Investor Presentation December 2019
DISCLAIMER 2 This presentation of RIB Software SE (the “Company”) contains forward-looking statements. These statements can be identified by terminology such as “will”, “expects”, “anticipates”, “future”, “intends”, “plans”, “believes”, “estimates”, “potential”, “continue”, “ongoing”, “targets”, “guidance” and similar statements. The company may also make written or oral forward-looking statements in its periodic reports, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward- looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: development risks, financial risks, sales risks, cooperation risks, and acquisition risks. All information provided in this presentation is current as of the date of this presentation, and the Running Together Company does not undertake any obligation to update such information, except as required under applicable law. Some information in this presentation are researched results from multiple sources in the internet as references, and the Company does not take any responsibility of the credential of those information.
RIB MISSION 3 Digital Transformation of the Building and Infrastructure industries into the most Advanced industries on the planet, to create the next generation of Living. Running Together
RIB AT A GLANCE 4 € 151.6 Mil +59.7% Group Revenues 9M’19 YoY Revenue Growth +17.1% Organic Group Revenue Growth 9M’19 (H1 2019: 5.3%) Atlanta, USA € 77.6 Mil +95.0% Guangzhou, China Stuttgart, Germany Software ARR 9M’19 YoY ARR Growth € 35.9 Mil 23.7% Bangalore, India EBITDA 9M’19 EBITDA Margin 9M’19 € 136.9 Mil +26.4% Group Revenues of 2018 Annual Revenue Growth Brisbane, Australia HQ 44,325 1,524 R&D Center Running Together MTWO/iTWO 4.0 Users Employees By 9M’19 Average Number in 9M 2019 R I B M a i n B r a n d s
5 CLOUD PLATFORM TECHNOLOGY 100+ 100+ Modules Workflows Running Together Cloud AI Mobility
McTWO AI ENGINEER 6 Assist up to of Engineers/Managers Workload Running Together Deep Learning Voice Chatbot & Machine Assistant Learning
MARKET POTENTIAL FOR CONSTRUCTION IT 7 EBITDA US$ 135 Bil 30% [3] Global Construction Global Construction GDP GDP IT Investment IT Investment US$ US$ US$ US$ 10+ 15 1.5+% [2] 3% [2] 150 450 Tri [1] Bil Tri Bil Running Together 2019 2025 *[1] McKinsey & Company, Reinventing construction through a productivity revolution. *[2] Deloitte 2016-2017 Global CIO Survey, N747: IT budget as a percentage of revenue in the construction industry in 2016-2017 is 1.51%, while all-industry average IT spending is 3.28%. It is estimated that it will grow to at least 3% in the construction industry in 2025. *[3] CSIMARKET: Computer processing and cloud services industry's EBITDA margin in Q4 2018 is 27.77%. It is estimated that it will grow to at least 30% in 2025.
RIB TARGETS TO BECOME A CLOUD PLATFORM MARKET 8 LEADER 10% … … 60% … 10% Construction IT Addressable Market EBITDA 40% Other … Players Running Together Not Defined …
RIB TWO BUSINESS STREAMS 9 CLOUD PLATFORM TECHNOLOGY 60 % 40 % Enterprise Platform Supply Chain Management Platform Software Business Data Business Volume-based Running Together E-commerce TRANSACTION FEE LICENSE / SUBSCRIPTION New Digital Marketing, Perpetual License with Yearly Maintenance / Yearly/Monthly Subscription Services Consulting, Trade Finance… Managed Services
PERPETUAL LICENSE VS SUBSCRIPTION 10 Perpetual License Model Subscription Model $4,500,000 $4,500,000 $3,930,000 $3,210,000 $3,000,000 $3,000,000 $2,490,000 $2,310,000 $2,090,000 $1,870,000 $1,650,000 $1,770,000 $1,430,000 $1,500,000 $1,500,000 $1,050,000 Running Together $- $- yr 1 yr 2 yr 3 yr 4 yr 5 yr 1 yr 2 yr 3 yr 4 yr 5 License Fee Consulting/Training Fee Maintenance Fee Sum Total Consulting/Training Fee Subscription Sum Total Assumptions: • 100 license at 11,000 USD per license • Maintenance fee = 20% of license fee • Consulting/Training fee is based on the average estimation • 200 subscriptions at $3,600 per subscription per year (based on 1 concurrent user = 2-3 named user)
CASE STUDY – COMPANY X 11 $2,100,000 100% $1,800,000 91% $1,500,000 68% $1,200,000 $900,000 $600,000 31% $300,000 $0 Running Together 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 License Fee Consulting/Training Fee Maintenance Fee Subscription Consulting/Training on MTWO Conversion rate Case Description: • The company X started iTWO license in the middle of 2016 • Decided to convert to MTWO subscription since 2019 • About 137 licenses had been sold in 2016 • 137 licenses are expected to be fully converted to MTWO subscriptions in 2022 • Additional 275 subscriptions are expected to be implemented in the future
USER ACHIEVEMENTS AND TARGETS 12 2 Million Achieved Target Users 48% over 2019 user target Mid-term 20,726 8,447 100,000 3,000 Users Users Users 44,325 Users Users EBITDA Q3 2019 6M’19 Q1’19 2018 up to US$ 50 / User / Month 2020 iMTWO xYTWO up to $30 / user / up to $20 / user / Running Together month month 80+% Conversion Rate Target 95+% User Retention Rate Even $15/user/month EBITDA in the midterm is acceptable due to 2 Million User base & 360 M USD EBITDA
PRODUCT CONVERSION TO THE CLOUD 13 Running Together 3-6 months are needed for product conversion in average
INVEST FOR THE LIGHTNING FAST GROWTH 14 Investment & Lightning Fast Growth Phase Go-to-market & Investment Phase R&D Phase 1,000 Man Year Running Together Q3 Q1-Q31 Q4 Q1 Q2 Q4 21 2014 15 16 17 20 22 23 Mid-term 18 19 +59%* *average quarterly growth rate formula average quarterly YoY growth rate 57%+47%+49%+82% 30-60% average quarterly YoY growth rate target +59% = 4
15 INVESTMENT TARGETS AND EXECUTION CAPACITY Value Added Resellers Partner Network Focus on Building Technology Cloud Service Complete the direct sales and Software Providers Investments Software Vendors consulting network in 2019 Vendors 2019 2020 ERP Consulting Companies Running Together ≥ 50 MSP Partnership Investment targets in the Investment Phase *MSP Represents MTWO Service/Software/Sales Partners 3 MSPs 15 MSPs 15-16 MSPs 30-31 MSPs 50 MSPs 2018 2019 2019 2020 2021 As of November 6
GLOBALIZATION & LOCALIZATION 16 Running Together
THE LATEST 15 MSP INVESTMENTS 17 AUSTRALI INDIA USA SOUTH AFRICA INDIA GERMANY UK INDIA Nov. 2019 Oct. 2019 Oct. 2019 A Sept. 2019 Aug. 2019 Aug. 2019 July. 2019 Aug. 2019 UK 10%* 75% 100% 20% 60% 100% 15% 70% Total Investment in MSP Partnership: Average EV/REVENUE 1.09x Average EV/EBITDA 8.95x *MSP Represents MTWO Service/Software/Sales Partners USA UK GERMANY UAE NETHERLANDS AUSTRALIA USA June. 2019 April. 2019 April. 2019 Feb. 2019 Nov. 2018 Sept. 2018 Aug. 2018 Running Together 60% 20% 75% 60% 100% 60% 40% • RIB provides SoftTech with a loan of up to US$ 2 million with the right to convert into shares within the next 18 months
U.S. CAD – LEADING AEC AND BIM SERVICES PROVIDER 18 Founded in 1999, headquartered in California, USA. U.S. CAD is a leading AEC technology reseller and integrator by offering consulting, production, training and support in the architectural, engineering, and construction industries. It is also a leading provider of BIM technology and Autodesk Platinum partner & Bluebeam Platinum partner. U.S.CAD Offering 50,000+ Active Subscribers • “Out of the Box” MTWO and iTWO 4.0 Across the US Market cloud enterprise solution (expected to be 50%+ YOY Revenue Growth offered in January 2020) 60 % 30+ Million EUR Revenue Access to Offers • Full Range of BIM Services , Digital Share Transformation Consulting, application Contribution development, training and maintenance & services. 20-30% EBITDA Margin By 2020, excluding the third-party software. • Additional AI, IOT, and PPS technology Founders Running Together Jeff Rachel Daniel Counts President Founder & CEO • Joined the company since 2005 • Founded U.S. CAD in 1999 • Over 25 years of experiences in engineering and IT • Served at US Air Force NORAD from 1988 to 1990 industries • Over 30 years of experiences in engineering/design/IT • After acquisition, Jeff will focus on driving the growth of • After acquisition, Daniel will focus on the US market various business lines and the development of “Out of expansion by way of future acquisitions and additional the Box” markets
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