Contender Nemetschek's Financial Head Expresses Optimism Regarding Prospects for Growth
Nemetschek, the Munich-based software company founded by civil engineer Georg Nemetschek in 1963, is on the brink of promotion to Germany's top stock market league, the Dax. The Deutsche Börse is expected to announce changes to its indices at the beginning of September, with Nemetschek and Lufthansa being likely candidates for inclusion.
The company's growth strategy prioritizes expansion over optimizing margins, with the belief that growth will increase the value of the company. This approach has paid off, with Nemetschek more than doubling its market capitalization to around 15 billion euros in the past two years.
The subscription model, which accounted for approximately 92% of the company's 573 million euros in revenue in the first half of this year, plays a significant role in this growth. Louise Öfverström, responsible for finance, IT, and legal affairs at Nemetschek, anticipates the subscription model to account for around 95% of the company's revenue, but not 100%, due to certain customers who can only purchase licenses.
Öfverström, who has been on the board for about two and a half years after working in industrial companies like Linde, MAN, and ThyssenKrupp, expressed delight at the prospect of a Dax listing. She stated it would be a confirmation of the company's strong business model and the culmination of Professor Nemetschek's vision and pioneering spirit.
If Nemetschek were to be included in the Dax, its day-to-day business would remain largely unchanged. The company's software portfolio covers the entire lifecycle of construction and infrastructure projects, including planning, construction, and building management. Additionally, Nemetschek offers software for film productions, the gaming and advertising industries, to create two- and three-dimensional digital content.
The subscription model boosts profitability through scale effects, but Öfverström emphasizes that the company also provides added value to customers. She anticipates an average annual growth rate of 15% for Nemetschek, a figure that seems realistic given the company's recent performance.
Inclusion in the Dax can increase a company's visibility, attract more institutional investors, and potentially improve liquidity and valuation. However, without concrete statements from Nemetschek post-inclusion or around the anticipated date, the precise effects on their operations or growth strategy cannot be confirmed at this time.
Regardless, Öfverström expresses enthusiasm about contributing to the next chapter of Nemetschek. She sees the Dax listing as a confirmation that Nemetschek has recognized market opportunities early and remained curious and innovative, with the courage to consistently pursue its ideas.
[1] [Source 1] [2] [Source 2]
In the context of Nemetschek's potential inclusion in the Dax and its continued growth, the company's prioritization of expansion in the business sector, driven by technology and finance, has resulted in a significant increase in market capitalization. With the subscription model accounting for a majority of the company's revenue, Louise Öfverström anticipates an average annual growth rate of 15% solely due to this innovative business strategy. [Source 1, Source 2]
The Dax listing would further validate Nemetschek's strong business model and its success in leveraging technology to drive growth in the finance and business sectors, a testament to the pioneering spirit of its founder, Professor Nemetschek. [Source 1]
