Interim Report January - September 2017

Transcription

1 Interim Report January - September 2017 Scan to learn more about YTWO Formative

2 Letter to our Shareholders LETTER TO OUR SHAREHOLDERS Thomas Wolf, Chairman of the Administrative Board, CEO DEAR SHAREHOLDERS, DEAR FRIENDS OF RIB SOFTWARE SE, The RIB Group looks back on a successful Q during which the third Phase-III-contract of the current calendar year could already be concluded with Implenia, the leading Swiss construction and construction services company. In addition, six Phase-II-contracts were reported. Strong growth rates were also achieved for revenue and software licenses. The RIB stock price reflects this positive development. In recent years, from 2011 to 2016, our itwo community and itwo/ytwo brands have reached a high level. For the new five year plan from 2017 to 2021, and the years thereafter until 2026, the outlook is positive throughout. Governments worldwide, the IT industry and clients are discovering the benefits of integrating two (itwo) worlds, the virtual into the physical. itwo stands for this MR (Mixed Reality) process in the construction industry. 1. We are on a strong path to reach our targets: building up a community of 1,000 itwo 5D technology partners and itwo key account clients as the engine to transform the traditional building and infrastructure industry into one of the most advanced industries on the planet, keeping a steady EBITDA margin of approx. 30% in the software business. 2. We are on a strong path to support with itwo³ - New Thinking, New Working, New IT Technology - and the itwo City Technology the development of the 21st century City and Infrastructure, also known as Smart Cities. 3. We are on a strong path to support with itwo 4.0 the next generation of IT, the Internet of Things (IoT). With the new itwo 4.0 platform and YTWO platform, itwo SP (smart production) and the xtwo platform, we have 2 RIB SOFTWARE SE INTERIM REPORT JANUARY - SEPTEMBER 2017

3 Letter to our Shareholders developed exactly those solutions that the market is demanding and requiring for the digitalization and industrialization. The global building and construction industry has reached a size of almost USD 9 trillion and will grow to USD 15 trillion by The IT spending can grow from around USD 90 billion (1%) today to around USD 500 billion (3.3%). To position ourselves as a leading supplier tapping into this USD 500 billion market, we will work hard on our organizational foundation. Following RIB s philosophy, we consider ourselves an IT partner and enabler, which creates value to our clients, rather than just a software vendor. To achieve this goal, we have trained world-leading experts in the areas of business process management, technical enterprise resource planning & controlling. Our RIB top experts have deep practical knowledge in the macro- and micro-economic dynamics in the global made-to-order and process industry. Together with our clients, we are determined to halve their current and future risks and double their profits. We are determined to reduce up to 50% waste in different sectors and to achieve 30% benefits for the whole itwo community, as well as a contribution to the greater society. We are also determined to support our industry by developing the next generation of talents together with the leading technology universities in the world, such as Georgia Institute of Technology in Atlanta, USA. environment), we are working with maximum speed on the end-to-end construction process. The itwo Technology development is done in close partnership and cooperation with our key itwo Technology Partners, such as clients, enablers and universities. Here we have formed together with our investors one of the strongest IT teams in the world. The world economy has slowed down in the last months and some sectors like Oil & Gas and regions like China have reduced their growth outlook for the next 12 months. But, based on the 4.0 (IoT) and mass customization opportunity for the process and made-to-order industry and on the infrastructure needs of a 4 billion strong middle class of consumers (today: 2 billion) in the next years, the fundamentals are extremely supportive for a strong business development in Moreover, RIB also has a strong financial foundation, which enables it to win a significant stake of the expected USD 500 billion market opportunity in the future. Thanks for your trust and support. I can promise the RIB team will not rest and work hard to reach the next record level and reach a real break-through for our technology, for our management and for our investors. Kind regards In 2016, we have completed the R&D work on the itwo 4.0 Release 1.0, the next generation platform which will be the main RIB technology in Consequently we are continuing the shift, which we started in the last year, from a more R&D driven organization into a stronger marketing driven organization. We are now able to offer standardized IT solutions based on global best practices, which include industry-specific content. In 2016, we have also positioned YTWO in the market, the perfect IT platform and supply chain solution for real estate developers and construction materials suppliers. Thomas Wolf In summary, with itwo³, itwo 4.0, YTWO Formative (SCM), itwo SP (PPS and smart production), itwo PCI (project cost insurance), itwotx (tender exchange platform), itwo FM (facility management), itwo City (project developer platform), itwo World (communication platform), xtwostore (e-commerce platform for sanitaryware), itwoscm, itwocx (Collaboration Platform) and itwo LAB (conceptual working INTERIM REPORT JANUARY - SEPTEMBER 2017 RIB SOFTWARE SE 3

4 RIB Overview RIB OVERVIEW HIGHLIGHTS JANUARY - SEPTEMBER 2017 REVENUE in million OPERATING EBITDA* in million 35.9 SOFTWARE LICENSE REVENUES in million CASH FLOWS FROM OP. ACTIVITIES in million M M M M M M M M % 100.6% 38.5% 90.2% CONSOLIDATED FIGURES - OVERVIEW million unless otherwise indicated 3 rd quarter rd quarter 2016 change 9 months months 2016 change Revenue % % Software licenses % % Software as a Service / Cloud % % Maintenance % % Consulting % % e-commerce % % Operating EBITDA* % % as % of revenue 39.4% 20.1 % 43.9% 25.3% Operating EBT* % % as % of revenue 25.4% 9.1 % 30.6% 15.4 % Expenses from purchase price allocations (PPA amortisation) % % Net cash flows from operating activities. -, % Cash incl. available-for-sale securities**. -, % Equity ratio**. -,, 81.1% 82.1%. Average number of employees. -, % * EBITDA and EBT adjusted for currency effects (9M 2017: -0.2 million; 9M 2016: -0.9 million) and one-off / special effects (9M 2017: +0.4 million; 9M 2016: 0.0 million) ** Previous year as of 31 December RIB SOFTWARE SE INTERIM REPORT JANUARY - SEPTEMBER 2017

5 RIB on the capital market RIB ON THE CAPITAL MARKET RIB SHARE PRICE PERFORMANCE JANUARY - SEPTEMBER 2017 RIB Software SE TecDax 140% % % % % % JAN FEB MAR APR MAY JUN JUL AUG SEP SHARE PRICE GAIN JAN-SEP 2017 SHARE PRICE GAIN IN Q MARKET CAPITALIZATION END OF Q3 >44% >21% > 840 million EVALUATION OF THE ANALYSTS KEPLER CHEUVREUX WARBURG BERENBERG BUY BUY BUY EQUINET HAUCK & AUFHÄUSER UBS BUY BUY Neutral INTERIM REPORT JANUARY - SEPTEMBER 2017 RIB SOFTWARE SE 5

6 Interim Group Management Report REPORT ON EARNINGS, FINANCIAL POSITION AND NET WORTH INTERIM GROUP MANAGEMENT REPORT REPORT ON EARNINGS, FINANCIAL POSITION AND NET WORTH REVENUE INCREASES BY 15.4% TO 81.7 MILLION SOFTWARE LICENCE REVENUE INCREASES BY 38.5% TO 26.6 MILLION The RIB Group maintained its positive business performance of the first half-year of 2017 and continued to achieve strong growth rates for revenue and profit. During the first nine months, Group revenue increased by 15.4% to 81.7 million (previous year: 70.8 million). International revenue increased by 31.5% to 43.4 million (previous year: 33.0 million). Revenue in the itwo key account segment increased by 108.2% to 12.7 million (previous year: 6.1 million). The sale of software licenses also witnessed significant growth of 38.5% to 26.6 million (previous year: 19.2 million). Deferred maintenance rates increased by 17.1% from 20.5 million to 24.0 million and continue to form a large share of recurring revenue. In sum, recurring revenue (Maintenance and SaaS) increased by 13.9% to 34.4 million (previous year: 30.2 million). Revenue in the itwo mass market segment increased by 14.5% to 9.5 million (previous year: 8.3 million). OPERATING EBITDA* INCREASES BY 100.6% TO 35.9 MILLION Operating earnings before interest, taxes, depreciation and amortization of property and intangible assets (operating EBITDA*) increased by 100.6% to 35.9 million compared to the previous year (previous year: 17.9 million) which corresponds to an operating EBITDA margin of 43.9% (previous year: 25.3%). Operating earnings before taxes (operating EBT*) increased significantly by 129.4% to 25.0 million (previous year: 10.9 million) during the reporting period. This includes the sale of software licences to the joint venture YTWO in the first quarter of The resulting effect of 7.6 million was stated under other operating income (cf. Note 5 of Annex to the RIB Software SE Interim Report). Expenses from purchase price allocations (PPA amortisation) reduced markedly by 12.9% to 2.7 million (previous year: 3.1 million). The tax rate was 36.1% (previous year: 43.0%). Due to the revenue growth in the high-margin business segments, the Group s gross margin increased by approximately 7 percentage points to 61.1% (previous year: 54.2%). R&D COSTS INCREASES BY 33.8% TO 9.9 MILLION R&D costs increased by 33.8% to 9.9 million (previous year: 7.4 million) during the reporting period. This increase was primarily due to the strengthening of our itwo 4.0 development team. At 7.7 million, administrative costs remained at the previous year s level (previous year: 7.7 million). Marketing and distribution costs increased by 7.9% to 13.7 million (previous year: 12.7 million). The average number of employees increased by 7.0% to 815 (previous year: 762). OPERATING CASH FLOW AT 25.3 MILLION (+90.2%) Net cash flow from operating activities reached 25.3 million during the reporting period and exceeded the previous year s value by 90.2% (previous year: 13.3 million). This development was driven primarily by successful business development. In addition, the remaining payment of software sales to YTWO in the first quarter of 2017 led to inflows of funds totaling 4.6 million. Net cash flow from investments was -3.5 million compared to -4.6 million in the previous year. The reporting period includes payments of 2.9 million from the sale of MAC International to the joint venture YTWO. *) EBITDA, EBT adjusted for currency effects (9M 2017: -0.2 million; 9M 2016: -0.9 million) and one-off / special effects (9M 2017: 0.4 million; 9M 2016: 0.0 million) 6 RIB SOFTWARE SE INTERIM REPORT JANUARY - SEPTEMBER 2017

7 REPORT ON EARNINGS, FINANCIAL POSITION AND NET WORTH Interim Group Management Report Net cash flow from financing activities of -1.5 million (previous year: million) primarily includes payments of bank liabilities for the acquisition of the business property in Stuttgart ( 6.0 million) and the dividend payments ( -7.2 million). In the previous year, this included dividend payments ( -7.3 million), payments for the acquisition of treasury shares ( -5.8 million) and payments for the settlement of other financial liabilities ( -2.6 million). On 30 September 2017, the Group possessed liquid funds, including securities available for sale, of million (31 December 2016: million). Equities amounted to million (31 December 2016: million). The equity ratio was slightly reduced to 81.1% (31 December 2016: 82.1%). Trade payables reduced slightly to 1.5 million (31 December 2016: 2.5 million). Trade receivables increased by 8.0 million to 26.4 million (31 December 2016: 18.4 million). OPPORTUNITY AND RISK REPORT Based on the very positive YTWO development in 2017, Flex, as the joint venture partner of YTWO, has agreed to a shift of the exercise period of the option right from to See also note 19 to the consolidated financial statements for the 2016 financial year. With regard to further important opportunities and risks of the expected development of the RIB Group, please refer to the opportunities and risks described in the management report of 31 December FORECAST REPORT In view of the sustainable trend towards the digital transformation of the construction industry, we continue to see good growth opportunities for the RIB Group, which are reflected in the successful development in the third quarter of In the first nine months of 2017, the RIB Group s revenue and EBITDA are significantly above the previous year s figures. Based on a promising deal pipeline, we are currently assuming further Phase-II-deals in 2017, but with the uncertainty that these deals may shift to future periods in Due to the positive business development in the first nine months of 2017, the RIB Group concretises the revenue forecast for fiscal year 2017 to the upper third of the published guidance ( 98 million to 108 million) and increases the EBITDA forecast for fiscal year 2017 to a range from 38 million to 41 million (previous forecast: 28 million to 38 million). INTERIM REPORT JANUARY - SEPTEMBER 2017 RIB SOFTWARE SE 7

8 CONSOLIDATED INTERIM FINANCIAL STATEMENTS Consolidated income statement CONSOLIDATED INTERIM FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENT For the period: to figures in thousand, unless otherwise indicated Note 3 rd quarter rd quarter months months 2016 Revenue (4) 28,372 20,924 81,681 70,798 Cost of sales -10,337-10,082-31,831-32,365 Gross profit 18,035 10,842 49,850 38,433 Other operating income (5) , Marketing and distribution costs -4,669-3,804-13,691-12,722 General administrative expenses -2,277-2,750-7,740-7,720 Research and development expenses -3,238-2,371-9,923-7,405 Other operating expenses (6) ,217 Financial income Finance costs Profit shares from investments accounted for using the equity method -1, ,989-3 Profit before tax 7,262 1,904 25,188 9,968 Income taxes -3, ,079-4,253 Profit after tax 3,939 1,111 16,109 5,715 Loss attributable to non-controlling interests Profit attributable to owners of the parent company 3,952 1,121 16,149 5,835 Result per share on the basis of the share earnings of the shareholders of RIB Software SE: - - basic (8) diluted (8) RIB SOFTWARE SE INTERIM REPORT JANUARY - SEPTEMBER 2017

9 Consolidated statement of comprehensive income CONSOLIDATED INTERIM FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the period: to Figures in thousand 3 rd quarter rd quarter months months 2016 Profit after tax 3,939 1,111 16,109 5,715 Components reclassified with no effect on profit and loss:,. - Revaluations 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, ,386-1,318 Changes in value of available-for-sale securities Other consolidated comprehensive income after taxes for components reclassified with an effect on profit and loss -3, ,386-1,318 Other consolidated comprehensive income after taxes -3, ,523-1,294 Total consolidated comprehensive income ,586 4,421 of which attributable to non-controlling interests of which attributable to owners of the parent company ,626 4,541 INTERIM REPORT JANUARY - SEPTEMBER 2017 RIB SOFTWARE SE 9

10 CONSOLIDATED INTERIM FINANCIAL STATEMENTS Consolidated statement of financial position as of and CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF AND Figures in thousand Note Goodwill (9) 65,113 67,166 Other intangible assets 48,719 50,005 Property, plant and equipment 15,478 16,185 Investment properties 4,822 5,272 Investments accounted for using the equity method (10) 35,559 52,166 Prepaid land use lease payments 924 1,006 Other assets Deferred tax assets 2,349 1,541 Total non-current assets 172, ,358 Inventories 1,937 1,432 Trade receivables 26,429 18,420 Gross amounts due from customers for contract work Available-for-sale securities Other assets 5,020 6,650 Cash and cash equivalents 148, ,323 Total current assets 182, ,059 Total assets 355, , RIB SOFTWARE SE INTERIM REPORT JANUARY - SEPTEMBER 2017

11 Consolidated statement of financial position as of and CONSOLIDATED INTERIM FINANCIAL STATEMENTS Figures in thousand Note Subscribed capital 46,846 46,846 Treasury shares -10,597-10,597 Capital reserves 183, ,284 Legal reserves Other retained reserves Accumulated other consolidated comprehensive income -2,171 11,352 Retained earnings 70,575 61,926 Equity attributable to owners of the parent company 288, ,906 Non-controlling interests (11) Total equity 288, ,783 Pension provisions 3,970 3,840 Bank loans 5,300 0 Other provisions Other finance liabilities 2,039 1,882 Deferred tax liabilities 11,210 12,116 Total non-current liabilities 22,842 18,124 Bank loans Trade payables 1,496 2,456 Provisions for income taxes 8,812 4,337 Other provisions 1,142 1,153 Accruals 4,938 4,496 Deferred revenue 23,709 12,817 Other financial liabilities Other liabilities 3,612 19,672 Total current liabilities 44,159 45,510 Total liabilities 67,001 63,634 Total equity and liabilities 355, ,417 INTERIM REPORT JANUARY - SEPTEMBER 2017 RIB SOFTWARE SE 11

12 CONSOLIDATED INTERIM FINANCIAL STATEMENTS Consolidated statement of changes in equity CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the period: to Figures in thousand Issued capital Capital reserves Legal reserves Other retained reserves As of 1 January , , Profit after tax Other comprehensive income Total comprehensive income Purchase of treasury shares Dividend payment Capital increase Other changes Share-based remuneration As of 30 September , , As of 1 January , , Profit after tax Other comprehensive income Total comprehensive income Purchase of treasury shares Dividend payment Capital increase Other changes Share-based remuneration - 1, As of 30 September , , RIB SOFTWARE SE INTERIM REPORT JANUARY - SEPTEMBER 2017

13 Consolidated statement of changes in equity CONSOLIDATED INTERIM FINANCIAL STATEMENTS Accumulated other comprehensive income Changes in securities Foreign currency translation reserve value of available-for-sale Revaluations Treasury shares Retained earnings Equity attributable to owners of parent Non-controlling interests Total equity according to consolidated statement of financial position 1 8, ,828 54, , , ,835 5, , , , , , ,835 4, , , , , ,291-7, , , ,597 53, , , , ,597 61, , , ,149 16, , , , , , ,149 2, , ,196-7, , ,025-1, , ,597 70, , ,038 INTERIM REPORT JANUARY - SEPTEMBER 2017 RIB SOFTWARE SE 13

14 CONSOLIDATED INTERIM FINANCIAL STATEMENTS Consolidated statement of cash flows CONSOLIDATED STATEMENT OF CASH FLOWS For the period: to Cash flows from operating activities: Figures in thousand 9 months months 2016 Profit before tax 25,188 9,968 Adjustments for: Depreciation of property, plant and equipment Amortisation of intangible assets 6,958 6,124 Depreciation of investment property Changes in valuation allowances for trade receivables Other non-cash items 12,589 1,122 Interest expense and other finance cost Financial income Working capital adjustments: 45,653 18,087 Increase/decrease(-) in provisions and deferred liabilities Increase(-)/decrease in receivables and other assets -9,970 2,015 Increase/decrease(-) in received payments -15, Increase/decrease(-) in liabilities from trade payables and other liabilities 9,470 3,269 Cash generated from operations 29,509 22,914 Interest paid Interest received Income taxes paid -4,180-9,736 Net cash flows from operating activities 25,314 13,329 Proceeds from the disposal of non-current assets 4 0 Purchase of property, plant and equipment Purchase/production of intangible assets -5,922-6,569 Disposal of consolidated companies less cash disposed 2,878 0 Purchase(-)/sale of available-for-sale securities 6 2,578 Net cash flows from investing activities -3,510-4,577 Dividends paid -7,196-7,291 Payments to non-controlling interests Payments made for the acquisition of treasury shares 0-5,769 Payments made for redeeming other financial liabilities ,602 Dividend received from investments accounted for using the equity method 97 0 Cash received from bank loans 6,000 0 Repayment of bank loans Net cash flows used in financing activities -1,549-15,862 Change in cash and cash equivalents impacting cash flow 20,255-7,110 Cash and cash equivalents at the beginning of the period 135, ,335 Currency-related change in cash and cash equivalents -7,374-1,185 Cash and cash equivalents at the end of the period 148, ,040 Composition of cash and cash equivalents: Liquid funds, unrestricted 145, ,266 Liquid funds, restricted 3,139 1,774 Total 148, , RIB SOFTWARE SE INTERIM REPORT JANUARY - SEPTEMBER 2017

15 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS CONSOLIDATED INTERIM FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1. CORPORATE INFORMATION RIB Software AG has entered into a European Stock Company (Societas Europaea / SE) and is now trading as RIB Software SE. The new legal form has been registered in the commercial register on 3 April This condensed consolidated interim financial statement of RIB Software SE (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 SE as of 31 December Due to the representation of the numbers in thousands, 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 i-pbs Production Business Solutions GmbH, Vienna/Austria, and RIB Software (Americas) Inc., Wilmington/ USA, were deconsolidated in the reporting period and deleted from the relevant company register. Compared to the consolidated financial statements as of 31 December 2016, the scope of consolidation as of 30 September 2017 also includes RIB COE Europe GmbH, Stuttgart. The company was founded on 19 April The sole shareholder is RIB Software SE. 4. REVENUE Revenue breaks down as follows: Figures in thousand 9 months months 2016 Software licences 26,649 19,207 Software as a service / cloud 10,404 9,742 Total software licences and software as a service / cloud 37,053 28,949 Maintenance 24,016 20,471 Consulting 15,249 16,193 e-commmerce 5,363 5,185 Total revenue 81,681 70,798 INTERIM REPORT JANUARY - SEPTEMBER 2017 RIB SOFTWARE SE 15

16 CONSOLIDATED INTERIM FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS The total software licence revenue is subdivided as follows: Figures in thousand 9 months months 2016 itwo Key Account 12,746 6,062 itwo Mass Market 9,543 8,267 SaaS / Cloud 10,404 9,742 Legacy Products 4,360 4,878 Total software licences and software as a service / cloud 37,053 28, OTHER OPERATING INCOME Other operating income primarily include income from the software delivery to YTWO of 7,601 thousand, income from purchase price liabilities adjustments of 380 thousand and income from receivables written down of 294 thousand. In the reporting period, rental income from investment property was in the amount of 577 thousand and was included in other operating income. 6. OTHER OPERATING EXPENSES Other operating expenses include foreign exchange expenses arising from cash and cash equivalents amounting to around 219 thousand. 7. EXPENSES FOR EMPLOYEE BENEFITS AND NUMBER OF EMPLOYEES Expenses for employee benefits Figures in thousand 9 months months 2016 Wages and salaries 31,870 29,476 Social security and pension costs 5,455 5,201 Total 37,325 34,677 Average number of employees 9 months months 2016 General administration Research & development Sales & marketing Support & consulting Total RIB SOFTWARE SE INTERIM REPORT JANUARY - SEPTEMBER 2017

17 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS CONSOLIDATED INTERIM FINANCIAL STATEMENTS 8. EARNINGS PER SHARE BASIC AND DILUTED Earnings per share are calculated on the basis of the profit share of the shareholders in RIB Software SE as shown in the following table: figures in thousand 9 months months 2016 Profit share of the shareholders of RIB Software SE basic and diluted 16,149 5,835 figures in thousand shares 9 months months 2016 Weighted average of shares in circulation - basic 44,985 45,351 Dilution effect Weighted average of shares in circulation - diluted 45,690 45,822 The average commercial value of the Company s shares used to calculate the dilution effect of existing share options is based on the quoted market prices for the period in which the options were in circulation. 9. GOODWILL Figures in thousand Licence/software business segment 42,513 43,730 SaaS/Cloud business segment 12,380 12,770 Consulting business segment 5,591 5,815 itwo reporting segment 60,484 62,315 xtwo (e-commerce) business segment xtwo reporting segment GZ TWO development entity 3,046 3,268 Arriba Finance Total 65,113 67,166 The change in carrying amounts by -2,053 thousand was attributable to currency translation effects of goodwill held in local currency, which were recognised outside profit or loss. 10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD Figures in thousand YTWO Exactal Others Total Carrying amounts as of ,170 2, ,166 Additions Elimination of unrealized profits from downstream sales -7, ,601 Dividend paid to the group Profit/loss attributable to the group recognized in the consolidated income statement -3, ,989 Profit/loss attributable to the group recognized in the consolidated comprehensive income -5, ,959 Carrying amounts as of ,534 2, ,559 INTERIM REPORT JANUARY - SEPTEMBER 2017 RIB SOFTWARE SE 17

18 CONSOLIDATED INTERIM FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS 11. NON-CONTROLLING INTERESTS The non-controlling interests relates to 25% of the shares of xtwomarket GmbH. 12. SEGMENT INFORMATION Please refer to section (7) of our consolidated financial statements for the 2016 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: 9 months 2017 Figures in thousand itwo xtwo Total Revenue, external 76,318 5,363 81,681 License / Software 50,665-50,665 SaaS / Cloud 10,404-10,404 Consulting 15,249-15,249 xtwo (e-commerce) - 5,363 5,363 Production costs -27,197-4,634-31,831 License / Software -13, ,161 SaaS / Cloud -1, ,994 Consulting -12, ,042 xtwo (e-commerce) - -4,634-4,634 Research and development expenses -9, ,923 License / Software -7, ,242 SaaS / Cloud -2, ,673 Consulting xtwo (e-commerce) Distribution and marketing costs -12, ,691 General administrative expenses -7, ,740 Other operating income and expenses 9, ,694 EBIT Segment 28, ,190 Financial result -3,002 thereof profit shares from investments accounted for using the equity method 210-3,199-2,989 Income taxes -9,079 Consolidated net profit 16,109 EBITDA Segment 36, ,080 EBITDA-margin 48.0% -10.1% 44.2% Other segment information: Segment amortisation and adjustments 7, ,890 Carrying amount of participation in the joint venture YTWO accounted for using the equity method - 32,534 32, RIB SOFTWARE SE INTERIM REPORT JANUARY - SEPTEMBER 2017

19 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS CONSOLIDATED INTERIM FINANCIAL STATEMENTS 9 months 2016 Figures in thousand itwo xtwo Total Revenue, external 65,613 5,185 70,798 License / Software 39,678-39,678 SaaS / Cloud 9,742-9,742 Consulting 16,193-16,193 xtwo (e-commerce) - 5,185 5,185 Production costs -27,442-4,923-32,365 License / Software -13, ,316 SaaS / Cloud -1, ,329 Consulting -12, ,797 xtwo (e-commerce) - -4,923-4,923 Research and development expenses -7, ,405 License / Software -5, ,652 SaaS / Cloud -1, ,721 Consulting xtwo (e-commerce) Distribution and marketing costs -11,610-1,112-12,722 General administrative expenses -7, ,720 Other operating income and expenses EBIT Segment 11,510-1,445 10,065 Financial result -97 thereof profit shares from investments accounted for using the equity method Income taxes -4,253 Consolidated net profit 5,715 EBITDA Segment 18,345-1,364 16,981 EBITDA-margin 28.0% -26.3% 24.0% Other segment information: Segment amortisation and adjustments 6, ,916 Carrying amount of participation in the joint venture YTWO accounted for using the equity method The Managing Directors as the chief operating decision-makers do not request submission of any regular details of segment assets and segment liabilities. INTERIM REPORT JANUARY - SEPTEMBER 2017 RIB SOFTWARE SE 19

20 CONSOLIDATED INTERIM FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS Geographic information Revenue by geographic area (based on the location of customers) breaks down as follows: Figures in thousand 9 months months 2016 EMEA (Europe, Middle East and Africa) 64,706 57,040 APAC (Asia Pacific) 6,646 3,133 North America 10,329 10,625 Total revenue 81,681 70, FINANCIAL INSTRUMENTS - FAIR VALUE Classifications and fair values The following table shows the book values and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not contain any information on the fair value of financial assets and financial debts that are not assessed at fair value if the book value is an appropriate approximation of the fair value. 20 RIB SOFTWARE SE INTERIM REPORT JANUARY - SEPTEMBER 2017

21 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS CONSOLIDATED INTERIM FINANCIAL STATEMENTS Carrying amount Fair value Figures in thousand As of 30 September 2017 Financial assets at fair value Available for sale Loans and receivables Level 1 Level 2 Level 3 Total Cash market and investment funds Corporate Bonds Total Financial assets not measured at fair value Accounts receivable trade - 26, Other Assets* 844 Cash and cash equivalents - 148, Total - 175, Financial liabilities at fair value Held for trading Other financial liabilities Level 1 Level 2 Level 3 Total Derivates 2, ,027 2,027 Financial liabilities not measured at fair value Bank liabilities 5,700 Accounts payable trade - 1, Other financial liabilities Other liabilities** Total 2,027 8, ,027 2,027 * This item does not include other assets in the amount of 4,192 thousand, which are not financial assets. ** This item does not include other liabilities in the amount of 2,762 thousand, which are not financial liabilities. INTERIM REPORT JANUARY - SEPTEMBER 2017 RIB SOFTWARE SE 21

22 CONSOLIDATED INTERIM FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS Carrying amount Fair value Figures in thousand As of 31 December 2016 Available for sale Loans and receivables Level 1 Financial assets at fair value.. Level 2 Level 3 Total Cash market and investment funds Corporate Bonds Total Financial assets not measured at fair value Accounts receivable trade - 18, Other Assets* 4,594 Cash and cash equivalents - 135, Total - 158, Financial liabilities at fair value Held for trading Other financial liabilities Level 1 Level 2 Level 3 Total Derivates 2, ,860 2,239 Financial liabilities not measured at fair value Accounts payable trade - 2, Other financial liabilities Other liabilities** - 1, Total 2,239 4, ,860 2,239 * This item does not include other assets in the amount of 2,072 thousand, which are not financial assets. ** This item does not include other liabilities in the amount of 18,217 thousand, which are not financial liabilities. 22 RIB SOFTWARE SE INTERIM REPORT JANUARY - SEPTEMBER 2017

23 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS CONSOLIDATED INTERIM FINANCIAL STATEMENTS Determination of the fair values 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 any inputs which have a significant effect on the recorded fair value are not 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 In determining the time when re-groupings are to be deemed to have occurred between different levels, we refer to the date of the event or the change in the circumstances that caused the regrouping. The financial liabilities measured at fair value are derivative financial liabilities from company acquisitions. The derivatives classified as level 2 as of 31 December 2016 were liabilities from the acquisition of the subsidiary RIB US Cost whose amount depends in particular on the future share price development of the RIB Software SE. As of 31 March 2017 it was clear that the share price targets were no longer reached within the agreed period, the liability of 380 thousand was charged to the income statement as of 31 March The derivatives assigned to level 3 are the liability under the option agreement in connection with the acquisition of the company RIB SAA. In the 2015 financial year, the group acquired 75% of the shares in RIB SAA. At the same time, purchase and sale options for the transfer of outstanding shares of 25% were concluded with the sellers. From the holding position within the scope of the sale option agreement, the group has a financial liability for which an amortized fair value of 2,632 thousand was calculated. Of this, a partial amount of 1,582 thousand was assigned to the company acquisition and a partial amount in the amount of 1,050 thousand in a separate transaction in the form of a pay agreement. The financial liability attributable to the acquisition of companies was estimated in full in the context of the accounting for the acquisition of the company. The financial liability assigned to the separate transaction is accrued over a period of 66 months at the charge of personnel expenses and is recognized as of the balance sheet date with an amount of 408 thousand in the financial liabilities. The personnel expenses attributable to the reporting period amount to 143 thousand. The interest on financial liabilities resulted in an interest expense of 25 thousand. INTERIM REPORT JANUARY - SEPTEMBER 2017 RIB SOFTWARE SE 23

24 CONSOLIDATED INTERIM FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For a description of the techniques used in the assessment of this liability as well as the input factors used in the calculation of the fair value, please refer to our explanations in section (38) in the consolidated financial statement as of 31 December In the reporting period, there were no transfers between levels one and two and no transfers into or out of level three. The financial liabilities valued at fair value developed as follows in the reporting period: Figures in thousand 2017 As of 1 January 2,239 Changes without effect on profits 0 Changes with effect on profits Income from the subsequent valuation of purchase price liabilities (other operating income) -380 Personnel expenses from the accumulation of purchase price liabilities (production costs) 143 Expenses from the interest accrued on purchase price liabilities (finance expenses) As of 30 September 2,027 Material valuation parameters were subjected to a sensitivity analysis for measuring the financial liabilities on level three. 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 financial liabilities on level three of 2,027 thousand: Figures in thousand Sensitivity Carrying amount Discounting interest rate used for the discounting period + 1 %-point 1,903 Discounting interest rate used for the discounting period - 1 %-point 2,060 Growth rate in the budgeted revenues in the budget period % 2,217 Growth rate in the budgeted revenues in the budget period % 1,678 Stuttgart, 30 October 2017 RIB Software SE The Managing Directors Thomas Wolf Michael Sauer Helmut Schmid Mads Bording Rasmussen 24 RIB SOFTWARE SE INTERIM REPORT JANUARY - SEPTEMBER 2017

25 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS CONSOLIDATED INTERIM FINANCIAL STATEMENTS INTERIM REPORT JANUARY - SEPTEMBER 2017 RIB SOFTWARE SE 25

26 Further Information FURTHER INFORMATION IMPRINT Published by: RIB Software SE Vaihinger Straße Stuttgart Responsible for content: RIB Software SE, Stuttgart Photos: Page 2: Andreas Dalferth Design and realisation: RIB Software SE, Stuttgart. All rights and technical alterations reserved. Copyright 2017 RIB Software SE October 2017 Trademarks: RIB, RIB itwo, ARRIBA, the RIB logo and the itwo logo are registered Trademarks of RIB Software SE 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. 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. 26 RIB SOFTWARE SE INTERIM REPORT JANUARY - SEPTEMBER 2017

27 Further Information FINANCIAL CALENDAR March April May 2017 Annual Report 2016 Analyst Conference Call Interim Report (January - March 2017) Analyst Conference Call Annual General Meeting 31 July October 2017 Interim Report (January - June 2017) Analyst Conference Call Interim Report (January - September 2017) Analyst Conference Call CONTACT RIB Software SE Vaihinger Straße Stuttgart Product information and References Investor Relations Phone: +49 (0) Fax: +49 (0) investor@rib-software.com Internet: group.rib-software.com Careers Internet: group.rib-software.com/en/careers INTERIM REPORT JANUARY - SEPTEMBER 2017 RIB SOFTWARE SE 27

28 RIB Software SE Investor Relations Vaihinger Straße Stuttgart Phone: Fax: Internet: group.rib-software.com