January - September · and one-off/special effects (2015: € +331thousand; 2014: €...
Transcript of January - September · and one-off/special effects (2015: € +331thousand; 2014: €...
LETTER TO THE SHAREHOLDERS
Dear Shareholders, With an 81.7% growth in iTWO revenues in the first nine months of 2015 we are gradually coming closer every year to reach our objective of industrialising the global building and construction industry and delivering a globally leading iTWO end-to-end technology to build cities and infrastructure for the 21st century knowledge age.
To reach this target RIB needs to develop a global iTWO community of 1000 leading technology partners and enter-prise clients until 2020 or latest by 2025.
To reach this target we need a strong growth in “Large Deal” (> 500,000 USD ) signings every year.
In 2015 our plan is to announce 25 large deals (2014: 14) and in 2016 we are targeting again a growth of large deal signings/announcements by 50-100%.
Within our guidance we have planned to sign two phase III deals in Q4 with a combined revenue recognition of 10 Mio. Euro and we need to add 5 phase II signings to reach the 25 deal target.
There is always a potential risk, that a targeted deal signing is postponed to a future quarter, resulting in a direct negative impact on the revenue and EBITDA. For example, in a scenario where none of the two large deals phase III is signed and recognized until the end of December 2015 the revenue increase from 70 Million Euro (2014) to over 85 Million Euro as stated in our guidance above will not be reached.
However our growth momentum remains solid and we believe we will reach strong growth in 2016 with a continuing average EBITDA margin >30% in the software business in the future.
The BIM 5D technology gained a lot of momentum in 2015 and the enterprises are now step by step realizing the massive investment needs to perform the innovation transformation process within their organizations.
Since more and more governments, developers and investors are demanding the usage of 5D technology from their supply chain, the contractors and consultants are starting now to build up budgets for 5D related IT investments. By this means 5D technology will develop gradually from its early stages into an industry standard.
In 2016 we plan to focus more on success case development, university cooperation, content development and marketing as well as on the continued execution of our investment plan.
In 2016 RIB will introduce our new IT solution iTWO 4.0 to the global market. We are targeting to position iTWO 4.0 as the leading web-based end-to-end IT platform for the AEC and EPC Industry.
In 2016 iTWO will enter the Spanish speaking market and we will introduce iTWO SAA Technology, our leading pre-fabrication solution using iTWO 5D design data to steer an industrialized iTWO (pre-) production process. This Industry 4.0 “mass-customization” solution has the potential to significantly accelerate the industrialization process within the construction industry by directly connecting individual design and production.
Dear Shareholders,
I want to thank you for your trust, friendship and continuous support. I can ensure you that the whole RIB team will not rest before we have reached the 25 deal announcements in 2015 and have completed the foundation work for strong growth in 2016.
Yours sincerely,
Thomas Wolf
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LETTER TO THE SHAREHOLDERS | INTERIM REPORT JANUARY - SEPTEMBER 2015 | RIB SOFTWARE AG
RIB SOFTWARE AG | INTERIM REPORT JANUARY - SEPTEMBER 2015 | FINANCIAL DATA
17iTWO revenue grew by 81.7 %
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KEYFIGURES OF RIB GROUP (IFRS)
€ million unless otherwise indicated 3rd quarter 2015
3rd quarter 2014
Change 9 months 2015
9 months 2014
Change
Group revenue 17.9 15.1 18.5% 57.3 42.2 35.8%
iTWO revenue 7.2 5.5 30.9% 23.8 13.1 81.7%
thereof iTWO Key Account 0.9 1.7 -47.1% 3.7 3.0 23.3%
thereof iTWO Mass Market 2.1 1.5 40.0% 6.6 4.4 50.0%
thereof iTWO SaaS / Cloud 4.2 2.3 82.6% 13.5 5.7 136.8%
EBITDA as % of revenue
4.4 24.6%
12.4 82.1%
-64.5% 15.2 26.5%
21.6 51.2%
-29.6%
EBITDA (adjusted)* as % of revenue
3.6 20.1%
4.9 32.5%
-26.5% 14.4 25.1%
11.7 27.7%
23.1%
EBIT as % of revenue
2.3 12.8%
10.8 71.5%
-78.7% 9.0 15.7%
17.2 40.8%
-47.7%
EBIT (adjusted)* as % of revenue
1.4 7.8%
3.3 21.9%
-57.6% 8.2 14.3%
7.4 17.5%
10.8%
Profit after tax 1.5 8.4 -82.1% 6.2 13.5 -54.1%
Amortization from purchase price allocation (PPA)
0.8 0.5 60.0% 2.2 1.1 100.0%
Cash flow from operating activities 15.6 10.2 5.4
Cash flow from investing activities -17.5 -13.1 -4.4
Cash flow from financing activities 37.0 44.3 -7.3
Liquid funds and available-for-sale securities**
177.7 137.9 28.9%
Equity ratio** 87.0% 85.0%
Average number of employees 660 590 11.9%* 9M: EBITDA and EBIT adjusted by currency effects (2015: € +452 thousand; 2014: € +4,292 thousand) and one-off / special effects (2015: € +331 thousand; 2014: € +5,559 thousand) * Q3: EBITDA and EBIT adjusted by currency effects (2015: € +519 thousand; 2014: € +4,096 thousand) and one-off / special effects (2015: € +331 thousand; 2014: € +3,443 thousand) ** Presentation of previous as of December 31, 2014
17 Large-Deals during the first 9 months of the 2015 Financial Year
xTWO - Start of the first global B2B e-Commerce platform for construction industry
Group revenue grew by 35.8 % compared to the previous year
FINANCIAL DATA
THE RIB SHARE
Performance of the RIB shareThe RIB Software AG share performed positively in the first nine months of financial year 2015 with growth of more than 28%. At times the price clearly decoupled from the leading TecDAX index and reached a new all-time high of € 16.94 per share at the end of July. At the end of the third quarter, the share traded at € 14.06 per share (XETRA closing price as of 30 September 2015).
In light of a capital increase on 04 September 2015, RIB Software AG placed 3,378,696 new shares at a price of € 14.25. The number of shares thus amounted to 46,845,657 as of 30 September 2015. The proceeds from the transaction will be used to expand the iTWO platform and finance further international growth. The market capitali-sation as of 30 September 2015 therefore amounted to € 658.65 million (previous year: € 471.61 million). The RIB share continues to receive a clear buy recommendation from analysts Berenberg, Hauck & Aufhäuser and Equinet, whilst Warburg Research categorises the share as “Hold” with a target price of € 15. Experts and analysts categori-se the RIB share as having a target price of between € 15.00 and € 18.75.
RIB share price performance January 2015 - September 2015
€9,85
€10,94
€12,03
€13,13
€14,22
€15,32
€16,41
€17,50
90%
100%
110%
120%
130%
140%
150%
160%
January February March April May June July August SeptemberRIB So�ware AG TecDAX
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THE RIB SHARE | INTERIM REPORT JANUARY - SEPTEMBER 2015 | RIB SOFTWARE AG
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RIB SOFTWARE AG | INTERIM REPORT JANUARY - SEPTEMBER 2015 | INTERIM GROUP MANAGEMENT REPORT
INTERIM GROUP MANAGEMENT REPORT
REPORT ON RESULTS OF OPERATIONS, FINANCIAL POSITION AND NET ASSETS
Total revenue increases by 35.8% to € 57.3 million iTWO Software & Cloud’s revenues reach € 23.8 million (+81.7%) The RIB Group continued its positive business performance of the first half of 2015 in the third quarter and again realised high growth revenue growth rates. In the current financial year, 18 out of a total of 25 planned phase II / III deals have already been concluded to date. In the first nine months Group revenues went up 35.8% to € 57.3 million (previous year: € 42.2 million). iTWO Software and Cloud revenues saw an increase of 81.7% to € 23.8 million (previous year: € 13.1 million). Adjusted for acquisitions, overall sales grew by 14.4% to € 47.7 million during the first nine months (previous year: € 41.7 million). It was very pleasing to see that the demand for iTWO 5D increased by 50.0% to €6.6 million (previous year: €4.4 million) in the small and medium-sized companies segment (mass market). The share of Group revenues realised abroad increased to 49.0% (previous year: 38.2%) in the reporting period.
Accrued maintenance revenues increased by 8.6% from € 16.3 million to € 17.7 million. The recurring revenues (maintenance and SaaS) already account for 54.5% of total revenues (previous year: 52.1%). Low-margin consul-ting revenues grew by 38.4% to € 13.7 million (previous year: € 9.9 million).
Operating EBITDA* increased by 23.1% to € 14.4 million – operating EBITDA margin of 25.1%The operating profit before interest, tax, depreciation and amortisation on tangible and intangible assets (operating EBITDA*) increased by 23.1% to € 14.4 million (previous year: € 11.7 million) year-over-year. Despite the significant increase in the write-downs from the purchase price allocation (PPA) to a value of € 2.2 million (prior year: € 1.1 mil-lion), operating profit before tax (operating EBT*) went up 10.8% to € 8.2 million (previous year: € 7.4 million) in the first nine months. Earnings after taxes reached € 6.2 million in the first nine months (previous year: € 13.5 million). The results in the same period in the prior year included high foreign currency gains and income from one-off/speci-al effects. The calculated tax rate rose to 31.1% (previous year: 21.5%).
During the reporting period, R&D expenses increased by 22.7% to € 5.4 million (previous year: € 4.4 million) due to the strengthening of our development team in the area of cloud solutions and the acquisition of Byggeweb in the third quarter of 2014.
Distribution and marketing costs increased to € 12.3 million (previous year: € 9.6 million). The increase is primarily due to the acquisitions of the companies Byggeweb (Q3 2014) and xTWO (Q4 2014). Administrative expenses amounted to € 6.4 million (previous year: € 4.9 million). The average number of employees rose to 660 (previous year: 590 employees). This rise is primarily due to the increase in development capacities for web-based solutions and the integration of Byggeweb, xTWO and Soft SA.
*) EBITDA and EBT adjusted for currency effects (2015: € +452 thousand; 2014: € +4,292 thousand) and one-off/special effects (2015: € +331 thous-and; 2014: € +5,559 thousand).
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INTERIM GROUP MANAGEMENT REPORT | INTERIM REPORT JANUARY - SEPTEMBER 2015 | RIB SOFTWARE AG
Operating cash flow reaches € 15.6 million (+52.9%)Net cash flow from operating activities amounted to € 15.6 million after nine months thus improving by 52.9% year-over-year (prior year: € 10.2 million). In the reporting period, net cash flow from investing activities decreased by € 4.4 million to € -17.5 million (prior year: € -13.1 million). This is primarily due to payments made for the acquisi-tion of consolidated companies less cash acquired. The payment for the acquisition of consolidated companies was above the previous year’s figures at € -9.7 million (€ -6.6 million). Net cash flow from financing activities of € 37.0 million (previous year: € 44.3 million) mostly includes payments due to the capital increase in the amount of € 48.1 million (previous year: €48.4 million), the dividend payment in the amount of € -6.8 million (previous year: € -2.2 million) and payments made for the repayment of other financial liabilities of € -2.7 million relating to the acquisition of Byggeweb in Denmark.
Liquid funds including available-for-sale securities amounted to € 177.7 million as of 30 September 2015 (31 December 2014: € 137.9 million).
Shareholder’s equity totalled € 279.2 million as of 30 September 2015 (31 December 2014: € 226.4 million) and the equity ratio increased by two percentage points to 87.0% (31 December 2014: 85.0%).
Trade payables amounted to € 2.1 million as of the reporting date (31 December 2014: € 1.5 million). Trade recei-vables decreased to € 12.4 million (31 December 2014: € 13.8 million).
OPPORTUNITY AND RISK REPORTWith respect to the significant opportunities and risks posed by the expected development of the RIB Group, please refer to the opportunities and risks described in the Group Management Report of 31 December 2014.
FORECAST REPORTOur target is to increase the number of Phase II/III contracts again by approximately 80% from 14 to 25 in 2015. Therefore, we forecast revenues of between € 85.0 million and € 95.0 million and an EBITDA of between € 29.0 and € 36.0 million for the RIB Group, provided we sign two Phase III contracts each with a recognized contract volume of approximately € 5.0 million with effect on revenues and earnings.
In accordance to our guidance we are targeting to sign two phase III deals in Q4 with a combined revenue recogniti-on of € 10 million and five Phase II contracts in order to reach the 25 deals in 2015.
There is always a potential risk that a targeted deal signing is postponed to a future quarter, resulting in a direct ne-gative impact on the revenue and EBITDA. For example, in a scenario where none of the two large deals phase III is signed and recognized with effect on revenues and earnings until the end of December 2015 the revenue increase from € 70 Million (2014) to over €85 Million as stated in our guidance above will not be reached.
Based on the statements above we hereby re-affirm our forecast from the beginning of the year for an annual turno-ver of € 85 million to € 95 million and an EBITDA of € 29 million to € 36 million.
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RIB SOFTWARE AG | INTERIM REPORT JANUARY - SEPTEMBER 2015 | CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Consolidated income statementFor the period: 01.01.2015 to 30.09.2015
€ thousand, unless otherwise indicated
Note3rd quarter
20153rd quarter
20149 months
20159 months
2014Revenue (5) 17,891 15,076 57,252 42,198Cost of sales -8,801 -5,470 -25,382 -16,320
Gross profit 9,090 9,606 31,870 25,878Other operating income (6) 999 7,965 1,774 10,671
Marketing and distribution costs -4,210 -3,293 -12,275 -9,633
General administrative expenses -1,916 -1,855 -6,424 -4,858
Research and development expenses -1,656 -1,456 -5,428 -4,436
Other operating expenses (7) -27 -122 -511 -382
Financial income 55 82 153 246
Finance costs -34 -107 -173 -269
Share of profit and losses of associates -2 0 -2 0
Profit before tax 2,299 10,820 8,984 17,217Income taxes -810 -2,405 -2,736 -3,740
Profit after tax 1,489 8,415 6,248 13,477Profit attributable to non-controlling interests 0 0 0 0
Profit attributable to owners of the parent company 1,489 8,415 6,248 13,477
Result per share on the basis of the share earnings of the shareholders of RIB Software AG:
basic and diluted (9) 0.03 € 0.22 € 0.15 € 0.35 €
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
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CONSOLIDATED INTERIM FINANCIAL STATEMENTS | INTERIM REPORT JANUARY - SEPTEMBER 2015 | RIB SOFTWARE AG
Consolidated statement of comprehensive incomeFor the period: 01.01.2015 to 30.09.2015
€ thousand 3rd quarter
20153rd quarter
20149 months
20159 months
2014Profit after tax 1,489 8,415 6,248 13,477Components reclassified with no effect on profit and loss:Revaluations -78 5 -231 15
Other consolidated comprehensive income after taxes for components reclassified with no effect on profit and loss -78 5 -231 15Components reclassified in subsequent periods with an effect on profit and loss:Exchange differences -1,499 3,671 3,554 4,340
Changes in value of available-for-sale securities 0 -5 -5 10
Other consolidated comprehensive income after taxes for components reclassified with an effect on profit and loss -1,499 3,666 3,549 4,350Other consolidated comprehensive income after taxes -1,577 3,671 3,318 4,365Total consolidated comprehensive income -88 12,086 9,566 17,842of which attributable to non-controlling interests 0 0 0 0
of which attributable to owners of the parent company -88 12,086 9,566 17,842
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RIB SOFTWARE AG | INTERIM REPORT JANUARY - SEPTEMBER 2015 | CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Consolidated statement of financial position as of 30.09.2015 and 31.12.2014€ thousand
Note 30.09.2015 31.12.2014Goodwill (10) 62,981 52,951
Other intangible assets 48,427 44,575
Property, plant and equipment 7,277 6,836
Investment properties 5,954 5,732
Investments accounted for using the equity method 10 0
Prepaid land use lease payments 1,059 1,015
Other assets 111 63
Deferred tax assets 457 199
Total non-current assets 126,276 111,371Inventories 819 109
Trade receivables 12,378 13,826
Available-for-sale securities (11) 2,424 273
Other assets 3,970 2,992
Cash and cash equivalents 175,265 137,621
Total current assets 194,856 154,821Total assets 321,132 266,192
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CONSOLIDATED INTERIM FINANCIAL STATEMENTS | INTERIM REPORT JANUARY - SEPTEMBER 2015 | RIB SOFTWARE AG
€ thousand Note 30.09.2015 31.12.2014
Subscribed capital (12) 46,846 43,467
Treasury shares -4,828 -5,543
Capital reserves (12) 181,314 135,157
Legal reserves 60 60
Accumulated other consolidated comprehensive income 5,660 2,342
Retained earnings 50,457 50,963
Equity attributable to owners of the parent 279,509 226,446Non-controlling interests (13) 6 0
Total equity 279,515 226,446Pension provisions 3,868 3,579
Other finance liabilities 2,568 2,286
Deferred tax liabilities 12,620 11,604
Total non-current liabilities 19,056 17,469Trade payables 2,117 1,529
Provisions for income taxes 4,970 5,398
Other provisions 1,102 1,056
Accruals 3,521 3,511
Deferred revenue 9,260 4,959
Other financial liabilities 62 2,669
Other liabilities 1,529 3,155
Total current liabilities 22,561 22,277Total liabilities 41,617 39,746Total equity and liabilities 321,132 266,192
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RIB SOFTWARE AG | INTERIM REPORT JANUARY - SEPTEMBER 2015 | CONSOLIDATED INTERIM FINANCIAL STATEMENTS
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CONSOLIDATED INTERIM FINANCIAL STATEMENTS | INTERIM REPORT JANUARY - SEPTEMBER 2015 | RIB SOFTWARE AG
Consolidated statement of cash flowsFor the period: 01.01.2015 to 30.09.2015
€ thousand
9 months 2015
9 months 2014
Cash flows from operating activities:Profit before tax 8,984 17,217Adjustments for:
Depreciation of property, plant and equipment 505 451
Amortisation of intangible assets 5,542 3,810
Depreciation of investment property 114 103
Changes in valuation allowances for trade receivables 35 27
Other non-cash items 17 -9,614
Interest expense and other finance cost 173 269
Financial income -153 -246
15,217 12,017Working capital adjustments:
Increase/decrease(-) in provisions and deferred liabilities 345 386
Increase(-)/decrease in receivables and other assets 106 -2,574
Increase/decrease(-) in liabilities from trade payables and other liabilities 2,804 3,570
Cash generated from operations 18,472 13,399Interest paid 0 -67
Interest received 56 123
Income taxes paid -2,888 -3,238
Net cash flows from operating activities 15,640 10,217Proceeds from the disposal of non-current assets 20 16
Purchase of property, plant and equipment -572 -634
Purchase/production of intangible assets -7,201 -5,978
Purchase of consolidated companies net of cash acquired -9,760 -6,615
Purchase(-)/sale of available-for-sale securities 2 71
Net cash flows from investing activities -17,511 -13,140Payments received from capital increase 48,147 48,394
Payments made for capital increase expenses -1,565 -1,718
Dividends paid -6,754 -2,238
Payments to non-controlling interests -60 0
Payments made for the acquisition of non-controlling interests 0 -90
Payments made for redeeming other financial liabilities -2,748 -2
Payments made for finance leases 0 -1
Net cash flows used in financing activities 37,020 44,345Change in cash and cash equivalents impacting cash flow 35,149 41,422Cash and cash equivalents at the beginning of the period 137,621 78,378
Currency-related change in cash and cash equivalents 2,495 5,882
Cash and cash equivalents at the end of the period 175,265 125,682Composition of cash and cash equivalents:Liquid funds, unrestricted 172,700 123,933
Liquid funds, restricted 2,565 1,749
Total 175,265 125,682
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RIB SOFTWARE AG | INTERIM REPORT JANUARY - SEPTEMBER 2015 | CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. Corporate informationThis condensed consolidated interim financial statement of RIB Software AG (the “Company”) and its subsidiaries (collectively the “Group”) was drawn up according to the regulations of the International Financial Reporting Stan-dards (IFRS). It complies in particular with the IAS 34 regulations “Interim reporting”.
The condensed consolidated interim financial statement has not been subjected to auditing inspection or a general audit.
Our business activity is in some respects subject to seasonal fluctuations.
In the past the revenue in the fourth quarter tended to be higher than in the individual preceding quarters. The inte-rim results can therefore only be regarded as an indicator for the results of the entire financial year.
This condensed and unaudited consolidated interim financial statement should be read with the audited IFRS con-solidated financial statements of RIB Software AG as of 31 December 2014.
Due to the representation of the numbers in € thousands, rounding differences may arise in individual items.
2. Accounting policiesIn drawing up the consolidated interim financial report the same accounting policies and calculation methods were used as in the consolidated financial statements as of 31 December 2014.
3. Consolidated groupCompared to the consolidated financial statements as of 31 December 2014, the scope of consolidation as of 30 September 2015 also includes Soft SA, Madrid / Spain (hereinafter: Soft SA). Soft SA was fully consolidated in the interim financial statements as of 30 September 2015 for the first time. Please see our disclosures in the following section (4).
The name of RIB Sales International GmbH, Stuttgart was changed to iTWO Baufabrik 4.0 F&E GmbH, Stuttgart in the reporting period. Under the agreement dated 02 July 2015, RIB Software AG sold 75.1% of its shares to iTWO Baufabrik 4.0 F&E GmbH at a purchase price of € 37 thousand. The company was therefore deconsolidated in July 2015. The deconsolidation resulted in earnings of € 6 thousand. The participation in the now associated company is accounted for according to the equity method.
RIB iTWO Software Inc., Philippines was newly established as of 01 July 2015 and is fully consolidated in the inte-rim financial statements as of 30 September 2015 for the first time.
xTWOmarket GmbH, Hungen (hereinafter: xTWOmarket) was newly established as of 24 September 2015 and is fully consolidated in the interim financial statements as of 30 September 2015 for the first time. RIB Software AG holds 75% of the shares, the remaining 25% are attributable to non-controlling interests.
STRAPS Bausoftware GmbH, Stuttgart merged with RIB Deutschland GmbH, Stuttgart on 31 July 2015 and was deleted from the relevant company register.
4. Mergers
Acquisition of Soft SAUnder the agreement dated 03 July 2015, the Group acquired a 100% shareholding in Soft SA. As the acquisition detailed below is close to the closing date of these interim financial statements, the fair values attributable to the identifiable assets and liabilities were only determined as preliminary figures. The acquisition date was 29 July 2015. For the sake of simplicity, the purchase price allocation was based on the value as of 31 July 2015. The transactions
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CONSOLIDATED INTERIM FINANCIAL STATEMENTS | INTERIM REPORT JANUARY - SEPTEMBER 2015 | RIB SOFTWARE AG
between 29 July and 31 July 2015 were of minor importance. Furthermore, no material changes in value occurred during this period.
The total cost of acquisition was € 13,320 thousand. This amount includes a fixed purchase price of € 10,000 thousand, which was paid on 29 July 2015. In addition, 164,286 shares in RIB Software AG are to be transferred as consideration for the shares acquired in Soft SA. Of these, 57,143 shares were transferred on 29 July 2015. The remaining 107,143 shares were retained to secure the seller’s warranties and will only be transferred after two years and one month. The shares are measured at the share price on closing in the amount of € 16.46 and thus have a fair value of approx. € 2,700 thousand. In addition after two years and two weeks of closing, a conditional payment (earn-out payment) in the amount of € 1,000 thousand is due that is payable on condition that certain employment relationships are continued for a period of 24 months after the acquisition date as well as reaching a set minimum price for the RIB share within one year after the date of acquisition. The probability of the fulfilment of the condition was estimated by means of a Monte Carlo simulation. The liability is recognised at the cash value of the probabili-ty-weighted payment obligation. For the discount interest rate, an interest rate appropriate to the term of 1.06% p.a. was used. The fair value of the conditional consideration determined in this way amounted to € 620 thousand on the date of acquisition.
The fair value of the identifiable assets and liabilities of Soft SA as of the acquisition date and the corresponding book values immediately before the acquisition date were provisionally as follows:
€ thousand Carrying amount Fair Value
31.07.2015 31.07.2015Intangible assets 594 2,007
Property, plant and equipment 50 50
Other assets 50 50
Trade receivables 405 405
Available-for-sale securities 2,150 2,150
Cash and cash equivalents 240 240
3,489 4,902Deferred revenue 130 130
Other debts and other liabilities 333 333
Deferred tax liabilities 0 424
463 887Net assets 3,026 4,015Goodwill from the company acquisition 9,305
Total acquisition costs 13,320
Soft SA offers a leading cost estimating software in Spain and Spanish-speaking countries and is widely present on the Spanish-speaking market with more than 60,000 end users and a network of 15,000 top customers.
The existing software, Presto, will be integrated into the iTWO 5D Big Data platform. Soft SA will provide iTWO Presto technologies on the market and establish iTWO 5D in the Spanish-speaking regions.
The goodwill particularly reflects expected synergy effects from the company acquisition, and the know-how of the acquired team.
The goodwill as a whole is not deductible for tax purposes.
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RIB SOFTWARE AG | INTERIM REPORT JANUARY - SEPTEMBER 2015 | CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Of the intangible assets totalling € 2,007 thousand, software accounted for € 808 thousand and € 1,198 thousand accounted for customer agreements and associated customer relationships.
As a result of the acquisition of Soft SA, revenues increased by € 173 thousand in the reporting period, and consoli-dated earnings went down by € 97 thousand.
If Soft SA had already been acquired as of 01 January 2015, the revenues in the reporting period would have been € 1,930 thousand higher, and the consolidated earnings would have been € 538 thousand higher.
5. RevenueRevenue breaks down as follows:
€ thousand
9 months 2015
9 months 2014
Software licences 12,392 10,271
Software as a service / cloud 13,512 5,711
Total software licences and software as a service / cloud 25,904 15,982Maintenance 17,688 16,305
Consulting 13,660 9,911
Total revenue 57,252 42,198
The total software licence revenue is subdivided as follows:
€ thousand
9 months 2015
9 months 2014
iTWO Key Account 3,694 3,001
iTWO Mass Market 6,620 4,365
SaaS / Cloud 13,512 5,711
Legacy Products 2,078 2,905
Total software licences and software as a service / cloud 25,904 15,982
6. Other operating incomeOther operating income include primarily foreign exchange effects arising from cash and cash equivalents and exch-ange gain arising from available-for-sale securities and income from the adjustment of purchase price liabilities.
7. Other operating expensesOther operating expenses include foreign exchange expenses arising from cash and cash equivalents, foreign cur-rency differences due to intercompany consolidation and other expenses not attributable to the functional positions.
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CONSOLIDATED INTERIM FINANCIAL STATEMENTS | INTERIM REPORT JANUARY - SEPTEMBER 2015 | RIB SOFTWARE AG
8. Expenses for employee benefits and number of employees
Expenses for employee benefits
€ thousand
9 months 2015
9 months 2014
Wages and salaries 25,183 19,834
Social security and pension costs 4,054 3,641
Total 29,237 23,475
Average number of employees
9 months 2015
9 months 2014
General administration 93 77
Research & development 264 243
Sales & marketing 122 98
Support & consulting 181 172
Total 660 590
9. Earnings per share – basic and dilutedEarnings per share are calculated on the basis of the profit share of the shareholders in RIB Software AG as shown in the following table:
€ thousand
9 months 2015
9 months 2014
Profit share of the shareholders of RIB Software AG – basic and diluted 6,248 13,477
Shares in thousand
9 months 2015
9 months 2014
Weighted average of shares in circulation - basic 42,595 38,841
Dilution effect 437 238
Weighted average of shares in circulation - diluted 43,032 39,079
The average commercial value of the Company’s shares used to calculate the dilution effect of existing share op-tions is based on the quoted market prices for the period in which the options were in circulation.
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RIB SOFTWARE AG | INTERIM REPORT JANUARY - SEPTEMBER 2015 | CONSOLIDATED INTERIM FINANCIAL STATEMENTS
10. Goodwill€ thousand
30.09.2015 31.12.2014License / Software Segment 40,262 31,424
SaaS / Cloud Segment 13,222 13,299
Professional Services Segment 5,243 4,160
GZ TWO development unit 3,360 3,174
ARRIBA Finance 894 894
Total 62,981 52,951
The change in carrying amounts by € 10,030 thousand was attributable to the addition of € 9,305 thousand from the initial consolidation of Soft SA and € 725 thousand from currency translation effects of goodwill held in local curren-cy, which were recognised outside profit or loss.
11. Available-for-sale securitiesAvailable-for-sale securities comprise corporate bonds of foreign companies in US dollars and a euro money market fund invested in short-term time deposits of EU-based banks. The fair values of the securities are based on quoted prices on an active market.
12. Capital increaseWith the consent of the company’s Supervisory Board, RIB Software AG’s Executive Board on 03 September 2015 decided on a share capital increase from authorised capital of 7.77%. The company‘s share capital was increased by € 3,379 thousand, from € 43,467 thousand to € 46,846 thousand, under exclusion of existing shareholders’ sub-scription rights. On 03 and 04 September 2015, the 3,378,696 new shares were placed as a private placement with institutional investors in Germany and other European countries – pursuant to Regulation S of the U.S. Securities Act of 1933 in the currently valid version („Securities Act“) – as well as in the United States of America with Quali-fied Institutional Buyers within the meaning of Rule 144A of the Securities Act in the context of an accelerated book building process.
All the shares from the capital increase were placed at a price of € 14.25 per new share.
As a result of the capital increase, the subscribed capital of RIB Software AG increased by € 3.379 thousand in the reporting period. The premium from the capital increase was transferred to the capital reserve after deduction of transaction costs (€ 1,565 thousand) as well as taking into account the tax benefits arising in this connection (€ 478 thousand). The capital reserve therefore increased by € 43,681 thousand in the reporting period.
The company plans to use the net proceeds from the placement amounting to approx. € 46.5 million to expand the iTWO platform and finance further international growth.
13. Non-controlling interestsThe non-controlling interest relates to 25% of the shares in the new establishment of xTWOmarket. Please also see our disclosures in section (3) in this regard.
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CONSOLIDATED INTERIM FINANCIAL STATEMENTS | INTERIM REPORT JANUARY - SEPTEMBER 2015 | RIB SOFTWARE AG
14. Segment informationPlease refer to section (8) of our consolidated financial statements for the 2014 financial year for information on the basis of our segment reporting and notes on the segments.
The tables below show the segment revenue, segment results and reconciliations with the revenue shown in the consolidated income statement and comprehensive income.
€ thousand
9 months 2015License / Software SaaS / Cloud Prof. Services Total
Total revenue, external sales 30,080 13,512 13,660 57,252Cost of sales -8,171 -4,981 -12,230 -25,382
Research and development expenses -3,979 -1,449 0 -5,428
Segment profit (EBIT) 17,930 7,082 1,430 26,442
Interest income and expense -20
Other unallocated income and expenses -17,438
Profit before tax (EBT) 8,984
Income tax expense -2,736
Profit after tax 6,248
€ thousand
9 months 2014License / Software SaaS / Cloud Prof. Services Total
Total revenue, external sales 26,575 5,711 9,912 42,198Cost of sales -7,147 -571 -8,602 -16,320
Research and development expenses -3,185 -1,251 0 -4,436
Segment profit (EBIT) 16,243 3,889 1,310 21,442
Interest income and expense -23
Other unallocated income and expenses -4,202
Profit before tax (EBT) 17,217
Income tax expense -3,740
Profit after tax 13,477
The other non-allocated income and expenses include other operating income, general management expenses, sales and marketing costs, other operating expenses and share of profit and losses of associates.
Geographic information
Revenue by geographic area (based on the location of customers) breaks down as follows:
€ thousand
9 months 2015
9 months 2014
EMEA (Germany, Europe, Middle East and Africa) 42,443 30,060
APAC (Asia Pacific) 3,636 3,401
North America 11,173 8,737
Total revenue 57,252 42,198
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RIB SOFTWARE AG | INTERIM REPORT JANUARY - SEPTEMBER 2015 | CONSOLIDATED INTERIM FINANCIAL STATEMENTS
15. Disclosures on assets and liabilities measured at fair value on first recognitionThe Group uses the following hierarchy for determining and disclosing the fair value of financial instruments:
▪ Level 1: fair values measured based on quoted prices (unadjusted) in active markets for identical assets or liabilities
▪ Level 2: fair values measured based on valuation techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly
▪ Level 3: fair values measured based on valuation techniques for which any inputs which have a significant effect on the recorded fair value are not observable, either directly or indirectly
Financial assets measured at fair value as of 30 September 2015:
€ thousand
Level 1 Level 2 Level 3 Total
Available-for-sale financial assets:Corporate bonds 34 - - 34
Euro money market fund 2,390 - - 2,390
Financial assets measured at fair value as of 31 December 2014:
€ thousand
Level 1 Level 2 Level 3 Total
Available-for-sale financial assets:Corporate bonds 273 - - 273
Euro money market fund - - - 0
Financial liabilities measured at fair value as of 30 September 2015:
€ thousand
Level 1 Level 2 Level 3 Total
Financial liabilities:Derivatives - 756 1,694 2,450
Financial liabilities measured at fair value as of 31 December 2014:
€ thousand
Level 1 Level 2 Level 3 Total
Financial liabilities:Derivatives - 564 1,681 2,245
The financial liabilities measured at fair value are derivative financial liabilities from company acquisitions.
The derivatives allocated to level 2 are liabilities whose amount depends on the future price performance of RIB Software AG’s share. A partial amount of € 467 thousand attributable to liabilities from the acquisition of the subsidi-ary RIB US Cost. If the share exceeds an agreed minimum rate in the period up until April 2017, the liability shall be increased up to an agreed maximum amount. If the performance targets are not met, a fixed minimum amount must be paid. We assume that the performance targets will be met and have therefore recognised the liabilities at the pre-sent value of the agreed maximum amount.
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CONSOLIDATED INTERIM FINANCIAL STATEMENTS | INTERIM REPORT JANUARY - SEPTEMBER 2015 | RIB SOFTWARE AG
The remaining amount of € 289 thousand is attributable to liabilities in connection with the company acquisition of Soft SA carried out in the reporting period. Please also refer to our disclosures in section (4) in this regard. Other operating income of € 331 thousand results from the subsequent measurement as of 30 September 2015.
The derivatives allocated to level 3 are liabilities from option agreements related to the acquisition of RIB Cosinus GmbH, Freiburg (hereinafter referred to as RIB Cosinus) and xTWO GmbH, Frankfurt am Main (hereinafter referred to as xTWO).
Under the agreement dated 24 November 2014, RIB Software AG acquired 75% of the shares in xTWO. Alongsi-de this, a put option agreement was concluded concerning the transfer of the remaining shares (25%), leading to recognition of a derivative financial liability. If the purchase option is exercised, RIB Software AG is obligated to pay a fixed purchase price of € 500 thousand. The financial liability from the acquisition of xTWO was determined by discounting this strike price as of the acquisition date using an interest rate of 1.25%, which is appropriate for the respective period and risk. The fair value of the financial liability from the put option as of the acquisition date is thus € 474 thousand.
As the exercise of the put option requires continued employment of the owner of the option, a part of this contingent consideration is attributable to a transaction in the form of a consideration arrangement, which is to be considered separate from the company acquisition. Based on the purchase price for 75% of the shares, we have derived an amount of € 158 thousand for the proportion attributable to the financial obligation from the company acquisition, and an amount of € 316 thousand for the proportion attributable to the separate transaction, which is accumulated over a period of 26 months at the expense of personnel expenses through profit or loss. This results in a personnel expense of € 109 thousand in the reporting period. Further, the accrued interest from the financial liabilities results in an interest expense of € 2 thousand.
The financial liability from the acquisition of RIB Cosinus results from mutually agreed buy and sell options for the transfer of the outstanding stake of 20% to this company. The options may be exercised for a period of six months starting from 1 August 2016 under certain circumstances, or else from 1 August 2018. The option price is based on the value of RIB Cosinus as a going concern at the time the option is exercised. However, the option price is limited by a contractually agreed minimum price (€ 1,100 thousand) as well as a maximum price (€ 1,900 thousand). As re-gards the subsequent valuation of the financial liability from the acquisition of RIB Cosinus, the expected enterprise value that will arise in the event of application of the valuation method agreed in the purchase agreement at the time of the option was determined in the 2014 financial year on the basis of updated budget figures. Alternative future scenarios were taken into account.
There were no significant changes compared to 31 December 2014 with respect to the valuation parameters. For further detail, please see Section 38 of our consolidated financial statements of the financial year 2014.
The subsequent valuation of the financial liability was undertaken by discounting this purchase price on the balance sheet date using a risk-compliant interest rate corresponding to the respective term of 1.02% or 1.25%.
From the interest accrued on purchase price liabilities results an interest expense of € 14 thousand.
No reallocations between Levels 1 and 2 and reallocations to or from Level 3 were undertaken during the reporting period.
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RIB SOFTWARE AG | INTERIM REPORT JANUARY - SEPTEMBER 2015 | CONSOLIDATED INTERIM FINANCIAL STATEMENTS
The financial liabilities valued at fair value developed as follows in the reporting period:
€ thousand
2015As of 1 January 2,245Changes without effect on profitsAcquisition of company shares 620
Repayments -79
Change arising from currency translation 37
Other disposals -111
467Changes with effect on profitsIncome from the subsequent valuation of purchase price liabilities (other operating income) -331
Expenses from the subsequent valuation of purchase price liabilities (other operating expenses) 50
Expenses from the interest accrued on purchase price liabilities (finance expenses) 19
-262As of 30 September 2,450
Material valuation parameters were subjected to a sensitivity analysis for measuring the purchase price liabilities. The calculations carried out for this purpose by the Group were undertaken separately for the valuation parameters classified as material. An increase or decrease in the material assumptions would have had the following effects on the carrying amounts of the purchase price liabilities on level 3 of € 1,694 thousand:
€ thousand
Valuation parameterSensitivity
Carrying amount
Discounting interest rate used for the discounting period + 1 %-point 1,654
Discounting interest rate used for the discounting period - 1 %-point 1,736
Growth rate in the budgeted revenues in the budget period + 10,0 % 1,720
Growth rate in the budgeted revenues in the budget period - 10,0 % 1,639
16. Events after the balance sheet dateUnder the agreement dated 02 October 2015, the Group acquired 75% of the shares in SAA Software Engineering GmbH, Vienna, Austria (hereinafter: SAA). The consideration includes a fixed purchase price of € 4,250 thousand, payable immediately after closing as well as a conditional purchase price in the amount of maximum of € 1,000 thousand (earn-out component), dependent on the performance of SAA in the 2015 and 2016 financial years. The consideration will therefore amount to a maximum total of € 5,250 thousand once the earn-out conditions are fully met. Of the fixed purchase price, € 3,750 thousand are directly payable to the sellers and € 500 thousand initial-ly to an escrow account. The amount paid to the escrow account will be paid out to the sellers depending on the guarantees agreed to in the purchase agreement. With respect to the sellers’ remaining shares of 25%, reciprocal buy and sell options were agreed that can be exercised with the sellers entitled to the option in financial year 2021 on continuation of employment. The purchase price for the shares relating to the option may be paid in cash and/or in treasury shares of RIB Software AG. The amount of the exercise price is based on the results of SAA in financi-al years 2020 and 2021 with the lower threshold of the exercise prices being capped at a total amount of € 1,750 thousand and the upper threshold capped at a total of € 4,000 thousand.
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CONSOLIDATED INTERIM FINANCIAL STATEMENTS | INTERIM REPORT JANUARY - SEPTEMBER 2015 | RIB SOFTWARE AG
As a European market leader in the automation of precast concrete parts, SAA offers intelligent machine controller solutions based on the latest technologies for a smooth production flow throughout the entire production process. SAA has customers in Europe, North and South America, Russia, Asia, the Middle East as well as in Australia and Africa.
With the integration of SAA‘s technologies in the iTWO 5D Big Data platform, all the production and logistics proces-ses will, in future, be simulated and optimised as early as the planning phase and the production of intelligent parts will be controlled directly from 5D models through production specifications.
As the aforementioned acquisition is so close to the date of preparation of the interim financial statements, the initial accounting for the company merger had not yet been completed when the publication was approved. The additional disclosures required in accordance with IFRS 3.64b regarding the company acquisition, in particular the attributable fair values for the acquired assets and the assumed liabilities, the attributable fair value of all considerations as well as the revenue and profit contributions that would have had to be recorded as of 01 January 2015 on the inclusion of SAA in the reporting period could therefore not be made.
Stuttgart, 30 October 2015
RIB Software AG
Stuttgart
The Executive Board
Thomas Wolf Michael Sauer Dr Hans-Peter Sanio Helmut Schmid
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RIB SOFTWARE AG | INTERIM REPORT JANUARY - SEPTEMBER 2015 | FURTHER INFORMATION
FURTHER INFORMATION
Contact
RIB Software AGVaihinger Straße 151 70567 Stuttgart Germany
Investor RelationsPhone: +49 (0) 711 7873-191 Fax: +49 (0) 711 7873-311 E-Mail: [email protected] Internet: group.rib-software.com
Imprint
Published by:RIB Software AG Vaihinger Straße 151 70567 Stuttgart Germany
Responsible for content:RIB Software AG, Stuttgart
Photos:Title: Shutterstock
October 2015
Trademarks:RIB, RIB iTWO, ARRIBA, the RIB logo and the iTWO logo are registered Trademarks of RIB Software AG in Germa-ny und optionally in other countries. All other trademarks and product names is property of the respective owners. After deadline changes may have occurred. RIB does not guarantee its accuracy.
Translation of the original German version:“The English version of the Interim Report is a translation of the original German version; in the event of variances, the German version shall take precedence over the English translation.”
RIB Software AG
Investor Relations Vaihinger Straße 151 70567 Stuttgart Germany
Phone: +49 711 7873-191 Fax: +49 711 7873-311
E-Mail: [email protected] Internet: group.rib-software.com