Interim Report 2014 January - September

Transcription

1 Interim Report 2014 January - September

2 Letter to the shareholders Interim Report January September 2014 RIB Software AG Dear Shareholders, The 5D Technology Market It is an exciting year for the 5D BIM technology companies. The capital markets have now identified major growth and sales potential arising from the digitalisation of the global construction industry. According to Yahoo Finance, Autodesk (ADSK / USA) was rated on 29 October with a price/earnings ratio (PE) of > Dassault (DASTY / Europe) also achieved a PE of > 42.6 and AEC s software player is attracting the attention of major investors. Experts see good opportunities for the market in AEC, EPC and infrastructure growing from USD 8 trillion to USD 15 trillion by 2025 and IT expenses increasing from the current 1% to 3%. This could result in a new market worth USD 500 billion. 1% of this could result in a potential of USD 5 billion in annual revenue. This could allow market leaders such as RIB, Autodesk and Dassault to continue to increase their large deals by 80% p.a. over many years. However, the expectations in the champions in 5D BIM are also continuously rising. We will not rest until the market has completely converted to 5D technology. According to a study published by BHF Bank in September 2014, RIB AG held the top spot of all 1,111 owner-managed listed European companies with a market capitalisation exceeding EUR 500 million. The focus was on the attractiveness of the share for investors. RIB AG 2014 In the name of the Executive Board and many shareholders of RIB AG, we wish to first express our sincere thanks to the global RIB itwo team in Germany (DACH Region), the United States (NA Region), China (Greater China Region), Denmark (Nordic Countries), Singapore (Southeast Asia Region), Australia (ANZ Region) and the United Arab Emirates (Middle East Region) for the tremendous work they have done in the current financial year We are extremely proud to be part of this world-class team. itwo technology stands for team sport! The board take our hats off to honour your great achievements! The RIB Group s high expectations for the Chinese Year of the Horse are on track to be met, with all targets for the fiscal year 2014 appearing within reach as of early October: at least 100% growth (>USD 10 million) for one itwo company licence (>USD 5 million in 2013). at least 80% growth of itwo s large deals from 8 in 2013 to 14 in at least 50% growth of itwo license and cloud revenue. at least 100% growth of earnings after taxes. Due to the positive development, we were already able to exceed the previous year s earnings after taxes at the end of the third quarter. We therefore expect to increase net profit by at least 100% for the year as a whole. With the development of our itwo Big Data Technology we have strengthened the position of RIB AG (RSTA) as the global market leader in the 5D BIM End to End Technology. In this segment, RIB presented the itwo LAB technology for the first time in 2014 and developed the first itwo based 5D BIM financial product with itwo PCI (project cost insurance) jointly with Munich Re (a globally leading reinsurer). In addition, we started construction on the first virtual high-rise building (project name: itwo Tower) in the itwo LAB at Georgia Tech University in October. Here we are now hoping to see the final breakthrough for the 5D building and construction process and the itwo 5D Big Data Technology in America. 2

3 Letter to the shareholders Interim Report January September 2014 RIB Software AG With the German Railway (DB AG) win, we signed in October 2014 the biggest order in the in the 50 year history of RIB. This was highly anticipated and expected by not only all our employees, but also by our shareholders all over the world. We would also now expect and anticipate a lot of follow up orders from the top 1,000 suppliers of the German Railway and of the global leading infrastructure and utility companies. We are proud to serve for the No.1 infrastructure investor in Europe and support Deutsche Bahn (DB) to become the most advanced and technology driven infrastructure provider for mobility and logistics in the world. We now focusing with our entire global team on our second itwo World Conference, which will be held on 20 & 21 November in Hong Kong. As in November 2013, we expect to see yet again strong momentum and a strong increase in the spirit of optimism from the itwo group of visionaries, who are joining the Revolution Im Bauwesen. We wish you all a successful final sprint in 2014 and a perfect start into promising and booming new year in Yours sincerely, Thomas Wolf Michael Sauer Dr. Hans-Peter Sanio 3

4 RIB on the capital market Interim Report January September 2014 RIB Software AG RIB on the Capital Market Deutsche Börse AG decided to reinstate RIB Software AG, Stuttgart (ISIN DE000A0Z2XN6) in the TecDAX on 22 September Therefore RIB is one of the top 30 technology stocks listed in the prime standard of the Frankfurt Stock Exchange. RIB shares experienced positive development in the course of the year 2014 and performed well above the benchmark index TecDAX. At the end of the third quarter 2014 the Xetra closing price was per share (Xetra closing price ). On 28 October 2014 the Xetra closing price of the RIB share was which corresponds to an increase of about 46% since the beginning of the year. Currently the RIB share is rated by three analysts (Equinet, Berenberg and Hauck & Aufhäuser) with an average 12 month price target of 15. RIB share price performance Key Figures million unless otherwise indicated Change Software and software-related service revenue % Total revenue % EBITDA % as % of revenue 51.2% 28.7% EBIT % as % of revenue 40.8% 19.8% Profit after tax % R&D expenses* % R&D ratio* (Expenses on R&D as % of revenue) 24.4% 22.2% Average number of empoyees % Liquid funds and availabe-for-sale securities** % Equity** % Equity ratio** 84.8% 80.2% * before capitalisation and amortisation. ** Presentation of previous year as of December 31,

5 Interim group management report Interim Report January September 2014 RIB Software AG Consolidated interim management report A. Results of operations, financial position and net assets Strong revenue growth of 25.1% in Germany, Austria and Switzerland Revenue from maintenance contracts increased by approx. 20% to 16.3 million Cloud revenue increased by approx. 10% RIB Group increased its revenue by 25.1% to 28.9 million (previous year: 23.1 million) in the first nine months in the regions of Germany, Austria and Switzerland. This figure excludes the major order by Deutsche Bahn. In the cloud segment, total revenue increased by 9.6 % to 5.7 million (previous year: 5.2 million). Global software and software-related service revenues rose to 32.3 million (previous year: 30.4 million). Overall, total revenue increased to 42.2 million (previous year: 41.5 million). Deferred maintenance revenues increased 19.9%, from 13.6 million to 16.3 million. As announced in the half-year report, consulting revenues dropped to 9.9 million as a result of the reorganisation of the US consulting business (previous year: 11.1 million). EBITDA reaches record high of 21.6 million Gross margin steady above 60% In the first nine months, profit after tax increased by 121.3% reaching 13.5 million (previous year: 6.1 million). EBITDA stood at 21.6 million (previous year: 11.9 million) with an EBITDA margin of 51.2%. This included an increase in other operating income to 10.7 million (previous year: 1.0 million) and is primarily due to the purchase price liabilities adjustments as well as income in foreign currency from cash and cash equivalents and available-for-sale securities. The gross profit again exceeded 60% with 61.3% (previous year: 61.7%). R&D expenses during the reporting period increased by 22.2% to 4.4 million (previous year: 3.6 million) due to the strengthening of our development teams in the cloud solutions segment. Selling and marketing costs stood at 9.6 million (previous year: 9.0 million). Administrative expenses amounted to 4.9 million (previous year: 4.2 million).the average number of employees increased to 590 employees (previous year: 546 employees). The increase was primarily due to an increase in development capacities for the development of Web-based solutions, as well as company acquisitions. Cash and cash equivalents, incl. securities increase by 58% to million Equity ratio amounts to 84.8% The RIB Group generated a net cash flow of 10.2 million (previous year: 14.1 million) from operating activities in the first half of the year. Net cash flow from investing activities totalled million (previous year: 21.1 million) in the reporting period. Payments made for the acquisition of consolidated companies less cash acquired ( -6.6 million) are included in this figure in the reporting period; inflows from fixedinterest securities of 28.7 million were included here in the same period of the previous year. Net cash flow from financing activities of 44.3 million (previous year: million) primarily includes deposits from capital increases ( 46.7 million) as well as the dividend payment ( -2.2 million). In the previous year, this item included payments for the acquisition of treasury shares ( -7.3 million) and the dividend payment ( -5.3 million). After the capital increase and dividend payment, cash and cash equivalents including fixed-interest securities increased by 58% and stood at million (31 December 2013: 82.1 million). Equity amounted to million (31 December 2013: million). The equity ratio increased accordingly to 84.8% (31 December 2013: 80.2%). Trade payables fell to 0.9 million (31 December 2013: 1.2 million). Trade receivables increased by 22.5% to 12.5 million (31 December 2013: 10.2 million). 5

6 Interim group management report Interim Report January September 2014 RIB Software AG B. FORECAST REPORT In financial year 2014, we expect the demand for 5D technologies and cloud software in the construction industry to continue to grow. In October we were able to win the largest deal in the 50 year history of RIB. Deutsche Bahn as the worldwide leading infrastructure provider for mobility and logistics is one of the largest contractors for construction services in Europe. With an investment volume (CAPEX / Capital Expenses) of >$ 10 Billion p.a. (> 8 Billion) DB is responsible for more than 10,000 small, medium-sized and large infrastructure and construction investment projects each year. Against this background, and assuming the same underlying conditions in the market as in the reporting period, we are expecting a revenue growth rate of 25% for the RIB Group year-on-year. We expect to increase profit after taxes for the year as a whole by 100% to at least 18.0 million. C. OPPORTUNITY AND RISK REPORT The main opportunities and risks associated with the probable development of the RIB Group are outlined in the consolidated management report as at 31 December

7 Consolidated interim financial statements Consolidated income statement For the period: to unless otherwise indicated Note 3rd quarter rd quarter months months 2013 Revenue (5) 15,076 14,535 42,198 41,478 Cost of sales -5,470-4,726-16,320-15,906 Gross profit 9,606 9,809 25,878 25,572 Other operating income (6) 7, , Selling and distribution costs -3,293-2,837-9,633-9,044 Administrative expenses -1,855-1,378-4,858-4,201 Research and development expenses -1,456-1,221-4,436-3,648 Other operating expenses (7) ,412 Finance income Finance costs Profit before tax 10,820 3,600 17,217 8,316 Income tax expense -2, ,740-2,200 Profit after tax 8,415 2,860 13,477 6,116 Profit attributable to non-controlling interests Profit attributable to owners of parent company 8,415 2,843 13,477 6,099 Earnings per share: Diluted and basic (9)

8 Consolidated statement of comprehensive income For the period: to rd quarter rd quarter months months 2013 Profit after tax 8,415 2,860 13,477 6,116 Components reclassified with no effect on profit and loss: Revaluations Income tax in connection with components that are not reclassified Other consolidated comprehensive income after taxes for components reclassified with no effect on profit and loss Components reclassified in subsequent periods with an effect on profit and loss: Exchange differences 3,671-1,276 4,340-1,998 Changes in value of available-for-sale securities Income tax in connection with components that are reclassified Other consolidated comprehensive income after taxes for components reclassified with an effect on profit and loss 3,666-1,266 4,350-2,057 Other consolidated comprehensive income after taxes 3,671-1,297 4,365-2,150 Total consolidated comprehensive income 12,086 1,563 17,842 3,966 of which attributable to non-controlling interests of which attributable to owners of the parent company 12,086 1,546 17,842 3,949 8

9 Consolidated statement of financial position as of and Note Goodwill (10) 52,418 38,180 Other intangible assets 44,531 32,435 Property, plant and equipment 7,005 6,108 Investment property 5,358 5,031 Prepaid land lease payments 1, Other assets Deferred tax assets Total non-current assets 110,867 83,168 Trade receivables 12,476 10,233 Available-for-sale securities (11) 3,994 3,761 Other assets 3,950 2,353 Cash and cash equivalents 125,682 78,378 Total current assets 146,102 94,725 Total assets 256, ,893 9

10 Note Issued capital (12) 43,467 38,715 Treasury shares -5,543-6,240 Capital reserves 134,998 80,768 Legal reserves Accumulated other comprehensive income 1,279-3,086 Retained earnings 43,636 32,397 Equity attributable to owners of parent 217, ,610 Non-controlling interests (13) 0 67 Total equity 217, ,677 Pension provisions 3,138 3,182 Other finance liabilities (14) 2,590 10,805 Deferred tax liabilities 11,415 8,081 Total non-current liabilities 17,143 22,068 Trade payables 857 1,237 Provisions for income taxes 2,406 2,428 Other provisions Accruals 3,693 2,733 Deferred revenue 9,370 4,242 Finance lease obligations, current portion 0 1 Other financial liabilities 3,005 9 Other liabilities 2,307 2,192 Total current liabilities 21,933 13,148 Total liabilities 39,076 35,216 Total equity and liabilities 256, ,893 10

11 Noncontrolling interests Total equity according to consolidated statement of financial position As of 1 January ,715 80, , , ,368 Profit after tax ,099 6, ,116 Other comprehensive income , , ,150 Total comprehensive income , ,099 3, ,966 Share buybacks , , ,313 Sale of own shares ,275-1,425-1,425 Dividends paid ,336-5, ,336 Other changes As of 30 September ,715 80, , ,240 29, , ,139 As of 1 January ,715 80, , ,240 32, , ,677 Profit after tax ,477 13,477-13,477 Other comprehensive income , ,365-4,365 Total comprehensive income , ,477 17, ,842 Share buybacks Sale of own shares - 1, ,758-1,758 Dividends paid ,238-2, ,238 Capital increase 4,752 53, ,761-57,761 Other changes Share-based remuneration As of 30 September , , , ,543 43, , ,893 Consolidated interim financial statements Interim Report January September 2014 RIB Software AG Consolidated statement of changes in equity For the period: to Accumulated other comprehensive income Issued capital Capital reserves Legal reserves Changes in value of available-for-sale securities Foreign currency translation reserve Revaluations Treasury shares Retained earnings Equity attributable to owners of parent 11

12 Consolidated statement of cash flows For the period: to months months 2013 Cash flows from operating activities: Profit before tax 17,217 8,316 Adjustments for: Depreciation and impairment of property, plant and equipment Amortisation and impairment of intangible assets 3,810 3,426 Depreciation of investment property Changes in allowance for impairment of trade receivables Other non-cash items -9,614 1,163 Interest expense and other finance cost Finance income ,017 13,069 Working capital adjustments: Increase/decrease(-) in provisions and accruals Increase(-)/decrease in receivables and other assets -2,574-1,037 Increase/decrease(-) in trade payables and other liabilities 3,570 2,900 Cash generated from operations 13,399 15,141 Interest paid Interest received Income taxes paid -3,238-1,502 Net cash flows from operating activities 10,217 14,110 Proceeds from the disposal of non-current assets 16 0 Purchase of property, plant and equipment Purchase/production of intangible assets -5,978-5,548 Purchase of consolidated companies net of cash acquired -6,615-1,329 Purchase(-)/sale of available-for-sale securities 71 28,718 Net cash flows from investing activities -13,140 21,144 Proceeds from capital increase 46,678 0 Dividends paid -2,238-5,336 Cash outflow for the acquisition of non-controlling interests Cash outflow for share buybacks 0-7,313 Cash outflow for repayment of other financial liabilities -4-7 Cash paid for finance leases Net cash flows used in financing activities 44,345-12,692 Change in cash and cash equivalents impacting on cash flow 41,422 22,562 Cash and cash equivalents at the beginning of the period 78,378 49,266 Currency-related change in cash and cash equivalents 5,882-1,175 Cash and cash equivalents at the end of the period 125,682 70,653 Composition of cash and cash equivalents Cash and bank balances, unrestricted 123,933 67,517 Cash and bank balances, restricted 1,749 3,136 Total 125,682 70,653 12

13 Notes to the consolidated interim financial statements 1. Corporate information This 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 Standards (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 interim 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 consolidated financial statements of RIB Software AG as of 31 December Due to the representation of the numbers in, rounding differences may arise in individual items. 2. Accounting policies In 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 Consolidated group As of 30 September 2014, the consolidated Group also included BYGGEWEB A/S, Copenhagen, Denmark (hereinafter referred to as BYGGEWEB) as against the consolidated financial statements as of 31 December The company BYGGEWEB was fully consolidated for the first time in the interim financial statements as at 30 September Please refer to our information in Section (4) below. The group increased its share in RIB Cosinus Solutions GmbH, Mannheim, from 70% to 100% during the report period. Relevant details on this are in section (10). In all other respects the consolidated companies are unchanged compared to the conditions described in the group financial reporting on 31 December The Group increased its share in RIB US Cost Incorporated, Atlanta, USA (hereinafter referred to as RIB US Cost) from % to % during the reporting period. Relevant details in this regard can be found in Section (14). In August 2014, the Group acquired the outstanding shares in RIB Software PTY, Sydney, New South Wales, Australia (hereinafter referred to as RIB Software PTY) (formerly: RIB CADX PTY Limited, Sydney, New South Wales, Australia). After this transaction, the Group now owns 100% of the shares. Further disclosures in this regard can be found in Section (14). In all other respects, the consolidated companies are unchanged compared to the conditions described in the consolidated financial statements as of 31 December Mergers Acquisition of BYGGEWEB The Group acquired 100% of the shares in BYGGEWEB by means of an agreement dated 25 July As the acquisition detailed below took place only shortly before the cut-off date of these interim financial statements, the fair value of the identifiable assets and liabilities could only be determined on a provisional basis. The acquisition date was 29 August For the sake of simplicity, the purchase price allocation was based on the value as of 31 August The transactions between 29 August and 31 August 2014 were of minor importance. Furthermore, no material changes in value occurred during this period. 13

14 The acquisition costs amounted to a total of 20,660 thousand. This amount includes a fixed purchase price of 7,100 thousand, which was transferred on 28 August In addition, the acquisition costs include a maximum amount of 3,000 thousand as a so-called earn-out component, depending on the operational result of the company in financial year Furthermore, 880 thousand shares in RIB Software AG were to be transferred as consideration for the acquired shares in BYGGEWEB. These shares originate from a capital increase through contributions in kind carried out in the reporting period. Please refer to our disclosures in Section (12) in this regard. The shares were also transferred on 28 August At the time of the transfer, the shares had a price of 10,560 thousand. The fair value of the identifiable assets and liabilities of BYGGEWEB as of the acquisition date and the corresponding book values immediately before the acquisition date were provisionally as follows: Carrying amount Fair value Intangible assets 31 9,432 Property, plant and equipment Other assets Trade receivables 1,123 1,123 Cash and cash equivalents 1,375 1,375 3,017 12,418 Deferred revenue Other debts and other liabilities 1,183 1,183 Deferred tax liabilities 24 2,375 1,827 4,178 Net assets 1,190 8,240 Goodwill from the company acquisition 12,420 Total acquisition costs 20,660 BYGGEWEB offers Web-based solutions for project and facility management (6D technology). With approx. 7,000 customers and some 140,000 users, the company is a market leader in Scandinavia. The goodwill particularly reflects expected synergy effects from the acquisition and the know-how of the acquired team. Goodwill as a whole is not deductible for tax purposes. Of the intangible assets totalling 9,432 thousand, 5,456 thousand relates to software and 3,945 thousand to customer agreements and associated customer relationships. As a result of the acquisition of BYGGEWEB, revenues increased by 505 thousand in the reporting period, and consolidated earnings went up by 112 thousand. If BYGGEWEB had already been acquired as of 1 January 2014, the revenues in the reporting period would have been 4,913 thousand higher, and the consolidated earnings would have been 870 thousand higher. 14

15 5. Revenue Revenue breaks down as follows: 9 months months 2013 Software licences 10,271 11,537 Software as a service / cloud 5,711 5,222 Total software licences and software as a service / cloud 15,982 16,759 Maintenance 16,305 13,632 Consulting 9,911 11,087 Total revenue 42,198 41,478 The total software licence revenue is subdivided as follows: 9 months months 2013 itwo Key Account 3,001 3,826 itwo Mass Market 4,365 3,764 SaaS / Cloud 5,711 5,222 Legacy Products 2,905 3,947 Total software licences and software as a service / cloud 15,982 16, Other operating income Operating income primarily includes income from purchase price liabilities adjustments amounting to 5,559 thousand (please also see Section 14 in this regard) as well as income in foreign currency from cash and cash equivalents and available-for-sale securities amounting to approx. 4,748 thousand. 7. Other operating expenses Other operating expenses include foreign exchange expenses arising from cash and cash equivalents, foreign currency differences due to intercompany consolidation and other expenses not attributable to the functional positions. 15

16 8. Expenses for employee benefits and number of employees Expenses for employee benefits 9 months months 2013 Wages and salaries 19,834 19,160 Social security and pension costs 3,641 3,669 Total 23,475 22,829 Average number of employees 9 months months 2013 General administration Research and development Sales and distribution Support/Consulting Total Earnings per share basic and diluted Basic earnings per share are determined by dividing the net income for the period allocable to the shareholders by the weighted average number of bearer shares outstanding during the period. During the reporting period the weighted average of shares in circulation is 38,841,228. unless otherwise indicated 9 months months 2013 Profit after tax 13,477 6,116 Weighted average of shares in circulation 38,841,228 37,890,903 Earnings per share (diluted and basic)

17 10. Goodwill License / Software Segment 32,227 25,025 SaaS / Cloud Segment 12,874 6,221 Professional Services Segment 4,222 4,069 GZ TWO development unit 3,096 2,865 Total 52,419 38,180 The change of 14,239 thousand in the carrying amounts was attributable to the addition of 12,420 thousand from the initial consolidation of BYGGEWEB and 1,819 thousand from currency adjustments from the conversion of goodwill held in local currency, which were recognised with no effect on profit or loss. 11. Available-for-sale securities Available-for-sale securities comprise short-term sovereign bonds of Singapore and corporate bonds of foreign companies in US dollars. The fair values of the sovereign bonds and corporate bonds are based on quoted prices on an active market. 12. Capital increase With the approval of the company s Supervisory Board, the Executive Board of RIB Software AG approved a capital increase of 10% of the share capital from authorised capital on 14 July The company s share capital was increased from 38,715, by 3,871, to 42,586, to the exclusion of the existing shareholders subscription right. On 14 and 15 July 2014, the 3,871,541 new shares were offered to institutional investors in Germany and in other European countries as an accelerated bookbuild. The capital increase was placed on 15 July 2014 at a price of per new share. At the same time, 2 million shares were placed from the portfolio of existing shareholders, which also included members of the company s Executive Board. The aim of the transaction was to increase the free float and the liquidity in the shares of the company. The company plans to use the net proceeds of approx million from the IPO for further expansion, in particular for the acquisition of software providers with a similar or complementary service offering. In addition, the company plans to invest in big data technology such as co-sharing in HPDC (high-performance data centre) as well as in in-memory database technology. With the approval of the Supervisory Board, the Executive Board of RIB Software AG on 28 July 2014 resolved a further capital increase from authorised capital in connection with the acquisition of BYGGEWEB (please see Section 4) during the reporting period. The company s share capital was increased from 42,586, by 880, to 43,466, under exclusion of the existing shareholders subscription right. The capital increase was carried out for a contribution in kind of 2,896,280 shares (of a total of 5,555,560 shares) in BYGGEWEB. The capital increase through contributions in kind was entered in the Commercial Register on 25 August Non-controlling interests The group acquired the remaining outstanding shares in RIB Cosinus Solutions GmbH, Mannheim, through a contract dated 27 March 2014 for a purchase price of 90 thousand and thus increased its share in the company from 70% to 100%. Because the group already held control of the subsidiary company before the acquisition of the outstanding shares, the acquisition was treated as a self-funded capital transaction without an impact on income. 17

18 14. Other financial liabilities The Group acquired further shares in RIB US Cost in the amount of 31.91% by means of an agreement dated 30 April The purchase price includes a fixed component as well as a profit-dependent component in the form of a so-called earn-out regulation and thus amounts to a maximum total of 1,276 thousand. Of the total amount, 890 thousand were paid during the reporting period. A forward agreement regarding the outstanding shares was concluded when the original shareholding was acquired in financial year The result was that the Group could not avoid having to take on the outstanding shares, and no minority shareholdings were therefore recognised in the consolidated financial statements. Instead, the obligation to take over the outstanding shares led to the recognition of a financial liability. The actual purchase price for the shares acquired during the reporting period was below the expected purchase price, which was used as a basis for measuring the financial liability. This resulted in other operating income of 2,116 thousand. The financial liabilities as of 30 June 2014 relating to the outstanding obligations in connection with the shares already acquired and the outstanding shares in RIB US Cost amounted to 1,204 thousand. The Group acquired the outstanding shares of 25.0% in RIB Software PTY by means of an agreement dated 22 July The purchase price amounted to 1,758 thousand and was paid with treasury shares. Mutual buy and sell options were agreed for the transfer of the outstanding shares when the original shareholding was acquired in financial year The consequence was that the Group could not avoid having to take on the outstanding shares and no minority shareholdings were therefore recognised in the consolidated financial statements. Instead, the obligation to take over the outstanding shares led to the recognition of a financial liability. The actual purchase price for the shares acquired during the reporting period was below the expected purchase price, which was used as a basis for measuring the financial liability. This resulted in other operating income of 3,443 thousand. As of 30 September 2014, there is no longer a purchase price liability in this respect. 18

19 15. Segment information Please refer to section (8) of our consolidated financial statements for the 2013 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. 9 months 2014 License / Software SaaS / Cloud Prof. Services Total Total revenue, external sales 26,575 5,711 9,912 42,198 Cost of sale -7, ,602-16,320 Research and development expenses -3,185-1, ,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 9 months 2013 License / Software SaaS / Cloud Prof. Services Total Total revenue, external sales 25,169 5,222 11,087 41,478 Cost of sale -5, ,129-15,906 Research and development expenses -2,362-1, ,648 Segment profit (EBIT) 17,521 3, ,924 Interest income and expense 84 Other unallocated income and expenses -13,692 Profit before tax (EBT) 8,316 Income Tax Expense -2,200 Profit after tax 6,116 The other non-allocated income and expenses include other operating income, general management expenses, sales and marketing costs and other operating expenses. 19

20 Geographic information Revenue by geographic area (based on the location of customers) breaks down as follows: 9 months months 2013 EMEA (Germany, Europe, Middle East and Africa) 30,060 26,365 APAC (Asia Pacific) 3,401 3,937 North America 8,737 11,176 Total revenue 42,198 41, Disclosures on assets and liabilities measured at fair value on first recognition The 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 all inputs which have a significant effect on the recorded fair value are not observable, either directly or indirectly As of 30 September 2014 and 31 December 2013, the Group held the following financial assets measured at fair value. Financial assets measured at fair value as of 30 September 2014: Level 1 Level 2 Level 3 Total Available-for-sale financial assets: Sovereign bonds 3, ,735 Corporate bonds Financial assets measured at fair value as of 31 December 2013: Level 1 Level 2 Level 3 Total Available-for-sale financial assets: Sovereign bonds 3, ,484 Corporate bonds

21 The financial liabilities valued at fair value concern purchase price liabilities from company acquisitions. Financial liabilities measured at fair value as of 30 September 2014: Level 1 Level 2 Level 3 Total Financial liabilities: Derivatives - - 2,492 2,492 Financial liabilities measured at fair value as of 31 December 2013: Level 1 Level 2 Level 3 Total Financial liabilities: Derivatives ,697 10,697 The respective value of the company at the time of the option or expiry thereof was determined for the subsequent measurement of the financial liabilities. The company valuations are undertaken on the basis of updated budget figures according to the discounted cash flow method taking into account various scenarios. For the calculations, industry-specific beta factors as well as country-specific market risk premiums and non-risk interest rates were taken into account. The assumption of the financial liabilities is a result of the acquisitions of outstanding shares in RIB US Cost and RIB Software PTY (please see Section 14). In all other respects, the valuation was undertaken according to the procedure as of 31 December For further details, please refer to Section (39) of our consolidated financial statements as of 31 December No reallocations between Levels 1 and 2 and reallocations to or from Level 3 were undertaken during the reporting period. The financial liabilities valued at fair value developed in the reporting period as follows: 9 months 2014 As of 1 January ,697 Changes without effect on profits Repayments made in cash -974 Repayments made in treasury shares -1,759-2,733 Changes with effect on profits Income from the subsequent measurement (other operating income) -5,559 Expenses from accrued interest (finance expenses) 87-5,472 As of 30 September ,492 21

22 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 of 2,492 thousand: Tsd. Valuation parameter Discount interest rate in the scope of the DCF method Discount interest rate in the scope of the DCF method Growth rate in the budgeted revenues in the detailed budget period Growth rate in the budgeted revenues in the detailed budget period Sensitivity Carrying amount + 1 %-point 2,407-1 %-point 2, % 2, % 2,195 Stuttgart, 31 October 2014 RIB Software AG The Executive Board Thomas Wolf Michael Sauer Dr. Hans-Peter Sanio 22

23 Further information Interim Report January September 2014 RIB Software AG Further information Contact Details RIB Software AG Vaihinger Straße Stuttgart Germany Investor Relations Phone: Fax: Internet: group.rib-software.com Imprint Published by: RIB Software AG Vaihinger Straße Stuttgart Responsible for content: RIB Software AG, Stuttgart Photos: Title: Fotolia October 2014 Trademarks: RIB, RIB itwo, ARRIBA, the RIB logo and the itwo logo are registered Trademarks of RIB Software AG in Germany 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. 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. 23