Nemetschek Group: Solid start to 2020 in an uncertain market environment, outlook confirmed
The Nemetschek Group, one of the world’s leading software providers for the building industry, posts a solid first quarter of 2020 with profitability levels remaining high.
- Q1 revenue growth of 12.8% to EUR 146.6 million
- +27.1% growth in recurring revenue, driven by subscriptions
- +14.0% rise in EBITDA to EUR 41.8 million leads to EBITDA margin of 28.5%
- Earnings per share at EUR 0.19 (+9.3%)
Optimistic yet cautious planning for 2020 confirmed given the global Covid-19 pandemic
Munich, April 30, 2020 – The Nemetschek Group (ISIN DE 0006452907), one of the world’s leading software providers for the building industry, posts a solid first quarter of 2020 with profitability levels remaining high. Following a favorable start of the new year, general conditions worsened in March as a result of the worldwide Covid-19 pandemic. The company responded fast and, in keeping with changed conditions, adapted support and training measures in particular to maintain customer contact, which is critical in this situation. In this regard, for instance, virtual support and distribution options as well as online tutorials were put in place. Moreover, the executives were involved in adapting cost management in the Group at an early stage.
Major indicators of the Group’s success in the first quarter of 2020
- Group revenue rose 12.8% to EUR 146.6 million (currency-adjusted: 11.4%) compared to the previous year’s figure of EUR 129.9 million. The increase in revenue is a result of organic growth amounting to 9.9% (currency-adjusted: 8.5%) and the revenue contributed by the newly acquired Red Giant, which has been integrated in the Maxon brand in the Media & Entertainment segment since January 1, 2020.
- Recurring revenue from software service contracts and subscriptions were growth drivers yet again, the revenues from which rose by 27.1% (currency-adjusted: 25.5%) to EUR 86.1 million compared to the previous year’s quarter. Thus, its proportion of Group revenue increased to 58.7% (previous year’s period: 52.1%). This more predictable revenue is of great importance to the robustness of the Nemetschek business model especially in today’s uncertain market environment.
- Continued advances in the Group’s global alignment are another growth driver. In the first quarter, revenues generated abroad rose by 14.7% to EUR 109.0 million (Q1 2019: EUR 95.0 million. North America in particular contributed to this increase.
- Consolidated operating earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 14.0%, rising from EUR 36.7 million to EUR 41.8 million. Thus, the EBITDA margin rose slightly from 28.2% in the previous year’s period to 28.5%. The high EBITDA margin is also a reflection of disciplined cost management in connection with the impacts of Covid-19.
- The quarterly profit increased by 9.3%, rising from EUR 19.6 million to EUR 21.4 million, which results in an earnings per share figure of EUR 0.19. Adjusted for the amortization from the purchase price allocation, net income for the quarter amounting to EUR 26.3 million was 15.0% higher than the previous year. The adjusted earnings per share amounted to EUR 0.23.
Performance of the segments generally corresponded to expectations. In March, the Design segment was already feeling the effects of the Covid-19 pandemic, which led to reduced customer demand. The Build and Manage segments continued to be able to post favorable growth rates of more than 20%. The Media & Entertainment segment was considerably strengthened by the acquisition Red Giant. The integration of the company, consolidated since January 1, 2020, in the Maxon brand has proceeded according to plan.
Group outlook for 2020 confirmed
Consequently, these forecasts continue to be expressly subject to the reservation that international economic and industry-specific framework conditions do not significantly worsen especially as a result of the consequences of the Covid-19 pandemic.
Overview of quarterly key figures (Q1)
| In EUR million | Q1 2020 | Q1 2019 | Δ in % | Δ in % FX-adj |
| Revenues | 146.6 | 129.9 | +12.8% | +11.4% |
| - thereof software licenses | 53.4 | 55.0 | -2.9% | -4.4% |
| - thereof recuring revenues | 86.1 | 67.7 | +27.1% | +25.5% |
| - Subscription (part of recurring revenues) | 19.6 | 9.7 | +102.5% | +100.3% |
| EBITDA | 41.8 | 36.7 | +14.0% | +9.6% |
| Margin | 28.5% | 28.2% | ||
| EBITA | 35.6 | 30.9 | +15.2% | |
| Margin | 24.3% | 23.8% | ||
| EBIT | 29.2 | 26.8 | +8.9% | |
| Margin | 19.9% | 20.7% | ||
| Net income (Group shares) | 21.4 | 19.6 | +9.3% | |
| Earnings per share | 0.19 | 0.17 | +9.3% | |
| Net income (Group shares) before amortization of purchase price allocation (PPA) | 26.3 | 22.9 | +15.0% | |
| Earnings per share before PPA in EUR | 0.23 | 0.20 | +15.0% |
| In EUR million | Q1 2020 | Q1 2019 | Δ in % (organic) | Δ in % FX-adj. (organic) |
| Design | ||||
| Revenue | 77.2 | 75.5 | +2.2% | +1.3% |
| EBITDA | 23.1 | 22.7 | +2.0% | -3.1% |
| EBITDA margin | 30.0% | 30.0% | ||
| Build | ||||
| Revenue | 48.7 | 40.5 | +20.2% | +17.5% |
| EBITDA | 18.7 | 14.1 | +32.8% | +29.4% |
| EBITDA margin | 38.3% | 34.7% | ||
| Manage | ||||
| Revenue | 10.0 | 8.2 | +20.9% | +21.0% |
| EBITDA | 1.0 | 0.0 | - | - |
| EBITDA margin | 10.2% | -0.4% | ||
| Media & Entertainment | ||||
| Revenue | 12.7 | 7.6 | 67.7% (16.8%) | +64.4% (14.9%) |
| EBITDA | 3.0 | 3.1 | -1.5% | -1.1% |
| EBITDA margin | 23.9% | 40.8% |