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Dear ladies and gentlemen, welcome to the earnings call of Nemetschek Group. At our customer's request, this conference will be recorded. [Operator Instructions]May I now hand you over to Mrs. Stefanie Zimmermann, who will start this conference. Please go ahead, Madam.
Thank you, operator. Good morning, everybody, and welcome to our conference call. Thank you for joining us to discuss our results for the first quarter 2018. Today's conference call is being recorded. A replay of the call will be available at our website after the call. We have prepared a short presentation with the most important figures and events of the last 3 months. You will find the presentation, the quarterly report and the press release on our Investor Relations website as well. Let's start now with the presentation. I would like to hand over to Patrik Heider, who will lead you through the presentation.
Thank you, Stefanie, and hello to everyone. I appreciate you joining our call today. I will be brief in my presentation so we can get your questions afterwards. Overall, The Nemetschek Group is well on plan for the year 2018, and the midterm guidance we communicated. Q1 results are in line with our expectations. A highlight in Q1 was our successful development in recurring revenues. Recurring revenues were up by a strong 22.4%. They're off subscription revenues with a strong growth of 47.3%. Our strategic investments into internationalization, next-generation products and solutions and operational excellence are running well, and we are making good progress.Let's talk about our top key figures in Q1 2018. Unless otherwise noted, I report on constant currency ratios. Revenue grew by 13.1% to EUR 102.2 million. Reported growth was at 6.2%. We had a strong currency headwind with EUR 6.7 million and a strong growth in Q1 2017 with 24%. The development of our recurring revenues is very positive with a close of 22.4% to EUR 50.6 million. Our profitability remains high. Additionally, we performed the strategic investments to secure future growth.EBITDA grew 13.3% to EUR 27.9 million, with a margin of 27.3%. The EPS is developing very positively due to a lower tax rate of actually 24.5%. Reported EPS increased by 15.2% to EUR 0.43.On Page 3, you see the segmentation of our revenues in recurring and software licenses. Recurring revenues developed very well by 22.4% to EUR 50.6 million with a share of almost 50% of our revenues. Besides good development of maintenance revenues, the high growth was driven by a very good development on subscription. Subscription revenue grew by 47.3% to EUR 4.3 million. We keep our path of a smooth transition of our business model. License growth was 4.8% in Q1. This was in line with our plans as we have an extraordinary growth of more than 20% in licenses the year before.Now a few words in our internationalization progress. The U.S. remains the strongest-growing region with a growth rate of 26%. Also very positive development we see in the U.K., clearly driven by the entry of several brands. The single-digit development in Germany relates to the strong license growth in Q1 2017. We expect Germany's stronger performing in the next period.Coming now to our segment overview on Page 5. The Design segment showed solid growth with 8.2%, in line with our expectation. In the Design segment, we also see integrated most of the strategic initiatives. During the year, the growth rate in top line and profitability will improve.The Build segment keeps the high growth rate of 26.6%. On margin side, the main drivers are efficiency improvement and seasonal shifts of OpEx. Manage segment showed good development in top line and margin.In the Media & Entertainment segment, we saw a strong development in maintenance contract, driven by a campaign to increase attach rate in Q1. This is reflected in deferred revenues and gives us visibility on stronger growth in the upcoming quarters. All segments are in line with our plan for the year.Our cash generation, reflected on Page 6, remains strong. Our cash conversion rate remains on a high 95.2%. The operating cash flow increased by 19.6%. Cash flow from financing activity is mainly driven by repayments of debt. This development leads us to an increase of our net liquidity to EUR 47.4 million and a high equity ratio of around 50%.Turning now into our strategic investments. In the next periods, we will report more and more market success stories. The Nemetschek Group is the leading AEC Open BIM group, strong innovative brands addressing their market segments with the best software solutions; same time, taking all benefits of being part of a strong group. This is what we mean shifting our group from a financial to a strategic holding. All the above-mentioned highlights in Q1 are reflecting these strategic investment directions. Brands can benefit from the group's setup to go international much more efficient and faster than before. Brands are developing future solutions together when the market requires it. Those investments strengthen and expand our market position worldwide.With our current setup, we are in the great position to consider and decide between make or buy development, which makes us much more independent from multiple bidding processes in M&A. One example is our development of the CDE platform we are performing with our brand, Bluebeam, instead of buying at high multiples. Additionally, we are investing into operational excellence within our group to enable future growth and increase efficiency.In the end of my presentation, we are confirming our positive outlook for the year 2018. Our outlook for the year is to reach EUR 447 million to EUR 457 million in revenues, with an EBITDA margin of 25% to 27%, additionally investing EUR 10 million to leverage future growth.Thank you very much for your ongoing interest in the Nemetschek Group. I'm now happy to answer your questions.
[Operator Instructions] The first question is from Mr. Gal Munda, Berenberg.
Can you just talk a bit about the subscription offering? It grew significantly and becoming more meaningful part of overall revenue as part of strategic kind of one-off initiatives for the year. Can you talk which brands are pushing it in terms of -- or offering it? And how do you compensate sales for it? Maybe also talk a bit about the comparison of the pricing between different -- offerings between the subscription and licenses. That would be really helpful.
Thank you for your question. So mainly, the subscription increase is mainly driven from our U.S. brands and also coming from the new brands. As you know that our new brands, like dRofus and RISA, are mainly already in the subscription: dRofus completely, and RISA is shifting to it. And those are mainly coming from the U.S. markets. And this is what we see. We don't see any change in message, what we already told you, that we do have a smooth transition of our business model. So it's not already an influence in our license growth. This was different reason why license growth was there where it is at the moment. But no shift in -- or no change in our message. Also in the U.K., we do see that it's also adopting faster in a way that the new offerings we are going into and the brands, like for example also dRofus and other brands, are seeing in the U.K. an slight increase, but mainly driven from new brands and the U.S. Competitor pricing, it would be too detailed now because every brand, as you know, have a different setup. And this would be too detailed to have an overall message for the Nemetschek [indiscernible], which is not possible.
As a follow-up, can I just focus on Bluebeam for a second. Can you maybe talk about the drivers that contributed to Bluebeam profitability improvement? And if you can just talk a bit more about the growth of Bluebeam. Was it in line with the Build segment? Or can you maybe share some specifics on Bluebeam in terms of revenue? And how that compares with the Design brands maybe, especially, the bigger ones?
Yes. Exactly. Bluebeam is continuing the success story. I mean, Bluebeam had an incredible strong quarter again. And as I always state, it's different from the already highly penetrated U.S. market to the one they go international. International successes are coming. As for example, they contributed highly to the U.K. They are also gaining attraction in Germany and the Nordic countries. So this is very successful from the internationalization perspective. But also the U.S. market, what we already stated, they have a good price increasing power, and this is also reflected. So to the EBITDA margin side, that's clearly, I would say, also efficiency falls into but also a seasonal shift of OpEx. As they -- exactly in the end of the quarter, they came up last year with their new release. Now it was 11th of April. That's 11 days in between. So this is why the OpEx shifted also to the second quarter. So I wouldn't assume that the margin remains there where it is. Definitely, we're driving efficiency, improving also. But also, we will see a seasonal shift of OpEx. For the Design brands, we clearly need to see the German development and we need to see the year-before development compared to quarter 1 in 2017. That's also why we are very positive to see an improvement in top line and margin in the next quarters. Yes, there is also a margin impact because our strategic initiatives are highly contributing to the margin in the Design segment. But all the Design segment brands are in line with expectations. We have a very good development, as for example, to take the positive path also is the Vectorworks in the U.K. market, which is also contributing very nicely to the growth here in U.K., as for example. So all the brands are in line with expectations so far.
The next question is from Knut Woller, Baader Bank.
A couple of questions. Firstly, Patrik, on the spending, it looks like looking at the margin on the group level, it was not too much affected by the spending. Can you give us an idea how we should think about the spending in the remainder of the year? My take of your results as that there hasn't been too much invest in the strategic initiatives from the EUR 10 million you plan for the full year. So how should we think about that in the remainder of the year? Then briefly on the multimedia segment, can you give us some more color on what you implemented there on the maintenance side? You mentioned there was a positive impact in deferred income that will help growth in the remainder of the year. So some color on that. And lastly, on the license side, of course, the comps are pretty tough. However, adjusted for currency, it was single-digit license growth. What should we think of license growth in the remainder of the year? I think you're still targeting, also on the back of the new growth initiatives, for double-digit license growth this year. Is that the right way to look at things?
Yes. Thank you for your questions, Knut. First of all, for the spending. Definitely, what we always stated that we want to drive efficiency and investing the EUR 10 million roundabout, which is also partly CapEx and partly OpEx. And this is what we will see the next quarters. All the strategic initiatives we are running in the projects are in line with expectations as well. And definitely, we will need the guidance here with the 25% to 27% of margin. So we will see some upcoming OpEx shifts, or not really shifts because they are already planned for Q2, 3 and 4. But definitely, we will be in line with guidance. For the multimedia segment, that's our thought on Maxon, what they had is they wanted to increase and optimize the SSA attach rate. So those are our services contract, and this is why they made a special action here. And the SSA contract is recurring revenue you see in deferred revenues, so this is why it's reflected not at the moment in the Q1 results. So this will give us a higher visibility for the upcoming quarters. But it's a pure optimization of the SSA attach rate, which is nice, because that's future revenues. And for the license growth, you're absolutely right. We do believe that there will be improvement, of course, in the license rate. We do see it realistic, not in the organic portfolio range from 13% to 15%, but definitely in the high single-digit roundabout. I would say the 9% to 11% is a realistic figure we could expect. And you're absolutely right, we will have an improvement.
Just a last follow-up on the tax rate. You had some -- you had a better tax rate than, at least, I modeled, which was also below your full year guide slightly in the range of 25% to 27%. Was that mainly due to the strong performance of the U.S. business, and here, the impact from the tax reform? And if this performance should continue in the remainder of the year, is it then fair to assume that we will be rather at the low end of your tax range?
Absolutely right. Also here, it will increase slightly, but 25% to 27%, what we guided, it will be even more to the lower side, the 25% of the reason behind, you're absolutely right, it was because of the strong performance of the U.S., absolutely true.
The next question is from Chandra Sriraman, MainFirst.
Just a couple of questions from my side. On your Build margins, I mean, they are very strong. Are you trying to invest here to sustain this growth over the next few years. Because I gather you're still targeting 25% plus growth for the segment. So I was just wondering how we should be looking at Build margins going forward. That's my first question. And number two, in terms of your strategic investments, is it mainly personnel cost? Because I see personnel cost coming down in Q1. So I'm just wondering how we should be looking at personnel cost.
So first of all, to the Build margin -- first of all, thank you for your questions. To the Build margin, yes, we will definitely see an increase of efficiency. But yes, also to the parts, and we will invest further, because that's what we also stated. It will remain the highest growth rate in our portfolio, organic portfolio, and we need to invest. There are also strategic initiatives in the Build segment. What we already announced, for example, the CDE platform project, what Bluebeam is running. And there is an operational shift of OpEx to the next quarter. So as I stated in the first question, that I definitely see that we don't see this margin in the end of the year. So there will be some investments during the year. And the second one, the personnel costs, yes, mainly driven through our personnel costs. Here, we also have year-on-year impact, always what we need to consider Q1 to last year. So that's the comparison. We already got the main people for the strategic initiatives into. We will see that development also. But also, have a CapEx part into -- in those investments. But the main cost driver will be, of course, personnel costs, because it's all about project costs, it's all about development costs, and that means it's all about personnel costs in yet.
Great. Maybe a quick one on subscriptions. So I understand that you are letting customers choose between license and subscriptions. Is that also the case for sales incentives in the sense they are equally compensated, whether it's a subscription deal or a license deal?
There's also depending -- it's very difficult to give an over question to the Nemetschek Group because we do have the indirect, we have the direct channels. We have different brands with a different setup. We have different brands with a different status. So here, we need to go deeper into the business model of the brands. But of course, as we do always state that we want to do subscription move also with a reseller part, and this is very depending on -- in which branch you are moving. So for example, Graphisoft is completely different to RISA is, for example. And this is -- of course, it needs to be incentivized because otherwise, you don't drive it. So it depends on the strategy. As you know, all brands are having a clear subscription strategy in mind. As you also know that, we are not saying that we need to obligatory force and shift the customer base to subscription. We are a believer that we will remain in the 2 models for the next upcoming years. So this is why it's difficult to guide or give a general message for the group.
The next question is from Martin Jungfleisch, Kepler Cheuvreux.
Just only one left. It's on sales and marketing. First of all, how have your sales with direct sellers and resellers developed over the last few quarters, also in relation to the increase in subscription-related revenues? And the second one is on bundled sales. Can you comment maybe how that has been progressing over the past couple of quarters? And if you see increased potential there?
Yes. Thank you. Thank you for the question. For the first one, there's no change in message. Direct and indirect remains as strong, both equally on a group level, 50-50. And it also depends -- when you listen to the brands, what I said, the U.S. brands, as for example, RISA, they are more in the direct model but it doesn't mean that we are not doing subscription well with an indirect model as for example, Graphisoft. In new markets, like New Zealand or Australia, they are going with their indirect model also license to subscription. But no any change from the general message, direct and indirect, for the Nemetschek Group. The bundle, I assume, the bundle sales, I assume that you mean cross and co-selling and that's nicely performing, to be honest. That's also part of our strategic initiatives. That's also part of our new strategic direction. We always stated that we want to increase without giving up our general business approach. That strong brands are attracting and penetrating the customer segment. But we also do see that we have nicely market power and potential with co- and cross-selling. As for example, Bluebeam, Solibri are typically brands we can co- and cross-sell, and that's nicely performing in line with the general revenue growth, I would say. So when we stated the 45% is cross-selling and co-selling already in the Nemetschek Group, this is nicely performing as a part of our revenue. So good performing. And if it's a bundle or not a bundle, it's -- if you are reselling or co-selling part, that's also depends on the brand's relations to each other and the regional certainties or the specifics per country.
The next question is from Victoria Kruchevska, Commerzbank.
Couple of questions from my side. The first one is regarding the margin in the Design segment. It went down by roughly 12% based on strategic investments. Maybe you can elaborate on that one. And the other one, the second one will be regarding your recurring revenues. So I was just simply wondering, I mean, given the rising levels of SaaS and cloud-based revenue, do you actually consider introducing some, I don't know, I'd say alternative non-IFRS financial metrics to better track the performance on that side? And the very last one, I would say like more a general question is, that now that you have tip the toe, so to speak, into 2018, what are you looking forward to this year? And what are your biggest worries for this year? Or other formulated, what will make you to upgrade or downgrade your guidance for 2018?
Okay. So for the Design margin, it clearly needs to be seen, of course, that the revenue part is not there for the moment what -- where we want to have it in the year-end. So definitely, there will be impact on a better top line on the margin at the moment. But we also see at the moment the reflected strategic initiatives. That's the pure mathematics, I can tell you, we're behind. And that's the one -- when top line is increasing, license rate is increasing, what we definitely expect because the year-before comparable, Q1 last year, was very strong, and that already explained it. So we all-in-all, we are clearly seeing that top line and margin will increase further and improve in the Design segment. The recurring revenues, we are -- because it's still, we need to be fair, the 47% we are growing, it's still on a small base. And what we're doing is we're developing also some KPIs for the market to inform clearly and what impact we have for the Nemetschek Group. So this is what we always stated. At the moment, we don't see that need for this call. Maybe it's in the next quarter or the next quarters, we will have some KPIs informing you more transparent about development. ARR, as an idea, could be mentioned. I'm not saying that we exactly going into that KPI, but we definitely will give transparency in the development moving forward. And the last question, I hope that I got it right. You speak about challenges. Overall, we are very positive about meeting the guidance. We do believe that we are exactly on plan in 2018 for the first quarter. We see definitely a positive development in all market indicators, given the underlying indicators. Definitely, what we already announced, we will have another currency impact, especially when it comes to Q2 out of the U.S. dollar. This one should improve from half year on, so for Q3 and Q4. This is our actual view, and for the moment, for the currency, we can't forecast it. But anything else, I would say we are keeping positive because we already have an ambitious guidance and a nice guidance, and we are positive to meet it. So no negative flavor from our side.
The next question is from Andreas Wolf, Warburg Research.
I have 3 questions, basically. The first one is regarding the subscription. You mentioned that it's basically related to -- or mainly related to your U.S. brands. So my question related to that is, do you, maybe in the near future, intend to go with some other brands to the U.S. market? And related to this is the question, are all your brands in the software solutions already multitenant-able? Or should we expect -- do you see the need to develop new versions of any particular brand? So obviously, this is mainly related to the U.S. market as there, the subscription demand is higher than in Europe and to your established markets. So the second is on software license growth. To what extent was it driven by Bluebeam? And to what extent was it driven by the other brands? So I'm just trying to get a feeling which part of your business was the main driver of growth here. And then the third question, I don't know if you have transparency on this one already. But do we have a rule of thumb that we could stick to with regard to the move from license to subscription? When does a subscription revenue break even with the traditional license plus maintenance revenue model? Is it 2 years, 3 years, 4 years? That would be interesting.
Okay. So the first one is for -- thank you, Andreas, for the question. The first one is for subscription in the U.S. brands. I always state, and that's a clear message, every brand is ready to go for subscription. No investments into new versions or models. Every brand is able to offer subscription. And yes, you are right. It's, especially for the U.S. market, it's highly interesting, and especially for new brands going into that market. As for example, Graphisoft, they're introducing a subscription. Also Allplan, what, in general, is behind the strategic initiatives as well to give a market entry in the U.S., Allplan, as we have always stated, is going to the U.S. as well with a subscription offering. So -- but all brands are ready to offer subscription. For the software licenses, it's -- that's, of course, it's complex and sophisticated model behind. But as I can say, as for example, it's completely different to Bluebeam as for example to the Design segment brands. I mean, Bluebeam, as you know, they have a much, much more larger customer base. And to repeat a license growth rate for Bluebeam in a market where they're already strongly into, like the U.S. market, it's a tremendous good result to repeat that one. Because that would mean that they enlarge their -- or double their customer base in that market already again. So definitely, it has an impact also for the growth rate in license in the overall one because Bluebeam is a big brand here. But it means in the new markets, we see an increase clearly in license in the one in -- for example, for the U.S. market, an increase is more or less possible and better in revenues when we go to the recurring part with the pricing power they have and with the subscription offering they will also have in the U.S. market. So all in all, Bluebeam revenues are performing nicely, but the composition of those revenue for Bluebeam are different for the future. And this is the main message between software licenses and subscription. So we need to see it different from the Build segment as, for example, to the Design segment. And again, I already tried to answer the question for license -- perpetual license, software services compared to subscription. It's always difficult because we need to see different customer segments and niches in markets, so it depends on the brand. But all in all, to -- now you get me on one answer. So I would say, it's comparable on a 3-year base. This is our feel for the overall message. But again, the pricing is very dedicated to the customer segments and the customer -- and to the countries. And that means there's no overall real valid message for the Nemetschek Group.
Okay. Just for clarification. Subscription does not necessarily then mean cloud revenues. It can be on-premise, just on a month's basis.
Exactly.
The next question is from Tobias Brickel, Industrial Equity Partners.
This is Tobias Brickel at Industrial Equity Partners. I'd like to ask question on the infrastructure software market. You mentioned this is an area that you are increasingly focusing on, in particular, bridges and tunnels. You recently announced the launch of Allplan bridge. So wanted to ask, what are your expectations for this particular solution? And more broadly, how do you rate your capabilities in infrastructure today? And will there need to be more product launches to better serve these customers?
No. We already monitor -- thank you for the question. I really like it because yes, we are really proud to enter the infrastructure market with Allplan. And we, quite recently, released the Allplan bridge model in that area. And that's exactly the messaging behind our world as well. I mean, at the moment, we are performing 75% of our revenues into buildings, 25% into infrastructure. And definitely, you will see a stronger growth rate in the infrastructure part. And this is where we want to go and with Allplan Engineer, we have a wonderful setup to start here. And also with the other structural engineering Design brands, as, for example, RISA, Scia, and also Frilo, which contributing highly to the infrastructure capabilities. Take, for example, also the Gotthard tunnel, one of the best reference projects for BIM projects. Here, Allplan Engineering was involved already. And yes, we see for Q2, a very good development in that part as well into Allplan, mainly, that means also for the Design segment. This one why we are so positive. And we -- our capabilities are great. And here, we're going into different competitive environments as well. So for the infrastructure part, it's not Autodesk who is strong there. It's more or less [ Bently ] who is strong in the infrastructure part. And this is the beauty of the Nemetschek Group, that we can play with -- in different industries and segments with our capabilities. And this is great for us, and that's a huge investment part also for the strategic initiatives.
And if I could follow with a second question, and that will be on Solibri. How did the brand perform in the first quarter? And what are your expectations for the remainder of the year?
Yes. Solibri, we are really happy. Solibri is after a silent year, I would say, silent -- neutral year after takeover in the first year, they already had a great year last year. And they're continuing that road, which is great. And they are one of the best-performing brands. They are round about 35%, 40% growing, which is great. And they go international. They are now attracting in the U.S. as well. And yes, we think that it's definitely in this growth basket being around -- being stronger than 30% in top line, and that's really good. Solibri is performing nicely. Are you still there?
Yes.
At the moment, there are no further questions. [Operator Instructions] We received a follow-up of Gal Munda, Berenberg.
Just wanted to understand a bit more on the M&A pipeline, if you can talk, especially in light of some of the consolidation in the industries that's going on, especially in the U.S. side. How do you see that? Do you see any transformational deals in the pipeline at this stage? Or would you say that valuations are still problem at this time? And maybe like you said in your presentation, it's more about thinking about building versus buying.
Yes. Thank you for that question. It's very good question for us. So we've remain active in the M&A part. We are having a good pipeline filled, and we're very positive to announce in the upcoming periods another M&A activity, so that's one part. And as you know, we are putting a high focus on the Manage segment. And also, we do believe that in the Build segment, there are nice opportunities. First-priority markets remains the U.S. and then Europe. Maybe also we would be happy to see in Asia, but we don't -- the probability is not that high that it will be one in Asia. And with my message in my presentation, that's exactly where we do see a big U.S. be an advantage of the Nemetschek Group. I mean, we heard last week one of the activities in the U.S. market as well when Trimble announced in the collaboration area their acquisition, and we do see also the multiple behind. And we clearly see that we, with our setup, being in all the technology, all the customer segment, is very broad with the focus to AEC. We also have -- we always have this make-or-buy decision, which is, for example, for the CDE platform, clearly a make with our brand, Bluebeam, in that area. So we are not forced to jump into that high-multiples bidding processes in M&A anymore, which is great because we all have the technology in the portfolio. This is why we need to strategically invest also in our organic portfolio, meaning, for example, investing into the CDE platform. And we are having a great market position ready there. So that's a very high advantage. So that means the overall message, we remain active in M&A, but we are not forced to do something because we are not there. We are in every aspect with our technology. We are represented already. So we have capabilities and possibilities to do it by our own now. And this clearly a big advantage we have.
Perfect. Just as a follow-up, expand in your comment in Bluebeam, considering the fact it's still growing so fast. I'm trying to get a sense of how do you see penetration by market at this stage. Maybe it would help if you kind of talk about the -- maybe in terms of the number of users in an absolute, just kind proportion of how many users are coming from U.S. today from Bluebeam. And how many are already from Europe? Considering the fact that you've now introduced it a few years ago, how that penetration's been going on? But I would assume it's still a lot smaller than the U.S. market. So how do you see that maybe overall potential for seats in the future? And how much of that has been penetrated?
Yes. Definitely, that's very difficult if you're low [indiscernible]. Because that's -- those are brand-level details we need to analyze further, and we'd normally don't publish. But for the Bluebeam case, it definitely can be said that they are open up with such a project, like they perform in the CDE platform, they open up a new user base. Because this is why it's so difficult to get an overall impression of our penetration of markets. Before, they had been only to model collaboration. And now they are opening up to a CDE platform, which meaning, at the end of the day, they are opening up their market volume and market potentials also for the U.S. market. At the moment, clearly, it driven by users coming from the U.S. I would say, 80% are coming from the U.S. And this means, we are, day by day, expanding our user base in the U.S. still ongoing. But it doesn't mean necessarily that we are growing 13% to 15% in license. But already with a stable and repeat on the license rate, we are enlarging our customer base in the U.S. market. And now lifting them up to a new functionality, to a new world in the CDE world, this has become straight for the U.S. market, also for the international markets. So this is Bluebeam for the next upcoming periods. They have, as I said, they have a different model. We won't see them in license world performing. We see them in revenue performing. And that's very important. And we see them investing into new areas and new fields because their technology setup is wonderful.
At the moment, there are no further questions. I would like to hand back to you.
Yes. Thank you very much for your ongoing interest into the Nemetschek Group. Thanks for making the questions, and I'm really looking forward to the next calls and to a very positive year for Nemetschek Group. Thank you. Have a good time.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.