Nemetschek SE

Interim / Quarterly Report • Jun 30, 2006

To the Shareholders, Employees, and Friends of the Company

Dear Sir or Madam,

Nemetschek can look back on a successful fi rst half of 2006: the fi rst six months were characterized by growth and improved earnings. We were able to increase sales to 51 million euros. The EBIT signifi cantly improved to 7.2 million euros. We set ourselves ambitious goals and worked hard to achieve them. The fi gures and our market position show our approach was right.

We are setting new standards with the Design2Cost initiative. Our customers have solutions for the growing time and cost pressures in the building industry: with our software, they can determine their costs reliably and quickly from the early planning stage. The advantages are immense: construction companies minimize their risks and can create more offers in a shorter space of time. Building contractors and constructors of prefabricated houses can get solid profitability and cost analyses for marketing the object. Designers are able to increase productivity and provide effective support for their contacts. Design2Cost impressively highlights our role as innovation leader.

Research and development is a central topic in the Nemetschek Group. Around one third of our employees work in this area and guarantee our innovative strength. We continue to develop the products to meet customer requirements and make them more open, functional, and user-friendly. Because we are constantly improving and can draw on many years of experience, we are the specialist in the construction and real estate industry.

This has also been rewarded on the stock exchange. The Nemetschek share price rose by more than 50 % in the fi rst half of the year to 21.50 euros (as of June 30, 2006). The share has therefore developed far better than the DAX (+ 5.1 %), TecDAX (+ 9.3 %), Prime All (+ 5.7 %), and GEX (+16.2 %) indices. Shareholders are benefi ting not only from the share price development but also from a continued dividend policy: in May, they received a dividend of 0.65 euros per share. A dividend payout is also planned for the current fi nancial year.

We are very confi dent for 2006 as a whole and expect the positive development of sales and earnings to continue. The industry is extremely interested in the software and consulting services from Nemetschek. We are well placed at home and abroad to exploit the potential and have every reason to be optimistic.

Best regards,

Gerhard Weiss Chairman of the Board

Nemetschek Group at a Glance

in million u	June 30, 2006	June 30, 2006	Change
Sales	50.7	47.1	7.5 %
Operating income	51.9	47.7	8.7 %
Gross profi t	47.4	43.0	10.2 %
in % of sales	93.6 %	91.4 %
EBITDA	8.6	7.0	23.1 %
in % of sales	17.0 %	14.8 %
EBIT	7.2	5.2	38.9 %
in % of sales	14.1 %	10.9 %
Net income (Group shares)	5.7	4.1	38.3 %
per share in u	0.59	0.42
Net income	5.8	4.2	38.7 %
per share in u	0.60	0.43
Cash fl ow for the period	8.6	7.3	18.8 %
Cash an cash equivalents	23.2	24.7	– 5.9 %
Equity	46.7	44.7	4.6 %

Nemetschek Leading the Way with Software for Cost Management

With the new Design2Cost solution, Nemetschek has once again proven its innovation leadership in the development of software for design, construction, and management. The campaign, which was announced in the last quarterly statement, was launched in May 2006 with a Germanywide series of events, online seminars, and the website www.design2cost.de. In the pioneering Design2Cost solution, we have bundled our expertise and experience from more than 16 years of component-oriented and cost-aware planning and have thus proven our market leadership. The new method decisively improves the overall workfl ow in CAD and cost planning and will bring significant changes to the industry.

Numerous architects and engineers have already recognized the benefi ts of Design-2Cost and are organizing their cost management effectively. Designers, general contractors, building contractors,

constructors of prefabricated houses and house manufacturers can use the new solution to determine costs quickly and reliably from the earliest planning stage and thereby increase revenue and productivity. Our customers can therefore offer their clients cost and planning security and lay the foundations for a partnership of trust.

We at Nemetschek are proud that TÜV SÜD has audited and certifi ed graphical quantity takeoff with Allplan and Allright. This certifi cate is unique to date in the industry and highlights the potential of the integrated solution. Design2Cost opens up new market and growth opportunities worldwide, which we will exploit effectively in the coming years.

Optimize building costs reliability and processes with Nemetschek solutions and thus increase productivity and earnings

Strong Market Presence with Innovative Solutions and Sales Strategies

The outlook for 2006 as a whole is good. In their most recent forecasts, experts predict a slight improvement to the economic situation in the European building industry. In surveys, architects and engineers said they were more optimistic than they had been for years.

We have taken advantage of the upcoming positive mood in the industry for numerous marketing activities. The major Design2Cost campaign was launched in Germany. A Germany-wide campus tour also began in May. We are supporting academic training with the Nemetschek starter packs for students. We particularly value dialog with students, because their wishes and suggestions are the requirements our products of tomorrow will have to meet.

In Europe, France in particular can look back on an above-average rise in sales in the fi rst half of the year. Customer satisfaction is revealed in the very high proportion of service agreements. There is a very high demand for training courses and consulting services in

France. NEMETSCHEK NORTH AMERICA is also continuing to grow profi tably at a very high level. One particularly noteworthy success in the fi rst six months was the introduction of VectorWorks Designer in Japan. The campaign far exceeded all expectations.

The Nemetschek civil engineering group, consisting of Nemetschek Ingenieurbau, SCIA International NV, GLASER ISB CAD Programmsysteme GmbH, and Friedrich + Lochner GmbH, exploited shared marketing activities for cross-selling within the Nemetschek Group. Three factors will generate future growth in the civil engineering sector: the latest technological developments, the introduction of Eurocodes – uniform European standards for structural design – and higher security requirements, which will increase the demand for better planning tools.

A particular highlight this summer at ING. AUER – Die Bausoftware GmbH is the AUER Mobility Suite, a mobile dimensioning system. The solution was presented to experts at live

events across Austria and was supported by a media campaign. Customers were able to get an idea of the high product quality and functionality of the Nemetschek Bausoftware solutions at user meetings and seminar events in Switzerland. In addition, new-client prospecting was particularly intensifi ed in Austria.

The new version 18 of Allfa, the IT solution for optimized facility management from Nemetschek CREM Solution GmbH & Co. KG, and the new versions 4.7 for commercial real estate management were showcased across Germany in numerous customer events and met with broad interest.

MAXON Computer GmbH, our specialist for visualization and animation, reported a major success in the fi rst half of the year. In June, CINEMA 4D Release 9 reached the 20,000 mark for licenses sold and is thus the best-selling CINEMA 4D version of all times. The presence of MAXON at numerous national and international trade fairs played a signifi cant role in this.

Nemetschek Continues on Profi table Growth Course

In the second quarter of 2006, the Nemetschek Group continued to build on its good start to the year. The growth in sales in the Design and Multimedia business units, in particular, resulted in a signifi cant improvement in the group earnings. In the fi rst six months, the operating profi t increased by 38.9 % to 7.2 million euros. The net income rose to 5.8 million euros. In the same period, the sales revenues increased by 7.5 % to 50.7 million euros. The positive development refl ects Nemetschek's good market position and improved underlying conditions in the individual regions.

Positive Growth Trend

In the second quarter, sales totaled 26.8 million euros, and were therefore 1.9 million euros higher than in the same quarter of the previous year. Compared to the fi rst half of the previous year, sales rose by 3.5 million euros to 50.7 million euros. With a growth rate for the fi rst six months of 7.5 %, the company continued the positive trend of the fi rst quarter. With an increase in sales of 2.7 million euros to 38.3 million euros, the Design business unit made a signifi cant contribution to this success. Sales increased strongly abroad, in particular.

The Multimedia business unit is growing dynamically, with an increase compared to the fi rst half of the previous year of 22.8 % to 3.5 million euros, and the Manage business unit also reported a good rise in sales. The Build business unit saw a slight fall in sales. The acquisition of SCIA International NV, with sales of 2.6 million euros, and the

sale of acadGraph CAD Studio GmbH with 2.1 million euros led to an overall growth in sales of 0.5 million euros in the fi rst half of the year. The organic growth rate, adjusted to take account of company acquisitions and sales, was 6.8 % in the fi rst six months.

A Rise of 19 % for International Sales Revenues

Sales revenues abroad rose in the fi rst six months by 4.7 million euros to 29.7 million euros, 2.6 million euros of which were generated by SCIA International NV. The share in foreign business rose to 59 % of total sales, compared to 53 % in the previous year. This rise is due to the acquisition of the Belgian company SCIA International NV and the above-average sales success of NEMETSCHEK NORTH AMERICA, the Maxon

Consolidated Income Statement for the Period from January 1 or April 1 to June 30, 2006 and 2005

	Thousands of u 2nd quarter 2006	2nd quarter 2005	6 months 2006	6 months 2005
Sales	26,832	24,900	50,653	47,108
Other operating income	723	430	1,252	635
Operating income	27,555	25,330	51,905	47,743
Cost of materials/cost of purchased services	– 1,768	– 2,401	– 3,219	– 4,067
Personnel expenses	– 11,814	– 11,036	– 23,044	– 21,821
Depreciation of property, plant and equipment and intangible assets	– 795	– 968	– 1,427	– 1,821
Other operating expenses	– 9,003	– 7,753	– 17,053	– 14,879
Operating expenses	– 23,380	– 22,158	– 44,743	– 42,588
Operating result	4,175	3,172	7,162	5,155
Interest income	115	215	253	361
Interest expenses	– 46	– 17	– 68	– 35
Income from associates	24	3	54	38
Earnings before taxes	4,268	3,373	7,401	5,519
Income taxes	– 905	– 785	– 1,641	– 1,366
Net income	3,363	2,588	5,760	4,153
Of this amount:
Equity of the parent company	3,352	2,608	5,650	4,086
Minority interests	11	– 20	110	67
	3,363	2,588	5,760	4,153
Earnings per share (basic) in EUR	0.35	0.27	0.59	0.42
Earnings per share (diluted) in EUR	0.35	0.27	0.59	0.42
Average number of outstanding shares (basic)	9,625,000	9,625,000	9,625,000	9,625,000
Average number of outstanding shares (diluted)	9,625,000	9,625,000	9,625,000	9,625,000

Consolidated Balance Sheet as of June 30, 2006 and December 31, 2005

Group, and Nemetschek France SARL. At home, sales amounted to 20.8 million euros compared with 22.1 million euros in the previous year, caused by of the sale of acad-Graph CAD Studio GmbH. Adjusted, this represents growth in domestic sales of 4.4 %, due primarily to the Manage and Multimedia business units.

Operating Result Increases by 2.0 Million Euros to 7.2 Million Euros

In the second quarter of 2006, Nemetschek achieved an operating profi t of 4.2 million euros (previous year: 3.2 million euros). The fi rst-half result was 7.2 million euros, 38.9 % higher than the previous year's value. The growth in earnings in the fi rst six months of 2.0 million euros was mainly generated by the Design business unit. The contributing factors were higher organic growth and lower material costs. NEMETSCHEK NORTH AMERICA reported a particularly good improvement in earnings, and Nemetschek France SARL and Nemetschek Engineering GmbH were also able to signifi cantly increase earnings. The sale of acadGraph CAD Studio GmbH also had a positive effect on the halfyear results (previous year: – 0.3 million euros). The acquisition of SCIA International NV did not affect the fi rst-half results. Because of the purchase price allocation, the operating result of SCIA International NV is adversely affected by depreciation.

The Multimedia and Manage business units were also able to signifi cantly improve their earnings, particularly as a result of the growth in sales. The operating result in the Build business unit remained at around the previous year's level.

The gross profi t margin rose, and is 93.6 % compared to 91.4 % in the fi rst half of the previous year. This rise is due mainly to the fact that the 2006 fi nancial year does not include the material costs of acadGraph.

Assets Thousands of u	June 30, 2006	Dec. 31, 2005
Current assets
Cash and cash equivalents	23,226	28,966
Trade receivables, net	16,710	14,435
Receivables from associates	145	148
Inventories	399	481
Tax refunded claims for income taxes	1,317	1,917
Prepaid expenses and other current assets	4,335	2,777
Assets classifi ed as held for sale	560	2,075
Current assets, total	46,692	50,799
Non-current assets
Property, plants and equipment	3,423	2,811
Intangible assets	4,865	1,166
Goodwill	25,278	23,734
Shares in associates/fi nancial assets	299	387
Deferred taxes	2,262	1,835
Other non-current assets	230	230
Non-current assets, total	36,357	30,163
Total assets	83,049	80,962

Equity and liabilities Thousands of u	June 30, 2006	Dec. 31, 2005
Current liabilities
Short-term loans and current portion of long-term loans	789	702
Trade payables	3,454	3,615
Payments on account	65	64
Provisions and accrued liabilities	8,776	8.780
Deferred income	12,398	6,807
Income taxes	1,503	1,118
Other current liabilities	4,290	9,181
Liabilities directly associated with non-current assets classifi ed as held for sale	0	763
Current liabilities, total	31,275	31,030
Non-current liabilities
Long-term loans without current portion	186	0
Deferred taxes	2,465	1,215
Pension provisions	600	583
Other non-current liabilities	1,797	0
Non-current liabilities, total	5,048	1,798
Equity
Subscribed capital	9,625	9,625
Capital reserves	41,451	41,354
Revenue reserve	52	52
Currency translation	– 2,501	– 1,851
Retained earnings/accumulated loss	– 2,688	– 2,083
Minority interests	787	1,037
Equity, total	46,726	48,134
Total equity and liabilities	83,049	80,962

Net Income up by Around 39%

For the fi rst six months of 2005, the Nemetschek Group reported a positive net income for the year of 5.8 million euros (previous year: 4.2 million euros). This corresponds to an increase of 38.7 %, which is primarily due to the signifi cantly improved

operating result. The fi nancial result for the fi rst half of 2006 is 0.3 million euros, 0.1 million euros less than in the previous year. The improved earnings situation led to a 0.4 million euros increase in taxes. The earnings per share were 0.59 euros, compared to 0.42 euros in the same period of the previous year.

Consolidated Cash Flow Statement for the Period from January 1 to June 30, 2006 and 2005

Thousands of 1	2006	2005
Earnings (before taxes)	7,401	5,452
Amortization and depreciation of non-current assets	1,427	1,821
Change in pension provision	17	17
Non-cash transactions	97	0
Income from associates	– 171	– 38
Expense from disposal of property, plant and equipment	– 157	0
Cash fl ow for the period	8,614	7,252
Interest income	– 253	– 361
Interest expenses	68	35
Change in other provisions and accruals	– 4	– 766
Change in trade receivables, net	366	– 1,170
Change in inventories, other assets	– 662	– 2,839
Change in trade payables	– 735	– 573
Change in other liabilities	4,239	5,019
Cash received from distributions of associates	141	251
Interest received	253	361
Income taxes received	650	0
Income taxes paid	– 1,658	– 1,416
Cash fl ow from operating activities	11,019	5,793
Capital expenditure	– 1,198	– 5,320
Acquisition of a subsidiary after deduction of acquired means of payment	– 3,341	0
Change in liabilities from acquisitions	– 5,295	4,800
Cash received from the disposal of non-current assets	4	0
Cash fl ow from investing activities	– 9,830	– 520
Dividend payments	– 6,256	– 19,250
Minority interests paid	– 360	– 873
Repayment liabilities to banks	0	0
Interest paid	– 57	– 35
Cash received from the sale of shares	0	173
Cash fl ow from fi nancing activities	– 6,673	– 19,985
Changes in cash and cash equivalents	– 5,484	– 14,712
Effect of exchange rate differences on cash and cash equivalents	– 256	355
Cash and cash equivalents at the beginning of the period	28,966	39,033
Cash and cash equivalents at the end of the period	23,226	24,676

Good Earnings Situation Increases Cash Flow for the Period

The good earnings situation also had a positive effect on the generation of funds. The cash fl ow for the period increased to 8.6 million euros (previous year: 7.3 million euros). The cash fl ow from operating activities rose by 5.2 million euros to 11.0 million euros. The cash fl ow from investing activities was – 9.8 million euros, whereby a total of 8.6 million euros was used as payment for the purchase price for the remaining 25 % of shares in ING. AUER – Die Bausoftware GmbH and the acquisition of 78 % shares in SCIA International NV. Both investments were fi nanced using internally-generated funds. The dividend payout of 0.65 euros per share on May 24, 2006 affected the cash fl ow from fi nancing activities.

Nemetschek will also enjoy a good liquidity situation in the future for the growth course that is now under way. Cash and cash equivalents amounted to 23.3 million euros on June 30, 2006 (December 31, 2005: 29.0 million euros). Adjusted to take account of the dividend payment (6.3 million euros) and the fi nancing of the acquisitions (8.6 million euros), the liquid assets rose in the fi rst six months by 9.3 million euros (previous year: 4.9 million euros).

Very Good Equity Situation

The equity capital amounts to 46.7 million euros (December 31, 2005: 48.1 million euros). This corresponds to a very good equity ratio of 56.3 % (December 31, 2005: 59.5 %). The difference in equity compared to December 31, 2005 is due mainly to the net income achieved in the fi rst half of 2006 and the dividend payment.

The current assets fell as a result of the sale of acadGraph CAD Studio GmbH. This is revealed in particular in the assets classifi ed as held for sale. The non-current assets increased by 6.2 million euros, primarily as a result of the acquisition of the SCIA Group. As in previous years, the deferred income from software service agreements had increased on June 30, 2006 to 12.4 million euros (previous year: 11.5 million euros). This will lead to sales revenues in the second half of 2006.

The other liabilities fell as a result of the purchase price payment for ING. AUER – Die Bausoftware GmbH. The sale of acadGraph CAD Studio GmbH reduced the liabilities directly connected to the assets classifi ed as held by 0.8 million euros. The other non-current liabilities include the variable purchase price adjustment and the option to buy the remaining shares in the SCIA Group.

Outlook

The outlook for the Nemetschek Group remains positive. In their most recent forecasts, economic experts predict a slight improvement of the economic situation in the European building industry. Growth markets for Nemetschek are Western and Eastern Europe and, outside of Europe, the United States and Japan. For the year as a whole, we expect an increase in sales revenues and a substantially improved operating result. The third quarter is expected to be somewhat weaker than the other quarters in 2006.

Segment Reporting for the Period from January 1 to June 30, 2006 and 2005

Thousands of u	2006 Sales	Amortization and depreciation	EBIT	2005 Sales	Amortization and depreciation	EBIT
Design	38,341	1,206	5,137	35,581	1,370	3,805
Build	5,893	81	1,712	6,048	244	1,821
Manage	2,891	32	– 306	2,605	52	– 815
Core business units	47,125	1,319	6,543	44,234	1,666	4,811
Multimedia/NBO	3,528	108	619	2,874	155	344
Total	50,653	1,427	7,162	47,108	1,821	5,155

Statement of Changes in Group Equity for the Period from January 1, 2005 to June 30, 2006

Thousands of 1	Equity applicable to the parent company's shareholders
	Subscribed capital	Capital reserve	Revenue reserve	Currency translation	Retained earnings/ accumulated loss	Total	Minority interests	Total Equity
As of January 1, 2005	9,625	46,345	0	– 3,037	5,496	58,429	1,497	59,926
Sale of shares		182	52			234		234
Additional share purchases		– 5,254				– 5,254	– 66	– 5,320
Share-based compensation		81				81		81
Income payment from minority interests						0	– 874	– 874
Changes from currency translation				1,186	3	1,189		1,189
Dividend payment					– 19,250	– 19,250		– 19,250
Net income					11,668	11,668	480	12,148
As of December 31, 2005	9,625	41,354	52	– 1,851	– 2,083	47,097	1,037	48,134
Share-based compensation		97				97		97
Income payment from minority interests						0	– 360	– 360
Changes from currency translation				– 650		– 650		– 650
Dividend payment					– 6,256	– 6,256		– 6,256
Net income					5,651	5,651	110	5,761
As of June 30, 2006	9,625	41,451	52	– 2,501	– 2,688	45,939	787	46,726

Quarterly Statement Based on IAS/IFRS

The Nemetschek Group's quarterly statement is compiled in accordance with the International Accounting Standards Board's (IASB) International Financial Reporting Standards (IFRS). It is based on the same accounting, appraisal and calculation methods as the annual fi nancial statement dated December 31, 2005.

The group of companies corresponds to the situation on December 31, 2005, with the following differences:

• Deconsolidation of 100% of shares in acad Graph CAD Studio GmbH, Munich on January 1, 2006.
• Acquisition: In the purchase agreement of February 14, 2006, Nemetschek AG acquired – via the two companies Campus Technology Fund, Heverlee, Belgium and Software Adventure Cv, Herk-de-Stad, Belgium – a 78.84 % stake in SCIA International NV, Herk-de-Stad, Belgium, which acts as a holding company for the subsidiaries of the SCIA group.

The SCIA International NV group includes the following companies: SCIA Group NV, Herk-de-Stad, Belgium SCIAW+B Software BV, Arnhem, Netherlands SCIA Sarl, Roubaix, France SCIA Cz s.r.o., Brno, Czech Republic SCIA SK s.r.o, Zilina, Slovakia SCIA MAPS SA, Gurmels, Switzerland

The date of acquisition was February 28, 2006. The acquisition costs for the merger are 4.4 million euros, 0.2 million euros of which are incidental acquisition costs.

Number of Shares Held by Directors as of June 30, 2006

	Number of shares	Subscribtion rights
Managing board
Gerhard Weiß	26,092	0
Dr. Peter Mossack	0	50,000
Michael Westfahl	0	50,000
Supervisory board
Kurt Dobitsch	0	0
Prof. Georg Nemetscheck	2,314,497	0
Rüdiger Herzog	0	0

Imprint

Copyright 2006 Nemetschek AG, Munich

Concept and Editorial Offi ce Maren Moisl (Nemetschek AG)

Design and Realization FIRST RABBIT GmbH, Cologne

Pictures

Cover: Ralph Rieger, www.visualservices.de, copyright: Nemetschek AG Cover: FIRST RABBIT GmbH, copyright: Nemetschek AG

Nemetschek Aktiengesellschaft Konrad-Zuse-Platz 1 81829 Munich Germany Phone: +49 (0) 89-9 27 93-1219 Fax: +49 (0) 89-9 27 93-5404 E-Mail: investorrelations@nemetschek.de www.nemetschek.de