German AEC/O industry software giant, the Nemetschek Group, had an excellent financial year in 2021 and the company marches towards annual revenue of USD 1 billion. Still shy of that target, the company posted annual revenues of EUR 681.5 million (= USD 743 million) with a YoY of 14.5 percent growth.
The company posted 28.8 percent EBITDA growth to EUR 220.0 million, with a margin expansion to 32.6 percent. This resulted in a 38.9 percent growth in earnings per share to EUR 1.17.
The future 2022 outlook is very strong with a similar percentage YoY growth and EBITDA margin between 32 and 33 percent. A larger drive of their growth is transitioning revenues to subscription/SaaS models. The share of recurring revenues, which includes service contracts plus rental models, increased to 61.1 percent of group revenues.
The Nemetschek Group has dramatically expanded its software in the Media & Entertainment segment when Maxon acquired Redshift, Red Giant, and Pixologic.
In 2021 the Group also invested in three innovative startups from Germany, the USA, and Norway. All three companies are in the AEC/O space. It also began to merge some of its daughter companies.
Here are segment financial details for 2021:
- Design segment — EUR 351.8 million (11.7 percent increase YoY) (main brands: Allplan, Archicad, Vectorworks, Scia)
- Build segment — EUR 221.8 million (14.9 percent increase YoY) (main brands: Bluebeam, Nevaris, dRofus)
- Manage segment — EUR 43.7 million (7 percent increase YoY) (main brands: Spacewell, Cremsolutions)
- M&E segment — EUR 70.5 million (27.7 percent increase YoY) (main brands: Maxon)
The Nemetschek Group employs 3,400 employees around the world and serves over 6.5 million users worldwide. The Group is a proponent of open standards (OPEN BIM) and transformative innovation. It is publicly listed on the MDAX and TechDAX in Europe.
The Nemetschek Group also added executive talent to its leadership. Yves Padrines (45) joined the Executive Board of Nemetschek SE in early March as its new chief executive officer (CEO). Prior to joining the Nemetschek Group, Padrines was CEO of Synamedia, a carve-out from Cisco-owned Permira and Comcast/Sky.
Prior to that Padrines was Cisco’s Vice President of Global Service Provider for EMEA and was fully responsible for the full suite of Cisco products and services from major telco, broadcast, and media companies. His early career was formed at the management consulting company PricewaterhouseCoopers.
“As a market-leading provider of software solutions for the AEC/O and Media & Entertainment industries, the Nemetschek Group’s impeccable history, strong brands, and culture of innovation are what attracts me most,” said Yves Padrines. “I am both thrilled and honored to lead the Nemetschek Group to its next phase of growth and look forward to working with a world-class team. My experience and enthusiasm should further maximize the potential of the business and create premier workplaces and a winning culture for our people while driving long-term value for our customers and shareholders.”
To learn more about the Nemetschek Group click here.
Architosh Analysis and Commentary
Probably the biggest news in 2021 for the Nemetschek Group was its many acquisitions in M&E companies vis-a-vis Maxon. The second item was more of a surprise, and that is the investments in startup companies in the AEC/O space. Rather than form startups themselves, the Group is investing in established startups. What is notable to watch is the year-over-year revenue growth in the M&E space via organic growth and acquisitions.
In terms of acquisitions, we think it is disappointing that the Group hasn’t yet made a stronger move in the VR/AR/XR market segment. This market segment may have “crossed the chasm”—to use Geoffrey Moore’s innovation adoption model term phase—and thus will accelerate quickly with early majority type users which is 34 percent of the market to twice as large as the users thus far. Having The Wild be picked up by Autodesk likely has this segment on the minds of Group executives. Such technology has become table stakes for firms that want to operate successfully in a post-pandemic context, enabling hybrid meeting workflows in the “new normal.”
Meanwhile, we can see continued acquisitions happening under the Maxon umbrella, in search of continued growth in the 3D animation market currently estimated to be worth EUR 16 billion.