Munich, April 30, 2019 – After an outstanding fiscal 2018, the Nemetschek Group (ISIN DE 0006452907) has now achieved its strongest quarterly growth of the past few years while maintaining high profitability. At the same time, the top player in the global AEC market is continuing to invest substantially in strategic projects and further internationalization to enable continued double-digit growth in the future.
“We’ve made an outstanding start to the year and achieved an exceptionally strong first quarter. Our strategic investments in next-generation solutions and further internationalization are paying off,” says Patrik Heider, Spokesman and CFOO of the Nemetschek Group. “In addition to our future-oriented investments, our new management structure enables us to act even more decisively in the market and in our various customer segments,” Heider adds, “meaning we’ve set the course for this strong performance to continue into the future.”
Major indicators of the Group’s success in Q1 2019
- Group revenue rose in the first quarter to EUR 129.9 million, which represents growth of 27.1% (currency-adjusted: 23.2%) compared to the same quarter of the previous year (EUR 102.2 million). This increase is a result of both strong organic growth of 21.3% and the recent acquisition of the Spacewell brand.
- Growth drivers were recurring revenues from software service contracts and subscriptions, which rose by 33.9% (currency-adjusted: 30.0%) to EUR 67.7 million. Revenue from subscriptions increased considerably by 124.8% from EUR 4.3 million to EUR 9.7 million.
- Ongoing internationalization remains another major driver of growth. Revenues generated abroad in Q1 grew by 32.7% to EUR 95.0 million. And in Germany, too, Nemetschek achieved double-digit revenue growth of 14.0%.
- Consolidated operating earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 31.4% to EUR 36.7 million. This represents an EBITDA margin of 28.2%. The increase was partly boosted by the first application of the new IFRS 16 standard for the accounting of leasing contracts. Adjusted for this effect, the EBITDA would have increased by 18.5%, which is equivalent to an EBITDA margin of 25.5%. In the first quarter of 2019, Nemetschek also invested as planned in strategic projects. In addition, the growth-related increase in the number of employees up to the end of last year led to a noticeable increase in personnel costs. Furthermore, in the Manage segment, the acquired Spacewell brand’s still below-average EBITDA margin (due primarily to the acquisition costs) had an impact on the operating result in Q1.
- Net income for the quarter also increased substantially by 19.7% to EUR 19.6 million (same period in previous year: EUR 16.4 million). Earnings per share came to EUR 0.51 (Q1 2018: EUR 0.43).
Segment performance in Q1 2019
In segment reporting, the Solibri brand, which had been allocated to the Build segment up to the end of 2018, was reclassified to the Design segment as of 2019. The previous year’s values in segment reporting were adjusted accordingly.
- As in the previous quarters, the Build segment recorded the strongest revenue growth, increasing by 34.7% (currency adjusted: 27.0%) to EUR 40.2 million. EBITDA rose by 36.0% to EUR 12.8 million, resulting in a high EBITDA margin of 31.8% (previous year: 31.5%). Without the first-ever application of IFRS 16, the EBITDA margin would have been 28.4%.
- The Design segment recorded very pleasing revenue growth of 15.1% (currency adjusted: 12.8%) to EUR 74.3 million, due in part to a rise in demand prompted by BAU, the world’s leading trade fair for the building sector, which took place in January. At 36.0%, the increase in EBITDA to EUR 21.2 million was notably disproportionate to revenue and equivalent to an EBITDA margin of 28.5% (adjusted for IFRS 16: 26.1%; same period in previous year: 24.1%).
- The Manage segment was significantly reinforced through the acquisition of Spacewell. Revenues increased from EUR 2.0 million in the same period the previous year to EUR 8.2 million. Purely organic revenue growth amounted to 11.7%. In this segment, EBITDA was EUR -0.2 million due to acquisition costs (Q1 2018: EUR 0.4 million). Adjusted for approximately EUR 1.5 million in acquisition costs, the EBITDA margin would amount to 15.6%.
- The Media & Entertainment segment was able to substantially accelerate its growth compared to the previous year. Revenues climbed by 23.9% (currency-adjusted: 19.9%) to EUR 7.2 million. In spite of high acquisition costs for Redshift, EBITDA increased by 13.7% to EUR 2.9 million, which is equivalent to an EBITDA margin of 40.7% (without IFRS 16: 39.4%).
Strong growth also affirmed for year 2019 as a whole
After the very strong start to the year, the Executive Board reaffirms the existing growth targets for the year 2019 as a whole, that is: achieving Group revenue in the region of EUR 540 million to 550 million, which represents growth of 17% to 19% year on year.
In view of renewed high, future-oriented investment and the still below-average EBITDA margin in the Manage segment, the EBITDA margin is expected to stay within the range of 25% to 27%. This range does not reflect the effects from the changeover to the new IFRS 16* leasing standard. Including the positive effects from the application of IFRS 16, the Nemetschek Group expects an EBITDA margin of between 27% and 29% for 2019.
* The new IFRS 16 accounting standard, according to which leases of any type (operate leasing and finance leasing) must always be recognized in the balance sheet, must be adopted for the first time as of January 1, 2019. The Nemetschek Group anticipates this change to have a positive effect of around EUR 13 million to 14 million on EBITDA. The Nemetschek Group will present the effects of IFRS 16 on EBITDA in detail in the quarterly reports.
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The full 3-month report for 2019 can be downloaded from the Investor Relations section of the company’s website.
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About the Nemetschek Group
The Nemetschek Group is a pioneer in the digital transformation of the AEC industry. With its software solutions, Nemetschek is the only corporate group in the world that covers the entire lifecycle of construction and infrastructure projects and guides its customers into the future of digitalization. With its smart software solutions, the Nemetschek Group enhances the quality of the construction process and improves the digital workflow for everyone involved. At the heart of this is the use of open standards (Open BIM). More than five million users worldwide apply the innovative solutions of the 16 brands in the four customer-oriented divisions. Founded by Prof. Georg Nemetschek in 1963, the Nemetschek Group today employs more than 2,600 experts. Publicly traded since 1999 and listed on the MDAX and TecDAX, in 2018 the company achieved revenue of EUR 461.3 million and an EBITDA of EUR 121.3 million.