly as
an expense in the income statement.
Property, plant, and equipment
Property, plant, and equipment is measured at cost less accumulated depreciation, taking into account
accumulated impairment losses and reversals of impairment losses. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets. Depreciation is based primarily on the
following useful lives:
Computer equipment
Office furniture/ Presentation equipment
3 years
4–5 years
Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease terms or
their estimated useful lives. When items of property, plant, and equipment are decommissioned, sold, or
abandoned, the gain or loss from the difference between the sale proceeds and the carrying amount is
reported in “other operating income” or “other operating expenses”.
Impairment of assets
For property, plant, and equipment and intangible assets with finite and indefinite useful lives an estimate
is made at each balance sheet date to establish whether there are any indications that the assets in ques-
tion may be impaired in accordance with IAS 36, Impairment of Assets.
If such indications exist, the recoverable amount of the asset is determined so that the impairment loss
can be calculated. The recoverable amount is the higher of fair value less costs to sell and value in use. The
fair value less costs to sell is defined as the amount that could be generated by the sale of an asset in an
arm’s length transaction between willing parties. The value in use is determined on the basis of discounted
future cash flows using a market rate of interest that reflects the risks of the asset that are not yet included
in the estimated future cash flows. If the recoverable amount of an asset is lower than its carrying amount,
the asset must be written down to its recoverable amount. Impairment losses are recognized immediately
in profit or loss. There were impairment losses of EUR 559 thousand on internally developed software in
2011 and EUR 527 thousand in 2010. For details, please see section “Intangible Assets” in chapter “Notes to
the Individual Balance Sheet Items”. In the case of reversals of impairment losses in a subsequent period,
the carrying amount of the asset is adjusted to reflect the identified recoverable amount; however, the
value of the asset may only be increased to the carrying amount that would have arisen if no impairment
loss had previously been charged. Reversals of impairment losses must be recognized immediately in
profit or loss. No such reversals were performed in 2010 and 2011.
The goodwill impairment test is to be performed on cash generating units. The goodwill impairment test
is to be performed on the cash generating unit to which goodwill is allocated. Goodwill comprises the in-
tellectual property incorporated in the software obtained from previous acquisitions (net carrying amount
at December 31, 2011: EUR 4,473 thousand) and goodwill resulting from the acquisition of SoQuero GmbH
relating to expected future positive cash flows based on long-term customer relationships (net carrying
amount at December 31, 2011: EUR 754 thousand). Goodwill from the acquisition of SoQuero GmbH was
generated by the cash generating unit of the subsidiary SoQuero GmbH. For the goodwill representing
the intellectual property incorporated in the software, the relevant cash-generating unit is the Intershop
Group excluding the online marketing, full-service business areas and The Bakery GmbH. As a first step,
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 46
the carrying amounts of the cash generating units are compared with their value in use. The total of the
carrying amounts is also compared with the fair value of the Company. For this purpose, the fair value is
derived from the Company’s market capitalization. The impairment write-down required is determined in
a second step, but only if the value in use or fair value is less than the carrying amount. To determine the
value in use of the cash generating units, the net cash flows were calculated for 2012 to 2015 and a per-
petual annuity (without growth rate) was calculated for the period beginning 2016. The calculations are
based on the corporate planning for the period from 2012 to 2015 approved by Intershop’s management;
this planning builds on a market forecast and reflects parameters including customer retention, market
share, and sector growth. When determining the value in use, present values were calculated on the basis
of a discount rate of 9.8% (weighted average cost of capital – WACC). No impairment losses on goodwill
were reported in 2010 and 2011. Impairment losses on goodwill are not reversed.
Leases
IAS 17 requires leases to be classified into financing leases and operating leases. Leases are classified as
financing leases if the terms and conditions of the lease transfer substantially all risks and rewards inci-
dental to ownership to the lessee. All other leases are classified as operating leases. Under a finance lease,
the leased assets are capitalized at fair value on initial recognition and depreciated over their useful lives.
Lease payments under an operating lease are expensed over the term of the lease using the straight-line
method. Intershop only has operating leasing arrangements.
Financial instruments
Financial assets and financial liabilities, which include trade receivables and liabilities, cash and cash equiv-
alents and restricted cash, are recognized in the balance sheet at the date when the Group becomes a
party to the contractual provisions of the financial instrument. Purchases or sales are usually accounted
for at the trade date.
Financial instruments are recognized at fair value on acquisition. Financial instruments are recognized at
fair value on acquisition and are subsequently measured on the basis of the following categories: a) finan-
cial assets and liabilities at fair value through profit or loss, classified as “held for trading” and “designated”,
b) held-to-maturity financial assets, c) loans and receivables, d) available-for-sale financial assets, and e)
liabilities measured at amortized cost.
Financial assets are classified as “at fair value through profit or loss” if they have been acquired with
the intention of being sold in the short term or are held for trading. Derivatives are classified as “held for
trading” if they are not designated as being included in a hedging relationship. If their fair value is negative,
this leads to a financial liability. In this category, financial assets are subsequently measured at fair value.
Any gain or loss resulting from subsequent measurement is reported in the income statement under other
operating income or expenses. held-to-maturity financial assets are non-derivative financial assets
with fixed or determinable payments and a fixed maturity that an entity has the positive intention and abil-
ity to hold to maturity. Following initial recognition, they are measured at amortized cost. Gains and losses
are reported in profit or loss for the period if the asset in question is derecognized or impaired. loans and
receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. They are subsequently measured at amortized cost using the effective interest meth-
od. available-for-sale financial assets are non-derivative financial assets that are either attributable to
this category or have not been allocated to any of the other categories presented. They are subsequently
measured at fair value, with any unrealized gains or losses being recognized directly in equity.
Following initial recognition, financial liabilities are generally measured at amortized cost using the effec-
tive interest method, with the exception of financial liabilities at fair value through profit or loss.
Currently, Intershop’s financial assets are trade receivables and investments with no operating activities
that are generally held for sale and are recognized at amortized cost. As of the balance sheet date, Inter-
shop did not hold any financial instruments that are classified as “held to maturity” or that are measured at
fair value on initial recognition in accordance with IAS 39.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 47
Trade receivables, other receivables and other assets
Trade receivables are reported at fair value, which usually corresponds to cost, at the date of recognition.
They are subsequently measured at amortized cost net of any valuation allowances. Receivables from the
sale of software licenses are recognized only when a contract has been signed with the customer, any
right of return granted to the customer has expired, the software has been made available according to
the contract, and it is more probable than not that the receivable will be collected.
Trade receivables are recognized at their principal amount, which equals fair value at the time of collection.
Receivables with longer maturities (> 1 year) are discounted using market interest rates.
Other receivables and other assets are recognized at amortized cost. All identifiable risks of default are
taken into account by deducting appropriate allowances.
The Company makes judgments as to its ability to collect outstanding receivables and recognizes allow-
ances for the portion of receivables where collection becomes doubtful. Allowances are recognized based
on a specific review of all significant outstanding invoices. For those invoices not specifically reviewed,
allowances are recognized at differing rates, based on the age of the receivable. In determining these
percentages, Intershop analyzes its historical collection experience and current economic trends. If the
historical data the Company uses to calculate the allowances recognized for doubtful accounts does not
reflect the future ability to collect outstanding receivables, additional allowances for doubtful accounts
may be needed and the future results of operations could be materially affected.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, checks, and unrestricted deposits with banks that have
an original maturity of up to 90 days and are recognized at nominal value.
Restricted cash
Restricted cash is reported separately (see section entitled “Liquid Funds”).
Stock option plans
Stock option plans allow employees to acquire shares in the Company. In accordance with IFRS 2, they are
accounted for at the fair value of the options issued; they are recognized in employee-related expenses,
with a corresponding increase in equity. See section entitled “Equity” for further details.
Intershop has launched the following stock option plans:
1999 stocK option plan
With effect from June 21, 1999, the Company adopted a stock option plan (the 1999 Plan) for the issuance
of shares to Management Board members, executives, and various employees. The options under the 1999
Plan vest ratably over a four-year period, beginning six months from the grant date; however, in compli-
ance with the applicable provisions of the German Aktiengesetz (AktG) [„Aktiengesetz”: German Stock
Corporation Act] (valid version of 1999), the options are not exercisable prior to expiry of a two-year period
from the date on which they are granted, even if a portion is already vested. The options expire if they are
not exercised within five years of the grant date. If an employee leaves the Company, those options expire
that are not exercisable up to the date on which the employee leaves. The exercise price of the options is
equal to 120% of the market price of the shares at the grant date, where the market price is determined
to be the average closing price as quoted on the Prime Standard for the 10 trading days prior to the grant
date. Options were last granted under the 1999 Plan in October 2007. A maximum of 12,500 options may
still be exercised by a former Management Board member of the Company under the 1999 stock option
plan. Please see the section on „Conditional capital” under „Equity.”
2001 stocK option plan
As of January 1, 2001, the Company adopted a stock option plan (the 2001 Plan) for the issuance of shares
to all employees. The options under the 2001 Plan vest ratably over a fifty-month period beginning from
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 48
the grant date; however, no options will be exercisable, even though a portion is vested, prior to the six
months after the grant date. The options expire if they are not exercised within five years of the grant date.
If an employee leaves the Company, those options expire that are not exercisable up to the date on which
the employee leaves; exercisable options may be exercised up to six months after the employee leaves
the Company, but expire after this period. The exercise price of the options is the fair value at the grant
date, defined as equivalent to the xETRA closing price on the Frankfurt Stock Exchange for voting shares
of stock of the Company. Options were last granted under the 2001 Plan in spring 2008. A maximum of
118,000 options may still be exercised under this stock option plan. Please refer to the section on „Equity”.
Other provisions and contingent liabilities
According to IAS 37, provisions are recognized for obligations to third parties if they have arisen from a
past event, an outflow of resources is probable, and the amount can be reliably estimated. Provisions that
do not lead to an outflow of resources in the subsequent year are recognized at the settlement value,
discounted to the balance sheet date using market interest rates. The settlement value includes expected
cost increases. Rights of recourse are not deducted from provisions.
Contingent liabilities are firstly possible obligations whose existence will be confirmed only by the oc-
currence or nonoccurrence of one or more uncertain future events not wholly within the control of the
entity. Secondly, they are existing obligations where it is not probable that they will lead to an outflow of
resources, or the outflow cannot be reliably quantified. According to IAS 37, contingent liabilities are not
recognized in the balance sheet.
Trade accounts payable
Trade accounts payable are accounted at their amortized cost. Trade accounts payable are classified into
current and noncurrent trade accounts payable. Trade accounts payable within one year are current liabili-
ties, and trade accounts payable after one year are noncurrent liabilities.
Income and expense recognition
Intershop derives revenues from the following primary sources: software license revenues and services
revenues, which mainly include maintenance, consulting and education, online marketing, and Full Ser-
vice and The Bakery business.
Intershop assesses whether fees are fixed or determinable at the time of sale and recognizes revenue if all
other revenue recognition requirements are met. For software license arrangements that do not require
significant modification or customization of the underlying software, the Company recognizes the ser-
vices performed as revenue when: (1) it enters into a legally binding arrangement with a customer for the
license of software; (2) it delivers the products and, (3) the amount of income can be reliably determined.
Substantially, all of the Company’s license revenues are recognized in this manner.
Some of the Company’s software arrangements additionally include implementation services sold sep-
arately under consulting engagement contracts. Revenues from these arrangements are generally ac-
counted for separately from the license revenue. The more significant factors considered in determining
whether the revenue should be accounted for separately include the nature of services (i.e., consideration
of whether the services are essential to the functionality of the licensed product), degree of risk, availability
of services from other vendors, timing of payments, and impact of milestones or acceptance criteria on the
collectibility of the software license fee.
Where several services are covered by a single agreement (so-called multi-component contracts), the
Company allocates total income to the individual elements of the transaction on the basis of their respec-
tive fair values. These fair values are determined using vendor-specific objective evidence (“VSOE”). Ven-
dor-specific objective evidence of fair value for all elements of an arrangement is based upon the normal
pricing and discounting practices for those products and services when sold separately. If the Company
cannot objectively determine the fair value of any undelivered element included in bundled software and
service arrangements, it defers revenue until all elements are delivered, services have been performed, or
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 49
until fair value can objectively be determined. When VSOE of a license or other delivered element has not
been established, the Company uses the residual method to record license revenue if VSOE of all undeliv-
ered elements is determinable. Under the residual method, VSOE of the undelivered elements is deferred
and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized
as revenue.
Intershop’s license arrangements generally do not include acceptance provisions. However, if acceptance
provisions exist within previously executed terms and conditions that are referenced in the current agree-
ment, the Company then applies judgment in assessing the significance of the provision. If the Company
determines that the likelihood of non-acceptance of these arrangements is remote, it then recognizes
revenue once all of the criteria described above have been met. If such a determination cannot be made,
revenue is recognized upon the earlier of receipt of written customer acceptance or expiration of the
acceptance period.
Revenue for consulting services is generally recognized as the services are performed. If there is a signifi-
cant uncertainty about the project completion or receipt of payment for the consulting services, revenue
is deferred until the uncertainty is sufficiently resolved.
The determination of the amount of revenues to be recognized is partly based upon the use of estimates.
The Company estimates, for example, the percentage of completion on contracts with fixed or “not to ex-
ceed” fees on a monthly basis, utilizing hours incurred to date as a percentage of total estimated hours to
complete the project. This is used for fixed-price projects in the consulting area. If Intershop does not have
a sufficient basis to measure progress towards completion, revenue is recognized when the Company
receives final acceptance from the customer. When total cost estimates exceed the contractually agreed
upon revenues, Intershop sets aside valuation allowances or reserves for the estimated losses, using cost
estimates that are based upon an average burdened daily rate and all expenses applicable to the organiza-
tion delivering the services.
The complexity of the estimation process and issues related to the assumptions, risks, and uncertainties
inherent in the application of the percentage-of-completion method of accounting affect the amounts of
revenues and related expenses reported in the Company’s consolidated financial statements. A number of
internal and external factors can affect Intershop’s estimates, including costs for employees, utilization and
efficiency variances, and specification and testing requirement changes.
Since fiscal year 2011, the consulting services include the services to be billed for the product develop-
ment services rendered by Intershop within the context of the strategic alliance. Revenue is recognized on
a time and material basis when services are rendered.
Revenues from maintenance are recognized ratably over the period in which the services are provided.
Revenue-based billing models are used in the full-service business area. Revenues are recognized on the
basis of agreed percentages of the sales generated by the relevant online shop.
Revenue from The Bakery business is determined based on the agreed price per transaction stipulated in
the specific customer contracts. In this context, a transaction is a business process defined together with
the customer that is carried out on The Bakery’s transaction platform.
In the case of revenues from online marketing, gross revenues are netted against media costs to report net
revenues. Both gross and net revenues are presented in the statement of comprehensive income.
Cost of revenues
The cost of revenues comprises the costs incurred in generating revenues. They include in particular all
costs incurred in the consulting, maintenance, training, full-service, the Bakery and online marketing areas.
The cost of revenues relating to licenses also includes amortization of capitalized software development
costs. In the online marketing area, however, the costs passed directly on to customers (media costs) are
deducted directly from revenues.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 50
Cost of debt
Interest expenses are recognized in the period in which they arise. Interest relating to the production of
qualifying assets is generally capitalized.
Government grants
In accordance with IAS 20, government grants are only recognized when there is reasonable assurance
that the conditions attaching to them will be complied with and that the grants will be received. IAS 20
provides in principle for grants to be recognized as income over the periods in which the related costs are
recognized. If all the conditions have been complied with, the Company reports non-repayable income
subsidies as “other operating income”.
Income taxes
In accordance with IAS 12, deferred taxes are recognized for all temporary differences between the carry-
ing amount of assets and liabilities in the IFRS balance sheet and their tax base at the balance sheet date
using the balance sheet liability method. Deferred tax assets are recognized for all deductible temporary
differences, unused tax loss carryforwards, and unused tax credits to the extent that it is probable that tax-
able income will be available against which the deductible temporary differences and the unused tax loss
carryforwards and tax credits can be utilized.
Deferred taxes are measured at the tax rates that have been enacted or substantively enacted for the pe-
riod in which an asset is realized or a liability settled. The effect of changes in the tax rate on deferred taxes
is recognized as of the effective date of the legal changes. Deferred tax assets are recognized only if it is
probable that taxable profit will be available against which they can be utilized in the future.
Operating segments
The segments have been presented in accordance with IFRS 8, Operating Segments. The structure and
content of segment reporting reflects the internal reports provided to management. An operating seg-
ment is a component of an entity that engages in business activities from which it may earn revenues and
incur expenses, whose results are regularly reviewed by management, and for which financial informa-
tion is available. An operating segment becomes a reportable segment if it can be identified and exceeds
certain quantitative thresholds. Expenses are generally allocated on the basis of the percentage revenue
breakdown.
Earnings per share
The basic net loss per share is determined in accordance with IAS 33, Earnings per Share for all periods pre-
sented. Basic net loss per share is computed using the weighted average number of outstanding shares
of common shares.
The diluted net loss per share is computed using the weighted average number of ordinary shares out-
standing and, in the case of dilution, the ordinary shares outstanding and the potential number of ordinary
shares from options and warrants to purchase such shares using the treasury stock method. In the case of
convertible securities the “if-converted method” is used. The options exercised that result in shares subject
to repurchase have been excluded in computing the number of weighted average shares outstanding for
basic earnings per share purposes. All potential ordinary shares have been excluded from the computa-
tion of the diluted net loss per share for 2010 and 2011 because the effect would be antidilutive.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 51
NOTES TO THE INDIVIDUAL BALANCE SHEET ITEMS
(1) intangible assets
in EUR thousand
software
costs of purchase
balance at January 1, 2010
5,416
Additions
Disposals
Currency translation differences
balance at december 31, 2010
Additions
Disposals
Currency translation differences
127
0
91
5,634
156
(1,220)
0
internally
developed
software
other
intangible
assets
goodwill
total
5,662
1,388
0
0
7,050
2,479
0
0
1,895
24,851
37,824
0
0
0
0
0
0
1,515
0
91
1,895
24,851
39,430
0
0
0
0
0
0
2,635
(1,220)
0
balance at december 31, 2011
4,570
9,529
1,895
24,851
40,845
amortization, write-downs,
and impairment losses
balance at January 1, 2010
5,323
Additions
Scheduled additions
Non-scheduled additions
Disposals
Currency translation differences
52
52
0
0
91
balance at december 31, 2010
5,466
Additions
Scheduled additions
Non-scheduled additions
Disposals
Currency translation differences
103
103
0
(1,219)
0
1,567
2,361
1,834
527
0
0
3,928
1,307
748
559
0
0
1,806
19,624
28,320
89
89
0
0
0
0
0
0
0
0
2,502
1,975
527
0
91
1,895
19,624
30,913
0
0
0
0
0
0
0
0
0
0
1,410
851
559
(1,219)
0
balance at december 31, 2011
4,350
5,235
1,895
19,624
31,104
net carrying amount at
december 31, 2010
net carrying amount at
december 31, 2011
168
220
3,122
4,294
0
0
5,227
8,517
5,227
9,741
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt
52
“Internally developed software” includes capitalized software development costs for continued develop-
ment of Intershop’s Enfinity software as well as capitalized development costs for the creation of online
shops for full-service customers. Other intangible assets include assets identified and measured in connec-
tion with the allocation of the purchase price for the acquisition of SoQuero GmbH in 2006. The carrying
amount of those assets is EUR 0 thousand.
The remaining amortization period for the item “software” is three years. Of the amortization, write-downs
and impairment losses on intangible assets recognized in the Statement of Comprehensive Income,
EUR 1,341 thousand (2010: EUR 2,368 thousand) are included in the cost of revenues, of which EUR 559 thou-
sand are for non-scheduled write-downs, EUR 44 thousand (2010: EUR 94 thousand) in research and devel-
opment expenses as well as EUR 25 thousand (2010: EUR 40 thousand) in general and administrative costs.
With the exception of goodwill, there are no intangible assets with indefinite useful lives.
There was a non-scheduled write-down of EUR 559 thousand on capitalized software development costs
because attainable and classifiable revenue can no longer be assumed. In the segment reporting, the im-
pairment loss was allocated proportionally to all segments.
(2) property, plant, and eQuipment
in EUR thousand
costs of purchase
balance at January 1, 2010
Additions
Disposals
Currency translation differences
balance at december 31, 2010
Additions
Disposals
Currency translation differences
balance at december 31, 2011
depreciation, write-downs,
and impairment losses
balance at January 1, 2010
Additions
Disposals
Currency translation differences
balance at december 31, 2010
Additions
Disposals
Currency translation differences
balance at december 31, 2011
net carrying amount
at dec. 31, 2010
net carrying amount
at dec. 31, 2011
computer
equipment
office and
operating
equipment
leasehold
improvements
total
7,650
281
(264)
26
7,693
537
(639)
8
7,599
7,380
202
(264)
25
7,343
347
(633)
9
7,066
350
533
1,602
177
(14)
4
1,769
326
(23)
5
2,077
1,394
101
(14)
2
1,483
106
(23)
1
1,567
286
510
273
9,525
0
0
0
458
(278)
30
273
9,735
10
(2)
0
873
(664)
13
281
9,957
180
24
0
0
8,954
327
(278)
27
204
9,030
24
(2)
0
477
(658)
10
226
8,859
69
55
705
1,098
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt
53
Of depreciation, write-downs and impairment losses on property, plant and equipment recognized in
the Statement of Comprehensive Income, EUR 260 thousand (2010: EUR 135 thousand) are included in
the cost of revenues, EUR 125 thousand (2010: EUR 82 thousand) in research and development expenses,
EUR 29 thousand (2010: EUR 12 thousand) in marketing and sales expenses as well as EUR 63 thousand
(2010: EUR 98 thousand) in general and administrative expenses.
(3) trade receivables
Trade receivables as of the balance sheet date include receivables from the sale of software licenses and
the performance of services amounting to EUR 11,793 thousand (2010: EUR 8,099 thousand) and due
within one year (current assets).
On average, settlement of receivables from( the sale of licenses and the performance of services is due
within 30 days of invoicing. From the date the receivables become due, the statutory rate of interest (8%
above prime) is charged on outstanding amounts.
The following table shows the time bands for receivables past due but not individually impaired:
in EUR thousand
Up to 30 days past due
31 to 60 days past due
61 to 90 days past due
dec. 31, 2011
3,369
dec. 31, 2010
1,520
46
12
3,427
353
15
1,888
Specific allowances are recognized after 90 days. Allowances amounting to EUR 952 thousand (2010: EUR
793 thousand) have been recognized. As regards the other trade receivables due or not yet due at the bal-
ance sheet date, it is not expected that the customers will fail to fulfill their payment obligations.
Impairments changed as follows:
in EUR thousand
balance at beginning of year
Impairment of receivables
Amounts written off due to uncollectibility
Amounts received during the fiscal year on receivables
written off
Reversals of impairments
balance at end of year
2011
793
169
0
(10)
0
952
2010
794
(8)
78
(71)
0
793
(4) other receivables and other assets
Other noncurrent assets in the amount of EUR 24 thousand (2010: EUR 28 thousand) comprise rental
security deposits.
Other current receivables and current assets include the following items:
in EUR thousand
Other tax receivables
Prepayments
Gross amount due from customers for contract work
Receivables from employees and former employees
Other
dec. 31, 2011
245
313
0
1
117
676
dec. 31, 2010
650
196
172
24
70
1,112
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt
54
(5) cash and cash eQuivalents
Cash and cash equivalents include current and noncurrent restricted cash as well as current cash and cash
equivalents.
in EUR thousand
dec. 31, 2011
dec. 31, 2010
Restricted cash – noncurrent
Restricted cash – current
0
67
67
72
383
455
Cash and cash equivalents
16,884
16,390
Cash and cash equivalents include balances at various credit institutions that are available at any time, as
well as cash on hand and checks. Current cash and cash equivalents subject to restrictions are comprised
mainly of cash from rent security deposits that will become available in 2012.
(6) eQuity
The development of INTERSHOP Communications AG’s equity is shown in the statement of equity.
Subscribed capital
As of December 31, 2011, subscribed capital amounted to EUR 30,170,984 and is divided into 30,174,984
no-par value bearer shares, all of which have been fully paid. There are no restrictions of voting rights. Sub-
scribed capital amounted to EUR 29,582,305 as of December 31, 2010. The changes in subscribed capital
totaling EUR 588,679 reflect capital increases from Authorized Capital II. Subscribed capital changed as
follows:
in EUR thousand
balance as of January 1,
Capital increases from conditional capital
Capital increases from authorized capital
balance as of december 31,
2011
2010
29,582,305
26,309,094
0
33,333
588,679
3,239,878
30,170,984
29,582,305
As of the balance sheet date, 26.15% of the shares in INTERSHOP Communications AG were held by eBay
Inc. through GSI Commerce Inc. and GSI Commerce Solutions Inc., which are under its control, as well
as 5.01% by Cyrte Investments. These disclosures are based on the following notifications according to
section 21 (1) of the German Securities Trading Act (Wertpapierhandelsgesetz; WpHG) regarding amend-
ments to voting rights published in the reporting period by the Company pursuant to section 26 (1) of the
WpHG: eBay Inc.’s percentage of voting rights in the Company exceeded the thresholds of 3%, 5%, 10%,
15%, 20% and 25% on June 17, 2011, amounting to 26.25% (7,889,222 voting rights). Cyrte Investments’
share of voting rights exceeded the threshold of 3% on July 11, 2011 and as of this date stood at 3.32%
(996,170 voting rights), as well as the threshold of 5% on October 13, 2011, which amounted to 5.01%
(1,510,170 voting rights). Accordingly, as of the balance sheet date, the free float of INTERSHOP Communi-
cations AG comes to a total of 68.84%.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 55
Authorized capital
At the Annual Stockholder’s Meeting on June 29, 2011, Authorized Capital I and II (Authorized Capital
2011) were newly created through resolutions for the amendment of the Articles of Association under
the cancellation of the prior authorizations and Authorized Capital (Authorized Capital 2007), provided
that they were not used. The new Authorized Capital and corresponding amendments to the Articles of
Association were entered into the commercial register on July 21, 2011. As of the balance sheet date, the
Company had a total of EUR 7,656,137 in new authorized capital. As of December 31, 2010, the now can-
celled Authorized Capital 2007 came to EUR 5,032,919.
Under the Articles of Association of INTERSHOP Communications AG, the Management Board is entitled,
with the approval of the Supervisory Board, to increase the capital stock by issuing new ordinary shares
as follows:
• By up to a total of EUR 7,500,000 against cash contributions (Authorized Capital I 2011). The authorization
of the Management Board applies until July 21, 2016. The Management Board is authorized, subject to
approval by the Supervisory Board, to suspend the stockholders’ subscription rights in certain cases. As
of December 31, 2010, the now cancelled Authorized Capital I 2007 amounted to EUR 4,553,103. There
were no capital increases from Authorized Capital 1 2007 or 2011 in fiscal year 2011.
• By up to a total of EUR 156,137 against cash contributions, excluding the stockholders’ subscription
rights (Authorized Capital II 2011). The authorization is valid until December 31, 2012. As of December
31, 2010, cancelled capital came to EUR 479,816, which was used as a result of the following three capi-
tal increases due to the exercise of employee options: capital increases of EUR 382,479 as of February 8,
2011, of EUR 87,200 as of May 4, 2011, and of EUR 10,137 as of July 8, 2011. Authorized Capital II 2011 in
the amount of EUR 265,000 was newly created effective July 21, 2011. A capital increase of EUR 108,863
from Authorized Capital II took place as of September 30, 2011 by way of the exercise of employee
options. With this, the amount of Authorized Capital II 2011 as of the balance sheet date was still EUR
156,137. This authorized capital in the amount of EUR 156,137 serves to fulfill the subscription rights from
Stock Option Plan 2001, whereby however a maximum of 118,000 shares may be issued due to the expi-
ration of subscription rights (see also the section on the „Stock Option Plan 2001”).
Conditional capital
Conditional capital remained unchanged in fiscal year 2011. As of December 31, 2011, the Company’s
share capital was increased conditionally by up to EUR 59,584 by issuing up to 59,584 shares. In order to
grant Management Board stock options, these EUR 59,584 are allocated for options in accordance with
section 192 (2) No. 3 of the AktG (Conditional Capital I), whereby however a maximum of 12,500 shares
may be issued due to subscription rights that expire or do not come into existence. Conditional Capital I
is reserved for subscription rights exercisable under the Stock Option Plan 1999 (see also the section on
„Stock Option Plan 1999”).
Capital increases in fiscal year 2011
Employee stock options were exercised and exchanged for shares of the Company under the terms of the
employee stock option plan. This lead to capital increases from Authorized Capital II, which are shown in
the following overview:
date of entry in commercial register
amount (eur)
February 8, 2011
May 4, 2011
July 8, 2011
September 30, 2011
total
382,479
87,200
10,137
108,863
588,679
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 56
The issued shares include the same rights as the other issued shares. The new transferred shares from the
capital increases of September 30, 2011 (capital increase from the new Authorized Capital II – see section
on „Authorized Capital”), however, may not be sold by the option holders for a period of six months after
exercise of the option. Intershop received cash and cash equivalents of EUR 732 thousand as a result of
the capital increases. The transaction costs came to EUR 41 thousand. In the prior year, the capital increases
from Authorized Capital II totaled EUR 754,981 (Stock Option Plan 2001) and from Conditional Capital I
EUR 33,333 (Stock Option Plan 1999).
Stock option plans
Options issued under Intershop’s stock option plans entitle employees to acquire shares of the Company
The lock-up period is six months for the 2001 stock option plan, and two years for the 1999 stock option
plan. Options expire if they are not exercised within five years from the grant date. If an employee leaves
the Company, the options expire that are not exercisable up to the date on which the employee leaves;
exercisable options may be exercised up to six months after the employee leaves the Company, but expire
after this period (2001 stock options plan). In addition, all options are withdrawn from employees if they
leave the Company within the first six months of the grant date.
In the last five years, the Company granted new options to employees and the Management Board in fiscal
years 2006, 2007, and most recently in 2008 under its stock option program.
Option activity under the plans was as follows (in Euro thousand, except per-share data).
year ended December 31,
2011
2011
2010
2010
Outstanding at beginning of period
Granted
Exercised
Forfeited
outstanding at end of period
Exercisable options at end of period
Number
of shares
outstanding
(in thousand)
Weighted
average
exercise price
(EUR)
Number
of shares out-
standing
(in thousand)
Weighted
average
exercise price
(EUR)
903
0
(206)
(566)
131
131
1.80
-
1.69
1.85
1.80
1.80
2,861
1.27
0
-
(1,145)
(813)
903
807
1.02
1.04
1.80
1.73
The weighted average share price for the exercised options amounted to EUR 2.19 (2010: EUR 1.92) on the
exercise date.
The outstanding options as of the balance sheet date have the following weighted exercise prices and
remaining contractual terms:
Range of
exercise price
(in EUR)
1.67 – 2.50
2.51 – 3.61
Number
of options
outstanding
Weighted
average
remaining
contractual life
Weighted
average
exercise price
Number
exercisable
on December
31, 2011
Weighted
average
exercise price
(in thousand)
(in years)
(in EUR)
(in thousand)
(in EUR)
125
6
131
0.2
0.7
0.2
1.73
3.35
1.80
125
6
131
1.73
3.35
1.80
In connection with stock option plans, the Company recognized expenses of EUR 22 thousand in fiscal
year 2011 (2010: EUR 51 thousand). Liabilities from stock option plans in the amount of EUR 17 thousand
(2010: EUR 516 thousand) were reported as of the balance sheet date.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt
57
(6.1) capital reserve
The capital reserve includes stock option expense, amounts in excess of the par value generated from the
issuance of shares. Please see Statement of Change in Equity for details.
(6.2) other reserves
Other reserves include a conversion reserve, reserves from cumulative gains/losses, and cumulative cur-
rency translation differences. The conversion reserve includes the expense from stock options that related
to the first-time adoption of IFRSs. The reserve from cumulative currency translation differences shows the
differences that result from the translation of the financial statements of subsidiaries into euros.
(7) trade accounts payable
Trade accounts payable comprise unsettled liabilities relating to the delivery of goods and services and
amounted to EUR 5,580 thousand (2010: EUR 3,255 thousand).
(8) income tax liabilities
Income tax liabilities amounted to EUR 579 thousand (2010: EUR 472 thousand) and relate to income tax
for the years 2009 to 2011. Please see section (21) Taxes on Income for information on deferred taxes.
(9) other liabilities
Other liabilities consist only of current liabilities and comprise:
in TEUR
dec. 31, 2011
dec. 31, 2010
Liabilities from advance payments received for fixed-price projects
Other liabilities relating to social security benefits
Liabilities to employees
Liabilities arising from stock option plans
Other VAT and wage tax liabilities
Liabilities to the Occupational Health and Safety Agency
Liabilities from outstanding vacation entitlement
Derivative financial instruments with negative fair values
Miscellaneous other liabilities
163
58
1,211
17
544
134
493
0
143
0
19
848
516
536
65
452
229
110
2,763
2,775
Liabilities to employees mainly include liabilities from commissions and performance-related compen-
sation. The item „Prepayments from Fixed-Price Projects” includes an order with a total order volume of
EUR 1.2 million, for which prepayments of EUR 707 thousand were made. In 2011, revenue of EUR 544
thousand was realized, which was offset with the prepayment of EUR 544 thousand. These were measured
based on the stage of completion of the project using the percentage of completion method. The costs of
the project amounted to EUR 389 thousand. This fixed-price project resulted in a contribution to earnings
of EUR 155 thousand for fiscal year 2011.
(10) deFerred revenue
Deferred revenue relates to prepayments by customers, primarily in the form of revenue from mainte-
nance agreements. Deferred revenue is reversed and revenue is recognized in the period in which the
service was provided by Intershop.
In the case of current deferred revenue, reversal and recognition take place within a year.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 58
(11) other provisions
Other noncurrent provisions amounted to EUR 78 thousand (2010: EUR 303 thousand). These include
provisions for the year 2013 for losses from subletting relating to the leased space at the Company’s head-
quarters. These provisions were recognized at their discounted amount as of December 31, 2011, as they
will not lead to an outflow of resources in 2012.
The following table shows the development of other provisions.
Other noncurrent provisions:
in EUR thousand
balance at January 1, 2011
Additions
Utilization
Reversal
Reclassification to current provisions
Currency adjustments
balance at december 31, 2011
Other current provisions:
in EUR thousand
balance at January 1, 2011
Additions
Utilization
Reversal
Reclassification from non-current provisions
Currency adjustments
balance at december 31, 2011
303
0
0
(125)
(100)
0
78
total
807
630
(324)
(184)
100
0
1,029
litigation risks
other
38
37
(3)
(35)
0
0
37
769
593
(321)
(149)
100
0
992
Miscellaneous other provisions relate to provisions for the Stockholders’ Meeting, guarantee provisions,
litigation-related reserves and provisions for 2012 for losses from subletting relating to the leased space
at the Company’s headquarters. The Company considers that recourse to these provisions is probable.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 59
NOTES TO THE INDIVIDUAL ITEMS OF THE STATEMENT OF COMPREHENSIVE INCOME
(12) revenues
When referring to revenues, a distinction is made between gross revenues and net revenues. Gross rev-
enues contain media costs that are passed on to the customer. Net revenues are gross revenues less media
costs. These costs arise for online marketing revenues only. As a result, only online marketing revenues
exhibit differences between gross revenues and net revenues.
License revenues amounted to EUR 5,500 thousand (2010: EUR 4,184 thousand).
Net revenues from services, maintenance, and other are composed of the following items:
in EUR thousand
Consulting / Training
Maintenance
Online Marketing
Other revenues
2011
26,807
9,899
3,504
3,446
2010
19,915
9,471
2,649
2,031
43,656
34,066
Other revenue includes the revenue from the full-service and The Bakery businesses. Gross revenues of
online marketing amounted to EUR 9,726 thousand (2010: EUR 8,625 thousand).
(13) media costs
Intershop plans and implements Internet advertising campaigns for its customers. It purchases advertis-
ing spots for its own account from various providers such as Google or yahoo, in order to carry out these
advertising campaigns. The costs for purchasing these advertising spots are usually passed on to the cus-
tomers together with a fixed surcharge. Additionally, Intershop offers its customers a software solution that
allows the listing of products in various online sales channels. Costs of the providers of the online sales
channels are passed on to Intershop’s customers.
(14) cost oF revenues
The production costs for licenses in the amount of EUR 1,118 thousand (2010: EUR 2,194 thousand) pri-
marily include the amortization of software development costs. The cost of revenues relating to services,
maintenance, and other are composed of the following items:
in EUR thousand
Consulting / Training
Maintenance
Online Marketing
Other
2011
18,274
3,306
2,297
4,195
2010
12,866
3,438
1,777
2,249
28,072
20,330
(15) research and development expenses
Research and development expenses comprise all expenses attributable to R&D activities, largely person-
nel expenses. The increase of research and development costs from EUR 4,015 thousand to EUR 6,389
thousand can mainly be attributed to the higher costs associated with the hiring of new employees, as
well as higher third-party costs resulting from the involvement of additional partners in software develop-
ment. Please see section “Research and Development” in the Group Management Report.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 60
(16) sales and marKeting expenses
The costs for sales and marketing are mainly due to personnel costs for sales and marketing employees,
sales commissions, expenditures for sales partners, and costs associated with advertising and exhibitions
for various trade shows. The expenditures for sales and marketing increased to EUR 6,663 thousand (2010:
EUR 4,275 thousand), especially as a result of higher costs for sales partners and intensified marketing ac-
tivities.
(17) general and administrative expenses
General and administrative expenses mainly comprise personnel and non-personnel expenses as well as
depreciation and amortization applicable to administrative functions. They include the cost of investor
relations activities, expenses relating to the Stockholders’ Meetings, all expenses for legal advise as well as
other consulting fees. General and administrative expenses came to EUR 5,252 thousand (2010: EUR 4,653
thousand).
(18) other operating income
Other operating income is composed of the following items:
in EUR thousand
Income from currency translation gains
Income from government grants
Miscellaneous
2011
268
498
910
1,676
2010
252
224
345
821
Income from currency gains of EUR 242 thousand is attributable to financial instruments. Income from
government grants was paid out in 2011. These government grants are related to research and develop-
ment projects, which are supported by the Federal Ministry of Education and Research, as well as by the
Thüringer Aufbaubank. Other income includes the liquidation proceeds of Intershop (UK) Ltd.
(19) other operating expenses
Other operating expenses relate to the following items:
in EUR thousand
Currency translation losses
Losses on currency forwards
Miscellaneous
2011
521
0
190
711
2010
244
318
796
1,359
Expenses from currency losses is attributable exclusively to financial instruments. The „Miscellaneous” item
mainly includes impairment losses.
(20) interest income
Interest income in the amount of EUR 92 thousand (2010: EUR 33 thousand) primarily includes interest on
bank balances.
(21) income taxes
The Company recognizes and measures income taxes using the balance sheet liability method in accord-
ance with IAS 12. Deferred taxes are calculated at the respective national income tax rates. A corporate
income tax rate of 15% (previous year: 15%) plus the solidarity surcharge of 5.5% (previous year: 5.5%), as
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt well as an effective trade tax rate of 14.70 % (previous year: 14.70%), were used to calculate the deferred
taxes of the German companies as of December 31, 2011.
The Group’s income taxes are broken down as follows:
61
in EUR thousand
current taxes
Abroad
Germany
deferred taxes
Abroad
Germany
2011
(3)
(320)
0
0
(323)
2010
738
99
0
(446)
391
The Group tax rate of 30.525% applicable in fiscal year 2011 (on the basis of a rate of assessment for trade
tax of 420%) was multiplied by IFRS earnings before taxes to calculate the expected tax expense. In the
prior year, a Group tax rate of 29.65% was based on a rate of assessment for trade tax of 395%.
The tax rate reconciliation contains the following details:
in EUR thousand
IFRS pretax income
Corporate tax rate
Expected income tax expense
Effects of changes in tax rates and different rates
of foreign taxation
Utilization of tax losses carried forward
Permanent effects, tax refunds
Effects of changes in basis of consolidation and others
income taxes
The components of the deferred tax assets were as follows:
in EUR thousand
Net operating loss carryforwards
Other
Valuation allowance or nonrecognition in
accordance with IAS 12.34
Offset
deferred tax assets after offset
Intangible assets
Consolidation effects
Other
Offset
deferred tax liabilities after offset
net deferred tax assets
2011
2,717
30.53%
829
(2)
(697)
(410)
(43)
(323)
2011
74,721
92
(72,492)
2,321
(1,426)
895
1,311
19
96
1,426
(1,426)
0
895
2010
2,256
29.65%
669
85
(431)
86
(18)
391
2010
99,907
176
(98,109)
1.974
(1,079)
895
952
18
109
1,079
(1,079)
0
895
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt
62
Deferred tax assets are recognized for temporary differences and for tax loss carryforwards in the amount
of the expected reduction in tax expense in subsequent fiscal years to the extent that it is probable that
they will be used. As of December 31, 2011 and in accordance with IAS 12.24, deferred tax assets were
only recognized in the amount of taxable profit probably available in the future. Deferred tax assets are
predominantly noncurrent.
For the year ended December 31, 2011, the Company had net loss carryforwards for tax reporting pur-
poses in various tax jurisdictions as follows:
in EUR thousand
US Federal
US State
German corporate income tax
German municipal trade tax
Other
2011
93.819
96.202
152.039
147.513
0
2010
90,681
91,177
212,614
207,002
4,967
U.S. federal and state net operating loss carryforwards expire in various fiscal periods through 2031. The
rise in the U.S. loss carryforwards is attributable to currency translation, which overcompensated for the
reduction due to utilization. German net operating loss carryforwards relate to corporate income tax and
municipal trade tax and carry forward indefinitely. The reduction in German loss carryforwards is attribut-
able to the partial forfeiture of loss carryforwards because of a harmful transfer of shares within the mean-
ing of section 8c of the KStG (Körperschaftssteuergesetz, German Corporation Income Tax Act) and the use
of tax loss carryforwards.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 63
(22) earnings per share
The calculation of basic and diluted earnings per share is based on the following data:
in EUR thousand
basis for calculating basic earnings per share
(earnings after tax attributable to intershop shareholders)
basis for calculating diluted earnings per share
The number of shares is calculated as follows:
weighted average number of ordinary shares used to
calculate basic earnings per share
Dilutive effect of potential ordinary shares:
Weighted average number of options outstanding
weighted average number of ordinary shares used to
calculate diluted earnings per share
calculation of earnings per share (basic)
Basis for calculating basic earnings per share (in EUR thousand)
Weighted average number of shares (basic)
earnings per share (basic) (in eur)
calculation of earnings per share (diluted)
Basis for calculating diluted earnings per share (in EUR thousand)
Weighted average number of shares (diluted)
Earnings per share (diluted) (in EUR)
adjustment of earnings per share (diluted) (in eur)
2011
3,040
3,040
2011
30,015
33
30,048
2010
1,865
1,865
2010
30,015
39
30,054
2011
2010
3,040
30,015
0.10
3,040
30,048
0.10
0.10
1,865
30,015
0.06
1,865
30,054
0.06
0.06
In accordance with IAS 33.47, the stock options issued are included in the calculation of diluted earnings
only if the average market price of Intershop ordinary shares during the fiscal year exceeds the exercise
price of the stock options. If the diluted earnings reduce the loss per share or increase earnings per share,
an adjustment is made to the amount of basic earnings per share (antidilutive effect) in accordance with
IAS 33.43. In accordance with IAS 33.64, the calculation of the number of shares was adjusted retrospec-
tively for the prior year.
NOTES TO THE CASH FLOW STATEMENT
Cash comprises exclusively the cash and cash equivalents reported in the balance sheet. Restricted cash
was not included. In the cash flow statement, cash flows are classified into net cash provided by/used in
operating, investing, and financing activities.
Cash flows from operating activities are calculated on the basis of earnings before tax, adjusted for non-
cash income and expenses, and of the changes in operating assets and liabilities compared with last year’s
balance sheet.
Cash inflow from ongoing business activities amounted to EUR 3,061 thousand in 2011, compared to a
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt
64
cash inflow of EUR 7,350 thousand in 2010. The reasons for the decreased inflow of cash in 2011 include
the buildup of trade receivables, as well as the effects of deferred revenue. Non-cash impairment losses
decreased from EUR 2,829 thousand to EUR 1,886 thousand. The cash outflow from investment activities
increased to EUR 3,115 thousand (2010: EUR 1,573 thousand), especially due to higher payments for invest-
ments in intangible assets. The payments for investments in intangible assets came to EUR 2,634 thousand
(2010: EUR 1,516 thousand). Cash flow from financing activities was EUR 691 thousand (2010: EUR 4,125
thousand). Please refer to the explanations in the section on „Equity.” In total, there was a net cash inflow
of EUR 494 thousand in fiscal year 2011 compared to a cash inflow of EUR 10,076 thousand in the prior
year. As of December 31, 2011, Intershop had a total of cash and cash equivalents of EUR 16,884 thousand
(December 31, 2010: EUR 16,390 thousand).
The changes in the balance sheet items used to determine the cash flow statement are not immediately
evident from the balance sheet because effects from currency translation and from changes in the basis
of consolidation do not impact cash and are eliminated.
OTHER DISCLOSURES
Segment reporting
Segment reporting as of December 31, 2011
in EUR thousand
net revenues from external customers
Licenses
Consulting and training
Maintenance
Online Marketing
Other
europe
u.s.a.
asia/
pacific
consoli-
dation
4,659
656
11,270
11,573
5,067
3,504
3,021
1,194
0
425
185
3,964
3,638
0
0
group
5,500
26,807
9,899
3,504
3,446
49,156
0
0
0
0
0
0
total net revenues from external customers
27,521
13,848
7,787
Intersegment revenues
total net revenues
Cost of revenues
gross profit
Operating expenses, operating income
result from operating activities
Financial result
earnings before tax
income taxes
earnings after tax
assets
depreciation and amortization
noncash expenses
1,490
983
398
(2,871)
0
29,011
14,831
8,185
(2,871)
49,156
16,346
8,232
11,175
5,616
9,709
1,466
4,890
726
4,612
3,175
2,740
435
23,061
11,612
6,506
744
414
374
209
210
117
0
0
0
0
0
0
0
29,190
19,966
17,339
2,627
90
2,717
323
3,040
41,179
1,328
740
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt
65
group
4,184
19,933
9,471
2,631
2,031
38,250
0
0
0
0
0
0
Segment reporting as of December 31, 2010
europe
u.s.a.
asia/
pacific
consoli-
dation
in EUR thousand
net revenues from external customers
Licenses
Consulting and training
Maintenance
Online Marketing
Other
2,542
9,929
4,693
2,631
1,503
1,374
6,392
1,213
0
503
268
3,612
3,565
0
25
total net revenues from external customers
21,298
9,482
7,470
Intersegment revenues
total net revenues
Cost of revenues
gross profit
Operating expenses, operating income
result from operating activities
Financial result
earnings before tax
income taxes
earnings after tax
assets
depreciation and amortization
noncash expenses
646
790
0
(1,436)
0
21,944
10,272
7,470
(1,436)
38,250
12,546
5,586
4,392
8,752
3,896
3,078
7,508
1,244
3,343
553
2,629
449
20,164
8,978
7,059
1,282
538
571
240
449
188
0
0
0
0
0
0
0
22,524
15,726
13,480
2,246
10
2,256
(391)
1,865
36,201
2,302
966
The segment reporting is prepared in accordance with IFRS 8, Operating Segments. Segmentation reflects
the internal management and reporting by the Company’s management. The operating segments were
determined mainly by the different geographical regions in which business activities take place. In this
context, Intershop distinguishes between the Europe, U.S.A., and Asia-Pacific segments. The reportable
business segments generate revenue with the sale of software licenses (licenses) and different services
relating to these services. In turn, they are broken down into consulting and training, maintenance, online
marketing and other, with the latter comprised of the full-service and The Bakery business.
The operating segments are broken down as follows:
The segment “Europe” includes the sales activities of INTERSHOP Communications AG, SoQuero GmbH as
well as The Bakery GmbH in Europe. The segment “U.S.A.” includes the sales activities of Intershop Com-
munications Inc. in North America as well as the sales activities of INTERSHOP Communications AG in this
region. The segment “Asia/Pacific” includes the sales activities of the Group in that region, including the
sales activities of INTERSHOP Communications Australia Pty Ltd. The segment “Consolidation” includes all
transactions in the individual segments.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt
66
Notes to the content of the individual line items:
• Net revenues from external customers represent revenues from the segments with third parties outside
the Group.
• Intersegment revenues include revenues from intersegment relationships. These revenues are recog-
nized in the same way as those from external third parties.
• The cost of revenues comprises the costs attributed to each operating segment for generating its rev-
enues.
• Gross profit, which is calculated as the difference between segment revenues and the cost of revenues,
is the first assessment level for management decisions.
• Operating expenses and income comprise research and development expenses, sales and marketing
costs, general and administrative expenses, and other operating expenses and income that are attribut-
able to the relevant segments. Other operating expenses and income also include the effects of one-
time expenses and income such as valuation allowances, and currency losses and gains.
• The result from operating activities (EBIT), which is the gross profit or loss less operating expenses and
income, forms the basis for assessing the performance of the segments.
• Interest income and income taxes are not allocated to the segments as the relevant transactions are
managed by the Group.
• Segment assets comprise the Intershop Group’s noncurrent and current assets that are allocated to the
respective segment on the basis of the percentage revenue breakdown. No other measurement of seg-
ment assets is used.
• Depreciation and amortization relates to the depreciation and amortization of the segment assets al-
located to the individual regions.
• Non-cash expenses include expenses relating to stock option plans, valuation allowances, non-sched-
uled write-downs as well as unrealized losses from hedging transactions (only in 2010). No significant
non-cash income arose in the two fiscal years and this was therefore not reported separately.
All amounts reported in the “Group” column in the segment reporting reflect the Group figures from the
statement of comprehensive income or the balance sheet. Adding together the amounts for the operat-
ing segments produces the Group figures.
The Company is domiciled in Germany. Revenues from external customers that were generated in Ger-
many amounted to EUR 21,808 thousand (2010: EUR 18,093 thousand). Revenues of EUR 27,348 thousand
(2010: EUR 20,157 thousand) were recorded from external customers in other countries. EUR 13,848 thou-
sand (2010: EUR 9,482 thousand) of these revenues was attributable to customers in the U.S. and EUR 7,721
thousand (2010: EUR 7,319) to customers in Australia. Total noncurrent assets excluding deferred taxes
amounted to EUR 10,768 thousand (2010: EUR 9,270 thousand) in Germany and EUR 95 thousand (2010:
EUR 52 thousand) in other countries. The Company does not have any assets relating to financial instru-
ments associated with pensions or rights arising from insurance contracts.
Revenues of EUR 6,105 thousand respectively EUR 7,188 thousand were recorded with two customers
(2010: EUR 6,352 thousand and EUR 5,703 thousand) in the segments Asia/Pacific respectively U.S.A.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 67
Operating leases
Office space and furniture and fixtures are leased within the scope of “operating leases”. The minimum
long-term lease payments relate mainly to rental obligations for the Company’s headquarters in Jena.
The cumulated minimum lease payments to be paid from non-cancellable operating lease arrangements
are as follows:
in EUR thousand
Minimum lease payments
from operating leases
due within
1 year
due in
1 to 5 years
due after more
than 5 years
3,082
7,878
0
total
10,960
The sum of future minimum payments arising from subleases amounted to EUR 609 thousand as of the
balance sheet date. Rental expense of EUR 2,664 thousand (2010: EUR 2,218 thousand) was recognized in
the income statement. Rental income amounted to EUR 680 thousand (2010: EUR 545 thousand), which
was offset in full against rental expenses in both years.
Litigation / contingent liabilities
The Company is a defendant in various legal proceedings arising from the normal course of business. A
negative ruling in any such legal dispute, or in several or all such disputes, could have a material adverse
effect on the Company’s results of operations. The Company recognizes all legal costs associated with loss
contingency as an expense as they are incurred.
In 2002, another software company brought a claim for damages of around EUR 5 million for the alleged
violation of a license agreement. An out-of-court settlement was initially agreed, but the software com-
pany declined to finally accept the terms of the settlement. In 2004, the Munich Regional Court dismissed
its claim for payment. However, the court ordered Intershop to provide information on the delivery of soft-
ware owned by the other software company. The Company has since provided this information. Intershop
believes that the other software company has no further claims. In addition, the other software company
has told the Company that it will not actively further pursue legal action.
In fiscal year 2006, a contract partner that had acquired the Company’s standard software in 2004 and pur-
chased services from the Company in 2005 sued the Company for reversal of contract and repayment of
the purchase price as well as damages in the total amount of about EUR 730 thousand. The Company vig-
orously fought the claims for repayment and damages and believes that the contract party does not have
a valid claim on the merits and also that the amount requested is without justification. Irrespective of this,
the Company has insurance coverage for a part of the claims. The Company filed a counterclaim for unpaid
services in the amount of about EUR 250 thousand in December 2008. After a hearing before the district
court in April of 2010, the hearing of evidence took place on February 3, 2011. In the legal dispute with a
contract partner of the Company, the Company and the contract partner have expressed their positions
with regard to the minutes of the hearings. The regional court (following a change of department) set a
date of April 26, 2012 for the continuation of the oral proceedings and the taking of evidence, if necessary.
The Company maintains its position that the claims, as well as the reason and the amount involved do not
exist. As a precautionary measure, the Company has established a provision in the lower six-figure range.
In January 2011, three annulment and rescission lawsuits were brought against the Company by share-
holders regarding the resolution of item 3 (acquisition authorization), which was decided at the Extraor-
dinary Annual Stockholders’ Meeting of December 14, 2010. The lawsuits were combined. All parties de-
clared the disputes to be settled. A final ruling on the costs is pending. In addition, an annulment and
rescission lawsuit was brought against the company in February 2011 by a shareholder regarding the
resolution of item 1 (Supervisory Board election) at the Extraordinary Annual Stockholders’ Meeting of
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 68
December 14, 2010. This lawsuit was settled amicably. The settlement between the Company and share-
holder was published in the Electronic German Federal Gazette on April 7, 2011 pursuant to sections 249a,
149 (2) of the AktG.
In addition to the litigation described in detail, the Company is a defendant in various other actions aris-
ing from the normal course of business. Although the outcome of these actions cannot be forecast with
certainty, the Company believes that the outcome of the actions will not have any material effects on its
net assets and results of operations.
Financial instrument disclosures
Intershop is exposed to certain risks with regard to its assets, liabilities, and transactions, in particular li-
quidity and default risk. The Company’s risk management system is explained in detail in the management
report.
The Company manages its capital structure with the aim of achieving its corporate goals through financial
flexibility. The indicator in this context is the equity ratio. The Group’s overall strategy here is unchanged as
against fiscal year 2011. The capital structure changed as follows and was within budget figures:
in EUR thousand
Equity
Trade accounts payable
Other liabilities
Equity ratio
dec. 31, 2011
dec. 31, 2010
as a % of
previous year
28,219
5,580
7,380
69%
24,610
3,255
8,336
68%
15%
71%
-11%
1%
The equity ratio is the ratio of equity to total assets.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 69
categories oF Financial instrument
The following table shows the classification of financial instruments required by IFRS 7 as well as the fair
values of the financial instruments that are recognized in the balance sheet at amortized cost and their
carrying amounts:
in EUR thousand
measurement
categories
dec. 31, 2011
dec. 31, 2010
carrying
amount
Fair value
carrying
amount
Fair value
measured at amortized cost
assets
Other noncurrent assets
Loans and receivables
Trade receivables
Restricted cash
Loans and receivables
Loans and receivables
Cash and cash equivalents
Loans and receivables
Other receivables and other assets
of which gross amount due from customers
for contract work
liabilities
Trade payables
Other current liabilities
Financial liabilities measured
at amortized cost
of which financial liabilities measured at amortized cost
of which derivative financial instruments held
for trading
24
11,794
67
16,884
676
0
5,580
2,763
81
0
24
11,794
67
16,884
0
28
8,099
455
16,390
1,112
172
28
8,099
455
16,390
172
5,580
3,255
3,255
2,775
78
229
81
2
78
229
carrying amount aggregated by measurement category
Loans and receivables
Financial liabilities measured at amortized cost
Financial liabilities held for trading
2011
28,769
5,661
0
2010
24,972
3,333
229
net gain/loss per
measurement category
on interest
2011
2010
Loans and receivables
Financial liabilities measured at
amortized cost
Financial liabilities held for trading
90
0
0
10
0
0
on valuation
allowances
Fair value
changes
2011
159
0
0
2010
2011
2010
70
0
0
0
0
2
0
0
229
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 70
In fiscal year 2011, financial instruments to be recognized at fair value were classified using the following
measurement levels in the fair value hierarchy.
in EUR thousand
Financial liabilities
measurement level
2011
2010
Derivatives with negative fair values (current)
2
2
229
The contractual maturities of most of the existing financial instruments are within one year of the balance
sheet date. The carrying amounts do not therefore differ significantly from the fair values.
non-payment risKs
The Company is exposed to a potential default risk mainly from its trade receivables. The Company per-
forms ongoing creditworthiness checks on its customers. The default risk with regard to trade receivables
is also mitigated by the fact that the Company has a broad customer base. In addition, the Company does
not demand collateral for its receivables. In the case of larger contracts, this risk is reduced by agreements
on advance payments or partial payments based on the stage of completion of the contract.
Appropriate allowances are also recognized. The Company’s cash and cash equivalents are largely invested
with German and U.S. American banks in secure investments. There is no significant default risk here. The
Company regularly monitors current and future returns. The maximum default risk relating to financial as-
sets is their carrying amounts in the balance sheet.
liQuidity risK
Intershop does not have any loans or other liabilities to banks. Intershop ensures it has access to liquid-
ity through its bank balances. As of the balance sheet date, the bank balances amounted to EUR 16,884
thousand.
The following table shows the future undiscounted cash flows of financial liabilities that will affect the
Company’s future liquidity situation:
in EUR thousand
Other noncurrent liabilities
Trade accounts payable
Other current liabilities
of which derivatives with
negative fair values
carrying
amount at
dec. 31, 2010
cash flow
in 2011
carrying
amount at
dec. 31, 2011
cash flow
in 2012
cash flow
after 2012
0
3,255
2,775
229
0
3,255
2,323
229
0
5,580
2,763
0
0
5,580
2,270
0
0
0
0
0
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 71
interest rate risK
An interest rate risk could arise from a change in market interest rates for medium- or long-term liabilities.
As Intershop does not have any loans, there is no interest rate risk.
currency risK
Certain transactions in the Intershop Group are denominated in foreign currencies. This leads to risks from
exchange rate fluctuations. To hedge against currency risks, Intershop concluded forward exchange trans-
actions in 2010 for one year. These were related to hedging the exchange rate of the Australian dollar of
cash flows from revenue. Following the expiration of these forward exchange transactions in the sec-
ond half of 2011, Intershop no longer hedges revenue with fixed forward exchange transactions. Invoic-
es in foreign currencies are usually hedged with currency options. The nominal volume of the hedging
transactions is AUD 1.2 million (prior year: AUD 2.7 million). As of the balance sheet date, the fair value is
EUR 2. Intershop is primarily exposed to exchange rate risk relating to the U.S. dollar and the Australian
dollar. The carrying amount of the Group’s monetary assets and liabilities denominated in these currencies
was as follows at the balance sheet date:
in EUR thousand
in USD
in AUD
liabilities
assets
2011
1,409
1,102
2010
2,635
2,700
2011
3
458
2010
6
179
The following table shows the sensitivity of a 10 % rise or fall in the euro against the two currencies from
the Group’s perspective. The sensitivity analysis merely comprises outstanding monetary items denomi-
nated in foreign currency and adjusts their translation at the end of the period to reflect a 10 % change in
the exchange rates.
in EUR thousand
Change due to 10% appreciation
of the euro
Change due to 10% depreciation
of the euro
Events subsequent to the balance sheet date
earnings after tax
usd
earnings after tax
aud
2011
(128)
156
2010
(239)
2011
(59)
2010
(229)
292
72
280
With the resolution of January 26, 2012, the district court of Jena appointed Bob van Dijk new member of
the Supervisory Board of the Company until the next Annual Stockholders’ Meeting. The previous Supervi-
sory Board member, James MacIntyre, resigned from his office as of January 31, 2012. Bob van Dijk is Vice
President of eBay Europe.
On March 28, 2012, Intershop announced that Australia´s leading telecommunications provider Telstra has
extended its existing service order with Intershop. The agreement extends a managed service order lever-
aging from the previous managed service agreement executed in the year 2009. The agreement includes
consulting, testing and support services around the installed e-commerce system based on the Intershop
software Enfinity. The contract has a term of three years and a total revenue potential for Intershop of
around EUR 11 million.
On March 28, 2012, the Company’s subscribed capital was increased by EUR 12,500 to EUR 30,183,484 due
to the issue of shares from Conditional Capital I.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 72
Related party disclosures
In addition to the business relations with consolidated subsidiaries, there is one relationship with a
company that has a stake in Intershop. As the largest shareholder of the Company, GSI Commerce
Solutions Inc. owned 26.15% of the shares in Intershop as of the balance sheet date. We refer to the
section on „Disclosures according to section 289 (4) and section 315 (4) of the HGB with explanato-
ry report” in the management report. The Supervisory Board members, Michael R. Conn, Tobias Hart-
mann and James W. MacIntyre were employed at GSI Commerce Inc. in fiscal year 2011: Mr. Conn as
Chief Financial Officer, Mr. Hartmann as Chief Executive Officer of Global Operations and Mr. MacIn-
tyre as Head of E-Commerce Technology. As of the balance sheet date, the Intershop Group did not
have any relationships with unconsolidated subsidiaries, joint ventures or associated companies.
The income generated with the participating company came to EUR 7,188 thousand (2010: EUR 5,703
thousand). Income included revenue from licenses, consulting and maintenance. The outstanding bal-
ance for receivables came to EUR 1,090 thousand as of December 31, 2011 (2010: EUR 1,274 thousand).
Receivables include trade receivables, which were not yet due or which were settled shortly after the
balance sheet date. In 2011 and 2010, no deliverables or services were obtained from the participating
company. There were no liabilities as of the balance sheet dates.
With respect to the remuneration for Supervisory Board and Management Board members, please refer to
the remuneration report in the management report.
Disclosure requirements under German law
members oF the executive bodies
The Management Board comprised in 2011 the following members:
name
Heinrich Göttler
Dr. Ludger Vogt
Ludwig Lutter
Peter Mark Droste
Function
Member of the
Management Board
Member of the
Management Board
Member of the
Management Board
Member of the
Management Board
term of office
since 06/23/ 2008
since 12/01/ 2008
since 04/01/ 2011
04/01/2009 – 03/31/2011
The Supervisory Board comprised the following members in 2011:
name
Function
term of office
Dr. Herbert May
James W. MacIntyre
Chairman of the
Supervisory Board
Vice Chairman of the
Supervisory Board
since 10/19/2010
(Chairman since 11/17/2010)
06/01/2010 – 01/31/2012
(Vice Chairman since 12/14/2010)
Tobias Hartmann
Member of the Supervisory Board
Since 07/01/2011
Michael R. Conn
Member of the Supervisory Board
12/14/2010 – 06/30/2011
Total remuneration paid to the Management Board for fiscal year 2011 amounted to EUR 880 thousand
(2010: EUR 934 thousand), of which EUR 624 thousand (2010: EUR 528 thousand) accounted for fixed re-
muneration and EUR 256 thousand (2010: EUR 406 thousand) for the variable components. In fiscal year
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 73
2011, the total remuneration for the Supervisory Board members came to EUR 161 thousand (2010: EUR
78 thousand), of which EUR 101 thousand (2010: EUR 63 thousand) accounted for fixed remuneration and
EUR 60 thousand (2010: EUR 15 thousand) for the performance-related portion. Due to the relinquishment
of Supervisory Board members, the actual total remuneration to be paid for the Supervisory Board comes
to EUR 83 thousand (2010: EUR 65 thousand). The payments of the Management Board and Supervisory
Board consist exclusively of benefits due in the short term.
The particulars regarding the remuneration of the Management Boards and Supervisory Boards are out-
lined in the remuneration reports as part of the combined Group management report and management
report of INTERSHOP Communications AG.
directors’ holdings and securities transactions subJect to reporting re-
Quirements
As of December 31, 2011, Management Board member Dr. Ludger Vogt held 70,000 Intershop bearer
shares.
In fiscal year 2011, one of the Company’s board members made the following reportable securities trans-
action of Intershop bearer shares:
name
date
type of transaction
amount total value (eur)
management board:
Dr. Ludger Vogt
04/12/2011
Lending*
57,700
0
* Dr. Vogt lent the Company the shares to hedge the employee stock option plan free of charge.
The Company returned the shares to Dr. Vogt as of the balance sheet date.
employees
During the fiscal year 2011, Intershop Group had an average of 441 full-time employees, of whom 438
were salaried employees and 3 members of the executive bodies (2010: 333 full-time employees, of whom
330 were salaried employees and 3 members of the executive bodies).
Employee-related expenses amounted to EUR 26,188 thousand (2010: EUR 19,937 thousand). Pension in-
surance contributions paid by the Company for statutory pension insurance schemes totaled EUR 1,620
thousand (2011: EUR 1,241 thousand).
auditors’ Fees
In fiscal year 2011, the Company incurred expenses of EUR 139 thousand (2010: EUR 91 thousand) for au-
dit services in accordance with sections 285 no. 17 and 314(1) no. 9 of the HGB, of EUR 6 thousand (2010:
EUR 10 thousand) for other assurance services, and of EUR 8 thousand (2010: EUR 18 thousand) for other
services. Expenses for tax consulting services amounted to EUR 17 thousand (2010: EUR 23 thousand).
declaration oF conFormity
The Company has issued a declaration of conformity as required by section 161 of the Aktiengesetz by the
annual deadline on February 15, 2012, and made this declaration permanently available to its stockhold-
ers. More information can be found in the Corporate Governance Report.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 74
responsibility
stateMent
To the best of our knowledge, and in accordance with the applicable reporting principles, the consoli-
dated financial statements give a true and fair view of the assets, liabilities, financial position and profit
or loss of the group, and the group management report includes a fair review of the development and
performance of the business and the position of the group, together with a description of the principal
opportunities and risks associated with the expected development of the group for the remaining months
of the financial year.
Jena, March 28, 2012
The Management Board
Heinrich Göttler
Dr. Ludger Vogt
Ludwig Lutter
auditor’s report
group
75
We have audited the consolidated financial statements prepared by INTERSHOP Communications
Aktiengesellschaft, Jena, comprising the balance sheet, the statement of comprehensive income, state-
ment of changes in equity, cash flow statement and the notes to the consolidated financial statements,
together with the Group management report of INTERSHOP Communications Aktiengesellschaft, Jena,
which is combined with the management report of the Company, for the business year from January 1 to
December 31, 2011. The preparation of the consolidated financial statements and the combined manage-
ment report in accordance with the IFRSs, as adopted by the EU, and the supplementary requirements of
German commercial law pursuant to Section 315a (1) HGB [“Handelsgesetzbuch”: German Commercial
Code] are the responsibility of the Company’s Board of Managing Directors. Our responsibility is to express
an opinion on the consolidated financial statements and the combined management report based on
our audit.
We conducted our audit of the consolidated financial statements in accordance with Section 317 HGB
and German generally accepted standards for the audit of financial statements promulgated by the In-
stitut der Wirtschaftsprüfer [Institute of Public Auditors in Germany - IDW]. Those standards require that
we plan and perform the audit such that misstatements materially affecting the presentation of the net
assets, financial position and results of operations in the consolidated financial statements in accordance
with the applicable financial reporting framework and in the combined management report are detected
with reasonable assurance. Knowledge of the business activities and the economic and legal environment
of the Group and expectations as to possible misstatements are taken into account in the determination
of audit procedures. The effectiveness of the accounting-related internal control system and the evidence
supporting the disclosures in the consolidated financial statements and in the combined management
report are examined primarily on a test basis within the framework of the audit. The audit includes assess-
ing the annual financial statements of those entities included in consolidation, the determination of the
entities to be included in consolidation, the accounting and consolidation principles used and significant
estimates made by the Company’s Board of Managing Directors, as well as evaluating the overall presenta-
tion of the consolidated financial statements and the combined management report. We believe that our
audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with the
IFRSs, as adopted by the EU, and the supplementary requirements of German commercial law pursuant
to Section 315a (1) HGB and give a true and fair view of the net assets, financial position and results of op-
erations of the Group in accordance with these requirements. The combined management report is con-
sistent with the consolidated financial statements and as a whole provides a suitable view of the Group’s
position and suitably presents the opportunities and risks of future development.
Erfurt, March 28, 2012
pricewaterhousecoopers
aktiengesellschaft
wirtschaftsprüfungsgesellschaft
(sgd. Rolf-Peter Stockmeyer)
Wirtschaftsprüfer
(German Public Auditor)
(sgd. ppa. Heinrich Peters)
Wirtschaftsprüfer
(German Public Auditor)
financial stateMents
& notes
intershop coMMunications ag
79 Balance Sheet INTERSHOP Communications AG
80 Statement of Operations of INTERSHOP Communications AG
81 Notes to the Financial Statements INTERSHOP Communications AG
financial stateMents
& notes
intershop coMMunications ag
financial
stateMents
79
BALANCE SHEET INTERSHOP COMMUNICATIONS AG
in EUR
assets
Fixed assets
Intangible assets
Software licenses
Property and equipment
Other facilities, furniture, and equipment
Financial Assets
Investments in affiliated companies
current assets
Inventories
Work in process
Payments on account
Receivables and other assets
Accounts receivable
Receivables from affiliated companies
Receivables from companies in which
participations are held
Other assets
Cash-in-hand, bank balances
prepaid expenses
total assets
shareholders’ eQuity and liabilities
shareholders’ equity
Common stock
Conditional capital: EUR 59,584
(previous year: EUR 59,584)
Capital surplus
Accumulated Deficit
accrued liabilities
Provisions for taxes
Other accrued liabilities
liabilities
Advance payments received
Accounts payable
Liabilities to affiliated companies
Other liabilities
thereof from taxes: EUR 237,645
(previous year: EUR 388,516)
thereof from social security benefits:
EUR 35,255 (previous year EUR 16,895)
december 31, 2011 december 31, 2010
208,098
929,810
153,362
588,231
10,496,834
11,634,742
10,491,261
11,232,854
443,793
15,000
458,793
8,065,124
2,242,870
1,090,251
298,912
11,697,157
14,749,472
26,905,422
192,029
38,732,193
171,738
0
171,738
5,495,309
5.682.079
1,273,855
704,055
13,155,298
10,110,580
23,437,616
108,450
34,778,920
30,170,984
29,582,305
6.431.531
(7,913,658)
28,688,857
568,777
4,474,445
5,043,222
707,273
2,491,777
544,090
612,813
6,288,368
(8,510,793)
27,359,880
471,946
3,606,570
4,078,516
0
1,096,068
126,081
1,026,241
deferred charges
total shareholders’ eQuity and liabilities
4,355,953
644,161
38,732,193
2,248,390
1,092,134
34,778,920
FINANCIAL STATEMENTS
INTERSHOP COMMUNICATIONS AKTIENGESELLSCHAFT
80
STATEMENT OF OPERATIONS OF INTERSHOP COMMUNICATIONS AG
in EUR
Revenues
Increase in inventories of work in progress
Other operating income
Cost of Materials
Cost of purchased merchandise
Cost of purchased services
Personnel Costs
Salaries
Social security contribution
Depreciation and amortization
January 1 to december 31,
2011
2010
40,448,126
31,848,021
272,055
(39,141)
3,092,763
2,292,465
(429,203)
(272,124)
(9,983,071)
(5,563,116)
(18,019,739)
(13,847,523)
(2,847,945)
(2,137,655)
of intangible fixed assets and property and equipment
(497,779)
of current assets to the extent it exceeds depreciation
and amortization that is normal for the Company
0
(327,703)
(999,506)
Other operating expenses
(12,516,930)
(10,013,401)
Profit from profit transfer agreements
Other interest and similar income
312,836
556,729
269,491
509,433
thereof from affiliated companies EUR 472,105
(previous year: EUR 476,462)
Write-downs of long-term financial assets and securities
classified as current assets
0
(5,274)
Interest and similar expenses
(14,124)
(45,908)
of which from expenses for accrued interest:
EUR 12,190 (prior year: EUR 22,391)
result from ordinary activities
Extraordinary expense
Taxes on income
net income for the year
Accumulated deficit carried forward
accumulated deficit
373,718
1,668,059
0
223,417
(10,360)
(539,466)
597,135
1,118,233
(8,510,793)
(9,629,026)
(7,913,658)
(8,510,793)
notes to the financial stateMents
intershop coMMunications aKtiengesellschaft
81
The annual financial statements were prepared in accordance with the provisions of the Handelsgesetz-
buch (HGB – German Commercial Code) and the Aktiengesetz (AktG – German Stock Corporation Act) in
accordance with the principles applicable to large corporations.
The fiscal year corresponds with the calendar year.
The income statement is prepared using the “nature of expense” method. The item designation „Expendi-
tures for goods purchased” was adjusted to the contents of this item in the reporting year.
accounting policies
The accounting policies used remained unchanged from the prior year.
Intangible fixed assets and property, plant and equipment are carried at cost, less scheduled, straight-line
depreciation and any required non-scheduled write-downs. The scheduled depreciation is made over the
average useful life of the fixed assets.
Intershop did not make use of the option to capitalize the development costs.
Financial assets are carried at cost, less necessary valuation allowances.
Inventories are measured at cost. In addition to direct materials and labor costs, they include an appropri-
ate share of the necessary indirect materials and labor costs.
Cash is measured at its nominal value or at the mean spot rate.
Receivables and other assets are carried at their principal amounts, less any necessary valuation allow-
ances (specific and global valuation allowances).
Prepaid expenses and deferred charges are measured using the portion of expenses or income before the
balance sheet date that represent expenses or income for a particular period after the balance sheet date.
Common stock are stated at par value.
Accrued liabilities cover all recognizable risks and are measured in the amount dictated by prudent busi-
ness practice. They are measured at the settlement value deemed necessary by prudent business practice.
Provisions with a maturity of more than 1 year were discounted using the average market interest rate
of the past seven years determined by the Deutsche Bundesbank for the respective time periods. Future
price and cost increases are taken into consideration when accounting for provisions.
Liabilities are stated at their settlement value.
Current receivables and liabilities in a foreign currency were translated at the mean spot rate at the bal-
ance sheet date.
Differences between trade balance and tax balance as well as accumulated deficits carried forward result
in deferred tax assets. The Company did not make use of the option to account for the deferred tax assets
pursuant to section 274(1) sentence 2 of the HGB (German Commercial Code).
82
notes to the items in the annual Financial statements
Balance Sheet
Fixed assets changed as follows:
In EUR thousand
costs of purchase
balance at January 1, 2011
Additions
Disposals
balance at december 31, 2011
depreciation, write-downs, and
impairment losses
balance at January 1, 2011
Additions
Disposals
balance at december 31, 2011
net carrying amount at
december 31, 2010
net carrying amount at
december 31, 2011
intangible assets
tangible assets
Financial assets
total
Software licenses
Other equipment,
operating and office
equipment
Shares in affiliated
companies
3,099
157
0
3,256
2,946
102
0
3,048
153
208
2,922
743
(392)
3,273
2,334
396
(387)
2,343
588
930
46,145
52,166
6
0
906
(392)
46,151
52,680
35,654
40,934
0
0
498
(387)
35,654
41,045
10,491
11,232
10,497
11,635
Out of the financial assets, EUR 8,863 thousand are allocated to Intershop Communications Inc. and EUR
1,628 thousand to SoQuero GmbH. There were non-scheduled impairment losses at the lower fair value on
the shares in Intershop Communications Inc. in the prior years. Due to the positive operating results that
followed and were present in the reporting year, as well as after the current corporate planning, there are
currently no indications for further write-downs with Intershop Communications Inc. or SoQuero GmbH.
Receivables from affiliated companies in the amount of EUR 1,527 thousand (previous year: EUR 5,320
thousand) relate to Group financing, EUR 313 thousand to profit transfer from the subsidiary SoQuero
GmbH (previous year: EUR 269 thousand) and current goods and services.
Receivables from companies in which participations exist are trade receivables, as in the prior year.
All receivables and other assets have a remaining maturity of up to one year, as in the prior year.
Cash and cash equivalents totaling EUR 67 thousand (prior year: EUR 456 thousand) reported on the bal-
ance sheet under cash-in-hand and bank balances have been assigned as security (restricted cash) for
obligations arising from rental relationships.
The share capital in the amount of EUR 30,170,984 consists of 30,170,984 no-par value bearer shares.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt
The capital reserve developed as follows in fiscal year 2011 (in EUR thousand):
balance at december 31, 2010
Premium from the exercise of stock options
balance at december 31, 2011
83
6,288
153
6,432
The accumulated deficit contains a loss carryforward from previous years in the amount of EUR 8,511
thousand.
Other provisions primarily consist of outstanding invoices (EUR 1,602 thousand; previous year: EUR 702
thousand) and commissions (EUR 947 thousand; previous year: EUR 601 thousand). The remaining provi-
sions consist litigations, legal costs, expenses relating to the preparation of the financial statements and
the Annual Stockholders’ Meeting, vacation entitlements, pending losses from ongoing rental obligations
and executory contracts (EUR 500 thousand; previous year: EUR 490 thousand) and license fees.
As in the previous fiscal year, all liabilities are due within one year.
Other liabilities consist of liabilities to employees from cash received in connection with stock option plans
in the amount of EUR 17 thousand (previous year: EUR 516 thousand). Apart from that, largely current pay-
roll expenses are shown.
Receivables from affiliated companies relate to deliveries of goods and services, as in the prior year.
Statement of Operations
The following table shows a breakdown of revenues by region:
in EUR thousand
Germany
Rest of Europe
Rest of the world excluding Europe
2011
17,131
5,723
17,594
40,448
2010
15,163
3,329
13,356
31,848
Revenues of EUR 5,018 thousand (prior year: EUR 3,679 thousand) relate to license revenues and
EUR 35,430 thousand (prior year: EUR 28,169 thousand) to revenues from services (Consulting, Mainte-
nance and Other).
Revenue from foreign currency translation is included in “other operating income” and amounted to
EUR 241 thousand (prior year: EUR 250 thousand).
EUR 482 thousand from other operating income affects the previous periods.
Expenditures for goods purchased mainly include software license fees to third parties.
Other operating expenses include impairment losses on receivables from affiliated companies of EUR 868
thousand.
Impairment losses on receivables from affiliated companies that exceed the normal levels of impairment
losses were charged in the amount of EUR 1,000 thousand in the prior year.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt
84
Other operating expenses include expenses of EUR 486 thousand (prior year: EUR 237 thousand) from
currency translation.
Profit from profit transfer agreements is attributable to the profit transfer agreement with SoQuero GmbH
that has existed since fiscal year 2008.
EUR 472 thousand of other interest and similar income relates to affiliated companies (prior year: EUR 476
thousand).
The extraordinary expenses shown in the prior year come from the revaluation of provisions as a result
of the first-time application of the HGB in the version of the German Accounting Law Modernization Act
(Bilanzrechtsmodernisierungsgesetz; BilMoG).
Income taxes include previous years’ expenses in the amount of EUR 320 thousand.
other disclosures
Authorized capital
At the Annual Stockholder’s Meeting on June 29, 2011, Authorized Capital I and II (Authorized Capital
2011) were newly created through resolutions for the amendment of the Articles of Association under
the cancellation of the prior authorizations and Authorized Capital (Authorized Capital 2007), provided
that they were not used. The new Authorized Capital and corresponding amendments to the Articles of
Association were entered into the commercial register on July 21, 2011. As of the balance sheet date, the
Company had a total of EUR 7,656,137 in new authorized capital. As of December 31, 2010, the now can-
celled Authorized Capital 2007 came to EUR 5,032,919.
Under the Articles of Association of INTERSHOP Communications AG, the Management Board is entitled,
with the approval of the Supervisory Board, to increase the capital stock by issuing new ordinary shares
as follows:
• By up to a total of EUR 7,500,000 against cash contributions (Authorized Capital I 2011). The authorization
of the Management Board applies until July 21, 2016. The Management Board is authorized, subject to
approval by the Supervisory Board, to suspend the stockholders’ subscription rights in certain cases. As
of December 31, 2010, the now cancelled Authorized Capital I 2007 amounted to EUR 4,553,103. There
were no capital increases from Authorized Capital 1 2007 or 2011 in fiscal year 2011.
• By up to a total of EUR 156,137 against cash contributions, excluding the stockholders’ subscription
rights (Authorized Capital II 2011). The authorization is valid until December 31, 2012. As of December
31, 2010, cancelled capital came to EUR 479,816, which was used as a result of the following three capi-
tal increases due to the exercise of employee options: capital increases of EUR 382,479 as of February 8,
2011, of EUR 87,200 as of May 4, 2011, and of EUR 10,137 as of July 8, 2011. Authorized Capital II 2011 in
the amount of EUR 265,000 was newly created effective July 21, 2011. A capital increase of EUR 108,863
from Authorized Capital II took place as of September 30, 2011 by way of the exercise of employee
options. With this, the amount of Authorized Capital II 2011 as of the balance sheet date was still EUR
156,137. This authorized capital in the amount of EUR 156,137 serves to fulfill the subscription rights
from Stock Option Plan 2001, whereby however a maximum of 118,000 shares may be issued due to the
expiration of subscription rights.
Conditional capital
Conditional capital remained unchanged in fiscal year 2011. As of December 31, 2011, the Company’s
share capital was increased conditionally by up to EUR 59,584 by issuing up to 59,584 shares. In order to
grant Management Board stock options, these EUR 59,584 are allocated for options in accordance with
section 192 (2) No. 3 of the AktG (Conditional Capital I), whereby however a maximum of 12,500 shares
may be issued due to subscription rights that expire or do not come into existence. Conditional Capital I is
reserved for subscription rights exercisable under the Stock Option Plan 1999.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 85
The number of options outstanding under the Company’s stock option plans at the balance sheet date
was 130,500.
As of the balance sheet date, 26.15% of the shares in INTERSHOP Communications AG were held by eBay
Inc. through GSI Commerce Inc. and GSI Commerce Solutions Inc., which are under its control, as well
as 5.01% by Cyrte Investments. These disclosures are based on the following notifications according to
section 21 (1) of the German Securities Trading Act (Wertpapierhandelsgesetz; WpHG) regarding amend-
ments to voting rights published in the reporting period by the Company pursuant to section 26 (1) of the
WpHG: eBay Inc.’s percentage of voting rights in the Company exceeded the thresholds of 3%, 5%, 10%,
15%, 20% and 25% on June 17, 2011, amounting to 26.25% (7,889,222 voting rights). Cyrte Investments’
share of voting rights exceeded the threshold of 3% on July 11, 2011 and as of this date stood at 3.32%
(996,170 voting rights), as well as the threshold of 5% on October 13, 2011, which amounted to 5.01%
(1,510,170 voting rights). Accordingly, as of the balance sheet date, the free float of INTERSHOP Communi-
cations AG comes to a total of 68.84%.
Derivative financial instruments
In fiscal year 2011, invoices in foreign currency were hedged with currency options. The nominal volume
of hedging transactions amounts to AUD 1.2 million. As of the balance sheet date, the fair value is EUR 2.
The contractual maturity dates are within two months following the balance sheet date.
Disclosures pursuant to section 285 No. 3 of the HGB, contingent liabilities and other financial liabilities
Financial obligations resulting from the lease for the Company’s business premises amounted to
EUR 9.2 million as of December 31, 2011, which are due on a pro rata basis by the end of the lease term
up to the end of November 2015. The Company also has other financial liabilities amounting to EUR 1.2
million thousand relating to other tenancy agreements and leases for vehicles and office equipment. The
tenancy and leasing arrangements include the advantages and risks that are typical of contracts.
Employees
The Company had an average of 354 employees (salaried employees only) during the fiscal year 2011
(previous year: 270 employees). The figure excludes an average of 5 employees with temporary leave of
absence (previous year: 8 employees).
Executive bodies of the Company
The Supervisory Board comprised the following members:
dr. herbert may
Chairman of the Supervisory Board since 11/17/2010
Member since 10/19/2010
Dipl. Ingenieur (Engineer), independent management consultant
Other supervisory board mandates:
Ubidyne Inc., Scottsdale, AZ, USA
Versant Corp., Redwood City, CA, USA
Certon GmbH, Heidelberg, Germany
Communology GmbH, Cologne, Germany (advisory board member)
James w. macintyre
Vice Chairman of the Supervisory Board from 12/14/2010 (to 01/31/2012)
Member from 06/01/2010 (to 01/31/2012)
Director and member of management, Arimor, LLC, McLean, Virginia, USA
Director and member of management, Product Laboratory, LLC, McLean, Virginia, USA
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 86
michael r. conn
Member from 12/14/2010 to 06/30/2011
Chief Financial Officer, GSI Commerce, Inc. and its subsidiaries
tobias hartmann
Member since 07/01/2011
Chief Executive Officer Global Operations, GSI Commerce Inc.
The Management Board included the following persons:
heinrich göttler
Member of the Management Board since 06/23/2008
dr. ludger vogt
Member of the Management Board since 12/01/2008
ludwig lutter
Member of the Management Board since 04/01/2011
peter marK droste
Member of the Management Board from 04/01/2009 to 03/31/2011
compensation oF the members oF the management board and the
supervisory board
Total remuneration paid to the Management Board for fiscal year 2011 amounted to EUR 880 thousand
(2010: EUR 934 thousand), of which EUR 624 thousand (2010: EUR 528 thousand) accounted for fixed re-
muneration and EUR 256 thousand (2010: EUR 406 thousand) for the variable components. In fiscal year
2011, the total remuneration for the Supervisory Board members came to EUR 161 thousand (2010: EUR
78 thousand), of which EUR 101 thousand (2010: EUR 63 thousand) accounted for fixed remuneration and
EUR 60 thousand (2010: EUR 15 thousand) for the performance-related portion. Due to the relinquishment
of Supervisory Board members, the actual total remuneration to be paid for the Supervisory Board comes
to EUR 83 thousand (2010: EUR 65 thousand). The particulars regarding the remuneration of the Manage-
ment Boards and Supervisory Boards are outlined in the remuneration reports as part of the combined
Group management report and management report of INTERSHOP Communications AG.
As of December 31, 2011, Management Board member Dr. Ludger Vogt held 70,000 Intershop bearer
shares.
Intershop Group
As of December 31, 2011, in addition to the parent company, the consolidated companies included the
subsidiaries Intershop Communications, Inc., SoQuero GmbH, The Bakery GmbH, Intershop Communica-
tions Australia Pty Ltd, Intershop Communications AB, Aktiebolaget Grundstenen 137724, as well as Inter-
shop Communications Ventures GmbH.
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt 87
The following list shows the subsidiaries of Intershop Communications AG and the Company’s respective
interest as of December 31, 2011:
interest in % currency
equity*
net loss**
Intershop Communications, Inc.,
San Francisco, U.S.A.
Intershop Communications Ventures GmbH,
Jena, Germany
Intershop Communications AB, Stockholm, Sweden
Intershop Communications Korea Co. Ltd., Seoul,
Korea
Intershop Communications Taiwan Co. Ltd.,
Taipei, Taiwan
SoQuero GmbH, Frankfurt/Main, Germany
The Bakery GmbH, Berlin, Germany
Intershop Communications Australia Pty Ltd,
Melbourne, Australia
Aktienbolaget Grundstenen 137724, Malmö,
Sweden
100
100
100
100
100
100
100
100
100
Euro
(914,728)
(318,531)
Euro
(2,195,858)
475,200
Euro
Euro
Euro
Euro
Euro
Euro
Euro
21,147
0
0
608
0
0
213,151
312,327***
(1,049,381)
13,039
609,036
2,602
5,603
0
* Equity as of December 31, 2011 is translated at the exchange rate as of the reporting date
** (Preliminary) net profit/loss for fiscal year 2011 is translated at the average annual rate
*** Net profit/loss before profit transfer to parent company INTERSHOP Communications AG
The expenses for auditors’ fees are included in the notes to the Company’s consolidated financial
statements.
Declaration of Conformity in accordance with section 161 of the German Stock Corporation Act
The Company issued a declaration of conformity as required by section 161 of the Aktiengesetz on
February 15, 2012, and made this declaration publicly available on the Company’s website at
http://www.intershop.com/investors-corporate-governance.html .
Appropriation of net income/loss
The Management Board of Intershop Communications AG proposes to carry forward the accumulated
deficit of EUR 7,913,658 to new account.
Responsibility statement
To the best of our knowledge, and in accordance with the applicable reporting principles, the financial
statements give a true and fair view of the assets, liabilities, financial position and profit or loss of INTER-
SHOP Communications AG, and the management report includes a fair review of the development and
performance of the business and the position of the Company, together with a description of the princi-
pal opportunities and risks associated with the expected development of the Company for the remaining
months of the financial year.
Jena, March 28, 2012
The Management Board
Heinrich Göttler
Dr. Ludger Vogt
Ludwig Lutter
Notes to the CoNsolidated FiNaNCial statemeNts iNteRshoP CommuNiCatioNs aktieNgesellsChaFt
auditor’s report
intershop coMMunications ag
89
We have audited the annual financial statements, comprising the balance sheet, the income statement
and the notes to the financial statements, together with the bookkeeping system, and the management
report of the Company and the Group of INTERSHOP Communications Aktiengesellschaft, Jena, for the
business year from January 1 to December 31, 2011. The maintenance of the books and records and the
preparation of the annual financial statements and management report in accordance with German com-
mercial law are the responsibility of the Company’s Board of Managing Directors. Our responsibility is to
express an opinion on the annual financial statements, together with the bookkeeping system, and the
combined management report based on our audit.
We conducted our audit of the annual financial statements in accordance with Section 317 HGB (“Han-
delsgesetzbuch”: German Commercial Code) and German generally accepted standards for the audit of
financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Ger-
many - IDW). Those standards require that we plan and perform the audit such that misstatements materi-
ally affecting the presentation of the net assets, financial position and results of operations in the annual
financial statements in accordance with (German) principles of proper accounting and in the manage-
ment report are detected with reasonable assurance. Knowledge of the business activities and the eco-
nomic and legal environment of the Company and expectations as to possible misstatements are taken
into account in the determination of audit procedures. The effectiveness of the accounting-related in-
ternal control system and the evidence supporting the disclosures in the books and records, the annual
financial statements and the management report are examined primarily on a test basis within the frame-
work of the audit. The audit includes assessing the accounting principles used and significant estimates
made by the Company’s Board of Managing Directors, as well as evaluating the overall presentation of
the annual financial statements and management report. We believe that our audit provides a reasonable
basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the annual financial statements comply with the legal
requirements and give a true and fair view of the net assets, financial position and results of operations of
the Company in accordance with (German) principles of proper accounting. The combined management
report is consistent with the annual financial statements and as a whole provides a suitable view of the
Company’s position and suitably presents the opportunities and risks of future development.
Erfurt, March 28, 2012
pricewaterhousecoopers
aktiengesellschaft
wirtschaftsprüfungsgesellschaft
(sgd. Rolf-Peter Stockmeyer)
Wirtschaftsprüfer
(German Public Auditor)
(sgd. ppa. Heinrich Peters)
Wirtschaftsprüfer
(German Public Auditor)
report of
the supervisory board
corporate
governance report
report of
the supervisory board
corporate
governance report
report of
the supervisory board
93
The Supervisory Board has continuously monitored the management of business activities by the Manage-
ment Board, in accordance with the tasks entrusted to it by law and by the Articles of Associations, and
assured itself that the applicable rules and regulations and legal requirements were complied with by the
management.
supervisory board meetings and content
In fiscal year 2011, the Supervisory Board met a total of 12 times, of which 9 were telephone consultations.
Key topics of the meetings were the current economic situation of the Company, especially development
of earnings, revenue and the employees, as well as the strategic direction of the Company, in particular the
strategic partnerships. All Supervisory Board members participated in all of the meetings.
In the meeting on April 13, 2011, the Supervisory Board dealt with the audit of the annual and consolidat-
ed financial statements for 2010 in the presence of the auditor, as well as with the Corporate Governance
Report. The Supervisory Board approved the consolidated and annual financial statements of INTERSHOP
Communications AG in this meeting. In addition, the budget for fiscal year 2011 was approved. In the meet-
ings on January 25, August 5 and November 3, 2011, the Management Board reported on the current and
expected business development and presented important sales projects. In the other Supervisory Board
meetings of February 21, May 2, May 18, May 25, July 1, July 14, August 19 and September 2, 2011, the items
that were handled included the following: resolutions for capital increases were adopted, a resolution for
a new Rules of Procedure for the Management Board was passed, and agreements requiring approval and
personnel issues were discussed. In addition to the meetings, there were circulation resolutions regarding
appointments of Management Board members, as well as agreements requiring approval.
Business transactions of importance to the Company were discussed in detail and carefully monitored by
the Supervisory Board on the basis of Management Board reports. The Management Board submitted all
transactions requiring approval under its Rules of Procedure to the Supervisory Board for approval. The
Supervisory Board examined the draft resolutions relating to these transactions and measures requiring
approval in detail and took the appropriate decisions.
In addition to its reports at the Supervisory Board meetings, the Management Board regularly informed the
Chairman of the Supervisory Board of the current developments of the Company and the related necessary
measures. The Chairman and other members of the Supervisory Board were in constant contact with the
Management Board, and important issues of the Company were discussed, analyzed and monitored.
No committees were established because the Supervisory Board only comprises three members.
corporate governance
In three individual cases, the Supervisory Board had to pass a resolution in February, March and September
2011 for its approval for amendment agreements regarding the agreement concluded in 2010 on the stra-
tegic partnership with GSI Commerce Solutions Inc. as well as its approval for the acceptance of individual
orders in line with this strategic partnership. In these cases, as a precautionary measure, Supervisory Board
members James W. MacIntyre, Michael Conn and, after July 1, 2011, Tobias Hartmann assumed that there
could be a potential conflict of interest because of their respective main professional activities at GSI Com-
merce Inc. and notified the Company in the meaning of section 5.5 of the German Corporate Governance
Code. They abstained from voting in these cases.
The new declaration of compliance with the German Corporate Governance Code was issued by the Man-
agement Board and Supervisory Board in February 2012. The remuneration of the individual Supervisory
Board members is broken down into its components in the explanatory notes to the group management
report, as well as in the Corporate Governance report.
REPORT OF
THE SUPERVISORy BOARD
94
personnel changes in the supervisory board and the management board
In fiscal year 2011, there were two personnel changes in the managing bodies, one in the Supervisory Board and anoth-
er in the Management Board. Michael Conn retired from his office, leaving the Supervisory Board effective as of the end
of the day on June 30, 2011. The Supervisory Board would like to thank Mr. Conn for his work. At the Ordinary Annual
Stockholders’ Meeting on June 29, 2011, Tobias Hartmann, Chief Executive Officer, Global Operations of GSI Commerce,
Inc., was elected as a new Supervisory Board member effective July 1, 2011.
Peter Mark Droste retired from the Management Board at the end of his contract as of March 31, 2011. Mr. Droste was
appointed to the Management Board in April 2009 with the primary goal of finding a strategic partner with whom In-
tershop can push forward the internationalization of its e-Commerce business and accelerate growth. The Supervisory
Board would like to thank Mr. Droste for his high degree of commitment to the Company.
On March 24, 2011 the Supervisory Board appointed Ludwig Lutter member of the Management Board effective
April 1, 2011. Ludwig Lutter succeeded Peter Mark Droste and, as Chief Financial Officer of Intershop, is responsible for the
areas of Finance, Mergers and Acquisitions, and IR, as well as the Operations, Legal and Human Resources departments.
annual Financial statements and consolidated Financial statements, dependent
company report, annual audit
PricewaterhouseCoopers AG Wirtschaftsprüfungsgesellschaft, the auditor for the 2011 fiscal year elected at the
Annual Stockholder’s Meeting held on June 29, 2011 and engaged by the Supervisory Board, thoroughly reviewed the
separate financial statements, the consolidated financial statements, the combined management report and the group
management report of INTERSHOP Communications AG and issued unqualified audit opinions in each case. In addi-
tion, the auditors reviewed the dependent company report prepared by the Company pursuant to section 312 of the
German Stock Corporation Act (AktG), reported on it pursuant to section 313 (3) of the AktG, and issued the following
unqualified audit opinion:
„Based on our audit and assessment in accordance with professional standards, we confirm that (1) the actual disclo-
sures contained in the report are correct, (2) the payments made by the Company in connection with transactions
detailed in the report were not unreasonably high, and (3) the measures detailed in the report do not represent any
circumstances, which could lead to a significantly different assessment as that given by the Management Board.”
Following its own thorough examination, in particular after inspecting the auditor’s reports, as well as discussing the
key points of the audit in detail with the auditor and the material findings of the audit, the Supervisory Board did not
raise any objections with respect to the financial statements or the dependent company report. The Supervisory Board
concurs with the result of the audit and the audit of the dependent company report. The Supervisory Board does not
raise any objections against the declaration given by the Management Board at the end of the dependent company
report and approved the separate financial statements and consolidated financial statements prepared by the Man-
agement Board in its meeting on April 11, 2012. The annual financial statements of INTERSHOP Communications AG
were thus adopted. Since the Company has not yet generated retained earnings due to the remaining loss carryfor-
wards under German commercial law in 2011, in spite of its positive operating result, there was no need to examine a
proposal on the appropriation of profits.
The Supervisory Board would like to thank the Management Board and all the employees of the Intershop Group for
their dedicated work. The Supervisory Board would like to thank the shareholders for the trust they have placed in
the Company.
Jena, April 2011
on behalf of the Supervisory Board
Dr. Herbert May
Chairman of the Supervisory Board
corporate
governance report
95
Intershop welcomes the German Corporate Governance Code presented by the Government Commis-
sion and most recently amended in May 2010. The Company largely complied with the recommendations
of the German Corporate Governance Code in the fiscal year 2011; any departures were explained in the
Declaration of Conformity. Pursuant to section 161 of the AktG, the Supervisory Board and the Manage-
ment Board jointly issued the following Declaration of Conformity on February 15, 2012:
Since its last declaration of compliance dated February 23, 2011 to the time of this declaration, Intershop
Communications AG has complied with the recommendations of the Government Commission on the
German Corporate Governance Code (hereinafter referred to as the „Code”) in the version dated May 26,
2010, with the following exceptions and will comply with them in the future with the following exceptions:
a) The existing D&O insurance does not include a deductible for the members of the Supervisory Board
(section 3.8 of the Code) since the Company has not been offered a policy with comparatively more
favorable terms. Furthermore, the Management Board and Supervisory Board hold the view that the
members of the Supervisory Board also exercise their obligations responsibly without a deductible.
b) The Management Board does not have a Chairman or Spokesperson (section 4.2.1 of the Code). No
one was appointed because the members of the Management Board have equal status, work to-
gether on the basis of trust, and the rules of procedure detail the organizational arrangements in this
respect.
c)
In accordance with section 5.4.1 (2) of the Code, the Supervisory Board has not specified concrete ob-
jectives regarding its composition, which take diversity into account and which provide for an appro-
priate degree of female representation. The Supervisory Board is of the opinion that due to its small
number of members, a concrete determination of goals restricts the selection of suitable members
for the Supervisory Board. Instead, the Supervisory Board wishes to make its decisions with regard to
recommendations about its composition independently based on the respective situation.
d) The consolidated financial statements for fiscal year 2010 were published 20 days after the dead-
line stipulated in the Code, however, within the four-month-period as stipulated in Art. 62(3) of the
Börsenordnung der Frankfurter Wertpapierbörse (Frankfurt Stock Exchange Rules and Regulations),
Art. 37v(1) of the Wertpapierhandelsgesetz (WpHG, German Securities Trading Act) and Art. 325(4)
of the Handelsgesetzbuch (HGB, German Commercial Code) (section 7.1.2 of the Code). An earlier
publication date is not possible due to the timetables for the preparation, audit and approval of the
consolidated financial statements. However, important preliminary key figures shall be published be-
forehand.
This declaration and all previous declarations have been made permanently available on the Company’s
website at http://www.intershop.com/investors-corporate-governance.html.
members oF the management board and supervisory board in Fiscal year 2011
The Management Board comprised the following members:
name
Function
term of office
Heinrich Göttler
Member of the Management Board
since 06/23/2008
Dr. Ludger Vogt
Member of the Management Board
since 12/01/2008
Ludwig Lutter
Member of the Management Board
since 04/01/2011
Peter Mark Droste
Member of the Management Board
04/01/2009 – 03/31/2011
96
The Supervisory Board comprised the following members:
name
Function
term of office
Dr. Herbert May
Chairman of the Supervisory Board
James W. MacIntyre
Vice Chairman of the Supervisory Board
since 10/19/2010
(Chairman since 11/17/2010)
06/01/2010 – 01/31/2012
(Vice Chairman since 12/14/2010)
Tobias Hartmann
Member of the Supervisory Board
Since 07/01/2011
Michael R. Conn
Member of the Supervisory Board
12/14/2010 – 06/30/2011
compensation oF the members oF the management board and supervisory board
(remuneration report)
Remuneration of the Management Board
The compensation of the Management Board comprises fixed and variable components. The fixed com-
ponents comprise the fixed salary and additional benefits, such as the non-cash benefit resulting from
the use of a company car, and are paid monthly. The variable, annually recurring remuneration is based
on various annual and multi-annual quantitative and qualitative objectives, whose assessment depends
on the degree achieved of the objective. The basis for assessment of the quantitative objectives that have
greater weight are the Group’s EBIT, revenue and share price. The qualitative objectives are based on
strategic targets.
Total remuneration paid to the Management Board for fiscal year 2011 amounted to EUR 880 thousand
(2010: EUR 934 thousand), of which EUR 624 thousand (2010: EUR 528 thousand) accounted for fixed
remuneration and EUR 256 thousand (2010: EUR 406 thousand) for the variable components. The fixed
remuneration components include EUR 582 thousand for fixed salary and EUR 42 thousand for additional
benefits (2010: EUR 490 thousand for fixed salary, EUR 38 thousand for additional benefits).
The remuneration of the Management Board members is as follows:
in EUR thousand
Heinrich Göttler
Dr. Ludger Vogt
Ludwig Lutter
Peter Mark Droste
Fixed
remuneration
variable
remuneration
total
remuneration
2011
2010
2011
2010
2011
2010
212
201
159
52
624
189
164
-
175
528
100
100
56
0
256
90
90
-
226
406
312
301
216
52
880
279
254
-
401
934
New stock options were not granted to the members of the Management Board in the reporting year. The
members of the Management Board also do not own any stock options from prior years.
Membership on the Management Board ends in the event of the Company’s reorganization (merger, split-
up, or change in legal form). By way of compensation, the Management Board member then receives a
severance payment amounting to twelve months’ salary; if the remaining term of the Management Board
member’s contract is less than one year, the severance payment is reduced accordingly. The members
of the Management Board agreed to a non-compete agreement, which stipulates that the Company is
to pay compensation for one year. The compensation includes 75% of the last remuneration received,
excluding additional benefits. The compensation is not paid if Intershop cancels the non-compete agree-
ment within a specified period. In the event of illness, the Management Board agreements include an enti-
Corporate governanCe reportInterSHop CommunICatIonS aktIengeSellSCHaft 97
tlement to continued payment of the fixed basic salary for a period of six months up to a maximum period
until the end of the contract duration. In the event of the death of a member of the Management Board,
the surviving dependants are entitled to the monthly fixed basic salary for the month in which the death
occurs, as well as for the following six months. No member of the Management Board has been promised
further benefits in the event of the termination of his employment with the Company. No loans or similar
benefits were granted to members of the Management Board. No member of the Management Board re-
ceived any benefits from third parties during the fiscal year that were promised or granted because of his
position as a member of the Management Board.
Remuneration of the Supervisory Board
Upon resolution of the Annual Stockholders’ Meeting of June 29, 2011, the remuneration of the Super-
visory Board changed effective January 1, 2011, due to the amendment of section 13 of the Articles of
Association. The remuneration continues to include fixed and variable components. The fixed remunera-
tion is comprised of an annual fixed remuneration of EUR 12,500, as well as an attendance allowance of
EUR 2,500 per meeting or EUR 500 if a telephone conference is held in place of a meeting. In addition, the
members of the Supervisory Board receive a performance-related remuneration, as long as the result of
the operating activities (EBIT) reported in the approved consolidated financial statements of the Company
for the fiscal year concerned was positive and the established quantitative goals were reached: EUR 5,000
are granted, respectively if a) the EBIT of the prior year is achieved, b) the EBIT increased by more than
10% compared to the prior year, c) the EBIT increased by more than 20% compared to the prior year, and
d) there was an increase in revenue of more than 20% compared to the prior year. The chairman of the
Supervisory Board receives twice the amount of the fixed and variable remuneration. Supervisory Board
members who belong to the Supervisory Board for only part of the fiscal year receive remuneration pro-
portionate to the duration of their position. Expenses incurred by the members of Supervisory Board in the
performance of their duties are reimbursed by the Company.
In fiscal year 2011, the total remuneration for the Supervisory Board members came to EUR 161 thousand
(2010: EUR 78 thousand), of which EUR 101 thousand (2010: EUR 63 thousand) accounted for fixed remu-
neration and EUR 60 thousand (2010: EUR 15 thousand) for the performance-related portion. The remu-
neration of the Supervisory Board members is as follows:
in EUR thousand
Dr. Herbert May
James W. MacIntyre
Tobias Hartmann
Michael R. Conn
Members who left the
Supervisory Board in 2010
Fixed
remuneration
variable
remuneration
total
remuneration
2011
2010
2011
2010
2011
2010
53
24
11
13
-
101
5
9
-
1
48
63
30
15
8
8
60
1
3
-
0
11
15
83
39*
19*
21*
-
161
6
12*
-
1*
59
78
* The Supervisory Board member relinquished the remuneration entitled to him in accordance with the Articles of Association.
The Supervisory Board members, James W. MacIntyre, Tobias Hartmann, as well as Michael R. Conn
relinquished their total remuneration of EUR 78 thousand for fiscal year 2011 (of which EUR 48 thousand
account for fixed remuneration and EUR 30 thousand for variable remuneration). As a result of these re-
linquishments, the actual total remuneration to be paid for the Supervisory Board for fiscal year 2011
comes to EUR 83 thousand (2010: EUR 65 thousand). Supervisory Board members James W. MacIntyre and
Michael R. Conn relinquished their remuneration of a total of EUR 13 thousand for fiscal year 2010.
Corporate governanCe reportInterSHop CommunICatIonS aktIengeSellSCHaft
98
directors’ holdings and securities transactions subJect to reporting
reQuirements
As of December 31, 2011, Management Board member Dr. Ludger Vogt held 70,000 Intershop bearer
shares (this corresponds to a stake of 0.23%).
In fiscal year 2011, one of the Company’s board members made the following reportable securities trans-
action of Intershop bearer shares:
name
date
management board:
type of
transaction
amount
total value (eur)
Dr. Ludger Vogt
04/12/2011
Lending*
57,700
0
* Dr. Vogt lent the Company the shares to hedge the employee stock option plan free of charge. The Company returned the shares to
Dr. Vogt as of the balance sheet date.
stocK option plans
Stock option plans allow employees to acquire shares in the Company. Intershop has the following Stock
Options Plans:
1999 Stock Option Plan
With effect from June 21, 1999, the Company adopted a stock option plan (the 1999 Plan) for the issu-
ance of shares to Management Board members, executives, and various employees. The options under
the 1999 Plan vest ratably over a four-year period, beginning six months from the grant date; however, in
compliance with the applicable provisions of the German Aktiengesetz (AktG) [„Aktiengesetz”: German
Stock Corporation Act] (valid version of 1999), the options are not exercisable prior to expiry of a two-year
period from the date on which they are granted, even if a portion is already vested. The options expire if
they are not exercised within five years of the grant date. If an employee leaves the Company, those op-
tions expire that are not exercisable up to the date on which the employee leaves. The exercise price of
the options is equal to 120% of the market price of the shares at the grant date, where the market price is
determined to be the average closing price as quoted on the Prime Standard for the 10 trading days prior
to the grant date. Options were last granted under the 1999 Plan in October 2007. A maximum of 12,500
options may still be exercised by a former Management Board member of the Company under the 1999
stock option plan.
2001 Stock Option Plan
As of January 1, 2001, the Company adopted a stock option plan (the 2001 Plan) for the issuance of shares
to all employees. The options under the 2001 Plan vest ratably over a fifty-month period beginning from
the grant date; however, no options will be exercisable, even though a portion is vested, prior to the six
months after the grant date. The options expire if they are not exercised within five years of the grant date.
If an employee leaves the Company, those options expire that are not exercisable up to the date on which
the employee leaves; exercisable options may be exercised up to six months after the employee leaves the
Company, but expire after this period. The exercise price of the options is the fair value at the grant date,
defined as equivalent to the xETRA closing price on the Frankfurt Stock Exchange for voting shares of stock
of the Company. Options were last granted under the 2001 Plan in spring 2008. A maximum of 118,000
options may still be exercised under this stock option plan.
Corporate governanCe reportInterSHop CommunICatIonS aktIengeSellSCHaft
99
As of December 31, 2011, the total number of outstanding and exercisable options from both stock option
plans was 130,500 options.
Jena, March 28, 2012
The Management Board
Heinrich Göttler
Dr. Ludger Vogt
Ludwig Lutter
Jena, April 11, 2012
On behalf of the Supervisory Board
Dr. Herbert May
Chairman of the Supervisory Board
Corporate governanCe reportInterSHop CommunICatIonS aktIengeSellSCHaft 100
intershop shares
stock market data on intershop shares
ISIN
WKN
Stock market symbol
Admission segment
Sector
DE000A0EPUH1
A0EPUH
ISH2
Prime Standard / Regulated market
Software
Membership of Deutsche Börse indices
CDAx, Prime All Share, Technology All Share
Key figures for intershop shares
2011
2010
Closing price*
High*
Low*
in EUR
in EUR
in EUR
Number of shares outstanding (as of Dec. 31)
in million shares
Market capitalization
in EUR million
Earings per share
Cashflow per share
Carrying amount per share
Average trading volume per day **
Free float
* Basis: xetra
** Basis: all stock exchanges
in EUR
in EUR
in EUR
Number
in %
2.06
3.60
1.59
30.17
62.15
0.10
0.10
0.94
1.90
2.22
1.52
29.58
56.21
0.06
0.25
0.83
85,310
64,171
69
73
FINANCIALCALENDAR 2012
Date
Event
February 22, 2012
Release of Q4 and FY financials 2011
May 9, 2012
Release of Q1 financials 2012
May 30, 2012
Ordinary Annual Stockholders‘ Meeting 2012
August 8, 2012
Release of Q2 and 6-month financials 2012
November 7, 2012
Release of Q3 and 9-month financials 2012
Investor Relations Contact:
INTERSHOP Communications AG
Investor Relations
Intershop Tower
07740 Jena
Germany
Phone: +49 3641 50 -1000
Fax: +49 3641 50 -1309
ir@intershop.com
www.intershop.com/investor-relations
Layout:
timespin - Digital Communication GmbH
www.timespin.de
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ANNUAL REPORT
2011
www.intershop.com
INTERSHOP Communications AG
Intershop Tower
07740 Jena
Germany
Phone: +49 3641 50 -0
Fax: +49 3641 50 -1111
info@intershop.com
www.intershop.com