Nemetschek, one of Europe’s largest suppliers of solutions for architects and the building industry, reported today that revenue in 2010 grew by 10% to €150 million. This returns the company to 2008 levels — and the outlook is good, meaning that Nemetschek, at least, sees an end to the recent recession. Even better, the company’s net income grew 55% to €19 million.
• In 2010, Nemetschek was able to “make up for the slump in license sales in the crisis year 2009”, according to the earnings release. License revenue increased 16% to €75 million.
• Nemetschek apparently did not suffer the same woes as other software companies, where poor license sales in 2009 dampened maintenance revenue in 2010. The company reports that “revenues from long-term maintenance contracts have been increasing constantly for years and at an increasingly dynamic pace: in 2010 they increased by a total of 8% to €67 million.”
• License revenue was €75 million 2010, up 16% from 2009; in Q4, license revenue was up 6% to €22 million over a relatively strong Q4 2009.
• Maintenance revenue was €67 million in 2010, up 8%; in Q4 maintenance rose 12% to €18 million as a result of upgrade campaigns and new product releases.
• Services and hardware revenue declined in 2010, down 13% to €8 million.
From a geo perspective, revenue from countries outside Germany increased 15% to €89 million while revenue from grew 5% to €61 million. Signs from recovery in almost all regions; the company highlighted recovery in Europe (but no Eastern Europe), the Americas and Asia. Highlighted was Brazil, where the company saw growth of about 25%.
By business unit, the company’s Design segment revenue grew 11% to €122 million. The Multimedia business unit saw revenue increase 37 % to €11 million. Revenue from the Build segment “remained largely stable”, said Nemetschek, at €14 million while the Manage business unit saw revenue decline slightly to €4 million with a steep decline in margin, but remained profitable.
Nemetschek invested almost 24% of revenue in R&D, a higher proportion than many of its competitors. During the earnings call for investors, CEO Ernst Homolka said that this was the correct approach even in uncertain economic times because the companies major brands were able to release new products, which led to growth in license and maintenance revenue in 2010. The company will continue to invest, said Mr. Homolka, to position Nemetschek for profitable, sustainable growth.
On the wave of the successes seen in 2010, Nemetschek has set ambitious goals for 2011: organic revenue growth of around 10% to total revenue of about €165 million.
Mr. Homolka said that Nemetschek will focus on growing its international markets in 2011; including establishing a subsidiary in Brazil. In addition, the company is working towards the cloud, to make its solutions web-capable and to be able to offer new services over the Internet in the future. "We will consistently harness new growth opportunities that arise as a result of the general trend toward cloud computing," said Mr. Homolka.
As Mr. Homolka said, “Ladies and gentlemen, we are back on track.”
Final results for 2010 will be presented on March 28, 2011.