Nemetschek SE — Call Transcript 2023

Mar 23, 2023

Earnings Call Q4- / FY-22

Nemetschek Group March 23, 2023

Agenda

01 Highlights FY-2022 and Strategic Update

05 Appendix

02 Financial Results Q4- / FY-2022

03 Update Subscription/SaaS Transition

04 Guidance 2023 and Ambition 2024 & 2025

Highlights FY-2022 and Strategic Update

Key Messages

• 1. Record results in FY-2022 with challenging Design markets in Europe and the successful start of Bluebeam's subscription/SaaS transition
• 1. Long-term structural growth drivers in our industries remain intact
• 1. We are positioned for growth and continued value creation: our increasing share of recurring and subscription/SaaS revenues provide greater visibility, resilience and profitability
• 1. Attractive growth and margin development even during our subscription/SaaS transition in 2023
• 1. Significantly above-market growth in the medium- to longterm, capitalizing on our leading positions in structurally growing industries

Progress in all Strategic Focus Areas in FY-2022

• Increase recurring revenues
• Continuing Subscription/SaaS transition in all segments
• Successful launch of Bluebeam Cloud
• Migration of Chinese perpetual license market in Media

Subscription / SaaS Internationalization / Go-to-Market Innovation

• Internationalization: o Stronger focus on North
• America & Asia/Pacific Go-to-Market:
• o Stronger focus on E-Commerce

• o Stronger focus on Solution Selling

• Digital Twin platform

• Media: Expansion of flagship product MaxonOne

M&A / Venture Investments

• M&A:
• o Pixologic
• o DC Software
• Latest Venture investments:
• o Imerso
• o SymTerra
• o Kewazo

Operational Excellence

• Harmonization of overhead and IT functions for greater efficiencies
• Joining forces: Nemetschek Engineering
• Integration of acquired companies

Goals:

• Strengthening our leading positions in global AEC/O and Media markets
• Driving share of recurring revenues, internationalization and harmonization for the benefits of our customers

Financial Results Q4- / FY-2022

05 Nemetschek Group | Earnings Call Q4- / FY-22

Financial Highlights Q4-22: Continued High Growth in Recurring Revenues

1 Constant currency

2 Annual Recurring Revenue (ARR): Average of all recurring revenues (Sub./SaaS and maintenance contracts) over the last three months x 4.

Key Financial Highlights FY-22: Continued Growth in a Challenging Environment

Segments FY-2022: Stellar Year in Media, High Growth in Build Despite Transition

¹ Constant currency

* As a result of the strategic reorganization of brands between the Design and Build segments, prior year figures were restated for comparability reasons..

Recurring Revenues: ARR Indicates Strong Future Growth

1 Constant currency 2 Annual Recurring Revenue (ARR): Average of all recurring revenues (Sub./SaaS and maintenance contracts) over the last

At a Glance: Income Statement and Important KPIs

Key Figures mEUR	FY-22	In % of revenue	FY-21	Growth y/y
Revenues	801.8	100%	681.5	+17.7%
Cost of goods and services	-31.8	4.0%	-25.3	+25.5%
Personnel expenses	-337.2	42.1%	-292.0	+15.5%
Other operating income/expenses	-175.8	21.9%	-142.1	+23.7%
EBITDA	257.0	32.0%	222.0	+15.8%
EBITDA margin	32.0%	-	32.6%	-60bps
D&A (incl. PPA)	-58.8	7.3%	-50.0	+17.7%
EBIT	198.1	24.7%	170.6	+16.9%
EBIT margin	24.7%	-	25.2%	-50bps
Net income (group shares)	161.9	20.2%	134.6	+20.3%
EPS	1.40	-	1.17	+20.3%
FCF (before M&A)	182.4	-	193.8	-5.9%
Equity ratio in %	57.5%	-	52.2%
Net Cash	124.9	-	28.4

Update Subscription/SaaS Transition

Overview Subscription/SaaS Transition: Phased Across the Segments

	DESIGN	BUILD	MANAGE	MEDIA
Subscription/ SaaS Strategy	Dual Offering	Subscription/ SaaS only	Subscription/ SaaS only	Subscription only
Status of Subscription Transition	• Good progress • Still in early innings of phased Subscription/ SaaS transition	• Strong acceleration with Bluebeam transition • Successful start of migration in Q3-22	• Well advanced	• Will be completed in FY-23

Revenue Split 2022-2025

12 Nemetschek Group | Earnings Call Q4- / FY-22

Update: Bluebeam Subscription/SaaS Transition

End Q3-22

• Global launch across all Bluebeam Websites & Webstores

Q4-22

• First full transition quarter

• 10% of users transitioned to new subscription packages at end of 2022

Q2 to Q4 2023

• Existing customers: End of option to buy licenses
• End of possibility to renew maintenance contracts

End of 2024

90%+ of users on new subscription packages

MAJORITY OF SALES MIX

First Learnings & Next Steps

New customers:

• Positive early adoption and promising feedback for Bluebeam Cloud and mobile offerings.
• Customers are trending towards more expensive and feature-rich packages (Core & Complete).
• Good early adoption in SMB segment.

Existing customers:

• Successful launch of programs to incentivize existing customers to transition to subscription in order to accelerate transitions and upgrades.
• Majority of existing customers choose subscriptions vs. license for additional seats.

Guidance 2023 and Ambition 2024 & 2025

Massive Market Opportunity – AEC/O & Media

Long Term Structural Growth Drivers:

• Very low degree of digitalization
• Regulation
• Efficiency needs (cost & time)
• Green buildings & carbon footprint
• Labor shortage
• Urbanization trend
• Demand for buildings with higher quality
• Increased material & energy prices
• ….

Long Term Structural Growth Drivers:

• Increasing demand for digital content creation
• 3D animation
• Metaverse
• AR/VR
• Gaming
• …

Resilient Business Model Through Diversification

Guidance 2023 and Ambition 2024 & 2025

2022	Guidance	Ambition
Starting Point	2023	2024	2025
ARR: EUR 581.7m Revenue: EUR 801.8m EBITDA Margin: 32.0% Share Recurring Revenue: 66%	ARR Growth: > 25% Share Recurring Revenue: > 75% Revenue Growth: 4% - 6% (at constant currencies) EBITDA Margin: 28% - 30%	Revenue Growth: Double digit percentage growth EBITDA Margin: > 30% Share Recurring Revenue: ~85%	Revenue Growth: Significantly above market – At least Mid-teens

Guidance 2023:

Please note: The guidance is based on the assumption that there will be no material change in the economic conditions during the course of 2023 and that the war in Ukraine & geopolitical tensions will not escalate further.

Appendix

18 Nemetschek Group | Earnings Call Q4- / FY-22

Income Statement

€m	FY 2022	FY 2021	% YoY
Revenues	801.8	681.5	+17.7%
Other income	12.6	9.8	+27.9%
Operating income	814.4	691.3	+17.8%
Cost of goods and services	-31.8	-25.3	+25.4%
Personnel expenses	-337.2	-292.0	+15.5%
Other expenses	-188.4	-152.0	+24.0%
Operating expenses	-616.2	-519.3	+18.7%
EBITDA	257.0	222.0	+15.8%
Margin	32.0%	32.6%
Depreciation and amortization	-58.8	-50.0	+17.7%
t/o right -of -use assets	-16.3	-14.9	+9.3%
t/o PPA	-31.8	-25.4	+25.0%
EBIT	198.1	172.0	+15.2%
Financial result	+1.4	-1.4	> 100%
t/o IFRS 16	-1.4	-1.3	+5.1%
EBT	199.5	170.6	+16.9%
Income taxes	-34.4	-33.7	+2.1%
Non -controlling interests	3.2	2.3	+39.1%
Net income (group shares)	161.9	134.6	+20.3%
EPS in EUR	1.40	1.17	+20.3%

Balance Sheet – Assets

€m	December 31, 2022	December 31, 2021
Assets
Cash and cash equivalents	196.8	157.1
Trade receivables, net	84.5	70.1
Inventories	0.9	0.9
Other current assets	44.9	35.0
Current assets, total	327.1	263.1
Property, plant and equipment	26.6	20.7
Right-of-use assets	69.8	59.2
Intangible assets	171.7	158.9
Goodwill	557.0	542.0
Other non-current assets	45.9	28.2
Non-current assets, total	871.0	809.1
Total assets	1,198.1	1,072.2

Balance Sheet – Equity and Liabilities

€m	December 31, 2022	December 31, 2021
Equity and liabilities
Short-term borrowings and current portion of long-term loans	65.1	93.8
Trade payables & accrued liabilities	86.0	83.0
Deferred revenue	206.9	158.0
Current lease liability	14.9	14.1
Other current liabilities	31.0	35.7
Current liabilities, total	403.8	384.5
Long-term borrowings without current portion	6.9	34.9
Deferred tax liabilities	19.8	20.6
Non-current lease liability	62.4	52.0
Other non-current liabilities	15.9	20.5
Non-current liabilities, total	105.1	128.0
Subscribed capital and capital reserve	128.0	128.0
Retained earnings	533.9	415.4
Other reserves	-8.6	-17.5
Non-controlling interests	36.0	33.8
Equity, total	689.2	559.7
Total equity and liabilities	1,198.1	1,072.2

Cash Flow Statement

€m	FY 2022	FY 2021	% YoY
Cash and cash equivalents at the beginning of the period	157.1	139.3	+12.8%
Cash flow from operating activities	213.8	214.4	-0.3%
Cash flow from investing activities	-52.4	-147.6	+64.5%
t/o CapEX	-19.0	-9.9
t/o Cash paid for acquisition of subsidiaries, net of cash acquired	-21.0	-127.1
Cash flow from financing activities	-124.0	-55.4	+124.0%
t/o Dividend payments	-45.0	-34.7
t/o Cash received from loans	40.8	75.6
t/o Repayments of borrowings	-98.7	-77.5
t/o Principal elements of lease payments	-16.0	-15.1
FX-effects	2.3	6.4
Free cash flow	161.4	66.7	+141.8%
Free cash flow (before M&A)1	182.4	193.8	-5.9%
Cash and cash equivalents at the end of the period	196.8	157.1	+25.3%

SHAPE THE WORLD

NEMETSCHEK SE Investor Relations Konrad-Zuse-Platz 1 81829 Munich Germany

investorrelations@nemetschek.com www.nemetschek.com

NEMETSCHEK SE Konrad-Zuse-Platz 1 | 81829 München | Tel. (089) 540459-0 | www.nemetschek.com

Disclaimer

This presentation contains forward-looking statements based on the beliefs of Nemetschek SE management. Such statements reflect current views of Nemetschek SE with respect to future events and results and are subject to risks and uncertainties. Actual results may vary materially from those projected here, due to factors including changes in general economic and business conditions, changes in currency exchange, the introduction of competing products, lack of market acceptance of new products, services or technologies and changes in business strategy. Nemetschek SE does not intend or assume any obligation to update these forward-looking statements.