Interim Report 2014 - RIB Software · It is an exciting year for the 5D BIM technology companies....

Interim Report 2014 January - September

Letter to the shareholders | Interim Report January – September 2014 | RIB Software AG

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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 > 74.7. 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 2014. 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 2014. 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.

Letter to the shareholders | Interim Report January – September 2014 | RIB Software AG

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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 2015.

Yours sincerely,

Thomas Wolf Michael Sauer Dr. Hans-Peter Sanio

RIB on the capital market | Interim Report January – September 2014 | RIB Software AG

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RIB on the Capital Market

Deutsche Börse AG decided to reinstate RIB Software AG, Stuttgart (ISIN DE000A0Z2XN6) in the TecDAX on 22 September 2014. 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 € 10.85 per share (Xetra closing price 30.09.2014). On 28 October 2014 the Xetra

closing price of the RIB share was € 11.25 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 01.01.2014 – 30.09.2014

Key Figures

€ million unless otherwise indicated 30.09.2014 30.09.2013 Change

Software and software-related service revenue 32.3 30.4 6.3%

Total revenue 42.2 41.5 1.7%

EBITDA 21.6 11.9 81.5%

as % of revenue 51.2% 28.7%

EBIT 17.2 8.2 109.8%

as % of revenue 40.8% 19.8%

Profit after tax 13.5 6.1 121.3%

R&D expenses* 10.3 9.2 12.0%

R&D ratio* (Expenses on R&D as % of revenue)

24.4% 22.2%

Average number of empoyees 590 546 8.1%

Liquid funds and availabe-for-sale securities** 129.7 82.1 58.0%

Equity** 217.9 142.7 52.7%

Equity ratio** 84.8% 80.2%

* before capitalisation and amortisation. ** Presentation of previous year as of December 31, 2013.

Interim group management report | Interim Report January – September 2014 | RIB Software AG

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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 € 129.7 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 € -13.1 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 fixed-

interest 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: € -12.7 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

€ 129.7 million (31 December 2013: € 82.1 million). Equity amounted to € 217.9 million (31 December 2013: € 142.7 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).

Interim group management report | Interim Report January – September 2014 | RIB Software AG

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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 2013.

Consolidated interim financial statements | Interim Report January – September 2014 | RIB Software AG

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Consolidated interim financial statements

Consolidated income statement

For the period: 01.01.2014 to 30.09.2014

€ thousands unless otherwise indicated

Note 3rd quarter

2014 3rd quarter

2013 9 months

2014 9 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) 7,965 155 10,671 965

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) -122 -933 -382 -1,412

Finance income 82 110 246 426

Finance costs -107 -105 -269 -342

Profit before tax 10,820 3,600 17,217 8,316

Income tax expense -2,405 -740 -3,740 -2,200

Profit after tax 8,415 2,860 13,477 6,116

Profit attributable to non-controlling interests 0 17 0 17

Profit attributable to owners of parent company 8,415 2,843 13,477 6,099

Earnings per share:

Diluted and basic (9) 0.22 € 0.08 € 0.35 € 0.16 €


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Consolidated statement of comprehensive income

For the period: 01.01.2014 to 30.09.2014

€ thousands

3rd quarter

2014 3rd quarter

2013 9 months 2014 9 months 2013

Profit after tax 8,415 2,860 13,477 6,116

Components reclassified with no effect on profit and loss:

Revaluations 7 -45 21 -134

Income tax in connection with components that are not reclassified -2 14 -6 41

Other consolidated comprehensive income after taxes for components reclassified with no effect on profit and loss 5 -31 15 -93

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 -4 60 13 -31

Income tax in connection with components that are reclassified -1 -50 -3 -28

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 0 17 0 17

of which attributable to owners of the parent company 12,086 1,546 17,842 3,949


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Consolidated statement of financial position as of 30.09.2014 and 31.12.2013

€ thousands

Note 30.09.2014 31.12.2013

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 1,001 936

Other assets 51 51

Deferred tax assets 503 427

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 256,969 177,893


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€ thousands

Note 30.09.2014 31.12.2013

Issued capital (12) 43,467 38,715

Treasury shares -5,543 -6,240

Capital reserves 134,998 80,768

Legal reserves 56 56

Accumulated other comprehensive income 1,279 -3,086

Retained earnings 43,636 32,397

Equity attributable to owners of parent 217,893 142,610

Non-controlling interests (13) 0 67

Total equity 217,893 142,677

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 295 306

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 256,969 177,893

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12

Consolidated statement of cash flows

For the period: 01.01.2014 to 30.09.2014

€ thousands 9 months 2014 9 months 2013

Cash flows from operating activities:

Profit before tax 17,217 8,316

Adjustments for:

Depreciation and impairment of property, plant and equipment 451 282

Amortisation and impairment of intangible assets 3,810 3,426

Depreciation of investment property 103 0

Changes in allowance for impairment of trade receivables 27 -34

Other non-cash items -9,614 1,163

Interest expense and other finance cost 269 342

Finance income -246 -426

12,017 13,069

Working capital adjustments:

Increase/decrease(-) in provisions and accruals 386 209

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 -67 -25

Interest received 123 496

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 -634 -697

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 -90 0

Cash outflow for share buybacks 0 -7,313

Cash outflow for repayment of other financial liabilities -4 -7

Cash paid for finance leases -1 -36

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


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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 2013.

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 2013.

3. 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 2013. The company BYGGEWEB was fully consolidated for

the first time in the interim financial statements as at 30 September 2014. 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 2013.

The Group increased its share in RIB US Cost Incorporated, Atlanta, USA (hereinafter referred to as RIB US Cost) from 61.675% to 93.585%

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 2013.

4. Mergers

Acquisition of BYGGEWEB

The Group acquired 100% of the shares in BYGGEWEB by means of an agreement dated 25 July 2014. 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 2014. For the sake of simplicity, the purchase price allocation was based

on the value as of 31 August 2014. The transactions between 29 August and 31 August 2014 were of minor importance. Furthermore, no

material changes in value occurred during this period.


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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 2014. 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 2014. 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 2014. 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:

€ thousands

Carrying amount

31.08.2014

Fair value

31.08.2014

Intangible assets 31 9,432

Property, plant and equipment 233 233

Other assets 255 255

Trade receivables 1,123 1,123

Cash and cash equivalents 1,375 1,375

3,017 12,418

Deferred revenue 620 620

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.


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5. Revenue

Revenue breaks down as follows:

€ thousands

9 months 2014 9 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:

€ thousands


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 16,759

6. 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.


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8. Expenses for employee benefits and number of employees

Expenses for employee benefits

€ thousands


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


General administration 77 68

Research and development 243 208

Sales and distribution 98 85

Support/Consulting 172 185

Total 590 546

9. 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.

€ thousands unless otherwise indicated


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) 0.35 € 0.16 €


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10. Goodwill

€ thousands

30.09.2014 31.12.2013

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 2014. The company’s share capital was increased from € 38,715,420.00 by € 3,871,541.00 to

€ 42,586,961.00 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 €12.50 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. € 46.6 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 € 42,586,961.00 by € 880,000.00 to € 43,466,961.00 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 2014.

13. 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.


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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 2014. 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 2012. 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 2014. 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

2012. 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.


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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.

€ thousands

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 -7,147 -571 -8,602 -16,320

Research and development expenses -3,185 -1,251 0 -4,436

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

€ thousands

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 -5,286 -491 -10,129 -15,906

Research and development expenses -2,362 -1,286 0 -3,648

Segment profit (EBIT) 17,521 3,445 958 21,924

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.


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Geographic information

Revenue by geographic area (based on the location of customers) breaks down as follows:

€ thousands


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 41,478

16. 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:

€ thousands

Level 1 Level 2 Level 3 Total

Available-for-sale financial assets:

Sovereign bonds 3,735 - - 3,735

Corporate bonds 259 - - 259

Financial assets measured at fair value as of 31 December 2013:

€ thousands


Available-for-sale financial assets:

Sovereign bonds 3,484 - - 3,484

Corporate bonds 277 - - 277


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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:

€ thousands


Financial liabilities:

Derivatives - - 2,492 2,492

Financial liabilities measured at fair value as of 31 December 2013:

€ thousands


Financial liabilities:

Derivatives - - 10,697 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 2013. For further details, please refer to Section (39) of our consolidated financial statements as of 31 December 2013.

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:

€ thousands

9 months 2014

As of 1 January 2014 10,697

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 2014 2,492


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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 Sensitivity Carrying amount

Discount interest rate in the scope of the DCF method + 1 %-point 2,407

Discount interest rate in the scope of the DCF method - 1 %-point 2,601

Growth rate in the budgeted revenues in the detailed budget period + 10.0 % 2,767

Growth rate in the budgeted revenues in the detailed budget period - 10.0 % 2,195

Stuttgart, 31 October 2014

RIB Software AG

The Executive Board

Thomas Wolf Michael Sauer Dr. Hans-Peter Sanio

Further information | Interim Report January – September 2014 | RIB Software AG

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Further information

Contact Details

RIB Software AG

Vaihinger Straße 151

70567 Stuttgart

Germany

Investor Relations

Phone: +49 711 7873-191

Fax: +49 711 7873-311

e-mail: [email protected]

Internet: group.rib-software.com

Imprint

Published by:

RIB Software AG

Vaihinger Straße 151

70567 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.”

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