Nemetschek SE — Call Transcript 2020

Apr 30, 2020

Irina Viner-Usmanova Rhythmic Gymnastics Center, Moscow, Russia

Architects: Creative Production Union PRIDE | Realized with Graphisoft

Nemetschek Group

Earnings Call Q1 -2020

April 30, 2020 | Dr. Axel Kaufmann, Spokesman & CFOO

Key Business Highlights Q1-2020: Solid Start of the Year

Strong Financial Performance M&A Transactions, Divestitures

01/2020: Red Giant by Maxon 01/2020: Integration of Red Giant and Redshift progressing as planned

Planning & Design Division:

04/2020: ADAPT by RISA. Strengthens structural engineering competence in the US

APRIL 2020 Earnings Call Q1-2020 3

Top Key Figures Q1-2020: Solid Growth with High Profitability

Globally Positioned: Continued Growth in all Regions

Q1-2020: Over-proportional growth in the United States

Earnings Call Q1-2020

Strong Growth in Recurring Revenues: Subscription Is Key Driver

Revenue distribution Q1-2020

Comments Software licenses y/y Recurring revenues y/y Subscription y/y +27.1% +25.5% cc1 -2.9% -4.4% cc1 Q1-2020 +102.5% +100.3% cc1 | Above average growth to € 86.1m | Organic growth: 23.4% (21.9% cc1) | Share of recurring revenues by 7pp y/y | Highest growth to € 19.6m | Strong impact from Red Giant and Maxon move to subscription | Organic growth: 76.5% (75.1% cc1) | Decline to € 53.4m | Organic growth: -5.3% (-6.8% cc1) | Negative impact from Covid-19 (esp. Design) and Maxon move to subscription

At a Glance: Income Statement and Important KPIs

				in % of
Key Figures mEUR	Q1 2019	Q1 2020	growth y/y	revenue
Revenues	129.9	146.6	+12.8%	-
Cost of materials/cost of purchased services	-4.3	-5.1	+17.6%	3.5%
Personnel expenses	-57.3	-65.5	+14.4%	44.7%
Other operating expenses	-33.2	-38.2	+14.8%	26.1%
EBITDA	36.7	41.8	+14.0%	28.5%
EBITDA margin	28.2%	28.5%	+30bps	-
D&A (incl. PPA)	-9.8	-12.6	+28.1%	8.6%
EBIT	26.8	29.2	+8.9%	19.9%
EBIT margin	20.7%	19.9%	-80bps	-
Net income (Group shares)	19.6	21.4	+9.3%	14.7%
EPS	0.17	0.19	+9.3%	-
Operating cash flow	34.5	43.1	+24.8%	-
Free cash flow (ex M&A)	29.0	40.5	+39.7%	-
Equity ratio in %	35.4%	43.3%	-	-
Net debt (liquidity)	-55.7	-21.8	-	-

Segment Overview: Build Remains strong, C-19 impact not yet visible

Earnings Call Q1-2020

Wardian London, London, Great Britain Contractor: Ballymore; Image: Jason Hakwes | Realized with Bluebeam 02 Financial Outlook

Long-term Trend remains intact: AEC BIM Software Market offers huge potential

AEC Software Market

End-user expenditure in bn €

BIM Maturity Map

Source: Cambashi BIM Design Observatory 2020, internal research

Earnings Call Q1-2020

Sustainability: Gaining a Greater Importance for Our Customers

The FOOTPRINT of the Building Industry

Buildings and construction account for

| 36% of global final energy use and | 39% of energy-related CO2 emissions

During the construction phase

| 10% of materials are wasted | 30% of construction is rework

In 90% of all projects, time or cost overruns occur.

Sources: Global Status Report 2019, UN Environment and the International Energy Agency; Engineering-News Record 2018/2019

Nemetschek Is Well Positioned!

Nemetschek SE

Attractive End	Unique market	Attractive business	Strong financial	Value accretive
markets	position	model	position	M&A
Huge growth potential Structural long-term growth drivers (low degree of digitalization) Growth supported by regulation	Best in class products Product offering along the complete AEC value chain Leader in Open BM Close proximity to customers within our 4 divisions	Highly profitable Strong Cash conversion (> 80%) High share of recurring revenues (approx.60%) High returns (ROCE>20%)	Very healthy balance sheet Net cash position Equity ratio: 43% No major refinancing needs Long-term anchor shareholder	Strong track record of bolt-on acquisitions (e.g. Bluebeam) Disciplined approach Substantial financial fire power Focus on long-term value generation

Operating mode via four strong divisions with leading global brands

12 APRIL 2020 Earnings Call Q1-2020

Our Business Model in Light of a Crisis Scenario

Earnings Call Q1-2020

Covid-19 Impact: Status Quo after Q1-2020

First negative effects in Q1:

• Deceleration in pockets of growth in Asia and Europe
• Customer demand muted in Design division in March

First measures quickly implemented:

• Sales & support activities adapted to new environment
• Cost saving measures initiated

Our working assumptions

• Significant deceleration in global GDP in Q2 followed by gradual recovery in Q3 and Q4
• Timing of Covid-19 impact on our business:

By division:

Design M&E Manage Build

By geography:

APAC Europe Americas

• Strong decline in new licences
• Solid growth in recurring revenues

Status quo after Q1-2020 Our response to the challenges

• Our first priority is the safety of our employees and customers
• We ensure business continuity and support our customers and the society in this difficult situation

We will continue to...:

• monitor the situation closely and steer the business on sight
• be flexible and quick to react to new developments (e.g. Spacewell workplace solutions)
• stay opportunistic

Earnings Call Q1-2020

Outlook 2020: Confirmed after the First Quarter

Income Statement

€m	Q1 -2020	Q1 -2019	%YoY
Revenues	146.6	129.9	+12.8%
Own work capitalized/other operating income	4.0	1.6	+152.8%
Operating income	150.6	131.5	+14.5%
Cost of materials/purchased services	-5.1	-4.3	+17.6%
Personnel expenses	-65.5	-57.3	+14.4%
Other operating expenses	-38.2	-33.2	+14.8%
Operating expenses	-108.8	-94.8	+14.7%
EBITDA	41.8	36.7	+14.0%
Margin	28.5%	28.2%
Depreciation and amortization	-12.6	-9.8	+28.1%
t/o right -of -use assets	-3.9	-3.4	+14.6%
t/o PPA	-6.4	-4.0	+57.5%
EBITA (normalized EBIT)	35.6	30.9	+15.2%
EBIT	29.2	26.8	+8.9%
Financial result	-0.5	-0.5
t/o interest expenses right -of -use assets	-0.4	-0.4
EBT	28.7	26.3	+9.2%
Income taxes	-7.2	-6.7	+8.1%
Non -controlling interests	0.1	0.0
Net income (group shares)	21.4	19.6	+9.3%
EPS in EUR	0.19	0.17	+9.3%

Balance Sheet – Assets

€m	March 31, 2020	December 31, 2019
Assets
Cash and cash equivalents	152.7	209.1
Trade receivables, net	65.8	62.0
Inventories	1.0	1.0
Other current assets	29.6	23.3
Current assets, total	249.2	295.5
Property, plant and equipment	27.4	27.6
Right-of-use assets	64.4	66.2
Intangible assets	158.7	127.7
Goodwill	414.7	325.0
Other non-current assets	15.2	15.2
Non-current assets, total	680.3	561.7
Total assets	929.5	857.2

Balance Sheet – Equity and Liabilities

€m	March 31, 2020	December 31, 2019
Equity and liabilities
Short-term borrowings and current portion of long-term loans	62.8	58.6
Trade payables & accrued liabilities	44.8	56.4
Deferred revenue	149.4	118.5
Current lease liability	13.3	12.6
Other current assets	33.5	25.6
Current liabilities, total	303.9	271.6
Long-term borrowings without current portion	111.7	129.5
Deferred tax liabilities	30.0	23.3
Non-current lease liability	56.7	57.7
Other non-current liabilities	24.8	26.4
Non-current liabilities, total	223.2	236.9
Subscribed capital and capital reserve	128.0	128.0
Retained earnings	239.3	230.9
Other comprehensive income	-13.8	-10.4
Non-controlling interests	48.9	0.1
Equity, total	402.4	348.6
Total equity and liabilities	929.5	857.2

Earnings Call Q1-2020

Cash Flow Statement

€m	Q1-2020	Q1-2019	% YoY
Cash and cash equivalents at the beginning of the period	209.1	120.7	+73.2%
Cash flow from operating activities	43.1	34.5	+24.8%
Cash flow from investing activities	-81.7	-78.8
t/o CapEX	-2.6	-5.6
t/o Cash paid for business combinations	-79.1	-73.3
Cash flow from financing activities	-17.5	66.8
t/o Repayments of borrowings	-13.6	-10.5
t/o Changes in bank liabilities due to company acquisitions	0.0	80.4
t/o Principal elements of lease payments	-3.1	-2.4
FX-effects	-0.4	1.5
Cash and cash equivalents at the end of the period	152.7	144.7	+5.5%
Free cash flow1	-38.6	-44.3
Free cash flow1 (w/o acquisition effects)	40.5	29.0	+39.7%

¹ Operating cash flow – Investing cash flow

Contact

NEMETSCHEK SE Investor Relations

Konrad-Zuse-Platz 1 81829 Munich Germany

investorrelations@nemetschek.com www.nemetschek.com

Safe Harbor Statement

The presentation today does contain forward-looking statements about our strategies, products, future results, performance or achievements, financial, operational and otherwise, including statements about our strategic priorities, guidance and our mid-term goal, our M&A strategy, and our capital allocation initiatives. These statements reflect management's current expectations, estimates and assumptions based on the information currently available to us. These forward-looking statements are not guarantees of future performance and involve significant risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from results, performance or achievements expressed or implied by the forward-looking statements contained in these presentations.

Nemetschek undertakes no obligation to publicly update or revise any forward looking statements. All forward looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of their dates.

Haus der Bayerischen Geschichte, Regensburg, Germany

Architects: wörner traxler richter planungsgesellschaft mbh | Image: Frank Blümler | Realized with Allplan