At least in AEC, 2020 looks … OK
European companies report preliminary results for a financial year in February and then follow up with a final report at the end of March. Nemetschek and RIB Software reported on schedule (see the reports here and here, respectively) –and 2019 was a very, very good year for both– but what interests people most right now are the forecasts: what will 2020 be? These are the most recent examples of company’s thinking, given the uncertainty.
Here’s what the companies said. Read this with the lens that they need to give honest assessments (because regulators) but that earnings press releases are ultimately marketing documents, intended to lure and reassure investors.
… the executive board continues to take a fundamentally positive view of the future even in the currently very uncertain environment due to the worldwide Covid-19 pandemic. The possible direct and indirect effects of Covid-19 on the business activities of the Nemetschek Group cannot currently be reliably estimated in terms of the extent, duration and geographical spread. Nevertheless, the first two months of 2020 went according to plan.
The release goes on to cite Nemetschek’s 54% of total revenue from recurring sources, which give Nemetschek a
higher degree of planning reliability than in previous crises. In addition, the international positioning of the group and the targeting of different customer groups across the four segments offer a broader risk diversification than in the past. This is complemented by the Nemetschek Group’s very solid financial structure with an equity ratio of approximately 41% and high levels of cash generation.
Bottom line? For 2020, Nemetschek “anticipates at least a stable development or a slight increase in Group revenues”.
RIB takes a much, much more cautious tone:
We announced in the press release of 13 February 2020, that the RIB Group planned to achieve revenues of between EUR 270 million and EUR 310 million and an operating EBITDA of between EUR 57 million and EUR 65 million for 2020.
Due to current developments in connection with the coronavirus (COVID-19) and the as yet unforeseeable economic consequences, the guidance of 13 February 2020 may no longer be relevant, and we have to suspend this guidance until further notice and may- issue new guidance for 2020 around the time of the Annual General Meeting in June, as the situation develops.
Two companies, two takes on the situation. What can we learn? As we’ve heard from others, Q1 was OK until March, when things started to go off the rails. Recurring revenue creates a cushion. Nemetschek’s revenue comes, to a large degree, from office workers who may be able to work remotely — a plus. RIB’s most connected to the construction site, which may have to shut to wait out a local COVID situation and supply chain shocks. They’re not directly comparable, but they are the second and third (after ESI, last week) signals that our little part of the tech world might just be OK.
Please check out the links I put up here and here to get involved in projects to build personal protective equipment, use data science to map the pandemic and find a vaccine, and more. Our skills are valuable even if our workplaces aren’t using them right now, and our compute resources can help, too. I’ll be adding to the master list (again, here) as we go. If you have a project you’d like me to include, let me know!
So many vendors are doing their part, too, to help — offering creative licensing to let people work from home, adding cloud credits, offering remote training and so on. Check your supplier’s website to learn more. I just saw over on LinkedIn that OpenBOM Is free for medical projects — learn more here. That’s awesome, Oleg – thank you.
I hope you’re safe, washing those hands and know that this, too, shall pass. It won’t be easy, but knowing we can help makes a huge difference.