Revenue up by 11 percent in first half year / EBITDA margin of 23 percent / forecast for 2011 confirmed.
Nemetschek AG, Europe's largest vendor of software for architecture and construction, remained on a growth course in the first half of 2011: revenues increased by 11 percent to 79.1 million euros, and the operating result (EBITDA) rose from 17.6 in the previous year to 18.3 million euros. This is equivalent to an EBITDA margin of 23 percent, currency-adjusted, the operating margin was 24 percent.
Double-digit increase in license and maintenance revenues
Revenues from license sales increased by 10 percent in the first six months to 38.5 million euros. Revenues from long-term maintenance contracts rose by 13 percent to 36.5 million euros and thus made up 46 percent of the total revenue. In the foreign markets, revenues increased by 12 percent to 48 million euros and the proportion of foreign revenue therefore rose from 60 to 61 percent of the total revenue. In Germany, revenues increased by 10 percent compared to the same quarter of the previous year to 31.1 million euros.
In the Design business unit, revenue rose by 8 percent year-on-year to 63.3 million euros. As a result of higher operating expenses, the EBITDA margin in this segment fell from 23 to 19 percent. The Multimedia segment was once again the front runner in terms of revenue and increased profit: Here, revenues increased by 56 percent to 7 million euros and consequently, the EBITDA margin rose from 34 to 51 percent. In the Build segment, revenues increased by 8 percent to 7 million euros, and the EBITDA margin was 34 percent (previous year: 37 percent). In the Manage business unit, revenues (1.8 million euros) and EBITDA (0.1 million euros) were at the same level as in the previous year; this unit is currently being restructured and recently acquired numerous new customers.
Earnings per share 0.94 euros
Despite the clear growth in revenue, the operating result (EBITDA) rose only 4 percent compared to the previous year to 18.3 million euros, which corresponds to an EBITDA margin of 23 percent. One main reason was a one-time foreign currency loss of 0.8 million euros. Currency-adjusted, the operating result was 9 percent higher than in the previous year, amounting to 19.1 million euros, with an EBITDA margin of 24 percent.
As a result of the announced growth and innovation initiatives, operating expenses rose by 10 percent from 60.7 million euros to 67.1 million euros. Personnel costs increased by 9 percent from 31.4 million euros to 34.3 million euros. This was primarily due to the changes made to the employee and salary structure at the Hungarian group subsidiary Graphisoft as well as a moderate increase in personnel in several Group companies. Other operating expenses rose by 15 percent from 21.0 to 24.1 million euros. The reasons for this included the foreign currency losses, higher dealer commissions and marketing costs, as well as additional costs for consulting services and external staff.
After amortization from the purchase price allocation of 3.5 million euros and positive net interest income of 0.1 million euros, the net income was 9.8 million euros, 7 percent higher than in the previous year (9.1 million euros). The good result in the previous year was characterized by one-time earnings of 1.6 million euros from the sale of 8 percent of shares in DocuWare AG. The earnings per share (group shares, basic) are 0.94 euros (previous year: 0.92 euros).
Cash flow for the period increases by 11 percent
In the first half of the year, the Group achieved cash flow for the period of 17.8 million euros, compared with 16 million euros in the previous year. Following the reduction of liabilities, the cash flow from operating activities was 18.3 million euros, compared with 20.3 million euros. Cash flow from investment activities was -3.2 million euros (previous year: - 0.9 million euros). At 2.7 million euros, investments in fixed assets remained largely at the previous year's level (2.6 million euros), but in the previous year, an additional 1.6 million euros flowed into the company as a result of the sale of the DocuWare shares. The free cash flow was thus 15.1 million euros, compared with 19.3 million euros in the same period of the previous year.
After a dividend payment of 9.6 million euros and loan repayments of 7.8 million euros, cash and cash equivalents were 26.1 million and therefore exceeded the remaining loan for the Graphisoft acquisition by 14.4 million euros. The equity ratio of the Nemetschek Group is 58 percent.
The development in the first half of the year confirms the growth in revenue of 10 percent forecast for 2011. “Revenues from license contracts are now increasing in double figures again, and these are the basis for future maintenance contracts," stated Ernst Homolka, CEO of Nemetschek AG.
As expected, Nemetschek grew in Germany and abroad, with the focus on the foreign markets. According to new industry analyses, building output in Germany, France and Switzerland will grow more strongly in 2011 than expected, and Nemetschek should continue to benefit from this. In addition, the Group wants to grow significantly in all relevant foreign markets in the future. "This takes time, but we need to lay the foundations for it now," said Homolka. The opening of a Nemetschek branch in Brazil was just one step in this direction.
In view of the expected revenue growth on the one hand, and the growth initiatives that have been launched on the other, the Group continues to forecast an operating result (EBITDA) in the 40 million euro range for 2011, which would correspond to an EBITDA margin of around 24 percent. Net income should increase to over 20 million euros in 2011, as expected.
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