RIB with strong revenue and profit development in Q3 2019

October 30, 2019 - Corporate News

Organic growth in Q3 2019 exceeds 20% for the first time / Operating EBITDA margin in the iMTWO segment at 26.0% (Q2 2019: 20.8%) / Cash and cash equivalents of € 132.6 million

  • Group revenues increase by 59.7% to € 151.6 million (previous year: € 94.9 million)
  • Recurring revenues (ARR) grow by 95.0% to € 77.6 million (previous year: € 39.8 million)
  • The EBITDA margin Q3 2019 in the iMTWO segment is at a high level of 26.0% (Q2 2019: 20.8%)
  • Number of MTWO/iTWO 4.0 platform users grows by 113.9% compared to Q2 2019 to 44,325 (target 2019: 30,000; target 2020: 100,000 cumulated) Target 2019 exceeded after 9 months
  • Group forecast (Guidance) for 2019 confirmed

Stuttgart, Germany, 30 October 2019. RIB Software SE, the world’s leading provider of iTWO 4.0 Cloud Enterprise Platform Technology, today announces its financial figures for the first nine months of 2019.

STRONG REVENUE AND PROFIT DEVELOPMENT IN THE THIRD QUARTER OF 2019
The RIB Group delivered a strong result in the third quarter for both revenues (plus 81.5%) and operating EBITDA (plus 23.9%). In the third quarter, recurring revenues (ARR) increased 112.4% to € 25.7 million (previous year: € 12.1 million). Non-recurring revenues (NRR) rose by 40.8% year-on-year to € 14.5 million (previous year: € 10.3 million). Adjusted for acquisitions, revenue growth of 24.6% was significantly higher than organic growth of 5.3% in the first half of 2019. At € 14.5 million, operating EBITDA in the third quarter was 23.9% higher than in the third quarter of the previous year (€ 11.7 million). This corresponds to an operating EBITDA margin of 24.6%.

DYNAMIC GROWTH IN 2019 CONTINUES TO INCREASE
The dynamic growth during the investment phase is further boosted and is also reflected in the cumulative Group figures. Group revenues for the first nine months rose strongly by 59.7% to € 151.6 million (previous year € 94.9 million). Organic Group sales growth amounted to 17.1% (H1 2019: 5.3%). Organic growth was influenced by the gradual shift of the business model from license sales to subscription – adjusted for this effect, organic growth in the Group would have been 19.8%. Recurring revenues (ARR) grew very strongly by 95.0% to € 77.6 million (previous year: € 39.8 million).

OPERATING EBITDA INCREASES BY 13.7 % TO € 34.8 MILLION
Operating EBITDA rose by 13.7% year-on-year to € 34.8 million (previous year: € 30.6 million). The operating EBITDA margin of 23.0% during the investment phase was in the expected range of 20-30%, despite acquisition and start-up costs of € 4.5 million. Operating EBITDA, adjusted for one-off acquisition and start-up costs, rose by 28.8% to € 39.3 million (previous year: € 30.6 million). This corresponds to a margin of 25.9%.

GROUP LIQUIDITY AND M&A CAPACITIES
RIB currently has investment funds of € 219.3 million (€ 132.6 million cash and cash equivalents plus 3.719 million treasury shares (value € 23.30 per share)). In 2019, we invested in Levtech/Dubai, Datengut/Leipzig, Cadline/London, BSD/Atlanta, CCS/Johannesburg, Redstack/Adelaide, Winjit/Nashik, Capricot/Bangalore, datapine/Berlin, U.S. CAD/Irvine, California, and CSS UK/London. The goal is to increase revenues in 13 quarters by an average of 30-60% – after 4 quarters (Q4 2018 to Q3 2019) we have reached the upper end with 59% ((57%+47%+49%+82%) divided by 4).

30,000 USER MTWO/iTWO 4.0 PLATFORM IN 2019 AND FURTHER TARGETS
In Q3 2019, we were able to increase the USER by 113.9% from 20,726 USER in Q3 2019 to 44,325 USER. We have thus already far exceeded the target for 2019 after 9 months and confirm our target of over 100,000 USER in 2020 and over 2 million USER in the medium term.

MICROSOFT PARTNERSHIP TO BUILD THE WORLD’S LEADING VERTICAL CLOUD MTWO FOR THE CONSTRUCTION INDUSTRY
The establishment of a leading vertical cloud platform MTWO for the construction industry together with Microsoft and for the marketing of the iTWO 4.0 technology is on track. We have completed 80% of the foundation for a global roll-out of iTWO 4.0 technology and MTWO in the world’s core IT markets. The successful establishment of distribution networks in the USA, Australia, the United Kingdom and India will enable MTWO and iTWO 4.0 technology to attract massive numbers of users in key markets from 2020 onwards.

xYTWO SEGMENT
The revenues of xYTWO are estimated to be less than 5% of Group revenue in 2019. xTWO achieved a positive EBITDA margin in the third quarter of 2019. Due to the strong demand for iTWO 4.0 and MTWO, we already decided in H1/2019 not to expand YTWO’s customer base and to focus on MTWO, iTWO 4.0 and the integration of new business units. As planned, xYTWO will deliver positive impulses in the medium term.

STRATEGY 2020-2030
The Administrative Board develops a strategy for the years 2020 – 2030 to ensure the long-term success of the company. The aim of the strategy is to establish RIB as the global market leader for digital transformation combined with cloud-based business software in the global construction industry.

TRADE WAR, RIB MARKETS AND COMPETITORS
Software revenues in China account for less than 1% of total revenues. Therefore, we do not see any significant negative impact from the trade war between the US and China. The market for cloud and BIM construction software is growing rapidly, and construction markets are booming. In the first nine months, RIB was able to increase its lead over our competitors in many areas, and we believe we can achieve our medium-term goal of becoming a leading platform provider in our industry.

GROUP FORECAST (GUIDANCE) FOR 2019 CONFIRMED
On the basis of the strong and high revenue and profit development in the 2019 financial year to date, we confirm the Group forecast for the 2019 financial year and, in line with the guidance, expect revenues of € 210 million to € 225 million and operating EBITDA of € 46 million to € 52 million.

FIGURES SEGMENT iMTWO

FIGURES SEGMENT xYTWO

CONSOLIDATED FIGURES – OVERVIEW

* Cash and cash equivalents, time deposits and available-for-sale securities. Previous year as of 31 December 2018
** Previous year as of 31 December 2018

The complete Quarterly Statement (January – September 2019) is available for download on the RIB Group website under investor relations.

About RIB

RIB Software SE is an innovator in construction business. The company creates, develops and offers cutting-edge digital technologies for construction enterprises and projects across various industries worldwide. Its flagship product iTWO 4.0 is the world’s first 5D BIM enterprise cloud solution for construction companies, industrial companies, developers and project owners, etc. Since its inception in 1961, RIB Software SE has been the pioneer in construction innovation, exploring and bringing in new thinking, new working method and new technology to enhance construction productivity, and transforming the construction industry into the most advanced and digitalized industry in the 21st century. RIB is headquartered in Stuttgart, Germany, and listed in Prime Standard Frankfurt Stock Exchange since 2011. With more than 900 talents located in over 30 offices worldwide, RIB is serving 100,000 clients including construction contractors, sub-contractors, developers, owners, investors and governments, in the field of building construction, infrastructure, EPC sector and more.

© 2019 RIB Software SE