Earnings Release • Apr 29, 2016
Earnings Release
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QUARTERLY STATEMENT AS OF MARCH 31, 2016
Patrik Heider, Spokesman of the Executive Board and CFOO
After record year 2015, the Nemetschek Group got off to a dynamic start in the new financial year 2016 and continues on its growth course. The greatest growth impulses originated from abroad.
We got the year off to an outstanding start with a smooth continuation of the strong development of the previous year. Our strategic investments in new brands, solutions and markets are paying off. Nemetschek has again been able to further extend its worldwide market position.
The Group's net asset structure and financial position remain extremely sound. As of March 31, 2016, the equity ratio rose to 44.5% (December 31, 2015: 44.0%). Moreover, the Nemetschek Group demonstrates very good cash generation with simultaneously high-quality growth. As of March 31, 2016, cash and cash equivalents increased to EUR 97.2 million (December 31, 2015: EUR 84.0 million) and net liquidity improved to EUR 21.2 million (December 31, 2015: EUR 3.3 million).
In the Design segment, revenue in Q1 rose by 11.6% to EUR 51.4 million (previous year's period: EUR 46.1 million). EBITDA increased by 16.0% to EUR 13.5 million (Q1 2015: EUR 11.6 million). The EBITDA margin rose correspondingly from 25.1% in the previous year to 26.1%. This growth can be traced back to practically all regions and brands.
As a result of the Solibri acquisition, the Build segment underwent great expansion. Segment revenue increased by 41.2% to EUR 19.5 million (previous year's period: EUR 13.8 million). Organically as well – particularly as a result of the Bluebeam brand acquired in 2014 – revenue rose considerably by about 34%. EBITDA leapt by 66.0% from EUR 3.0 million to EUR 5.0 million, which caused the EBITDA margin to increase significantly by 3.8 percentage points to 25.6%.
In the Manage segment, revenue rose by 13.0% to EUR 1.5 million (previous year: EUR 1.3 million). EBITDA even rose by 56.8% to EUR 0.2 million, which corresponds to an EBITDA margin of 13.7% (previous year's period: 9.8%).
The Media & Entertainment segment was able to keep its revenue stable at the previous year's level with EUR 5.2 million (previous year: EUR 5.3 million). EBITDA was EUR 2.3 million (previous year's period: EUR 2.6 million), which corresponds to an EBITDA margin of 45.1% (Q1 2015: 49.7%).
Following the favorable start of the year, we affirm the communicated targets for the fiscal year of 2016. We anticipate Group revenue ranging from EUR 319 million to EUR 325 million and an EBITDA of between EUR 77 million and EUR 80 million.
Thank you for your trust!
Yours sincerely,
Patrik Heider
In January 2016, share markets worldwide got off to the weakest start in years. Most share markets were down more than 20% in the interim compared to their high point in 2015. Fear of recession and ongoing anxiety regarding the growth perspectives of several emerging markets, China in particular, depressed the mood of investors. It has primarily been the relaxed monetary policy in Europe and of late the rather moderate actions of the Fed in the USA that have spurred prices. In addition, concerns about a global recession have been assuaged for the most part. On the whole, however, share markets remain very volatile.
Upon consideration of the share price development in Germany since the beginning of the year, the DAX recovered slightly from a downturn as of the beginning of February and closed with a minus of 7%. The TecDAX, which contains the 30 largest technology values, including Nemetschek, posted a more significant decline and closed the first quarter with a minus of 11%.
The price of the Nemetschek share has also decreased since the beginning of the year. On January 4, 2016 the share started with a price of EUR 45.00 Euro and on February 11, 2016 reached an all-time low for the year of EUR 34.28. The Nemetschek share was subsequently able to recover and closed the quarter with a price of EUR 42.45 – a minus of approximately 6% since the beginning of the year. The market capitalization of Nemetschek SE amounted to around EUR 1.6 billion as of the end of the quarter.
Nemetschek shares develop better than TecDAX and DAX
The conversion of Nemetschek AG into a Societas Europaea (SE) has been completed. The new legal form went into effect on March 22, 2016 with its entry in the Commercial Register. Thus, the resolution of the annual general meeting of May 20, 2015 has been implemented.
The SE underscores the definitive international market alignment of the company. The conversion into an SE is in keeping with the Group's global alignment and the requirements of an international and open corporate culture.
Nemetschek SE will continue to use a dualist system consisting of an executive board and a supervisory board. The rights of the shareholders are unaffected by the conversion.
Nemetschek Aktiengesellschaft's share capital as of the end of the quarter on March 31, 2016 was unchanged at EUR 38,500,000 and was divided into 38,500,000 no-par value bearer shares.
The free float remained unchanged at 46.43 percent as of March 31, 2016.
The annual general meeting of Nemetschek SE will be held in Munich on May 20, 2016. The agenda for the annual general meeting was published in the Federal Gazette on April 8, 2016 and is accessible in addition to all the other documents for the annual general meeting on the website of the Nemetschek Group. The agenda items include inter alia the distribution of dividends. For the 2015 financial year, the supervisory board and executive board propose a dividend in the amount of EUR 0.50 per share, an increase of about 25% compared to the previous year (EUR 0.40 per share after the stock split, EUR 1.60 per share before the stock split of 1 to 4). The considerable dividend increase is in keeping with the very positive business development in 2015. With 38.5 million shares entitled to a dividend, the total amount of dividends to be distributed should increase to EUR 19.25 million (previous year: EUR 15.4 million). The dividend payout ratio for the 2015 financial year is therefore approximately 30% – in relation to the operative cash flow amounting to EUR 65.1 million.
| in EUR million | 1st Quarter 2016 | 1st Quarter 2015 | Change |
|---|---|---|---|
| Revenues | 77.7 | 66.6 | 16.7% |
| EBITDA | 21.0 | 17.4 | 21.0% |
| as % of revenue | 27.0 % | 26.1 % | |
| EBITA | 19.3 | 15.8 | 22.3% |
| as % of revenue | 24.8 % | 23.7 % | |
| EBIT | 16.6 | 13.2 | 25.4% |
| as % of revenue | 21.3 % | 19.9 % | |
| Net income (group shares) | 11.0 | 8.4 | 31.6% |
| per share in €* | 0.29 | 0.22 | |
| Net income (group shares) before depreciation of PPA** | 13.0 | 10.2 | 27.5% |
| per share in €* | 0.34 | 0.26 | |
| Cash flow from operating activities | 21.3 | 19.9 | 7.2% |
| Free cash flow | 19.5 | 17.3 | 12.8% |
| Net liquidity/net debt*** | 21.2 | 3.3 | |
| Equity ratio*** | 44.5% | 44.0% | |
| Headcount as of balance sheet date | 1,769 | 1,601 | 10.5% |
* For better comparability, the figures have been presented after the share split of 1 to 4
** Purchase Price Allocation *** Presentation of previous year as of December 31, 2015
The conversion into a Societas Europaea was completed with the entry into the Commercial Register on March 22, 2016. Thus, the resolution of the annual general meeting of May 20, 2015 has been implemented. The SE underscores the definitive international market alignment of the company. Nemetschek SE will continue to use a dualist system consisting of an executive board and a supervisory board. The rights of the shareholders are unaffected by the conversion.
The Nemetschek Group increased its revenues in the first three months by 16.7% to EUR 77.7 million (previous year: EUR 66.6 million). EBITDA improved over-proportionally compared to revenue. With a plus of 21.0%, EBITDA rose to EUR 21.0 million (previous year: EUR 17.4 million), which corresponds to an operating margin of 27.0% (previous year: 26.1%).
Revenues from software licenses increased by 17.1 percent The Nemetschek Group increased revenue from software licenses in the first three months by 17.1% to EUR 40.3 million (previous year: EUR 34.4 million). In addition, during the same period, it was possible to raise recurring revenues to an almost identical degree, i.e. by 16.1% to EUR 33.3 million (previous year: EUR 28.7 million). The share of revenues from software licenses compared to total revenues grew slightly from 51.7% to 51.9%.
In terms of region, the growth impulses originated primarily from abroad. In overseas markets the Nemetschek Group achieved revenues amounting to EUR 53.3 million, a plus of 20.8% compared to the previous year. The share of revenues from overseas amounted to 68.7%, following 66.4% in the previous year's period. Revenues within Germany increased by 8.7% to EUR 24.3 million (previous year: EUR 22.4 million).
In the Design segment, the Group generated revenue growth of 11.6%, reaching EUR 51.4 million (previous year: EUR 46.1 million). EBITDA grew over-proportionally compared to revenue by 16.0%, reaching EUR 13.5 million (previous year: EUR 11.6 million). This is equivalent to an operating margin of 26.1%, following 25.1% in the previous year. In the Build segment revenues were clearly above those of the previous year due to the continued growth of Bluebeam Software, Inc., reaching EUR 19.5 million (previous year: EUR 13.8 million). The EBITDA margin amounted to 25.6% (previous year: 21.8%). The Manage segment maintained the positive development of the previous year and increased revenues by 13.0%, achieving EUR 1.5 million. It was possible to raise the EBITDA margin to 13.7% (previous year: 9.8%). Revenues in the Media & Entertainment segment amounted to EUR 5.2 million at the end of the first quarter, almost reaching the level of the previous year (EUR 5.3 million). The EBITDA margin remained at a high 45.1% (previous year: 49.7%).
Operating expenses rose by 12.1% from EUR 55.6 million to EUR 62.3 million. The resulting material expenses grew to EUR 2.4 million (previous year: EUR 2.0 million). Personnel expenses increased by 16.7% from EUR 30.0 million to EUR 35.0 million. Due to higher investments in the previous year, the amortization and depreciation on fixed assets increased from EUR 4.1 million in the previous year to EUR 4.4 million. Additionally, other operating expenses rose slightly by 5.3% from EUR 19.4 million to EUR 20.5 million.
The tax rate of the Group in the first quarter of 2016 amounted to 29.2% (previous year: 33.0%). In the previous year, deferred tax expenses on unrealized intra-Group foreign exchange gains had the effect of increasing the tax rate in the consolidated financial statements. The net income for the year (Group shares) amounted to EUR 11.0 million and thus exceeded the previous year's amount of EUR 8.4 million by 31.6%. Thus the earnings per share amounted to EUR 0.29 (value of the previous year for comparison purposes: EUR 0.22 per share after the stock split). Adjusted for the amortization from the purchase price allocation, net income for the year climbed by 27.5% to EUR 13.0 million (previous year: EUR 10.2 million), and thus the earnings per share reached EUR 0.34 (value of the previous year for comparison purposes: EUR 0.26 per share after the stock split).
The Nemetschek Group generated an operating cash flow in the first three months of 2016 amounting to EUR 21.3 million (previous year: EUR 19.9 million). The cash flow from investing activities amounting to EUR 1.8 million was below the previous year's level (EUR 2.6 million). The previous year included a purchase price payment in the amount of EUR 1.4 million for the acquisition of a sales unit.
The cash flow from financing activities of EUR 4.8 million (previous year: EUR 4.8 million) primarily includes the repayment of capital on bank loans amounting to EUR 4.6 million.
At the end of the quarter, the Nemetschek Group held cash and cash equivalents of EUR 97.2 million (December 31, 2015: EUR 84.0 million).
Mainly due to this increase in liquidity as well as higher trade receivables, current assets increased to EUR 144.3 million (December 31, 2015: EUR 125.9 million). Mainly due to scheduled amortization as well as foreign currency exchange rate influences of the USD, non-current assets decreased to EUR 246.3 million (December 31, 2015: EUR 253.6 million).
Deferred revenues increased by EUR 14.7 million to EUR 56.6 million in line with software service contracts invoiced. The balance sheet total as of March 31, 2016 was EUR 390.5 million (December 31, 2015: EUR 379.5 million). Equity amounted to EUR 173.8 million (December 31, 2015: EUR 166.9 million), thus the equity ratio was 44.5% following 44.0% as of December 31, 2015.
Against the backdrop of the current liquidity position, the Nemetschek Group has a solid basis for the proposed dividend distribution of EUR 19.25 million (previous year: EUR 15.4 million). This represents EUR 0.50 per share (previous year: EUR 0.40 per share after the stock split, EUR 1.60 per share before the stock split) and will be presented to the annual general meeting on May 20, 2016 for approval.
There were no significant events after the end of the interim reporting period.
As of the reporting date, March 31, 2016, the Nemetschek Group employed a staff of 1,769 (March 31, 2015: 1,601). The increase is mainly attributable to the recruitment planned in several Group companies.
Earnings per share increased by 31.6 percent to EUR 0.29
Dividend increased by 25 percent
There are no significant changes compared to the information provided in the consolidated financial statements as of December 31, 2015.
Please see the opportunities and risks described in the Group management report for the year ended December 31, 2015 for details on significant opportunities and risks for the prospective development of the Nemetschek Group. In the interim period there have been no material changes.
Forecast confirmed for 2016 fiscal year
The development in the first three months confirms the expectations for the 2016 financial year. Therefore, the Nemetschek Group firmly maintains its objective of achieving revenues ranging from EUR 319 million to 325 million (increase of 12% to 14%). An EBITDA of between EUR 77 and 80 million is expected.
The interim financial statements of the Nemetschek Group have been prepared in accordance with the International Financial Reporting Standards (IFRS), as required to be applied in the European Union, and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and of the Standing Interpretations Committee (SIC). These interim financial statements have been prepared in agreement with the requirements of IAS 34.
The interim financial statements as of March 31, 2016 have not been audited and have not undergone an audit review. The same accounting policies and calculation methods are applied to the interim financial statements as to the consolidated financial statements dated December 31, 2015. Significant changes to the consolidated statement of financial position, the consolidated statement of comprehensive income and the consolidated cash flow statement are detailed in the report on the earnings, financial and asset situation.
The scope of companies consolidated is the same as at December 31, 2015.
Munich, April 2016
Patrik Heider Sean Flaherty Viktor Várkonyi
for the period from January 1 to March 31, 2016 and 2015
| Thousands of € | 1st Quarter 2016 | 1st Quarter 2015 |
|---|---|---|
| Revenues | 77,681 | 66,551 |
| Own work capitalized | 0 | 7 |
| Other operating income | 1,168 | 2,225 |
| Operating Income | 78,849 | 68,783 |
| Cost of materials/cost of purchased services | – 2,393 | – 2,007 |
| Personnel expenses | – 35,004 | – 29,997 |
| Depreciation of property, plant and equipment and amortization of intangible assets | – 4,426 | – 4,139 |
| thereof amortization of intangible assets due to purchase price allocation | – 2,697 | – 2,545 |
| Other operating expenses | – 20,457 | – 19,428 |
| Operating expenses | –62,280 | –55,571 |
| Operating results (EBIT) | 16,569 | 13,212 |
| Interest income | 16 | 66 |
| Interest expenses | – 234 | – 191 |
| Share of results of associated companies | 0 | 166 |
| Earnings before taxes (EBT) | 16,351 | 13,253 |
| Income taxes | – 4,770 | – 4,375 |
| Net income for the year | 11,581 | 8,878 |
| Other comprehensive income: | ||
| Difference from currency translation | – 4,593 | 15,209 |
| Subtotal of items of other comprehensive income that will be reclassified to income in future periods |
–4,593 | 15,209 |
| Gains / losses on revaluation of defined benefit pension plans | – 107 | – 938 |
| Tax effect | 30 | 263 |
| Subtotal of items of other comprehensive income that will not be reclassified to income in future periods |
–77 | –675 |
| Subtotal other comprehensive income for the year | –4,670 | 14,534 |
| Total comprehensive income for the year | 6,911 | 23,412 |
| Net profit or loss for the period attributable to: | ||
| Equity holders of the parent | 11,049 | 8,399 |
| Non-controlling interests | 532 | 479 |
| Net income for the year | 11,581 | 8,878 |
| Total comprehensive income for the year attributable to: | ||
| Equity holders of the parent | 6,465 | 22,778 |
| Non-controlling interests | 446 | 634 |
| Total comprehensive income for the year | 6,911 | 23,412 |
| Earnings per share (undiluted) in euros | 0.29 | 0.22* |
| Earnings per share (diluted) in euros | 0.29 | 0.22* |
| Average number of shares outstanding (undiluted, units) | 38,500,000 | 38,500,000* |
| Average number of shares outstanding (diluted, units) | 38,500,000 | 38,500,000* |
* For better comparability, figures has been presented after the share split
as of March 31, 2016 and December 31, 2015
| ASSETS | Thousands of € | March 31, 2016 | December 31, 2015 |
|---|---|---|---|
| Current assets | |||
| Cash and cash equivalents | 97,206 | 83,966 | |
| Trade receivables, net | 33,230 | 29,611 | |
| Inventories | 531 | 530 | |
| Tax refunded claims for income taxes | 2,086 | 2,467 | |
| Other current financial assets | 13 | 78 | |
| Other current assets | 11,233 | 9,297 | |
| Current assets, total | 144,299 | 125,949 | |
| Non-current assets | |||
| Property, plant and equipment | 13,942 | 13,792 | |
| Intangible assets | 95,637 | 100,761 | |
| Goodwill | 132,273 | 134,949 | |
| Investments in associates and non-current available-for-sale assets |
1,913 | 1,863 | |
| Deferred tax assets | 1,563 | 1,372 | |
| Non-current financial assets | 51 | 51 | |
| Other non-current assets | 871 | 793 | |
| Non-current assets, total | 246,250 | 253,581 |
| Total assets | 390,549 | 379,530 |
|---|---|---|
| Thousands of € | March 31, 2016 | December 31, 2015 |
|---|---|---|
| 18,555 | 18,577 | |
| 4,846 | 6,590 | |
| 19,918 | 25,619 | |
| 56,648 | 41,996 | |
| 4,749 | 3,707 | |
| 423 | 571 | |
| 10,557 | 7,086 | |
| 115,696 | 104,146 | |
| 57,459 | 62,059 | |
| 23,393 1,863 13,443 4,867 |
24,315 | |
| 1,744 | ||
| 13,732 6,617 |
||
| 38,500 | 38,500 | |
| 12,485 127,340 |
12,485 | |
| 116,345 | ||
| – 7,028 | – 2,498 | |
| 171,297 | 164,832 | |
| 2,531 | 2,085 | |
| 173,828 | 166,917 | |
| 390,549 | 379,530 | |
for the period from January 1 to March 31, 2016 and 2015
| Thousands of € | 1st Quarter 2016 | 1st Quarter 2015 |
|---|---|---|
| Profit (before tax) | 16,351 | 13,253 |
| Depreciation and amortization of fixed assets | 4,426 | 4,139 |
| Change in pension provision | 12 | 126 |
| Other non-cash transactions | 81 | 0 |
| Portion of the result of non-controlling interests | 0 | – 166 |
| Result from disposal of fixed assets | 10 | 42 |
| Cash flow for the period | 20,880 | 17,394 |
| Interest income | – 16 | – 66 |
| Interest expenses | 234 | 191 |
| Change in other provisions | – 5,480 | – 4,789 |
| Change in trade receivables | – 4,118 | – 1,797 |
| Change in other assets | – 1,981 | – 187* |
| Change in trade payables | – 1,744 | – 1,334 |
| Change in other liabilities | 15,919 | 11,673* |
| Interest received | 16 | 66 |
| Income taxes received | 912 | 189 |
| Income taxes paid | – 3,298 | – 1,456 |
| Cash flow from operating activities | 21,324 | 19,884 |
| Capital expenditure | – 1,949 | – 1,142 |
| Cash received from disposal of fixed assets | 162 | 10 |
| Cash paid for acquisition of a subsidiary, net of cash acquired | 0 | – 1,437* |
| Cash flow from investing activities | –1,787 | –2,569 |
| Cash paid to non-controlling interests | 0 | – 190 |
| Interest paid | – 229 | – 28 |
| Repayment of borrowings | – 4,600 | – 3,000 |
| Payments for acquisition of non-controlling interests | 0 | – 1,577* |
| Cash flow from financing activities | –4,829 | –4,795 |
| Changes in cash and cash equivalents | 14,708 | 12,520 |
| Effect of exchange rate differences on cash and cash equivalents | –1,468 | 3,964 |
| Cash and cash equivalents at the beginning of the period | 83,966 | 56,968 |
| Cash and cash equivalents at the end of the period | 97,206 | 73,452 |
* For reasons of comparability the previous year figures were reclassified
for the period from January 1 to March 31, 2016 and 2015
| 2016 | Thousands of € | Total | Elimination | Design | Build | Manage | Media & Entertainment |
|---|---|---|---|---|---|---|---|
| Revenue, external | 77,681 | 51,440 | 19,547 | 1,515 | 5,179 | ||
| Intersegment revenue | 0 | – 539 | 0 | 183 | 2 | 354 | |
| Total revenue | 77,681 | –539 | 51,440 | 19,730 | 1,517 | 5,533 | |
| EBITDA | 20,995 | 13,450 | 5,003 | 207 | 2,335 | ||
| Depreciation/Amortization | – 4,426 | – 1,797 | – 2,538 | – 12 | – 79 | ||
| Segment Operating result (EBIT) | 16,569 | 11,653 | 2,465 | 195 | 2,256 | ||
| 2015 | Thousands of € | Total | Elimination | Design | Build | Manage | Media & Entertainment |
| Revenue, external | 66,551 | 46,105 | 13,841 | 1,341 | 5,264 | ||
| Intersegment revenue | 0 | – 430 | 0 | 88 | 2 | 340 | |
| Total revenue | 66,551 | –430 | 46,105 | 13,929 | 1,343 | 5,604 | |
| EBITDA | 17,351 | 11,591 | 3,014 | 132 | 2,614 | ||
| Depreciation/Amortization | – 4,139 | – 1,882 | – 2,177 | – 11 | – 69 | ||
| Segment Operating result (EBIT) | 13,212 | 9,709 | 837 | 121 | 2,545 |
for the period from January 1 to March 31, 2016 and 2015
| Equity attributable to the parent company's shareholders | |||||||
|---|---|---|---|---|---|---|---|
| Thousands of € | Subscribed | capital Capital reserve | Retained earnings |
currency conversion |
Total | Non-controlling interests |
Total equity |
| As of January 1, 2015 | 9,625 | 41,360 | 96,621 | –12,625 | 134,981 | 1,595 | 136,576 |
| Difference from currency translation |
14,852 | 14,852 | 357 | 15,209 | |||
| Remeasurement gains/ losses from pensions and related obligations |
– 473 | – 473 | –202 | – 675 | |||
| Net income for the year | 8,398 | 8,398 | 479 | 8,877 | |||
| Total comprehensive income for the year |
7,925 | 14,852 | 22,777 | 634 | 23,411 | ||
| Share purchase from non-controlling interests |
0 | 0 | 0 | ||||
| Dividend payments to non-controlling interests |
– 190 | – 190 | 0 | – 190 | |||
| Dividend payment | 0 | 0 | 0 | 0 | |||
| As of March 31, 2015 | 9,625 | 41,360 | 104,356 | 2,227 | 157,568 | 2,229 | 159,797 |
| As of January 1, 2016 | 38,500 | 12,485 | 116,345 | –2,498 | 164,832 | 2,085 | 166,917 |
| Difference from currency translation |
–4,530 | – 4,530 | –63 | – 4,593 | |||
| Remeasurement gains/ losses from pensions and related obligations |
– 54 | – 54 | –23 | – 77 | |||
| Net income for the year | 11,049 | 11,049 | 532 | 11,581 | |||
| Total comprehensive income for the year |
0 | 0 | 10,995 | –4,530 | 6,465 | 446 | 6,911 |
| Transaction with non-controlling interests |
0 | 0 | 0 | 0 | |||
| Dividend payments to non-controlling interests |
0 | 0 | 0 | 0 | |||
| Dividend payment | 0 | 0 | 0 | ||||
| As of March 31, 2016 | 38,500 | 12,485 | 127,340 | –7,028 | 171,297 | 2,531 | 173,828 |
Nemetschek SE, Munich Investor Relations, Konrad-Zuse-Platz 1, 81829 Munich
Contact: Stefanie Zimmermann,
Director Investor Relations and Corporate Communication
Tel.: +49 89 92793-1229, Fax: +49 89 92793-4229,
E-Mail: [email protected]
NEMETSCHEK SE Konrad-Zuse-Platz 1 81829 Munich Tel.: +49 89 92793-0 Fax: +49 89 92793-5511 [email protected] www.nemetschek.com
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