Nemetschek Se Unsp/Adr

Ladies and gentlemen, welcome to the NEMSCHEK Earnings Call Half-Year Financial Report 2026. My name is Yousef, the course call operator. I would like to remind you that all participants will be in listen-only mode in that this conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star followed by one on your telephone. For operator assistance, you may press star followed by zero. The conference must not be recorded for publication or for broadcast. At this time, it's my pleasure to hand over to Stefanie Zimmermann. Please go ahead.

Thank you, Operator, and hello, everyone, and a warm welcome. Thank you for joining our earnings call today to discuss the results for the second quarter and the first half of 2026 with us. With me today are our CEO, Yves Padrine, and our CFO, Louis Superström. Today's conference call is being recorded A replay of the call will be available at our website after the call. Additionally, you will find the quarterly report, the presentation and the press release on our investor relations website as well. But now let's get started. So I would like to turn over to our CEO, Yves.

Thank you, Stefanie. Welcome everyone to our H1 2026 earnings call. You have probably all seen our pre-release on Tuesday with our fully confirmed organic guidance as well as our expected outlook following the completion of the HCSS acquisition. As usual, we have prepared a short but informative presentation containing the most important information with regards to our second quarter, as well as first half year results that our CFO, Louise Ofverstrom, and I will briefly walk you through so that we have enough time to address any questions you may have in the end. To begin with, on page number three, please find some highlights of the most important aspects of the second quarter as well as the first half of 2026. Firstly, I will summarize our second quarter 2026 as very successful, with a continuation of the remarkable momentum we have seen at the beginning of the year. This development was again first and foremost driven by an excellent performance in our build segment, which continued its outstanding growth trajectory also in the second quarter. At the same time, the design segment continued to show a strong growth despite the exceptionally high comparison base in Q2. The reported EBITDA margin in Q2 was impacted by the slightly negative foreign currency translation effect, and in addition, an extraordinary transactional currency effect, as well as M&A related costs. If we adjust the reported EBITDA margin only for the acquisition-related one-off costs, the margin would have already been at 31%. With our H1 results, we are therefore where we wanted to be after the first six months of the year, driven by the strong increasing recurring revenue in the design and build segments, and despite the weaker-than-expected development in our media segment. The increase in the underlying profitability, so excluding FX and M&A effects, demonstrates our healthy operating leverage, the continued focus on our cost-based and continuous improvements and operational excellence. The foundation for this very strong operational performance is the continued progress we have made across all our key strategic focus areas. whether that is in AI with a successful rollout of multiple agentic AI-based products such as Bluebeam Max or Next Design Intelligence Platform and of course the ongoing subscription transition and the transformational acquisition of HCSS. These initiatives and investments are not only paying off already today, they are also making sure the Nemetschek Group is fully prepared for the future. Based on a very successful start of the year, as well as a continued progress on our strategic initiatives, we are therefore well on track to once again reach all our goals for the financial year and therefore fully reiterate our organic outlook for 2026. In addition, we also expand our outlook following the acquisition of HCSS, but more details on that later in our presentation. On page number four, You see an overview of the corresponding figures to the Q2 development that we just discussed. Overall, we continued our strong growth dynamic and delivered another very good quarter and a strong finish to the first half of the year 2026. Starting with the ARR or annual recurring revenue. As a result of one of our key strategic priorities, the transition to a subscription and SaaS centric business model. Our annual recurring revenue recorded an increase of plus 15.9%. If we adjust for the FX headwind we had in the second quarter, mainly steamed from the weaker US dollar, our ARR increased by plus 17.4%. The main driver behind this strong growth were once again the revenue from our subscription and SaaS offerings, which increased by plus 29.6% in constant currency. Thanks to this substantial growth in our recurring revenue base, we were able to strongly increase our revenues once again, despite a very high comparison base in our design and build segment and the weaker than expected performance in media in Q2. by plus 13% on a reported basis. On an ethics-adjusted basis, the growth even amounted to plus 14.5%. The main growth driver was once again the exceptional performance of our build segment, in particular Bluebeam, which continued to benefit from strong network effects, its successful international expansion, and the unprecedented investment in data centers. In addition, we also saw a good growth in the design segment which continued its successful subscription transition, including the sale of multi-year contracts to convert existing maintenance customers to subscription. The EBITDA increased by 11.5% plus 15.8% to €98.6 million in the second quarter, corresponding to a reported EBITDA margin of 30.1%. However, in addition to a slightly negative translation currency effect stemmed from the weaker US dollar, the EBDA was also impacted by an extraordinary transactional currency effect. This effect in the higher single digit million euro range resulted from the revaluation of assets and liabilities held in a non-functional currency of an individual group company as of the reporting date due to the due to the significant and unexpected exchange rate fluctuation during the quarter. Furthermore, the reported EBITDA margin already includes acquisition-related one-off costs of a low single-digit million euro amount. Adjusted for this one acquisition-related cost only, the EBITDA margin in Q2 amounted to 31%. Finally, net income for the quarter, also driven by a strongly improved financial results, grew over proportionally by 20.3% to 66 million euros, resulting in earnings per share of 57 cents. Before Louise will dive deeper into our Q2 financial results as well as the first half of the year, I would like to use this opportunity to also give you an update on our defined strategic focus areas and the various highlights in the first six months of the year on page number five. Starting on the left side, Artificial intelligence plays a pivotal role for us, not only in optimizing our own internal processes and productivity, but especially in advancing our product development to deliver even greater value to our customers and shareholders. Our goal is clear, to become the construction AI leader. We are deeply convinced that AI represents a tremendous opportunity and we are ideally positioned to capture it. Over decades, we have built deep knowledge, expertise, and strong integration into our customers' workflows, as well as long-standing, trusted customer relationships, strong network effects, and vast industry-specific data sets across the entire lifecycle, primarily for buildings, and now with the acquisition of HESS, also in the infrastructure and heavy civil sector. Over the past months, we have already introduced several truly value-adding AI features into our product portfolio. For example, we successfully rolled out our agentic AI suite, Bluebeam Max. Bluebeam Max supports users with time-consumed tasks such as quality control in the pre-construction phase, document analysis, quantity takeoff, and 2D to 3D conversion. thereby increasing productivity and efficiency throughout key construction processes. In addition, we launched our next generation design intelligence platform that uses AI and integrated simulation to help teams in the design and planning phase to make better decisions during the design process. As you all know, one of our absolute top priorities over the last few years was to strengthen both our resilience and long-term growth potential by increasing the share of recurring revenue through our transition to a subscription and SaaS-centric business model. I'm very pleased to say that this transition is progressing extremely well. We are seeing strong momentum across the group, especially in the design segment, where the pace of the shift continued to be high. As a result, we reached a new record share of recurring revenue for the group, a direct result of the dynamic growth in our subscription and SaaS business. Over the past six months, we have continued to enhance our go-to-market approach even further, especially by expanding our international presence and the successful internationalization of our brands. Our goal is twofold. First, to make our business more resilient by reducing our dependency on a single market or region. And second, to unlock new growth opportunities for the Nemetschek Group in high potential regions. This is why we continued our expansion into high growth markets such as Southeast Asia to complement our expansion into India and the Middle East as Nemetschek, representing the full portfolio of the Group. Going forward, we will continue this strategy and expand into new markets and regions in the coming quarters and years. M&A has always been an integral part of the Nemetschek Group's DNA and a key driver of our long-term success story. We have a strong track record of highly successful and value-accurative acquisitions. The latest example, which is only the largest Which is also the largest acquisition in the Nemetschek Group history is HCSS, which increase our market opportunity by 30% in the highly attractive infrastructure and heavy civil market. By combining HCSS with our leading brands in the build segment, we create the next construction tech giant with a unique combination of scale, In addition, we also did some smaller technology acquisitions such as Morfolio, which is a leading provider of mobile design apps for architects and designers, which strengthens our design ecosystem by seamlessly connecting early-stage conceptual design and Sketching with professional BeamCAD workflows while adding differentiated AI and mobile capabilities. Another very small bolt-on acquisition was MBU, which strengthens our AI capabilities in pre-construction and construction document workflow and will therefore further enhance RubyMax with specialized workflow-driven AI. These acquisitions are mainly technology-centric with almost or very, very low revenue. In parallel, we are also continuing our dedicated venture investment strategy. Over the past years, as you know, we have made several minority investments in highly innovative AI-driven startups, which align perfectly with our long-term AI and technology strategy. A good example is our recent strategic investment in DAOX, which strengthens our long-term AI strategy by enabling trusted data ecosystem and secure data exchange. Key prerequisites for the next generation of AI powered and agent workflows across the AECO lifecycle. There is no construction AI without trusted AI, and this is why DAOX is helping the market with. And last but not least, in the area of business enablement, we work on the further harmonization and further enhance operational excellence across the Nemetschek group. Artificial intelligence also plays an increasing role internally, for example in software development, customer success and support, etc. And we are increasingly leveraging AI to further enhance efficiency and harmonize processes across the group. And with that, I hand it over to you, Louise.