Nemetschek SE

Quarterly Report • Oct 28, 2021

Building Lifecycle Intelligence

2021 QUARTERLY STATEMENT AS OF SEPTEMBER 30,

Key Figures

NEMETSCHEK GROUP

in EUR million	3rd quarter 2021	3rd quarter 2020	Change	9 months 2021	9 months 2020	Change
Operative figures
Revenues	169.3	148.6	13.9%	493.6	436.8	13.0%
- thereof software licenses	55.7	51.8	7.5%	169.0	152.0	11.2%
- thereof recurring revenues	106.5	90.4	17.8%	302.6	265.4	14.0%
- subscription (as part of the recurring revenues)	34.5	23.3	48.0%	93.0	63.5	46.6%
EBITDA	54.4	46.7	16.4%	160.3	129.3	24.0%
as % of revenue	32.1%	31.4%		32.5%	29.6%
EBIT	42.0	34.5	21.8%	123.0	92.1	33.6%
as % of revenue	24.8%	23.2%		24.9%	21.1%
Net income (group shares)	34.2	25.2	35.7%	96.8	67.7	42.9%
per share in €	0.30	0.22		0.84	0.59
Net income (group shares) before purchase price allocation	39.3	29.6	32.9%	111.8	82.0	36.3%
per share in €	0.34	0.26		0.97	0.71
Cash flow figures
Cash flow from operating activities	57.8	36.3	59.2%	163.6	114.5	42.9%
Cash flow from investing activities	–5.5	–2.0		–19.7	–90.3
Cash flow from financing activities	–29.5	–14.4		–95.8	–81.8
Free cash flow	52.3	34.3		143.9	24.2
Free cash flow before M&A investments	55.5	33.9	64.0%	149.3	107.5	39.0%
Balance sheet figures
Cash and cash equivalents*				191.9	139.3	37.7%
Net liquidity/net debt*				109.1	9.0
Balance sheet total*				957.5	889.7	7.6%
Equity ratio in %*				52.0%	46.9%
Headcount as of balance sheet date				3,139	3,067	2.3%
Share figures
Closing price (Xetra) in €				90.70	62.50
Market Capitalization				10,475.85	7,218.80

* Presentation of previous year as of December 31, 2020.

Interim Group Management Report

Report on the earnings, financial and asset situation

Strong nine month 2021: Revenue growth of 13.0% and increase in EBITDA margin to 32.5%

Consolidated revenue rose by 13.0% in the first nine months to EUR 493.6 million (previous year: EUR 436.8 million). The increase in revenue is a result of solely organic growth. Adjusted for currency translation effects at constant exchange rates, revenue growth would have been 15.7%.

EBITDA increased by 24.0% to EUR 160.3 million (previous year: EUR 129.3 million). The EBITDA margin thus rose considerably from 29.6% in the previous year to 32.5%. The aboveaverage margin is mainly due to the strong operating business development.

Subscription and SaaS continue to drive growth

Overall, there was a recovery in the license business compared to the previous year. In the first nine months of 2021, the Nemetschek Group's revenues from software licenses were 11.2% higher than in the same quarter of the previous year at EUR 169.0 million (previous year: EUR 152.0 million). Adjusted for currency effects, the increase was 14.2%. Recurring revenues again increased significantly in the first nine month by 14.0% to EUR 302.6 million (previous year: EUR 265.4 million). Adjusted for currency effects, recurring revenues rose by 16.7%. The disproportionately strong increase reflects the strategic change in the business model to increasingly offer subscription and SaaS. Revenues from subscription /SaaS increased significantly by 46.6% (adjusted for currency effects: 50.2%) to EUR 93.0 million. Software licenses accounted for 34.2% of total revenues (previous year: 34.8%), while the share of recurring revenues slightly increased from 60.8% in the previous year to 61.3%.

Internationalization

An essential diversification factor is the Group's continuing global orientation. Domestic sales increased by 9.8% to EUR 117.9 million (previous year: EUR 107.4 million). In the foreign markets, the Nemetschek Group achieved revenues of EUR 375.7 million, an increase of 14.1% compared to the previous year. The share of revenues generated abroad increased to 76.1% (previous year: 75.4%).

Overview of segments

In the Design segment, revenues increased by 10.8% (adjusted for currency effects: 12.5%) to EUR 254.0 million compared to the prior-year (EUR 229.3 million). EBITDA increased by 9.2% to EUR 83.2 million (previous year: EUR 76.1 million). This corresponds to an operating margin of 32.7%, which was slightly below the previous year's level of 33.2%. In the Build segment, revenues increased significantly year-on-year by 11.6% (after adjustment for currency translation effects: 16.0%) to EUR 161.1 million (previous year: EUR 144.3 million). The EBITDA margin increased to 42.5% (previous year: 38.0%). In the Manage segment, revenues increased by 12.9% (adjusted for currency translation effects: 12.8%) to EUR 33.0 million (previous year EUR 29.2 million). The EBITDA margin was 9.7% and below the previous year (14.1%). The Media & Entertainment segment revenues significantly increased by 27.2% to EUR 50.1 million (previous year: EUR 39.4 million) in the first nine months. The currency-adjusted growth was at 31.1%. At 37.5%, the EBITDA margin significantly increased (previous year: 28.9%).

Earnings per share at EUR 0.84

Operating expenses increased by 7.0% from EUR 352.0 million to EUR 376.8 million. The cost of materials included in this figure rose to EUR 18.1 million (previous year: EUR 17.2 million). Personnel expenses rose by 8.3% from EUR 196.4 million to EUR 212.6 million. Other operating expenses increased by 7.5% from EUR 101.3 million to EUR 108.9 million. Depreciation and amortization on fixed assets slightly increased by 0.2% from EUR 37.2 million to EUR 37.2 million.

The net income for the year (group shares) increased to EUR 96.8 million (previous year EUR 67.7 million). Adjusted for amortization from the purchase price allocation after tax, net income rose by 36.3% to EUR 111.8 million (previous year: EUR 82.0 million), resulting in earnings per share of EUR 0.97.

The Group's tax rate at the end of the third quarter of 2021 was 19.4% (previous year: 24.4%).

Operating cash flow at EUR 163.6 million – Cash and cash eqivalents at EUR 191.9 million

The cash flow from operating activities was mainly used for investments in fixed assets and the start-up Reconstruct Inc., dividends as well as the repayment of loans and lease liabilities.

The operating cash flow of the first nine months in the amount of EUR 163.6 million increased significantly due to the higher operating performance (previous year: EUR 114.5 million) supported by positive working capital effects as well as tax effects.

Cash flow from investing activities was EUR –19.7 million (previous year: EUR –90.3 million) and included the investment in the start-up Reconstruct Inc. In the previous year, EUR 79.1 million were paid for the acquisition of Red Giant in the Media & Entertainment segment. The cash flow from financing activities of EUR –95.8 million (previous year: EUR –81.8 million) mainly includes dividends paid out in the amount of EUR 34.7 million (previous year: EUR 32.3 million), the repayment of bank loans of EUR 47.6 million (previous year EUR 43.1 million), the repayment of short-term interim financing EUR 18.0 million (previous year EUR 0) and the repayment of lease liabilities of EUR 11.2 million (previous year EUR 9.6 million).

On the quarterly closing date, the Nemetschek Group held cash and cash equivalents of EUR 191.9 million (December 31, 2020: EUR 139.3 million).

Equity ratio at 52.0%

The balance sheet total increased from EUR 889.7 million to EUR 957.5 million compared to December 31, 2020. Equity amounted to EUR 497.8 million (December 31, 2020: EUR 417.3 million), resulting in an equity ratio of 52.0% compared to 46.9% as of December 31, 2020. The increase was driven by the net income for the year (EUR 98.3 million), the currencyrelated increase of Group assets (EUR 17.3 million) and decreased by dividends paid (EUR 34.7 million).

Significant events after the interim reporting period

There were no significant events after the end of the interim reporting period.

Employees

As of September 30, 2021, the Nemetschek Group employed a staff of 3,139 (September 30, 2020: 3,067), an increase of 2.3% on the prior-year quarter. In the following quarters, the Nemetschek Group intends to further increase the number of employees in order to ensure future growth.

Report on opportunities and risks

For the main opportunities and risks of the Nemetschek Group's anticipated development, we refer to the opportunities and risks described in the Group management report as of December 31, 2020. No significant changes have occurred in the meantime. With regard to the effects of the Covid-19 pandemic, we refer to the forecast report in the Group management report as of December 31, 2020, and to the comments in this quarterly report.

Report on forecasts and other statements on expected development

Based on the very good business development in the first nine months and the continued positive outlook, the Executive Board expects to achieve the upper end of the previously raised target ranges for revenue growth and EBITDA. The currency-adjusted revenue growth is expected to be in a range between 12% and 14% while the EBITDA margin is targeted to be between 30% and 32%.

The outlook is based on the assumption that there will be no significant deterioration in the macroeconomic conditions in the fourth quarter of 2021 and that the Corona pandemic will continue to be under control.

Consolidated statement of comprehensive income

for the period from January 1 to September 30, 2021 and 2020

STATEMENT OF COMPREHENSIVE INCOME

Thousands of €	3rd quarter 2021	3rd quarter 2020	9 months 2021	9 months 2020
Revenues	169,321	148,649	493,619	436,844
Other income	2,022	2,493	6,194	7,295
Operating income	171,343	151,142	499,813	444,139
Cost of goods and services	–5,806	–6,128	–18,075	–17,155
Personnel expenses	–72,382	–66,841	–212,621	–196,394
Depreciation of property, plant and equipment and amortization of intangible assets	–12,340	–12,220	–37,231	–37,172
thereof amortization of intangible assets due to purchase price allocation	–6,370	–5,941	–19,134	–18,488
Other expenses	–38,803	–31,460	–108,863	–101,306
Operating expenses	–129,331	–116,649	–376,791	–352,027
Operating result (EBIT)	42,012	34,493	123,022	92,112
Interest income	25	22	50	257
Interest expenses	–577	–683	–2,076	–2,008
Other financial expenses/income	1,590	7	862	5
Net finance costs	1,037	–654	–1,165	–1,746
Share of net profit of associates	0	0	83	0
Earnings before taxes (EBT)	43,049	33,839	121,940	90,365
Income taxes	–8,120	–8,277	–23,642	–22,028
Net income for the year	34,929	25,562	98,298	68,338
Other comprehensive income:
Difference from currency translation	5,785	–13,051	17,273	–20,957
Items of other comprehensive income that are reclassified subsequently to profit or loss	5,785	–13,051	17,273	–20,957
Gains /losses from the revaluation of defined benefit pension plans	–76	28	159	–79
Tax effect	22	–8	–45	22
Items of other comprehensive income that will not be reclassified to profit or loss	–55	20	114	–57
Subtotal other comprehensive income	5,730	–13,031	17,387	–21,013
Total comprehensive income for the year	40,659	12,531	115,685	47,325
Net profit or loss for the period attributable to:
Equity holders of the parent	34,223	25,213	96,797	67,740
Non-controlling interests	706	349	1,500	598
Net income for the year	34,929	25,562	98,298	68,338
Total comprehensive income for the year attributable to:
Equity holders of the parent	39,406	12,182	113,281	46,684
Non-controlling interests	1,253	348	2,404	641
Total comprehensive income for the year	40,659	12,531	115,685	47,325
Earnings per share (undiluted) in euros	0.30	0.22	0.84	0.59
Earnings per share (diluted) in euros	0.30	0.22	0.84	0.59
Average number of shares outstanding (undiluted)	115,500,000	115,500,000	115,500,000	115,500,000
Average number of shares outstanding (diluted)	115,500,000	115,500,000	115,500,000	115,500,000

Consolidated statement of financial position

as of September 30, 2021 and December 31, 2020

STATEMENT OF FINANCIAL POSITION

Assets Thousands of €	September 30, 2021	December 31, 2020
Current assets
Cash and cash equivalents	191,895	139,320
Trade receivables	66,783	64,571
Inventories	747	642
Income tax receivables	4,859	6,010
Other financial assets	1,444	1,624
Other non-financial assets	26,713	24,204
Current assets, total	292,441	236,371
Non-current assets
Property, plant and equipment	20,790	21,628
Intangible assets	131,862	138,176
Goodwill	428,375	416,706
Right-of-use assets	58,909	61,328
Investments in associates	1,859	1,344
Deferred tax assets	9,065	7,465
Other financial assets	12,832	4,835
Other non-financial assets	1,378	1,809
Non-current assets, total	665,071	653,290

Total assets	957,511	889,661

Equity and liabilities	Thousands of €	September 30, 2021	December 31, 2020
Current liabilities
Short-term borrowings and current portion of long-term loans		40,940	59,601
Trade payables		7,565	11,229
Provisions and accrued liabilities		61,985	56,250
Deferred revenue		158,776	129,469
Income tax liabilities		13,843	9,253
Other financial liabilities		7,401	1,618
Lease liabilities		13,797	13,369
Other non-financial liabilities		16,264	15,023
Current liabilities, total		320,572	295,813
Non-current liabilities
Long-term borrowings without current portion		41,895	70,670
Deferred tax liabilities		24,671	25,222
Pensions and related obligations		3,638	3,083
Provisions		4,529	4,153
Deferred revenue		2,914	2,406
Income tax liabilities		3,860	3,050
Other financial liabilities		1,235	8,731
Lease liabilities		51,683	54,254
Other non-financial liabilities		4,752	4,986
Non-current liabilities, total		139,177	176,556
Equity
Subscribed capital		115,500	115,500
Capital reserve		12,485	12,485
Retained earnings		377,587	315,341
Other reserves		–23,022	–39,408
Equity (group shares)		482,550	403,919
Non-controlling interests		15,212	13,373
Equity, total		497,762	417,292
Total equity and liabilities		957,511	889,661

Consolidated cash flow statement

for the period from January 1 to September 30, 2021 and 2020

CONSOLIDATED STATEMENT OF CASH FLOWS

Thousands of €	9 months 2021	9 months 2020
Profit (before tax)	121,940	90,365
Depreciation and amortization of fixed assets	37,231	37,172
Net finance costs	1,165	1,746
Share of net profit of associates	–83	0
EBITDA	160,253	129,283
Other non-cash transactions	308	4,083
Cash flow for the period	160,562	133,366
Change in trade working capital	20,636	7,592
Change in other working capital	3,529	3,891
Dividends received from associates	97	31
Interests received	50	262
Financing effects and tax cash flow	–21,279	–30,641
Cash flow from operating activities	163,594	114,501
Capital expenditure	–5,596	–7,322
Changes in liabilities from acquisitions	–1,583	0
Cash received from disposal of fixed assets	154	282
Cash paid for acquisition of subsidiaries, net of cash acquired	–5,420	–83,289
Cash paid for acquisition of other investments	–7,232	0
Cash flow from investing activities	–19,678	–90,329
Dividend payments	–34,650	–32,340
Dividend payments to non-controlling interests	–564	–105
Cash received from bank loans	18,000	6,850
Repayment of borrowings	–65,575	–43,110
Principal elements of lease payments	–11,196	–9,649
Interests paid	–1,833	–1,993
Payments for acquisitions of non-controlling interests	0	–1,500
Cash flow from financing activities	–95,818	–81,847
Changes in cash and cash equivalents	48,098	–57,676
Effect of exchange rate differences on cash and cash equivalents	4,477	–4,838
Cash and cash equivalents at the beginning of the period	139,320	209,143
Cash and cash equivalents at the end of the period	191,895	146,630

Consolidated statement of changes in equity

for the period from January 1 to September 30, 2021 and 2020

		Equity attributable to the parent company's shareholders
Thousands of €	Subscribed capital	Capital reserve	Retained earnings	Translation reserve	Total	Non-controlling interests	Total equity
As of January 1, 2020	115,500	12,485	230,924	–10,396	348,513	103	348,616
Other comprehensive income	–	–	–44	–21,012	–21,056	43	–21,013
Net income for the year	–	–	67,740	–	67,740	598	68,338
Total comprehensive income for the year	0	0	67,696	–21,012	46,684	641	47,325
Acquisition of a subsidiary	–	–	–12,862	–	–12,862	48,027	35,165
Dividend payments to non-controlling interests	–	–	–	–	0	–105	–105
Dividend payment	–	–	–32,340	–	–32,340	–	–32,340
As of September 30, 2020	115,500	12,485	253,418	–31,408	349,995	48,666	398,661
As of January 1, 2021	115,500	12,485	315,341	–39,408	403,919	13,373	417,292
Other comprehensive income	–	–	99	16,386	16,484	903	17,387
Net income for the year	–	–	96,797	–	96,797	1,500	98,298
Total comprehensive income for the year	0	0	96,896	16,386	113,281	2,404	115,685
Dividend payments to non-controlling interests	–	–	–	–	0	–564	–564
Dividend payment	–	–	–34,650	–	–34,650	–	–34,650
As of September 30, 2021	115,500	12,485	377,587	–23,022	482,549	15,213	497,762

NEMETSCHEK SE Konrad-Zuse-Platz 1 81829 Munich Tel.: +49 89 540459-0 Fax: +49 89 540459-414 investorrelations@nemetschek.com www.nemetschek.com