Despite the troubling global pandemic context, the Nemetschek Group achieved its 2020 financial targets. Revenues increased to EUR 596.9 million (USD 705.8 million at today’s rate) for the year. EBITDA margin was 28.9 percent.
2020 in Summary
During the course of 2020, the Nemetschek Group raised its annual targets for revenues and profitability (EBITDA margin) and met them both. Furthermore, the German holding company laid the foundation for continued acceleration of growth for the future, reports the company.
“Thanks to our rapid adaption to the new circumstances, a crisis-resistant business model, and prudent cost management, we have successfully mastered the past year,” said Dr. Axel Kaufmann, Spokesman of the Executive Board and CFOO. “With our very good positioning regionally and with customers, and the steadily increasing share of recurring revenues, we have laid the foundation for further growth in 2021 while achieving attractive profitability. In the coming years, the clear benefits from the stronger shift to subscription and cloud will contribute to value creation and significantly accelerate our growth,” Kaufmann added.
For 2021 the company is guiding for currency-adjusted revenue growth in at least the high single-digit range. An increasing share of revenues coming from recurring revenues (subscription) is anticipated. This will be driven partly by the conversion to a cloud-centric subscription (SaaS) model of its global Build-division brand Bluebeam which will start in the second half of 2021.
In 2021 EBITDA margin is planned to be within the range of 27 – 29 percent, as previously targeted. Additionally, the Executive Board is confident to reach a mid-teens growth starting in 2023 and following the successful subscription/SaaS transition.
Financial Details
Here is a highlight selection of key figures. For more see the link below.
- Group revenues increased by 7.2 percent to EUR 596.9 million (USD 705.8 million at today’s rate). Adjusted for currency effects 8.3 percent)
- Group operating EBITDA for the full year rose 4 percent (4.9 percent adjusted for currency effect), to EUR 172.3 million (the previous year was EUR 165.7 million)
- Recurring revenues from subscription + SaaS increased by 19.9 percent to EUR 359 million and thus accounting for above 60 percent of total revenues. This marks a clear growth driver.
Segment or Division Performance
There are four segments or divisions at Nemetschek: Design, Build, Manage, and M&E (Media & Entertainment).
- Design: EUR 314.9 million up from the previous year slightly from EUR 314.7 million. EBITDA was 30.4 percent, down from the previous year at 31.1 percent.
- Build: EUR 193 million. EBITDA was 36.3 percent up from 34.7 percent the year before. Revenues in this division, which is highly centered on the US construction market, rose by 8.7 percent but felt the effects of the pandemic crisis and a time lag in the sector.
- Manage: EUR 40.9 million with EBITDA at 9 percent. This is a young segment and it also felt the impact of the Covid-19 crisis. The lower EBITDA was due to investments in future growth, reports the company.
- Media & Entertainment: EUR 55.2 million but saw a significant growth of 62.8 percent due to the acquisition of US-based Red Giant. Organic growth impressively grew 27.8 percent. EBITDA margin rose to 28.1 percent.
Strategic Priorities
The Group is looking towards an intensive bundling of competencies of the Nemetschek brands in the four segments. The German company is aiming to reduce internal complexity and create synergies for addressing overarching solutions developed for customers from a single source.
New SaaS and rental models are aimed at driving closer relationships with customers and more easily targeting prospects. The company successfully converted to subscription models in the Media segment in 2020, while the Bluebeam brand in the Build segment will begin its conversion to a cloud and data-centric offering (SaaS) in the second half of 2021. The stronger shift to subscription/SaaS business models creates value by opening up additional market potential through newly addressed customers, expanded customer lifetime value, and increased recurring revenues.
Future Outlook and Ambition
The Group is looking to increase its revenues and growth via conversions to subscription/SaaS models from 2021 and 2022 onward; the Group sees a return to mid-teens in annual revenue targets in the 2023 time period.
To read the full press release go here.
Architosh Analysis and Commentary
The most interesting news in the Nemetschek Group’s annual financial numbers is the conversion to a cloud-based SaaS model in the Build division’s chief software subsidiary, Bluebeam. Once the standout software leader in the US construction industry (predating the acquisition by the Group), since the emergence of Procore, Plangrid, and a wave of new entrants in the “contech” software boom targeting construction professionals, Bluebeam has found itself with significant new competitors. In particular, the rise of common data environment (CDE) tools from within the US, UK, Germany, and Australia, have implemented features that provide unique advantages over Bluebeam Revu and its Studio session environment. Principally, cloud-based SaaS tools are more accessible and flexible than a desktop installed tool, particularly one that works on just one platform at the present. CDEs also now feature adequate mark-up tools though nothing yet still rivals Bluebeam’s comprehensive and powerful markup and audit trail features.
MORE: Exclusive: Bluebeam Dropping Mac Platform — Pushing Cloud Ecosystem Instead
Taking Bluebeam to a cloud-based SaaS model can address all of these limitations. Multi-level stakeholders are better supported conceivably by browser-based solutions because it provides URL-directed engagement for collaboration across more platforms and devices. Cloud-first usually means mobile-app ready and Bluebeam already has an excellent mobile version of Revu. Depending on the particular features, the future direction of Bluebeam on a subscription-driven, cloud-based SaaS model could be quite bright, adding significant competitive pressure to other leading contech contenders from the likes of Procore, Autodesk, Bentley, and others.
Additionally, the Group’s comments mention a “data-centric” offering. Cloud-based SaaS solutions done right position themselves for enrichment via app integrations. All the leading CDE systems currently on the market support a healthy and growing set of app integration potentials. Bluebeam’s offering will no doubt want to support this but will also strive ideally for synergistic integrations with other Nemetschek brands, which already exist to some extent today.