RIB Software grew 57% in 2019

Revenues at Germany’s RIB Group grew 57% in 2019, and the company’s financial performance has also been detailed in a Reasoned Statement in response to Schneider Electric’s takeoever bid.

RIB software logoThe latest annual report and accounts from Stuttgart, Germany-based software provider RIB Group, for the year to 31 December 2019, shows revenue up over 57% on 2018 (post) to €214.6m (c. US$231.9m or £188.4m). The company also increased its profits: EBITDA was up 32% to €51.2m (c. US$55.2m or £44.9m).

According to RIB’s announcement:

“2019 was characterized by strong investments in personnel, technology expansions for MTWO and the acquisition of users for our MTWO/iTWO 4.0 platform as well as promising initiatives such as the MTWO “out of the box” solution, which can be used by clients within 48 hours. As a result, we were able to significantly increase the MTWO/iTWO 4.0 user base from 3,000 to 69,337, far exceeding our target of 30,000 users in 2019.”

As well as the MTWO/iTWO offerings (within which the Microsoft-supported MTWO is positioned as “the first vertical cloud platform for the construction industry“), RIB also provides web-based support for procurement processes (supply chain management and e-commerce, grouped as RIB’s xYTWO segment).

RIB 2019 metricsUntil 2019, RIB derived most of its revenues from Germany. Now it’s much less:

  • Germany: €73.8m (34.4%)
  • EMEA: €65.5m (30.5%)
  • North America: €41.0m (19.1%)
  • APAC: €34.3m (16.0%)

While Germany is still its most important single market, accounting for just over a third of income, revenues from the rest of Europe, the Middle East and Africa now account for around 30% of revenues, while the North American and APAC regions have grown rapidly, buoyed by the company’s programme of mergers and acquisitions. This programme has also seen the company grow its headcount from just over 1000 to almost 1600 during 2019.

During a busy 2019, among other deals, RIB invested in the UK AEC software reseller Cadline (April), acquired 60% of the Atlanta, USA-based building specification software vendor, BSD (June),  acquired 70% of South Africa’s CCS, a provider of cost estimation and project control software (July), and took a strategic 15% stake in India’s company, Winjit, an Internet of Things (IoT), artificial intelligence (AI), machine learning and blockchain developer (August). It then invested in another India-based software business, SoftTech, bought a German business intelligence specialist, Datapine, and acquired an Australian reseller, Redstack (November).

In 2019, RIB aimed to become a more global player by reducing its reliance on localised, on-premise software installations, In 2018, annual recurring revenues (SaaS/cloud and maintenance) grew 21% to €57.4m. In 2019, this figure was almost doubled: ARR for 2019 was up 94.5% to €112.6 million.

Schneider Electric deal commended to shareholders

In February 2020, French multinational Schneider Electric made a €1.4bn bid for RIB Software. RIB’s financial announcement was accompanied by a Reasoned Statement from the managing directors and the administrative board of RIB. In it, they recommend that RIB shareholders accept the offer, saying the offer price of €29.00 per RIB share is adequate and arguing that a strategic participation of Schneider Electric in RIB is in the best interests of RIB, RIB shareholders and other stakeholders.

Update (20 April 2020) – Two days before the deadline (midnight CEST, on 22 April) on for acceptance of the Schneider Electric offer, RIB has appealed to shareholders urging them to respond.

A condition of the offer’s acceptance is that it must reach a minimum acceptance threshold of 50% (plus one RIB share) of all RIB shares. The acceptance rate as of 17 April (14.00 hrs CEST) was only 32.47%.

RIB underlines that the €29 offer price offers a premium of over 40% over the closing price of  RIB shares one day before the announcement of the transaction. Since then, the SDAX and the TecDAX have lost 22.2% and 12.5% respectively, mainly due to the Coronavirus crisis. “The Managing Directors and the administrative board of RIB recommend that shareholders wishing to accept Schneider Electric’s offer do so without delay.”

Update (30 April 2020) – The minimum acceptance threshold was reached (at the deadline, 76.63% of shareholders had indicated acceptance). Schneider Electric expected to complete the transaction in the second quarter of 2020, subject to approval by competition authorities.

A quarterly trading update from RIB showed revenues in the first quarter of 2020 were up 39.8% to €65.6m, and operating EBITDA up 36.2% to €15.8m. Uncertainties caused by Covid-19 led RIB to “severely limit” its M&A activities an to focus on the successful expansion of its iMTWO segment. The company continued: “we plan to discontinue or sell the physical trading business in the segment xYTWO, which does not contribute to EBITDA.”

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