Quickies: AEC earnings show upswing in construction
Time to catch up! Nearly 15 companies reported September quarter earnings while I was away, so to get a the general sense of what they’re reporting I’m going to be summarizing them all over the next few weeks. Today, we’re looking at AEC, the world of Architecture, Engineering and Construction.
In general, the news was good but not stellar. Mid- to high-single digit revenue growth over the third quarter of 2012 but sequential flatness or slight declines for a typically weak quarter. Each company said that their end-verticals were looking more positive and that 2014 should see even further improvement.
We covered Hexagon‘s Q3 a couple of weeks ago. The big AEC-related headline for Hexagon‘s third quarter was that construction is up in many parts of the world, leading to increasing demand for its surveying, laser scanning and other sensing solutions — and, of course, interest in Intergraph PP&M’s solutions never really waned. But by far the most conversation was around Shell’s plan to shake up the world of oil & gas projects by creating a central data store for its assets and to require EPCs to use Intergraph’s SmartPlant Cloud as the delivery vehicle. Back to Q3, 2013, though, for AEC-related results: Geosystems revenue was up nearly 10% as reported and Intergraph PP&M revenue was up 7% year/year (y/y).
Nemetschek‘s holding company management keeps changing, but that doesn’t seem to be slowing down the brand teams that are developing and selling its AEC brands, including Allplan, Graphisoft ArchiCAD, VectorWorks, and the new bim+ platform. Interim CEO Dr. Tobias Wagner, member of the Executive Board and head of the Allplan business, announced Q3 results that show Nemetschek’s total revenue was up 5% y/y to €46 million, led by growth in maintenance revenue of 9%. The vast majority of Nemetschek’s revenue comes from Europe (40% from Germany alone), but the company sees strong potential for expansion, acquiring a Graphisoft distributor to form a Mexican subsidiary that will focus on the Central and Latin American markets. The Design segment is by far its largest, reporting revenue of €107 million for the first 9 months of the year, up 4% y/y. Dr. Wagner told investors that he sees robust growth in construction that should boost Nemetschek to total revenue growth of about 6% y/y in 2013, with the potential to return to the higher levels of growth seen in prior years.
Last week, Nemetschek acquired the Norwegian firm Data Design System (DDD), to extend its offerings into MEP (mechanical, electrical, plumbing), heating, ventilation, air conditioning and photovoltaic engineering. In 2012 DDS had sales of about €8.7 million; Nemetschek said that the purchase price was “in the low two-digit million euro range”. Finally, Viktor Varkonyi, the CEO of Graphisoft and Sean Flaherty CEO of Vectorworks were named to the Nemetschek Executive Board but will continue in their divisional responsibilities as well. The company continues its search for a new Financial and Operational Executive Manager.
Trimble is rapidly turning itself from a GPS/hardware shop to a full-fledged provider of everything needed to design and build infrastructure assets. The company recently announced that Q3 revenue was up 10% y/y to $557 million as strengthening construction markets in the US and elsewhere outweighed concerns about US government spending. Trimble’s largest business, Engineering & Construction, reported a y/y revenue increase of 8% to $311 million due to acquisitions, and higher sales of survey and heavy civil building construction products. On Tuesday, Trimble added yet another offering to its menu: Building Information Modeling consulting services for MEP contractors, helping them with 3D modeling, laser scanning and creating 3D models from point cloud.
On Thursday we find out how the big daddy of AEC did in the most recent period, when Autodesk reports its results for the October quarter. As a quick reminder, its AEC business did really well in FQ2, when revenue rose 9% y/y to $177 million. Autodesk has been on a buying binge lately, snapping up Delcam and VSR — maybe there’ll be something AEC-related to be thankful for?